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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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Emerging growth company ¨
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(Do not check if a smaller reporting company)
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Page
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June 30,
2018 |
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December 31,
2017 |
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ASSETS
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||||||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
|
$
|
293
|
|
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$
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326
|
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Accounts receivable, net
|
|
348
|
|
|
292
|
|
||
Inventories
|
|
24
|
|
|
15
|
|
||
Derivative assets
|
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2
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|
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15
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Other current assets
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89
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98
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Total current assets
|
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756
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|
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746
|
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||
Oil and gas properties, net — full cost method ($1,244 and $1,200 were excluded from amortization at June 30, 2018 and December 31, 2017, respectively)
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4,416
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3,931
|
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Other property and equipment, net
|
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169
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168
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Derivative assets
|
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—
|
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1
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||
Long-term investments
|
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24
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24
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||
Restricted cash
|
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46
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|
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40
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||
Other assets
|
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50
|
|
|
51
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||
Total assets
|
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$
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5,461
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$
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4,961
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LIABILITIES AND STOCKHOLDERS' EQUITY
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||||||||
Current liabilities:
|
|
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Accounts payable
|
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$
|
57
|
|
|
$
|
46
|
|
Accrued liabilities
|
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692
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591
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Advances from joint owners
|
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71
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80
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||
Asset retirement obligations
|
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2
|
|
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3
|
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||
Derivative liabilities
|
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228
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98
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||
Total current liabilities
|
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1,050
|
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818
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Other liabilities
|
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66
|
|
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69
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||
Derivative liabilities
|
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39
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|
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26
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Long-term debt
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2,435
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2,434
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Asset retirement obligations
|
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134
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130
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Deferred taxes
|
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97
|
|
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76
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||
Total long-term liabilities
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2,771
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2,735
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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 ($0.01 par value, 300,000,000 shares authorized at June 30, 2018 and December 31, 2017; 201,554,837 and 201,363,345 shares issued at June 30, 2018 and December 31, 2017, respectively)
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2
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2
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Additional paid-in capital
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3,332
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3,303
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Treasury stock (at cost, 1,702,469 and 1,658,476 shares at June 30, 2018 and December 31, 2017, respectively)
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(60
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)
|
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(59
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)
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||
Accumulated other comprehensive income (loss)
|
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(1
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)
|
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—
|
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Retained earnings (deficit)
|
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(1,633
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)
|
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(1,838
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)
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Total stockholders' equity
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1,640
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1,408
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Total liabilities and stockholders' equity
|
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$
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5,461
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$
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4,961
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2018
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2017
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2018
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2017
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||||||||
Oil, gas and NGL revenues
|
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$
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679
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|
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$
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402
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$
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1,259
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|
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$
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819
|
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||||||||
Operating expenses:
|
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Lease operating
|
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73
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58
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|
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131
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|
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114
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Transportation and processing
|
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83
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71
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161
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143
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Production and other taxes
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27
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13
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51
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27
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Depreciation, depletion and amortization
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151
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110
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284
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|
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216
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General and administrative
|
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51
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|
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51
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|
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105
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|
|
98
|
|
||||
Other expenses (income)
|
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(6
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)
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—
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(5
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)
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1
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|
||||
Total operating expenses
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379
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|
|
303
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727
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599
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|
||||
Income (loss) from operations
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300
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|
|
99
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532
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220
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Other income (expense):
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Interest expense
|
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(37
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)
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(37
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)
|
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(75
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)
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(75
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)
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Capitalized interest
|
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15
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15
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30
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31
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Commodity derivative income (expense)
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(145
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)
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28
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(256
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)
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81
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|
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Other, net
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—
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2
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1
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4
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Total other income (expense)
|
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(167
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)
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8
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(300
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)
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41
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Income (loss) before income taxes
|
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133
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|
|
107
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|
|
232
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|
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261
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Income tax provision (benefit):
|
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Current
|
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6
|
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|
2
|
|
|
6
|
|
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—
|
|
||||
Deferred
|
|
8
|
|
|
7
|
|
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21
|
|
|
16
|
|
||||
Total income tax provision (benefit)
|
|
14
|
|
|
9
|
|
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27
|
|
|
16
|
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Net income (loss)
|
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$
|
119
|
|
|
$
|
98
|
|
|
$
|
205
|
|
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$
|
245
|
|
|
|
|
|
|
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Earnings (loss) per share:
|
|
|
|
|
|
|
|
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Basic
|
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$
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0.60
|
|
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$
|
0.49
|
|
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$
|
1.03
|
|
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$
|
1.23
|
|
Diluted
|
|
$
|
0.59
|
|
|
$
|
0.49
|
|
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$
|
1.02
|
|
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$
|
1.22
|
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Weighted-average number of shares outstanding for basic earnings (loss) per share
|
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200
|
|
|
199
|
|
|
200
|
|
|
199
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|
||||
Weighted-average number of shares outstanding for diluted earnings (loss) per share
|
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201
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|
|
200
|
|
|
200
|
|
|
200
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|
|
|
|
|
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
119
|
|
|
$
|
98
|
|
|
$
|
205
|
|
|
$
|
245
|
|
Other comprehensive income (loss), net of tax
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
Comprehensive income (loss)
|
|
$
|
119
|
|
|
$
|
99
|
|
|
$
|
204
|
|
|
$
|
246
|
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
||||||
Net income (loss)
|
|
$
|
205
|
|
|
$
|
245
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
|
284
|
|
|
216
|
|
||
Deferred tax provision (benefit)
|
|
21
|
|
|
16
|
|
||
Stock-based compensation
|
|
25
|
|
|
20
|
|
||
Unrealized (gain) loss on derivative contracts
|
|
157
|
|
|
(46
|
)
|
||
Other, net
|
|
5
|
|
|
7
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||
(Increase) decrease in accounts receivable
|
|
(56
|
)
|
|
8
|
|
||
Increase (decrease) in accounts payable and accrued liabilities
|
|
110
|
|
|
5
|
|
||
Other items, net
|
|
(3
|
)
|
|
3
|
|
||
Net cash provided by (used in) operating activities
|
|
748
|
|
|
474
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Additions to oil and gas properties
|
|
(752
|
)
|
|
(507
|
)
|
||
Acquisitions of oil and gas properties
|
|
(26
|
)
|
|
(6
|
)
|
||
Proceeds from sales of oil and gas properties
|
|
23
|
|
|
28
|
|
||
Additions to other property and equipment
|
|
(11
|
)
|
|
(8
|
)
|
||
Redemptions of investments
|
|
—
|
|
|
25
|
|
||
Purchases of investments
|
|
—
|
|
|
(25
|
)
|
||
Net cash provided by (used in) investing activities
|
|
(766
|
)
|
|
(493
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Proceeds from issuances of common stock, net
|
|
1
|
|
|
2
|
|
||
Debt issue costs
|
|
(8
|
)
|
|
—
|
|
||
Purchases of treasury stock, net
|
|
(1
|
)
|
|
(8
|
)
|
||
Other
|
|
(1
|
)
|
|
(1
|
)
|
||
Net cash provided by (used in) financing activities
|
|
(9
|
)
|
|
(7
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(27
|
)
|
|
(26
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
366
|
|
|
580
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
339
|
|
|
$
|
554
|
|
|
|
|
|
|
|
|
|
|
Additional
Paid-in
Capital
|
|
Retained Earnings
(Deficit)
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total
Stockholders' Equity
|
||||||||||||||
|
Common Stock
|
|
Treasury Stock
|
|
|
|
|
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|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance, December 31, 2017
|
201.4
|
|
|
$
|
2
|
|
|
(1.7
|
)
|
|
$
|
(59
|
)
|
|
$
|
3,303
|
|
|
$
|
(1,838
|
)
|
|
$
|
—
|
|
|
$
|
1,408
|
|
Issuances of common stock
|
0.2
|
|
|
—
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
2
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
27
|
|
||||||||||||
Treasury stock, net
|
|
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
||||||||||
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
205
|
|
|
|
|
205
|
|
||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||||||
Balance, June 30, 2018
|
201.6
|
|
|
$
|
2
|
|
|
(1.7
|
)
|
|
$
|
(60
|
)
|
|
$
|
3,332
|
|
|
$
|
(1,633
|
)
|
|
$
|
(1
|
)
|
|
$
|
1,640
|
|
|
|
As Originally Presented
|
|
Adoption Adjustments
|
|
As Adjusted
|
||||||
|
|
(In millions)
|
||||||||||
For the period ended June 30, 2017
|
|
|
|
|
|
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
467
|
|
|
$
|
7
|
|
|
$
|
474
|
|
|
|
|
|
|
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(33
|
)
|
|
7
|
|
|
(26
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
|
555
|
|
|
25
|
|
|
580
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
522
|
|
|
$
|
32
|
|
|
$
|
554
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
Revenue
|
|
$
|
258
|
|
|
$
|
175
|
|
Joint interest
|
|
82
|
|
|
108
|
|
||
Other
|
|
24
|
|
|
25
|
|
||
Reserve for doubtful accounts
|
|
(16
|
)
|
|
(16
|
)
|
||
Total accounts receivable, net
|
|
$
|
348
|
|
|
$
|
292
|
|
|
|
|
|
NYMEX Contract Price Per Bbl
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
Collars
|
|
Estimated Fair Value
Asset (Liability) |
|||||||||||||
Period and Type of Instrument
|
|
Volume in MBbls
|
|
Swaps
(Weighted Average) |
|
Puts
(Weighted Average) |
|
Floors
(Weighted Average) |
|
Ceilings
(Weighted Average) |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed-price swaps
|
|
8,096
|
|
|
$
|
56.33
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(120
|
)
|
Fixed-price swaps with sold puts:
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
|
|
56.78
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Sold puts
|
|
|
|
—
|
|
|
44.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collars with sold puts:
|
|
1,932
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
48.34
|
|
|
56.60
|
|
|
(25
|
)
|
||||||
Sold Puts
|
|
|
|
|
—
|
|
|
39.47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Collars with sold puts:
|
|
10,566
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
50.59
|
|
|
57.13
|
|
|
(105
|
)
|
||||||
Sold puts
|
|
|
|
—
|
|
|
40.60
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Total
|
|
$
|
(263
|
)
|
|
|
|
|
NYMEX Contract Price Per MMBtu
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
Collars
|
|
Estimated Fair Value Asset (Liability)
|
|||||||||||||
Period and Type of Instrument
|
|
Volume in MMMBtus
|
|
Swaps (Weighted Average)
|
|
Puts (Weighted Average)
|
|
Floors (Weighted Average)
|
|
Ceilings (Weighted Average)
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
|||||||||||
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps
|
|
30,360
|
|
|
$
|
2.97
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Fixed-price swaps with sold puts:
|
|
9,800
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price swaps
|
|
|
|
3.01
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
2.64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Collars
|
|
4,590
|
|
|
—
|
|
|
—
|
|
|
2.88
|
|
|
3.26
|
|
|
—
|
|
|||||
Collars with sold puts:
|
|
3,690
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Collars
|
|
|
|
—
|
|
|
—
|
|
|
2.87
|
|
|
3.32
|
|
|
—
|
|
||||||
Sold puts
|
|
|
|
—
|
|
|
2.30
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed-price swaps
|
|
3,650
|
|
|
2.91
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Collars
|
|
9,000
|
|
|
—
|
|
|
—
|
|
|
3.00
|
|
|
3.47
|
|
|
1
|
|
|||||
Total
|
|
$
|
2
|
|
|
|
|
|
Mont Belvieu Contract Price Per Gallon
|
|
|
|||||
Period and Type of Instrument
|
|
Volume in MBbls
|
|
Swaps
(Weighted Average)
|
|
Estimated Fair Value Asset (Liability)
|
|||||
|
|
|
|
|
|
(In millions)
|
|||||
2018:
|
|
|
|
|
|
|
|
|
|
||
Fixed-price swaps
|
|
736
|
|
|
$
|
0.82
|
|
|
$
|
(4
|
)
|
Total
|
|
$
|
(4
|
)
|
|
|
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, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Oil positions
|
|
$
|
98
|
|
|
$
|
(98
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(361
|
)
|
|
$
|
98
|
|
|
$
|
(224
|
)
|
|
$
|
(39
|
)
|
Natural gas positions
|
|
5
|
|
|
(3
|
)
|
|
2
|
|
|
—
|
|
|
(3
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||||
NGL positions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
||||||||
Total
|
|
$
|
103
|
|
|
$
|
(101
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(368
|
)
|
|
$
|
101
|
|
|
$
|
(228
|
)
|
|
$
|
(39
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Oil positions
|
|
$
|
48
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(170
|
)
|
|
$
|
48
|
|
|
$
|
(96
|
)
|
|
$
|
(26
|
)
|
Natural gas positions
|
|
22
|
|
|
(6
|
)
|
|
15
|
|
|
1
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
—
|
|
||||||||
NGL positions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||||||
Total
|
|
$
|
70
|
|
|
$
|
(54
|
)
|
|
$
|
15
|
|
|
$
|
1
|
|
|
$
|
(178
|
)
|
|
$
|
54
|
|
|
$
|
(98
|
)
|
|
$
|
(26
|
)
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In millions)
|
|
(In millions)
|
||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||||||
Realized gain (loss) on oil positions
|
|
$
|
(70
|
)
|
|
$
|
19
|
|
|
$
|
(108
|
)
|
|
$
|
45
|
|
Realized gain (loss) on natural gas positions
|
|
4
|
|
|
(4
|
)
|
|
10
|
|
|
(10
|
)
|
||||
Realized gain (loss) on NGL positions
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Total realized gain (loss)
|
|
(67
|
)
|
|
15
|
|
|
(99
|
)
|
|
35
|
|
||||
Unrealized gain (loss) on oil positions
|
|
(65
|
)
|
|
(4
|
)
|
|
(141
|
)
|
|
(3
|
)
|
||||
Unrealized gain (loss) on natural gas positions
|
|
(7
|
)
|
|
17
|
|
|
(14
|
)
|
|
49
|
|
||||
Unrealized gain (loss) on NGL positions
|
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
Total unrealized gain (loss)
|
|
(78
|
)
|
|
13
|
|
|
(157
|
)
|
|
46
|
|
||||
Total
|
|
$
|
(145
|
)
|
|
$
|
28
|
|
|
$
|
(256
|
)
|
|
$
|
81
|
|
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, as of September 30, 2017, commodity options (i.e., price collars, sold puts, purchased calls or swaptions).
|
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).
|
|
|
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 June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund investments
|
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
215
|
|
Deferred compensation plan assets
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
Equity securities available-for-sale
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Oil, gas and NGL derivative contracts
|
|
—
|
|
|
(265
|
)
|
|
—
|
|
|
(265
|
)
|
||||
Stock-based compensation liability awards
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Total
|
|
$
|
225
|
|
|
$
|
(265
|
)
|
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Money market fund investments
|
|
$
|
162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
162
|
|
Deferred compensation plan assets
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Equity securities available-for-sale
|
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Oil, gas and NGL derivative contracts
|
|
—
|
|
|
(108
|
)
|
|
—
|
|
|
(108
|
)
|
||||
Stock-based compensation liability awards
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Total
|
|
$
|
174
|
|
|
$
|
(108
|
)
|
|
$
|
—
|
|
|
$
|
66
|
|
|
|
Derivatives
|
||
|
|
(In millions)
|
||
Balance at January 1, 2017
|
|
$
|
(75
|
)
|
Unrealized gains (losses) included in earnings
|
|
(17
|
)
|
|
Purchases, issuances, sales and settlements:
|
|
|
|
|
Settlements
|
|
30
|
|
|
Transfers into Level 3
|
|
—
|
|
|
Transfers out of Level 3
|
|
—
|
|
|
Balance at June 30, 2017
|
|
$
|
(62
|
)
|
Change in unrealized gains or losses included in earnings relating to Level 3 instruments still held at June 30, 2017
|
|
$
|
(10
|
)
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
5¾% Senior Notes due 2022
|
|
$
|
783
|
|
|
$
|
802
|
|
5⅝% Senior Notes due 2024
|
|
1,054
|
|
|
1,089
|
|
||
5⅜% Senior Notes due 2026
|
|
716
|
|
|
739
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
Proved
|
|
$
|
23,985
|
|
|
$
|
23,272
|
|
Unproved
|
|
1,244
|
|
|
1,200
|
|
||
Gross oil and gas properties
|
|
25,229
|
|
|
24,472
|
|
||
Accumulated depreciation, depletion and amortization
|
|
(10,304
|
)
|
|
(10,032
|
)
|
||
Accumulated impairment
|
|
(10,509
|
)
|
|
(10,509
|
)
|
||
Net oil and gas properties
|
|
$
|
4,416
|
|
|
$
|
3,931
|
|
|
|
Costs Incurred In
|
|
|
||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015 & Prior
|
|
Total
|
||||||||||
|
|
(In millions)
|
|
|
||||||||||||||||
Acquisition costs
|
|
$
|
24
|
|
|
$
|
107
|
|
|
$
|
483
|
|
|
$
|
304
|
|
|
$
|
918
|
|
Exploration costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capitalized internal cost
|
|
8
|
|
|
38
|
|
|
49
|
|
|
47
|
|
|
142
|
|
|||||
Capitalized interest
|
|
30
|
|
|
61
|
|
|
51
|
|
|
42
|
|
|
184
|
|
|||||
Total costs withheld from amortization
|
|
$
|
62
|
|
|
$
|
206
|
|
|
$
|
583
|
|
|
$
|
393
|
|
|
$
|
1,244
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
Furniture, fixtures and equipment
|
|
$
|
167
|
|
|
$
|
165
|
|
Gathering systems and equipment
|
|
117
|
|
|
115
|
|
||
Accumulated depreciation and amortization
|
|
(115
|
)
|
|
(112
|
)
|
||
Net other property and equipment
|
|
$
|
169
|
|
|
$
|
168
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
Revenue payable
|
|
$
|
327
|
|
|
$
|
239
|
|
Accrued capital costs
|
|
171
|
|
|
173
|
|
||
Accrued lease operating expenses
|
|
30
|
|
|
22
|
|
||
Employee incentive expense
|
|
24
|
|
|
44
|
|
||
Accrued interest on debt
|
|
67
|
|
|
67
|
|
||
Income and other taxes payable
|
|
24
|
|
|
11
|
|
||
Other
|
|
49
|
|
|
35
|
|
||
Total accrued liabilities
|
|
$
|
692
|
|
|
$
|
591
|
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
(In millions)
|
||||||
Senior unsecured debt:
|
|
|
|
|
||||
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
|
|
|
2,450
|
|
||
Debt issuance costs
|
|
(15
|
)
|
|
(16
|
)
|
||
Total long-term debt
|
|
$
|
2,435
|
|
|
$
|
2,434
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
||||||||||||||
Net income (loss)
|
|
$
|
119
|
|
|
$
|
98
|
|
|
$
|
205
|
|
|
$
|
245
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares (denominator):
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted-average shares — basic
|
|
200
|
|
|
199
|
|
|
200
|
|
|
199
|
|
||||
Dilution effect of stock options and unvested restricted stock and restricted stock units outstanding at end of period
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Weighted-average shares — diluted
|
|
201
|
|
|
200
|
|
|
200
|
|
|
200
|
|
||||
Excluded due to anti-dilutive effect
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic
|
|
$
|
0.60
|
|
|
$
|
0.49
|
|
|
$
|
1.03
|
|
|
$
|
1.23
|
|
Diluted
|
|
$
|
0.59
|
|
|
$
|
0.49
|
|
|
$
|
1.02
|
|
|
$
|
1.22
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In millions)
|
||||||||||||||
Equity awards
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
27
|
|
|
$
|
29
|
|
Liability awards — cash-settled restricted stock units
|
|
5
|
|
|
—
|
|
|
4
|
|
|
2
|
|
||||
Total stock-based compensation
|
|
19
|
|
|
13
|
|
|
31
|
|
|
31
|
|
||||
Capitalized in oil and gas properties
|
|
(2
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|
(10
|
)
|
||||
Net stock-based compensation expense
|
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
|
Service-Based
Shares
|
|
Weighted- Average Grant Date Fair Value per Share
|
|
Market-Based
Shares
|
|
Weighted- Average Grant Date Fair Value per Share
|
|
Total
Shares
|
|||||||
|
|
(In thousands, except per share data)
|
|||||||||||||||
Non-vested shares outstanding at January 1, 2018
|
|
2,033
|
|
|
$
|
32.41
|
|
|
741
|
|
|
$
|
38.12
|
|
|
2,774
|
|
Granted
|
|
325
|
|
|
27.18
|
|
|
464
|
|
(1)
|
30.89
|
|
|
789
|
|
||
Forfeited
|
|
(59
|
)
|
|
31.84
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||
Vested
|
|
(118
|
)
|
|
33.20
|
|
|
—
|
|
|
—
|
|
|
(118
|
)
|
||
Non-vested shares outstanding at June 30, 2018
|
|
2,181
|
|
|
$
|
31.60
|
|
|
1,205
|
|
|
$
|
35.33
|
|
|
3,386
|
|
(1)
|
In February 2018, we granted approximately 464,000 restricted stock units, which based on achievement of certain criteria, could vest within a range of 0% to 200% of shares granted upon completion of the period ending December 31, 2020.
|
|
|
Cash-Settled Restricted Stock Units
|
|
|
|
(In thousands)
|
|
Non-vested units outstanding at January 1, 2018
|
|
351
|
|
Granted
|
|
186
|
|
Forfeited
|
|
(9
|
)
|
Vested
|
|
(49
|
)
|
Non-vested units outstanding at June 30, 2018
|
|
479
|
|
14.
|
Segment Information
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2018:
|
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|||
Oil
|
|
$
|
422
|
|
|
$
|
58
|
|
|
$
|
480
|
|
Gas
|
|
86
|
|
|
—
|
|
|
86
|
|
|||
NGL
|
|
112
|
|
|
—
|
|
|
112
|
|
|||
Oil, gas and NGL revenues
|
|
620
|
|
|
58
|
|
|
678
|
|
|||
|
|
|
|
|
|
|
||||||
Lease operating
|
|
60
|
|
|
13
|
|
|
73
|
|
|||
Transportation and processing
|
|
83
|
|
|
—
|
|
|
83
|
|
|||
Production and other taxes
|
|
26
|
|
|
1
|
|
|
27
|
|
|||
Depreciation, depletion and amortization
|
|
140
|
|
|
11
|
|
|
151
|
|
|||
Results of operations for oil and gas producing activities before tax
|
|
311
|
|
|
33
|
|
|
344
|
|
|||
|
|
|
|
|
|
|
||||||
Other revenues
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
General and administrative
|
|
50
|
|
|
1
|
|
|
51
|
|
|||
Other expense (income)
|
|
(7
|
)
|
|
1
|
|
|
(6
|
)
|
|||
Allocated income tax (benefit)(1)
|
|
62
|
|
|
14
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
207
|
|
|
$
|
17
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Total revenues
|
|
|
|
|
|
$
|
679
|
|
||||
Total operating expenses
|
|
|
|
|
|
379
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
300
|
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(22
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(145
|
)
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
133
|
|
||||
Total assets
|
|
$
|
5,366
|
|
|
$
|
95
|
|
|
$
|
5,461
|
|
Additions to long-lived assets
|
|
$
|
411
|
|
|
$
|
—
|
|
|
$
|
411
|
|
(1)
|
Allocated income tax based on estimated combined federal and state statutory tax rates in effect during the period, comprised of 23% for domestic and 46% for China.
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Three Months Ended June 30, 2017:
|
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|||
Oil
|
|
$
|
217
|
|
|
$
|
41
|
|
|
$
|
258
|
|
Gas
|
|
83
|
|
|
—
|
|
|
83
|
|
|||
NGL
|
|
61
|
|
|
—
|
|
|
61
|
|
|||
Oil, gas and NGL revenues
|
|
361
|
|
|
41
|
|
|
402
|
|
|||
|
|
|
|
|
|
|
||||||
Lease operating
|
|
45
|
|
|
13
|
|
|
58
|
|
|||
Transportation and processing
|
|
71
|
|
|
—
|
|
|
71
|
|
|||
Production and other taxes
|
|
13
|
|
|
—
|
|
|
13
|
|
|||
Depreciation, depletion and amortization
|
|
100
|
|
|
10
|
|
|
110
|
|
|||
Results of operations for oil and gas producing activities before tax
|
|
132
|
|
|
18
|
|
|
150
|
|
|||
|
|
|
|
|
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
General and administrative
|
|
49
|
|
|
2
|
|
|
51
|
|
|||
Other expense (income)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Allocated income tax (benefit)(1)
|
|
30
|
|
|
10
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
53
|
|
|
$
|
6
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Total revenues
|
|
|
|
|
|
$
|
402
|
|
||||
Total operating expenses
|
|
|
|
|
|
303
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
99
|
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(20
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
28
|
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
107
|
|
||||
Total assets
|
|
$
|
4,504
|
|
|
$
|
91
|
|
|
$
|
4,595
|
|
Additions to long-lived assets
|
|
$
|
275
|
|
|
$
|
—
|
|
|
$
|
275
|
|
(1)
|
Allocated income tax based on estimated combined federal and state statutory tax rates in effect during the period, comprised of 37% for domestic and 60% for China.
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Six Months Ended June 30, 2018:
|
|
|
|
|
|
|
||||||
Revenues
|
|
|
|
|
|
|
||||||
Oil
|
|
$
|
797
|
|
|
$
|
75
|
|
|
$
|
872
|
|
Gas
|
|
183
|
|
|
—
|
|
|
183
|
|
|||
NGL
|
|
201
|
|
|
—
|
|
|
201
|
|
|||
Oil, gas and NGL revenues
|
|
1,181
|
|
|
75
|
|
|
1,256
|
|
|||
|
|
|
|
|
|
|
||||||
Lease operating
|
|
114
|
|
|
17
|
|
|
131
|
|
|||
Transportation and processing
|
|
161
|
|
|
—
|
|
|
161
|
|
|||
Production and other taxes
|
|
50
|
|
|
1
|
|
|
51
|
|
|||
Depreciation, depletion and amortization
|
|
269
|
|
|
15
|
|
|
284
|
|
|||
Results of operations for oil and gas producing activities before tax
|
|
587
|
|
|
42
|
|
|
629
|
|
|||
|
|
|
|
|
|
|
||||||
Other revenues
|
|
3
|
|
|
—
|
|
|
3
|
|
|||
General and administrative
|
|
102
|
|
|
3
|
|
|
105
|
|
|||
Other expense (income)
|
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
|||
Allocated income tax (benefit)(1)
|
|
114
|
|
|
17
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
380
|
|
|
$
|
21
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Total revenues
|
|
|
|
|
|
$
|
1,259
|
|
||||
Total operating expenses
|
|
|
|
|
|
727
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
532
|
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(44
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
(256
|
)
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
232
|
|
||||
Total assets
|
|
$
|
5,366
|
|
|
$
|
95
|
|
|
$
|
5,461
|
|
Additions to long-lived assets
|
|
$
|
789
|
|
|
$
|
—
|
|
|
$
|
789
|
|
(1)
|
Allocated income tax based on estimated combined federal and state statutory tax rates in effect during the period, comprised of 23% for domestic and 46% for China.
|
|
|
Domestic
|
|
China
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Six Months Ended June 30, 2017:
|
|
|
|
|
|
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Oil
|
|
$
|
447
|
|
|
$
|
75
|
|
|
$
|
522
|
|
Gas
|
|
169
|
|
|
—
|
|
|
169
|
|
|||
NGL
|
|
127
|
|
|
—
|
|
|
127
|
|
|||
Oil, gas and NGL revenues
|
|
743
|
|
|
75
|
|
|
818
|
|
|||
|
|
|
|
|
|
|
||||||
Lease operating
|
|
93
|
|
|
21
|
|
|
114
|
|
|||
Transportation and processing
|
|
143
|
|
|
—
|
|
|
143
|
|
|||
Production and other taxes
|
|
27
|
|
|
—
|
|
|
27
|
|
|||
Depreciation, depletion and amortization
|
|
196
|
|
|
20
|
|
|
216
|
|
|||
Results of operations for oil and gas producing activities before tax
|
|
284
|
|
|
34
|
|
|
318
|
|
|||
|
|
|
|
|
|
|
||||||
Other revenues
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
General and administrative
|
|
95
|
|
|
3
|
|
|
98
|
|
|||
Other expense (income)
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Allocated income tax (benefit)(1)
|
|
69
|
|
|
19
|
|
|
|
||||
Net income (loss) from oil and gas properties
|
|
$
|
120
|
|
|
$
|
12
|
|
|
|
||
|
|
|
|
|
|
|
||||||
Total revenues
|
|
|
|
|
|
$
|
819
|
|
||||
Total operating expenses
|
|
|
|
|
|
599
|
|
|||||
Income (loss) from operations
|
|
|
|
|
|
220
|
|
|||||
Interest expense, net of interest income, capitalized interest and other
|
|
|
|
|
|
(40
|
)
|
|||||
Commodity derivative income (expense)
|
|
|
|
|
|
81
|
|
|||||
Income (loss) from operations before income taxes
|
|
|
|
|
|
$
|
261
|
|
||||
Total assets
|
|
$
|
4,504
|
|
|
$
|
91
|
|
|
$
|
4,595
|
|
Additions to long-lived assets
|
|
$
|
521
|
|
|
$
|
—
|
|
|
$
|
521
|
|
(1)
|
Allocated income tax based on estimated combined federal and state statutory tax rates in effect during the period, comprised of 37% for domestic and 60% for China.
|
|
|
Six Months Ended
June 30, |
||||||
|
|
2018
|
|
2017
|
||||
|
|
(In millions)
|
||||||
Non-cash investing and financing activities excluded from the statement of cash flows:
|
|
|
|
|
||||
(Increase) decrease in accrued capital expenditures
|
|
$
|
2
|
|
|
$
|
(57
|
)
|
(Increase) decrease in asset retirement costs
|
|
(1
|
)
|
|
2
|
|
•
|
Domestic production was 16.9 MMBOE in the second quarter of 2018, up 35% over the same period of 2017;
|
•
|
Anadarko Basin production was 11.9 MMBOE in the second quarter of 2018, up 48% over the same period of 2017; and
|
•
|
Oil production from the Anadarko Basin was 3.8 MMBO in the second quarter of 2018, up 43% over the same period of 2017.
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2017
|
|
Price Variance
|
|
Volume Variance
|
|
2018
|
|
|
2017
|
|
Price Variance
|
|
Volume Variance
|
|
2018
|
||||||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Crude oil and condensate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Bbl)
|
$
|
42.52
|
|
|
$
|
20.63
|
|
|
|
|
$
|
63.15
|
|
|
|
$
|
44.22
|
|
|
$
|
16.45
|
|
|
|
|
$
|
60.67
|
|
||||
Production (MBbls)
|
5,132
|
|
|
|
|
1,564
|
|
|
6,696
|
|
|
|
10,120
|
|
|
|
|
3,027
|
|
|
13,147
|
|
||||||||||
Crude oil and condensate revenues
|
$
|
217
|
|
|
$
|
138
|
|
|
$
|
67
|
|
|
$
|
422
|
|
|
|
$
|
447
|
|
|
$
|
216
|
|
|
$
|
134
|
|
|
$
|
797
|
|
Natural gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Mcf)
|
$
|
2.75
|
|
|
$
|
(0.53
|
)
|
|
|
|
$
|
2.22
|
|
|
|
$
|
2.84
|
|
|
$
|
(0.39
|
)
|
|
|
|
$
|
2.45
|
|
||||
Production (Bcf)
|
30.0
|
|
|
|
|
8.4
|
|
|
38.4
|
|
|
|
59.4
|
|
|
|
|
15.1
|
|
|
74.5
|
|
||||||||||
Natural gas revenues
|
$
|
83
|
|
|
$
|
(20
|
)
|
|
$
|
23
|
|
|
$
|
86
|
|
|
|
$
|
169
|
|
|
$
|
(29
|
)
|
|
$
|
43
|
|
|
$
|
183
|
|
Natural gas liquids
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Bbl)
|
$
|
24.54
|
|
|
$
|
4.28
|
|
|
|
|
$
|
28.82
|
|
|
|
$
|
25.77
|
|
|
$
|
2.70
|
|
|
|
|
$
|
28.47
|
|
||||
Production (MBbls)
|
2,491
|
|
|
|
|
1,401
|
|
|
3,892
|
|
|
|
4,945
|
|
|
|
|
2,106
|
|
|
7,051
|
|
||||||||||
Natural gas liquids revenues
|
$
|
61
|
|
|
$
|
17
|
|
|
$
|
34
|
|
|
$
|
112
|
|
|
|
$
|
127
|
|
|
$
|
19
|
|
|
$
|
55
|
|
|
$
|
201
|
|
Total Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per BOE)
|
$
|
28.66
|
|
|
$
|
7.84
|
|
|
|
|
$
|
36.50
|
|
|
|
$
|
29.79
|
|
|
$
|
6.42
|
|
|
|
|
$
|
36.21
|
|
||||
Production (MBOE)
|
12,622
|
|
|
|
|
4,367
|
|
|
16,989
|
|
|
|
24,960
|
|
|
|
|
7,651
|
|
|
32,611
|
|
||||||||||
Total domestic oil and gas revenues
|
$
|
361
|
|
|
$
|
135
|
|
|
$
|
124
|
|
|
$
|
620
|
|
|
|
$
|
743
|
|
|
$
|
206
|
|
|
$
|
232
|
|
|
$
|
1,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
China:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Crude oil and condensate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Bbl)
|
$
|
49.01
|
|
|
$
|
24.96
|
|
|
|
|
$
|
73.97
|
|
|
|
$
|
50.84
|
|
|
$
|
20.91
|
|
|
|
|
$
|
71.75
|
|
||||
Production/liftings (MBbls)
|
830
|
|
|
|
|
(48
|
)
|
|
782
|
|
|
|
1,473
|
|
|
|
|
(430
|
)
|
|
1,043
|
|
||||||||||
China oil and condensate revenues
|
$
|
41
|
|
|
$
|
20
|
|
|
$
|
(3
|
)
|
|
$
|
58
|
|
|
|
$
|
75
|
|
|
$
|
22
|
|
|
$
|
(22
|
)
|
|
$
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Crude oil and condensate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Bbl)
|
$
|
43.42
|
|
|
$
|
20.86
|
|
|
|
|
$
|
64.28
|
|
|
|
$
|
45.06
|
|
|
$
|
16.42
|
|
|
|
|
$
|
61.48
|
|
||||
Production/liftings (MBbls)
|
5,962
|
|
|
|
|
1,516
|
|
|
7,478
|
|
|
|
11,593
|
|
|
|
|
2,597
|
|
|
14,190
|
|
||||||||||
Crude oil and condensate revenues
|
$
|
258
|
|
|
$
|
158
|
|
|
$
|
64
|
|
|
$
|
480
|
|
|
|
$
|
522
|
|
|
$
|
238
|
|
|
$
|
112
|
|
|
$
|
872
|
|
Natural gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Mcf)
|
$
|
2.75
|
|
|
$
|
(0.53
|
)
|
|
|
|
$
|
2.22
|
|
|
|
$
|
2.84
|
|
|
$
|
(0.39
|
)
|
|
|
|
$
|
2.45
|
|
||||
Production (Bcf)
|
30.0
|
|
|
|
|
8.4
|
|
|
38.4
|
|
|
|
59.4
|
|
|
|
|
15.1
|
|
|
74.5
|
|
||||||||||
Natural gas revenues
|
$
|
83
|
|
|
$
|
(20
|
)
|
|
$
|
23
|
|
|
$
|
86
|
|
|
|
$
|
169
|
|
|
$
|
(29
|
)
|
|
$
|
43
|
|
|
$
|
183
|
|
Natural gas liquids
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per Bbl)
|
$
|
24.54
|
|
|
$
|
4.28
|
|
|
|
|
$
|
28.82
|
|
|
|
$
|
25.77
|
|
|
$
|
2.70
|
|
|
|
|
$
|
28.47
|
|
||||
Production (MBbls)
|
2,491
|
|
|
|
|
1,401
|
|
|
3,892
|
|
|
|
4,945
|
|
|
|
|
2,106
|
|
|
7,051
|
|
||||||||||
Natural gas liquids revenues
|
$
|
61
|
|
|
$
|
17
|
|
|
$
|
34
|
|
|
$
|
112
|
|
|
|
$
|
127
|
|
|
$
|
19
|
|
|
$
|
55
|
|
|
$
|
201
|
|
Total consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Price (per BOE)
|
$
|
29.92
|
|
|
$
|
8.23
|
|
|
|
|
$
|
38.15
|
|
|
|
$
|
30.96
|
|
|
$
|
6.36
|
|
|
|
|
$
|
37.32
|
|
||||
Production/liftings (MBOE)
|
13,452
|
|
|
|
|
4,319
|
|
|
17,771
|
|
|
|
26,433
|
|
|
|
|
7,221
|
|
|
33,654
|
|
||||||||||
Total consolidated oil and gas revenues
|
$
|
402
|
|
|
$
|
155
|
|
|
$
|
121
|
|
|
$
|
678
|
|
|
|
$
|
818
|
|
|
$
|
228
|
|
|
$
|
210
|
|
|
$
|
1,256
|
|
(1)
|
Represents our net share of volumes sold regardless of when produced.
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2017
|
|
2018
|
|
|
2017
|
|
2018
|
||||||||||||||||||||||||
|
Total Amount
|
|
Unit-of-Production
|
|
Total Amount
|
|
Unit-of-Production
|
|
|
Total Amount
|
|
Unit-of-Production
|
|
Total Amount
|
|
Unit-of-Production
|
||||||||||||||||
|
(In millions)
|
|
(Per BOE)
|
|
(In millions)
|
|
(Per BOE)
|
|
|
(In millions)
|
|
(Per BOE)
|
|
(In millions)
|
|
(Per BOE)
|
||||||||||||||||
Domestic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Lease operating
|
$
|
45
|
|
|
$
|
3.53
|
|
|
$
|
60
|
|
|
$
|
3.54
|
|
|
|
$
|
93
|
|
|
$
|
3.73
|
|
|
$
|
114
|
|
|
$
|
3.49
|
|
Transportation and processing
|
71
|
|
|
5.67
|
|
|
83
|
|
|
4.85
|
|
|
|
143
|
|
|
5.74
|
|
|
161
|
|
|
4.93
|
|
||||||||
Production and other taxes
|
13
|
|
|
1.03
|
|
|
26
|
|
|
1.52
|
|
|
|
27
|
|
|
1.06
|
|
|
50
|
|
|
1.52
|
|
||||||||
Depreciation, depletion and amortization
|
100
|
|
|
7.92
|
|
|
140
|
|
|
8.30
|
|
|
|
196
|
|
|
7.84
|
|
|
269
|
|
|
8.27
|
|
||||||||
General and administrative
|
49
|
|
|
3.90
|
|
|
50
|
|
|
2.94
|
|
|
|
95
|
|
|
3.80
|
|
|
102
|
|
|
3.14
|
|
||||||||
Other expenses (income)
|
—
|
|
|
0.02
|
|
|
(7
|
)
|
|
(0.41
|
)
|
|
|
1
|
|
|
0.06
|
|
|
(6
|
)
|
|
(0.17
|
)
|
||||||||
Total operating expenses
|
$
|
278
|
|
|
$
|
22.07
|
|
|
$
|
352
|
|
|
$
|
20.74
|
|
|
|
$
|
555
|
|
|
$
|
22.23
|
|
|
$
|
690
|
|
|
$
|
21.18
|
|
China:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Lease operating
|
$
|
13
|
|
|
$
|
15.16
|
|
|
$
|
13
|
|
|
$
|
16.69
|
|
|
|
$
|
21
|
|
|
$
|
13.94
|
|
|
$
|
17
|
|
|
$
|
16.44
|
|
Production and other taxes
|
—
|
|
|
0.15
|
|
|
1
|
|
|
1.32
|
|
|
|
—
|
|
|
0.19
|
|
|
1
|
|
|
1.14
|
|
||||||||
Depreciation, depletion and amortization
|
10
|
|
|
13.06
|
|
|
11
|
|
|
13.42
|
|
|
|
20
|
|
|
13.84
|
|
|
15
|
|
|
14.14
|
|
||||||||
General and administrative
|
2
|
|
|
2.13
|
|
|
1
|
|
|
1.83
|
|
|
|
3
|
|
|
2.10
|
|
|
3
|
|
|
2.52
|
|
||||||||
Other expenses (income)
|
—
|
|
|
—
|
|
|
1
|
|
|
0.72
|
|
|
|
—
|
|
|
0.04
|
|
|
1
|
|
|
0.54
|
|
||||||||
Total operating expenses
|
$
|
25
|
|
|
$
|
30.50
|
|
|
$
|
27
|
|
|
$
|
33.98
|
|
|
|
$
|
44
|
|
|
$
|
30.11
|
|
|
$
|
37
|
|
|
$
|
34.78
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Lease operating
|
$
|
58
|
|
|
$
|
4.25
|
|
|
$
|
73
|
|
|
$
|
4.12
|
|
|
|
$
|
114
|
|
|
$
|
4.29
|
|
|
$
|
131
|
|
|
$
|
3.89
|
|
Transportation and processing
|
71
|
|
|
5.32
|
|
|
83
|
|
|
4.64
|
|
|
|
143
|
|
|
5.42
|
|
|
161
|
|
|
4.78
|
|
||||||||
Production and other taxes
|
13
|
|
|
0.97
|
|
|
27
|
|
|
1.51
|
|
|
|
27
|
|
|
1.02
|
|
|
51
|
|
|
1.51
|
|
||||||||
Depreciation, depletion and amortization
|
110
|
|
|
8.24
|
|
|
151
|
|
|
8.52
|
|
|
|
216
|
|
|
8.18
|
|
|
284
|
|
|
8.45
|
|
||||||||
General and administrative
|
51
|
|
|
3.79
|
|
|
51
|
|
|
2.90
|
|
|
|
98
|
|
|
3.71
|
|
|
105
|
|
|
3.12
|
|
||||||||
Other expenses (income)
|
—
|
|
|
0.02
|
|
|
(6
|
)
|
|
(0.36
|
)
|
|
|
1
|
|
|
0.05
|
|
|
(5
|
)
|
|
(0.15
|
)
|
||||||||
Total operating expenses
|
$
|
303
|
|
|
$
|
22.59
|
|
|
$
|
379
|
|
|
$
|
21.33
|
|
|
|
$
|
599
|
|
|
$
|
22.67
|
|
|
$
|
727
|
|
|
$
|
21.60
|
|
•
|
On a per BOE basis, domestic LOE was flat over the three-month comparative period, and decreased 6% over the six-month comparative period, primarily due to an increased concentration of total production in STACK where unit operating costs are lower. Total domestic LOE has increased 22% and 35%, respectively, over the comparative three and six-month periods, respectively, due to increased production.
|
•
|
China LOE per BOE has increased 10% and 18%, respectively, over the comparative three and six-month periods, primarily due to significantly higher production handling fees per BOE, which increase as oil prices increase. China LOE decreased 16% over the comparative six-month period due to the sale of our interest in the Bohai Bay field in May 2017.
|
•
|
Transportation and processing expense per BOE decreased over the comparative three and six-month periods primarily due to lower oil deficiency fees of $7 million and $12 million, respectively. Total transportation and processing expense increased over the comparative three and six-month periods primarily due to a 35% and 31% increase in production, respectively.
|
•
|
Production taxes have increased significantly over the comparative periods primarily due to increased revenues as a result of increased production and higher prices for oil and NGLs. In addition, 2018 production tax as a percentage of revenue has increased due to production tax rate increases in Oklahoma.
|
•
|
Our domestic DD&A increased significantly for the three and six-month periods of 2018 compared to the same periods in 2017 due to a 35% and 31% increase in production, respectively. Our DD&A rate was lower in 2017 due to the impact of the 2016 ceiling test write-downs which significantly lowered the amounts subject to depletion. As expected, our 2018 rate increased, a trend we expect to continue as we increase the amount subject to depletion through future drilling and development expenditures.
|
•
|
Domestic G&A increased 8% for the first six months of 2018 compared to the same period in 2017 primarily due to lower capitalized internal costs in 2018. Capitalized internal costs decreased $7 million in the first six months of 2018 as compared to the same period in 2017 due to reduced employee-related expenses that can be capitalized.
|
•
|
Other income for the three and six-month periods of 2018 was impacted by a legal settlement received during the second quarter.
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(In millions)
|
||||||||||||||
Gross interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Credit arrangements
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Senior notes
|
|
35
|
|
|
35
|
|
|
70
|
|
|
70
|
|
||||
Total gross interest expense
|
|
37
|
|
|
37
|
|
|
75
|
|
|
75
|
|
||||
Capitalized interest
|
|
(15
|
)
|
|
(15
|
)
|
|
(30
|
)
|
|
(31
|
)
|
||||
Net interest expense
|
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
45
|
|
|
$
|
44
|
|
|
|
Positions Settled in the Three Months Ended
June 30, 2018 |
|
Positions Settling After June 30, 2018
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Net derivative asset (liability) at March 31, 2018
|
|
$
|
(46
|
)
|
|
$
|
(141
|
)
|
|
$
|
(187
|
)
|
Change in fair value of settled positions
|
|
(21
|
)
|
|
—
|
|
|
(21
|
)
|
|||
Realized settlements (gain) loss
|
|
67
|
|
|
—
|
|
|
67
|
|
|||
Change in fair value of outstanding positions
|
|
—
|
|
|
(124
|
)
|
|
(124
|
)
|
|||
Total unrealized gain (loss)
|
|
46
|
|
|
(124
|
)
|
|
(78
|
)
|
|||
Net derivative asset (liability) at June 30, 2018
|
|
$
|
—
|
|
|
$
|
(265
|
)
|
|
$
|
(265
|
)
|
|
|
Positions Settled in the Six Months Ended
June 30, 2018 |
|
Positions Settling After June 30, 2018
|
|
Total
|
||||||
|
|
(In millions)
|
||||||||||
Net derivative asset (liability) at December 31, 2017
|
|
$
|
(46
|
)
|
|
$
|
(62
|
)
|
|
$
|
(108
|
)
|
Change in fair value of settled positions
|
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|||
Realized settlements (gain) loss
|
|
99
|
|
|
—
|
|
|
99
|
|
|||
Change in fair value of outstanding positions
|
|
—
|
|
|
(203
|
)
|
|
(203
|
)
|
|||
Total unrealized gain (loss)
|
|
46
|
|
|
(203
|
)
|
|
(157
|
)
|
|||
Net derivative asset (liability) at June 30, 2018
|
|
$
|
—
|
|
|
$
|
(265
|
)
|
|
$
|
(265
|
)
|
|
|
Positions Settled in the Three Months Ended
June 30, 2017 |
|
Positions Settling After June 30, 2017
|
|
|
||||||
|
|
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||
Net derivative asset (liability) at March 31, 2017
|
|
$
|
13
|
|
|
$
|
(5
|
)
|
|
$
|
8
|
|
Change in fair value of settled positions
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
Realized settlements (gain) loss
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Change in fair value of outstanding positions
|
|
—
|
|
|
26
|
|
|
26
|
|
|||
Total unrealized gain (loss)
|
|
(13
|
)
|
|
26
|
|
|
13
|
|
|||
Net derivative asset (liability) at June 30, 2017
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
21
|
|
|
|
Positions Settled in the Six Months Ended
June 30, 2017 |
|
Positions Settling After June 30, 2017
|
|
|
||||||
|
|
|
|
Total
|
||||||||
|
|
(In millions)
|
||||||||||
Net derivative asset (liability) at December 31, 2016
|
|
$
|
8
|
|
|
$
|
(33
|
)
|
|
$
|
(25
|
)
|
Change in fair value of settled positions
|
|
27
|
|
|
—
|
|
|
27
|
|
|||
Realized settlements (gain) loss
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|||
Change in fair value of outstanding positions
|
|
—
|
|
|
54
|
|
|
54
|
|
|||
Total unrealized gain (loss)
|
|
(8
|
)
|
|
54
|
|
|
46
|
|
|||
Net derivative asset (liability) at June 30, 2017
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
21
|
|
•
|
spent $752 million for capital additions to oil and gas properties and $11 million for other property and equipment, a total increase of $248 million compared to the same period of 2017. The increased capital activity is associated with our development program in the Anadarko Basin;
|
•
|
acquired additional interest in oil and gas properties of $26 million; and
|
•
|
divested $23 million of non-core acreage.
|
•
|
oil, natural gas and natural gas liquids prices;
|
•
|
actions of the Organization of the Petroleum Exporting Countries (OPEC), its members and other state-controlled oil companies relating to oil price and production controls;
|
•
|
environmental liabilities that are not covered by an effective indemnity or insurance;
|
•
|
legislation or regulatory initiatives intended to address seismic activity;
|
•
|
the timing and our success in discovering, producing and estimating reserves;
|
•
|
sustained decline in commodity prices resulting in impairments of assets;
|
•
|
ability to develop existing reserves or acquire new reserves;
|
•
|
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;
|
•
|
operating hazards inherent in the exploration for and production of oil and natural gas;
|
•
|
general economic, financial, industry or business trends or conditions;
|
•
|
the impact of, and changes in, legislation, law and governmental regulations, including the Tax Cuts and Jobs Act (the Tax Act) and those related to hydraulic fracturing, the environment, natural resources, climate change, and over-the-counter derivatives;
|
•
|
land, legal, regulatory, and ownership complexities inherent in the U.S. and Chinese oil and gas industries;
|
•
|
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, including the creditworthiness of such counterparties;
|
•
|
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;
|
•
|
the prices and availability of goods and services;
|
•
|
the cost and availability of drilling rigs and other oilfield services;
|
•
|
global events that may impact our domestic and international operating contracts, markets and prices;
|
•
|
our ability to monetize non-strategic assets, repay or refinance our existing indebtedness and the impact of changes in our investment ratings;
|
•
|
labor conditions;
|
•
|
severe weather conditions;
|
•
|
competitive conditions;
|
•
|
terrorism or civil or political unrest in a region or country;
|
•
|
electronic, cyber or physical security breaches;
|
•
|
changes in federal or state tax rates;
|
•
|
inflation rates;
|
•
|
the effect of worldwide energy conservation measures;
|
•
|
the price and availability of, and demand for, competing energy sources;
|
•
|
our ability to successfully execute our business and financial plans and strategies;
|
•
|
the availability (or lack thereof) of acquisition, disposition or combination opportunities; and
|
•
|
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 2017 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, 2018
|
|
104
|
|
|
$
|
24.02
|
|
|
—
|
|
—
|
May 1 — May 31, 2018
|
|
9,536
|
|
|
28.79
|
|
|
—
|
|
—
|
|
June 1 — June 30, 2018
|
|
420
|
|
|
29.75
|
|
|
—
|
|
—
|
|
Total
|
|
10,060
|
|
|
$
|
28.78
|
|
|
—
|
|
—
|
(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
|
|
|
|
|
|
*3.2
|
|
|
|
|
|
†*10.1
|
|
|
|
|
|
†*10.2
|
|
|
|
|
|
†*10.3
|
|
|
|
|
|
*31.1
|
|
|
|
|
|
*31.2
|
|
|
|
|
|
*32.1
|
|
|
|
|
|
*32.2
|
|
|
|
|
|
*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: July 31, 2018
|
By:
|
/s/ LAWRENCE S. MASSARO
|
|
|
Lawrence S. Massaro
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
Page
|
|
ARTICLE I
|
OFFICES
|
1
|
|
Section 1.01
|
Registered Office
|
1
|
|
Section 1.02
|
Other Offices
|
1
|
|
ARTICLE II
|
STOCKHOLDERS
|
1
|
|
Section 2.01
|
Place of Meetings
|
1
|
|
Section 2.02
|
Quorum; Withdrawal During Meeting; Adjournment
|
1
|
|
Section 2.03
|
Annual Meetings
|
2
|
|
Section 2.04
|
Special Meetings
|
2
|
|
Section 2.05
|
Record Dates
|
2
|
|
Section 2.06
|
Notice of Meetings
|
3
|
|
Section 2.07
|
List of Stockholders
|
4
|
|
Section 2.08
|
Proxies
|
4
|
|
Section 2.09
|
Voting; Elections; Inspectors
|
5
|
|
Section 2.10
|
Conduct of Meetings
|
6
|
|
Section 2.11
|
Treasury Stock
|
7
|
|
Section 2.12
|
Action Without Meeting
|
7
|
|
Section 2.13
|
Nominations and Stockholder Business
|
7
|
|
ARTICLE III
|
BOARD OF DIRECTORS
|
23
|
|
Section 3.01
|
Power; Number; Term of Office
|
23
|
|
Section 3.02
|
Quorum; Required Vote for Director Action
|
24
|
|
Section 3.03
|
Place of Meetings; Order of Business
|
24
|
|
Section 3.04
|
First Meeting
|
24
|
|
Section 3.05
|
Regular Meetings
|
24
|
|
Section 3.06
|
Special Meetings
|
24
|
|
Section 3.07
|
Removal
|
25
|
|
Section 3.08
|
Vacancies; Increases in the Number of Directors
|
25
|
|
Section 3.09
|
Compensation
|
25
|
|
Section 3.10
|
Action Without a Meeting; Telephone Conference Meeting
|
25
|
|
Section 3.11
|
Approval or Ratification of Acts or Contracts by Stockholders
|
25
|
|
ARTICLE IV
|
COMMITTEES
|
26
|
|
Section 4.01
|
Designation; Powers
|
26
|
|
Section 4.02
|
Procedure; Meetings; Quorum
|
26
|
|
Section 4.03
|
Subcommittees
|
26
|
|
ARTICLE V
|
OFFICERS
|
26
|
|
Section 5.01
|
Number, Titles and Term of Office
|
26
|
|
Section 5.02
|
Compensation
|
27
|
|
Section 5.03
|
Removal
|
27
|
|
Section 5.04
|
Vacancies
|
27
|
|
Section 5.05
|
Powers and Duties of the Chief Executive Officer
|
27
|
|
Section 5.06
|
Chairman of the Board
|
27
|
|
Section 5.07
|
Powers and Duties of the President
|
27
|
|
Section 5.08
|
Vice Presidents
|
27
|
|
Section 5.09
|
Secretary
|
27
|
|
Section 5.10
|
Assistant Secretaries
|
28
|
|
Section 5.11
|
Action with Respect to Securities of Other Corporations
|
28
|
|
ARTICLE VI
|
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
|
28
|
|
Section 6.01
|
Right to Indemnification
|
28
|
|
Section 6.02
|
Advance Payment
|
29
|
|
Section 6.03
|
Appearance as a Witness
|
29
|
|
Section 6.04
|
Employees and Agents
|
29
|
|
Section 6.05
|
Right of Claimant to Bring Suit
|
29
|
|
Section 6.06
|
Nonexclusivity of Rights
|
30
|
|
Section 6.07
|
Insurance
|
30
|
|
Section 6.08
|
Savings Clause
|
30
|
|
Section 6.09
|
Definitions
|
30
|
|
ARTICLE VII
|
CAPITAL STOCK
|
31
|
|
Section 7.01
|
Certificates of Stock
|
31
|
|
Section 7.02
|
Transfer of Shares
|
31
|
|
Section 7.03
|
Ownership of Shares
|
31
|
|
Section 7.04
|
Regulations Regarding Certificates
|
31
|
|
Section 7.05
|
Lost, Stolen, Destroyed or Mutilated Certificates
|
31
|
|
ARTICLE VIII
|
ADJUDICATION OF DISPUTES
|
32
|
|
Section 8.01
|
Exclusive Forum
|
32
|
|
ARTICLE IX
|
MISCELLANEOUS PROVISIONS
|
32
|
|
Section 9.01
|
Fiscal Year
|
32
|
|
Section 9.02
|
Corporate Seal
|
32
|
|
Section 9.03
|
Facsimile Signatures
|
32
|
|
Section 9.04
|
Reliance upon Books, Reports and Records
|
32
|
|
ARTICLE X
|
AMENDMENTS
|
33
|
|
(a)
|
Shares. Pursuant to the Company’s 2017 Omnibus Incentive Plan, as the same may be amended and/or restated from time to time (the “2017 Plan”), and this Agreement, [____] shares of Stock (the “Restricted Stock”) are granted to Director as of the Grant 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 2017 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 2017 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 Section 6(d) of the 2017 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 (A) due to death or Disability, or (B) following Director’s completion of the current term of office, where (x) with the approval of the Nominating and Corporate Governance Committee of the Board, Director chooses to not stand for re-election at the next annual meeting of the stockholders, (y) the Nominating and Corporate Governance Committee of the Board does not nominate Director to stand for re-election at the next annual meeting of the stockholders, or (z) Director is not re-elected at the next annual meeting of stockholders, then, 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
|
(b)
|
Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to the Restricted Stock on the one year anniversary of the Grant Date, provided that the lapse conditions described below have been satisfied (the “Lapse Date”). The Forfeiture Restrictions shall lapse as provided above and the shares of Restricted Stock shall become vested only if Director has remained a director of the Company continuously from the Grant Date through the Lapse Date; provided, however, that if, prior to the Lapse Date, (i) Director terminates service as a director (A) by reason of death or Disability, or (B) following Director’s completion of the current term of office, where (x) with the approval of the Nominating and Corporate Governance Committee of the Board, Director chooses to not stand for re-election at the next annual meeting of the stockholders, (y) the Nominating and Corporate Governance Committee of the Board does not nominate Director to stand for re-election at the next annual meeting of the stockholders, or (z) Director is not re-elected at the next annual meeting of stockholders, or (ii) a Change in Control occurs, then, in each case, the Forfeiture Restrictions on all Restricted Stock issued to Director shall immediately lapse as of the date of his or her termination of service as a director or as of the date of the Change in 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 Restricted Stock that are then subject to Forfeiture Restrictions.
|
(c)
|
Rights as a Stockholder. 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 the right to receive dividends, and which shall be registered in the name of 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
|
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 MATTERS. 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 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 2017 Omnibus Incentive Plan, as the same may be amended and/or restated from time to time (the “2017 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 Grant Date as hereinafter provided subject to certain restrictions described herein. For purposes of this Agreement, a grant of RSUs is a bookkeeping entry in 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 2017 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)
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Restrictions. Except as may be otherwise provided in Section 6(e) of the 2017 Plan, in the event of termination of Director’s service for any reason other than (i) due to death or Disability, or (ii) following Director’s completion of the current term of office, where (A) with the approval of the Nominating and Corporate Governance Committee of the Board, Director chooses to not stand for re-election at the next annual meeting of the stockholders, (B) the
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(b)
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Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to the RSUs on the one year anniversary of the Grant Date, provided that the lapse conditions described below have been satisfied (the “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 Grant Date through the Lapse Date; provided, however, that if, prior to the Lapse Date, (i) Director terminates service as a director (A) by reason of death or Disability, or (B) following Director’s completion of the current term of office, where (x) with the approval of the Nominating and Corporate Governance Committee of the Board, Director chooses to not stand for re-election at the next annual meeting of the stockholders, (y) the Nominating and Corporate Governance Committee of the Board does not nominate Director to stand for re-election at the next annual meeting of the stockholders, or (z) Director is not re-elected at the next annual meeting of stockholders, 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.
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(c)
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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
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(d)
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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, notwithstanding the foregoing, upon a Qualifying Change of Control, any remaining payment(s) shall automatically be distributed to Director (or the Director’s Beneficiary) in a single lump sum on or within 30 days following the date of such Qualifying Change of Control. 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).
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3.
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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.
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4.
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SECTION 409A. The RSUs and the payment of Common Stock under this Agreement are intended to comply with the applicable requirements of Section 409A of the Code and the Nonqualified Deferred Compensation Rules (“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.
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5.
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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.
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6.
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TAX MATTERS. 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 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.
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7.
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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.
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(1)
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Indicates the vest date of the stock-settled and cash-settled awards.
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(2)
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Tax Rate options are the statutory minimum (22%), statutory maximum (37%) and your W-4 withholding rate, plus any other applicable payroll taxes including FICA and Medicare. For supplemental wages paid to you during calendar year [____] that do not exceed $1 million, you may elect withholding at either the statutory minimum or your W-4 withholding rate. If supplemental wages paid to you during calendar year [____] exceed $1 million, the excess over $1 million will automatically be subject to withholding at 37% notwithstanding any other election, and you may also elect to subject the entire amount of such supplemental wage payment to withholding at the statutory maximum rate.
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(3)
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Options are 0%, 25%, 50%, 75% or 100%. Total percentage across both % withheld columns must equal 100%.
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1.
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I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2018 of Newfield Exploration Company (the “Registrant”);
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
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4.
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The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
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a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
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5.
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The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):
|
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
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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.
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Date: July 31, 2018
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By:
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/s/ LEE K. BOOTHBY
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|
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Lee K. Boothby
|
|
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President and Chief Executive Officer
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|
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(Principal Executive Officer)
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1.
|
I have reviewed this quarterly report on Form 10-Q for the quarterly period ended June 30, 2018 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
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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.
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Date: July 31, 2018
|
By:
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/s/ LAWRENCE S. MASSARO
|
|
|
Lawrence S. Massaro
|
|
|
Executive Vice President and Chief Financial Officer
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|
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(Principal Financial Officer)
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1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: July 31, 2018
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/s/ LEE K. BOOTHBY
|
|
Lee K. Boothby
|
|
(Principal Executive Officer)
|
1.
|
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.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: July 31, 2018
|
/s/ LAWRENCE S. MASSARO
|
|
Lawrence S. Massaro
|
|
(Principal Financial Officer)
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