v3.20.2
Sales and Other Operating Revenues
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
Note 19—Sales and Other Operating Revenues
 
Revenue from Contracts with Customers
 
The following table provides further disaggregation
 
of our consolidated sales and other operating
 
revenues:
Millions of Dollars
 
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
Revenue from contracts with customers
$
1,919
6,633
6,830
13,692
Revenue from contracts outside the scope of ASC Topic 606
Physical contracts meeting the definition of a derivative
856
1,371
2,152
3,452
Financial derivative contracts
(26)
(51)
(75)
(41)
Consolidated sales and other operating revenues
$
2,749
7,953
8,907
17,103
Revenues from contracts outside the scope of ASC
 
Topic 606 relate primarily to physical gas contracts at
market prices which qualify as derivatives accounted
 
for under ASC Topic 815, “Derivatives and Hedging,”
and for which we have not elected NPNS.
 
There is no significant difference in contractual
 
terms or the policy
for recognition of revenue from these contracts
 
and those within the scope of ASC Topic 606.
 
The following
disaggregation of revenues is provided in conjunction
 
with Note 20—Segment Disclosures and Related
Information:
Millions of Dollars
 
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
Revenue from Outside the Scope of ASC Topic 606
by Segment
Lower 48
$
698
1,111
1,674
2,724
Canada
121
100
300
341
Europe and North Africa
37
160
178
387
Physical contracts meeting the definition of a derivative
$
856
1,371
2,152
3,452
Millions of Dollars
 
Three Months Ended
Six Months Ended
June 30
June 30
2020
2019
2020
2019
Revenue from Outside the Scope of ASC Topic 606
by Product
Crude oil
$
26
165
118
353
Natural gas
763
1,095
1,853
2,863
Other
67
111
181
236
Physical contracts meeting the definition of a derivative
$
856
1,371
2,152
3,452
Practical Expedients
Typically,
 
our commodity sales contracts are less than
 
12 months in duration; however, in certain specific
cases may extend longer, which may be out to the end of field
 
life.
 
We have long-term commodity sales
contracts which use prevailing market prices at the time of delivery, and under these contracts, the market-
based variable consideration for each performance obligation (i.e., delivery of commodity) is allocated to each
wholly unsatisfied performance obligation within the contract.
 
Accordingly,
we have applied the practical
expedient allowed in ASC Topic 606 and do not disclose the aggregate amount of the transaction price
allocated to performance obligations or when we expect to recognize revenues that are unsatisfied (or partially
unsatisfied) as of the end of the reporting period.
Receivables and Contract Liabilities
Receivables from Contracts with Customers
At June 30, 2020, the “Accounts and notes receivable”
 
line on our consolidated balance sheet,
 
includes trade
receivables of $
745
 
million compared with $
2,372
 
million at December 31, 2019, and includes
 
both contracts
with customers within the scope of ASC Topic 606 and those that are outside the
 
scope of ASC Topic 606.
 
We typically receive payment within 30 days or less (depending on the terms of the invoice) once delivery is
made.
 
Revenues that are outside the scope of ASC Topic 606 relate primarily to physical
 
gas sales contracts at
market prices for which we do not elect NPNS and
 
are therefore accounted for as a derivative
 
under ASC
Topic 815.
 
There is little distinction in the nature of the
 
customer or credit quality of trade receivables
associated with gas sold under contracts for
 
which NPNS has not been elected compared
 
to trade receivables
where NPNS has been elected.
 
 
Contract Liabilities from Contracts with Customers
We have entered into contractual arrangements where we license proprietary technology
 
to customers related
to the optimization process for operating LNG
 
plants.
 
The agreements typically provide for negotiated
payments to be made at stated milestones.
 
The payments are not directly related to our performance under the
contract and are recorded as deferred revenue to be recognized as revenue when the customer can utilize and
benefit from their right to use the license.
 
Payments are received in installments over the construction period.
Millions of Dollars
Contract Liabilities
As of June 30, 2020 and December 31, 2019
$
80
Amounts Recognized in the Consolidated Balance
 
Sheet at June 30, 2020
Current liabilities
$
47
Noncurrent liabilities
33
$
80
We expect to recognize the contract liabilities as of June 30, 2020, as revenue during 2021 and 2022.
 
There
were
no
 
revenues recognized for the three- and six-month
 
periods ended June 30, 2020.