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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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June 30,
2016 |
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December 31,
2015 |
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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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165
|
|
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$
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5
|
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Accounts receivable, net
|
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256
|
|
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262
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||
Inventories
|
|
19
|
|
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34
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||
Derivative assets
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150
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|
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284
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Other current assets
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48
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40
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Total current assets
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638
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|
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625
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||
Oil and gas properties, net — full cost method ($1,386
and $780 were excluded from amortization at June 30, 2016 and December 31, 2015, respectively)
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3,403
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3,819
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Other property and equipment, net
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170
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172
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Derivative assets
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20
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105
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Long-term investments
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21
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20
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Other assets
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33
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27
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Total assets
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$
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4,285
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$
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4,768
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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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59
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|
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$
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41
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|
Accrued liabilities
|
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441
|
|
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533
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|
||
Advances from joint owners
|
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77
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58
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Asset retirement obligations
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2
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2
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Derivative liabilities
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78
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13
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Total current liabilities
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657
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647
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Other liabilities
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72
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48
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Derivative liabilities
|
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21
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|
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9
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Long-term debt
|
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2,430
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2,467
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Asset retirement obligations
|
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204
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192
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Deferred taxes
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29
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26
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Total long-term liabilities
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2,756
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2,742
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Commitments and contingencies (Note
11
)
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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 ($0.01 par value, 300,000,000 shares authorized at June 30, 2016 and December 31, 2015; 199,529,109 and 164,102,786 shares issued at June 30, 2016 and December 31, 2015, respectively)
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2
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2
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Additional paid-in capital
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3,231
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2,436
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Treasury stock (at cost, 936,218 and 612,469 shares at June 30, 2016 and December 31, 2015, respectively)
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(33
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)
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(22
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)
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Accumulated other comprehensive gain (loss)
|
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(2
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)
|
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(2
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)
|
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Retained earnings (deficit)
|
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(2,326
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)
|
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(1,035
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)
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Total stockholders' equity
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872
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1,379
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Total liabilities and stockholders' equity
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$
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4,285
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$
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4,768
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Three Months Ended
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Six Months Ended
|
||||||||||||
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June 30,
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June 30,
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||||||||||||
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2016
|
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2015
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2016
|
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2015
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||||||||
Oil, gas and NGL revenues
|
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$
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381
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$
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469
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$
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665
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$
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818
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||||||||
Operating expenses:
|
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Lease operating
|
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62
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73
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123
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148
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Transportation and processing
|
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66
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|
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52
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|
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129
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101
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Production and other taxes
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11
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17
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21
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30
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Depreciation, depletion and amortization
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160
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248
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337
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485
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General and administrative
|
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58
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51
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102
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|
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114
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Ceiling test and other impairments
|
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522
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1,521
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1,028
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2,313
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Other
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—
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3
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1
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7
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Total operating expenses
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879
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|
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1,965
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1,741
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3,198
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Income (loss) from operations
|
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(498
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)
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(1,496
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)
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(1,076
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)
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(2,380
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)
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Other income (expense):
|
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Interest expense
|
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(38
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)
|
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(46
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)
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(79
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)
|
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(90
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)
|
||||
Capitalized interest
|
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11
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8
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20
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15
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Commodity derivative income (expense)
|
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(133
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)
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(10
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)
|
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(150
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)
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143
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|
||||
Other, net
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—
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(22
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)
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1
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(14
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)
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||||
Total other income (expense)
|
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(160
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)
|
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(70
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)
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(208
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)
|
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54
|
|
||||
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|
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||||||||
Income (loss) before income taxes
|
|
(658
|
)
|
|
(1,566
|
)
|
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(1,284
|
)
|
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(2,326
|
)
|
||||
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Income tax provision (benefit):
|
|
|
|
|
|
|
|
|
|
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||||||
Current
|
|
6
|
|
|
15
|
|
|
4
|
|
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18
|
|
||||
Deferred
|
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3
|
|
|
(589
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)
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3
|
|
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(872
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)
|
||||
Total income tax provision (benefit)
|
|
9
|
|
|
(574
|
)
|
|
7
|
|
|
(854
|
)
|
||||
Net income (loss)
|
|
$
|
(667
|
)
|
|
$
|
(992
|
)
|
|
$
|
(1,291
|
)
|
|
$
|
(1,472
|
)
|
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|
|
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||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
(3.36
|
)
|
|
$
|
(6.09
|
)
|
|
$
|
(6.87
|
)
|
|
$
|
(9.55
|
)
|
Diluted
|
|
$
|
(3.36
|
)
|
|
$
|
(6.09
|
)
|
|
$
|
(6.87
|
)
|
|
$
|
(9.55
|
)
|
Weighted-average number of shares outstanding for basic earnings (loss) per share
|
|
198
|
|
|
163
|
|
|
188
|
|
|
154
|
|
||||
Weighted-average number of shares outstanding for diluted earnings (loss) per share
|
|
198
|
|
|
163
|
|
|
188
|
|
|
154
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
|
$
|
(667
|
)
|
|
$
|
(992
|
)
|
|
$
|
(1,291
|
)
|
|
$
|
(1,472
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Comprehensive income (loss)
|
|
$
|
(667
|
)
|
|
$
|
(992
|
)
|
|
$
|
(1,291
|
)
|
|
$
|
(1,472
|
)
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
||||||
Net income (loss)
|
|
$
|
(1,291
|
)
|
|
$
|
(1,472
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
|
337
|
|
|
485
|
|
||
Deferred tax provision (benefit)
|
|
3
|
|
|
(872
|
)
|
||
Stock-based compensation
|
|
19
|
|
|
25
|
|
||
Unrealized (gain) loss on derivative contracts
|
|
296
|
|
|
101
|
|
||
Ceiling test and other impairments
|
|
1,028
|
|
|
2,313
|
|
||
Other, net
|
|
6
|
|
|
22
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
(Increase) decrease in accounts receivable
|
|
(1
|
)
|
|
(25
|
)
|
||
(Increase) decrease in inventories
|
|
4
|
|
|
1
|
|
||
(Increase) decrease in other current assets
|
|
(8
|
)
|
|
5
|
|
||
(Increase) decrease in other assets
|
|
(7
|
)
|
|
(3
|
)
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
|
(41
|
)
|
|
(8
|
)
|
||
Increase (decrease) in advances from joint owners
|
|
19
|
|
|
9
|
|
||
Increase (decrease) in other liabilities
|
|
14
|
|
|
(4
|
)
|
||
Net cash provided by (used in) operating activities
|
|
378
|
|
|
577
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Additions to oil and gas properties
|
|
(471
|
)
|
|
(916
|
)
|
||
Acquisitions of oil and gas properties
|
|
(495
|
)
|
|
(1
|
)
|
||
Proceeds from sales of oil and gas properties
|
|
29
|
|
|
29
|
|
||
Additions to other property and equipment
|
|
(8
|
)
|
|
(10
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(945
|
)
|
|
(898
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Proceeds from borrowings under credit arrangements
|
|
536
|
|
|
916
|
|
||
Repayments of borrowings under credit arrangements
|
|
(575
|
)
|
|
(1,362
|
)
|
||
Proceeds from issuance of senior notes
|
|
—
|
|
|
691
|
|
||
Repayment of senior subordinated notes
|
|
—
|
|
|
(700
|
)
|
||
Debt issue costs
|
|
—
|
|
|
(8
|
)
|
||
Proceeds from issuances of common stock, net
|
|
777
|
|
|
817
|
|
||
Purchases of treasury stock, net
|
|
(11
|
)
|
|
(4
|
)
|
||
Other
|
|
—
|
|
|
(1
|
)
|
||
Net cash provided by (used in) financing activities
|
|
727
|
|
|
349
|
|
||
Increase (decrease) in cash and cash equivalents
|
|
160
|
|
|
28
|
|
||
Cash and cash equivalents, beginning of period
|
|
5
|
|
|
14
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
165
|
|
|
$
|
42
|
|
|
|
|
|
|
|
|
|
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Gain (Loss)
|
|
Total
Stockholders' Equity
|
||||||||||||||
|
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance, December 31, 2015
|
|
164.1
|
|
|
$
|
2
|
|
|
(0.6
|
)
|
|
$
|
(22
|
)
|
|
$
|
2,436
|
|
|
$
|
(1,035
|
)
|
|
$
|
(2
|
)
|
|
$
|
1,379
|
|
Issuances of common stock
|
|
35.4
|
|
|
—
|
|
|
|
|
|
|
777
|
|
|
|
|
|
|
777
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
18
|
|
||||||||||||
Treasury stock, net
|
|
|
|
|
|
(0.3
|
)
|
|
(11
|
)
|
|
—
|
|
|
|
|
|
|
(11
|
)
|
||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
(1,291
|
)
|
|
|
|
(1,291
|
)
|
||||||||||||
Balance, June 30, 2016
|
|
199.5
|
|
|
$
|
2
|
|
|
(0.9
|
)
|
|
$
|
(33
|
)
|
|
$
|
3,231
|
|
|
$
|
(2,326
|
)
|
|
$
|
(2
|
)
|
|
$
|
872
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
Revenue
|
|
$
|
133
|
|
|
$
|
94
|
|
Joint interest
|
|
100
|
|
|
125
|
|
||
Other
|
|
39
|
|
|
59
|
|
||
Reserve for doubtful accounts
|
|
(16
|
)
|
|
(16
|
)
|
||
Total accounts receivable, net
|
|
$
|
256
|
|
|
$
|
262
|
|
|
|
|
|
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)
(2)
|
|
Sold Puts
(Weighted Average) (1) |
|
Floors
(Weighted Average) |
|
Ceilings
(Weighted Average) |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed-price swaps
|
|
6,808
|
|
|
$
|
41.84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(55
|
)
|
Fixed-price swaps with sold puts:
|
|
4,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-price swaps
|
|
|
|
89.97
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
184
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
74.40
|
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|||||||
Collars with sold puts:
|
|
2,944
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
95.98
|
|
|
118
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||||
Purchased calls
|
|
7,544
|
|
|
—
|
|
|
73.70
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fixed-price swaps
|
|
6,205
|
|
|
45.43
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||
Fixed-price swaps with sold puts:
|
|
4,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed-price swaps
|
|
|
|
88.37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
73.28
|
|
|
—
|
|
|
—
|
|
|
(99
|
)
|
|||||||
Collars with sold puts:
|
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
90.00
|
|
|
95.59
|
|
|
79
|
|
|||||||
Sold puts
|
|
|
|
—
|
|
|
—
|
|
|
75.00
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||||
Purchased calls
|
|
6,548
|
|
|
—
|
|
|
73.81
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Total
|
|
$
|
114
|
|
(1)
|
For the volumes with sold puts, if the market prices remain below our sold puts at contract settlement, we will receive the market price plus the following:
|
•
|
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.
|
(2)
|
We deferred the premiums related to the purchased calls until contract settlement. At
June 30, 2016
, the deferred premiums totaled
$19 million
.
|
|
|
|
|
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)
|
|||||||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed-price swaps
|
|
36,800
|
|
|
$
|
2.28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(26
|
)
|
Collars
|
|
5,520
|
|
|
—
|
|
|
—
|
|
|
4.00
|
|
|
4.54
|
|
|
5
|
|
|||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed-price swaps
|
|
27,375
|
|
|
2.73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||
Collars
|
|
29,200
|
|
|
—
|
|
|
—
|
|
|
2.64
|
|
|
2.93
|
|
|
(10
|
)
|
|||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Collars
|
|
10,950
|
|
|
—
|
|
|
—
|
|
|
2.80
|
|
|
3.32
|
|
|
—
|
|
|||||
Total
|
|
$
|
(43
|
)
|
|
|
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)
|
||||||||||||||||||||||||||||
June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Oil positions
|
|
$
|
520
|
|
|
$
|
(355
|
)
|
|
$
|
145
|
|
|
$
|
20
|
|
|
$
|
(406
|
)
|
|
$
|
355
|
|
|
$
|
(39
|
)
|
|
$
|
(12
|
)
|
Natural gas positions
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(39
|
)
|
|
(9
|
)
|
||||||||
Total
|
|
$
|
525
|
|
|
$
|
(355
|
)
|
|
$
|
150
|
|
|
$
|
20
|
|
|
$
|
(454
|
)
|
|
$
|
355
|
|
|
$
|
(78
|
)
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Oil positions
|
|
$
|
1,005
|
|
|
$
|
(638
|
)
|
|
$
|
262
|
|
|
$
|
105
|
|
|
$
|
(660
|
)
|
|
$
|
638
|
|
|
$
|
(13
|
)
|
|
$
|
(9
|
)
|
Natural gas positions
|
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total
|
|
$
|
1,027
|
|
|
$
|
(638
|
)
|
|
$
|
284
|
|
|
$
|
105
|
|
|
$
|
(660
|
)
|
|
$
|
638
|
|
|
$
|
(13
|
)
|
|
$
|
(9
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Realized gain (loss) on oil positions
|
|
$
|
58
|
|
|
$
|
91
|
|
|
$
|
129
|
|
|
$
|
187
|
|
Realized gain (loss) on natural gas positions
|
|
6
|
|
|
32
|
|
|
17
|
|
|
57
|
|
||||
Total realized gain (loss)
|
|
64
|
|
|
123
|
|
|
146
|
|
|
244
|
|
||||
Unrealized gain (loss) on oil positions
|
|
(149
|
)
|
|
(99
|
)
|
|
(232
|
)
|
|
(62
|
)
|
||||
Unrealized gain (loss) on natural gas positions
|
|
(48
|
)
|
|
(34
|
)
|
|
(64
|
)
|
|
(39
|
)
|
||||
Total unrealized gain (loss)
|
|
(197
|
)
|
|
(133
|
)
|
|
(296
|
)
|
|
(101
|
)
|
||||
Total
|
|
$
|
(133
|
)
|
|
$
|
(10
|
)
|
|
$
|
(150
|
)
|
|
$
|
143
|
|
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, purchased calls 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) was a Monte Carlo simulation that was 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.
|
|
|
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, 2015:
|
|
|
|
|
|
|
|
|
||||||||
Money market fund investments
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Deferred compensation plan assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Equity securities available-for-sale
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Oil and gas derivative swap contracts
|
|
—
|
|
|
675
|
|
|
—
|
|
|
675
|
|
||||
Oil and gas derivative option contracts
|
|
—
|
|
|
—
|
|
|
(308
|
)
|
|
(308
|
)
|
||||
Stock-based compensation liability awards
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
||||
Total
|
|
$
|
3
|
|
|
$
|
675
|
|
|
$
|
(308
|
)
|
|
$
|
370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of June 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund investments
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158
|
|
Deferred compensation plan assets
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Equity securities available-for-sale
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Oil and gas derivative swap contracts
|
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
||||
Oil and gas derivative option and swaption contracts
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
(135
|
)
|
||||
Stock-based compensation liability awards
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Total
|
|
$
|
150
|
|
|
$
|
206
|
|
|
$
|
(135
|
)
|
|
$
|
221
|
|
|
|
Derivatives
|
|
Stock-Based Compensation
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Balance at January 1, 2015
|
|
$
|
(381
|
)
|
|
$
|
(3
|
)
|
|
$
|
(384
|
)
|
Realized or unrealized gains (losses) included in earnings
|
|
109
|
|
|
—
|
|
|
109
|
|
|||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|||
Settlements
|
|
104
|
|
|
—
|
|
|
104
|
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at June 30, 2015
|
|
$
|
(168
|
)
|
|
$
|
(3
|
)
|
|
$
|
(171
|
)
|
Change in unrealized gains or losses included in earnings relating to Level 3 instruments still held at June 30, 2015
|
|
$
|
108
|
|
|
$
|
—
|
|
|
$
|
108
|
|
|
|
|
|
|
|
|
||||||
Balance at January 1, 2016
|
|
$
|
(308
|
)
|
|
$
|
—
|
|
|
$
|
(308
|
)
|
Realized or unrealized gains (losses) included in earnings
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Purchases, issuances, sales and settlements:
|
|
|
|
|
|
|
|
|
|
|||
Settlements
|
|
131
|
|
|
—
|
|
|
131
|
|
|||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3
(1)
|
|
46
|
|
|
—
|
|
|
46
|
|
|||
Balance at June 30, 2016
|
|
$
|
(135
|
)
|
|
$
|
—
|
|
|
$
|
(135
|
)
|
Change in unrealized gains or losses included in earnings relating to Level 3 instruments still held at June 30, 2016
|
|
$
|
43
|
|
|
$
|
—
|
|
|
$
|
43
|
|
(1)
|
During the second quarter of 2016, we transferred
$46 million
of derivative option contracts out of the Level 3 hierarchy. The transfer was the result of our Level 3 swaptions being exercised by the counterparties as swaps in June 2016.
|
|
|
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
|
|
$
|
(131
|
)
|
|
Black-Scholes
|
|
Oil price volatility
|
|
28.67
|
%
|
|
—
|
|
61.37%
|
|
|
|
|
|
|
Credit risk
|
|
0.02
|
%
|
|
—
|
|
1.92%
|
||
Natural gas option and swaption
contracts
|
|
$
|
(4
|
)
|
|
Black-Scholes
|
|
Natural gas price volatility
|
|
25.13
|
%
|
|
—
|
|
56.34%
|
|
|
|
|
|
|
Credit risk
|
|
0.01
|
%
|
|
—
|
|
2.79%
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
5¾% Senior Notes due 2022
|
|
$
|
765
|
|
|
$
|
668
|
|
5⅝% Senior Notes due 2024
|
|
1,000
|
|
|
831
|
|
||
5⅜% Senior Notes due 2026
|
|
679
|
|
|
542
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
Proved
|
|
$
|
21,889
|
|
|
$
|
21,568
|
|
Unproved
|
|
1,386
|
|
|
780
|
|
||
Gross oil and gas properties
|
|
23,275
|
|
|
22,348
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(9,363
|
)
|
|
(9,048
|
)
|
||
Accumulated impairment
|
|
(10,509
|
)
|
|
(9,481
|
)
|
||
Net oil and gas properties
|
|
$
|
3,403
|
|
|
$
|
3,819
|
|
|
|
Costs Incurred In
|
|
|
||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
Total
|
||||||||||
|
|
(In millions)
|
|
|
||||||||||||||||
Acquisition costs
|
|
$
|
516
|
|
|
$
|
339
|
|
|
$
|
165
|
|
|
$
|
115
|
|
|
$
|
1,135
|
|
Exploration costs
|
|
143
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|||||
Capitalized interest
|
|
20
|
|
|
33
|
|
|
43
|
|
|
—
|
|
|
96
|
|
|||||
Total costs withheld from amortization (unproved)
|
|
$
|
679
|
|
|
$
|
384
|
|
|
$
|
208
|
|
|
$
|
115
|
|
|
$
|
1,386
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
Furniture, fixtures and equipment
|
|
$
|
158
|
|
|
$
|
152
|
|
Gathering systems and equipment
|
|
115
|
|
|
115
|
|
||
Accumulated depreciation and amortization
|
|
(103
|
)
|
|
(95
|
)
|
||
Net other property and equipment
|
|
$
|
170
|
|
|
$
|
172
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
U.S. statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal effect
|
0.7
|
|
|
2.1
|
|
|
0.7
|
|
|
2.1
|
|
Valuation allowance, domestic
|
(37.0
|
)
|
|
—
|
|
|
(35.7
|
)
|
|
—
|
|
Valuation allowance, international
|
(1.5
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
Foreign tax on foreign earnings
|
—
|
|
|
(0.6
|
)
|
|
1.1
|
|
|
(0.5
|
)
|
Other
|
1.4
|
|
|
0.2
|
|
|
0.5
|
|
|
0.1
|
|
Effective income tax rate
|
(1.4
|
)%
|
|
36.7
|
%
|
|
(0.6
|
)%
|
|
36.7
|
%
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
Revenue payable
|
|
$
|
164
|
|
|
$
|
164
|
|
Accrued capital costs
|
|
93
|
|
|
128
|
|
||
Accrued lease operating expenses
|
|
30
|
|
|
48
|
|
||
Employee incentive expense
|
|
31
|
|
|
53
|
|
||
Accrued interest on debt
|
|
65
|
|
|
66
|
|
||
Taxes payable
|
|
15
|
|
|
25
|
|
||
Other
|
|
43
|
|
|
49
|
|
||
Total accrued liabilities
|
|
$
|
441
|
|
|
$
|
533
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
(In millions)
|
||||||
Senior unsecured debt:
|
|
|
|
|
||||
Revolving credit facility — LIBOR based loans (matures in June 2020)
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market lines of credit
(1)
|
|
—
|
|
|
39
|
|
||
Total credit arrangements
|
|
—
|
|
|
39
|
|
||
5¾% Senior Notes due 2022
|
|
750
|
|
|
750
|
|
||
5⅝% Senior Notes due 2024
|
|
1,000
|
|
|
1,000
|
|
||
5⅜% Senior Notes due 2026
|
|
700
|
|
|
700
|
|
||
Total senior unsecured debt
|
|
2,450
|
|
|
2,489
|
|
||
Debt issuance costs
|
|
(20
|
)
|
|
(22
|
)
|
||
Total long-term debt
|
|
$
|
2,430
|
|
|
$
|
2,467
|
|
(1)
|
Because we have the ability and intent to use our available credit facility capacity to repay borrowings under our money market lines of credit as of the indicated dates, amounts outstanding under these obligations, if any, are classified as long-term debt.
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions, except per share data)
|
||||||||||||||
Net income (loss)
|
|
$
|
(667
|
)
|
|
$
|
(992
|
)
|
|
$
|
(1,291
|
)
|
|
$
|
(1,472
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares (denominator):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted-average shares — basic
|
|
198
|
|
|
163
|
|
|
188
|
|
|
154
|
|
||||
Dilution effect of stock options and unvested restricted stock awards and restricted stock units outstanding at end of period
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average shares — diluted
|
|
198
|
|
|
163
|
|
|
188
|
|
|
154
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
(3.36
|
)
|
|
$
|
(6.09
|
)
|
|
$
|
(6.87
|
)
|
|
$
|
(9.55
|
)
|
Diluted
|
|
$
|
(3.36
|
)
|
|
$
|
(6.09
|
)
|
|
$
|
(6.87
|
)
|
|
$
|
(9.55
|
)
|
(1)
|
The effect of unvested restricted stock awards or restricted stock units and stock options has not been included in the calculation of shares outstanding for diluted EPS for the
three and six
months ended
June 30, 2016
and
2015
, as their effect would have been anti-dilutive. Had we recognized net income for the quarter, incremental shares attributable to the assumed vesting of unvested restricted stock awards and restricted stock units and the assumed exercise of outstanding stock options would have increased diluted weighted-average shares outstanding by
1.6 million
and
1.3 million
shares for the
three and six
months ended
June 30, 2016
, respectively, and
1.5 million
and
1.4 million
shares for the
three and six
months ended
June 30, 2015
, respectively.
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Equity awards
|
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
22
|
|
Liability awards:
|
|
|
|
|
|
|
|
|
||||||||
Cash-settled restricted stock units
|
|
7
|
|
|
5
|
|
|
10
|
|
|
12
|
|
||||
Stockholder Value Appreciation Program
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
Total liability awards
|
|
7
|
|
|
—
|
|
|
10
|
|
|
12
|
|
||||
Total stock-based compensation
|
|
16
|
|
|
12
|
|
|
28
|
|
|
34
|
|
||||
Capitalized in oil and gas properties
|
|
(5
|
)
|
|
(2
|
)
|
|
(9
|
)
|
|
(9
|
)
|
||||
Net stock-based compensation expense
|
|
$
|
11
|
|
|
$
|
10
|
|
|
$
|
19
|
|
|
$
|
25
|
|
|
|
Service-Based
Shares
|
|
Weighted- Average Grant Date Fair Value per Share
|
|
Performance/
Market-Based
Shares
(1)
|
|
Weighted- Average Grant Date Fair Value per Share
|
|
Total
Shares
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||||
Non-vested shares outstanding at January 1, 2016
|
|
1,700
|
|
|
$
|
30.30
|
|
|
1,074
|
|
|
$
|
23.76
|
|
|
2,774
|
|
Granted
|
|
473
|
|
|
29.37
|
|
|
436
|
|
|
28.94
|
|
|
909
|
|
||
Forfeited
|
|
(48
|
)
|
|
32.54
|
|
|
(44
|
)
|
|
56.49
|
|
|
(92
|
)
|
||
Vested
|
|
(316
|
)
|
|
31.71
|
|
|
(574
|
)
|
|
21.36
|
|
|
(890
|
)
|
||
Non-vested shares outstanding at June 30, 2016
|
|
1,809
|
|
|
$
|
29.75
|
|
|
892
|
|
|
$
|
26.23
|
|
|
2,701
|
|
(1)
|
In February 2016, we granted approximately
436,000
shares of restricted stock units, which based on achievement of certain performance criteria, could vest within a range of
0%
to
200%
of shares granted.
|
|
|
Cash-Settled Restricted Stock Units
|
|
|
|
(In thousands)
|
|
Non-vested units outstanding at January 1, 2016
|
|
708
|
|
Granted
|
|
295
|
|
Forfeited
|
|
(75
|
)
|
Vested
|
|
(7
|
)
|
Non-vested units outstanding at June 30, 2016
|
|
921
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Type of Restructuring Cost
|
|
Location in the Consolidated Statement of Operations
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
(In millions)
|
||||||||||||||
Severance and related benefit costs
|
|
Operating expenses - General and administrative
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
8
|
|
|
$
|
3
|
|
Relocation costs
|
|
Operating expenses - General and administrative
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Office-lease abandonment costs
|
|
Operating expenses - General and administrative
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Other associated costs
|
|
Operating expenses - Depreciation, depletion and amortization
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total
|
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
5
|
|
|
|
Severance and Related Benefit Costs
|
|
Office-lease Abandonment Costs
|
|
Relocation Costs
|
|
Other Associated Costs
|
|
Total
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Restructuring liability at January 1, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions
|
|
3
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|||||
Settlements
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||||
Revisions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring liability at June 30, 2015
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Cumulative costs as of June 30, 2015
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restructuring liability at January 1, 2016
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Additions
|
|
8
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
9
|
|
|||||
Settlements
|
|
(2
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Revisions
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Restructuring liability at June 30, 2016
|
|
$
|
7
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20
|
|
Cumulative costs as of June 30, 2016
|
|
$
|
15
|
|
|
$
|
17
|
|
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
39
|
|
Expected total costs as of June 30, 2016
|
|
$
|
20
|
|
|
$
|
21
|
|
|
$
|
13
|
|
|
$
|
3
|
|
|
$
|
57
|
|
16
.
|
Segment Information
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2016:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
309
|
|
|
$
|
72
|
|
|
$
|
381
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
46
|
|
|
16
|
|
|
62
|
|
|||
Transportation and processing
|
|
66
|
|
|
—
|
|
|
66
|
|
|||
Production and other taxes
|
|
11
|
|
|
—
|
|
|
11
|
|
|||
Depreciation, depletion and amortization
|
|
126
|
|
|
34
|
|
|
160
|
|
|||
General and administrative
|
|
56
|
|
|
2
|
|
|
58
|
|
|||
Ceiling test and other impairments
|
|
501
|
|
|
21
|
|
|
522
|
|
|||
Allocated income tax (benefit)
|
|
(183
|
)
|
|
(1
|
)
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
(314
|
)
|
|
$
|
—
|
|
|
|
||
Total operating expenses
|
|
|
|
|
|
879
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
(498
|
)
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(27
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(133
|
)
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
(658
|
)
|
||||
Total assets
|
|
$
|
4,095
|
|
|
$
|
190
|
|
|
$
|
4,285
|
|
Additions to long-lived assets
|
|
$
|
699
|
|
|
$
|
—
|
|
|
$
|
699
|
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2015:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
370
|
|
|
$
|
99
|
|
|
$
|
469
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
56
|
|
|
17
|
|
|
73
|
|
|||
Transportation and processing
|
|
52
|
|
|
—
|
|
|
52
|
|
|||
Production and other taxes
|
|
17
|
|
|
—
|
|
|
17
|
|
|||
Depreciation, depletion and amortization
|
|
207
|
|
|
41
|
|
|
248
|
|
|||
General and administrative
|
|
49
|
|
|
2
|
|
|
51
|
|
|||
Ceiling test and other impairments
|
|
1,521
|
|
|
—
|
|
|
1,521
|
|
|||
Other
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
Allocated income tax (benefit)
|
|
(568
|
)
|
|
23
|
|
|
|
|
|||
Net income (loss) from oil and gas properties
|
|
$
|
(967
|
)
|
|
$
|
16
|
|
|
|
||
Total operating expenses
|
|
|
|
|
|
1,965
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
(1,496
|
)
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(60
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(10
|
)
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
(1,566
|
)
|
||||
Total assets
|
|
$
|
6,776
|
|
|
$
|
659
|
|
|
$
|
7,435
|
|
Additions to long-lived assets
|
|
$
|
340
|
|
|
$
|
15
|
|
|
$
|
355
|
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Six Months Ended June 30, 2016:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
544
|
|
|
$
|
121
|
|
|
$
|
665
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
93
|
|
|
30
|
|
|
123
|
|
|||
Transportation and processing
|
|
129
|
|
|
—
|
|
|
129
|
|
|||
Production and other taxes
|
|
21
|
|
|
—
|
|
|
21
|
|
|||
Depreciation, depletion and amortization
|
|
259
|
|
|
78
|
|
|
337
|
|
|||
General and administrative
|
|
99
|
|
|
3
|
|
|
102
|
|
|||
Ceiling test and other impairments
|
|
962
|
|
|
66
|
|
|
1,028
|
|
|||
Other
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Allocated income tax (benefit)
|
|
(377
|
)
|
|
(34
|
)
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
(643
|
)
|
|
$
|
(22
|
)
|
|
|
||
Total operating expenses
|
|
|
|
|
|
1,741
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
(1,076
|
)
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(58
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(150
|
)
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
(1,284
|
)
|
||||
Total assets
|
|
$
|
4,095
|
|
|
$
|
190
|
|
|
$
|
4,285
|
|
Additions to long-lived assets
|
|
$
|
960
|
|
|
$
|
—
|
|
|
$
|
960
|
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Six Months Ended June 30, 2015:
|
|
|
|
|
|
|
||||||
Oil, gas and NGL revenues
|
|
$
|
673
|
|
|
$
|
145
|
|
|
$
|
818
|
|
Operating expenses:
|
|
|
|
|
|
|
||||||
Lease operating
|
|
121
|
|
|
27
|
|
|
148
|
|
|||
Transportation and processing
|
|
101
|
|
|
—
|
|
|
101
|
|
|||
Production and other taxes
|
|
30
|
|
|
—
|
|
|
30
|
|
|||
Depreciation, depletion and amortization
|
|
419
|
|
|
66
|
|
|
485
|
|
|||
General and administrative
|
|
110
|
|
|
4
|
|
|
114
|
|
|||
Ceiling test and other impairments
|
|
2,313
|
|
|
—
|
|
|
2,313
|
|
|||
Other
|
|
6
|
|
|
1
|
|
|
7
|
|
|||
Allocated income tax (benefit)
|
|
(898
|
)
|
|
28
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
(1,529
|
)
|
|
$
|
19
|
|
|
|
||
Total operating expenses
|
|
|
|
|
|
3,198
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
(2,380
|
)
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(89
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
143
|
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
(2,326
|
)
|
||||
Total assets
|
|
$
|
6,776
|
|
|
$
|
659
|
|
|
$
|
7,435
|
|
Additions to long-lived assets
|
|
$
|
736
|
|
|
$
|
27
|
|
|
$
|
763
|
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2016
|
|
2015
|
||||
|
|
(In millions)
|
||||||
Non-cash investing and financing activities excluded from the statement of cash flows:
|
|
|
|
|
||||
(Increase) decrease in receivables for property sales
|
|
$
|
6
|
|
|
$
|
8
|
|
(Increase) decrease in accrued capital expenditures
|
|
33
|
|
|
169
|
|
||
(Increase) decrease in accrued insurance proceeds
|
|
—
|
|
|
57
|
|
||
(Increase) decrease in asset retirement costs
|
|
(8
|
)
|
|
1
|
|
•
|
additional properties acquired in the Anadarko Basin STACK play for an adjusted purchase price of
$490 million
;
|
•
|
consolidation of our Tulsa regional office to our headquarters in The Woodlands, Texas announced in an effort to improve business and cost efficiencies;
|
•
|
total consolidated production increased 9% to 15.1 MMBOE compared to the second quarter of 2015, and total domestic production increased
11%
to
13.5
MMBOE compared to the second quarter of 2015;
|
•
|
Anadarko Basin production was 7.6 MMBOE in the second quarter of 2016, up 53%
over the same period of 2015 and 7% over the first quarter of 2016. Anadarko Basin crude oil production increased 64% over the
second
quarter of 2015;
|
•
|
domestic lease operating expense was $3.42 per BOE, a 25% improvement compared to the second quarter of 2015; and
|
•
|
crude oil and natural gas derivative contracts generated realized income of $
64 million
for the second quarter of 2016.
|
|
|
Three Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
|
Six Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Production/Liftings:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Domestic:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (MBbls)
|
|
5,250
|
|
|
5,532
|
|
|
(5
|
)%
|
|
10,585
|
|
|
10,482
|
|
|
1
|
%
|
||||
Natural gas (Bcf)
|
|
32.4
|
|
|
27.9
|
|
|
16
|
%
|
|
65.3
|
|
|
55.2
|
|
|
18
|
%
|
||||
NGLs (MBbls)
|
|
2,792
|
|
|
1,976
|
|
|
41
|
%
|
|
5,268
|
|
|
3,825
|
|
|
38
|
%
|
||||
Total (MBOE)
|
|
13,454
|
|
|
12,160
|
|
|
11
|
%
|
|
26,742
|
|
|
23,515
|
|
|
14
|
%
|
||||
China:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (MBbls)
|
|
1,629
|
|
|
1,643
|
|
|
(1
|
)%
|
|
3,272
|
|
|
2,549
|
|
|
28
|
%
|
||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (MBbls)
|
|
6,879
|
|
|
7,175
|
|
|
(4
|
)%
|
|
13,857
|
|
|
13,031
|
|
|
6
|
%
|
||||
Natural gas (Bcf)
|
|
32.4
|
|
|
27.9
|
|
|
16
|
%
|
|
65.3
|
|
|
55.2
|
|
|
18
|
%
|
||||
NGLs (MBbls)
|
|
2,792
|
|
|
1,976
|
|
|
41
|
%
|
|
5,268
|
|
|
3,825
|
|
|
38
|
%
|
||||
Total (MBOE)
|
|
15,083
|
|
|
13,803
|
|
|
9
|
%
|
|
30,014
|
|
|
26,064
|
|
|
15
|
%
|
||||
Average Realized Prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Domestic:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (per Bbl)
|
|
$
|
38.17
|
|
|
$
|
47.59
|
|
|
(20
|
)%
|
|
$
|
31.89
|
|
|
$
|
43.16
|
|
|
(26
|
)%
|
Natural gas (per Mcf)
|
|
1.69
|
|
|
2.36
|
|
|
(28
|
)%
|
|
1.76
|
|
|
2.53
|
|
|
(30
|
)%
|
||||
NGLs (per Bbl)
|
|
19.23
|
|
|
19.17
|
|
|
—
|
%
|
|
17.12
|
|
|
19.55
|
|
|
(12
|
)%
|
||||
Crude oil equivalent (per BOE)
|
|
22.96
|
|
|
30.43
|
|
|
(25
|
)%
|
|
20.35
|
|
|
28.60
|
|
|
(29
|
)%
|
||||
China:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (per Bbl)
|
|
$
|
43.95
|
|
|
$
|
60.24
|
|
|
(27
|
)%
|
|
$
|
36.89
|
|
|
$
|
56.87
|
|
|
(35
|
)%
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil and condensate (per Bbl)
|
|
$
|
39.54
|
|
|
$
|
50.49
|
|
|
(22
|
)%
|
|
$
|
33.07
|
|
|
$
|
45.84
|
|
|
(28
|
)%
|
Natural gas (per Mcf)
|
|
1.69
|
|
|
2.36
|
|
|
(28
|
)%
|
|
1.76
|
|
|
2.53
|
|
|
(30
|
)%
|
||||
NGLs (per Bbl)
|
|
19.23
|
|
|
19.17
|
|
|
—
|
%
|
|
17.12
|
|
|
19.55
|
|
|
(12
|
)%
|
||||
Crude oil equivalent (per BOE)
|
|
25.23
|
|
|
33.98
|
|
|
(26
|
)%
|
|
22.15
|
|
|
31.37
|
|
|
(29
|
)%
|
(1)
|
Excludes natural gas produced and consumed in operations of
1.3
Bcf and
1.9
Bcf during the
three months ended June 30, 2016
and
2015
, respectively, and 2.8 Bcf and 4.1 Bcf during the
six months ended June 30, 2016
and
2015
, respectively.
|
(2)
|
Represents our net share of volumes sold regardless of when produced.
|
(3)
|
Had we included the realized effects of derivative contracts, the average realized prices for our domestic crude oil and natural gas production would have been as follows:
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Crude oil and condensate (per Bbl)
|
|
$
|
49.12
|
|
|
$
|
64.18
|
|
|
$
|
44.00
|
|
|
$
|
61.03
|
|
Natural gas (per Mcf)
|
|
1.86
|
|
|
3.50
|
|
|
2.02
|
|
|
3.56
|
|
|
|
Unit-of-Production
|
|
Total Amount
|
||||||||||||||||||
|
|
Three Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
|
Three Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
|
|
(Per BOE)
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
3.42
|
|
|
$
|
4.58
|
|
|
(25
|
)%
|
|
$
|
46
|
|
|
$
|
56
|
|
|
(17
|
)%
|
Transportation and processing
|
|
4.86
|
|
|
4.22
|
|
|
15
|
%
|
|
66
|
|
|
52
|
|
|
28
|
%
|
||||
Production and other taxes
|
|
0.82
|
|
|
1.35
|
|
|
(39
|
)%
|
|
11
|
|
|
17
|
|
|
(33
|
)%
|
||||
Depreciation, depletion and amortization
|
|
9.35
|
|
|
17.05
|
|
|
(45
|
)%
|
|
126
|
|
|
207
|
|
|
(39
|
)%
|
||||
General and administrative
|
|
4.21
|
|
|
4.09
|
|
|
3
|
%
|
|
56
|
|
|
49
|
|
|
14
|
%
|
||||
Ceiling test and other impairments
|
|
37.28
|
|
|
125.05
|
|
|
(70
|
)%
|
|
501
|
|
|
1,521
|
|
|
(67
|
)%
|
||||
Other
|
|
—
|
|
|
0.24
|
|
|
(100
|
)%
|
|
—
|
|
|
3
|
|
|
(100
|
)%
|
||||
Total operating expenses
|
|
59.94
|
|
|
156.58
|
|
|
(62
|
)%
|
|
806
|
|
|
1,905
|
|
|
(58
|
)%
|
||||
China:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
9.57
|
|
|
$
|
10.61
|
|
|
(10
|
)%
|
|
$
|
16
|
|
|
$
|
17
|
|
|
(10
|
)%
|
Depreciation, depletion and amortization
|
|
20.56
|
|
|
25.16
|
|
|
(18
|
)%
|
|
34
|
|
|
41
|
|
|
(19
|
)%
|
||||
General and administrative
|
|
0.97
|
|
|
0.96
|
|
|
1
|
%
|
|
2
|
|
|
2
|
|
|
—
|
%
|
||||
Ceiling test impairment
|
|
12.79
|
|
|
—
|
|
|
100
|
%
|
|
21
|
|
|
—
|
|
|
100
|
%
|
||||
Total operating expenses
|
|
43.89
|
|
|
36.73
|
|
|
19
|
%
|
|
73
|
|
|
60
|
|
|
18
|
%
|
||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
4.08
|
|
|
$
|
5.28
|
|
|
(23
|
)%
|
|
$
|
62
|
|
|
$
|
73
|
|
|
(16
|
)%
|
Transportation and processing
|
|
4.34
|
|
|
3.72
|
|
|
17
|
%
|
|
66
|
|
|
52
|
|
|
28
|
%
|
||||
Production and other taxes
|
|
0.74
|
|
|
1.21
|
|
|
(39
|
)%
|
|
11
|
|
|
17
|
|
|
(33
|
)%
|
||||
Depreciation, depletion and amortization
|
|
10.56
|
|
|
18.01
|
|
|
(41
|
)%
|
|
160
|
|
|
248
|
|
|
(36
|
)%
|
||||
General and administrative
|
|
3.86
|
|
|
3.72
|
|
|
4
|
%
|
|
58
|
|
|
51
|
|
|
13
|
%
|
||||
Ceiling test and other impairments
|
|
34.63
|
|
|
110.18
|
|
|
(69
|
)%
|
|
522
|
|
|
1,521
|
|
|
(66
|
)%
|
||||
Other
|
|
—
|
|
|
0.21
|
|
|
(100
|
)%
|
|
—
|
|
|
3
|
|
|
(100
|
)%
|
||||
Total operating expenses
|
|
58.21
|
|
|
142.33
|
|
|
(59
|
)%
|
|
879
|
|
|
1,965
|
|
|
(55
|
)%
|
•
|
Lease operating expense decreased 17% despite an 11% increase in total production. On a per BOE basis, lease operating expense was 25% lower due to our focused growth in the Anadarko Basin, which has significantly lower operating costs than our other basins. Additionally, there was a reduction of lease operating expense per BOE across all basins due to our focus on cost-reduction initiatives combined with downward service cost pressures in the industry as a result of a lower commodity price environment.
|
•
|
Transportation and processing expense per BOE increased
15%
primarily due to increased natural gas and NGL volumes in our SCOOP and STACK plays. Second quarter 2016 gas production from these two plays increased 47% compared to the second quarter of 2015, while NGL production increased 51%. Additionally, oil transportation costs increased in the Williston Basin due to new pipeline marketing agreements in the second half of
2015
. These pipeline agreements allow us to transport oil to more favorable markets and thus receive a higher net price.
|
•
|
Production and other taxes decreased 39%
per BOE due to lower revenue. As a percent of total revenue, production and other taxes were 3.6% and 4.4% for the
three months ended June 30, 2016
and
2015
, respectively. Our
2016
rate is lower as our development has been focused in areas with lower taxes due to horizontal well credits.
|
•
|
Depreciation, depletion and amortization (DD&A) decreased 45% on a per BOE basis primarily due to the impact of non-cash ceiling test impairments during
2015
and the first quarter of
2016
. We expect a further decrease in the third quarter of
2016
as a result of the impairment recorded in the
second quarter
of
2016
.
|
•
|
General and administrative (G&A) expenses increased
14%
during the
second quarter
of
2016
compared to the
second quarter
of
2015
. Severance and related benefit costs associated with our reduction in workforce and restructuring were $12 million during the
three months ended June 30, 2016
as compared to $5 million during the same period of 2015. Stock-based compensation expense was higher during the second quarter of 2016, due to a fair value decrease for awards under our Stockholder Value Appreciation Program during the second quarter of 2015. For the
three months ended June 30, 2016
, we capitalized $19 million of direct internal costs as compared to $17 million during the comparable quarter of
2015
. This increase in capitalization of costs is primarily due to the increase in stock-based compensation.
|
•
|
During the
second quarter
of
2016
, we recorded a ceiling test impairment of
$501 million
due to a net decrease in the discounted value of our proved reserves. The primary reason for the change in value was a
7%
decrease in both crude oil and natural gas SEC pricing since March 31, 2016.
These commodity price decreases were partially offset by the impact of current service cost reductions in reserve estimates. During the
second quarter
of
2015
, we recorded a ceiling test impairment of
$1.5 billion
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 both crude oil and natural gas SEC pricing since March 31, 2015, partially offset by the impact of service cost reductions in reserve estimates.
|
•
|
On a per BOE basis, lease operating expense was 10% lower primarily related to Pearl field cost reductions from renegotiated contracts, combined with lower production handling fees resulting from lower crude oil prices.
|
•
|
DD&A expense per BOE decreased by 18% primarily due to the impact of non-cash ceiling test impairments during
2015
and the first quarter of
2016
.
|
•
|
During the
second quarter
of
2016
, we recorded a non-cash ceiling test impairment of
$21 million
due to a net decrease in the discounted value of our proved reserves. The primary reason for the change in value was a 7% decrease in crude oil SEC pricing since March 31, 2016.
|
|
|
Unit-of-Production
|
|
Total Amount
|
||||||||||||||||||
|
|
Six Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
|
Six Months Ended
June 30, |
|
Percentage
Increase (Decrease)
|
||||||||||||||
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
|
|
(Per BOE)
|
|
|
|
(In millions)
|
|
|
||||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
3.47
|
|
|
$
|
5.15
|
|
|
(33
|
)%
|
|
$
|
93
|
|
|
$
|
121
|
|
|
(23
|
)%
|
Transportation and processing
|
|
4.82
|
|
|
4.27
|
|
|
13
|
%
|
|
129
|
|
|
101
|
|
|
28
|
%
|
||||
Production and other taxes
|
|
0.77
|
|
|
1.27
|
|
|
(39
|
)%
|
|
21
|
|
|
30
|
|
|
(31
|
)%
|
||||
Depreciation, depletion and amortization
|
|
9.70
|
|
|
17.81
|
|
|
(46
|
)%
|
|
259
|
|
|
419
|
|
|
(38
|
)%
|
||||
General and administrative
|
|
3.71
|
|
|
4.68
|
|
|
(21
|
)%
|
|
99
|
|
|
110
|
|
|
(10
|
)%
|
||||
Ceiling test and other impairments
|
|
35.98
|
|
|
98.36
|
|
|
(63
|
)%
|
|
962
|
|
|
2,313
|
|
|
(58
|
)%
|
||||
Other
|
|
0.02
|
|
|
0.24
|
|
|
(92
|
)%
|
|
1
|
|
|
6
|
|
|
(89
|
)%
|
||||
Total operating expenses
|
|
$
|
58.47
|
|
|
$
|
131.78
|
|
|
(56
|
)%
|
|
$
|
1,564
|
|
|
$
|
3,100
|
|
|
(50
|
)%
|
China:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
9.24
|
|
|
$
|
10.54
|
|
|
(12
|
)%
|
|
$
|
30
|
|
|
$
|
27
|
|
|
12
|
%
|
Depreciation, depletion and amortization
|
|
23.67
|
|
|
26.14
|
|
|
(9
|
)%
|
|
78
|
|
|
66
|
|
|
16
|
%
|
||||
General and administrative
|
|
0.91
|
|
|
1.56
|
|
|
(42
|
)%
|
|
3
|
|
|
4
|
|
|
(25
|
)%
|
||||
Ceiling test impairment
|
|
20.19
|
|
|
—
|
|
|
100
|
%
|
|
66
|
|
|
—
|
|
|
100
|
%
|
||||
Other
|
|
—
|
|
|
0.45
|
|
|
(100
|
)%
|
|
—
|
|
|
1
|
|
|
(100
|
)%
|
||||
Total operating expenses
|
|
$
|
54.01
|
|
|
$
|
38.69
|
|
|
40
|
%
|
|
$
|
177
|
|
|
$
|
98
|
|
|
79
|
%
|
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating
|
|
$
|
4.08
|
|
|
$
|
5.66
|
|
|
(28
|
)%
|
|
$
|
123
|
|
|
$
|
148
|
|
|
(17
|
)%
|
Transportation and processing
|
|
4.29
|
|
|
3.86
|
|
|
11
|
%
|
|
129
|
|
|
101
|
|
|
28
|
%
|
||||
Production and other taxes
|
|
0.70
|
|
|
1.16
|
|
|
(40
|
)%
|
|
21
|
|
|
30
|
|
|
(31
|
)%
|
||||
Depreciation, depletion and amortization
|
|
11.22
|
|
|
18.62
|
|
|
(40
|
)%
|
|
337
|
|
|
485
|
|
|
(31
|
)%
|
||||
General and administrative
|
|
3.40
|
|
|
4.37
|
|
|
(22
|
)%
|
|
102
|
|
|
114
|
|
|
(10
|
)%
|
||||
Ceiling test and other impairments
|
|
34.26
|
|
|
88.75
|
|
|
(61
|
)%
|
|
1,028
|
|
|
2,313
|
|
|
(56
|
)%
|
||||
Other
|
|
0.03
|
|
|
0.26
|
|
|
(88
|
)%
|
|
1
|
|
|
7
|
|
|
(88
|
)%
|
||||
Total operating expenses
|
|
$
|
57.98
|
|
|
$
|
122.68
|
|
|
(53
|
)%
|
|
$
|
1,741
|
|
|
$
|
3,198
|
|
|
(46
|
)%
|
•
|
Lease operating expense decreased 23% despite a
14%
increase in total production. On a per BOE basis, lease operating expense was 33% lower due to our focused growth in the Anadarko Basin, which has significantly lower operating costs than our other basins. Additionally, there was a reduction of lease operating expense per BOE across all basins due to our focus on cost-reduction initiatives combined with downward service cost pressures in the industry as a result of a lower commodity price environment.
|
•
|
Transportation and processing expense per BOE increased
13%
primarily due to increased natural gas and NGL volumes in our SCOOP and STACK plays. For the first six months of 2016, gas production from these two plays increased 47% compared to the same period of 2015, while NGL production increased 43%. Additionally, oil transportation costs increased in the Williston Basin due to new pipeline marketing agreements initiated in the second half of 2015. These pipeline agreements allow us to transport oil to more favorable markets and thus receive a higher net price.
|
•
|
Production and other taxes decreased 39% per BOE due to lower total revenues. As a percent of total revenue, production and other taxes were 3.8% and 4.4% for the
six months ended June 30, 2016
and
2015
, respectively. The lower rate in
2016
was due to development in areas with lower production taxes due to horizontal well credits.
|
•
|
Depreciation, depletion and amortization decreased 46% on a per BOE basis primarily due to the impact of non-cash ceiling test impairments during 2015 and the first quarter of 2016. We expect a further decrease in the third quarter of 2016 as a result of the impairment recorded in the second quarter of 2016.
|
•
|
General and administrative expenses decreased
10%
during the first
six months
of
2016
compared to the first
six months
of
2015
. Employee-related expenses were approximately $13 million lower due to a reduction of headcount and lower severance costs as compared to the
six months ended June 30,
2015. In addition, stock-based compensation expense decreased due to a reduction of the number of awards outstanding. For the
six months ended June 30, 2016
, we capitalized $36 million of direct internal costs as compared to $42 million during the comparable period of
2015
. This decrease in capitalization of costs is consistent with the decrease in stock-based compensation and lower development activity in 2016.
|
•
|
During the first
six months
of
2016
, we recorded non-cash ceiling test impairments of
$962 million
due to a net decrease in the discounted value of our proved reserves. The decrease primarily resulted from a 14% decrease in both crude oil and natural gas SEC pricing since December 31, 2015.
These commodity price decreases were partially offset by the impact of current service cost reductions in reserve estimates. During the first
six months
of
2015
, we recorded a non-cash ceiling test impairment of
$2.3 billion
due to a net decrease in the discounted value of our proved reserves. The decrease in 2015 primarily resulted from a 25% decrease in crude oil SEC pricing and a 22% decrease in natural gas SEC pricing since December 31, 2014. These commodity price decreases were partially offset by the impact of service cost reductions in reserve estimates. Additionally, during the first quarter of
2015
, we recorded a $4 million rig impairment associated with our decision to indefinitely lay down both of our company-owned drilling rigs in the Uinta Basin.
|
•
|
On a per BOE basis, lease operating expense was 12% lower primarily due to higher production volumes, cost reductions in our Pearl field from renegotiated contracts and lower production handling fees resulting from lower crude oil prices.
|
•
|
DD&A expense per BOE decreased by 9% primarily due to the impact of the non-cash ceiling test impairments during 2015 and the first quarter of 2016.
|
•
|
During the
six months
ended
June 30, 2016
, we recorded non-cash ceiling test impairments of $
66 million
due to a net decrease in the discounted value of our proved reserves. The primary reason for the change in value was a 14% decrease in crude oil SEC pricing since December 31, 2015.
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(In millions)
|
||||||||||||||
Gross interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Credit arrangements
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
6
|
|
Senior notes
|
|
35
|
|
|
35
|
|
|
70
|
|
|
63
|
|
||||
Senior subordinated notes
|
|
—
|
|
|
9
|
|
|
—
|
|
|
21
|
|
||||
Total gross interest expense
|
|
38
|
|
|
46
|
|
|
79
|
|
|
90
|
|
||||
Capitalized interest
|
|
(11
|
)
|
|
(8
|
)
|
|
(20
|
)
|
|
(15
|
)
|
||||
Net interest expense
|
|
$
|
27
|
|
|
$
|
38
|
|
|
$
|
59
|
|
|
$
|
75
|
|
|
Positions Settled in the Three Months Ended June 30, 2016
|
|
Positions Settling After June 30, 2016
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Net derivative asset at March 31, 2016
|
$
|
70
|
|
|
$
|
198
|
|
|
$
|
268
|
|
Settled positions
(1)
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|||
Change in fair value of remaining positions and fair value of new positions
|
—
|
|
|
(127
|
)
|
|
(127
|
)
|
|||
Total unrealized gain (loss)
|
(70
|
)
|
|
(127
|
)
|
|
(197
|
)
|
|||
Net derivative asset (liability) at June 30, 2016
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
71
|
|
(1)
|
Represents the fair value of positions included in the net derivative asset as of March 31, 2016 that have settled during the three months ended June 30, 2016. Actual settlement amounts differ due to the changes in the fair value of the positions between the balance sheet date and the settlement date and are reflected in the realized gain (loss) noted in Note
4
, "
Derivative Financial Instruments
."
|
|
Positions Settled in the Six Months Ended June 30, 2016
|
|
Positions Settling After June 30, 2016
|
|
Total
|
||||||
|
(In millions)
|
||||||||||
Net derivative asset at December 31, 2015
|
$
|
150
|
|
|
$
|
217
|
|
|
$
|
367
|
|
Settled positions
(1)
|
(150
|
)
|
|
—
|
|
|
(150
|
)
|
|||
Change in fair value of remaining positions and fair value of new positions
|
—
|
|
|
(146
|
)
|
|
(146
|
)
|
|||
Total unrealized gain (loss)
|
(150
|
)
|
|
(146
|
)
|
|
(296
|
)
|
|||
Net derivative asset (liability) at June 30, 2016
|
$
|
—
|
|
|
$
|
71
|
|
|
$
|
71
|
|
(1)
|
Represents the fair value of positions included in the net derivative asset as of December 31, 2015 that have settled during the six months ended June 30, 2016. Actual settlement amounts differ due to the changes in the fair value of the positions between the balance sheet date and the settlement date and are reflected in the realized gain (loss) noted in Note
4
, "
Derivative Financial Instruments
."
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
|
|
(In millions)
|
|
|
||||||
Total income (loss) before income taxes
|
|
$
|
(658
|
)
|
|
$
|
—
|
|
|
$
|
(658
|
)
|
U.S. federal statutory tax rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Tax expense (benefit) at statutory tax rate
|
|
(230
|
)
|
|
—
|
|
|
(230
|
)
|
|||
State and local income taxes, net of tax effect
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Change in valuation allowances
|
|
243
|
|
|
9
|
|
|
252
|
|
|||
Foreign tax on foreign earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Total provision (benefit) for income taxes
|
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Effective tax rate
|
|
—
|
%
|
|
—
|
%
|
|
(1.4
|
)%
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
|
|
(In millions)
|
|
|
||||||
Total income (loss) before income taxes
|
|
$
|
(1,228
|
)
|
|
$
|
(56
|
)
|
|
$
|
(1,284
|
)
|
U.S. federal statutory tax rate
|
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Tax expense (benefit) at statutory tax rate
|
|
(430
|
)
|
|
(19
|
)
|
|
(449
|
)
|
|||
State and local income taxes, net of tax effect
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Change in valuation allowances
|
|
459
|
|
|
28
|
|
|
487
|
|
|||
Foreign tax on foreign earnings
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||
Other
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||
Total provision (benefit) for income taxes
|
|
$
|
13
|
|
|
$
|
(6
|
)
|
|
$
|
7
|
|
Effective tax rate
|
|
(1.1
|
)%
|
|
10.7
|
%
|
|
(0.6
|
)%
|
|
Six Months Ended
June 30, |
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Exploration and development (exclusive of leasehold)
|
$
|
367
|
|
|
$
|
620
|
|
Acquisitions
|
503
|
|
|
1
|
|
||
Leasing proved and unproved property (leasehold)
|
25
|
|
|
77
|
|
||
Pipeline
|
—
|
|
|
2
|
|
||
Total
|
$
|
895
|
|
|
$
|
700
|
|
|
|
|
|
NYMEX Contract Price Per MMBtu
|
|||||||||||||||
|
|
|
|
|
|
|
|
Collars
|
|||||||||||
Period and Type of Instrument
|
|
Volume in MMMBtus
|
|
Swaps (Weighted Average)
|
|
Sold Puts (Weighted Average)
|
|
Floors (Weighted Average)
|
|
Ceilings (Weighted Average)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed-price swaps
|
|
36,800
|
|
|
$
|
2.28
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Collars
|
|
5,520
|
|
|
—
|
|
|
—
|
|
|
4.00
|
|
|
4.54
|
|
||||
Swaptions
(1)
|
|
—
|
|
|
3.75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Fixed-price swaps
|
|
27,375
|
|
|
2.73
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Collars
|
|
40,150
|
|
|
—
|
|
|
—
|
|
|
2.71
|
|
|
3.12
|
|
||||
Swaptions
(1)
|
|
—
|
|
|
3.75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Collars
|
|
10,950
|
|
|
—
|
|
|
—
|
|
|
2.80
|
|
|
3.32
|
|
(1)
|
During the third quarter of 2016, we sold natural gas swaption contracts that, if exercised on their expiration date in the fourth quarter of 2016, would protect 4,530 MMMBtus of November 2016 through March 2017 production from future commodity price volatility. These contracts give the counterparties the option to enter into swap contracts with us at $3.75 per MMBtu for production in the above period.
|
•
|
the availability and volatility of the securities, capital or credit markets and the cost of capital;
|
•
|
maintaining sufficient liquidity to fund our operations and business strategies;
|
•
|
the accuracy of and fluctuations in our reserves estimates due to sustained low commodity prices, incorrect assumptions and other causes;
|
•
|
the impact of, and changes in, legislation, law and governmental regulations, including those related to hydraulic fracturing, climate change, seismicity 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 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 volatility, instrument terms and liquidity in the commodity futures and commodity and financial derivatives markets;
|
•
|
drilling risks and results;
|
•
|
our ability to monetize non-strategic assets, repay or refinance our existing indebtedness and the impact of changes in our investment ratings;
|
•
|
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
2015
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
|
|||
April 1 — April 30, 2016
|
|
237,718
|
|
|
$
|
34.78
|
|
|
—
|
|
—
|
May 1 — May 31, 2016
|
|
3,420
|
|
|
36.04
|
|
|
—
|
|
—
|
|
June 1 — June 30, 2016
|
|
9,563
|
|
|
39.79
|
|
|
—
|
|
—
|
|
Total
|
|
250,701
|
|
|
$
|
34.99
|
|
|
—
|
|
—
|
(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
|
|
Fourth Amended and Restated Certificate of Incorporation of Newfield Exploration Company dated July 22, 2015 (incorporated by reference to Exhibit 3.1 to Newfield’s Current Report on Form 8-K filed with the SEC on July 27, 2015 (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))
|
|
|
|
†*10.1
|
|
First Amendment to the Newfield Exploration Company 2011 Omnibus Stock Plan, as Amended and Restated, effective April 12, 2016
|
|
|
|
†*10.2
|
|
Form of 2016 Restricted Stock Agreement for Non-Employee Directors under the Newfield Exploration Company 2011 Omnibus Stock Plan
|
|
|
|
†*10.3
|
|
Form of 2016 Restricted Stock Unit Award Agreement for Non-Employee Directors under the Newfield Exploration Company 2011 Omnibus Stock Plan and the Newfield Exploration Company Non-Employee Directors' Deferred Compensation 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
|
|
|
|
*101.DEF
|
|
XBRL Definition Linkbase Document
|
*
|
Filed or furnished herewith.
|
†
|
Identifies management contracts and compensatory plans or arrangements.
|
|
NEWFIELD EXPLORATION COMPANY
|
|
|
|
|
Date: August 3, 2016
|
By:
|
/s/ LAWRENCE S. MASSARO
|
|
|
Lawrence S. Massaro
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Exhibit Number
|
|
Description
|
3.1
|
|
Fourth Amended and Restated Certificate of Incorporation of Newfield Exploration Company dated July 22, 2015 (incorporated by reference to Exhibit 3.1 to Newfield’s Current Report on Form 8-K filed with the SEC on July 27, 2015 (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))
|
|
|
|
†*10.1
|
|
First Amendment to the Newfield Exploration Company 2011 Omnibus Stock Plan, as Amended and Restated, effective April 12, 2016
|
|
|
|
†*10.2
|
|
Form of 2016 Restricted Stock Agreement for Non-Employee Directors under the Newfield Exploration Company 2011 Omnibus Stock Plan
|
|
|
|
†*10.3
|
|
Form of 2016 Restricted Stock Unit Award Agreement for Non-Employee Directors under the Newfield Exploration Company 2011 Omnibus Stock Plan and the Newfield Exploration Company Non-Employee Directors' Deferred Compensation 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
|
|
|
|
*101.DEF
|
|
XBRL Definition Linkbase Document
|
*
|
Filed or furnished herewith.
|
†
|
Identifies management contracts and compensatory plans or arrangements.
|
(a)
|
Shares
. Pursuant to the Company’s 2011 Omnibus Stock Plan, as amended and restated (the “
2011 Plan
”), and this Agreement, [____] shares of Stock (the “
Restricted Stock
”) are granted to Director as of the Effective Date as hereinafter provided in Director’s name subject to certain restrictions described herein.
|
(b)
|
Issuance of Restricted Stock
. The shares of Restricted Stock will be issued upon acceptance hereof by Director.
|
(c)
|
Plan Documents Incorporated
. Director acknowledges receipt of a copy of the 2011 Plan, and agrees that this grant of Restricted Stock shall be subject to all of the terms and provisions thereof. Unless otherwise specified, capitalized terms used but not defined herein will have the meanings set forth in the 2011 Plan.
|
2.
|
RESTRICTED STOCK
.
Director hereby accepts the Restricted Stock and agrees with respect thereto as follows:
|
(a)
|
Forfeiture Restrictions
. Except as may be otherwise provided in Article VI of the 2011 Plan, (i) the Restricted Stock may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred or disposed of to the extent then subject to the Forfeiture Restrictions; and (ii) in the event of termination of Director’s service for any reason other than death or Disability, Director shall, for no consideration, forfeit to the Company all Restricted Stock to the extent then subject to the Forfeiture Restrictions. The prohibition against transfer and the obligation to forfeit and surrender shares to the Company upon termination of Director’s service are herein referred to as “
Forfeiture Restrictions
.” The Forfeiture Restrictions shall be binding upon and enforceable against any transferee of Restricted Stock.
|
(b)
|
Lapse of Forfeiture Restrictions
. The Forfeiture Restrictions shall lapse as to the Restricted Stock on the day before the date of the first annual meeting of stockholders following the date of issuance of the Restricted Stock, provided that the lapse conditions described below have been satisfied (the “
Annual Meeting Lapse Date
”). The Forfeiture Restrictions shall lapse as provided above only if Director has
|
(c)
|
Certificates
. Shares of Restricted Stock may be evidenced by the issuance of a stock certificate (electronic or physical), pursuant to which Director shall have voting rights and receive dividends, and which shall be registered in the name of the Director and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to the Restricted Stock. The Company shall retain custody of any stock certificate until the Forfeiture Restrictions lapse. The Company may require Director to execute and deliver a stock power, in blank, with respect to the Restricted Stock, and the Company may exercise such stock power in the event of forfeiture. Promptly upon the lapse of the Forfeiture Restrictions without forfeiture, the Company shall cause a new certificate or certificates to be issued without legend in the name of Director and deliver such stock certificate to the Director.
|
3.
|
SECURITIES LAWS
. Director agrees to be bound by such provisions as the Company may require to the end that the issuance by the Company or the sale by Director of any Stock that is the subject of this Agreement shall be in compliance with the applicable securities laws.
|
4.
|
COMMUNITY INTEREST OF SPOUSE
. The community interest, if any, of any spouse of Director in any of the Restricted Stock shall be subject to all the terms, conditions and restrictions of this Agreement, and shall be forfeited and surrendered to the Company upon the occurrence of any of the events requiring Director’s interest in such Restricted Stock to be so forfeited and surrendered pursuant to this Agreement.
|
5.
|
TAX WITHHOLDING AND] TAX ELECTION
. To the extent the issuance of the Restricted Stock or the lapse of Forfeiture Restrictions results in the receipt of compensation by Director, the Company is authorized to withhold from any other cash compensation then or thereafter payable to Director any tax payable or required to be withheld by reason of the receipt of compensation resulting from the issuance of shares or the lapse of Forfeiture Restrictions. Alternatively, Director may authorize the Company to retain or withhold sufficient shares of Restricted Stock otherwise receivable by Director from the Company with respect to Restricted Stock or may deliver to the Company sufficient shares of Stock to enable the Company to satisfy any such withholding or other tax obligation. If Director makes the election authorized by section 83(b) of the Code, Director shall submit to the Company a copy of the statement filed by Director to make such election.
|
6.
|
BINDING EFFECT
. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Director.
|
(a)
|
Restricted Stock Units
. Pursuant to the Company’s 2011 Omnibus Stock Plan, as amended and restated (the “
2011 Plan
”), the Company’s Non-Employee Directors’ Deferred Compensation Plan (the “
Director Deferred Plan
”), Director’s applicable Calendar Year Election Form (the “
Election Form
”) and this Agreement, [____] Restricted Stock Units (“
RSUs
”) are granted to Director as of the Effective Date as hereinafter provided subject to certain restrictions described herein. For purposes of this Agreement, a grant of RSUs is a bookkeeping entry in the Director’s RSU Subaccount that represents the right to receive one share of Common Stock on the applicable payment date(s) set forth in Section 2(d) in exchange for each Vested RSU. RSUs are not shares of Common Stock and, except as otherwise provided in this Agreement, have no voting rights, dividend rights or any other benefits generally accorded to stockholders unless and until Common Stock is actually issued pursuant to Section 2(d).
|
(b)
|
Plan Documents Incorporated
. Director acknowledges receipt of a copy of the 2011 Plan and the Director Deferred Plan, and agrees that this grant of RSUs shall be subject to all of the terms and provisions thereof. Unless otherwise specified, capitalized terms used but not defined herein will have the meanings set forth in the Director Deferred Plan.
|
2.
|
RESTRICTED STOCK UNITS
.
Director hereby accepts the RSUs when awarded and agrees with respect thereto as follows:
|
(a)
|
Restrictions
. Except as may be otherwise provided in Article VII of the 2011 Plan, in the event of termination of Director’s service for any reason other than death or Disability (as defined in the 2011 Plan), Director shall, for no consideration, forfeit to the Company all RSUs to the extent then subject to the Forfeiture Restrictions. The obligation to forfeit and surrender RSUs to the Company upon termination of Director’s service is referred to herein as the “
Forfeiture Restrictions
.” The
|
(b)
|
Lapse of Forfeiture Restrictions
. The Forfeiture Restrictions shall lapse as to the RSUs on the day before the date of the first annual meeting of stockholders following the date of issuance of the RSUs, provided that the lapse conditions described below have been satisfied (the “
Annual Meeting Lapse Date
”). The Forfeiture Restrictions shall lapse as provided above and the RSUs shall become Vested only if Director has remained a director of the Company continuously from the Effective Date through the Annual Meeting Lapse Date;
provided, howeve
r, that if, prior to the Annual Meeting Lapse Date, (i) Director terminates service as a director by reason of death or Disability, or (ii) a Qualifying Change of Control occurs, then, in each case, the Forfeiture Restrictions on all RSUs issued to Director shall immediately lapse, and the RSUs shall become Vested, as of the date of his or her termination of service as a director or as of the date of the Qualifying Change of Control, as applicable. To the extent that the lapse conditions are not satisfied, Director shall automatically for no consideration forfeit and surrender to the Company all of the RSUs that are then subject to Forfeiture Restrictions.
|
(c)
|
Plan Earnings
. RSUs credited to Director’s RSU Subaccount shall be credited with Plan Earnings in the form of additional Restricted Stock Units in accordance with Section 6.02 of the Director Deferred Plan. Any additional Restricted Stock Units so credited are subject to the terms and conditions of this Agreement, the Election Form and the 2011 Plan, and specifically will vest and be settled, or forfeited, as applicable, to the extent and at the time that the underlying RSUs to which such additional Restricted Stock Units relate are subject to vesting, settlement or forfeiture.
|
(d)
|
Issuance of Shares
. Payment with respect to Vested RSUs (including any additional Restricted Stock Units related thereto that are credited in accordance with Section 2(c)) shall be made in the form of shares of Common Stock
[and shall commence]
on the first day of the month following the six month anniversary of Director’s “separation from service” from the Company (within the meaning of Section 409A),
[with payments made in [___] substantially equal annual installments and any subsequent annual installments paid on the anniversary of the initial installment payment]
; provided, that, such payment shall instead be made
[in a lump sum in full]
upon a Qualifying Change of Control, if earlier. Common Stock issued pursuant to this Agreement may be evidenced in such manner as the Company may deem appropriate, including book-entry registration or by the issuance of a stock certificate (electronic or physical).
|
3.
|
SECURITIES LAWS
. Director agrees to be bound by such provisions as the Company may require to the end that the issuance by the Company or the sale by Director of Common Stock that is the subject of this Agreement shall be in compliance with the applicable securities laws.
|
4.
|
SECTION 409A
. The RSUs and the payment of Common Stock under this Agreement are intended to comply with the applicable requirements of Section 409A. This Agreement shall be operated, limited, construed and interpreted consistent with the foregoing intent to the maximum extent possible;
provided
, that the Company makes no representation that the Agreement and the RSUs comply with Section 409A and shall have no liability to Director for any failure to comply with Section 409A. The Company reserves the right (without obligation to do so) to amend, restructure, terminate or replace this Award in order to cause this Award to either not be subject to Section 409A or to comply with the applicable provisions of the rules thereunder.
|
5.
|
COMMUNITY INTEREST OF SPOUSE
. The community interest, if any, of any spouse of Director in any of the RSUs shall be subject to all the terms, conditions and restrictions of this Agreement, and shall be forfeited and surrendered to the Company upon the occurrence of any of the events requiring Director’s interest in such RSUs to be so forfeited and surrendered pursuant to this Agreement.
|
6.
|
TAX WITHHOLDING AND TAX ELECTION
. To the extent the issuance of the RSUs, the lapse of Forfeiture Restrictions or the payment of Common Stock hereunder results in the receipt of compensation by Director, the Company is authorized to withhold from any other cash compensation then or thereafter payable to Director any tax payable or required to be withheld by reason of the receipt of compensation resulting from the issuance of RSUs or shares related thereto or the lapse of Forfeiture Restrictions. Alternatively, Director may authorize the Company to retain or withhold sufficient shares of Common Stock otherwise receivable by Director from the Company with respect to the RSUs or may deliver to the Company sufficient shares of Common Stock to enable the Company to satisfy any such withholding or other tax obligation.
|
7.
|
BINDING EFFECT
. This Agreement shall be binding upon and inure to the benefit of any successors to the Company and all persons lawfully claiming under Director.
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
June 30, 2016
of Newfield Exploration Company (the “Registrant”);
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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.
|
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
|
b.
|
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.
|
Date: August 3, 2016
|
By:
|
/s/ LEE K. BOOTHBY
|
|
|
Lee K. Boothby
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended
June 30, 2016
of Newfield Exploration Company (the “Registrant”);
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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.
|
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
|
b.
|
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.
|
Date: August 3, 2016
|
By:
|
/s/ LAWRENCE S. MASSARO
|
|
|
Lawrence S. Massaro
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
1.
|
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.
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Date: August 3, 2016
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/s/ LEE K. BOOTHBY
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Lee K. Boothby
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(Principal Executive 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: August 3, 2016
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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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