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Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Geologic and geophysical costs | $ | 3 | $ | 4 | $ | 7 | $ | 9 | |||||||
Dry hole costs and impairments of exploratory area well costs | 18 | 1 | 18 | 2 | |||||||||||
Unproved leasehold property impairment, amortization and expiration | 36 | 15 | 47 | 28 | |||||||||||
Total exploration expenses | $ | 57 | $ | 20 | $ | 72 | $ | 39 |
|
June 30, 2014 | December 31, 2013 | ||||||
(Millions) | |||||||
Natural gas in underground storage | $ | 14 | $ | 13 | |||
Crude oil production in transit | 3 | 10 | |||||
Material, supplies and other | 64 | 49 | |||||
$ | 81 | $ | 72 |
|
June 30, 2014 | December 31, 2013 | ||||||
(Millions) | |||||||
5.250% Senior Notes due 2017 | $ | 400 | $ | 400 | |||
6.000% Senior Notes due 2022 | 1,100 | 1,100 | |||||
Credit facility agreement | 290 | 410 | |||||
Apco | 7 | 8 | |||||
Other | 2 | 1 | |||||
Total debt | $ | 1,799 | $ | 1,919 | |||
Less: Current portion of long-term debt | 5 | 3 | |||||
Total long-term debt | $ | 1,794 | $ | 1,916 |
|
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Current: | |||||||||||||||
Federal | $ | 24 | $ | 2 | $ | 25 | $ | 3 | |||||||
State | 4 | — | 4 | — | |||||||||||
Foreign | 3 | 4 | 4 | 8 | |||||||||||
31 | 6 | 33 | 11 | ||||||||||||
Deferred: | |||||||||||||||
Federal | (88 | ) | 3 | (82 | ) | (59 | ) | ||||||||
State | (12 | ) | 1 | 3 | (5 | ) | |||||||||
Foreign | 1 | 1 | 1 | 1 | |||||||||||
(99 | ) | 5 | (78 | ) | (63 | ) | |||||||||
Total provision (benefit) | $ | (68 | ) | $ | 11 | $ | (45 | ) | $ | (52 | ) |
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|
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
(Millions) | (Millions) | ||||||||||||||||||||||||||||||
Energy derivative assets | $ | 31 | $ | 28 | $ | 1 | $ | 60 | $ | 30 | $ | 26 | $ | 1 | $ | 57 | |||||||||||||||
Energy derivative liabilities | $ | 67 | $ | 85 | $ | — | $ | 152 | $ | 83 | $ | 38 | $ | 1 | $ | 122 | |||||||||||||||
Total debt (a) | $ | — | $ | 1,899 | $ | — | $ | 1,899 | $ | — | $ | 1,945 | $ | — | $ | 1,945 |
(a) | The carrying value of total debt, excluding capital leases, was $1,797 million and $1,918 million as of June 30, 2014 and December 31, 2013, respectively. |
|
Commodity | Period | Contract Type (a) | Location | Notional Volume (b) | Weighted Average Price (c) | ||||||||
Natural Gas | |||||||||||||
Natural Gas | Jul-Dec 2014 | Fixed Price Swaps | Henry Hub | (328 | ) | $ | 4.21 | ||||||
Natural Gas | Jul-Dec 2014 | Swaptions | Henry Hub | (50 | ) | $ | 4.24 | ||||||
Natural Gas | Jul-Dec 2014 | Costless Collars | Henry Hub | (190 | ) | $ 4.04 - 4.66 | |||||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Northeast | (77 | ) | $ | (0.73 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | MidCon | (285 | ) | $ | (0.15 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Rockies | (143 | ) | $ | (0.15 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | West | (73 | ) | $ | 0.13 | ||||||
Natural Gas | 2015 | Fixed Price Swaps | Henry Hub | (182 | ) | $ | 4.35 | ||||||
Natural Gas | 2015 | Swaptions | Henry Hub | (50 | ) | $ | 4.38 | ||||||
Natural Gas | 2015 | Costless Collars | Henry Hub | (50 | ) | $ 4.00 - 4.50 | |||||||
Natural Gas | 2015 | Basis Swaps | Midcon | (30 | ) | $ | (0.14 | ) | |||||
Natural Gas | 2015 | Basis Swaps | Rockies | (150 | ) | $ | (0.11 | ) | |||||
Natural Gas | 2015 | Basis Swaps | West | (20 | ) | $ | 0.18 | ||||||
Crude Oil | |||||||||||||
Crude Oil | Jul-Dec 2014 | Fixed Price Swaps | WTI | (14,975 | ) | $ | 96.01 | ||||||
Crude Oil | 2015 | Fixed Price Swaps | WTI | (8,736 | ) | $ | 94.38 | ||||||
Crude Oil | 2015 | Swaptions | WTI | (6,132 | ) | $ | 95.38 | ||||||
NGL | |||||||||||||
NGL Ethane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (3,261 | ) | $ | 0.29 | ||||||
NGL Propane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (489 | ) | $ | 1.17 | ||||||
NGL Iso Butane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (652 | ) | $ | 1.37 | ||||||
NGL Normal Butane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (652 | ) | $ | 1.34 | ||||||
NGL Natural Gasoline | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (1,630 | ) | $ | 2.06 |
(a) | Derivatives related to crude oil production are business day average swaps, basis swaps and swaptions. The derivatives related to natural gas production are fixed price swaps, basis swaps, swaptions and costless collars. The derivatives related to natural gas liquids are fixed price swaps. 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, crude oil volumes are reported in Bbl/day, and natural gas liquids are reported in Bbl/day. |
(c) | The weighted average price for natural gas is reported in $/MMBtu, the crude oil price is reported in $/Bbl and natural gas liquids are reported in $/Gallon. |
Commodity | Period | Contract Type (a) | Location (b) | Notional Volume (c) | Weighted Average Price (d) | ||||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Multiple | (39 | ) | — | |||||
Natural Gas | Jul-Dec 2014 | Index | Multiple | (152 | ) | — | |||||
Natural Gas | 2015 | Basis Swaps | Multiple | (21 | ) | — | |||||
Natural Gas | 2015 | Index | Multiple | (115 | ) | — | |||||
Natural Gas | 2016 | Index | Multiple | (70 | ) | — | |||||
Natural Gas | 2017+ | Index | Multiple | (478 | ) | — |
(a) | WPX Marketing enters 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) | WPX Marketing transacts at multiple locations primarily around our core assets to maximize the economic value of our transportation, storage and asset management agreements. |
(c) | Natural gas volumes are reported in BBtu/day, crude oil volumes are reported in Bbl/day, and natural gas liquids are reported in Bbl/day. |
(d) | 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. |
June 30, 2014 | December 31, 2013 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||
(Millions) | |||||||||||||||
Derivatives related to production not designated as hedging instruments | $ | 29 | $ | 85 | $ | 26 | $ | 39 | |||||||
Derivatives related to physical marketing agreements not designated as hedging instruments | 31 | 67 | 31 | 83 | |||||||||||
Total derivatives not designated as hedging instruments | $ | 60 | $ | 152 | $ | 57 | $ | 122 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Gain (loss) from derivatives related to production not designated as hedging instruments (a) | $ | (24 | ) | $ | 78 | $ | (110 | ) | $ | (11 | ) | ||||
Gain (loss) from derivatives related to physical marketing agreements not designated as hedging instruments (b) | 7 | — | (102 | ) | (5 | ) | |||||||||
Net gain (loss) on derivatives not designated as hedges | $ | (17 | ) | $ | 78 | $ | (212 | ) | $ | (16 | ) |
(a) | Includes payments totaling $16 million and $20 million for settlements of derivatives during the three months ended June 30, 2014 and 2013, respectively; and payments totaling $66 million and $15 million for the six months ended June 30, 2014 and 2013, respectively. |
(b) | Includes payments totaling $1 million for settlements of derivatives during both the three months ended June 30, 2014 and 2013, and payments totaling $119 million for the six months ended June 30, 2014 and receipts of $3 million for the six months ended June 30, 2013. |
Gross Amount Presented on Balance Sheet | Netting Adjustments (a) | Cash Collateral Posted (Received) | Net Amount | ||||||||||||
June 30, 2014 | (Millions) | ||||||||||||||
Derivative assets with right of offset or master netting agreements | $ | 60 | $ | (57 | ) | $ | — | $ | 3 | ||||||
Derivative liabilities with right of offset or master netting agreements | $ | (152 | ) | $ | 57 | $ | 36 | $ | (59 | ) | |||||
December 31, 2013 | |||||||||||||||
Derivative assets with right of offset or master netting agreements | $ | 57 | $ | (50 | ) | $ | — | $ | 7 | ||||||
Derivative liabilities with right of offset or master netting agreements | $ | (122 | ) | $ | 50 | $ | 52 | $ | (20 | ) |
(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. |
Counterparty Type | Gross Investment Grade (a) | Gross Total | Net Investment Grade (a) | Net Total | |||||||||||
(Millions) | |||||||||||||||
Financial institutions | $ | 60 | $ | 60 | $ | 3 | $ | 3 | |||||||
$ | 60 | 60 | $ | 3 | 3 | ||||||||||
Credit reserves | — | — | |||||||||||||
Credit exposure from derivatives | $ | 60 | $ | 3 |
(a) | We determine investment grade primarily using publicly available credit ratings. We include counterparties with a minimum Standard & Poor’s rating of BBB- or Moody’s Investors Service rating of Baa3 in investment grade. |
|
Domestic | International | Total | |||||||||
(Millions) | |||||||||||
Three months ended June 30, 2014 | |||||||||||
Total revenues | $ | 775 | $ | 39 | $ | 814 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 69 | $ | 8 | $ | 77 | |||||
Gathering, processing and transportation | 96 | 1 | 97 | ||||||||
Taxes other than income | 35 | 7 | 42 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 233 | — | 233 | ||||||||
Exploration | 54 | 3 | 57 | ||||||||
Depreciation, depletion and amortization | 206 | 9 | 215 | ||||||||
Loss on sale of working interests in the Piceance Basin | 195 | — | 195 | ||||||||
General and administrative | 71 | 3 | 74 | ||||||||
Other—net | 1 | 2 | 3 | ||||||||
Total costs and expenses | $ | 960 | $ | 33 | $ | 993 | |||||
Operating income (loss) | $ | (185 | ) | $ | 6 | $ | (179 | ) | |||
Interest expense | (28 | ) | — | (28 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | — | 5 | 5 | ||||||||
Income (loss) before income taxes | $ | (212 | ) | $ | 11 | $ | (201 | ) | |||
Three months ended June 30, 2013 | |||||||||||
Total revenues | $ | 773 | $ | 42 | $ | 815 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 63 | $ | 10 | $ | 73 | |||||
Gathering, processing and transportation | 110 | 1 | 111 | ||||||||
Taxes other than income | 30 | 6 | 36 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 222 | — | 222 | ||||||||
Exploration | 17 | 3 | 20 | ||||||||
Depreciation, depletion and amortization | 217 | 10 | 227 | ||||||||
General and administrative | 69 | 5 | 74 | ||||||||
Other—net | 5 | (4 | ) | 1 | |||||||
Total costs and expenses | $ | 733 | $ | 31 | $ | 764 | |||||
Operating income (loss) | $ | 40 | $ | 11 | $ | 51 | |||||
Interest expense | (28 | ) | — | (28 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | 2 | 7 | 9 | ||||||||
Income (loss) before income taxes | $ | 15 | $ | 18 | $ | 33 |
Domestic | International | Total | |||||||||
(Millions) | |||||||||||
Six months ended June 30, 2014 | |||||||||||
Total revenues | $ | 1,731 | $ | 70 | $ | 1,801 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 140 | $ | 16 | $ | 156 | |||||
Gathering, processing and transportation | 202 | 1 | 203 | ||||||||
Taxes other than income | 76 | 13 | 89 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 624 | — | 624 | ||||||||
Exploration | 69 | 3 | 72 | ||||||||
Depreciation, depletion and amortization | 403 | 19 | 422 | ||||||||
Loss on sale of working interests in the Piceance Basin | 195 | — | 195 | ||||||||
General and administrative | 139 | 7 | 146 | ||||||||
Other—net | 3 | 3 | 6 | ||||||||
Total costs and expenses | $ | 1,851 | $ | 62 | $ | 1,913 | |||||
Operating income (loss) | $ | (120 | ) | $ | 8 | $ | (112 | ) | |||
Interest expense | (57 | ) | — | (57 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | 2 | 7 | 9 | ||||||||
Income (loss) before income taxes | $ | (174 | ) | $ | 15 | $ | (159 | ) | |||
Six months ended June 30, 2013 | |||||||||||
Total revenues | $ | 1,368 | $ | 78 | $ | 1,446 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 130 | $ | 18 | $ | 148 | |||||
Gathering, processing and transportation | 216 | 2 | 218 | ||||||||
Taxes other than income | 59 | 12 | 71 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 465 | — | 465 | ||||||||
Exploration | 35 | 4 | 39 | ||||||||
Depreciation, depletion and amortization | 441 | 17 | 458 | ||||||||
General and administrative | 138 | 8 | 146 | ||||||||
Other—net | 11 | (3 | ) | 8 | |||||||
Total costs and expenses | $ | 1,495 | $ | 58 | $ | 1,553 | |||||
Operating income (loss) | $ | (127 | ) | $ | 20 | $ | (107 | ) | |||
Interest expense | (54 | ) | — | (54 | ) | ||||||
Interest capitalized | 2 | — | 2 | ||||||||
Investment income and other | 4 | 12 | 16 | ||||||||
Income (loss) before income taxes | $ | (175 | ) | $ | 32 | $ | (143 | ) | |||
Total assets | |||||||||||
Total assets as of June 30, 2014 | $ | 7,622 | $ | 396 | $ | 8,018 | |||||
Total assets as of December 31, 2013 | $ | 8,046 | $ | 383 | $ | 8,429 |
|
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Geologic and geophysical costs | $ | 3 | $ | 4 | $ | 7 | $ | 9 | |||||||
Dry hole costs and impairments of exploratory area well costs | 18 | 1 | 18 | 2 | |||||||||||
Unproved leasehold property impairment, amortization and expiration | 36 | 15 | 47 | 28 | |||||||||||
Total exploration expenses | $ | 57 | $ | 20 | $ | 72 | $ | 39 |
|
June 30, 2014 | December 31, 2013 | ||||||
(Millions) | |||||||
Natural gas in underground storage | $ | 14 | $ | 13 | |||
Crude oil production in transit | 3 | 10 | |||||
Material, supplies and other | 64 | 49 | |||||
$ | 81 | $ | 72 |
|
June 30, 2014 | December 31, 2013 | ||||||
(Millions) | |||||||
5.250% Senior Notes due 2017 | $ | 400 | $ | 400 | |||
6.000% Senior Notes due 2022 | 1,100 | 1,100 | |||||
Credit facility agreement | 290 | 410 | |||||
Apco | 7 | 8 | |||||
Other | 2 | 1 | |||||
Total debt | $ | 1,799 | $ | 1,919 | |||
Less: Current portion of long-term debt | 5 | 3 | |||||
Total long-term debt | $ | 1,794 | $ | 1,916 |
|
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Current: | |||||||||||||||
Federal | $ | 24 | $ | 2 | $ | 25 | $ | 3 | |||||||
State | 4 | — | 4 | — | |||||||||||
Foreign | 3 | 4 | 4 | 8 | |||||||||||
31 | 6 | 33 | 11 | ||||||||||||
Deferred: | |||||||||||||||
Federal | (88 | ) | 3 | (82 | ) | (59 | ) | ||||||||
State | (12 | ) | 1 | 3 | (5 | ) | |||||||||
Foreign | 1 | 1 | 1 | 1 | |||||||||||
(99 | ) | 5 | (78 | ) | (63 | ) | |||||||||
Total provision (benefit) | $ | (68 | ) | $ | 11 | $ | (45 | ) | $ | (52 | ) |
|
June 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
(Millions) | (Millions) | ||||||||||||||||||||||||||||||
Energy derivative assets | $ | 31 | $ | 28 | $ | 1 | $ | 60 | $ | 30 | $ | 26 | $ | 1 | $ | 57 | |||||||||||||||
Energy derivative liabilities | $ | 67 | $ | 85 | $ | — | $ | 152 | $ | 83 | $ | 38 | $ | 1 | $ | 122 | |||||||||||||||
Total debt (a) | $ | — | $ | 1,899 | $ | — | $ | 1,899 | $ | — | $ | 1,945 | $ | — | $ | 1,945 |
(a) | The carrying value of total debt, excluding capital leases, was $1,797 million and $1,918 million as of June 30, 2014 and December 31, 2013, respectively. |
|
Commodity | Period | Contract Type (a) | Location | Notional Volume (b) | Weighted Average Price (c) | ||||||||
Natural Gas | |||||||||||||
Natural Gas | Jul-Dec 2014 | Fixed Price Swaps | Henry Hub | (328 | ) | $ | 4.21 | ||||||
Natural Gas | Jul-Dec 2014 | Swaptions | Henry Hub | (50 | ) | $ | 4.24 | ||||||
Natural Gas | Jul-Dec 2014 | Costless Collars | Henry Hub | (190 | ) | $ 4.04 - 4.66 | |||||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Northeast | (77 | ) | $ | (0.73 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | MidCon | (285 | ) | $ | (0.15 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Rockies | (143 | ) | $ | (0.15 | ) | |||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | West | (73 | ) | $ | 0.13 | ||||||
Natural Gas | 2015 | Fixed Price Swaps | Henry Hub | (182 | ) | $ | 4.35 | ||||||
Natural Gas | 2015 | Swaptions | Henry Hub | (50 | ) | $ | 4.38 | ||||||
Natural Gas | 2015 | Costless Collars | Henry Hub | (50 | ) | $ 4.00 - 4.50 | |||||||
Natural Gas | 2015 | Basis Swaps | Midcon | (30 | ) | $ | (0.14 | ) | |||||
Natural Gas | 2015 | Basis Swaps | Rockies | (150 | ) | $ | (0.11 | ) | |||||
Natural Gas | 2015 | Basis Swaps | West | (20 | ) | $ | 0.18 | ||||||
Crude Oil | |||||||||||||
Crude Oil | Jul-Dec 2014 | Fixed Price Swaps | WTI | (14,975 | ) | $ | 96.01 | ||||||
Crude Oil | 2015 | Fixed Price Swaps | WTI | (8,736 | ) | $ | 94.38 | ||||||
Crude Oil | 2015 | Swaptions | WTI | (6,132 | ) | $ | 95.38 | ||||||
NGL | |||||||||||||
NGL Ethane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (3,261 | ) | $ | 0.29 | ||||||
NGL Propane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (489 | ) | $ | 1.17 | ||||||
NGL Iso Butane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (652 | ) | $ | 1.37 | ||||||
NGL Normal Butane | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (652 | ) | $ | 1.34 | ||||||
NGL Natural Gasoline | Jul-Dec 2014 | Fixed Price Swaps | Mont Belvieu | (1,630 | ) | $ | 2.06 |
(a) | Derivatives related to crude oil production are business day average swaps, basis swaps and swaptions. The derivatives related to natural gas production are fixed price swaps, basis swaps, swaptions and costless collars. The derivatives related to natural gas liquids are fixed price swaps. 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, crude oil volumes are reported in Bbl/day, and natural gas liquids are reported in Bbl/day. |
(c) | The weighted average price for natural gas is reported in $/MMBtu, the crude oil price is reported in $/Bbl and natural gas liquids are reported in $/Gallon. |
Commodity | Period | Contract Type (a) | Location (b) | Notional Volume (c) | Weighted Average Price (d) | ||||||
Natural Gas | Jul-Dec 2014 | Basis Swaps | Multiple | (39 | ) | — | |||||
Natural Gas | Jul-Dec 2014 | Index | Multiple | (152 | ) | — | |||||
Natural Gas | 2015 | Basis Swaps | Multiple | (21 | ) | — | |||||
Natural Gas | 2015 | Index | Multiple | (115 | ) | — | |||||
Natural Gas | 2016 | Index | Multiple | (70 | ) | — | |||||
Natural Gas | 2017+ | Index | Multiple | (478 | ) | — |
(a) | WPX Marketing enters 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) | WPX Marketing transacts at multiple locations primarily around our core assets to maximize the economic value of our transportation, storage and asset management agreements. |
(c) | Natural gas volumes are reported in BBtu/day, crude oil volumes are reported in Bbl/day, and natural gas liquids are reported in Bbl/day. |
(d) | 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. |
June 30, 2014 | December 31, 2013 | ||||||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||||||
(Millions) | |||||||||||||||
Derivatives related to production not designated as hedging instruments | $ | 29 | $ | 85 | $ | 26 | $ | 39 | |||||||
Derivatives related to physical marketing agreements not designated as hedging instruments | 31 | 67 | 31 | 83 | |||||||||||
Total derivatives not designated as hedging instruments | $ | 60 | $ | 152 | $ | 57 | $ | 122 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(Millions) | |||||||||||||||
Gain (loss) from derivatives related to production not designated as hedging instruments (a) | $ | (24 | ) | $ | 78 | $ | (110 | ) | $ | (11 | ) | ||||
Gain (loss) from derivatives related to physical marketing agreements not designated as hedging instruments (b) | 7 | — | (102 | ) | (5 | ) | |||||||||
Net gain (loss) on derivatives not designated as hedges | $ | (17 | ) | $ | 78 | $ | (212 | ) | $ | (16 | ) |
(a) | Includes payments totaling $16 million and $20 million for settlements of derivatives during the three months ended June 30, 2014 and 2013, respectively; and payments totaling $66 million and $15 million for the six months ended June 30, 2014 and 2013, respectively. |
(b) | Includes payments totaling $1 million for settlements of derivatives during both the three months ended June 30, 2014 and 2013, and payments totaling $119 million for the six months ended June 30, 2014 and receipts of $3 million for the |
Gross Amount Presented on Balance Sheet | Netting Adjustments (a) | Cash Collateral Posted (Received) | Net Amount | ||||||||||||
June 30, 2014 | (Millions) | ||||||||||||||
Derivative assets with right of offset or master netting agreements | $ | 60 | $ | (57 | ) | $ | — | $ | 3 | ||||||
Derivative liabilities with right of offset or master netting agreements | $ | (152 | ) | $ | 57 | $ | 36 | $ | (59 | ) | |||||
December 31, 2013 | |||||||||||||||
Derivative assets with right of offset or master netting agreements | $ | 57 | $ | (50 | ) | $ | — | $ | 7 | ||||||
Derivative liabilities with right of offset or master netting agreements | $ | (122 | ) | $ | 50 | $ | 52 | $ | (20 | ) |
(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. |
Counterparty Type | Gross Investment Grade (a) | Gross Total | Net Investment Grade (a) | Net Total | |||||||||||
(Millions) | |||||||||||||||
Financial institutions | $ | 60 | $ | 60 | $ | 3 | $ | 3 | |||||||
$ | 60 | 60 | $ | 3 | 3 | ||||||||||
Credit reserves | — | — | |||||||||||||
Credit exposure from derivatives | $ | 60 | $ | 3 |
(a) | We determine investment grade primarily using publicly available credit ratings. We include counterparties with a minimum Standard & Poor’s rating of BBB- or Moody’s Investors Service rating of Baa3 in investment grade. |
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Domestic | International | Total | |||||||||
(Millions) | |||||||||||
Three months ended June 30, 2014 | |||||||||||
Total revenues | $ | 775 | $ | 39 | $ | 814 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 69 | $ | 8 | $ | 77 | |||||
Gathering, processing and transportation | 96 | 1 | 97 | ||||||||
Taxes other than income | 35 | 7 | 42 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 233 | — | 233 | ||||||||
Exploration | 54 | 3 | 57 | ||||||||
Depreciation, depletion and amortization | 206 | 9 | 215 | ||||||||
Loss on sale of working interests in the Piceance Basin | 195 | — | 195 | ||||||||
General and administrative | 71 | 3 | 74 | ||||||||
Other—net | 1 | 2 | 3 | ||||||||
Total costs and expenses | $ | 960 | $ | 33 | $ | 993 | |||||
Operating income (loss) | $ | (185 | ) | $ | 6 | $ | (179 | ) | |||
Interest expense | (28 | ) | — | (28 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | — | 5 | 5 | ||||||||
Income (loss) before income taxes | $ | (212 | ) | $ | 11 | $ | (201 | ) | |||
Three months ended June 30, 2013 | |||||||||||
Total revenues | $ | 773 | $ | 42 | $ | 815 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 63 | $ | 10 | $ | 73 | |||||
Gathering, processing and transportation | 110 | 1 | 111 | ||||||||
Taxes other than income | 30 | 6 | 36 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 222 | — | 222 | ||||||||
Exploration | 17 | 3 | 20 | ||||||||
Depreciation, depletion and amortization | 217 | 10 | 227 | ||||||||
General and administrative | 69 | 5 | 74 | ||||||||
Other—net | 5 | (4 | ) | 1 | |||||||
Total costs and expenses | $ | 733 | $ | 31 | $ | 764 | |||||
Operating income (loss) | $ | 40 | $ | 11 | $ | 51 | |||||
Interest expense | (28 | ) | — | (28 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | 2 | 7 | 9 | ||||||||
Income (loss) before income taxes | $ | 15 | $ | 18 | $ | 33 |
Domestic | International | Total | |||||||||
(Millions) | |||||||||||
Six months ended June 30, 2014 | |||||||||||
Total revenues | $ | 1,731 | $ | 70 | $ | 1,801 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 140 | $ | 16 | $ | 156 | |||||
Gathering, processing and transportation | 202 | 1 | 203 | ||||||||
Taxes other than income | 76 | 13 | 89 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 624 | — | 624 | ||||||||
Exploration | 69 | 3 | 72 | ||||||||
Depreciation, depletion and amortization | 403 | 19 | 422 | ||||||||
Loss on sale of working interests in the Piceance Basin | 195 | — | 195 | ||||||||
General and administrative | 139 | 7 | 146 | ||||||||
Other—net | 3 | 3 | 6 | ||||||||
Total costs and expenses | $ | 1,851 | $ | 62 | $ | 1,913 | |||||
Operating income (loss) | $ | (120 | ) | $ | 8 | $ | (112 | ) | |||
Interest expense | (57 | ) | — | (57 | ) | ||||||
Interest capitalized | 1 | — | 1 | ||||||||
Investment income and other | 2 | 7 | 9 | ||||||||
Income (loss) before income taxes | $ | (174 | ) | $ | 15 | $ | (159 | ) | |||
Six months ended June 30, 2013 | |||||||||||
Total revenues | $ | 1,368 | $ | 78 | $ | 1,446 | |||||
Costs and expenses: | |||||||||||
Lease and facility operating | $ | 130 | $ | 18 | $ | 148 | |||||
Gathering, processing and transportation | 216 | 2 | 218 | ||||||||
Taxes other than income | 59 | 12 | 71 | ||||||||
Gas management, including charges for unutilized pipeline capacity | 465 | — | 465 | ||||||||
Exploration | 35 | 4 | 39 | ||||||||
Depreciation, depletion and amortization | 441 | 17 | 458 | ||||||||
General and administrative | 138 | 8 | 146 | ||||||||
Other—net | 11 | (3 | ) | 8 | |||||||
Total costs and expenses | $ | 1,495 | $ | 58 | $ | 1,553 | |||||
Operating income (loss) | $ | (127 | ) | $ | 20 | $ | (107 | ) | |||
Interest expense | (54 | ) | — | (54 | ) | ||||||
Interest capitalized | 2 | — | 2 | ||||||||
Investment income and other | 4 | 12 | 16 | ||||||||
Income (loss) before income taxes | $ | (175 | ) | $ | 32 | $ | (143 | ) | |||
Total assets | |||||||||||
Total assets as of June 30, 2014 | $ | 7,622 | $ | 396 | $ | 8,018 | |||||
Total assets as of December 31, 2013 | $ | 8,046 | $ | 383 | $ | 8,429 |
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