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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
Objectives and Strategies
The Company is exposed to fluctuations in crude oil and natural gas prices on the majority of its worldwide production, as well as fluctuations in exchange rates in connection with transactions denominated in foreign currencies. The Company manages the variability in its cash flows by occasionally entering into derivative transactions on a portion of its crude oil and natural gas production and foreign currency transactions. The Company utilizes various types of derivative financial instruments, including forward contracts, futures contracts, swaps, and options, to manage fluctuations in cash flows resulting from changes in commodity prices or foreign currency values. The Company has elected not to designate any of its derivative contracts as cash flow hedges.
Counterparty Risk
The use of derivative instruments exposes the Company to credit loss in the event of nonperformance by the counterparty. To reduce the concentration of exposure to any individual counterparty, the Company utilizes a diversified group of investment-grade rated counterparties, primarily financial institutions, for its derivative transactions. As of June 30, 2025, the Company had derivative positions with 11 counterparties. The Company monitors counterparty creditworthiness on an ongoing basis; however, it cannot predict sudden changes in counterparties’ creditworthiness. In addition, even if such changes are not sudden, the Company may be limited in its ability to mitigate an increase in counterparty credit risk. Should one of these counterparties not perform, the Company may not realize the benefit of some of its derivative instruments resulting from lower commodity prices.
Derivative Instruments
Commodity Derivative Instruments
As of June 30, 2025, the Company had the following open natural gas financial basis swap contracts:
Basis Swap PurchasedBasis Swap Sold
Production PeriodSettlement IndexMMBtu
(in 000’s)		Weighted Average Price DifferentialMMBtu
(in 000’s)		Weighted Average Price Differential
July—December 2025
NYMEX Henry Hub/IF Waha93,840$(3.16)——
July—December 2025
NYMEX Henry Hub/IF HSC——42,320$(0.51)
January—December 2026
NYMEX Henry Hub/IF Waha34,675$(1.97)——
Embedded Derivatives
As a result of the Callon acquisition, the Company assumed an earn-out obligation from Callon, where the Company could be required to pay up to $25 million in the aggregate if the average daily settlement price of WTI crude oil exceeds $60.00 per barrel for the 2025 calendar year. The Company determined that the earn-out obligation was not clearly and closely related to the underlying agreement and therefore bifurcated this embedded feature and recorded the derivative at fair value.
Fair Value Measurements
The following table presents the Company’s derivative assets and liabilities measured at fair value on a recurring basis:
Fair Value Measurements Using
Quoted Price in Active Markets
(Level 1)		Significant Other Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Total
Fair Value
Netting(1)
Carrying Amount
(In millions)
June 30, 2025
Assets:
Commodity derivative instruments$— $113 $— $113 $(3)$110 
Liabilities:
Commodity derivative instruments$— $3 $— $3 $(3)$— 
Contingent consideration arrangements
— 21 — 21 — 21 
December 31, 2024
Liabilities:
Contingent consideration arrangements
$— $18 $— $18 $— $18 
(1)    The derivative fair values are based on analysis of each contract on a gross basis, excluding the impact of netting agreements with counterparties.
The fair values of the Company’s commodity derivative instruments are not actively quoted in the open market. The Company primarily uses a market approach to estimate the fair values of these derivatives on a recurring basis, utilizing futures pricing for the underlying positions provided by a reputable third party, a Level 2 fair value measurement.
Derivative Activity Recorded in the Consolidated Balance Sheet
All derivative instruments are reflected as either assets or liabilities at fair value in the consolidated balance sheet. These fair values are recorded by netting asset and liability positions where counterparty master netting arrangements contain provisions for net settlement. The carrying value of the Company’s derivative assets and/or liabilities and their locations on the consolidated balance sheet are as follows:
June 30,
2025
December 31,
2024
(In millions)
Current Assets: Other current assets$103 $— 
Other Assets: Deferred charges and other7 — 
Total derivative assets$110 $— 
Current Liabilities: Other current liabilities$21 $— 
Deferred Credit and Other Noncurrent Liabilities: Other
— 18 
Total derivative liabilities$21 $18 
Derivative Activity Recorded in the Statement of Consolidated Operations
The following table summarizes the effect of derivative instruments on the Company’s statement of consolidated operations:
 
For the Quarter Ended
June 30,
For the Six Months Ended
June 30,
2025202420252024
 (In millions)
Realized:
Commodity derivative instruments$2 $(6)$2 $(2)
Realized gains (losses), net
2 (6)2 (2)
Unrealized:
Commodity derivative instruments138 3 110 (5)
Contingent consideration arrangements(2)— (2)— 
Unrealized gains (losses), net
136 3 108 (5)
Derivative instrument gains (losses), net
$138 $(3)$110 $(7)
Derivative instrument gains and losses are recorded in “Derivative instrument gains (losses), net” under “Revenues and Other” in the Company’s statement of consolidated operations. Unrealized gains and losses for derivative activity recorded in the statement of consolidated operations are reflected in the statement of consolidated cash flows separately as “Unrealized derivative instrument gains (losses), net” under “Adjustments to reconcile net income to net cash provided by operating activities.”