v3.20.2
Fair Value Measurement (Tables)
9 Months Ended
Sep. 30, 2020
Fair Value Measurement [Abstract]  
Fair value hierarchy for gross financial assets and liabilities
Millions of Dollars
September 30, 2020
December 31, 2019
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Assets
Investment in Cenovus Energy
$
809
-
-
809
2,111
-
-
2,111
Investments in debt securities
21
461
-
482
25
216
-
241
Commodity derivatives
173
117
11
301
172
114
36
322
Total assets
$
1,003
578
11
1,592
2,308
330
36
2,674
Liabilities
Commodity derivatives
$
173
89
15
277
174
115
22
311
Total liabilities
$
173
89
15
277
174
115
22
311
Commodity derivative balances subject to right of setoff
The following table summarizes those commodity
 
derivative balances subject to the right of setoff as
presented on our consolidated balance sheet.
 
We have elected to offset the recognized fair value amounts for
multiple derivative instruments executed with the
 
same counterparty in our financial statements
 
when a legal
right of setoff exists.
Millions of Dollars
Amounts Subject to Right of Setoff
Gross
Amounts Not
Gross
Net
Amounts
Subject to
Gross
Amounts
Amounts
Cash
Net
Recognized
Right of Setoff
Amounts
Offset
Presented
Collateral
Amounts
September 30, 2020
Assets
$
301
1
300
204
96
5
91
Liabilities
277
-
277
204
73
7
66
December 31, 2019
Assets
$
322
3
319
193
126
4
122
Liabilities
311
4
307
193
114
12
102
At September 30, 2020 and December 31, 2019,
 
we did not present any amounts gross on our consolidated
balance sheet where we had the right of setoff.
Values of assets, by major category, measured at fair value on a nonrecurring basis
Non-Recurring Fair Value Measurement
The following table summarizes the fair value
 
hierarchy by major category and date of
 
remeasurement for
assets accounted for at fair value on a non-recurring
 
basis:
Millions of Dollars
Fair Value
Measurement
Using
Fair Value
Level 3 Inputs
Before-Tax
Loss
Net PP&E (held for use)
March 31, 2020
$
77
77
510
Range and arithmetic average of significant unobservable inputs - Wind River Basin
Fair Value
(Millions of
Dollars)
Valuation
Technique
Unobservable Inputs
Range
 
(Arithmetic Average)
March 31, 2020
Wind River Basin
$
77
Discounted cash
flow
Natural gas production
(MMCFD)
8.4
 
-
55.2
 
(
22.9
)
Natural gas price outlook*
($/MMBTU)
$
2.67
 
- $
9.17
 
($
5.68
)
Discount rate**
7.9
%
 
-
9.1
% (
8.3
%)
 
*Henry Hub natural gas price outlook based on external pricing service
 
companies' outlooks for years 2022-2034; future prices
 
escalated at
2.2
% annually after
year 2034.
**Determined as the weighted average cost of capital of a group
 
of peer companies, adjusted for risks where
 
appropriate.
Net fair value of financial instruments
The following table summarizes the net fair
 
value of financial instruments (i.e., adjusted
 
where the right of
setoff exists for commodity derivatives):
Millions of Dollars
Carrying Amount
Fair Value
September 30
December 31
September 30
December 31
2020
2019
2020
2019
Financial assets
Investment in Cenovus Energy
$
809
2,111
809
2,111
Commodity derivatives
92
125
92
125
Investments in debt securities
482
241
482
241
Total loans and advances—related parties
219
339
219
339
Financial liabilities
Total debt, excluding finance leases
14,482
14,175
18,827
18,108
Commodity derivatives
66
106
66
106