v3.25.2
DERIVATIVES
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
We enter into commodity derivative contracts to help protect our cash flows, margins and capital program from the volatility of commodity prices. We primarily hedge a portion of our forecasted oil production and purchased natural gas used in our steamflood operations. We did not have any derivative instruments designated as accounting hedges as of and for the three and six months ended June 30, 2025 and 2024. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to implement our hedging strategy.
Summary of Derivative Contracts

We held the following Brent-based contracts as of June 30, 2025:

Q3
2025		Q4
2025		Q1
2026		Q2
2026		2H
2026		20272028
Sold Calls
Barrels per day30,000 29,000 35,000 35,000 35,000 — — 
Weighted-average price per barrel$87.08 $87.13 $83.86 $83.86 $83.86 $— $— 
Purchased Puts
Barrels per day30,000 29,000 35,000 35,000 35,000 — — 
Weighted-average price per barrel$61.67 $61.72 $61.14 $61.14 $61.14 $— $— 
Swaps
Barrels per day45,001 43,376 36,444 29,399 28,036 34,382 1,697 
Weighted-average price per barrel$70.63 $69.86 $68.98 $68.03 $67.25 $64.63 $65.00 

At June 30, 2025, we also held the following swaps to hedge purchased natural gas used in our operations as shown in the table below.

Q3
2025		Q4
2025		Q1
2026		Q2
2026		2H
2026		20272028
SoCal Border
MMBtu per day
25,750 22,408 20,350 13,250 10,329 — — 
Weighted-average price per MMBtu
$3.48 $3.53 $5.18 $4.82 $4.84 $— $— 
NWPL Rockies
MMBtu per day
51,750 51,750 51,750 51,750 51,750 33,616 1,576 
Weighted-average price per MMBtu
$2.95 $4.22 $4.67 $3.64 $3.93 $4.12 $3.95 

In the three and six months ended June 30, 2025 and 2024, we also had a limited number of derivative contracts related to our natural gas marketing activities that were intended to lock in locational price spreads. These derivative contracts were not significant to our results of operations or financial statements taken as a whole.

The outcomes of the derivative positions shown in the tables above are as follows:

•Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel.
•Purchased puts – we receive settlement payments for prices below the indicated weighted-average price per barrel.
•Swaps – with respect to swaps for crude oil, we make settlement payments for prices above the indicated weighted-average price per barrel and receive settlement payments for prices below the indicated weighted-average price per barrel. With respect to swaps for purchased natural gas, we receive settlement payments for prices above the indicated weighted-average price per MMBtu and we make settlement payments for prices below the weighted-average price per MMBtu.
Fair Value of Derivatives

Derivative instruments not designated as hedging instruments are required to be recorded on the balance sheet at fair value. We report gains and losses on our derivative contracts related to our oil production and our marketing activities in operating revenue on our consolidated statements of operations as shown in the table below:

Three months ended June 30,Six months ended
June 30,
2025202420252024
(in millions)
(in millions)
Non-cash commodity derivative gain (loss)
$140 $11 $162 $(48)
Net settlements and amortized premiums
17 (6)1 (18)
Net gain (loss) from commodity derivatives$157 $5 $163 $(66)

We report gains and losses on our commodity derivative contracts related to purchases of natural gas in operating expenses on our condensed consolidated statements of operations as shown in the table below:

Three months ended June 30,Six months ended
June 30,
2025202420252024
(in millions)(in millions)
Non-cash gain on natural gas purchase derivatives
$(4)$(3)$(22)$(4)
Settlements
7 4 19 6 
Net loss (gain) on natural gas purchase derivatives
$3 $1 $(3)$2 

Our derivative contracts are measured at fair value using industry-standard models with various inputs, including quoted forward prices, and are classified as Level 2 in the required fair value hierarchy for the periods presented. The following tables present the fair values of our outstanding commodity derivatives as of June 30, 2025 and December 31, 2024.

June 30, 2025
ClassificationGross Amounts at Fair ValueNettingNet Fair Value
(in millions)
Other current assets, net
$110 $(8)$102 
Other noncurrent assets
61 (11)50 
Current liabilities(15)8 (7)
Noncurrent liabilities(25)11 (14)
$131 $— $131 
December 31, 2024
ClassificationGross Amounts at Fair ValueNettingNet Fair Value
(in millions)
Other current assets, net
$26 $(12)$14 
Other noncurrent assets
32 (16)16 
Current liabilities(62)12 (50)
Noncurrent liabilities(61)16 (45)
$(65)$— $(65)