Delaware
|
|
46-5670947
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
27200 Tourney Road
|
|
|
Suite 315
|
|
|
Santa Clarita
|
|
|
California
|
|
91355
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
Common Stock
|
CRC
|
New York Stock Exchange
|
Large Accelerated Filer
|
☑
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
Smaller Reporting Company
|
☐
|
Emerging Growth Company
|
☐
|
|
|
Shares of common stock outstanding as of June 30, 2019
|
49,004,413
|
|
Page
|
|
Part I
|
|
|
Item 1
|
Financial Statements (unaudited)
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
Condensed Consolidated Statements of Operations
|
|
|
Condensed Consolidated Statements of Comprehensive Income
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
Condensed Consolidated Statements of Equity
|
|
|
Notes to the Condensed Consolidated Financial Statements
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
General
|
|
|
Business Environment and Industry Outlook
|
|
|
Seasonality
|
|
|
Recent Developments
|
|
|
Development Joint Ventures
|
|
|
Operations
|
|
|
Fixed and Variable Costs
|
|
|
Production and Prices
|
|
|
Balance Sheet Analysis
|
|
|
Statements of Operations Analysis
|
|
|
Liquidity and Capital Resources
|
|
|
2019 Capital Program
|
|
|
Lawsuits, Claims, Commitments and Contingencies
|
|
|
Significant Accounting and Disclosure Changes
|
|
|
Forward-Looking Statements
|
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Item 4
|
Controls and Procedures
|
|
|
|
|
Part II
|
|
|
Item 1
|
Legal Proceedings
|
|
Item 1A
|
Risk Factors
|
|
Item 5
|
Other Disclosures
|
|
Item 6
|
Exhibits
|
Item 1.
|
Financial Statements (unaudited)
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash
|
$
|
27
|
|
|
$
|
17
|
|
Trade receivables
|
234
|
|
|
299
|
|
||
Inventories
|
70
|
|
|
69
|
|
||
Other current assets, net
|
191
|
|
|
255
|
|
||
Total current assets
|
522
|
|
|
640
|
|
||
PROPERTY, PLANT AND EQUIPMENT
|
22,717
|
|
|
22,523
|
|
||
Accumulated depreciation, depletion and amortization
|
(16,308
|
)
|
|
(16,068
|
)
|
||
Total property, plant and equipment, net
|
6,409
|
|
|
6,455
|
|
||
OTHER ASSETS
|
101
|
|
|
63
|
|
||
TOTAL ASSETS
|
$
|
7,032
|
|
|
$
|
7,158
|
|
CURRENT LIABILITIES
|
|
|
|
||||
Current maturities of long-term debt
|
100
|
|
|
—
|
|
||
Accounts payable
|
290
|
|
|
390
|
|
||
Accrued liabilities
|
220
|
|
|
217
|
|
||
Total current liabilities
|
610
|
|
|
607
|
|
||
LONG-TERM DEBT
|
5,060
|
|
|
5,251
|
|
||
DEFERRED GAIN AND ISSUANCE COSTS, NET
|
185
|
|
|
216
|
|
||
OTHER LONG-TERM LIABILITIES
|
679
|
|
|
575
|
|
||
MEZZANINE EQUITY
|
|
|
|
||||
Redeemable noncontrolling interests
|
777
|
|
|
756
|
|
||
EQUITY
|
|
|
|
||||
Preferred stock (20 million shares authorized at $0.01 par value) no shares outstanding at June 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock (200 million shares authorized at $0.01 par value) outstanding shares (June 30, 2019 - 49,004,413 and
December 31, 2018 - 48,650,420)
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
4,994
|
|
|
4,987
|
|
||
Accumulated deficit
|
(5,397
|
)
|
|
(5,342
|
)
|
||
Accumulated other comprehensive loss
|
(5
|
)
|
|
(6
|
)
|
||
Total equity attributable to common stock
|
(408
|
)
|
|
(361
|
)
|
||
Equity attributable to noncontrolling interests
|
129
|
|
|
114
|
|
||
Total equity
|
(279
|
)
|
|
(247
|
)
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
7,032
|
|
|
$
|
7,158
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES AND OTHER
|
|
|
|
|
|
|
|
||||||||
Oil and gas sales
|
$
|
578
|
|
|
$
|
657
|
|
|
$
|
1,179
|
|
|
$
|
1,232
|
|
Net derivative gain (loss) from commodity contracts
|
21
|
|
|
(167
|
)
|
|
(68
|
)
|
|
(205
|
)
|
||||
Other revenue
|
54
|
|
|
59
|
|
|
232
|
|
|
131
|
|
||||
Total revenues and other
|
653
|
|
|
549
|
|
|
1,343
|
|
|
1,158
|
|
||||
|
|
|
|
|
|
|
|
||||||||
COSTS AND OTHER
|
|
|
|
|
|
|
|
||||||||
Production costs
|
230
|
|
|
231
|
|
|
463
|
|
|
443
|
|
||||
General and administrative expenses
|
79
|
|
|
90
|
|
|
162
|
|
|
153
|
|
||||
Depreciation, depletion and amortization
|
121
|
|
|
125
|
|
|
239
|
|
|
244
|
|
||||
Taxes other than on income
|
36
|
|
|
37
|
|
|
77
|
|
|
75
|
|
||||
Exploration expense
|
10
|
|
|
6
|
|
|
20
|
|
|
14
|
|
||||
Other expenses, net
|
55
|
|
|
49
|
|
|
203
|
|
|
110
|
|
||||
Total costs and other
|
531
|
|
|
538
|
|
|
1,164
|
|
|
1,039
|
|
||||
OPERATING INCOME
|
122
|
|
|
11
|
|
|
179
|
|
|
119
|
|
||||
|
|
|
|
|
|
|
|
||||||||
NON-OPERATING (LOSS) INCOME
|
|
|
|
|
|
|
|
||||||||
Interest and debt expense, net
|
(98
|
)
|
|
(94
|
)
|
|
(198
|
)
|
|
(186
|
)
|
||||
Net gain on early extinguishment of debt
|
20
|
|
|
24
|
|
|
26
|
|
|
24
|
|
||||
Gain on asset divestitures
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Other non-operating expenses
|
(3
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|
(12
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
41
|
|
|
(63
|
)
|
|
(3
|
)
|
|
(54
|
)
|
||||
Income tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
NET INCOME (LOSS)
|
41
|
|
|
(63
|
)
|
|
(3
|
)
|
|
(54
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|||||||||||||||
Mezzanine equity
|
(29
|
)
|
|
(29
|
)
|
|
(57
|
)
|
|
(43
|
)
|
||||
Equity
|
—
|
|
|
10
|
|
|
5
|
|
|
13
|
|
||||
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK
|
$
|
12
|
|
|
$
|
(82
|
)
|
|
$
|
(55
|
)
|
|
$
|
(84
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common stock per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
(1.70
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.81
|
)
|
Diluted
|
$
|
0.24
|
|
|
$
|
(1.70
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.81
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
41
|
|
|
$
|
(63
|
)
|
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Reclassification of realized losses on pension and postretirement benefits to income(a)
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
||||
Comprehensive income (loss) attributable to common stock
|
$
|
13
|
|
|
$
|
(81
|
)
|
|
$
|
(54
|
)
|
|
$
|
(81
|
)
|
(a)
|
No associated tax for the three and six months ended June 30, 2019 and 2018. See Note 10 Pension and Postretirement Benefit Plans for additional information.
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net loss
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
||||
Depreciation, depletion and amortization
|
239
|
|
|
244
|
|
||
Net derivative loss from commodity contracts
|
68
|
|
|
205
|
|
||
Net proceeds (payments) on settled commodity derivatives
|
28
|
|
|
(99
|
)
|
||
Net gain on early extinguishment of debt
|
(26
|
)
|
|
(24
|
)
|
||
Amortization of deferred gain
|
(36
|
)
|
|
(38
|
)
|
||
Gain on asset divestiture
|
—
|
|
|
(1
|
)
|
||
Dry hole expenses
|
7
|
|
|
4
|
|
||
Other non-cash charges to income, net
|
47
|
|
|
39
|
|
||
Changes in operating assets and liabilities, net
|
(52
|
)
|
|
(42
|
)
|
||
Net cash provided by operating activities
|
272
|
|
|
234
|
|
||
|
|
|
|
||||
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
||||
Capital investments
|
(271
|
)
|
|
(327
|
)
|
||
Changes in capital investment accruals
|
(57
|
)
|
|
22
|
|
||
Asset divestitures
|
165
|
|
|
13
|
|
||
Acquisitions
|
(2
|
)
|
|
(512
|
)
|
||
Other
|
(5
|
)
|
|
(3
|
)
|
||
Net cash used in investing activities
|
(170
|
)
|
|
(807
|
)
|
||
|
|
|
|
||||
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from 2014 Revolving Credit Facility
|
1,274
|
|
|
1,150
|
|
||
Repayments of 2014 Revolving Credit Facility
|
(1,289
|
)
|
|
(1,236
|
)
|
||
Debt repurchases
|
(59
|
)
|
|
(119
|
)
|
||
Contributions from noncontrolling interest holders, net
|
49
|
|
|
796
|
|
||
Distributions paid to noncontrolling interest holders
|
(65
|
)
|
|
(41
|
)
|
||
Issuance of common stock
|
1
|
|
|
50
|
|
||
Shares canceled for taxes
|
(3
|
)
|
|
(5
|
)
|
||
Net cash (used) provided by financing activities
|
(92
|
)
|
|
595
|
|
||
Increase in cash
|
10
|
|
|
22
|
|
||
Cash—beginning of period
|
17
|
|
|
20
|
|
||
Cash—end of period
|
$
|
27
|
|
|
$
|
42
|
|
|
Three months ended June 30, 2019
|
||||||||||||||||||||||
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
Equity Attributable to Common Stock
|
|
Equity Attributable to Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, March 31, 2019
|
$
|
4,989
|
|
|
$
|
(5,409
|
)
|
|
$
|
(6
|
)
|
|
$
|
(426
|
)
|
|
$
|
137
|
|
|
$
|
(289
|
)
|
Net loss
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Contribution from noncontrolling interest holders, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to noncontrolling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Share-based compensation, net
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Balance, June 30, 2019
|
$
|
4,994
|
|
|
$
|
(5,397
|
)
|
|
$
|
(5
|
)
|
|
$
|
(408
|
)
|
|
$
|
129
|
|
|
$
|
(279
|
)
|
|
Six months ended June 30, 2019
|
||||||||||||||||||||||
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
Equity Attributable to Common Stock
|
|
Equity Attributable to Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, December 31, 2018
|
$
|
4,987
|
|
|
$
|
(5,342
|
)
|
|
$
|
(6
|
)
|
|
$
|
(361
|
)
|
|
$
|
114
|
|
|
$
|
(247
|
)
|
Net loss
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
|
(5
|
)
|
|
(60
|
)
|
||||||
Contribution from noncontrolling interest holders, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||||
Distributions to noncontrolling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(29
|
)
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Share-based compensation, net
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Balance, June 30, 2019
|
$
|
4,994
|
|
|
$
|
(5,397
|
)
|
|
$
|
(5
|
)
|
|
$
|
(408
|
)
|
|
$
|
129
|
|
|
$
|
(279
|
)
|
|
Three months ended June 30, 2018
|
||||||||||||||||||||||
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
Equity Attributable to Common Stock
|
|
Equity Attributable to Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, March 31, 2018
|
$
|
4,930
|
|
|
$
|
(5,672
|
)
|
|
$
|
(21
|
)
|
|
$
|
(763
|
)
|
|
$
|
109
|
|
|
$
|
(654
|
)
|
Net loss
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|
(10
|
)
|
|
(92
|
)
|
||||||
Contribution from noncontrolling interest holders, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||||
Distributions to noncontrolling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Issuance of common stock
|
51
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
—
|
|
|
51
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Share-based compensation, net
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
||||||
Balance, June 30, 2018
|
$
|
4,985
|
|
|
$
|
(5,754
|
)
|
|
$
|
(20
|
)
|
|
$
|
(789
|
)
|
|
$
|
144
|
|
|
$
|
(645
|
)
|
|
Six months ended June 30, 2018
|
||||||||||||||||||||||
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other
Comprehensive
(Loss) Income
|
|
Equity Attributable to Common Stock
|
|
Equity Attributable to Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
Balance, December 31, 2017
|
$
|
4,879
|
|
|
$
|
(5,670
|
)
|
|
$
|
(23
|
)
|
|
$
|
(814
|
)
|
|
$
|
94
|
|
|
$
|
(720
|
)
|
Net loss
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
(84
|
)
|
|
(13
|
)
|
|
(97
|
)
|
||||||
Contribution from noncontrolling interest holders, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
||||||
Distributions to noncontrolling interest holders
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
||||||
Issuance of common stock
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
|
—
|
|
|
101
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
Share-based compensation, net
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||||
Balance, June 30, 2018
|
$
|
4,985
|
|
|
$
|
(5,754
|
)
|
|
$
|
(20
|
)
|
|
$
|
(789
|
)
|
|
$
|
144
|
|
|
$
|
(645
|
)
|
NOTE 2
|
ACCOUNTING AND DISCLOSURE CHANGES
|
NOTE 3
|
OTHER INFORMATION
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Derivative assets
|
$
|
92
|
|
|
$
|
168
|
|
Amounts due from joint interest partners
|
66
|
|
|
68
|
|
||
Prepaid expenses
|
23
|
|
|
16
|
|
||
Other
|
10
|
|
|
3
|
|
||
Other current assets, net
|
$
|
191
|
|
|
$
|
255
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Accrued employee-related costs
|
$
|
77
|
|
|
$
|
109
|
|
Accrued taxes other than on income
|
33
|
|
|
38
|
|
||
Asset retirement obligation
|
31
|
|
|
31
|
|
||
Operating lease liability
|
29
|
|
|
—
|
|
||
Accrued interest
|
15
|
|
|
15
|
|
||
Other
|
35
|
|
|
24
|
|
||
Accrued liabilities
|
$
|
220
|
|
|
$
|
217
|
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Materials and supplies
|
$
|
68
|
|
|
$
|
65
|
|
Finished goods
|
2
|
|
|
4
|
|
||
Total
|
$
|
70
|
|
|
$
|
69
|
|
|
Outstanding Principal
|
|
Interest Rate
|
|
Maturity
|
|
Security
|
||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
|
|
|
|
|
||||
Credit Agreements
|
(in millions)
|
|
|
|
|
|
|
||||||
2014 Revolving Credit Facility
|
$
|
525
|
|
|
$
|
540
|
|
|
LIBOR plus 3.25%-4.00%
ABR plus 2.25%-3.00% |
|
June 30, 2021
|
|
Shared First-Priority Lien
|
2017 Credit Agreement
|
1,300
|
|
|
1,300
|
|
|
LIBOR plus 4.75%
ABR plus 3.75% |
|
December 31, 2022(a)
|
|
Shared First-Priority Lien
|
||
2016 Credit Agreement
|
1,000
|
|
|
1,000
|
|
|
LIBOR plus 10.375%
ABR plus 9.375% |
|
December 31, 2021
|
|
First-Priority Lien
|
||
Second Lien Notes
|
|
|
|
|
|
|
|
|
|
||||
Second Lien Notes
|
1,991
|
|
|
2,067
|
|
|
8%
|
|
December 15, 2022(b)
|
|
Second-Priority Lien
|
||
Senior Notes
|
|
|
|
|
|
|
|
|
|
||||
5% Senior Notes due 2020
|
100
|
|
|
100
|
|
|
5%
|
|
January 15, 2020
|
|
Unsecured
|
||
5½% Senior Notes due 2021
|
100
|
|
|
100
|
|
|
5.5%
|
|
September 15, 2021
|
|
Unsecured
|
||
6% Senior Notes due 2024
|
144
|
|
|
144
|
|
|
6%
|
|
November 15, 2024
|
|
Unsecured
|
||
Total Debt
|
5,160
|
|
|
5,251
|
|
|
|
|
|
|
|
||
Less: Current Maturities
|
(100
|
)
|
|
—
|
|
|
|
|
|
|
|
||
Long-Term Debt
|
$
|
5,060
|
|
|
$
|
5,251
|
|
|
|
|
|
|
|
Note:
|
For a detailed description of our credit agreements, second lien notes and senior notes, please see our most recent Form 10-K for the year ended December 31, 2018.
|
(a)
|
The 2017 Credit Agreement is subject to a springing maturity of 91 days prior to the maturity of our 2016 Credit Agreement if more than $100 million in principal of the 2016 Credit Agreement is outstanding at that time.
|
(b)
|
The Second Lien Notes require principal repayments of $315 million in June 2021, $63 million in December 2021, $65 million in June 2022 and $1,548 million in December 2022.
|
NOTE 6
|
JOINT VENTURES
|
|
Equity Attributable to
Noncontrolling Interest
|
|
Mezzanine Equity - Redeemable Noncontrolling Interests
|
||||||||||||
|
Ares JV
|
|
BSP JV
|
|
Total
|
|
Ares JV
|
||||||||
|
(in millions)
|
||||||||||||||
Balance, December 31, 2018
|
$
|
15
|
|
|
$
|
99
|
|
|
$
|
114
|
|
|
$
|
756
|
|
Net (loss) income attributable to noncontrolling interests
|
(6
|
)
|
|
1
|
|
|
(5
|
)
|
|
57
|
|
||||
Contributions from noncontrolling interest holders, net
|
—
|
|
|
49
|
|
|
49
|
|
|
—
|
|
||||
Distributions to noncontrolling interest holders
|
(4
|
)
|
|
(25
|
)
|
|
(29
|
)
|
|
(36
|
)
|
||||
Balance, June 30, 2019
|
$
|
5
|
|
|
$
|
124
|
|
|
$
|
129
|
|
|
$
|
777
|
|
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2017
|
$
|
—
|
|
|
$
|
94
|
|
|
$
|
94
|
|
|
$
|
—
|
|
Net (loss) income attributable to noncontrolling interests
|
(6
|
)
|
|
(7
|
)
|
|
(13
|
)
|
|
43
|
|
||||
Contributions from noncontrolling interest holders, net
|
33
|
|
|
49
|
|
|
82
|
|
|
714
|
|
||||
Distributions to noncontrolling interest holders
|
(2
|
)
|
|
(17
|
)
|
|
(19
|
)
|
|
(22
|
)
|
||||
Balance, June 30, 2018
|
$
|
25
|
|
|
$
|
119
|
|
|
$
|
144
|
|
|
$
|
735
|
|
|
Q3
2019 |
|
Q4
2019 |
|
Q1
2020
|
|
Q2
2020
|
|
||||||||
Purchased Puts:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
40,000
|
|
|
35,000
|
|
|
25,000
|
|
|
10,000
|
|
|
||||
Weighted-average price per barrel
|
$
|
73.13
|
|
|
$
|
75.71
|
|
|
$
|
72.00
|
|
|
$
|
70.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sold Puts:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
40,000
|
|
|
35,000
|
|
|
25,000
|
|
|
10,000
|
|
|
||||
Weighted-average price per barrel
|
$
|
57.50
|
|
|
$
|
60.00
|
|
|
$
|
57.00
|
|
|
$
|
55.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
(a)
|
||||
Weighted-average price per barrel
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70.05
|
|
|
(a)
|
Counterparties have the option to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.05 for the second quarter of 2020.
|
June 30, 2019
|
||||||||||||
Balance Sheet Classification
|
|
Gross Amounts Recognized at Fair Value
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Fair Value Presented in the Balance Sheet
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
117
|
|
|
$
|
(25
|
)
|
|
$
|
92
|
|
Other assets
|
|
2
|
|
|
—
|
|
|
2
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
(28
|
)
|
|
25
|
|
|
(3
|
)
|
|||
Other long-term liabilities
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Total derivatives
|
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
90
|
|
December 31, 2018
|
||||||||||||
Balance Sheet Classification
|
|
Gross Amounts Recognized at Fair Value
|
|
Gross Amounts Offset in the Balance Sheet
|
|
Net Fair Value Presented in the Balance Sheet
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Other current assets
|
|
$
|
252
|
|
|
$
|
(84
|
)
|
|
$
|
168
|
|
Other assets
|
|
23
|
|
|
(9
|
)
|
|
14
|
|
|||
|
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
||||||
Accrued liabilities
|
|
(87
|
)
|
|
84
|
|
|
(3
|
)
|
|||
Other long-term liabilities
|
|
(10
|
)
|
|
9
|
|
|
(1
|
)
|
|||
Total derivatives
|
|
$
|
178
|
|
|
$
|
—
|
|
|
$
|
178
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions, except per-share amounts)
|
||||||||||||||
Net income (loss)
|
$
|
41
|
|
|
$
|
(63
|
)
|
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
Net income (loss) attributable to common stock
|
12
|
|
|
(82
|
)
|
|
(55
|
)
|
|
(84
|
)
|
||||
Less: net income allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) available to common stockholders
|
$
|
12
|
|
|
$
|
(82
|
)
|
|
$
|
(55
|
)
|
|
$
|
(84
|
)
|
Weighted-average common shares outstanding - basic
|
48.9
|
|
|
48.2
|
|
|
48.8
|
|
|
46.3
|
|
||||
Basic EPS
|
$
|
0.25
|
|
|
$
|
(1.70
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.81
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
41
|
|
|
$
|
(63
|
)
|
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
Net income (loss) attributable to common stock
|
12
|
|
|
(82
|
)
|
|
(55
|
)
|
|
(84
|
)
|
||||
Less: net income allocated to participating securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) available to common stockholders
|
$
|
12
|
|
|
$
|
(82
|
)
|
|
$
|
(55
|
)
|
|
$
|
(84
|
)
|
Weighted-average common shares outstanding - basic
|
48.9
|
|
|
48.2
|
|
|
48.8
|
|
|
46.3
|
|
||||
Dilutive effect of potentially dilutive securities
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted-average common shares outstanding - diluted
|
49.2
|
|
|
48.2
|
|
|
48.8
|
|
|
46.3
|
|
||||
Diluted EPS
|
$
|
0.24
|
|
|
$
|
(1.70
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.81
|
)
|
Weighted-average anti-dilutive shares
|
1.9
|
|
|
3.0
|
|
|
2.6
|
|
|
2.9
|
|
|
Three months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Pension
Benefit |
|
Postretirement
Benefit |
|
Pension
Benefit |
|
Postretirement
Benefit |
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest cost
|
—
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||
Expected return on plan assets
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Recognized actuarial loss
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Total
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Pension
Benefit |
|
Postretirement
Benefit |
|
Pension
Benefit |
|
Postretirement
Benefit |
||||||||
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Interest cost
|
1
|
|
|
3
|
|
|
1
|
|
|
2
|
|
||||
Expected return on plan assets
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Recognized actuarial loss
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
||||
Settlement loss
|
1
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
|
|
|
|
||||||||||
Oil and gas sales:
|
|
|
|
|
|
|
|
||||||||
Oil
|
$
|
496
|
|
|
$
|
553
|
|
|
$
|
976
|
|
|
$
|
1,019
|
|
NGLs
|
39
|
|
|
61
|
|
|
98
|
|
|
124
|
|
||||
Natural gas
|
43
|
|
|
43
|
|
|
105
|
|
|
89
|
|
||||
|
578
|
|
|
657
|
|
|
1,179
|
|
|
1,232
|
|
||||
Other revenue:
|
|
|
|
|
|
|
|
||||||||
Electricity
|
16
|
|
|
21
|
|
|
50
|
|
|
45
|
|
||||
Marketing, trading and other
|
38
|
|
|
38
|
|
|
182
|
|
|
85
|
|
||||
Interest income
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
54
|
|
|
59
|
|
|
232
|
|
|
131
|
|
||||
Net derivative gain (loss) from commodity contracts
|
21
|
|
|
(167
|
)
|
|
(68
|
)
|
|
(205
|
)
|
||||
Total revenues and other
|
$
|
653
|
|
|
$
|
549
|
|
|
$
|
1,343
|
|
|
$
|
1,158
|
|
|
Three months ended
June 30, 2019 |
|
Six months ended
June 30, 2019 |
||||
|
(in millions)
|
||||||
Operating lease cost
|
$
|
14
|
|
|
$
|
26
|
|
Short-term lease cost
|
18
|
|
|
38
|
|
||
Variable lease cost
|
3
|
|
|
8
|
|
||
Total operating lease costs
|
$
|
35
|
|
|
$
|
72
|
|
|
Three months ended
June 30, 2019 |
|
Six months ended
June 30, 2019 |
||||
|
(in millions)
|
||||||
Operating cash flows
|
$
|
2
|
|
|
$
|
5
|
|
Investing cash flows
|
$
|
12
|
|
|
$
|
21
|
|
|
June 30, 2019
|
||
Operating Leases
|
|
||
ROU asset obtained in exchange for lease obligations (in millions)
|
$
|
52
|
|
Weighted-average remaining lease term (in years)
|
2.74
|
|
|
Weighted-average discount rate
|
11.5
|
%
|
|
|
|
||
Finance Leases
|
|
||
ROU asset obtained in exchange for lease obligations (in millions)
|
$
|
2
|
|
Weighted-average remaining lease term (in years)
|
2.83
|
|
|
Weighted-average discount rate
|
8.5
|
%
|
|
|
|
June 30,
|
||
|
Balance Sheet Location
|
|
2019
|
||
|
|
|
(in millions)
|
||
Assets
|
|
|
|
||
Operating lease, net
|
Other assets
|
|
$
|
50
|
|
Finance lease, net
|
PP&E
|
|
2
|
|
|
Total lease assets
|
|
|
$
|
52
|
|
|
|
|
|
||
Liabilities
|
|
|
|
||
Current
|
|
|
|
||
Operating lease
|
Accrued liabilities
|
|
$
|
29
|
|
Finance lease
|
Accrued liabilities
|
|
1
|
|
|
Long term
|
|
|
|
||
Operating lease
|
Other long-term liabilities
|
|
23
|
|
|
Finance lease
|
Other long-term liabilities
|
|
1
|
|
|
Total lease liabilities
|
|
|
$
|
54
|
|
|
Operating
|
|
Finance
|
||||
|
Leases
|
|
Leases
|
||||
|
(in millions)
|
||||||
2019
|
$
|
19
|
|
|
$
|
—
|
|
2020
|
23
|
|
|
1
|
|
||
2021
|
7
|
|
|
1
|
|
||
2022
|
4
|
|
|
—
|
|
||
2023
|
2
|
|
|
—
|
|
||
Thereafter
|
6
|
|
|
—
|
|
||
Less: Interest
|
(9
|
)
|
|
—
|
|
||
Present value of lease liabilities
|
$
|
52
|
|
|
$
|
2
|
|
|
December 31,
|
||
|
2018
|
||
|
(in millions)
|
||
2019
|
$
|
12
|
|
2020
|
8
|
|
|
2021
|
7
|
|
|
2022
|
7
|
|
|
2023
|
6
|
|
|
Thereafter
|
28
|
|
|
Total
|
$
|
68
|
|
Condensed Consolidating Balance Sheets
|
|||||||||||||||||||
As of June 30, 2019 and December 31, 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
||||||||||||||||||
|
As of June 30, 2019
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total current assets
|
$
|
10
|
|
|
$
|
452
|
|
|
$
|
73
|
|
|
$
|
(13
|
)
|
|
$
|
522
|
|
Total property, plant and equipment, net
|
23
|
|
|
5,874
|
|
|
512
|
|
|
—
|
|
|
6,409
|
|
|||||
Investments in consolidated subsidiaries
|
5,684
|
|
|
130
|
|
|
—
|
|
|
(5,814
|
)
|
|
—
|
|
|||||
Other assets
|
2
|
|
|
71
|
|
|
28
|
|
|
—
|
|
|
101
|
|
|||||
TOTAL ASSETS
|
$
|
5,719
|
|
|
$
|
6,527
|
|
|
$
|
613
|
|
|
$
|
(5,827
|
)
|
|
$
|
7,032
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current liabilities
|
210
|
|
|
404
|
|
|
9
|
|
|
(13
|
)
|
|
610
|
|
|||||
Long-term debt
|
5,060
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,060
|
|
|||||
Deferred gain and issuance costs, net
|
185
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|||||
Other long-term liabilities
|
143
|
|
|
532
|
|
|
4
|
|
|
—
|
|
|
679
|
|
|||||
Amounts due to (from) affiliates
|
529
|
|
|
(529
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine equity
|
—
|
|
|
—
|
|
|
777
|
|
|
—
|
|
|
777
|
|
|||||
Total equity
|
(408
|
)
|
|
6,120
|
|
|
(177
|
)
|
|
(5,814
|
)
|
|
(279
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
5,719
|
|
|
$
|
6,527
|
|
|
$
|
613
|
|
|
$
|
(5,827
|
)
|
|
$
|
7,032
|
|
|
As of December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total current assets
|
$
|
7
|
|
|
$
|
590
|
|
|
$
|
56
|
|
|
$
|
(13
|
)
|
|
$
|
640
|
|
Total property, plant and equipment, net
|
23
|
|
|
5,913
|
|
|
519
|
|
|
—
|
|
|
6,455
|
|
|||||
Investments in consolidated subsidiaries
|
5,440
|
|
|
96
|
|
|
—
|
|
|
(5,536
|
)
|
|
—
|
|
|||||
Other assets
|
4
|
|
|
32
|
|
|
27
|
|
|
—
|
|
|
63
|
|
|||||
TOTAL ASSETS
|
$
|
5,474
|
|
|
$
|
6,631
|
|
|
$
|
602
|
|
|
$
|
(5,549
|
)
|
|
$
|
7,158
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total current liabilities
|
143
|
|
|
465
|
|
|
12
|
|
|
(13
|
)
|
|
607
|
|
|||||
Long-term debt
|
5,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,251
|
|
|||||
Deferred gain and issuance costs, net
|
216
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
216
|
|
|||||
Other long-term liabilities
|
140
|
|
|
431
|
|
|
4
|
|
|
—
|
|
|
575
|
|
|||||
Amounts due to (from) affiliates
|
85
|
|
|
(86
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Mezzanine equity
|
—
|
|
|
—
|
|
|
756
|
|
|
—
|
|
|
756
|
|
|||||
Total equity
|
(361
|
)
|
|
5,821
|
|
|
(171
|
)
|
|
(5,536
|
)
|
|
(247
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY
|
$
|
5,474
|
|
|
$
|
6,631
|
|
|
$
|
602
|
|
|
$
|
(5,549
|
)
|
|
$
|
7,158
|
|
Condensed Consolidating Statements of Operations
|
|||||||||||||||||||
For the three and six months ended June 30, 2019 and 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
||||||||||||||||||
|
For the three months ended June 30, 2019
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total revenues and other
|
$
|
—
|
|
|
$
|
610
|
|
|
$
|
113
|
|
|
$
|
(70
|
)
|
|
$
|
653
|
|
Total costs and other
|
52
|
|
|
490
|
|
|
59
|
|
|
(70
|
)
|
|
531
|
|
|||||
Non-operating (loss) income
|
(83
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|||||
NET (LOSS) INCOME
|
(135
|
)
|
|
122
|
|
|
54
|
|
|
—
|
|
|
41
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK
|
$
|
(135
|
)
|
|
$
|
122
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
For the three months ended June 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total revenues and other
|
$
|
—
|
|
|
$
|
526
|
|
|
$
|
94
|
|
|
$
|
(71
|
)
|
|
$
|
549
|
|
Total costs and other
|
64
|
|
|
499
|
|
|
46
|
|
|
(71
|
)
|
|
538
|
|
|||||
Non-operating (loss) income
|
(74
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|||||
NET (LOSS) INCOME
|
(138
|
)
|
|
27
|
|
|
48
|
|
|
—
|
|
|
(63
|
)
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK
|
$
|
(138
|
)
|
|
$
|
27
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
(82
|
)
|
|
For the six months ended June 30, 2019
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total revenues and other
|
$
|
—
|
|
|
$
|
1,255
|
|
|
$
|
235
|
|
|
$
|
(147
|
)
|
|
$
|
1,343
|
|
Total costs and other
|
106
|
|
|
1,074
|
|
|
131
|
|
|
(147
|
)
|
|
1,164
|
|
|||||
Non-operating (loss) income
|
(187
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(182
|
)
|
|||||
NET INCOME (LOSS)
|
(293
|
)
|
|
186
|
|
|
104
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
(52
|
)
|
|||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK
|
$
|
(293
|
)
|
|
$
|
186
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
$
|
(55
|
)
|
|
For the six months ended June 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Total revenues and other
|
$
|
1
|
|
|
$
|
1,111
|
|
|
$
|
159
|
|
|
$
|
(113
|
)
|
|
$
|
1,158
|
|
Total costs and other
|
107
|
|
|
960
|
|
|
85
|
|
|
(113
|
)
|
|
1,039
|
|
|||||
Non-operating (loss) income
|
(173
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(173
|
)
|
|||||
NET (LOSS) INCOME
|
(279
|
)
|
|
151
|
|
|
74
|
|
|
—
|
|
|
(54
|
)
|
|||||
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
|||||
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK
|
$
|
(279
|
)
|
|
$
|
151
|
|
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
(84
|
)
|
Condensed Consolidating Statements of Cash Flows
|
|||||||||||||||||||
For the six months ended June 30, 2019 and 2018
|
|||||||||||||||||||
(in millions)
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
For the six months ended June 30, 2019
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash (used) provided by operating activities
|
$
|
(348
|
)
|
|
$
|
303
|
|
|
$
|
317
|
|
|
$
|
—
|
|
|
$
|
272
|
|
Net cash used in investing activities
|
(5
|
)
|
|
(154
|
)
|
|
(11
|
)
|
|
—
|
|
|
(170
|
)
|
|||||
Net cash provided (used) by financing activities
|
353
|
|
|
(149
|
)
|
|
(296
|
)
|
|
—
|
|
|
(92
|
)
|
|||||
Increase in cash
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Cash—beginning of period
|
—
|
|
|
7
|
|
|
10
|
|
|
—
|
|
|
17
|
|
|||||
Cash—end of period
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
For the six months ended June 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash (used) provided by operating activities
|
$
|
(334
|
)
|
|
$
|
480
|
|
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
234
|
|
Net cash used in investing activities
|
(1
|
)
|
|
(776
|
)
|
|
(30
|
)
|
|
—
|
|
|
(807
|
)
|
|||||
Net cash provided (used) by financing activities
|
334
|
|
|
293
|
|
|
(32
|
)
|
|
—
|
|
|
595
|
|
|||||
Decrease (increase) in cash
|
(1
|
)
|
|
(3
|
)
|
|
26
|
|
|
—
|
|
|
22
|
|
|||||
Cash—beginning of period
|
7
|
|
|
8
|
|
|
5
|
|
|
—
|
|
|
20
|
|
|||||
Cash—end of period
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
42
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Brent oil ($/Bbl)
|
$
|
68.32
|
|
|
$
|
74.90
|
|
|
$
|
66.11
|
|
|
$
|
71.04
|
|
WTI oil ($/Bbl)
|
$
|
59.82
|
|
|
$
|
67.88
|
|
|
$
|
57.36
|
|
|
$
|
65.37
|
|
NYMEX gas ($/MMBtu)
|
$
|
2.66
|
|
|
$
|
2.75
|
|
|
$
|
2.95
|
|
|
$
|
2.81
|
|
Note:
|
Bbl refers to a barrel; MMBTU refers to one million British Thermal Units.
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Oil (MBbl/d)
|
|
|
|
|
|
|
|
||||
San Joaquin Basin
|
52
|
|
|
54
|
|
|
54
|
|
|
52
|
|
Los Angeles Basin
|
23
|
|
|
25
|
|
|
24
|
|
|
24
|
|
Ventura Basin
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
Total
|
79
|
|
|
83
|
|
|
82
|
|
|
80
|
|
NGLs (MBbl/d)
|
|
|
|
|
|
|
|
||||
San Joaquin Basin
|
15
|
|
|
15
|
|
|
14
|
|
|
15
|
|
Ventura Basin
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Total
|
16
|
|
|
16
|
|
|
15
|
|
|
16
|
|
Natural gas (MMcf/d)
|
|
|
|
|
|
|
|
||||
San Joaquin Basin
|
164
|
|
|
172
|
|
|
164
|
|
|
157
|
|
Los Angeles Basin
|
3
|
|
|
1
|
|
|
3
|
|
|
1
|
|
Ventura Basin
|
6
|
|
|
8
|
|
|
6
|
|
|
7
|
|
Sacramento Basin
|
30
|
|
|
29
|
|
|
29
|
|
|
31
|
|
Total
|
203
|
|
|
210
|
|
|
202
|
|
|
196
|
|
|
|
|
|
|
|
|
|
||||
Total Production (MBoe/d)
|
129
|
|
|
134
|
|
|
131
|
|
|
129
|
|
Note:
|
MBbl/d refers to thousands of barrels per day; MMcf/d refers to millions of cubic feet per day; MBoe/d refers to thousands of barrels of oil equivalent (Boe) per day. Natural gas volumes have been converted to Boe based on the equivalence of energy content of six thousand cubic feet of natural gas to one barrel of oil. Barrels of oil equivalence does not necessarily result in price equivalence.
|
|
Three months ended June 30,
|
||||||||||
|
2019
|
|
2018
|
||||||||
|
Price
|
|
Realization
|
|
Price
|
|
Realization
|
||||
Oil ($ per Bbl)
|
|
|
|
|
|
|
|
||||
Brent
|
$
|
68.32
|
|
|
|
|
$
|
74.90
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized price, without hedge
|
$
|
68.77
|
|
|
101%
|
|
$
|
73.19
|
|
|
98%
|
Settled hedges
|
1.89
|
|
|
|
|
(9.08
|
)
|
|
|
||
Realized price, with hedge
|
$
|
70.66
|
|
|
103%
|
|
$
|
64.11
|
|
|
86%
|
|
|
|
|
|
|
|
|
||||
WTI
|
$
|
59.82
|
|
|
|
|
$
|
67.88
|
|
|
|
Realized price, without hedge
|
$
|
68.77
|
|
|
115%
|
|
$
|
73.19
|
|
|
108%
|
Realized price, with hedge
|
$
|
70.66
|
|
|
118%
|
|
$
|
64.11
|
|
|
94%
|
|
|
|
|
|
|
|
|
||||
NGLs ($ per Bbl)
|
|
|
|
|
|
|
|
||||
Realized price (% of Brent)
|
$
|
27.82
|
|
|
41%
|
|
$
|
42.13
|
|
|
56%
|
Realized price (% of WTI)
|
$
|
27.82
|
|
|
47%
|
|
$
|
42.13
|
|
|
62%
|
|
|
|
|
|
|
|
|
||||
Natural gas
|
|
|
|
|
|
|
|
||||
NYMEX ($/MMBTU)
|
$
|
2.66
|
|
|
|
|
$
|
2.75
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized price, w/out hedge ($/Mcf)
|
$
|
2.33
|
|
|
88%
|
|
$
|
2.25
|
|
|
82%
|
Settled hedges
|
0.03
|
|
|
|
|
0.01
|
|
|
|
||
Realized price, with hedge ($/Mcf)
|
$
|
2.36
|
|
|
89%
|
|
$
|
2.26
|
|
|
82%
|
|
Six months ended June 30,
|
||||||||||
|
2019
|
|
2018
|
||||||||
|
Price
|
|
Realization
|
|
Price
|
|
Realization
|
||||
Oil ($ per Bbl)
|
|
|
|
|
|
|
|
||||
Brent
|
$
|
66.11
|
|
|
|
|
$
|
71.04
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized price, without hedge
|
$
|
65.97
|
|
|
100%
|
|
$
|
70.35
|
|
|
99%
|
Settled hedges
|
1.93
|
|
|
|
|
(6.88
|
)
|
|
|
||
Realized price, with hedge
|
$
|
67.90
|
|
|
103%
|
|
$
|
63.47
|
|
|
89%
|
|
|
|
|
|
|
|
|
||||
WTI
|
$
|
57.36
|
|
|
|
|
$
|
65.37
|
|
|
|
Realized price, without hedge
|
$
|
65.97
|
|
|
115%
|
|
$
|
70.35
|
|
|
108%
|
Realized price, with hedge
|
$
|
67.90
|
|
|
118%
|
|
$
|
63.47
|
|
|
97%
|
|
|
|
|
|
|
|
|
||||
NGLs ($ per Bbl)
|
|
|
|
|
|
|
|
||||
Realized price (% of Brent)
|
$
|
34.97
|
|
|
53%
|
|
$
|
42.63
|
|
|
60%
|
Realized price (% of WTI)
|
$
|
34.97
|
|
|
61%
|
|
$
|
42.63
|
|
|
65%
|
|
|
|
|
|
|
|
|
||||
Natural gas
|
|
|
|
|
|
|
|
||||
NYMEX ($/MMBTU)
|
$
|
2.95
|
|
|
|
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
||||
Realized price, w/out hedge ($/Mcf)
|
$
|
2.87
|
|
|
97%
|
|
$
|
2.51
|
|
|
90%
|
Settled hedges
|
(0.01
|
)
|
|
|
|
0.01
|
|
|
|
||
Realized price, with hedge ($/Mcf)
|
$
|
2.86
|
|
|
97%
|
|
$
|
2.52
|
|
|
89%
|
|
June 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Cash
|
$
|
27
|
|
|
$
|
17
|
|
Trade receivables
|
$
|
234
|
|
|
$
|
299
|
|
Inventories
|
$
|
70
|
|
|
$
|
69
|
|
Other current assets, net
|
$
|
191
|
|
|
$
|
255
|
|
Property, plant and equipment, net
|
$
|
6,409
|
|
|
$
|
6,455
|
|
Other assets
|
$
|
101
|
|
|
$
|
63
|
|
Current maturities of long-term debt
|
$
|
100
|
|
|
$
|
—
|
|
Accounts payable
|
$
|
290
|
|
|
$
|
390
|
|
Accrued liabilities
|
$
|
220
|
|
|
$
|
217
|
|
Long-term debt
|
$
|
5,060
|
|
|
$
|
5,251
|
|
Deferred gain and issuance costs, net
|
$
|
185
|
|
|
$
|
216
|
|
Other long-term liabilities
|
$
|
679
|
|
|
$
|
575
|
|
Mezzanine equity
|
$
|
777
|
|
|
$
|
756
|
|
Equity attributable to common stock
|
$
|
(408
|
)
|
|
$
|
(361
|
)
|
Equity attributable to noncontrolling interests
|
$
|
129
|
|
|
$
|
114
|
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Production costs
|
$
|
19.62
|
|
|
$
|
18.93
|
|
|
$
|
19.54
|
|
|
$
|
19.01
|
|
Production costs, excluding effects of PSC-type contracts(a)
|
$
|
17.98
|
|
|
$
|
17.41
|
|
|
$
|
17.99
|
|
|
$
|
17.44
|
|
Field general and administrative expenses(b)
|
$
|
1.28
|
|
|
$
|
1.07
|
|
|
$
|
1.27
|
|
|
$
|
0.90
|
|
Field depreciation, depletion and amortization(b)
|
$
|
9.55
|
|
|
$
|
9.67
|
|
|
$
|
9.41
|
|
|
$
|
9.78
|
|
Field taxes other than on income(b)
|
$
|
2.39
|
|
|
$
|
2.38
|
|
|
$
|
2.53
|
|
|
$
|
2.53
|
|
(a)
|
As described in the Operations section, the reporting of our PSC-type contracts creates a difference between reported production costs, which are for the full field, and reported volumes, which are only our net share, inflating the per barrel production costs. These amounts represent our production costs after adjusting for this difference.
|
(b)
|
Excludes corporate expenses.
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Oil and gas sales
|
$
|
578
|
|
|
$
|
657
|
|
|
$
|
1,179
|
|
|
$
|
1,232
|
|
Net derivative gain (loss) from commodity contracts
|
21
|
|
|
(167
|
)
|
|
(68
|
)
|
|
(205
|
)
|
||||
Other revenue
|
54
|
|
|
59
|
|
|
232
|
|
|
131
|
|
||||
Production costs
|
(230
|
)
|
|
(231
|
)
|
|
(463
|
)
|
|
(443
|
)
|
||||
General and administrative expenses
|
(79
|
)
|
|
(90
|
)
|
|
(162
|
)
|
|
(153
|
)
|
||||
Depreciation, depletion and amortization
|
(121
|
)
|
|
(125
|
)
|
|
(239
|
)
|
|
(244
|
)
|
||||
Taxes other than on income
|
(36
|
)
|
|
(37
|
)
|
|
(77
|
)
|
|
(75
|
)
|
||||
Exploration expense
|
(10
|
)
|
|
(6
|
)
|
|
(20
|
)
|
|
(14
|
)
|
||||
Other expenses, net
|
(55
|
)
|
|
(49
|
)
|
|
(203
|
)
|
|
(110
|
)
|
||||
Interest and debt expense, net
|
(98
|
)
|
|
(94
|
)
|
|
(198
|
)
|
|
(186
|
)
|
||||
Net gain on early extinguishment of debt
|
20
|
|
|
24
|
|
|
26
|
|
|
24
|
|
||||
Gain on asset divestitures
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Other non-operating expenses
|
(3
|
)
|
|
(5
|
)
|
|
(10
|
)
|
|
(12
|
)
|
||||
Income (loss) before income taxes
|
41
|
|
|
(63
|
)
|
|
(3
|
)
|
|
(54
|
)
|
||||
Income tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss)
|
41
|
|
|
(63
|
)
|
|
(3
|
)
|
|
(54
|
)
|
||||
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
Net Income (loss) attributable to common stock
|
$
|
12
|
|
|
$
|
(82
|
)
|
|
$
|
(55
|
)
|
|
$
|
(84
|
)
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net (loss) income
|
$
|
(14
|
)
|
|
$
|
(14
|
)
|
|
$
|
17
|
|
|
$
|
(6
|
)
|
Adjusted EBITDAX
|
$
|
255
|
|
|
$
|
245
|
|
|
$
|
556
|
|
|
$
|
495
|
|
Effective tax rate
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Oil
|
|
NGLs
|
|
Natural Gas
|
|
Total
|
||||||||
|
|
|
(in millions)
|
|
|||||||||||
Three months ended June 30, 2018
|
$
|
553
|
|
|
$
|
61
|
|
|
$
|
43
|
|
|
$
|
657
|
|
Changes in realized prices
|
(33
|
)
|
|
(22
|
)
|
|
2
|
|
|
(53
|
)
|
||||
Changes in production
|
(24
|
)
|
|
—
|
|
|
(2
|
)
|
|
(26
|
)
|
||||
Three months ended June 30, 2019
|
$
|
496
|
|
|
$
|
39
|
|
|
$
|
43
|
|
|
$
|
578
|
|
|
Three months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Non-cash derivative gain (loss), excluding noncontrolling interest
|
$
|
4
|
|
|
$
|
(92
|
)
|
Non-cash derivative gain (loss), noncontrolling interest
|
3
|
|
|
(7
|
)
|
||
Total non-cash changes
|
7
|
|
|
(99
|
)
|
||
Net proceeds (payments) on settled commodity derivatives
|
14
|
|
|
(68
|
)
|
||
Net derivative gain (loss)
|
$
|
21
|
|
|
$
|
(167
|
)
|
|
Oil
|
|
NGLs
|
|
Natural Gas
|
|
Total
|
||||||||
|
|
|
(in millions)
|
|
|||||||||||
Six months ended June 30, 2018
|
$
|
1,019
|
|
|
$
|
124
|
|
|
$
|
89
|
|
|
$
|
1,232
|
|
Changes in realized prices
|
(64
|
)
|
|
(23
|
)
|
|
13
|
|
|
(74
|
)
|
||||
Changes in production
|
21
|
|
|
(3
|
)
|
|
3
|
|
|
21
|
|
||||
Six months ended June 30, 2019
|
$
|
976
|
|
|
$
|
98
|
|
|
$
|
105
|
|
|
$
|
1,179
|
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Non-cash derivative gain (loss), excluding noncontrolling interest
|
$
|
(93
|
)
|
|
$
|
(99
|
)
|
Non-cash derivative gain (loss), noncontrolling interest
|
(3
|
)
|
|
(7
|
)
|
||
Total non-cash changes
|
(96
|
)
|
|
(106
|
)
|
||
Net proceeds (payments) on settled commodity derivatives
|
28
|
|
|
(99
|
)
|
||
Net derivative gain (loss) from commodity contracts
|
$
|
(68
|
)
|
|
$
|
(205
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||||||||||
|
2019
|
|
2018
|
|
Variance
|
|
2019
|
|
2018
|
|
Variance
|
||||||||||||
|
(in millions, except per Boe amounts)
|
||||||||||||||||||||||
G&A expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash-settled awards
|
$
|
3
|
|
|
$
|
19
|
|
|
$
|
(16
|
)
|
|
$
|
13
|
|
|
$
|
22
|
|
|
$
|
(9
|
)
|
Equity-settled awards
|
4
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
—
|
|
||||||
Total in G&A
|
$
|
7
|
|
|
$
|
23
|
|
|
$
|
(16
|
)
|
|
$
|
20
|
|
|
$
|
29
|
|
|
$
|
(9
|
)
|
Total in G&A per Boe
|
$
|
0.60
|
|
|
$
|
1.89
|
|
|
$
|
(1.29
|
)
|
|
$
|
0.84
|
|
|
$
|
1.24
|
|
|
$
|
(0.40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Production costs
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash-settled awards
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
(2
|
)
|
Equity-settled awards
|
1
|
|
|
1
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
||||||
Total in production costs
|
$
|
2
|
|
|
$
|
6
|
|
|
$
|
(4
|
)
|
|
$
|
6
|
|
|
$
|
8
|
|
|
$
|
(2
|
)
|
Total in production costs per Boe
|
$
|
0.17
|
|
|
$
|
0.49
|
|
|
$
|
(0.32
|
)
|
|
$
|
0.25
|
|
|
$
|
0.34
|
|
|
$
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total company
|
$
|
9
|
|
|
$
|
29
|
|
|
$
|
(20
|
)
|
|
$
|
26
|
|
|
$
|
37
|
|
|
$
|
(11
|
)
|
Total company per Boe
|
$
|
0.77
|
|
|
$
|
2.38
|
|
|
$
|
(1.61
|
)
|
|
$
|
1.09
|
|
|
$
|
1.58
|
|
|
$
|
(0.49
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions, except share data)
|
||||||||||||||
Net income (loss)
|
$
|
41
|
|
|
$
|
(63
|
)
|
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Net income attributable to noncontrolling interests
|
(29
|
)
|
|
(19
|
)
|
|
(52
|
)
|
|
(30
|
)
|
||||
Net income (loss) attributable to common stock
|
12
|
|
|
(82
|
)
|
|
(55
|
)
|
|
(84
|
)
|
||||
Unusual, infrequent and other items:
|
|
|
|
|
|
|
|
||||||||
Non-cash derivative (gain) loss from commodities, excluding noncontrolling interest
|
(4
|
)
|
|
92
|
|
|
93
|
|
|
99
|
|
||||
Early retirement and severance costs
|
2
|
|
|
2
|
|
|
2
|
|
|
4
|
|
||||
Net gain on early extinguishment of debt
|
(20
|
)
|
|
(24
|
)
|
|
(26
|
)
|
|
(24
|
)
|
||||
Other, net
|
(4
|
)
|
|
(2
|
)
|
|
3
|
|
|
(1
|
)
|
||||
Total unusual, infrequent and other items
|
(26
|
)
|
|
68
|
|
|
72
|
|
|
78
|
|
||||
Adjusted net (loss) income
|
$
|
(14
|
)
|
|
$
|
(14
|
)
|
|
$
|
17
|
|
|
$
|
(6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common stock per diluted share
|
$
|
0.24
|
|
|
$
|
(1.70
|
)
|
|
$
|
(1.13
|
)
|
|
$
|
(1.81
|
)
|
Adjusted net (loss) income per diluted share
|
$
|
(0.29
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.35
|
|
|
$
|
(0.13
|
)
|
|
Three months ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Net income (loss)
|
$
|
41
|
|
|
$
|
(63
|
)
|
|
$
|
(3
|
)
|
|
$
|
(54
|
)
|
Interest and debt expense, net
|
98
|
|
|
94
|
|
|
198
|
|
|
186
|
|
||||
Depreciation, depletion and amortization
|
121
|
|
|
125
|
|
|
239
|
|
|
244
|
|
||||
Exploration expense
|
10
|
|
|
6
|
|
|
20
|
|
|
14
|
|
||||
Unusual, infrequent and other items
|
(26
|
)
|
|
68
|
|
|
72
|
|
|
78
|
|
||||
Other non-cash items
|
11
|
|
|
15
|
|
|
30
|
|
|
27
|
|
||||
Adjusted EBITDAX
|
$
|
255
|
|
|
$
|
245
|
|
|
$
|
556
|
|
|
$
|
495
|
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net cash provided by operating activities
|
$
|
272
|
|
|
$
|
234
|
|
Cash interest
|
225
|
|
|
215
|
|
||
Exploration expenditures
|
10
|
|
|
10
|
|
||
Working capital changes
|
49
|
|
|
37
|
|
||
Other, net
|
—
|
|
|
(1
|
)
|
||
Adjusted EBITDAX
|
$
|
556
|
|
|
$
|
495
|
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net cash provided by operating activities
|
$
|
272
|
|
|
$
|
234
|
|
Net cash used in investing activities:
|
|
|
|
||||
Capital investments
|
$
|
(271
|
)
|
|
$
|
(327
|
)
|
Changes in capital investment accruals
|
$
|
(57
|
)
|
|
$
|
22
|
|
Acquisitions, divestitures and other
|
$
|
158
|
|
|
$
|
(502
|
)
|
Net cash (used) provided by financing activities:
|
|
|
|
||||
Debt transactions
|
$
|
(74
|
)
|
|
$
|
(205
|
)
|
Contributions (distributions) with noncontrolling interest holders
|
$
|
(16
|
)
|
|
$
|
755
|
|
Issuance of common stock and other
|
$
|
(2
|
)
|
|
$
|
45
|
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Oil and gas
|
$
|
212
|
|
|
$
|
296
|
|
Exploration
|
9
|
|
|
10
|
|
||
Corporate and other
|
7
|
|
|
3
|
|
||
Total internally funded capital
|
228
|
|
|
309
|
|
||
BSP funded capital
|
43
|
|
|
18
|
|
||
Total capital
|
$
|
271
|
|
|
$
|
327
|
|
|
Outstanding Principal
|
|
Interest Rate
|
|
Maturity
|
|
Security
|
||
Credit Agreements
|
(in millions)
|
|
|
|
|
|
|
||
2014 Revolving Credit Facility
|
$
|
525
|
|
|
LIBOR plus 3.25%-4.00%
ABR plus 2.25%-3.00% |
|
June 30, 2021
|
|
Shared First-Priority Lien
|
2017 Credit Agreement
|
1,300
|
|
|
LIBOR plus 4.75%
ABR plus 3.75% |
|
December 31, 2022(a)
|
|
Shared First-Priority Lien
|
|
2016 Credit Agreement
|
1,000
|
|
|
LIBOR plus 10.375%
ABR plus 9.375% |
|
December 31, 2021
|
|
First-Priority Lien
|
|
Second Lien Notes
|
|
|
|
|
|
|
|
||
Second Lien Notes
|
1,991
|
|
|
8%
|
|
December 15, 2022(b)
|
|
Second-Priority Lien
|
|
Senior Notes
|
|
|
|
|
|
|
|
||
5% Senior Notes due 2020
|
100
|
|
|
5%
|
|
January 15, 2020
|
|
Unsecured
|
|
5½% Senior Notes due 2021
|
100
|
|
|
5.5%
|
|
September 15, 2021
|
|
Unsecured
|
|
6% Senior Notes due 2024
|
144
|
|
|
6%
|
|
November 15, 2024
|
|
Unsecured
|
|
Total
|
5,160
|
|
|
|
|
|
|
|
|
Less: Current Maturities
|
(100
|
)
|
|
|
|
|
|
|
|
Long-Term Debt
|
$
|
5,060
|
|
|
|
|
|
|
|
Note:
|
For a detailed description of our credit agreements, second lien notes and senior notes, please see our most recent Form 10-K for the year ended December 31, 2018.
|
(a)
|
The 2017 Credit Agreement is subject to a springing maturity of 91 days prior to the maturity of our 2016 Credit Agreement if more than $100 million in principal of the 2016 Credit Agreement is outstanding at that time.
|
(b)
|
The Second Lien Notes require principal repayments of $315 million in June 2021, $63 million in December 2021, $65 million in June 2022 and $1,548 million in December 2022.
|
|
Q3
2019 |
|
Q4
2019 |
|
Q1
2020
|
|
Q2
2020
|
|
||||||||
Purchased Puts:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
40,000
|
|
|
35,000
|
|
|
25,000
|
|
|
10,000
|
|
|
||||
Weighted-average price per barrel
|
$
|
73.13
|
|
|
$
|
75.71
|
|
|
$
|
72.00
|
|
|
$
|
70.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sold Puts:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
40,000
|
|
|
35,000
|
|
|
25,000
|
|
|
10,000
|
|
|
||||
Weighted-average price per barrel
|
$
|
57.50
|
|
|
$
|
60.00
|
|
|
$
|
57.00
|
|
|
$
|
55.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Swaps:
|
|
|
|
|
|
|
|
|
||||||||
Barrels per day
|
—
|
|
|
—
|
|
|
—
|
|
|
5,000
|
|
(a)
|
||||
Weighted-average price per barrel
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70.05
|
|
|
(a)
|
Counterparties have the option to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.05 for the second quarter of 2020.
|
•
|
financial position, liquidity, cash flows and results of operations
|
•
|
business prospects
|
•
|
transactions and projects
|
•
|
operating costs
|
•
|
Value Creation Index (VCI) metrics, which are based on certain estimates including future production rates, costs and commodity prices
|
•
|
operations and operational results including production, hedging and capital investment
|
•
|
budgets and maintenance capital requirements
|
•
|
reserves
|
•
|
type curves
|
•
|
expected synergies from acquisitions and joint ventures
|
•
|
commodity price changes
|
•
|
debt limitations on our financial flexibility
|
•
|
insufficient cash flow to fund planned investments, debt repurchases, distributions to JV partners or changes to our capital plan
|
•
|
inability to enter desirable transactions including acquisitions, asset sales and joint ventures
|
•
|
legislative or regulatory changes, including those related to drilling, completion, well stimulation, operation, maintenance or abandonment of wells or facilities, managing energy, water, land, greenhouse gases or other emissions, protection of health, safety and the environment, or transportation, marketing and sale of our products
|
•
|
joint ventures and acquisitions and our ability to achieve expected synergies
|
•
|
the recoverability of resources and
|
•
|
incorrect estimates of reserves and related future cash flows and the inability to replace reserves
|
•
|
changes in business strategy
|
•
|
PSC effects on production and unit production costs
|
•
|
effect of stock price on costs associated with incentive compensation
|
•
|
insufficient capital, including as a result of lender restrictions, unavailability of capital markets or inability to attract potential investors
|
•
|
effects of hedging transactions
|
•
|
equipment, service or labor price inflation or unavailability
|
•
|
availability or timing of, or conditions imposed on, permits and approvals
|
•
|
lower-than-expected production, reserves or resources from development projects, joint ventures or acquisitions, or higher-than-expected decline rates
|
•
|
disruptions due to accidents, mechanical failures, transportation or storage constraints, natural disasters, labor difficulties, cyber attacks or other catastrophic events
|
•
|
factors discussed in Item 1A – Risk Factors of our Form 10-K for the year ended December 31, 2018.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1.A.
|
Risk Factors
|
Item 5.
|
Other Disclosures
|
Item 6.
|
Exhibits
|
3.1
|
|
|
|
3.2
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
31.1*
|
|
|
|
31.2*
|
|
|
|
32.1*
|
|
|
|
101.INS*
|
XBRL Instance Document.
|
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
CALIFORNIA RESOURCES CORPORATION
|
|
DATE:
|
August 1, 2019
|
/s/ Roy M. Pineci
|
|
|
|
Roy M. Pineci
|
|
|
|
Executive Vice President - Finance
|
|
|
|
(Principal Accounting Officer)
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of California Resources Corporation;
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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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Todd A. Stevens
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Todd A. Stevens
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of California Resources Corporation;
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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(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Marshall D. Smith
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Marshall D. Smith
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Senior Executive Vice President and
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Chief Financial Officer
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(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Todd A. Stevens
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Name:
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Todd A. Stevens
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Title:
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President and Chief Executive Officer
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Date:
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August 1, 2019
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/s/ Marshall D. Smith
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Name:
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Marshall D. Smith
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Title:
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Senior Executive Vice President and Chief Financial Officer
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Date:
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August 1, 2019
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