Income Taxes	3 Months Ended
Mar. 31, 2021
Income Taxes [Abstract]
Income Taxes	Note 18—Income Taxes Our effective tax rate for the first quarter of 2021 was 42.7 percent compared with negative 9.5 percent for the first quarter of 2020. The increase in the effective tax rate for the first quarter of 2021 is primarily due to a shift in the mix of our before-tax income between higher and lower tax jurisdictions and the impact of the interest deduction related to our Concho debt exchange, described below. This increase is partially offset by a decrease in our valuation allowance. Our effective tax rate for the first quarter of 2021 is adversely impacted by $ 75 million due to incremental interest deductions from the exchange of debt acquired from Concho offsetting U.S. foreign source revenue that would otherwise have been offset by foreign tax credits. See Note 6—Debt, for additional information on the debt exchange. During the first quarter of 2021, our valuation allowance decreased by $ 65 million compared to an increase of $ 346 million for the first quarter of 2020. The change to our U.S. valuation allowance for both periods relates primarily to the fair value measurement of our Cenovus Energy common shares and our expectation of the tax impact related to incremental capital gains and losses. Our deferred tax liability increased by approximately $ 1.1 billion as part of the liabilities assumed through our Concho acquisition. Additionally, our reserve for unrecognized tax benefits increased by $ 150 million related to tax credit carryovers acquired from Concho that we do not expect to recognize. See Note 3—Acquisitions and Dispositions for more information.

Income Taxes

3 Months Ended

Mar. 31, 2021

Income Taxes [Abstract]

Income Taxes

Note 18—Income Taxes

Our effective tax rate for the first quarter of 2021

was

42.7

percent compared with negative

9.5

percent for the

first quarter of 2020.

The increase in the effective tax rate for the first

quarter of 2021 is primarily due to a

shift in the mix of our before-tax income between

higher and lower tax jurisdictions and the

impact of the

interest deduction related to our Concho debt

exchange, described below.

This increase is partially offset by a

decrease in our valuation allowance.

Our effective tax rate for the first quarter of 2021 is

adversely impacted by $

million due to incremental

interest deductions from the exchange of debt

acquired from Concho offsetting U.S. foreign source revenue

that would otherwise have been offset by foreign tax credits.

See Note 6—Debt,

for additional information on

the debt exchange.

During the first quarter of 2021, our valuation

allowance decreased by $

million compared to an increase of

346

million for the first quarter of 2020.

The change to our U.S. valuation allowance

for both periods relates

primarily to the fair value measurement of our

Cenovus Energy common shares and our expectation

of the tax

impact related to incremental capital gains and losses.

Our deferred tax liability increased by approximately

1.1

billion as part of the liabilities assumed through

our

Concho acquisition.

Additionally, our reserve for unrecognized tax benefits increased by $

150

million related

to tax credit carryovers acquired from Concho that

we do not expect to recognize.

See Note 3—Acquisitions

and Dispositions for more information.