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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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72-1133047
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Page
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March 31,
2015 |
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December 31,
2014 |
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ASSETS
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||||||||
Current assets:
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Cash and cash equivalents
|
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$
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783
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$
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14
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Restricted cash
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3
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—
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Accounts receivable, net
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354
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439
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Inventories
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27
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33
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Derivative assets
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425
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431
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Other current assets
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18
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23
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Total current assets
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1,610
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940
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Oil and gas properties — full cost method ($729 and $677 were excluded from amortization at March 31, 2015 and December 31, 2014, respectively)
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15,983
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16,384
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Less — accumulated depreciation, depletion and amortization
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(8,380
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)
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(8,152
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)
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Total oil and gas properties, net
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7,603
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8,232
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Other property and equipment, net
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176
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182
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Derivative assets
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224
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190
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Long-term investments
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22
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26
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Other assets
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43
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28
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Total assets
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$
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9,678
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$
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9,598
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
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Accounts payable
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$
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62
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$
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32
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Accrued liabilities
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606
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880
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Advances from joint owners
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48
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34
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Asset retirement obligations
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2
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3
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Derivative liabilities
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1
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8
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Deferred taxes
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143
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144
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Total current liabilities
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862
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1,101
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Other liabilities
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45
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45
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Derivative liabilities
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2
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—
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Long-term debt
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3,146
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2,892
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Asset retirement obligations
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183
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183
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Deferred taxes
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1,202
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1,484
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Total long-term liabilities
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4,578
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4,604
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Commitments and contingencies (Note 13)
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Stockholders' equity:
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Preferred stock ($0.01 par value, 5,000,000 shares authorized; no shares issued)
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—
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—
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Common stock ($0.01 par value, 200,000,000 shares authorized at March 31, 2015 and December 31, 2014; 163,001,991 and 137,603,643 shares issued at March 31, 2015 and December 31, 2014, respectively)
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2
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1
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Additional paid-in capital
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2,401
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1,576
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Treasury stock (at cost, 304,944 and 275,069 shares at March 31, 2015 and December 31, 2014, respectively)
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(11
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)
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(10
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)
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Accumulated other comprehensive gain (loss)
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(1
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)
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(1
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)
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Retained earnings
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1,847
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2,327
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Total stockholders' equity
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4,238
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3,893
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Total liabilities and stockholders' equity
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$
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9,678
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$
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9,598
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Three Months Ended
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||||||
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March 31,
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||||||
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2015
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2014
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Oil, gas and NGL revenues
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$
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349
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$
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571
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Operating expenses:
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Lease operating
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75
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74
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Transportation and processing
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49
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37
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Production and other taxes
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13
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28
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Depreciation, depletion and amortization
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237
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192
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General and administrative
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63
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56
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Ceiling test and other impairments
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792
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—
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Other
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4
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2
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Total operating expenses
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1,233
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389
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Income (loss) from operations
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(884
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)
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182
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Other income (expense):
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Interest expense
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(44
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)
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(51
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)
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Capitalized interest
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7
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13
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Commodity derivative income (expense)
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153
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(96
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)
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Other, net
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8
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2
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Total other income (expense)
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124
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(132
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)
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Income (loss) from continuing operations before income taxes
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(760
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)
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50
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Income tax provision (benefit):
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Current
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3
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3
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Deferred
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(283
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)
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20
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Total income tax provision (benefit)
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(280
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)
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23
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Income (loss) from continuing operations
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(480
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)
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27
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Income (loss) from discontinued operations, net of tax
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—
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257
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Net income (loss)
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$
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(480
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)
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$
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284
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Earnings (loss) per share:
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Basic:
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Income (loss) from continuing operations
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$
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(3.30
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)
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$
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0.19
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Income (loss) from discontinued operations
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—
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1.89
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Basic earnings (loss) per share
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$
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(3.30
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)
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$
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2.08
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Diluted:
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Income (loss) from continuing operations
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$
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(3.30
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)
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$
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0.19
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Income (loss) from discontinued operations
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—
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1.88
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Diluted earnings (loss) per share
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$
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(3.30
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)
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$
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2.07
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Weighted-average number of shares outstanding for basic earnings (loss) per share
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145
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136
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Weighted-average number of shares outstanding for diluted earnings (loss) per share
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145
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137
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Three Months Ended
March 31, |
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2015
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|
2014
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Net income (loss)
|
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$
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(480
|
)
|
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$
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284
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Other comprehensive income (loss):
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|
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|
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Unrealized gain (loss) on investments, net of tax
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—
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—
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Other comprehensive income (loss), net of tax
|
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—
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|
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—
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|
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Comprehensive income (loss)
|
|
$
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(480
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)
|
|
$
|
284
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Three Months Ended
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||||||
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March 31,
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||||||
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2015
|
|
2014
|
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Cash flows from operating activities:
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|
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Net income (loss)
|
|
$
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(480
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)
|
|
$
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284
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Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
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Depreciation, depletion and amortization
|
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237
|
|
|
224
|
|
||
Deferred tax provision (benefit)
|
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(283
|
)
|
|
161
|
|
||
Stock-based compensation
|
|
15
|
|
|
11
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|
||
Unrealized (gain) loss on derivative contracts
|
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(32
|
)
|
|
57
|
|
||
Ceiling test and other impairments
|
|
792
|
|
|
—
|
|
||
Gain on sale of Malaysia business
|
|
—
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|
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(388
|
)
|
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Other, net
|
|
6
|
|
|
(4
|
)
|
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Changes in operating assets and liabilities:
|
|
|
|
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(Increase) decrease in accounts receivable
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38
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|
|
51
|
|
||
(Increase) decrease in inventories
|
|
2
|
|
|
(6
|
)
|
||
(Increase) decrease in restricted cash
|
|
(3
|
)
|
|
—
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|
||
(Increase) decrease in other current assets
|
|
4
|
|
|
(7
|
)
|
||
(Increase) decrease in other assets
|
|
4
|
|
|
—
|
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
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(105
|
)
|
|
(6
|
)
|
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Increase (decrease) in advances from joint owners
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|
14
|
|
|
(13
|
)
|
||
Increase (decrease) in other liabilities
|
|
(4
|
)
|
|
1
|
|
||
Net cash provided by (used in) operating activities
|
|
205
|
|
|
365
|
|
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Cash flows from investing activities:
|
|
|
|
|
|
|
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Additions to oil and gas properties
|
|
(511
|
)
|
|
(553
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)
|
||
Proceeds from sales of oil and gas properties
|
|
29
|
|
|
10
|
|
||
Proceeds received from sale of Malaysia business, net
|
|
—
|
|
|
809
|
|
||
Additions to other property and equipment
|
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(4
|
)
|
|
(8
|
)
|
||
Redemptions of investments
|
|
—
|
|
|
39
|
|
||
Net cash provided by (used in) investing activities
|
|
(486
|
)
|
|
297
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
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Proceeds from borrowings under credit arrangements
|
|
701
|
|
|
562
|
|
||
Repayments of borrowings under credit arrangements
|
|
(1,147
|
)
|
|
(1,211
|
)
|
||
Proceeds from issuance of senior notes
|
|
691
|
|
|
—
|
|
||
Debt issue costs
|
|
(8
|
)
|
|
—
|
|
||
Proceeds from issuances of common stock, net
|
|
815
|
|
|
—
|
|
||
Purchases of treasury stock, net
|
|
(1
|
)
|
|
(1
|
)
|
||
Other
|
|
(1
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
|
1,050
|
|
|
(650
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
|
769
|
|
|
12
|
|
||
Cash and cash equivalents, beginning of period
|
|
14
|
|
|
95
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
783
|
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
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Additional
Paid-in
Capital
|
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Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Gain (Loss)
|
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Total
Stockholders' Equity
|
||||||||||||||
|
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Common Stock
|
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Treasury Stock
|
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|
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||||||||||||||||||||||
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Shares
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Amount
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Shares
|
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Amount
|
|
|||||||||||||||||||||
Balance, December 31, 2014
|
|
137.6
|
|
|
$
|
1
|
|
|
(0.3
|
)
|
|
$
|
(10
|
)
|
|
$
|
1,576
|
|
|
$
|
2,327
|
|
|
$
|
(1
|
)
|
|
$
|
3,893
|
|
Issuances of common stock
|
|
25.4
|
|
|
1
|
|
|
|
|
|
|
814
|
|
|
|
|
|
|
815
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
11
|
|
|
|
|
|
|
11
|
|
||||||||||||
Treasury stock, net
|
|
|
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
|
|
|
|
|
(1
|
)
|
|||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
(480
|
)
|
|
|
|
(480
|
)
|
||||||||||||
Balance, March 31, 2015
|
|
163.0
|
|
|
$
|
2
|
|
|
(0.3
|
)
|
|
$
|
(11
|
)
|
|
$
|
2,401
|
|
|
$
|
1,847
|
|
|
$
|
(1
|
)
|
|
$
|
4,238
|
|
•
|
the present value (
10%
per annum discount rate) of estimated future net revenues from proved reserves using oil, natural gas and NGL reserve estimation requirements, which require use of the unweighted average first-day-of-the-month commodity prices for the prior 12 months, adjusted for market differentials (SEC pricing), applicable to our reserves (including the effects of hedging contracts that are designated for hedge accounting, if any); plus
|
•
|
the cost of properties not included in the costs being amortized, if any; less
|
•
|
related income tax effects.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions, except per share data)
|
||||||
Income (numerator):
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
(480
|
)
|
|
$
|
27
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
257
|
|
||
Net income (loss)
|
|
$
|
(480
|
)
|
|
$
|
284
|
|
|
|
|
|
|
||||
Weighted-average shares (denominator):
|
|
|
|
|
|
|
||
Weighted-average shares — basic
|
|
145
|
|
|
136
|
|
||
Dilution effect of stock options and unvested restricted stock and restricted stock units outstanding at end of period
(1)(2)
|
|
—
|
|
|
1
|
|
||
Weighted-average shares — diluted
|
|
145
|
|
|
137
|
|
||
|
|
|
|
|
||||
Earnings (loss) per share:
|
|
|
|
|
|
|
||
Basic:
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
(3.30
|
)
|
|
$
|
0.19
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
1.89
|
|
||
Basic earnings (loss) per share
|
|
$
|
(3.30
|
)
|
|
$
|
2.08
|
|
Diluted:
|
|
|
|
|
||||
Income (loss) from continuing operations
|
|
$
|
(3.30
|
)
|
|
$
|
0.19
|
|
Income (loss) from discontinued operations
|
|
—
|
|
|
1.88
|
|
||
Diluted earnings (loss) per share
|
|
$
|
(3.30
|
)
|
|
$
|
2.07
|
|
(1)
|
The effect of
2.4 million
unvested restricted stock or restricted stock units and stock options has not been included in the calculation of shares outstanding for diluted EPS for the quarter ended March 31, 2015, as their effect would have been anti-dilutive. Had we recognized income from continuing operations for the quarter, incremental shares attributable to the assumed vesting of unvested restricted stock and restricted stock units and the assumed exercise of outstanding stock options would have increased diluted weighted-average shares outstanding by
1.3 million
shares for the three months ended March 31, 2015.
|
(2)
|
Excludes
1.5 million
shares of unvested restricted stock or restricted stock units and stock options for the three months ended March 31, 2014, respectively, because including the effect would have been anti-dilutive.
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
|
|
(In millions)
|
||||||
Oil and gas properties:
|
|
|
|
|
||||
Subject to amortization
|
|
$
|
15,254
|
|
|
$
|
15,707
|
|
Not subject to amortization
|
|
729
|
|
|
677
|
|
||
Gross oil and gas properties
|
|
15,983
|
|
|
16,384
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(8,380
|
)
|
|
(8,152
|
)
|
||
Net oil and gas properties
|
|
$
|
7,603
|
|
|
$
|
8,232
|
|
Other property and equipment:
|
|
|
|
|
|
|
||
Furniture, fixtures and equipment
|
|
$
|
143
|
|
|
$
|
144
|
|
Gathering systems and equipment
|
|
115
|
|
|
114
|
|
||
Accumulated depreciation and amortization
|
|
(82
|
)
|
|
(76
|
)
|
||
Net other property and equipment
|
|
$
|
176
|
|
|
$
|
182
|
|
|
|
Costs Incurred In
|
|
|
||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012 and Prior
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Acquisition costs
|
|
$
|
41
|
|
|
$
|
182
|
|
|
$
|
158
|
|
|
$
|
91
|
|
|
$
|
472
|
|
Exploration costs
|
|
78
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
160
|
|
|||||
Fee mineral interests
|
|
—
|
|
|
—
|
|
|
1
|
|
|
23
|
|
|
24
|
|
|||||
Capitalized interest
|
|
7
|
|
|
52
|
|
|
14
|
|
|
—
|
|
|
73
|
|
|||||
Total oil and gas properties not subject to amortization
|
|
$
|
126
|
|
|
$
|
316
|
|
|
$
|
173
|
|
|
$
|
114
|
|
|
$
|
729
|
|
|
|
|
|
NYMEX Contract Price Per Bbl
|
|
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Collars
|
|
Estimated Fair Value
Asset (Liability) |
|||||||||||||||
Period and Type of Instrument
|
|
Volume in MBbls
|
|
Swaps
(Weighted Average) |
|
Purchased Calls (Weighted Average)
|
|
Sold Puts
(Weighted Average) (1) |
|
Floors
(Weighted Average) |
|
Ceilings
(Weighted Average) |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||||
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed-price swaps
|
|
1,555
|
|
|
$
|
90.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60
|
|
Fixed-price swaps with sold puts:
|
|
11,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-price swaps
|
|
|
|
90.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
429
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
71.57
|
|
|
—
|
|
|
—
|
|
|
(229
|
)
|
|||||||
Collars with sold puts:
|
|
550
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
104.00
|
|
|
21
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed-price swaps with sold puts:
|
|
10,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-price swaps
|
|
|
|
89.98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
74.14
|
|
|
—
|
|
|
—
|
|
|
(187
|
)
|
|||||||
Collars with sold puts:
|
|
6,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
96.15
|
|
|
198
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
|||||||
Purchased calls
|
|
732
|
|
|
—
|
|
|
70.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fixed-price swaps with sold puts:
|
|
4,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-price swaps
|
|
|
|
88.37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
73.28
|
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||||||
Collars with sold puts:
|
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
95.59
|
|
|
61
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|||||||
Total
|
|
$
|
547
|
|
(1)
|
If the market prices remain below our sold puts at contract settlement, we will receive the market price plus the following associated with our production:
|
•
|
the difference between our floors and our sold puts for collars with sold puts; or
|
•
|
the difference between our swaps and our sold puts for fixed-price swaps with sold puts.
|
|
|
|
|
NYMEX Contract Price Per MMBtu
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
Collars
|
|
Estimated Fair Value Asset (Liability)
|
|||||||||||||
Period and Type of Instrument
|
|
Volume in MMMBtus
|
|
Swaps (Weighted Average)
|
|
Sold Puts (Weighted Average)
|
|
Floors (Weighted Average)
|
|
Ceilings (Weighted Average)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
37,125
|
|
|
$
|
4.28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55
|
|
Collars
|
|
28,875
|
|
|
—
|
|
|
—
|
|
|
3.93
|
|
|
4.74
|
|
|
34
|
|
|||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Swaptions
(1)
|
|
—
|
|
|
4.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Collars
|
|
10,980
|
|
|
—
|
|
|
—
|
|
|
4.00
|
|
|
4.54
|
|
|
10
|
|
|||||
Total
|
|
$
|
99
|
|
(1)
|
During the fourth quarter of 2014, we sold natural gas swaption contracts that, if exercised on their expiration date in the second quarter of 2015, would protect
14,640
MMMBtus of calendar-year 2016 production from future commodity price volatility. These contracts give the counterparties the option to enter into swap contracts with us at
$4.10
/MMBtu for calendar-year 2016.
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||||||||
|
|
Gross Fair Value
|
|
Offset in Balance Sheet
|
|
Balance Sheet Location
|
|
Gross Fair Value
|
|
Offset in Balance Sheet
|
|
Balance Sheet Location
|
||||||||||||||||||||
|
|
|
|
Current
|
|
Noncurrent
|
|
|
|
Current
|
|
Noncurrent
|
||||||||||||||||||||
|
|
(In millions)
|
|
(In millions)
|
||||||||||||||||||||||||||||
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Natural gas positions
|
|
$
|
99
|
|
|
$
|
—
|
|
|
$
|
91
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Oil positions
|
|
1,145
|
|
|
(595
|
)
|
|
334
|
|
|
216
|
|
|
(598
|
)
|
|
595
|
|
|
(1
|
)
|
|
(2
|
)
|
||||||||
Total
|
|
$
|
1,244
|
|
|
$
|
(595
|
)
|
|
$
|
425
|
|
|
$
|
224
|
|
|
$
|
(598
|
)
|
|
$
|
595
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Natural gas positions
|
|
$
|
105
|
|
|
$
|
(2
|
)
|
|
$
|
99
|
|
|
$
|
4
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Oil positions
|
|
1,115
|
|
|
(597
|
)
|
|
332
|
|
|
186
|
|
|
(605
|
)
|
|
597
|
|
|
(8
|
)
|
|
—
|
|
||||||||
Total
|
|
$
|
1,220
|
|
|
$
|
(599
|
)
|
|
$
|
431
|
|
|
$
|
190
|
|
|
$
|
(607
|
)
|
|
$
|
599
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions)
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Realized gain (loss) on natural gas positions
|
|
$
|
25
|
|
|
$
|
(22
|
)
|
Realized gain (loss) on oil positions
|
|
96
|
|
|
(17
|
)
|
||
Total realized gain (loss)
|
|
121
|
|
|
(39
|
)
|
||
Unrealized gain (loss) on natural gas positions
|
|
(5
|
)
|
|
(17
|
)
|
||
Unrealized gain (loss) on oil positions
|
|
37
|
|
|
(40
|
)
|
||
Total unrealized gain (loss)
|
|
32
|
|
|
(57
|
)
|
||
Total
|
|
$
|
153
|
|
|
$
|
(96
|
)
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
|
|
(In millions)
|
||||||
Revenue
|
|
$
|
102
|
|
|
$
|
155
|
|
Joint interest
|
|
200
|
|
|
230
|
|
||
Other
|
|
68
|
|
|
70
|
|
||
Reserve for doubtful accounts
|
|
(16
|
)
|
|
(16
|
)
|
||
Total accounts receivable, net
|
|
$
|
354
|
|
|
$
|
439
|
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
|
|
(In millions)
|
||||||
Revenue payable
|
|
$
|
139
|
|
|
$
|
197
|
|
Accrued capital costs
|
|
293
|
|
|
441
|
|
||
Accrued lease operating expenses
|
|
41
|
|
|
47
|
|
||
Employee incentive expense
|
|
28
|
|
|
62
|
|
||
Accrued interest on debt
|
|
32
|
|
|
67
|
|
||
Taxes payable
|
|
39
|
|
|
32
|
|
||
Other
|
|
34
|
|
|
34
|
|
||
Total accrued liabilities
|
|
$
|
606
|
|
|
$
|
880
|
|
Level 1:
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. We consider active markets as those in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2:
|
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that we value using observable market data. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter commodity fixed-price swaps and certain investments.
|
Level 3:
|
Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e., supported by little or no market activity). Level 3 instruments primarily include derivative instruments, such as commodity options (i.e., price collars, sold puts or swaptions) and other financial investments.
|
•
|
Our valuation models for derivative contracts are primarily industry-standard models (i.e., Black-Scholes) that consider various inputs including: (a) forward prices for commodities, (b) time value, (c) volatility factors, (d) counterparty credit risk and (e) current market and contractual prices for the underlying instruments.
|
•
|
Our valuation model for the Stockholder Value Appreciation Program (SVAP) is a Monte Carlo simulation that is based on a probability model and considers various inputs including: (a) the measurement date stock price, (b) time value and (c) historical and implied volatility. See Note 12, “Stock-Based Compensation,” for a description of the SVAP.
|
|
|
Fair Value Measurement Classification
|
|
|
||||||||||||
|
|
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
As of December 31, 2014:
|
|
|
|
|
|
|
|
|
||||||||
Money market fund investments
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Deferred compensation plan assets
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Equity securities available-for-sale
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Oil and gas derivative swap contracts
|
|
—
|
|
|
994
|
|
|
—
|
|
|
994
|
|
||||
Oil and gas derivative option and swaption contracts
|
|
—
|
|
|
—
|
|
|
(381
|
)
|
|
(381
|
)
|
||||
Stock-based compensation liability awards
|
|
(12
|
)
|
|
—
|
|
|
(3
|
)
|
|
(15
|
)
|
||||
Total
|
|
$
|
8
|
|
|
$
|
994
|
|
|
$
|
(384
|
)
|
|
$
|
618
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of March 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund investments
|
|
$
|
768
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
768
|
|
Deferred compensation plan assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Equity securities available-for-sale
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Oil and gas derivative swap contracts
|
|
—
|
|
|
978
|
|
|
—
|
|
|
978
|
|
||||
Oil and gas derivative option and swaption contracts
|
|
—
|
|
|
—
|
|
|
(332
|
)
|
|
(332
|
)
|
||||
Stock-based compensation liability awards
|
|
(19
|
)
|
|
—
|
|
|
(8
|
)
|
|
(27
|
)
|
||||
Total
|
|
$
|
763
|
|
|
$
|
978
|
|
|
$
|
(340
|
)
|
|
$
|
1,401
|
|
|
|
Investments
|
|
Derivatives
|
|
Stock-Based Compensation
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||||||
Balance at January 1, 2014
|
|
$
|
39
|
|
|
$
|
(8
|
)
|
|
$
|
(5
|
)
|
|
$
|
26
|
|
Realized or unrealized gains (losses) included in earnings
|
|
—
|
|
|
(13
|
)
|
|
(14
|
)
|
|
(27
|
)
|
||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
||||
Settlements
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
Transfers in to Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at March 31, 2014
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
|
$
|
(38
|
)
|
Change in unrealized gains or losses included in earnings relating to Level 3 instruments still held at March 31, 2014
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
|
$
|
(14
|
)
|
|
$
|
(25
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at January 1, 2015
|
|
$
|
—
|
|
|
$
|
(381
|
)
|
|
$
|
(3
|
)
|
|
$
|
(384
|
)
|
Realized or unrealized gains (losses) included in earnings
|
|
—
|
|
|
(21
|
)
|
|
(5
|
)
|
|
(26
|
)
|
||||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Settlements
|
|
—
|
|
|
70
|
|
|
—
|
|
|
70
|
|
||||
Transfers in to Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at March 31, 2015
|
|
$
|
—
|
|
|
$
|
(332
|
)
|
|
$
|
(8
|
)
|
|
$
|
(340
|
)
|
Change in unrealized gains or losses included in earnings relating to Level 3 instruments still held at March 31, 2015
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
(5
|
)
|
|
$
|
(9
|
)
|
|
|
Estimated Fair Value Asset (Liability)
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
||||||||||||
Instrument Type
|
|
Valuation
Technique
|
|
Unobservable Input
|
|
Range
|
||||||||||
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|||||
Oil option contracts
|
|
$
|
(376
|
)
|
|
Black-Scholes
|
|
Oil price volatility
|
|
21.39
|
%
|
|
—
|
|
68.99
|
%
|
|
|
|
|
|
|
Credit risk
|
|
0.01
|
%
|
|
—
|
|
2.10
|
%
|
||
Natural gas option and swaption contracts
|
|
$
|
44
|
|
|
Black-Scholes
|
|
Natural gas price volatility
|
|
23.44
|
%
|
|
—
|
|
54.28
|
%
|
|
|
|
|
|
|
Credit risk
|
|
0.01
|
%
|
|
—
|
|
1.36
|
%
|
||
SVAP
|
|
$
|
(8
|
)
|
|
Monte Carlo
|
|
Implied volatility
|
|
|
|
|
|
46.7
|
%
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
|
|
(In millions)
|
||||||
5¾% Senior Notes due 2022
|
|
$
|
789
|
|
|
$
|
772
|
|
5⅝% Senior Notes due 2024
|
|
1,041
|
|
|
989
|
|
||
5⅜% Senior Notes due 2026
|
|
709
|
|
|
—
|
|
||
6⅞% Senior Subordinated Notes due 2020
|
|
725
|
|
|
721
|
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
|
|
(In millions)
|
||||||
Senior unsecured debt:
|
|
|
|
|
||||
Revolving credit facility — LIBOR based loans
|
|
$
|
—
|
|
|
$
|
345
|
|
Money market lines of credit
(1)
|
|
—
|
|
|
101
|
|
||
Total credit arrangements
|
|
—
|
|
|
446
|
|
||
5¾% Senior Notes due 2022
|
|
750
|
|
|
750
|
|
||
5⅝% Senior Notes due 2024
|
|
1,000
|
|
|
1,000
|
|
||
5⅜% Senior Notes due 2026
|
|
700
|
|
|
—
|
|
||
Total senior unsecured debt
|
|
2,450
|
|
|
2,196
|
|
||
6⅞% Senior Subordinated Notes due 2020
|
|
700
|
|
|
700
|
|
||
Discount on notes
|
|
(4
|
)
|
|
(4
|
)
|
||
Total long-term debt
|
|
$
|
3,146
|
|
|
$
|
2,892
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions)
|
||||||
Amount computed using the statutory rate
|
|
$
|
(266
|
)
|
|
$
|
17
|
|
Increase (decrease) in taxes resulting from:
|
|
|
|
|
|
|
||
State and local income taxes, net of federal effect
|
|
(17
|
)
|
|
2
|
|
||
Foreign tax on foreign earnings
|
|
2
|
|
|
2
|
|
||
Other
|
|
1
|
|
|
2
|
|
||
Total provision (benefit) for income taxes
|
|
$
|
(280
|
)
|
|
$
|
23
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions)
|
||||||
Equity awards
|
|
$
|
10
|
|
|
$
|
11
|
|
Liability awards:
|
|
|
|
|
|
|
||
Stockholder Value Appreciation Program
|
|
5
|
|
|
14
|
|
||
Cash-settled restricted stock units
|
|
7
|
|
|
6
|
|
||
Total liability awards
|
|
12
|
|
|
20
|
|
||
Total stock-based compensation
|
|
22
|
|
|
31
|
|
||
Capitalized in oil and gas properties
|
|
(7
|
)
|
|
(14
|
)
|
||
Net stock-based compensation expense
|
|
$
|
15
|
|
|
$
|
17
|
|
|
|
Service-Based
Shares
|
|
Performance/
Market-Based
Shares
|
|
Total
Shares
|
|
Weighted- Average Grant Date Fair Value per Share
|
|||||
|
|
(In thousands, except per share data)
|
|||||||||||
Non-vested shares outstanding at January 1, 2015
|
|
1,902
|
|
|
945
|
|
|
2,847
|
|
|
$
|
30.05
|
|
Granted
|
|
221
|
|
|
414
|
|
|
635
|
|
|
25.12
|
|
|
Forfeited
|
|
(171
|
)
|
|
—
|
|
|
(171
|
)
|
|
22.63
|
|
|
Vested
|
|
(53
|
)
|
|
(40
|
)
|
|
(93
|
)
|
|
44.47
|
|
|
Non-vested shares outstanding at March 31, 2015
|
|
1,899
|
|
|
1,319
|
|
|
3,218
|
|
|
$
|
28.62
|
|
14.
|
Segment Information
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended March 31, 2015:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
303
|
|
|
$
|
46
|
|
|
$
|
349
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
65
|
|
|
10
|
|
|
75
|
|
|||
Transportation and processing
|
|
49
|
|
|
—
|
|
|
49
|
|
|||
Production and other taxes
|
|
13
|
|
|
—
|
|
|
13
|
|
|||
Depreciation, depletion and amortization
|
|
212
|
|
|
25
|
|
|
237
|
|
|||
General and administrative
|
|
61
|
|
|
2
|
|
|
63
|
|
|||
Ceiling test and other impairments
|
|
792
|
|
|
—
|
|
|
792
|
|
|||
Other
|
|
3
|
|
|
1
|
|
|
4
|
|
|||
Allocated income tax (benefit)
|
|
(330
|
)
|
|
5
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
(562
|
)
|
|
$
|
3
|
|
|
|
||
Total operating expenses
|
|
|
|
|
|
1,233
|
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
(884
|
)
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(29
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
153
|
|
|||||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
$
|
(760
|
)
|
||||
Total assets
|
|
$
|
9,005
|
|
|
$
|
673
|
|
|
$
|
9,678
|
|
Additions to long-lived assets
|
|
$
|
396
|
|
|
$
|
12
|
|
|
$
|
408
|
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended March 31, 2014:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
553
|
|
|
$
|
18
|
|
|
$
|
571
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
72
|
|
|
2
|
|
|
74
|
|
|||
Transportation and processing
|
|
37
|
|
|
—
|
|
|
37
|
|
|||
Production and other taxes
|
|
25
|
|
|
3
|
|
|
28
|
|
|||
Depreciation, depletion and amortization
|
|
188
|
|
|
4
|
|
|
192
|
|
|||
General and administrative
|
|
56
|
|
|
—
|
|
|
56
|
|
|||
Other
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Allocated income tax (benefit)
|
|
64
|
|
|
5
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
109
|
|
|
$
|
4
|
|
|
|
||
Total operating expenses
|
|
|
|
|
|
389
|
|
|||||
Income (loss) from continuing operations
|
|
|
|
|
|
182
|
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(36
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(96
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
|
|
|
|
|
$
|
50
|
|
||||
Total assets
|
|
$
|
8,080
|
|
|
$
|
571
|
|
|
$
|
8,651
|
|
Additions to long-lived assets
|
|
$
|
438
|
|
|
$
|
17
|
|
|
$
|
455
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions)
|
||||||
Non-cash investing and financing activities excluded from the statement of cash flows:
|
|
|
|
|
||||
(Increase) decrease in receivables for property sales
|
|
$
|
7
|
|
|
$
|
—
|
|
(Increase) decrease in accrued capital expenditures
|
|
109
|
|
|
90
|
|
||
(Increase) decrease in asset retirement costs
|
|
3
|
|
|
13
|
|
|
Three Months Ended
March 31, |
||
|
2014
|
||
|
(In millions)
|
||
Oil and gas revenues
|
$
|
90
|
|
Operating expenses
|
69
|
|
|
Income (loss) from discontinued operations
|
21
|
|
|
Gain on sale of Malaysia business
|
388
|
|
|
Income from discontinued operations before income taxes
|
409
|
|
|
Income tax provision (benefit):
|
|
|
|
Current
|
12
|
|
|
Deferred
|
140
|
|
|
Total income tax provision (benefit)
|
152
|
|
|
Income (loss) from discontinued operations, net of tax
|
$
|
257
|
|
•
|
issued 25.3 million additional shares of common stock through a public equity offering and received proceeds of approximately $815 million, which were used primarily to repay all borrowings under our credit facility and money market lines of credit;
|
•
|
issued $700 million 5⅜% Senior Notes due 2026 through a public debt offering and received net proceeds of approximately $690 million. In April 2015, we used the proceeds to redeem the $700 million aggregate principal of our 6⅞% Senior Subordinated Notes due 2020;
|
•
|
amended our credit facility to increase the capacity from $1.4 billion to $1.8 billion and extended the maturity date until June 2020; and
|
•
|
completed our transition to focus our 2015 drilling efforts in the Anadarko Basin of Oklahoma.
|
|
|
Three Months Ended
March 31, |
|
Percentage
Increase (Decrease)
|
|||||||
|
|
2015
|
|
2014
|
|
||||||
Production/Liftings:
|
|
|
|
|
|
|
|||||
Domestic:
(1)
|
|
|
|
|
|
|
|||||
Crude oil and condensate (MBbls)
|
|
4,950
|
|
|
4,121
|
|
|
20
|
%
|
||
Natural gas (Bcf)
|
|
27.3
|
|
|
28.0
|
|
|
(2
|
)%
|
||
NGLs (MBbls)
|
|
1,849
|
|
|
1,681
|
|
|
10
|
%
|
||
Total (MBOE)
|
|
11,355
|
|
|
10,466
|
|
|
8
|
%
|
||
China:
(2)
|
|
|
|
|
|
|
|||||
Crude oil and condensate (MBbls)
|
|
906
|
|
|
163
|
|
|
456
|
%
|
||
Total Continuing Operations:
|
|
|
|
|
|
|
|||||
Crude oil and condensate (MBbls)
|
|
5,856
|
|
|
4,284
|
|
|
37
|
%
|
||
Natural gas (Bcf)
|
|
27.3
|
|
|
28.0
|
|
|
(2
|
)%
|
||
NGLs (MBbls)
|
|
1,849
|
|
|
1,681
|
|
|
10
|
%
|
||
Total (MBOE)
|
|
12,261
|
|
|
10,629
|
|
|
15
|
%
|
||
Average Realized Prices:
|
|
|
|
|
|
|
|
|
|
||
Domestic:
(3)
|
|
|
|
|
|
|
|||||
Crude oil and condensate (per Bbl)
|
|
$
|
38.21
|
|
|
$
|
86.46
|
|
|
(56
|
)%
|
Natural gas (per Mcf)
|
|
2.70
|
|
|
4.65
|
|
|
(42
|
)%
|
||
NGLs (per Bbl)
|
|
19.96
|
|
|
38.11
|
|
|
(48
|
)%
|
||
Crude oil equivalent (per BOE)
|
|
26.64
|
|
|
52.60
|
|
|
(49
|
)%
|
||
China:
|
|
|
|
|
|
|
|||||
Crude oil and condensate (per Bbl)
|
|
$
|
50.78
|
|
|
$
|
107.73
|
|
|
(53
|
)%
|
Total Continuing Operations:
|
|
|
|
|
|
|
|||||
Crude oil and condensate (per Bbl)
|
|
$
|
40.15
|
|
|
$
|
87.27
|
|
|
(54
|
)%
|
Natural gas (per Mcf)
|
|
2.70
|
|
|
4.65
|
|
|
(42
|
)%
|
||
NGLs (per Bbl)
|
|
19.96
|
|
|
38.11
|
|
|
(48
|
)%
|
||
Crude oil equivalent (per BOE)
|
|
28.43
|
|
|
53.44
|
|
|
(47
|
)%
|
(1)
|
Excludes natural gas produced and consumed in operations of 2.2 Bcf and 1.8 Bcf during the
three months ended March 31, 2015
and
2014
, respectively.
|
(2)
|
Represents our net share of volumes sold regardless of when produced.
|
(3)
|
We had no outstanding derivative contracts related to our NGL production or our production associated with our international operations. Had we included the realized effects of derivative contracts, the domestic average realized prices would have been as follows:
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
Crude oil and condensate (per Bbl)
|
|
$
|
57.51
|
|
|
$
|
82.26
|
|
Natural gas (per Mcf)
|
|
3.62
|
|
|
3.89
|
|
|
|
Unit-of-Production
|
|
Total Amount
|
||||||||||||||||||
|
|
Three Months Ended
March 31, |
|
Percentage
Increase (Decrease)
|
|
Three Months Ended
March 31, |
|
Percentage
Increase (Decrease)
|
||||||||||||||
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
||||||||||||
|
|
(Per BOE)
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
5.76
|
|
|
$
|
6.84
|
|
|
(16
|
)%
|
|
$
|
65
|
|
|
$
|
72
|
|
|
(9
|
)%
|
Transportation and processing
|
|
4.33
|
|
|
3.50
|
|
|
24
|
%
|
|
49
|
|
|
37
|
|
|
34
|
%
|
||||
Production and other taxes
|
|
1.18
|
|
|
2.43
|
|
|
(51
|
)%
|
|
13
|
|
|
25
|
|
|
(47
|
)%
|
||||
Depreciation, depletion and amortization
|
|
18.62
|
|
|
17.98
|
|
|
4
|
%
|
|
212
|
|
|
188
|
|
|
12
|
%
|
||||
General and administrative
|
|
5.31
|
|
|
5.32
|
|
|
—
|
%
|
|
61
|
|
|
56
|
|
|
8
|
%
|
||||
Ceiling test and other impairments
|
|
69.78
|
|
|
—
|
|
|
100
|
%
|
|
792
|
|
|
—
|
|
|
100
|
%
|
||||
Other
|
|
0.23
|
|
|
0.24
|
|
|
(4
|
)%
|
|
3
|
|
|
2
|
|
|
3
|
%
|
||||
Total operating expenses
|
|
105.21
|
|
|
36.31
|
|
|
190
|
%
|
|
1,195
|
|
|
380
|
|
|
214
|
%
|
||||
China:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
10.37
|
|
|
$
|
12.34
|
|
|
(16
|
)%
|
|
$
|
10
|
|
|
$
|
2
|
|
|
366
|
%
|
Production and other taxes
|
|
—
|
|
|
16.13
|
|
|
(100
|
)%
|
|
—
|
|
|
3
|
|
|
(100
|
)%
|
||||
Depreciation, depletion and amortization
|
|
27.93
|
|
|
23.21
|
|
|
20
|
%
|
|
25
|
|
|
4
|
|
|
569
|
%
|
||||
General and administrative
|
|
2.64
|
|
|
—
|
|
|
100
|
%
|
|
2
|
|
|
—
|
|
|
100
|
%
|
||||
Other
|
|
1.31
|
|
|
—
|
|
|
100
|
%
|
|
1
|
|
|
—
|
|
|
100
|
%
|
||||
Total operating expenses
|
|
42.25
|
|
|
51.68
|
|
|
(18
|
)%
|
|
38
|
|
|
9
|
|
|
355
|
%
|
||||
Total Continuing Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
6.09
|
|
|
$
|
6.93
|
|
|
(12
|
)%
|
|
$
|
75
|
|
|
$
|
74
|
|
|
1
|
%
|
Transportation and processing
|
|
4.01
|
|
|
3.44
|
|
|
17
|
%
|
|
49
|
|
|
37
|
|
|
34
|
%
|
||||
Production and other taxes
|
|
1.10
|
|
|
2.64
|
|
|
(58
|
)%
|
|
13
|
|
|
28
|
|
|
(52
|
)%
|
||||
Depreciation, depletion and amortization
|
|
19.31
|
|
|
18.06
|
|
|
7
|
%
|
|
237
|
|
|
192
|
|
|
23
|
%
|
||||
General and administrative
|
|
5.11
|
|
|
5.24
|
|
|
(2
|
)%
|
|
63
|
|
|
56
|
|
|
13
|
%
|
||||
Ceiling test and other impairments
|
|
64.62
|
|
|
—
|
|
|
100
|
%
|
|
792
|
|
|
—
|
|
|
100
|
%
|
||||
Other
|
|
0.31
|
|
|
0.24
|
|
|
29
|
%
|
|
4
|
|
|
2
|
|
|
51
|
%
|
||||
Total operating expenses
|
|
100.55
|
|
|
36.55
|
|
|
175
|
%
|
|
1,233
|
|
|
389
|
|
|
217
|
%
|
•
|
Lease operating expense decreased 9% despite an 8% increase in total production. On a per BOE basis, lease operating expense was 16% lower primarily due to lower service costs and higher production volumes. Service costs declined in our domestic regions period over period due to our increased focus on cost reduction initiatives as well as today's lower commodity price environment causing downward service cost pressures in the industry.
|
•
|
Transportation and processing expense per BOE increased 24% primarily due to the higher transportation and processing costs associated with NGL production as compared to natural gas production, combined with our continued NGL production growth. Our first quarter 2015 domestic NGL production, primarily in our SCOOP and STACK plays in our Mid-Continent region, increased 10%, and our natural gas production decreased 2% compared to the first quarter of 2014.
|
•
|
Production and other taxes decreased 51% per BOE primarily due to lower total revenues. As a percent of total revenue, production and other taxes were 4.4% and 4.6% for the three months ended March 31, 2015 and 2014, respectively.
|
•
|
Total depreciation, depletion and amortization (DD&A) increased 12% primarily due to an 8% increase in total production during the
first quarter
of
2015
compared to the
first quarter
of
2014
, combined with a 4% increase in the cost per BOE. The increased cost per unit-of-production is primarily due to the transfer of approximately $760 million of unevaluated property costs into the full cost pool amortization base during 2014. The majority of the costs were
|
•
|
General and administrative (G&A) expenses per BOE were flat during the
first quarter
of
2015
compared to the
first quarter
of
2014
. Excluding the effect of severance costs of approximately $9 million incurred during the first quarter of 2015 associated with a 15% reduction in our workforce, G&A expense per BOE for the first quarter of 2015 decreased 16% compared to the first quarter of 2014. For the three months ended
March 31, 2015
, we capitalized $25 million ($2.19 per BOE) of direct internal costs as compared to $36 million ($3.46 per BOE) during the comparable quarter of
2014
. This decrease in capitalization is primarily related to reduced exploration and development activities during the first quarter of 2015 and the associated reduction in direct internal costs related to exploration and development.
|
•
|
At March 31, 2015, we recorded a ceiling test impairment of $788 million due to a net decrease in the discounted value of our proved reserves. The primary reason for the change in value was a 13% decrease in crude oil SEC pricing partially offset by the impact of current service cost reductions in reserve estimates. During the first quarter of 2015, we recorded a $4 million rig impairment associated with our decision to indefinitely lay down both company-owned drilling rigs in the Uinta Basin.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
|
|
(In millions)
|
||||||
Gross interest expense:
|
|
|
|
|
||||
Credit arrangements
|
|
$
|
4
|
|
|
$
|
3
|
|
Senior notes
|
|
28
|
|
|
25
|
|
||
Senior subordinated notes
|
|
12
|
|
|
23
|
|
||
Total gross interest expense
|
|
44
|
|
|
51
|
|
||
Capitalized interest
|
|
(7
|
)
|
|
(13
|
)
|
||
Net interest expense
|
|
$
|
37
|
|
|
$
|
38
|
|
•
|
issued 25.3 million additional shares of common stock through a public equity offering and received proceeds of approximately $815 million, which were used primarily to repay all borrowings under our credit facility and money market lines of credit;
|
•
|
issued $700 million 5⅜% Senior Notes due 2026 through a public debt offering and received net proceeds of approximately
$690 million
in March 2015. In April 2015, we used the proceeds to redeem the $700 million aggregate principal of our 6⅞% Senior Subordinated Notes due 2020; and
|
•
|
amended our credit facility to increase the capacity from $1.4 billion to $1.8 billion and extended the maturity date until June 2020.
|
•
|
issued 25.3 million additional shares of common stock through a public equity offering and received proceeds of approximately $815 million, which were used primarily to repay all borrowings under our credit facility and money market lines of credit; and
|
•
|
issued $700 million 5⅜% Senior Notes due 2026 through a public debt offering and received net proceeds of approximately $690 million in March 2015. In April 2015, we used the proceeds to redeem the $700 million aggregate principal of our 6⅞% Senior Subordinated Notes due 2020.
|
|
Three Months Ended
March 31, |
||||||
|
2015
|
|
2014
|
||||
|
(In millions)
|
||||||
Continuing operations:
|
|
|
|
||||
Exploitation and development
|
$
|
281
|
|
|
$
|
324
|
|
Exploration (exclusive of exploitation and leasehold)
|
65
|
|
|
71
|
|
||
Leasing proved and unproved property (leasehold)
|
29
|
|
|
12
|
|
||
Pipeline spending
|
2
|
|
|
4
|
|
||
Total continuing operations
|
377
|
|
|
411
|
|
||
Discontinued operations
|
—
|
|
|
12
|
|
||
Total
|
$
|
377
|
|
|
$
|
423
|
|
|
|
|
|
NYMEX Contract Price Per Bbl
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Collars
|
|||||||||||||
Period and Type of Instrument
|
|
Volume in MBbls
|
|
Swaps
(Weighted Average) |
|
Purchased Calls (Weighted Average)
|
|
Sold Puts
(Weighted Average) |
|
Floors
(Weighted Average) |
|
Ceilings
(Weighted Average) |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps
|
|
1,285
|
|
|
$
|
90.00
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed-price swaps with sold puts:
|
|
10,399
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
|
|
90.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
71.52
|
|
|
—
|
|
|
—
|
|
||||||
Collars with sold puts:
|
|
490
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
104.00
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps with sold puts:
|
|
10,060
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
|
|
89.98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
74.14
|
|
|
—
|
|
|
—
|
|
||||||
Collars with sold puts:
|
|
6,220
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
96.15
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
||||||
Purchased calls
|
|
2,562
|
|
|
—
|
|
|
69.07
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fixed-price swaps with sold puts:
|
|
4,468
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
|
|
88.37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
73.28
|
|
|
—
|
|
|
—
|
|
||||||
Collars with sold puts:
|
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
95.59
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
•
|
the availability and volatility of the securities, capital or credit markets and the cost of capital to fund our operations and business strategies;
|
•
|
accuracy and fluctuations in our reserves estimates due to sustained low commodity prices;
|
•
|
ability to develop existing reserves or acquire new reserves;
|
•
|
the impact of, and changes in, legislation, law and governmental regulations, including those related to hydraulic fracturing, climate change and over-the-counter derivatives;
|
•
|
land, legal, regulatory, and ownership complexities inherent in the U.S. oil and gas industry;
|
•
|
the impact of regulatory approvals;
|
•
|
the availability and volatility of the securities, capital or credit markets and the cost of capital to fund our operations and business strategies;
|
•
|
the ability and willingness of current or potential lenders, derivative contract counterparties, customers and working interest owners to fulfill their obligations to us or to enter into transactions with us in the future on terms that are acceptable to us;
|
•
|
the prices and quantities of commodities reflected in our commodity derivative arrangements as compared to the actual prices or quantities of commodities we produce or use;
|
•
|
the other factors affecting our business described under the caption “
Risk Factors
” and “
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates
” included in our 2014 Annual Report on Form 10-K.
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased under the Plans or Programs
|
|||
January 1 — January 31, 2015
|
|
15,582
|
|
|
$
|
24.84
|
|
|
—
|
|
—
|
February 1 — February 28, 2015
|
|
9,703
|
|
|
29.02
|
|
|
—
|
|
—
|
|
March 1 — March 31, 2015
|
|
4,590
|
|
|
33.53
|
|
|
—
|
|
—
|
|
Total
|
|
29,875
|
|
|
$
|
27.53
|
|
|
—
|
|
—
|
(1)
|
All of the shares repurchased were surrendered by employees to pay tax withholding upon the vesting of restricted stock awards and restricted stock units. These repurchases were not part of a publicly announced program to repurchase shares of our common stock.
|
Exhibit Number
|
|
Description
|
3.1
|
|
Third Restated Certificate of Incorporation of Newfield Exploration Company dated December 14, 2011 (incorporated by reference to Exhibit 3.1 to Newfield’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-12534))
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Newfield (incorporated by reference to Exhibit 3.2 to Newfield’s Current Report on Form 8-K filed with the SEC on July 25, 2013 (File No. 1-12534))
|
|
|
|
4.1
|
|
Fourth Supplemental Indenture, dated as of March 10, 2015, between the Company and U.S. Bank National Association (as successor to Wachovia Bank, National Association (formerly First Union National Bank)), as Trustee (incorporated by reference to Exhibit 4.2 to Newfield's Current Report on Form 8-K filed with the SEC on March 12, 2015 (File No. 1-12534))
|
|
|
|
10.1
|
|
Retirement Agreement of William D. Schneider (incorporated by reference to Exhibit 10.1 to Newfield's Current Report on Form 8-K filed with the SEC on January 14, 2015 (File No. 1-12534))
|
|
|
|
*10.2
|
|
Fourth Amendment to Credit Agreement, dated as of March 5, 2015, by and among Newfield and , JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, U.S. Bank National Association, Sumitomo Mitsui Banking Corporation and Credit Suisse AG, Cayman Islands Branch, as Documentation Agents, and BMO Harris Bank N.A., Canadian Imperial Bank of Commerce, New York Branch, Goldman Sachs Bank USA and Mizuho Bank Ltd., as Managing Agents, and other Lenders thereto
|
|
|
|
*10.3
|
|
Form of 2015 Executive Officer Restricted Stock Unit Award Agreement under 2011 Omnibus Stock Plan
|
|
|
|
*31.1
|
|
Certification of Chief Executive Officer of Newfield Exploration Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*31.2
|
|
Certification of Chief Financial Officer of Newfield Exploration Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*32.1
|
|
Certification of Chief Executive Officer of Newfield Exploration Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*32.2
|
|
Certification of Chief Financial Officer of Newfield Exploration Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
*101.INS
|
|
XBRL Instance Document
|
|
|
|
*101.SCH
|
|
XBRL Schema Document
|
|
|
|
*101.CAL
|
|
XBRL Calculation Linkbase Document
|
|
|
|
*101.LAB
|
|
XBRL Label Linkbase Document
|
|
|
|
*101.PRE
|
|
XBRL Presentation Linkbase Document
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*101.DEF
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XBRL Definition Linkbase Document
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NEWFIELD EXPLORATION COMPANY
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Date: May 6, 2015
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By:
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/s/ LAWRENCE S. MASSARO
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Lawrence S. Massaro
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Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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Exhibit Number
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Description
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3.1
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Third Restated Certificate of Incorporation of Newfield Exploration Company dated December 14, 2011 (incorporated by reference to Exhibit 3.1 to Newfield’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-12534))
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3.2
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Amended and Restated Bylaws of Newfield (incorporated by reference to Exhibit 3.2 to Newfield’s Current Report on Form 8-K filed with the SEC on July 25, 2013 (File No. 1-12534))
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4.1
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Fourth Supplemental Indenture, dated as of March 10, 2015, between the Company and U.S. Bank National Association (as successor to Wachovia Bank, National Association (formerly First Union National Bank)), as Trustee (incorporated by reference to Exhibit 4.2 to Newfield's Current Report on Form 8-K filed with the SEC on March 12, 2015 (File No. 1-12534))
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10.1
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Retirement Agreement of William D. Schneider (incorporated by reference to Exhibit 10.1 to Newfield's Current Report on Form 8-K filed with the SEC on January 14, 2015 (File No. 1-12534))
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*10.2
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Fourth Amendment to Credit Agreement, dated as of March 5, 2015, by and among Newfield and , JPMorgan Chase Bank, N.A., as Administrative Agent, Wells Fargo Bank, National Association, as Syndication Agent, The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, U.S. Bank National Association, Sumitomo Mitsui Banking Corporation and Credit Suisse AG, Cayman Islands Branch, as Documentation Agents, and BMO Harris Bank N.A., Canadian Imperial Bank of Commerce, New York Branch, Goldman Sachs Bank USA and Mizuho Bank Ltd., as Managing Agents, and other Lenders thereto
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*10.3
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Form of 2015 Executive Officer Restricted Stock Unit Award Agreement under 2011 Omnibus Stock Plan
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*31.1
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Certification of Chief Executive Officer of Newfield Exploration Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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*31.2
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Certification of Chief Financial Officer of Newfield Exploration Company pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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*32.1
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Certification of Chief Executive Officer of Newfield Exploration Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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*32.2
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Certification of Chief Financial Officer of Newfield Exploration Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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*101.INS
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XBRL Instance Document
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*101.SCH
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XBRL Schema Document
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*101.CAL
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XBRL Calculation Linkbase Document
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*101.LAB
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XBRL Label Linkbase Document
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*101.PRE
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XBRL Presentation Linkbase Document
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*101.DEF
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XBRL Definition Linkbase Document
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BORROWER:
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NEWFIELD EXPLORATION COMPANY
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By:
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/s/ Lawrence S. Massaro
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Lawrence S. Massaro
Executive Vice President and
Chief Financial Officer
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ADMINISTRATIVE AGENT AND LENDER:
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JPMORGAN CHASE BANK, N.A.
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By:
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/s/ Michele Jones
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Name: Michele Jones
Title: Authorized Officer
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SYNDICATION AGENT AND LENDER:
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WELLS FARGO BANK, NATIONAL ASSOCIATION
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By:
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/s/ Ellen Cheng
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Name: Ellen Cheng
Title: Vice President
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DOCUMENTATION AGENT AND LENDER:
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
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By:
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/s/ Sherwin Brandford
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Name: Sherwin Brandford
Title: Director
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DOCUMENTATION AGENT AND LENDER:
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THE BANK OF NOVA SCOTIA
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By:
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/s/ Mark Sparrow
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Name: Mark Sparrow
Title: Director
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DOCUMENTATION AGENT AND LENDER:
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U.S. BANK, NATIONAL ASSOCIATION
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By:
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/s/ Bruce Hernandez
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Name: Bruce Hernandez
Title: Senior Vice President
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DOCUMENTATION AGENT AND LENDER:
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SUMITOMO MITSUI BANKING CORPORATION
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By:
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/s/ James D. Weinstein
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Name: James D. Weinstein
Title: Managing Director
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DOCUMENTATION AGENT AND LENDER:
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CREDIT SUISSE AG, Cayman Islands Branch
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By:
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/s/ Nupur Kumar
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Name: Nupur Kumar
Title: Authorized Signatory
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By:
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/s/ Karim Rahimtoola
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Name: Karim Rahimtoola
Title: Authorized Signatory
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MANAGING AGENT AND LENDER:
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BMO HARRIS BANK N.A.
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By:
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/s/ Melissa Guzmann
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Name: Melissa Guzmann
Title: Vice President
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MANAGING AGENT AND LENDER:
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CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
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By:
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/s/ William M. Reid
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Name: William M. Reid
Title: Authorized Signatory
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By:
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/s/ Trudy Nelson
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Name: Trudy Nelson
Title: Authorized Signatory
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MANAGING AGENT AND LENDER:
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GOLDMAN SACHS BANK USA
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By:
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/s/ Rebecca Kratz
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Name: Rebecca Kratz
Title: Authorized Signatory
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MANAGING AGENT AND LENDER:
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MIZUHO BANK LTD.
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By:
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/s/ Leon Mo
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Name: Leon Mo
Title: Authorized Signatory
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LENDER:
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BANK OF AMERICA, N.A.
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By:
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/s/ Ronald E. McKaig
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Name: Ronald E. McKaig
Title: Managing Director
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LENDER:
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FIFTH THIRD BANK
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By:
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/s/ Richard Butler
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Name: Richard Butler
Title: Senior Vice President
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LENDER:
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SOCIÉTÉ GÉNÉRALE
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By:
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/s/ David M. Bornstein
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Name: David M. Bornstein
Title: Director
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LENDER:
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ROYAL BANK OF CANADA
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By:
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/s/ Evans Swann, Jr.
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Name: Evans Swann, Jr.
Title: Authorized Signatory
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LENDER:
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BARCLAYS BANK PLC
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By:
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/s/ Marguerite Sutton
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Name: Marguerite Sutton
Title: Vice President
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EXITING LENDER:
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COMPASS BANK
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By:
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/s/ Rhianna L. Disch
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Name: Rhianna L. Disch
Title: Vice President
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EXITING LENDER:
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DNB BANK ASA,
GRAND CAYMAN BRANCH
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By:
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/s/ Kristie Li
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Name: Kristie Li
Title: First Vice President
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By:
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/s/ Henrik Asland
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Name: Henrik Asland
Title: Senior Vice President
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Lender
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Commitment
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JPMorgan Chase Bank, N.A.
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$210,000,000.00
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Wells Fargo Bank, National Association
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$210,000,000.00
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The Bank of Tokyo-Mitsubishi UFJ, Ltd.
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$155,000,000.00
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The Bank of Nova Scotia
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$155,000,000.00
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U.S. Bank, National Association
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$155,000,000.00
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Sumitomo Mitsui Banking Corporation
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$135,000,000.00
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Credit Suisse AG, Cayman Islands Branch
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$120,000,000.00
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BMO Harris Bank N.A.
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$90,000,000.00
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Canadian Imperial Bank of Commerce, New York Branch
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$90,000,000.00
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Goldman Sachs Bank USA
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$90,000,000.00
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Mizuho Bank Ltd.
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$90,000,000.00
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Bank of America, N.A.
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$75,000,000.00
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Fifth Third Bank
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$75,000,000.00
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Société Générale
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$75,000,000.00
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Royal Bank of Canada
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$50,000,000.00
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Barclays Bank PLC
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$25,000,000.00
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Awardee
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Date of Award:
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February 11, 2015
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Number of Restricted Stock Units:
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_______________
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1.
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FORFEITURE RESTRICTIONS.
If, prior to January 15, 2018, your employment with the Company and all direct and indirect wholly-owned subsidiaries (collectively, the “
Company Group
”) is terminated for any reason other than by
reason of a change of control of the Company or your (A) death or Disability or (B) Qualified Retirement, you shall, for no consideration, forfeit to the Company all Restricted Stock Units to the extent then subject to Forfeiture Restrictions.
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2.
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LAPSE OF FORFEITURE RESTRICTIONS.
If not previously forfeited, the Forfeiture Restrictions shall lapse as to the Restricted Stock Units as of the 15
th
day of the month following each Determination Quarter with respect to that number of Restricted Stock Units that is equal to the total number of Restricted Stock Units multiplied by a fraction, the numerator of which is (a) the number twenty (20)
minus
(b) the number which is the TSR Rank, and the denominator is the number 20; provided however that if such fraction is greater than or equal to 3/4, it shall be deemed to be one (1.0) and if such fraction is less than 1/4, it shall be deemed to be zero (0),
less
that number of Restricted Stock Units for which Forfeiture Restrictions shall have previously lapsed, all as determined by the Committee.
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Cabot Oil & Gas Corporation
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Chesapeake Energy
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Cimarex Energy Co
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Concho Resources Inc.
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EP Energy
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Energen Company
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Denbury Resources Inc.
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Continental Resources Inc.
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Laredo Petroleum
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Oasis Petroleum
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QEP Resources
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Southwestern Energy
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Devon Energy
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Range Resources
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SandRidge Energy, Inc.
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SM Energy
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Ultra Petroleum
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Whiting Petroleum
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WPX Energy
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4.
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PROHIBITED ACTIVITY
. Notwithstanding any other provision of these Terms and Conditions or the Restricted Stock Unit Agreement (the “
Agreement
”), if you engage in a “Prohibited Activity,” as described below, while employed by one or more members of the Company Group or within two years after the date your employment with the Company Group terminates, then your right to receive the shares of the Common Stock, to the extent still outstanding at that time, shall be completely forfeited. A “
Prohibited Activity
” shall be deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you divulge any non-public, confidential or proprietary information of the Company Group, but excluding information that (a) becomes generally available to the public other than as a result of your public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after your employment termination date from a source other than a member of the Company Group prior to the public use or disclosure by you,
provided
that such source is not bound by a confidentiality agreement or otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation.
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5.
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TAX WITHHOLDING
. To the extent that the receipt of the Restricted Stock Units or the lapse of any forfeiture restrictions results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company has a withholding obligation, you shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money as the Company may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is authorized to withhold from any shares of Common Stock issued under the Agreement or from any cash or stock remuneration or other payment then or thereafter payable to you any tax required to be withheld by reason of such taxable income, wages or compensation including (without limitation) shares of the Common Stock sufficient to satisfy the withholding obligation. No shares of Common Stock shall be withheld from the shares issued under the Agreement in excess of the Company’s minimum statutory withholding obligations (determined using the minimum statutory withholding rates required by the relevant tax authorities, including your share of payroll taxes that are applicable to such supplemental taxable income.)
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6.
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NONTRANSFERABILITY.
The Agreement is not transferable by you otherwise than by will or by the laws of descent and distribution.
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7.
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CAPITAL ADJUSTMENTS AND REORGANIZATIONS.
The existence of the Restricted Stock Units shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital
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8.
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RESTRICTED STOCK UNITS DO NOT AWARD ANY RIGHTS OF A STOCKHOLDER
. You shall not have the voting rights or any of the other rights, powers or privileges of a holder of the Common Stock with respect to the Restricted Stock Units that are awarded hereby. Only after a share of the Common Stock is issued in exchange for a Restricted Stock Unit will you have all of the rights of a stockholder with respect to such share of Common Stock issued in exchange for a Restricted Stock Unit.
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9.
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EMPLOYMENT RELATIONSHIP.
For purposes of the Agreement, you shall be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group. The Committee shall determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination shall be final and binding on all persons.
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10.
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NOT AN EMPLOYMENT AGREEMENT
. The Agreement is not an employment agreement, and no provision of the Agreement shall be construed or interpreted to create an employment relationship between you and any member of the Company Group or guarantee the right to remain employed by any member of the Company Group for any specified term.
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11.
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SECURITIES ACT LEGEND.
If you are an officer or affiliate of the Company under the Securities Act of 1933, you consent to the placing on any certificate for the shares of the Common Stock issued under the Agreement an appropriate legend restricting resale or other transfer of such shares except in accordance with such Act and all applicable rules thereunder.
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12.
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LIMIT OF LIABILITY
. Under no circumstances will any member of the Company Group be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.
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13.
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FUNDING.
You shall have no right, title, or interest whatsoever in or to any assets of the Company or any investments which the Company may make to aid it in meeting its obligations under this Agreement. Your right to receive payments under this Agreement shall be no greater than the right to an unsecured general creditor of the Company.
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14.
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MISCELLANEOUS
. The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any. In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan or the Agreement.
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NEWFIELD EXPLORATION COMPANY
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By:
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Name:
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Title:
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RETIRING EMPLOYEE
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[Retiring Employee]
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
March 31, 2015
of Newfield Exploration Company (the “Registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
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The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
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5.
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The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: May 6, 2015
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By:
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/s/ LEE K. BOOTHBY
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Lee K. Boothby
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
March 31, 2015
of Newfield Exploration Company (the “Registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
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The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
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5.
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The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):
|
a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
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Date: May 6, 2015
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By:
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/s/ LAWRENCE S. MASSARO
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Lawrence S. Massaro
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer)
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1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: May 6, 2015
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/s/ LEE K. BOOTHBY
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Lee K. Boothby
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(Principal Executive Officer)
|
1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 6, 2015
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/s/ LAWRENCE S. MASSARO
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|
Lawrence S. Massaro
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|
(Principal Financial Officer)
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