WPX ENERGY, INC., 10-Q filed on 5/6/2015
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2015
May 5, 2015
Document Documentand Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
WPX 
 
Entity Registrant Name
WPX ENERGY, INC. 
 
Entity Central Index Key
0001518832 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
204,742,653 
Consolidated Balance Sheet (Unaudited) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 82 
$ 41 
Accounts receivable, net of allowance of $6 million as of March 31, 2015 and December 31, 2014
347 
459 
Derivative assets, current
431 
498 
Inventories
49 
45 
Margin deposits
18 
27 
Assets classified as held for sale, current
132 
773 
Other
28 
26 
Total current assets
1,087 
1,869 
Properties and equipment (successful efforts method of accounting)
12,041 
11,753 
Less—accumulated depreciation, depletion and amortization
(5,130)
(4,911)
Properties and equipment, net
6,911 
6,842 
Derivative assets, noncurrent
58 
38 
Other noncurrent assets
47 
49 
Total assets
8,103 
8,798 
Current liabilities:
 
 
Accounts payable
464 
712 
Accrued and other current liabilities
139 
177 
Liabilities of disposal group associated with assets held for sale
47 
132 
Deferred income taxes, current
164 
151 
Derivative liabilities, current
22 
37 
Total current liabilities
836 
1,209 
Deferred income taxes
614 
621 
Long-term debt
2,000 
2,280 
Derivative liabilities, noncurrent
Asset retirement obligations
203 
198 
Other noncurrent liabilities
59 
57 
Contingent liabilities and commitments (Note 8)
   
   
Stockholders’ equity:
 
 
Preferred stock (100 million shares authorized at $0.01 par value; no shares issued)
Common stock (2 billion shares authorized at $0.01 par value; 204.8 million shares issued at March 31, 2015 and 203.7 million shares issued at December 31, 2014)
Additional paid-in-capital
5,564 
5,562 
Accumulated deficit
(1,177)
(1,244)
Accumulated other comprehensive income (loss)
(1)
Total stockholders’ equity
4,389 
4,319 
Noncontrolling interests in consolidated subsidiaries
109 
Total equity
4,389 
4,428 
Total liabilities and equity
$ 8,103 
$ 8,798 
Consolidated Balance Sheet (Unaudited) (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 6 
$ 6 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
100,000,000 
100,000,000 
Preferred stock, shares issued
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
2,000,000,000 
2,000,000,000 
Common stock, shares issued
204,800,000 
203,700,000 
Consolidated Statement of Operations (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Product revenues:
 
 
Natural gas sales
$ 167 
$ 317 
Oil and condensate sales
117 
149 
Natural gas liquid sales
23 
61 
Total product revenues
307 
527 
Gas management
158 
561 
Net gain (loss) on derivatives (Note 10)
105 
(195)
Other
Total revenues
572 
894 
Costs and expenses:
 
 
Lease and facility operating
57 
60 
Gathering, processing and transportation
73 
89 
Taxes other than income
22 
35 
Gas management, including charges for unutilized pipeline capacity
109 
391 
Exploration (Note 4)
15 
Depreciation, depletion and amortization
216 
193 
Gain on sale of assets
(69)
General and administrative
64 
67 
Other—net
26 
Total costs and expenses
505 
852 
Operating income (loss)
67 
42 
Interest expense
(33)
(29)
Investment income and other
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest
35 
13 
Provision (benefit) for income taxes
13 
13 
Income (Loss) from continuing operations
22 
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest
46 
19 
Net income (loss)
68 
19 
Less: Net income (loss) attributable to noncontrolling interests
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
67 
18 
Income (Loss) from Continuing Operations Attributable to Parent
22 
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent
45 
18 
Comprehensive income (loss) attributable to WPX Energy, Inc.
$ 67 
$ 18 
Basic earnings (loss) per common share (Note 3):
 
 
Income (Loss) from Continuing Operations, Per Basic Share
$ 0.11 
$ 0.00 
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share
$ 0.22 
$ 0.09 
Earnings Per Share, Basic
$ 0.33 
$ 0.09 
Weighted Average Number of Shares Outstanding, Basic
204.1 
201.5 
Income (Loss) from Continuing Operations, Per Diluted Share
$ 0.11 
$ 0.00 
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share
$ 0.21 
$ 0.09 
Earnings Per Share, Diluted
$ 0.32 
$ 0.09 
Weighted Average Number of Shares Outstanding, Diluted
205.9 
205.2 
Consolidated Statement of Changes in Equity (Unaudited) (USD $)
In Millions, unless otherwise specified
Total
Common Stock
Additional Paid-In- Capital
Accumulated Deficit
Accumulated Other Comprehensive Income (Loss)
Total Stockholders’ Equity
Noncontrolling Interests in Consolidated Subsidiaries
December 31, 2014 at Dec. 31, 2014
$ 4,428 
$ 2 
$ 5,562 
$ (1,244)
$ (1)
$ 4,319 
$ 109 1
Decrease In Accumulated Other Comprehensive Income Due to Deconsolidation
 
 
 
 
 
Noncontrolling Interest, Decrease from Deconsolidation
 
 
 
 
 
 
(110)
Comprehensive income (loss):
 
 
 
 
 
 
 
Net income (loss)
68 
 
 
 
 
 
 
Comprehensive Income (Loss) Attributable to Parent
67 
 
 
67 
 
67 
 
Net Income (Loss) Attributable to Noncontrolling Interest
 
 
 
 
 
Other comprehensive loss
 
 
 
 
Comprehensive income (loss)
68 
 
 
 
 
 
 
Stock based compensation
 
 
 
 
Decrease in Noncontrolling Interest and Accumulated Other Comprehensive Income Due To Deconsolidation
(109)
 
 
 
 
 
 
March 31, 2015 at Mar. 31, 2015
$ 4,389 
$ 2 
$ 5,564 
$ (1,177)
$ 0 
$ 4,389 
$ 0 1
Consolidated Statement of Changes in Equity (Parenthetical)
Mar. 31, 2015
Dec. 31, 2014
Statement of Stockholders' Equity [Abstract]
 
 
Noncontrolling interest, ownership percentage by noncontrolling owners
31.00% 
31.00% 
Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Operating Activities
 
 
Net income (loss)
$ 68 
$ 19 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
 
 
Depreciation Depletion And Amortization Including Discontinued Portion
216 
207 
Deferred Income Tax Expense Benefit From Continuing And Discontinued Operations
21 
Provision for impairment of properties and equipment (including certain exploration expenses)
15 
11 
Amortization of stock-based awards
Gain (Loss) on Disposition of Assets
(110)
Cash provided (used) by operating assets and liabilities:
 
 
Accounts receivable
110 
(128)
Inventories
(3)
Margin deposits and customer margin deposits payable
(44)
Other current assets
(5)
20 
Accounts payable
(90)
104 
Accrued and other current liabilities
(62)
(51)
Changes in current and noncurrent derivative assets and liabilities
30 
27 
Other, including changes in other noncurrent assets and liabilities
Net cash provided by operating activities
194 
206 
Investing Activities
 
 
Capital expenditures
(480)1
(352)1
Proceeds from sale of assets
563 
Other
(2)
Net cash provided by (used in) investing activities
87 
(354)
Financing Activities
 
 
Proceeds from common stock
Borrowings on credit facility
181 
622 
Payments on credit facility
(461)
(497)
Other
(17)
Net cash provided by (used in) financing activities
(269)
112 
Net increase (decrease) in cash and cash equivalents
12 
(36)
Effect of Exchange Rate on Cash and Cash Equivalents
(5)
Cash and Cash Equivalents, at Carrying Value, Including Discontinued Operations
70 2
99 2
Cash and cash equivalents at end of period
82 
58 
Increase to properties and equipment
(297)
(372)
Changes in related accounts payable and accounts receivable
$ (183)
$ 20 
Basis of Presentation and Description of Business
Basis of Presentation and Description of Business
Basis of Presentation and Description of Business
Description of Business
Operations of our company include natural gas, oil and NGL development, production and gas management activities primarily located in Colorado, New Mexico and North Dakota in the United States. We specialize in development and production from tight-sands and shale formations in the Piceance, Williston and San Juan Basins. We also have operations and interests in the Appalachian and Green River Basins located in Pennsylvania and Wyoming. Associated with our commodity production are sales and marketing activities, referred to as gas management activities, that include the management of various commodity contracts, such as transportation and related derivatives, coupled with the sale of our commodity volumes.
In addition, we have operations in the Powder River Basin in Wyoming that are classified as held for sale and, until January 29, 2015, we had a 69 percent controlling interest in Apco Oil and Gas International Inc. (“Apco”), an oil and gas exploration and production company with activities in Argentina and Colombia. For all periods presented, the results of Powder River Basin and Apco are reported as discontinued operations.
The consolidated businesses represented herein as WPX Energy, Inc., also referred to herein as “WPX” or the “Company” is at times referred to in the first person as “we”, “us” or “our”.
Basis of Presentation
The accompanying interim consolidated financial statements do not include all the notes included in our annual financial statements and, therefore, should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2014 in the Company’s Annual Report on Form 10-K. The accompanying interim consolidated financial statements include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly our financial position at March 31, 2015, results of operations for the three months ended March 31, 2015 and 2014, changes in equity for the three months ended March 31, 2015 and cash flows for the three months ended March 31, 2015 and 2014.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Our continuing operations are comprised of a single business segment, which includes the development, production and gas management activities of natural gas, oil and NGLs in the United States. Prior to classifying our international operations as discontinued operations, we reported business segments for domestic and international.
Discontinued Operations
On January 29, 2015, we completed the disposition of our international interests and we received net proceeds of $291 million after expenses but before $17 million of cash on hand at Apco as of the closing date. The results of operations of our international segment have been reported as discontinued operations on the Consolidated Statements of Operations and the assets and liabilities have been classified as held for sale on the Consolidated Balance Sheet as of December 31, 2014.
The results of operations of the Powder River Basin have also been reported as discontinued operations on the Consolidated Statements of Operations and the assets and liabilities have been classified as held for sale on the Consolidated Balance Sheets.
Additionally, see Note 8 for a discussion of contingencies related to Williams’ former power business (most of which was disposed of in 2007).
See Note 2 for a further discussion of discontinued operations. Unless indicated otherwise, the information in the Notes to Consolidated Financial Statements relates to continuing operations.
Recently Issued Accounting Standards     
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. The core principles of the guidance in ASU 2014-09 are that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On April 1, 2015, the FASB voted to propose to defer the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017. The FASB plans to expose its decision sometime during the second quarter of 2015. The Company is currently evaluating the impact, if any, of ASU 2014-09 to the Company's financial position, results of operations or cash flows.
In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company does not expect the adoption of ASU 2014-15 to have a significant impact on its Consolidated Financial Statements or related disclosures.
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The amendments in this update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. The guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows.
Discontinued Operations Discontinued Operations (Notes)
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
Discontinued Operations
On October 3, 2014, we announced an agreement to sell our international interests for approximately $294 million subject to the successful consummation of the definitive merger agreement entered into between Pluspetrol Resources Corporation and Apco. On January 29, 2015 we completed this divestiture and received net proceeds of $291 million after expenses but before $17 million of cash on hand at Apco as of the closing date. Together, these non-operated international holdings comprised our international segment. We recorded a pretax gain of $41 million related to this transaction during first quarter 2015.
During the third quarter of 2014, our management signed an agreement to sell our remaining mature, coalbed methane holdings in the Powder River Basin for $155 million. This sales agreement did not successfully close in March 2015 and we subsequently terminated the transaction with the counterparty. However, management is still pursuing the divestiture of these holdings with interested parties. In the first quarter of 2015 we recorded a $10 million impairment of the net assets to a probability weighted-average of expected sales prices. The Powder River operations have firm gathering and treating agreements with total commitments of $119 million through 2020. These commitments have been in excess of our production throughput. We also have certain pipeline capacity obligations held by our marketing company with total commitments for 2015 and thereafter totaling $163 million. Depending on the final terms upon closing a Powder River sale, we may record a portion of these obligations if they meet the definition of exit activities in association with exiting the Powder River Basin.
Summarized Results of Discontinued Operations
 
Three months ended March 31, 2015
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
25

 
$
15

 
$
40

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
10

 
$
4

 
$
14

Gathering, processing and transportation
14

 

 
14

Taxes other than income
3

 
3

 
6

Impairment of assets held for sale
10

 

 
10

General and administrative
1

 
1

 
2

Other—net
(1
)
 

 
(1
)
Total costs and expenses
37

 
8

 
45

Operating income (loss)
(12
)
 
7

 
(5
)
Investment income and other
2

 
1

 
3

Gain on sale of international assets

 
41

 
41

Income (loss) from discontinued operations before income taxes
(10
)
 
49

 
39

Provision (benefit) for income taxes(a)
(4
)
 
(3
)
 
(7
)
Income (loss) from discontinued operations
$
(6
)
 
$
52

 
$
46

__________
(a) International includes the reversal of certain U.S. deferred tax liabilities associated with Apco.

 
Three months ended March 31, 2014
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
62

 
$
31

 
$
93

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
11

 
$
8

 
$
19

Gathering, processing and transportation
17

 

 
17

Taxes other than income
6

 
6

 
12

Depreciation, depletion and amortization
4

 
10

 
14

General and administrative
1

 
4

 
5

Other—net

 
1

 
1

Total costs and expenses
39

 
29

 
68

Operating income (loss)
23

 
2

 
25

Investment income and other
2

 
2

 
4

Income (loss) from discontinued operations before income taxes
25

 
4

 
29

Provision (benefit) for income taxes
8

 
2

 
10

Income (loss) from discontinued operations
$
17

 
$
2

 
$
19


Assets and Liabilities in the Consolidated Balance Sheet Attributable to Discontinued Operations

As of March 31, 2015 the following table presents assets classified as held for sale and liabilities associated with assets held for sale related to our Powder River Basin operations.
 
March 31, 2015
 
Total
 
(Millions)
Assets classified as held for sale
 
Current assets:
 
Inventories
$
1

Total current assets
1

Investments
19

Properties and equipment (successful efforts method of accounting)(a)
122

Less—accumulated depreciation, depletion and amortization
(10
)
Properties and equipment, net
112

Total assets classified as held for sale on the Consolidated Balance Sheets
$
132

 
 
Liabilities associated with assets held for sale
 
Current liabilities:
 
Accrued and other current liabilities
$
3

Total current liabilities
3

Asset retirement obligations
44

Total liabilities associated with assets held for sale on the Consolidated Balance Sheets
$
47

__________
(a) Includes a cumulative total of $55 million in impairments of the net assets held for sale of the Powder River Basin.

As of December 31, 2014 the following table presents domestic assets classified as held for sale and liabilities associated with assets held for sale related to our Powder River Basin and Appalachian Basin operations, and the international assets classified as held for sale and liabilities associated with assets held for sale related to our international operations which were divested in January 2015.
 
December 31, 2014
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Assets classified as held for sale
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$

 
$
29

 
$
29

Accounts receivable

 
25

 
25

Inventories
1

 
7

 
8

Other

 
14

 
14

Total current assets
1

 
75

 
76

Investments
18

 
134

 
152

Properties and equipment (successful efforts method of accounting)(a)
132

 
445

 
577

Less—accumulated depreciation, depletion and amortization
(10
)
 
(228
)
 
(238
)
Properties and equipment, net
122

 
217

 
339

Other noncurrent assets

 
6

 
6

Total assets classified as held for sale—discontinued operations
$
141

 
$
432

 
$
573

Total assets classified as held for sale—continuing operations (Note 4)
200

 

 
200

Total assets classified as held for sale on the Consolidated Balance Sheets
$
341

 
$
432

 
$
773

 
 
 
 
 
 
Liabilities associated with assets held for sale
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$

 
$
34

 
$
34

Accrued and other current liabilities
3

 
23

 
26

Total current liabilities
3

 
57

 
60

Deferred income taxes

 
13

 
13

Long-term debt

 
2

 
2

Asset retirement obligations
45

 
7

 
52

Other noncurrent liabilities

 
3

 
3

Total liabilities associated with assets held for sale—discontinued operations
$
48

 
$
82

 
$
130

Total liabilities associated with assets held for sale—continuing operations (Note 4)
$
2

 
$

 
$
2

Total liabilities associated with assets held for sale on the Consolidated Balance Sheets
$
50

 
$
82

 
$
132

__________
(a) Domestic includes a total of $45 million in impairments of the net assets held for sale of the Powder River Basin.

Cash Flows Attributable to Discontinued Operations
Excluding income taxes and changes to working capital, total cash used by operating activities related to the Powder River Basin was $1 million for the three months ended March 31, 2015 and total cash provided by operating activities was $30 million for the three months ended March 31, 2014. Total cash used in investing activities related to Powder River Basin discontinued operations was $1 million and $2 million for the three months ended March 31, 2015 and 2014, respectively. Cash provided by operating activities related to our international operations was $3 million and $11 million for the three months ended March 31, 2015 and 2014, respectively. Total cash used in investing activities related our international operations was $15 million and $21 million for the three months ended March 31, 2015 and 2014, respectively.
Earnings (Loss) Per Common Share from Continuing Operations
Earnings (Loss) Per Common Share from Continuing Operations
Earnings (Loss) Per Common Share from Continuing Operations
The following table summarizes the calculation of earnings per share.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions, except per-share amounts)
Income (loss) from continuing operations attributable to WPX Energy, Inc. available to common stockholders for basic and diluted earnings (loss) per common share
$
22

 
$

Basic weighted-average shares
204.1

 
201.5

Effect of dilutive securities(a):
 
 
 
Nonvested restricted stock units and awards
1.7

 
2.7

Stock options
0.1

 
1.0

Diluted weighted-average shares
205.9

 
205.2

Earnings (loss) per common share from continuing operations:
 
 
 
Basic
$
0.11

 
$

Diluted
$
0.11

 
$


The table below includes information related to stock options that were outstanding at March 31, 2015 and 2014 but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the first quarter weighted-average market price of our common shares.
 
March 31,
 
2015
 
2014
Options excluded (millions)
2.6

 
0.4

Weighted-average exercise price of options excluded
$
16.16

 
$
20.23

Exercise price range of options excluded
$11.46 - $21.81

 
$19.95 - $20.97

First quarter weighted-average market price
$
11.43

 
$
18.44



For the three months ended March 31, 2015, approximately 1.0 million nonvested restricted stock units were antidilutive and were excluded from the computation of diluted weighted-average shares.
Asset Sale, Impairments and Exploration Expense
Asset Sales Impairments Exploration Expenses And Other Accruals [Text Block]
Asset Sale, Other Expenses and Exploration Expenses
Asset Sale
During the first quarter of 2015, we sold a portion of our Appalachian Basin operations and released certain firm transportation capacity to Southwestern Energy Company (NYSE: SWN) for approximately $288 million, subject to post closing adjustments. Including an estimate of post closing adjustments, we have recorded a net gain of $69 million in first-quarter 2015. This transaction included physical operations covering approximately 46,700 acres, roughly 50 MMcfe per day of net natural gas production and 63 horizontal wells. The assets are primarily located in the Appalachian Basin in Susquehanna County, Pennsylvania. The transaction also included the release of firm transportation capacity that we had under contract in the northeast, primarily 260 MMcfe per day with Millennium Pipeline. Upon the transfer of the firm capacity, we will be released from approximately $24 million per year in annual demand obligations associated with the transport.
Other Expenses
During the first quarter of 2015, we executed a termination and settlement agreement to release us from a crude oil transportation and sales agreement in anticipation of entering into a different agreement with another third party with more favorable terms. As a result of this contract termination and settlement, we recorded an expense of approximately $22 million which is included in Other—net on the Consolidated Statements of Operations.
Exploration Expenses
The following table presents a summary of exploration expenses.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Geologic and geophysical costs
$
1

 
$
5

Unproved leasehold property impairment, amortization and expiration
6

 
10

Total exploration expenses
$
7

 
$
15


As of March 31, 2015, our total capitalized well costs associated with our exploratory areas, including the Niobrara Shale in the Piceance Basin, totaled approximately $38 million.
Inventories
Inventories
Inventories
 
March 31,
2015
 
December 31,
2014
 
(Millions)
Material, supplies and other
$
48

 
$
43

Crude oil production in transit
1

 
2

     Total inventories
$
49

 
$
45

Debt and Banking Arrangements
Debt and Banking Arrangements
Debt and Banking Arrangements
As of the indicated dates, our debt consisted of the following:
 
March 31,
2015
 
December 31,
2014
 
(Millions)
5.250% Senior Notes due 2017
$
400

 
$
400

6.000% Senior Notes due 2022
1,100

 
1,100

5.250% Senior Notes due 2024
500

 
500

Credit facility agreement

 
280

Other
1

 
1

     Total debt
$
2,001

 
$
2,281

Less: Current portion of long-term debt
1

 
1

     Total long-term debt
$
2,000

 
$
2,280


Credit Facility
We have a $1.5 billion five-year senior unsecured revolving credit facility agreement with Citibank, N.A., as Administrative Agent, Lender and Swingline Lender and the other lenders party thereto (the “Credit Facility”). Under the terms of the Credit Facility and subject to certain requirements, we may request an increase in the commitments of up to an additional $300 million by either commitments from new lenders or increased commitments from existing lenders. The Credit Facility matures on October 28, 2019. The financial covenants in the Credit Facility may limit our ability to borrow money, depending on the applicable financial metrics at any given time. As of March 31, 2015, we were in compliance with our financial covenants and had full access to the Credit Facility. For additional information regarding the terms of our Credit Facility, see our Annual Report on Form 10-K for the year ended December 31, 2014.
Letters of Credit
WPX has also entered into three bilateral, uncommitted letter of credit (“LC”) agreements. These LC agreements provide WPX the ability to meet various contractual requirements and incorporate terms similar to those found in the Credit Facility. At March 31, 2015, a total of $315 million in letters of credit have been issued.
Provision (Benefit) for Income Taxes
Provision (Benefit) for Income Taxes
Provision (Benefit) for Income Taxes
The provision (benefit) for income taxes from continuing operations includes: 
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Current:
 
 
 
Federal
$

 
$
1

State

 

 

 
1

Deferred:
 
 
 
Federal
12

 
(1
)
State
1

 
13

 
13

 
12

Total provision (benefit)
$
13

 
$
13


The effective tax rate for all periods presented above differs from the federal statutory rate primarily due to the effects of state income taxes. Tax reform legislation was enacted by the state of New York on March 31, 2014, and had an impact on us as a result of our marketing activities in the state. As a result, we recorded an additional $9 million of deferred tax expense in the first quarter of 2014 to accrue for the impact of this new legislation.
As of March 31, 2015, the amount of unrecognized tax benefits is not material. During the next 12 months, we do not expect ultimate resolution of any uncertain tax position will result in a significant increase or decrease of our unrecognized tax benefit.
Pursuant to our tax sharing agreement with The Williams Companies, Inc. (“Williams”), we remain responsible for the tax from audit adjustments related to our business for periods prior to the spin-off. The 2011 consolidated tax filing by Williams is currently being audited by the IRS and is the only pre spin-off period for which we continue to have exposure to audit adjustments as part of Williams. We are not aware of any significant issues related to our business for which we would owe additional tax; however, the alternative minimum tax credit deferred tax asset that was allocated to us by Williams at the time of the spin-off could change due to audit adjustments unrelated to our business.
Contingent Liabilities
Contingent Liabilities
Contingent Liabilities
Royalty litigation
In September 2006, royalty interest owners in Garfield County, Colorado, filed a class action suit in District Court, Garfield County, Colorado, alleging we improperly calculated oil and gas royalty payments, failed to account for proceeds received from the sale of natural gas and extracted products, improperly charged certain expenses and failed to refund amounts withheld in excess of ad valorem tax obligations. Plaintiffs sought to certify a class of royalty interest owners, recover underpayment of royalties and obtain corrected payments related to calculation errors. We entered into a final partial settlement agreement. The partial settlement agreement defined the class for certification, resolved claims relating to past calculation of royalty and overriding royalty payments, established certain rules to govern future royalty and overriding royalty payments, resolved claims related to past withholding for ad valorem tax payments, established a procedure for refunds of any such excess withholding in the future, and reserved two claims for court resolution. We have prevailed at the trial court and all levels of appeal on the first reserved claim regarding whether we are allowed to deduct mainline pipeline transportation costs pursuant to certain lease agreements. The remaining claim related to the issue of whether we are required to have proportionately increased the value of natural gas by transporting that gas on mainline transmission lines and, if required, whether we did so and are entitled to deduct a proportionate share of transportation costs in calculating royalty payments. Plaintiffs had claimed damages of approximately $20 million plus interest for the period from July 2000 to July 2008. The court issued pretrial orders finding that we do bear the burden of demonstrating enhancement of the value of gas in order to deduct transportation costs and that the enhancement test must be applied on a monthly basis in order to determine the reasonableness of post-production transportation costs. Trial occurred in December 2013 on the issue of whether we have met that burden. Following that trial, the court issued its order rejecting plaintiffs’ proposed standard and accepting our position as to the methodology to use in determining the standard by which our activity should be judged. We have completed the accounting process under the standard and have obtained the court's approval. However, as we continue to believe our royalty calculations have been properly determined in accordance with the appropriate contractual arrangements and Colorado law, we have appealed this matter to the Colorado Court of Appeals. Plaintiffs have now filed a second class action lawsuit in the District Court, Garfield County containing similar allegations but related to subsequent time periods. The parties have agreed to stay this new lawsuit pending resolution of the first lawsuit in the Colorado Court of Appeals.
In October 2011, a potential class of royalty interest owners in New Mexico and Colorado filed a complaint against us in the County of Rio Arriba, New Mexico. The complaint presently alleges failure to pay royalty on hydrocarbons including drip condensate, breach of the duty of good faith and fair dealing, fraudulent concealment, conversion, misstatement of the value of gas and affiliated sales, breach of duty to market hydrocarbons in Colorado, violation of the New Mexico Oil and Gas Proceeds Payment Act, and bad faith breach of contract. Plaintiffs sought monetary damages and a declaratory judgment enjoining activities relating to production, payments and future reporting. This matter was removed to the United States District Court for New Mexico. In March 2015, the court denied plaintiffs' motion for class certification. Plaintiffs have not timely filed an appeal of this denial but have filed a motion seeking to conduct additional discovery in order to attempt to redefine their proposed class. In August 2012, a second potential class action was filed against us in the United States District Court for the District of New Mexico by mineral interest owners in New Mexico and Colorado. Plaintiffs claim breach of contract, breach of the covenant of good faith and fair dealing, breach of implied duty to market both in Colorado and New Mexico and violation of the New Mexico Oil and Gas Proceeds Payment Act, and seek declaratory judgment, accounting and injunction. At this time, we believe that our royalty calculations have been properly determined in accordance with the appropriate contractual arrangements and applicable laws. We do not have sufficient information to calculate an estimated range of exposure related to these claims.
Other producers have been pursuing administrative appeals with a federal regulatory agency and have been in discussions with a state agency in New Mexico regarding certain deductions, comprised primarily of processing, treating and transportation costs, used in the calculation of royalties. Although we are not a party to those matters, we are monitoring them to evaluate whether their resolution might have the potential for unfavorable impact on our results of operations. Certain outstanding issues in those matters could be material to us. We received notice from the U.S. Department of Interior Office of Natural Resources Revenue (“ONRR”) in the fourth quarter of 2010, intending to clarify the guidelines for calculating federal royalties on conventional gas production applicable to our federal leases in New Mexico. The guidelines for New Mexico properties were revised slightly in September 2013 as a result of additional work performed by the ONRR. The revisions did not change the basic function of the original guidance. The ONRR’s guidance provides its view as to how much of a producer’s bundled fees for transportation and processing can be deducted from the royalty payment. We believe using these guidelines would not result in a material difference in determining our historical federal royalty payments for our leases in New Mexico. No similar specific guidance has been issued by ONRR for leases in other states though such guidelines are expected in the future. However, the timing of any such guidance is uncertain and, independent of the issuance of additional guidance, ONRR asked producers to attempt to evaluate the deductibility of these fees directly with the midstream companies that transport and process gas. The issuance of similar guidelines in Colorado and other states could affect our previous royalty payments, and the effect could be material to our results of operations. Interpretive guidelines on the applicability of certain deductions in the calculation of federal royalties are extremely complex and may vary based upon the ONRR’s assessment of the configuration of processing, treating and transportation operations supporting each federal lease. Correspondence in 2009 with the ONRR’s predecessor did not take issue with our calculation regarding the Piceance Basin assumptions, which we believe have been consistent with the requirements. From April 2008 through March 2015, our deductions used in the calculation of the royalty payments in states other than New Mexico associated with conventional gas production total approximately $113 million.
Environmental matters
The Environmental Protection Agency (“EPA”), other federal agencies, and various state and local regulatory agencies and jurisdictions routinely promulgate and propose new rules, and issue updated guidance to existing rules. These new rules and rulemakings include, but are not limited to, new air quality standards for ground level ozone, methane, green completions, and hydraulic fracturing and water standards. We are unable to estimate the costs of asset additions or modifications necessary to comply with these new regulations due to uncertainty created by the various legal challenges to these regulations and the need for further specific regulatory guidance.
Matter related to Williams’ former power business
In connection with a Separation and Distribution Agreement between WPX and Williams, Williams is obligated to indemnify and hold us harmless from any losses arising out of liabilities assumed by us, and we are obligated to pay Williams any net proceeds realized from, the pending litigation described below relating to the reporting of certain natural gas-related information to trade publications.
Civil suits based on allegations of manipulating published gas price indices have been brought against us and others, seeking unspecified amounts of damages. We are currently a defendant in class action litigation and other litigation originally filed in state court in Colorado, Kansas, Missouri and Wisconsin and brought on behalf of direct and indirect purchasers of natural gas in those states. These cases were transferred to the federal court in Nevada. In 2008, the court granted summary judgment in the Colorado case in favor of us and most of the other defendants based on plaintiffs’ lack of standing. On January 8, 2009, the court denied the plaintiffs’ request for reconsideration of the Colorado dismissal and entered judgment in our favor. When a final order is entered against the one remaining defendant, the Colorado plaintiffs may appeal the order.
In the other cases, on July 18, 2011, the Nevada district court granted our joint motions for summary judgment to preclude the plaintiffs’ state law claims because the federal Natural Gas Act gives the FERC exclusive jurisdiction to resolve those issues. The court also denied the plaintiffs’ class certification motion as moot. The plaintiffs appealed to the United States Court of Appeals for the Ninth Circuit. On April 10, 2013, the United States Court of Appeals for the Ninth Circuit issued its opinion in the Western States Antitrust Litigation holding that the Natural Gas Act does not preempt the plaintiffs’ state antitrust claims and reversing the summary judgment previously entered in favor of the defendants. The U.S. Supreme Court granted Defendants' writ of certiorari. On April 21, 2015, the U.S. Supreme Court determined that the state antitrust claims are not preempted by the federal Natural Gas Act. Because of the uncertainty around pending unresolved issues, including an insufficient description of the purported classes and other related matters, we cannot reasonably estimate a range of potential exposures at this time.
Other Indemnifications
Pursuant to various purchase and sale agreements relating to divested businesses and assets, we have indemnified certain purchasers against liabilities that they may incur with respect to the businesses and assets acquired from us. The indemnities provided to the purchasers are customary in sale transactions and are contingent upon the purchasers incurring liabilities that are not otherwise recoverable from third parties. The indemnities generally relate to breach of warranties, tax, historic litigation, personal injury, environmental matters, right of way and other representations that we have provided.
At March 31, 2015, we have not received a claim against any of these indemnities and thus have no basis from which to estimate any reasonably possible loss. Further, we do not expect any of the indemnities provided pursuant to the sales agreements to have a material impact on our future financial position. However, if a claim for indemnity is brought against us in the future, it may have a material adverse effect on our results of operations in the period in which the claim is made.
In connection with the separation from Williams, we agreed to indemnify and hold Williams harmless from any losses resulting from the operation of our business or arising out of liabilities assumed by us. Similarly, Williams has agreed to indemnify and hold us harmless from any losses resulting from the operation of its business or arising out of liabilities assumed by it.
Summary
As of March 31, 2015 and December 31, 2014, the Company had accrued approximately $16 million for loss contingencies associated with royalty litigation and other contingencies. In certain circumstances, we may be eligible for insurance recoveries, or reimbursement from others. Any such recoveries or reimbursements will be recognized only when realizable.
Management, including internal counsel, currently believes that the ultimate resolution of the foregoing matters, taken as a whole and after consideration of amounts accrued, insurance coverage, recovery from customers or other indemnification arrangements, is not expected to have a materially adverse effect upon our future liquidity or financial position; however, it could be material to our results of operations in any given year.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The following table presents, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis. The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, restricted cash, and margin deposits and customer margin deposits payable approximate fair value due to the nature of the instrument and/or the short-term maturity of these instruments.
 
March 31, 2015
 
December 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(Millions)
 
(Millions)
Energy derivative assets
$
9

 
$
479

 
$
1

 
$
489

 
$
14

 
$
517

 
$
5

 
$
536

Energy derivative liabilities
$
16

 
$
7

 
$
1

 
$
24

 
$
32

 
$
10

 
$

 
$
42

Total debt(a)
$

 
$
1,868

 
$

 
$
1,868

 
$

 
$
2,218

 
$

 
$
2,218

__________
(a)
The carrying value of total debt, excluding capital leases, was $2,000 million and $2,280 million as of March 31, 2015 and December 31, 2014, respectively.
Energy derivatives include commodity based exchange-traded contracts and over-the-counter (“OTC”) contracts. Exchange-traded contracts include futures, swaps and options. OTC contracts include forwards, swaps, options and swaptions. These are carried at fair value on the Consolidated Balance Sheets.
Many contracts have bid and ask prices that can be observed in the market. Our policy is to use a mid-market pricing (the mid-point price between bid and ask prices) convention to value individual positions and then adjust on a portfolio level to a point within the bid and ask range that represents our best estimate of fair value. For offsetting positions by location, the mid-market price is used to measure both the long and short positions.
The determination of fair value for our assets and liabilities also incorporates the time value of money and various credit risk factors which can include the credit standing of the counterparties involved, master netting arrangements, the impact of credit enhancements (such as cash collateral posted and letters of credit) and our nonperformance risk on our liabilities. The determination of the fair value of our liabilities does not consider noncash collateral credit enhancements.
Exchange-traded contracts include New York Mercantile Exchange and Intercontinental Exchange contracts and are valued based on quoted prices in these active markets and are classified within Level 1.
Forward, swap, option and swaption contracts included in Level 2 are valued using an income approach including present value techniques and option pricing models. Option contracts, which hedge future sales of our production, are structured as costless collars or as swaptions and are financially settled. All of our financial options are valued using an industry standard Black-Scholes option pricing model. In connection with several natural gas and crude oil swaps entered into, we granted swaptions to the swap counterparties in exchange for receiving premium hedged prices on the natural gas and crude oil swaps. These swaptions grant the counterparty the option to enter into future swaps with us. Significant inputs into our Level 2 valuations include commodity prices, implied volatility and interest rates, as well as considering executed transactions or broker quotes corroborated by other market data. These broker quotes are based on observable market prices at which transactions could currently be executed. In certain instances where these inputs are not observable for all periods, relationships of observable market data and historical observations are used as a means to estimate fair value. Also categorized as Level 2 is the fair value of our debt, which is determined on market rates and the prices of similar securities with similar terms and credit ratings. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2.
Our energy derivatives portfolio is largely comprised of exchange-traded products or like products and the tenure of our derivatives portfolio is relatively short with 100 percent of the net fair value of our derivatives portfolio expiring at the end of 2016. Due to the nature of the products and tenure, we are consistently able to obtain market pricing. All pricing is reviewed on a daily basis and is formally validated with broker quotes or market indications and documented on a monthly basis.
Certain instruments trade with lower availability of pricing information. These instruments are valued with a present value technique using inputs that may not be readily observable or corroborated by other market data. These instruments are classified within Level 3 when these inputs have a significant impact on the measurement of fair value. The instruments included in Level 3 were a net asset of less than $1 million at March 31, 2015, and consist primarily of natural gas index transactions that are used to manage our physical requirements.
Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. No significant transfers occurred during the periods ended March 31, 2015 and 2014.
There have been no material changes in the fair value of our net energy derivatives and other assets classified as Level 3 in the fair value hierarchy.
 
 
 
 
Derivatives and Concentration of Credit Risk
Derivatives and Concentration of Credit Risk
 Derivatives and Concentration of Credit Risk
Energy Commodity Derivatives
Risk Management Activities
We are exposed to market risk from changes in energy commodity prices within our operations. We utilize derivatives to manage exposure to the variability in expected future cash flows from forecasted sales of natural gas, oil and natural gas liquids attributable to commodity price risk.
We produce, buy and sell natural gas, crude oil and natural gas liquids at different locations throughout the United States. To reduce exposure to a decrease in revenues from fluctuations in commodity market prices, we enter into futures contracts, swap agreements and financial option contracts to mitigate the price risk on forecasted sales of natural gas, crude oil and natural gas liquids. We have also entered into basis swap agreements to reduce the locational price risk associated with our producing basins. Our financial option contracts are either purchased options, a combination of options that comprise a net purchased option or a zero-cost collar or swaptions.
We also enter into forward contracts to buy and sell natural gas to maximize the economic value of transportation agreements. To reduce exposure to a decrease in margins from fluctuations in natural gas market prices, we may enter into futures contracts, swap agreements and financial option contracts to mitigate the price risk associated with these contracts. Derivatives for transportation contracts economically hedge the expected cash flows generated by those agreements.
  Derivatives related to production
The following table sets forth the derivative notional volumes that are economic hedges of production volumes, which are included in our commodity derivatives portfolio as of March 31, 2015.
Commodity
 
Period
 
Contract Type (a)
 
Location
 
Notional Volume (b)
 
Weighted Average
Price (c)
Natural Gas
 
 
 
 
 
 
 
 
 
 
Natural Gas
 
Apr-Dec 2015
 
Fixed Price Swaps
 
Henry Hub
 
(410
)
 
$
4.05

Natural Gas
 
Apr-Dec 2015
 
Costless Collars
 
Henry Hub
 
(50
)
 
$ 4.00 - 4.50

Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
NGPL
 
(18
)
 
$
(0.18
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
Rockies
 
(220
)
 
$
(0.16
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
San Juan
 
(100
)
 
$
(0.11
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
SoCal
 
(20
)
 
$
0.18

Natural Gas
 
2016
 
Fixed Price Swaps
 
Henry Hub
 
(280
)
 
$
3.81

Natural Gas
 
2016
 
Swaptions
 
Henry Hub
 
(90
)
 
$
4.23

Natural Gas
 
2017
 
Swaptions
 
Henry Hub
 
(65
)
 
$
4.19

Crude Oil
 
 
 
 
 
 
 
 
 
 
Crude Oil
 
Apr-Dec 2015
 
Fixed Price Swaps
 
WTI
 
(19,658
)
 
$
94.84

Crude Oil
 
Apr-Dec 2015
 
Swaptions
 
WTI
 
(1,171
)
 
$
97.29

Crude Oil
 
2016
 
Fixed Price Swaps
 
WTI
 
(4,500
)
 
$
62.04

Crude Oil
 
2016
 
Swaptions
 
WTI
 
(8,500
)
 
$
84.27

__________
(a)
Derivatives related to crude oil production are fixed price swaps settled on the business day average and swaptions. The derivatives related to natural gas production are fixed price swaps, basis swaps, swaptions and costless collars. In connection with several natural gas and crude oil swaps entered into, we granted swaptions to the swap counterparties in exchange for receiving premium hedged prices on the natural gas and crude oil swaps. These swaptions grant the counterparty the option to enter into future swaps with us.
(b)
Natural gas volumes are reported in BBtu/day and crude oil volumes are reported in Bbl/day.
(c)
The weighted average price for natural gas is reported in $/MMBtu and the crude oil price is reported in $/Bbl.
Derivatives primarily related to transportation
The following table sets forth the derivative notional volumes of the net long (short) positions of derivatives primarily related to transportation contracts, which are included in our commodity derivatives portfolio as of March 31, 2015. The weighted average price is not reported since the notional volumes represent a net position comprised of buys and sells with positive and negative transaction prices.
Commodity
 
Period
 
Contract Type (a)
 
Location (b)
 
Notional Volume (c)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
Multiple
 
(7
)
Natural Gas
 
Apr-Dec 2015
 
Index
 
Multiple
 
(108
)
Natural Gas
 
2016
 
Index
 
Multiple
 
(70
)
Natural Gas
 
2017
 
Index
 
Multiple
 
(70
)
Natural Gas
 
  2018+
 
Index
 
Multiple
 
(70
)
__________
(a)
We enter into exchange traded fixed price and basis swaps, over-the-counter fixed price and basis swaps, physical fixed price transactions and transactions with an index component.
(b)
We transact at multiple locations primarily around our core assets to maximize the economic value of our transportation and asset management agreements.
(c)
Natural gas volumes are reported in BBtu/day.
 Fair values and gains (losses)
The following table presents the fair value of energy commodity derivatives. Our derivatives are presented as separate line items in our Consolidated Balance Sheets as current and noncurrent derivative assets and liabilities. Derivatives are classified as current or noncurrent based on the contractual timing of expected future net cash flows of individual contracts. The expected future net cash flows for derivatives classified as current are expected to occur within the next 12 months. The fair value amounts are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements. Further, the amounts below do not include cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions.
 
March 31, 2015
 
December 31, 2014
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
(Millions)
Derivatives related to production
$
479

 
$
7

 
$
517

 
$
10

Derivatives related to physical marketing agreements
10

 
17

 
19

 
32

Total derivatives
$
489

 
$
24

 
$
536

 
$
42


We enter into commodity derivative contracts that serve as economic hedges but are not designated as cash flow hedges for accounting purposes as we do not utilize this method of accounting on derivative instruments. The following table presents the net gain (loss) related to our energy commodity derivatives.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Gain (loss) from derivatives related to production(a)
$
122

 
$
(86
)
Gain (loss) from derivatives related to physical marketing agreements(b)
(17
)
 
(109
)
Net gain (loss) on derivatives not designated as hedges
$
105

 
$
(195
)

__________
(a)
Includes receipts totaling $158 million and payments totaling $50 million for the three months ended March 31, 2015 and 2014, respectively.
(b)
Includes payments totaling $23 million and $118 million for the three months ended March 31, 2015 and 2014, respectively.
The cash flow impact of our derivative activities is presented in the Consolidated Statements of Cash Flows as changes in current and noncurrent derivative assets and liabilities.
Offsetting of derivative assets and liabilities
The following table presents our gross and net derivative assets and liabilities.
 
Gross Amount Presented on Balance Sheet
 
Netting Adjustments (a)
 
Cash Collateral Posted (Received)
 
Net Amount
March 31, 2015
(Millions)
Derivative assets with right of offset or master netting agreements
$
489

 
$
(17
)
 
$

 
$
472

Derivative liabilities with right of offset or master netting agreements
$
(24
)
 
$
17

 
$
7

 
$

 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
Derivative assets with right of offset or master netting agreements
$
536

 
$
(25
)
 
$

 
$
511

Derivative liabilities with right of offset or master netting agreements
$
(42
)
 
$
25

 
$
17

 
$

__________
(a)
With all of our financial trading counterparties, we have agreements in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements. Additionally, we have negotiated master netting agreements with some of our counterparties. These master netting agreements allow multiple entities that have multiple underlying agreements the ability to net derivative assets and derivative liabilities at settlement or in the event of a default or a termination under one or more of the underlying contracts.
Credit-risk-related features
Certain of our derivative contracts contain credit-risk-related provisions that would require us, under certain events, to post additional collateral in support of our net derivative liability positions. These credit-risk-related provisions require us to post collateral in the form of cash or letters of credit when our net liability positions exceed an established credit threshold. The credit thresholds are typically based on our senior unsecured debt ratings from Standard and Poor’s and/or Moody’s Investment Services. Under these contracts, a credit ratings decline would lower our credit thresholds, thus requiring us to post additional collateral. We also have contracts that contain adequate assurance provisions giving the counterparty the right to request collateral in an amount that corresponds to the outstanding net liability.
As of March 31, 2015, we had collateral totaling $18 million posted to derivative counterparties, which included $11 million of initial margin to clearinghouses or exchanges to enter into positions and $7 million of maintenance margin for changes in the fair value of those positions, to support the aggregate fair value of our net $7 million derivative liability position (reflecting master netting arrangements in place with certain counterparties), which includes a reduction of less than $1 million to our liability balance for our own nonperformance risk. The additional collateral that we would have been required to post, assuming our credit thresholds were eliminated and a call for adequate assurance under the credit risk provisions in our derivative contracts was triggered, was less than $1 million at March 31, 2015. 
Concentration of Credit Risk
Cash equivalents
Our cash equivalents are primarily invested in funds with high-quality, short-term securities and instruments that are issued or guaranteed by the U.S. government.

Derivative assets and liabilities
We have a risk of loss from counterparties not performing pursuant to the terms of their contractual obligations. Counterparty performance can be influenced by changes in the economy and regulatory issues, among other factors. Risk of loss is impacted by several factors, including credit considerations and the regulatory environment in which a counterparty transacts. We attempt to minimize credit-risk exposure to derivative counterparties and brokers through formal credit policies, consideration of credit ratings from public ratings agencies, monitoring procedures, master netting agreements and collateral support under certain circumstances. Collateral support could include letters of credit, payment under margin agreements and guarantees of payment by credit worthy parties.

We also enter into master netting agreements to mitigate counterparty performance and credit risk. During 2015 and 2014, we did not incur any significant losses due to counterparty bankruptcy filings. We assess our credit exposure on a net basis to reflect master netting agreements in place with certain counterparties. We offset our credit exposure to each counterparty with amounts we owe the counterparty under derivative contracts.

The gross and net credit exposure from our derivative contracts as of March 31, 2015, is summarized as follows:
Counterparty Type
Gross Total
 
Net Total
 
(Millions)
Financial institutions (Investment Grade)(a)
$
490

 
$
473

 
490

 
473

Credit reserves
1

 
1

Credit exposure from derivatives
$
489

 
$
472

 
__________
(a)
We determine investment grade primarily using publicly available credit ratings. We include counterparties with a minimum S&P’s rating of BBB- or Moody’s Investors Service rating of Baa3 in investment grade.
 
Our eight largest net counterparty positions represent approximately 96 percent of our net credit exposure from derivatives and are all with investment grade counterparties. Under our marginless hedging agreements with key banks, neither party is required to provide collateral support related to hedging activities.
Other
Collateral support for our commodity agreements could include margin deposits, letters of credit and guarantees of payment by credit worthy parties.
Subsequent Events (Notes)
Subsequent Events [Text Block]
Subsequent Events
Subsequent to March 31, 2015, WPX signed an agreement to sell a package of marketing contracts and release certain related firm transportation capacity in the Northeast to an undisclosed buyer for an amount in excess of $200 million cash. The parties expect to close the transaction in the second quarter, subject to regulatory approval and typical closing conditions. Upon completing the transaction, WPX will be released from various long-term natural gas purchase and sales obligations and approximately $390 million in future demand payment obligations associated with the transport position.
Discontinued Operations Discontinued Operation (Tables)
Summarized Results of Discontinued Operations
 
Three months ended March 31, 2015
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
25

 
$
15

 
$
40

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
10

 
$
4

 
$
14

Gathering, processing and transportation
14

 

 
14

Taxes other than income
3

 
3

 
6

Impairment of assets held for sale
10

 

 
10

General and administrative
1

 
1

 
2

Other—net
(1
)
 

 
(1
)
Total costs and expenses
37

 
8

 
45

Operating income (loss)
(12
)
 
7

 
(5
)
Investment income and other
2

 
1

 
3

Gain on sale of international assets

 
41

 
41

Income (loss) from discontinued operations before income taxes
(10
)
 
49

 
39

Provision (benefit) for income taxes(a)
(4
)
 
(3
)
 
(7
)
Income (loss) from discontinued operations
$
(6
)
 
$
52

 
$
46

__________
(a) International includes the reversal of certain U.S. deferred tax liabilities associated with Apco.

 
Three months ended March 31, 2014
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
62

 
$
31

 
$
93

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
11

 
$
8

 
$
19

Gathering, processing and transportation
17

 

 
17

Taxes other than income
6

 
6

 
12

Depreciation, depletion and amortization
4

 
10

 
14

General and administrative
1

 
4

 
5

Other—net

 
1

 
1

Total costs and expenses
39

 
29

 
68

Operating income (loss)
23

 
2

 
25

Investment income and other
2

 
2

 
4

Income (loss) from discontinued operations before income taxes
25

 
4

 
29

Provision (benefit) for income taxes
8

 
2

 
10

Income (loss) from discontinued operations
$
17

 
$
2

 
$
19

Summarized Results of Discontinued Operations
 
Three months ended March 31, 2015
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
25

 
$
15

 
$
40

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
10

 
$
4

 
$
14

Gathering, processing and transportation
14

 

 
14

Taxes other than income
3

 
3

 
6

Impairment of assets held for sale
10

 

 
10

General and administrative
1

 
1

 
2

Other—net
(1
)
 

 
(1
)
Total costs and expenses
37

 
8

 
45

Operating income (loss)
(12
)
 
7

 
(5
)
Investment income and other
2

 
1

 
3

Gain on sale of international assets

 
41

 
41

Income (loss) from discontinued operations before income taxes
(10
)
 
49

 
39

Provision (benefit) for income taxes(a)
(4
)
 
(3
)
 
(7
)
Income (loss) from discontinued operations
$
(6
)
 
$
52

 
$
46

__________
(a) International includes the reversal of certain U.S. deferred tax liabilities associated with Apco.

 
Three months ended March 31, 2014
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Total revenues
$
62

 
$
31

 
$
93

Costs and expenses:
 
 
 
 
 
Lease and facility operating
$
11

 
$
8

 
$
19

Gathering, processing and transportation
17

 

 
17

Taxes other than income
6

 
6

 
12

Depreciation, depletion and amortization
4

 
10

 
14

General and administrative
1

 
4

 
5

Other—net

 
1

 
1

Total costs and expenses
39

 
29

 
68

Operating income (loss)
23

 
2

 
25

Investment income and other
2

 
2

 
4

Income (loss) from discontinued operations before income taxes
25

 
4

 
29

Provision (benefit) for income taxes
8

 
2

 
10

Income (loss) from discontinued operations
$
17

 
$
2

 
$
19

Assets and Liabilities in the Consolidated Balance Sheet Attributable to Discontinued Operations

As of March 31, 2015 the following table presents assets classified as held for sale and liabilities associated with assets held for sale related to our Powder River Basin operations.
 
March 31, 2015
 
Total
 
(Millions)
Assets classified as held for sale
 
Current assets:
 
Inventories
$
1

Total current assets
1

Investments
19

Properties and equipment (successful efforts method of accounting)(a)
122

Less—accumulated depreciation, depletion and amortization
(10
)
Properties and equipment, net
112

Total assets classified as held for sale on the Consolidated Balance Sheets
$
132

 
 
Liabilities associated with assets held for sale
 
Current liabilities:
 
Accrued and other current liabilities
$
3

Total current liabilities
3

Asset retirement obligations
44

Total liabilities associated with assets held for sale on the Consolidated Balance Sheets
$
47

__________
(a) Includes a cumulative total of $55 million in impairments of the net assets held for sale of the Powder River Basin.

As of December 31, 2014 the following table presents domestic assets classified as held for sale and liabilities associated with assets held for sale related to our Powder River Basin and Appalachian Basin operations, and the international assets classified as held for sale and liabilities associated with assets held for sale related to our international operations which were divested in January 2015.
 
December 31, 2014
 
Domestic
 
International
 
Total
 
 
 
(Millions)
 
 
Assets classified as held for sale
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$

 
$
29

 
$
29

Accounts receivable

 
25

 
25

Inventories
1

 
7

 
8

Other

 
14

 
14

Total current assets
1

 
75

 
76

Investments
18

 
134

 
152

Properties and equipment (successful efforts method of accounting)(a)
132

 
445

 
577

Less—accumulated depreciation, depletion and amortization
(10
)
 
(228
)
 
(238
)
Properties and equipment, net
122

 
217

 
339

Other noncurrent assets

 
6

 
6

Total assets classified as held for sale—discontinued operations
$
141

 
$
432

 
$
573

Total assets classified as held for sale—continuing operations (Note 4)
200

 

 
200

Total assets classified as held for sale on the Consolidated Balance Sheets
$
341

 
$
432

 
$
773

 
 
 
 
 
 
Liabilities associated with assets held for sale
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$

 
$
34

 
$
34

Accrued and other current liabilities
3

 
23

 
26

Total current liabilities
3

 
57

 
60

Deferred income taxes

 
13

 
13

Long-term debt

 
2

 
2

Asset retirement obligations
45

 
7

 
52

Other noncurrent liabilities

 
3

 
3

Total liabilities associated with assets held for sale—discontinued operations
$
48

 
$
82

 
$
130

Total liabilities associated with assets held for sale—continuing operations (Note 4)
$
2

 
$

 
$
2

Total liabilities associated with assets held for sale on the Consolidated Balance Sheets
$
50

 
$
82

 
$
132

__________
(a) Domestic includes a total of $45 million in impairments of the net assets held for sale of the Powder River Basin.

Earnings (Loss) Per Common Share from Continuing Operations (Tables)
The following table summarizes the calculation of earnings per share.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions, except per-share amounts)
Income (loss) from continuing operations attributable to WPX Energy, Inc. available to common stockholders for basic and diluted earnings (loss) per common share
$
22

 
$

Basic weighted-average shares
204.1

 
201.5

Effect of dilutive securities(a):
 
 
 
Nonvested restricted stock units and awards
1.7

 
2.7

Stock options
0.1

 
1.0

Diluted weighted-average shares
205.9

 
205.2

Earnings (loss) per common share from continuing operations:
 
 
 
Basic
$
0.11

 
$

Diluted
$
0.11

 
$


The table below includes information related to stock options that were outstanding at March 31, 2015 and 2014 but have been excluded from the computation of weighted-average stock options due to the option exercise price exceeding the first quarter weighted-average market price of our common shares.
 
March 31,
 
2015
 
2014
Options excluded (millions)
2.6

 
0.4

Weighted-average exercise price of options excluded
$
16.16

 
$
20.23

Exercise price range of options excluded
$11.46 - $21.81

 
$19.95 - $20.97

First quarter weighted-average market price
$
11.43

 
$
18.44

Exploration Expense (Tables)
Exploration Expenses
The following table presents a summary of exploration expenses.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Geologic and geophysical costs
$
1

 
$
5

Unproved leasehold property impairment, amortization and expiration
6

 
10

Total exploration expenses
$
7

 
$
15

Inventories (Tables)
Inventories
 
March 31,
2015
 
December 31,
2014
 
(Millions)
Material, supplies and other
$
48

 
$
43

Crude oil production in transit
1

 
2

     Total inventories
$
49

 
$
45

Debt and Banking Arrangements (Tables)
Debt
As of the indicated dates, our debt consisted of the following:
 
March 31,
2015
 
December 31,
2014
 
(Millions)
5.250% Senior Notes due 2017
$
400

 
$
400

6.000% Senior Notes due 2022
1,100

 
1,100

5.250% Senior Notes due 2024
500

 
500

Credit facility agreement

 
280

Other
1

 
1

     Total debt
$
2,001

 
$
2,281

Less: Current portion of long-term debt
1

 
1

     Total long-term debt
$
2,000

 
$
2,280

Provision (Benefit) for Income Taxes (Tables)
Provision (Benefit) for Income Taxes from Continuing Operations
The provision (benefit) for income taxes from continuing operations includes: 
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Current:
 
 
 
Federal
$

 
$
1

State

 

 

 
1

Deferred:
 
 
 
Federal
12

 
(1
)
State
1

 
13

 
13

 
12

Total provision (benefit)
$
13

 
$
13

Fair Value Measurements (Tables)
Assets and Liabilities Measured at Fair Value on Recurring Basis
The following table presents, by level within the fair value hierarchy, our assets and liabilities that are measured at fair value on a recurring basis. The carrying amounts reported in the Consolidated Balance Sheets for cash and cash equivalents, restricted cash, and margin deposits and customer margin deposits payable approximate fair value due to the nature of the instrument and/or the short-term maturity of these instruments.
 
March 31, 2015
 
December 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(Millions)
 
(Millions)
Energy derivative assets
$
9

 
$
479

 
$
1

 
$
489

 
$
14

 
$
517

 
$
5

 
$
536

Energy derivative liabilities
$
16

 
$
7

 
$
1

 
$
24

 
$
32

 
$
10

 
$

 
$
42

Total debt(a)
$

 
$
1,868

 
$

 
$
1,868

 
$

 
$
2,218

 
$

 
$
2,218

__________
(a)
The carrying value of total debt, excluding capital leases, was $2,000 million and $2,280 million as of March 31, 2015 and December 31, 2014, respectively.
Derivatives and Concentration of Credit Risk (Tables)
The following table sets forth the derivative notional volumes that are economic hedges of production volumes, which are included in our commodity derivatives portfolio as of March 31, 2015.
Commodity
 
Period
 
Contract Type (a)
 
Location
 
Notional Volume (b)
 
Weighted Average
Price (c)
Natural Gas
 
 
 
 
 
 
 
 
 
 
Natural Gas
 
Apr-Dec 2015
 
Fixed Price Swaps
 
Henry Hub
 
(410
)
 
$
4.05

Natural Gas
 
Apr-Dec 2015
 
Costless Collars
 
Henry Hub
 
(50
)
 
$ 4.00 - 4.50

Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
NGPL
 
(18
)
 
$
(0.18
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
Rockies
 
(220
)
 
$
(0.16
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
San Juan
 
(100
)
 
$
(0.11
)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
SoCal
 
(20
)
 
$
0.18

Natural Gas
 
2016
 
Fixed Price Swaps
 
Henry Hub
 
(280
)
 
$
3.81

Natural Gas
 
2016
 
Swaptions
 
Henry Hub
 
(90
)
 
$
4.23

Natural Gas
 
2017
 
Swaptions
 
Henry Hub
 
(65
)
 
$
4.19

Crude Oil
 
 
 
 
 
 
 
 
 
 
Crude Oil
 
Apr-Dec 2015
 
Fixed Price Swaps
 
WTI
 
(19,658
)
 
$
94.84

Crude Oil
 
Apr-Dec 2015
 
Swaptions
 
WTI
 
(1,171
)
 
$
97.29

Crude Oil
 
2016
 
Fixed Price Swaps
 
WTI
 
(4,500
)
 
$
62.04

Crude Oil
 
2016
 
Swaptions
 
WTI
 
(8,500
)
 
$
84.27

__________
(a)
Derivatives related to crude oil production are fixed price swaps settled on the business day average and swaptions. The derivatives related to natural gas production are fixed price swaps, basis swaps, swaptions and costless collars. In connection with several natural gas and crude oil swaps entered into, we granted swaptions to the swap counterparties in exchange for receiving premium hedged prices on the natural gas and crude oil swaps. These swaptions grant the counterparty the option to enter into future swaps with us.
(b)
Natural gas volumes are reported in BBtu/day and crude oil volumes are reported in Bbl/day.
(c)
The weighted average price for natural gas is reported in $/MMBtu and the crude oil price is reported in $/Bbl.
Derivatives primarily related to transportation
The following table sets forth the derivative notional volumes of the net long (short) positions of derivatives primarily related to transportation contracts, which are included in our commodity derivatives portfolio as of March 31, 2015. The weighted average price is not reported since the notional volumes represent a net position comprised of buys and sells with positive and negative transaction prices.
Commodity
 
Period
 
Contract Type (a)
 
Location (b)
 
Notional Volume (c)
Natural Gas
 
Apr-Dec 2015
 
Basis Swaps
 
Multiple
 
(7
)
Natural Gas
 
Apr-Dec 2015
 
Index
 
Multiple
 
(108
)
Natural Gas
 
2016
 
Index
 
Multiple
 
(70
)
Natural Gas
 
2017
 
Index
 
Multiple
 
(70
)
Natural Gas
 
  2018+
 
Index
 
Multiple
 
(70
)
__________
(a)
We enter into exchange traded fixed price and basis swaps, over-the-counter fixed price and basis swaps, physical fixed price transactions and transactions with an index component.
(b)
We transact at multiple locations primarily around our core assets to maximize the economic value of our transportation and asset management agreements.
(c)
Natural gas volumes are reported in BBtu/day.
The following table presents the fair value of energy commodity derivatives. Our derivatives are presented as separate line items in our Consolidated Balance Sheets as current and noncurrent derivative assets and liabilities. Derivatives are classified as current or noncurrent based on the contractual timing of expected future net cash flows of individual contracts. The expected future net cash flows for derivatives classified as current are expected to occur within the next 12 months. The fair value amounts are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements. Further, the amounts below do not include cash held on deposit in margin accounts that we have received or remitted to collateralize certain derivative positions.
 
March 31, 2015
 
December 31, 2014
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
(Millions)
Derivatives related to production
$
479

 
$
7

 
$
517

 
$
10

Derivatives related to physical marketing agreements
10

 
17

 
19

 
32

Total derivatives
$
489

 
$
24

 
$
536

 
$
42

We enter into commodity derivative contracts that serve as economic hedges but are not designated as cash flow hedges for accounting purposes as we do not utilize this method of accounting on derivative instruments. The following table presents the net gain (loss) related to our energy commodity derivatives.
 
Three months
ended March 31,
 
2015
 
2014
 
(Millions)
Gain (loss) from derivatives related to production(a)
$
122

 
$
(86
)
Gain (loss) from derivatives related to physical marketing agreements(b)
(17
)
 
(109
)
Net gain (loss) on derivatives not designated as hedges
$
105

 
$
(195
)

__________
(a)
Includes receipts totaling $158 million and payments totaling $50 million for the three months ended March 31, 2015 and 2014, respectively.
(b)
Includes payments totaling $23 million and $118 million for the three months ended March 31, 2015 and 2014, respectively.
The following table presents our gross and net derivative assets and liabilities.
 
Gross Amount Presented on Balance Sheet
 
Netting Adjustments (a)
 
Cash Collateral Posted (Received)
 
Net Amount
March 31, 2015
(Millions)
Derivative assets with right of offset or master netting agreements
$
489

 
$
(17
)
 
$

 
$
472

Derivative liabilities with right of offset or master netting agreements
$
(24
)
 
$
17

 
$
7

 
$

 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
 
Derivative assets with right of offset or master netting agreements
$
536

 
$
(25
)
 
$

 
$
511

Derivative liabilities with right of offset or master netting agreements
$
(42
)
 
$
25

 
$
17

 
$

__________
(a)
With all of our financial trading counterparties, we have agreements in place that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements. Additionally, we have negotiated master netting agreements with some of our counterparties. These master netting agreements allow multiple entities that have multiple underlying agreements the ability to net derivative assets and derivative liabilities at settlement or in the event of a default or a termination under one or more of the underlying contracts.
The gross and net credit exposure from our derivative contracts as of March 31, 2015, is summarized as follows:
Counterparty Type
Gross Total
 
Net Total
 
(Millions)
Financial institutions (Investment Grade)(a)
$
490

 
$
473

 
490

 
473

Credit reserves
1

 
1

Credit exposure from derivatives
$
489

 
$
472

 
__________
(a)
We determine investment grade primarily using publicly available credit ratings. We include counterparties with a minimum S&P’s rating of BBB- or Moody’s Investors Service rating of Baa3 in investment grade.
Basis of Presentation and Description of Business Basis of Presentation and Description of Business- Additional Information (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Jan. 29, 2015
Dec. 31, 2014
Accounting Policies [Line Items]
 
 
 
Equity Method Investment, Ownership Percentage
 
69.00% 
 
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents
 
 
$ 29 
International [Member]
 
 
 
Accounting Policies [Line Items]
 
 
 
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents
 
17 
29 
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds
$ 291 
 
$ 294 
Discontinued Operations Discontinued Operation (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 15 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Dec. 31, 2014
Mar. 31, 2015
Domestic [Member]
Mar. 31, 2014
Domestic [Member]
Dec. 31, 2014
Domestic [Member]
Mar. 31, 2015
International [Member]
Mar. 31, 2014
International [Member]
Jan. 29, 2015
International [Member]
Dec. 31, 2014
International [Member]
Mar. 31, 2015
Powder River Basin [Member]
Mar. 31, 2014
Powder River Basin [Member]
Dec. 31, 2014
Powder River Basin [Member]
Mar. 31, 2015
Powder River Basin [Member]
Mar. 31, 2015
Gathering and Treating [Member]
Discontinued Operations [Member]
Mar. 31, 2015
Capacity [Member]
Discontinued Operations [Member]
Document Period End Date
Mar. 31, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Revenue
$ 40 
$ 93 
 
$ 25 
$ 62 
 
$ 15 
$ 31 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Lease Operating Expense
14 
19 
 
10 
11 
 
 
 
 
 
 
 
 
 
Disposal Group Including Discontinued Operation Gathering and Transportation Expense
14 
17 
 
14 
17 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation Taxes other than income
12 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Depreciation and Amortization
 
14 
 
 
 
 
10 
 
 
 
 
 
 
 
 
Impairment of Oil and Gas Properties, Disposal Group
10 
 
 
10 
 
 
 
 
 
10 
 
45 
55 
 
 
Disposal Group, Including Discontinued Operation, General and Administrative Expense
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Other Expense
(1)
 
(1)
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Operating Expense
45 
68 
 
37 
39 
 
29 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Operating Income (Loss)
(5)
25 
 
(12)
23 
 
 
 
 
 
 
 
 
 
Disposal Group Including Discontinued Operation Investment Income
 
 
 
 
 
 
 
 
 
 
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax
41 
 
 
 
 
41 
 
 
 
 
 
 
 
 
 
Disposal Group Including Discontinued Operation Income before Tax
39 
29 
 
(10)
25 
 
49 
 
 
 
 
 
 
 
 
Discontinued Operation, Tax Effect of Discontinued Operation
(7)
10 
 
(4)
 
(3)1
 
 
 
 
 
 
 
 
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest
46 
19 
 
(6)
17 
 
52 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents
 
 
29 
 
 
 
 
17 
29 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net
 
 
25 
 
 
 
 
 
25 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Inventory
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Other Assets, Current
 
 
14 
 
 
 
 
 
14 
 
 
 
 
 
 
Disposal Group Assets, Current
 
76 
 
 
 
 
 
75 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Investment
19 
 
152 
 
 
18 
 
 
 
134 
 
 
 
 
 
 
Disposal Group Including Discontinued Operations Properties and Equipment (successful effort method)
122 2
 
577 
 
 
132 3
 
 
 
445 
 
 
 
 
 
 
Disposal Group Including Discontinued Operations Accumulated Depreciation Depletion and Amortization
(10)
 
(238)
 
 
(10)
 
 
 
(228)
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment
112 
 
339 
 
 
122 
 
 
 
217 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Other Assets, Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Assets
 
 
573 
 
 
141 
 
 
 
432 
 
 
 
 
 
 
Assets Held for Sale, Continuing Operations
 
 
200 
 
 
200 
 
 
 
 
 
 
 
 
 
Assets of disposal group classified as held for sale
132 
 
773 
 
 
341 
 
 
 
432 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Accounts Payable
 
 
34 
 
 
 
 
 
34 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Accrued Liabilities
 
26 
 
 
 
 
 
23 
 
 
 
 
 
 
Disposal Group Liabilities, Current
 
60 
 
 
 
 
 
57 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Deferred Tax Liabilities
 
 
13 
 
 
 
 
 
13 
 
 
 
 
 
 
long term debt noncurrent disposal group
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group Asset Retirement Obligation Noncurrent
44 
 
52 
 
 
45 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Other Liabilities, Noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
Disposal Group, Including Discontinued Operation, Liabilities
 
 
130 
 
 
48 
 
 
 
82 
 
 
 
 
 
 
Liabilities of Disposal Group in Continuing Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual Obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
119 
163 
Liabilities of disposal group associated with assets held for sale
47 
 
132 
 
 
50 
 
 
 
82 
 
 
 
 
 
 
Additional Disclosures [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquistion costs or sale proceeds
 
 
 
 
 
 
291 
 
 
294 
 
 
155 
 
 
 
Disposal Group including Discontinued Operations Net Cash Provided By Used In Operating Activities
 
 
 
 
 
 
11 
 
 
(1)
30 
 
 
 
 
Disposal Group including Discontinued Operations Net Cash Provided By Used In Investing Activities
 
 
 
 
 
 
$ 15 
$ 21 
 
 
$ 1 
$ 2 
 
 
 
 
Earnings (Loss) Per Common Share from Continuing Operations (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
Income (Loss) from Continuing Operations Attributable to Parent
$ 22 
$ 0 
Weighted Average Number of Shares Outstanding, Basic
204.1 
201.5 
Weighted Average Number of Shares Outstanding, Diluted
205.9 
205.2 
Basic (in dollars per share)
$ 0.11 
$ 0.00 
Diluted (in dollars per share)
$ 0.11 
$ 0.00 
Non Vested Restricted Stock Units [Member]
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements
1.7 
2.7 
Employee Stock Option [Member]
 
 
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
 
 
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements
0.1 
1.0 
Earnings (Loss) Per Common Share from Continuing Operations (Details 1) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Weighted-average exercise price of options excluded
$ 16.16 
$ 20.23 
Exercise price range of options excluded, lower limit
$ 11.46 
$ 19.95 
Exercise price range of options excluded, upper limit
$ 21.81 
$ 20.97 
First quarter weighted-average market price
$ 11.43 
$ 18.44 
Restricted Stock Units (RSUs) [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
1.0 
 
Equity Option [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
2.6 
0.4 
Exploration Expense (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Costs Incurred, Oil and Gas Property Acquisition, Exploration, and Development Activities [Line Items]
 
 
Geologic and geophysical costs
$ 1 
$ 5 
Unproved leasehold property impairment, amortization and expiration
10 
Total exploration expenses
$ 7 
$ 15 
Asset Sale, Impairments and Exploration Expense Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Well
acre
Mar. 31, 2014
Extractive Industries [Abstract]
 
 
Capitalized Exploratory Well Costs
$ 38 
 
Significant Acquisitions and Disposals [Line Items]
 
 
Proceeds from Sales of Assets, Investing Activities
563 
Oil and Gas Property, Deep Rights, Acres Sold During Period
46,700 
 
Production related to sale
50 
 
Proved developed wells related to sale
63 
 
Oil and Gas Delivery Commitments and Contracts, Daily Production
260 
 
Cost Of Oil And Gas Services
24 
 
Loss on Contract Termination
22 
 
Pennsylvania [Member]
 
 
Significant Acquisitions and Disposals [Line Items]
 
 
Proceeds from Sales of Assets, Investing Activities
288 
 
Gain (Loss) on Disposition of Proved Property
$ 69 
 
Inventories (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Inventory [Line Items]
 
 
Materials, Supplies, and Other
$ 48 
$ 43 
Crude oil production in transit
Inventory, Total
$ 49 
$ 45 
Debt and Banking Arrangements (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
$ 2,001 
$ 2,281 
Debt, Current
Long-term debt
2,000 
2,280 
5.250% Senior Notes due 2017
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
400 
400 
6.000% Senior Notes due 2022
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
1,100 
1,100 
5.250% Senior Notes due 2024
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
500 
500 
Credit facility agreement
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
280 
Other
 
 
Debt Instrument [Line Items]
 
 
Debt and Capital Lease Obligations
$ 1 
$ 1 
Debt and Banking Arrangements Debt and Banking Arrangements - Debt - Additional information (Detail)
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
5.250% Senior Notes due 2017
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
5.25% 
5.25% 
Debt Instrument Maturity Year
2017 
2017 
6.000% Senior Notes due 2022
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
6.00% 
6.00% 
Debt Instrument Maturity Year
2022 
2022 
5.250% Senior Notes due 2024
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
5.25% 
5.25% 
Debt Instrument Maturity Year
2024 
2024 
Debt and Banking Arrangements Narrative (Details) (USD $)
3 Months Ended
Mar. 31, 2015
Contract
Mar. 31, 2014
Debt Instrument [Line Items]
 
 
Debt instrument additional borrowing capacity
$ 181,000,000 
$ 622,000,000 
Number of letter of credit agreements
 
Letters of credit issued
315,000,000 
 
Unsecured Revolving Credit Facility [Member]
 
 
Debt Instrument [Line Items]
 
 
Credit facility agreement
1,500,000,000.0 
 
Debt instrument maturity period
5 years 
 
Debt instrument additional borrowing capacity
$ 300,000,000 
 
Provision (Benefit) for Income Taxes from Continuing Operations (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Current:
 
 
Federal
$ 0 
$ 1 
State
Total current
Deferred:
 
 
Federal
12 
(1)
State
13 
Deferred Income Tax Expense (Benefit)
13 
12 
Total provision (benefit)
$ 13 
$ 13 
Provision (Benefit) for Income Taxes Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]
 
Deferred Tax Expense Related To New York Tax Reform Legislation
$ 9 
Contingent Liabilities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
1 Months Ended 84 Months Ended 97 Months Ended
Sep. 30, 2006
Claim
Mar. 31, 2015
Jul. 31, 2008
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
 
 
 
 
Number of claims reserved for court resolution
 
 
 
Loss Contingency, Damages Sought, Value
 
 
$ 20 
 
Processing, treating and transportation costs used in the calculation of federal royalties
 
113 
 
 
Loss contingencies associated with royalty litigation
 
$ 16 
 
$ 16 
Fair Value Measurements (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
$ 489 
$ 536 
Derivative Liability, Fair Value, Gross Liability
24 
42 
Energy Related Derivative
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
489 
536 
Derivative Liability, Fair Value, Gross Liability
24 
42 
Long-term debt
1,868 1
2,218 1
Level 1 |
Energy Related Derivative
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
14 
Derivative Liability, Fair Value, Gross Liability
16 
32 
Long-term debt
1
1
Level 2 |
Energy Related Derivative
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
479 
517 
Derivative Liability, Fair Value, Gross Liability
10 
Long-term debt
1,868 1
2,218 1
Level 3 |
Energy Related Derivative
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
Derivative Liability, Fair Value, Gross Liability
Long-term debt
$ 0 1
$ 0 1
Fair Value Measurements - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Assets And Liabilities Classified In Level 3 [Line Items]
 
 
Long-term debt
$ 2,000 
$ 2,280 
Percentage of net fair value of derivatives portfolio expiring
100.00% 
 
Maximum [Member] |
Level 3
 
 
Assets And Liabilities Classified In Level 3 [Line Items]
 
 
Derivative, Fair Value, Net
$ 1 
 
Derivatives and Concentration of Credit Risk (Details) (Short Position)
3 Months Ended
Mar. 31, 2015
2016 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Fixed Price Swaps |
Henry Hub
 
Derivative [Line Items]
 
Notional Volume
280,000 1
Underlying, Derivative
3.81 2
2016 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Swaptions |
Henry Hub
 
Derivative [Line Items]
 
Notional Volume
90,000 1
Underlying, Derivative
4.23 2
2016 [Member] |
Derivatives related to production |
Crude Oil |
Fixed Price Swaps |
WTI
 
Derivative [Line Items]
 
Notional Volume
4,500 1
Underlying, Derivative
62.04 2
2016 [Member] |
Derivatives related to production |
Crude Oil |
Swaptions |
WTI
 
Derivative [Line Items]
 
Notional Volume
8,500 1
Underlying, Derivative
84.27 2
2016 [Member] |
Derivatives related to storage and transportation |
Natural Gas [Member] |
Index |
Multiple
 
Derivative [Line Items]
 
Notional Volume
70,000 3
2018 and beyond [Member] |
Derivatives related to storage and transportation |
Natural Gas [Member] |
Index |
Multiple
 
Derivative [Line Items]
 
Notional Volume
70,000 3
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Fixed Price Swaps |
Henry Hub
 
Derivative [Line Items]
 
Notional Volume
410,000 1
Underlying, Derivative
4.05 2
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Basis Swap [Member] |
NGPL [Member]
 
Derivative [Line Items]
 
Notional Volume
18,000 1
Underlying, Derivative
(0.18)2
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Basis Swap [Member] |
Rockies
 
Derivative [Line Items]
 
Notional Volume
220,000 1
Underlying, Derivative
(0.16)2
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Basis Swap [Member] |
San Juan [Member]
 
Derivative [Line Items]
 
Notional Volume
100,000 1
Underlying, Derivative
(0.11)2
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Basis Swap [Member] |
Southern California [Member]
 
Derivative [Line Items]
 
Notional Volume
20,000 1
Underlying, Derivative
0.18 2
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Costless Collar [Member] |
Henry Hub
 
Derivative [Line Items]
 
Notional Volume
50,000 1
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Costless Collar [Member] |
Henry Hub |
Minimum [Member]
 
Derivative [Line Items]
 
Underlying, Derivative
4.00 
2015 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Costless Collar [Member] |
Henry Hub |
Maximum [Member]
 
Derivative [Line Items]
 
Underlying, Derivative
4.50 
2015 [Member] |
Derivatives related to production |
Crude Oil |
Fixed Price Swaps |
WTI
 
Derivative [Line Items]
 
Notional Volume
19,658 1
Underlying, Derivative
94.84 2
2015 [Member] |
Derivatives related to production |
Crude Oil |
Swaptions |
WTI
 
Derivative [Line Items]
 
Notional Volume
(1,171)
Underlying, Derivative
97.29 
2015 [Member] |
Derivatives related to storage and transportation |
Natural Gas [Member] |
Basis Swap [Member] |
Multiple
 
Derivative [Line Items]
 
Notional Volume
7,000 3
2015 [Member] |
Derivatives related to storage and transportation |
Natural Gas [Member] |
Index |
Multiple
 
Derivative [Line Items]
 
Notional Volume
108,000 3
2017 [Member] |
Derivatives related to production |
Natural Gas [Member] |
Swaptions |
Henry Hub
 
Derivative [Line Items]
 
Notional Volume
65,000 1
Underlying, Derivative
4.19 2
2017 [Member] |
Derivatives related to storage and transportation |
Natural Gas [Member] |
Index |
Multiple
 
Derivative [Line Items]
 
Notional Volume
70,000 3
Derivatives and Concentration of Credit Risk (Details 1) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
$ 489 
$ 536 
Derivative Liability, Fair Value, Gross Liability
24 
42 
Derivatives related to production |
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
479 
517 
Derivative Liability, Fair Value, Gross Liability
10 
Derivatives Related to Physical Marketing Agreements [Member] |
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
10 
19 
Derivative Liability, Fair Value, Gross Liability
17 
32 
Natural Gas Contracts [Member] |
Not Designated as Hedging Instrument
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset
489 
536 
Derivative Liability, Fair Value, Gross Liability
$ 24 
$ 42 
Derivatives and Concentration of Credit Risk Derivatives and Concentration of Credit Risk (Details 2) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Net gain (loss) on derivatives (Note 10)
$ 105 
$ (195)
Energy Related Derivative [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Payment Made for Settlement of Derivatives
 
50 
Payment Received for Settlement of Derivatives
158 
 
Net gain (loss) on derivatives (Note 10)
122 1
(86)1
Derivatives Related to Physical Marketing Agreements [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Payment Made for Settlement of Derivatives
23 
118 
Net gain (loss) on derivatives (Note 10)
$ (17)2
$ (109)2
Derivatives and Concentration of Credit Risk Derivatives and Concentration of Credit Risk (Details 3) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Gross And Net Derivative Assets and Liabilities [Line Items]
 
 
Document Period End Date
Mar. 31, 2015 
 
Derivative Asset, Fair Value, Gross Asset
$ 489 
$ 536 
Derivative Asset, Fair Value, Gross Liability
17 1
25 1
Derivative Asset, Collateral, Obligation to Return Cash, Offset
Derivative Asset, Fair Value, Amount Not Offset Against Collateral
472 
511 
Derivative Liability, Collateral, Right to Reclaim Cash, Offset
17 
Derivative Liability, Fair Value, Gross Liability
(24)
(42)
Derivative Liability, Fair Value, Gross Asset
17 1
25 1
Derivative Liability, Fair Value, Amount Not Offset Against Collateral
$ 0 
$ 0 
Derivatives and Concentration of Credit Risk (Details 4) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Credit Exposure From Derivatives [Line Items]
 
Total gross credit exposure from derivative contracts before credit reserve
$ 490 
Total net credit exposure from derivative contracts before credit reserve
473 
Gross credit reserves
Net credit reserves
Gross credit exposure from derivatives, Gross Total
489 
Net credit exposure from derivatives
472 
Financial institutions (Investment Grade)(a)
 
Credit Exposure From Derivatives [Line Items]
 
Total gross credit exposure from derivative contracts before credit reserve
490 1
Total net credit exposure from derivative contracts before credit reserve
$ 473 1
Derivatives and Concentration of Credit Risk - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Derivative [Line Items]
 
Collateral Already Posted, Aggregate Fair Value
$ 18 
NumberOfLargestNetCounterPartyPositionsInvestmentGrade
Occurrence Of Future Net Cash Flows For Derivatives
12 months 
Net derivative liability position
Additional collateral posted
Percentage of net credit exposure from derivatives
96.00% 
Collateral Already Posted, Maintenance Margin, Aggregate Fair Value
Collateral Already Posted, Initial Margin, Aggregate Fair Value
11 
Maximum [Member]
 
Derivative [Line Items]
 
Reduction in derivative liabilties
$ 1 
Subsequent Events (Details) (Subsequent Event [Member], USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2015
Subsequent Event [Member]
 
Subsequent Event [Line Items]
 
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds
$ 200 
Cost Of Oil And Gas Services
$ 390