View Filing Data

PROPERTY, PLANT AND EQUIPMENT

546

483

22,323

21,260

Accumulated depreciation, depletion and amortization

(15,937)

(15,564)

6,386

5,696

OTHER ASSETS

6,984

6,207

CURRENT LIABILITIES

Accounts payable

349

257

Accrued liabilities

522

475

DEFERRED GAIN AND ISSUANCE COSTS, NET

871

732

LONG-TERM DEBT

5,108

5,306

253

287

OTHER LONG-TERM LIABILITIES

612

602

MEZZANINE EQUITY

Redeemable noncontrolling interest

745

EQUITY

Preferred stock (20 million shares authorized at $0.01 par value) no shares outstanding at September 30, 2018 and December 31, 2017

Common stock (200 million shares authorized at $0.01 par value) outstanding shares (September 30, 2018 - 48,565,905 and December 31, 2017 - 42,901,946)

Additional paid-in capital

4,983

4,879

Accumulated deficit

(5,688)

(5,670)

Accumulated other comprehensive loss

(20)

(23)

Total equity attributable to common stock

(725)

(814)

Noncontrolling interests

120

(605)

^[1]

(720)

Condensed Consolidated Statements of Comprehensive Income

$ 6,984

$ 6,207

[1]	Excludes redeemable noncontrolling interest recorded in mezzanine equity. See Note 6 Joint Ventures for more information.

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Condensed Consolidated Balance Sheets
Preferred stock, authorized shares	20,000,000	20,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, outstanding shares	0	0
Common stock, authorized shares	200,000,000	200,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, outstanding shares	48,565,905	42,901,946

Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
REVENUES AND OTHER
Oil and gas sales	$ 700	$ 461	$ 1,932	$ 1,387
Net derivative (loss) gain from commodity contracts	(54)	(65)	(259)	51
Other revenue	182	49	313	113
Total revenues and other	828	445	1,986	1,551
COSTS AND OTHER
Production costs	236	222	679	649
General and administrative expenses	81	61	234	183
Depreciation, depletion and amortization	128	134	372	412
Taxes other than on income	45	39	120	103
Exploration expense	4	5	18	17
Other expenses, net	149	29	259	76
Total costs and other	643	490	1,682	1,440
OPERATING INCOME (LOSS)	185	(45)	304	111
NON-OPERATING (LOSS) INCOME
Interest and debt expense, net	(95)	(85)	(281)	(252)
Net gain on early extinguishment of debt	2		26	4
Gain on asset divestitures	3		4	21
Other non-operating expenses	(4)	(2)	(16)	(11)
INCOME (LOSS) BEFORE INCOME TAXES	91	(132)	37	(127)
Income tax	0	0	0	0
NET INCOME (LOSS)	91	(132)	37	(127)
Net income attributable to noncontrolling interests	(25)	(1)	(55)	(1)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$ 66	$ (133)	$ (18)	$ (128)
Net income (loss) attributable to common stock per share
Basic (in dollars per share)	$ 1.34	$ (3.11)	$ (0.38)	$ (3.01)
Diluted (in dollars per share)	$ 1.32	$ (3.11)	$ (0.38)	$ (3.01)

Condensed Consolidated Statements of Comprehensive Income - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Sep. 30, 2018

Sep. 30, 2017

Sep. 30, 2018

Sep. 30, 2017

Net income (loss)

$ 91

$ (132)

$ 37

$ (127)

Other comprehensive income items:

Reclassification of realized losses on pension and postretirement benefits to income

^[1]

Total other comprehensive income

Comprehensive income attributable to noncontrolling interest

(25)

(1)

(55)

(1)

Comprehensive income (loss) attributable to common stock

$ 66

$ (132)

$ (15)

$ (124)

[1]	No associated tax for the three and nine months ended September 30, 2018 and 2017. See Note 11 Pension and Postretirement Benefit Plans for additional information.

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 220
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-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=114867106&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
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-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=84234705&loc=SL4591551-111686

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109223946&loc=d3e3000-108585

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=108774443&loc=SL4569616-111683

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=84234705&loc=SL4591552-111686

+ Details

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Consolidated Statements of Comprehensive Income
Pension and postretirement income, associated tax	$ 0	$ 0	$ 0	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss)	$ 37	$ (127)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	372	412
Net derivative loss (gain) from commodity contracts	259	(51)
Net (payments) proceeds on settled commodity derivatives	(178)	15
Net gain on early extinguishment of debt	(26)	(4)
Amortization of deferred gain	(58)	(55)
Gain on asset divestitures	(4)	(21)
Other non-cash charges to income, net	78	46
Dry hole expenses	4	1
Changes in operating assets and liabilities, net	(91)	9
Net cash provided by operating activities	393	225
CASH FLOW FROM INVESTING ACTIVITIES
Capital investments	(504)	(232)
Changes in capital investment accruals	40	26
Asset divestitures	17	33
Acquisitions	(514)
Other	(4)	(1)
Net cash used in investing activities	(965)	(174)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from 2014 Revolving Credit Facility	1,822	1,000
Repayments of 2014 Revolving Credit Facility	(1,843)	(1,010)
Payments on 2014 Term Loan		(91)
Debt repurchases	(149)	(24)
Debt transaction costs	(4)	(2)
Contributions from noncontrolling interest holders, net	796	98
Distributions paid to noncontrolling interest holders	(80)	(6)
Issuance of common stock	52	2
Shares canceled for taxes	(11)	(2)
Net cash provided (used) by financing activities	583	(35)
Increase in cash	11	16
Cash-beginning of period	20	12
Cash-end of period	$ 31	$ 28

Condensed Consolidated Statements of Equity - USD ($)
$ in Millions

Equity Attributable to Common Stock

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive (Loss) Income

Equity Attributable to Noncontrolling Interest

Total

Beginning balance at Dec. 31, 2016

$ (557)

$ 4,861

$ (5,404)

$ (14)

$ (557)

Increase (decrease) in Equity

Net (loss) income

(128)

$ 1

(127)

Contributions from noncontrolling interest holders, net

Distributions paid to noncontrolling interest holders

(6)

Other comprehensive income

Share-based compensation, net

Ending balance at Sep. 30, 2017

(667)

4,875

(5,532)

(10)

(574)

Beginning balance at Dec. 31, 2017

(814)

4,879

(5,670)

(23)

(720)

Increase (decrease) in Equity

Net (loss) income

(18)

(16)

(34)

^[1]

Contributions from noncontrolling interest holders, net

^[1]

Distributions paid to noncontrolling interest holders

(40)

^[1]

Issuance of common stock

^[2]

101

Other comprehensive income

Share-based compensation, net

Ending balance at Sep. 30, 2018

$ (725)

$ 4,983

$ (5,688)

$ (20)

$ 120

$ (605)

^[1]

[1]

Excludes redeemable noncontrolling interest recorded in mezzanine equity. See Note 6 Joint Ventures for more information.

[2]

Includes 2.85 million shares of common stock (valued at $51 million at issuance) issued to Chevron in connection with our acquisition of Chevron's working interest in Elk Hills unit and 2.3 million shares of common stock (valued at $50 million at issuance) issued to an Ares-led investor group in connection with the formation of our Ares JV. See Note 7 Acquisitions and Divestitures for more information.

Condensed Consolidated Statements of Equity (Parenthetical)
shares in Thousands, $ in Millions

9 Months Ended

Sep. 30, 2018

USD ($)

Value of common stock at issuance

$ 101

^[1]

Chevron

Common stock shares issued (in shares) | shares

2,850

Value of common stock at issuance

$ 51

Ares-led investor group | Ares JV

Common stock shares issued (in shares) | shares

2,300

Value of common stock at issuance

$ 50

[1]

THE SPIN-OFF AND BASIS OF PRESENTATION	9 Months Ended
THE SPIN-OFF AND BASIS OF PRESENTATION	Sep. 30, 2018
THE SPIN-OFF AND BASIS OF PRESENTATION
THE SPIN-OFF AND BASIS OF PRESENTATION	NOTE 1 THE SPIN-OFF AND BASIS OF PRESENTATION The Separation and Spin-off We are an independent oil and natural gas exploration and production company operating properties within California. We were incorporated in Delaware as a wholly owned subsidiary of Occidental Petroleum Corporation (Occidental) on April 23, 2014 and remained a wholly owned subsidiary of Occidental until November 30, 2014. On November 30, 2014, Occidental distributed shares of our common stock on a pro-rata basis to Occidental stockholders (the Spin-off). We became an independent, publicly traded company on December 1, 2014. Occidental initially retained approximately 18.5% of our outstanding shares of common stock, which were distributed to Occidental stockholders on March 24, 2016. Except when the context otherwise requires or where otherwise indicated, all references to ‘‘CRC,’’ the ‘‘company,’’ ‘‘we,’’ ‘‘us’’ and ‘‘our’’ refer to California Resources Corporation and its subsidiaries, and all references to ‘‘Occidental’’ refer to Occidental Petroleum Corporation, our former parent, and its subsidiaries. Basis of Presentation In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2018 and December 31, 2017 and the statements of operations, comprehensive income, cash flows and equity for the three and nine months ended September 30, 2018 and 2017, as applicable. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and gas exploration and production ventures in which we have a direct working interest by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on our balance sheets, statements of operations and cash flows. We have prepared this report pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission (SEC) applicable to interim financial information, which permit the omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. This Form 10-Q should be read in conjunction with the consolidated financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior year amounts have been reclassified to conform to the 2018 presentation. On the statements of operations, we reclassified interest cost, expected return on assets, amortization of prior service costs and settlements/curtailments, all associated with defined benefit pension plans, from general and administrative expenses to other non-operating expenses, net in accordance with new accounting rules. See Note 2 Accounting and Disclosure Changes for more information.

ACCOUNTING AND DISCLOSURE CHANGES	9 Months Ended
ACCOUNTING AND DISCLOSURE CHANGES	Sep. 30, 2018
ACCOUNTING AND DISCLOSURE CHANGES
ACCOUNTING AND DISCLOSURE CHANGES	NOTE 2 ACCOUNTING AND DISCLOSURE CHANGES Recently Issued Accounting and Disclosure Changes In February 2016, the Financial Accounting Standards Board (FASB) issued rules requiring lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months and to include qualitative and quantitative disclosures with respect to the amount, timing, and uncertainty of cash flows arising from leases. In January 2018, the FASB issued an update to the lease standard providing an optional transition approach for land easements allowing entities to evaluate only new or modified land easements. In July 2018, the FASB provided optional transition relief allowing a prospective approach in applying the new rules by not adjusting comparative period financial information for the effects of the new rules and not requiring disclosures for periods before the effective date. These rules will be effective for us on January 1, 2019, which we expect to apply prospectively. We have identified our lease population and are currently implementing lease accounting software among other activities. We expect the adoption of these rules to increase both our assets and liabilities by the same amount, which could be significant. Recently Adopted Accounting and Disclosure Changes In May 2014, the FASB issued rules on the recognition of revenue that created Topic 606 (ASC 606), which superseded existing revenue recognition requirements reported in accordance with U.S. generally accepted accounting principles (GAAP), and required an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The new rules required certain sales-related costs to be reported as other expense as opposed to being netted against oil and gas sales or other revenue. We adopted ASC 606 on January 1, 2018 using the modified retrospective method with no adjustment to opening retained earnings. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect prior to adoption. See Note 12 Revenue Recognition for more information. In March 2017, the FASB issued rules requiring employers that sponsor defined benefit plans for pensions and postretirement benefits to present the service cost component of net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. Only the service cost component will be eligible for capitalization to assets. Employers are required to present the other components of the net periodic benefit cost separately from the line item that includes the service cost and outside of any subtotal of operating income. We adopted these rules in the first quarter of 2018 with no significant impact on our financial statements. The interest cost, expected return on assets, amortization of prior service costs and settlements/curtailments have been reclassified from general and administrative expense to other non-operating expenses. We elected to use the amounts disclosed for the various components of net periodic benefit cost in the pension and postretirement benefit plans footnote as the basis of the retrospective application. In May 2017, the FASB issued rules to simplify the guidance on the modification of share-based payment awards. The amendments provide clarity on which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting prospectively. We adopted these rules in the first quarter of 2018 with no impact on our financial statements. Components of accumulated other comprehensive income (AOCI) are recorded net of related taxes determined using prevailing rates when the components are initially recorded. When the U.S. federal corporate tax rates changed in December 2017, a difference arose between tax amounts recorded to AOCI as compared to the expected tax amount using the newly enacted corporate tax rates. Our accounting policy is to remove such residual tax differences from AOCI when the related components are ultimately settled. In February 2018, the FASB issued rules that give entities the option to reclassify this residual difference from AOCI to retained earnings. We early adopted this accounting standard in the first quarter of 2018 without reclassifying this residual tax difference to retained earnings.

OTHER INFORMATION

9 Months Ended

Sep. 30, 2018

OTHER INFORMATION

OTHER INFORMATION

NOTE 3 OTHER INFORMATION

Cash at September 30, 2018 and December 31, 2017 included approximately $13 million and $5 million, respectively, which is restricted under one of our joint venture agreements.

Other current assets, net as of September 30, 2018 and December 31, 2017 consisted of the following:


	September 30,		December 31,
	2018		2017
	(in millions)
Amounts due from joint interest partners	$	87	$	76
Derivative assets from commodities contracts		34		23
Prepaid expenses		23		19
Asset held for sale		—		12
Other		9		—
Other current assets, net	$	153	$	130

In the second quarter of 2018, we divested a non-core asset that was held for sale in the prior period. See Note 7 Acquisitions and Divestitures for more information.

Accrued liabilities as of September 30, 2018 and December 31, 2017 consisted of the following:


	September 30,		December 31,
	2018		2017
	(in millions)
Derivative liabilities from commodities contracts	$	191	$	154
Accrued taxes other than on income		65		130
Accrued employee-related costs		106		86
Accrued interest		60		23
Other		100		82
Accrued liabilities	$	522	$	475

Other long-term liabilities included asset retirement obligations of $417 million and $403 million at September 30, 2018 and December 31, 2017, respectively.

Fair Value of Financial Instruments

The carrying amounts of cash and other on-balance sheet financial instruments, other than debt, approximate fair value.

Supplemental Cash Flow Information

We did not make U.S. federal and state income tax payments during the nine months ended September 30, 2018 and 2017. Interest paid, net of capitalized amounts, totaled approximately $278 million and $249 million for the nine months ended September 30, 2018 and 2017, respectively. Non-cash financing activities in 2018 included 2.85 million shares of common stock (valued at $51 million) issued in connection with the Elk Hills transaction. See Note 7 Acquisitions and Divestitures for more on the Elk Hills transaction.

INVENTORIES

9 Months Ended

Sep. 30, 2018

INVENTORIES

INVENTORIES

NOTE 4 INVENTORIES

Inventories as of September 30, 2018 and December 31, 2017 consisted of the following:


	September 30,		December 31,
	2018		2017
		(in millions)
Materials and supplies	$	64	$	53
Finished goods		5		3
Total	$	69	$	56

DEBT

9 Months Ended

Sep. 30, 2018

DEBT

DEBT

NOTE 5 DEBT

As of September 30, 2018 and December 31, 2017, our long-term debt consisted of the following credit agreements, second lien notes and senior notes:


	Outstanding Principal
	(in millions)
	September 30,		December 31,
	2018		2017		Interest Rate	Maturity	Security
Credit Agreements
2014 Revolving Credit Facility	$	342	$	363	LIBOR plus 3.25%-4.00% ABR plus 2.25%-3.00%	June 30, 2021	Shared First-Priority Lien
2017 Credit Agreement		1,300		1,300	LIBOR plus 4.75% ABR plus 3.75%	December 31, 2022(a)	Shared First-Priority Lien
2016 Credit Agreement		1,000		1,000	LIBOR plus 10.375% ABR plus 9.375%	December 31, 2021	First-Priority Lien
Second Lien Notes
Second Lien Notes		2,122		2,250	8%	December 15, 2022(b)	Second-Priority Lien
Senior Notes
5% Senior Notes due 2020		100		100	5%	January 15, 2020	Unsecured
51/2% Senior Notes due 2021		100		100	5.5%	September 15, 2021	Unsecured
6% Senior Notes due 2024		144		193	6%	November 15, 2024	Unsecured
Total	$	5,108	$	5,306

Note: For a detailed description of our credit agreements, second lien notes and senior notes, please see our most recent Form 10-K for the year ended December 31, 2017.

(a)

The 2017 Credit Agreement is subject to a springing maturity of 91 days prior to the maturity of our 2016 Credit Agreement if more than $100 million in principal of the 2016 Credit Agreement is outstanding at that time.

(b)

The Second Lien Notes require principal repayments of approximately $335 million in June 2021, $67 million in December 2021 and $70 million in June 2022.

Deferred Gain and Issuance Costs

As of September 30, 2018, net deferred gain and issuance costs were $253 million, consisting of $357 million of a deferred gain offset by $104 million of deferred issuance costs and original issue discounts. The December 31, 2017 net deferred gain and issuance costs were $287 million, consisting of $415 million of a deferred gain offset by $128 million of deferred issuance costs and original issue discounts.

2014 Revolving Credit Facility

As of September 30, 2018, we had approximately $490 million of available borrowing capacity, subject to a $150 million month-end minimum liquidity requirement. The borrowing base under this facility was reaffirmed at $2.3 billion in October 2018. Our 2014 Revolving Credit Facility also includes a sub-limit of $400 million for the issuance of letters of credit. As of September 30, 2018 and December 31, 2017, we had letters of credit outstanding of approximately $167 million and $148 million, respectively. These letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters.

Note Repurchases

In the third quarter of 2018, we repurchased $31 million in aggregate principal amount of our 8% senior secured second lien notes due December 15, 2022 (Second Lien Notes) and $1 million of our 6% senior notes due November 15, 2024 (2024 Notes) for $30 million, resulting in a $2 million pre-tax gain, net of a reduction in deferred issuance costs. In the nine months ended September 30, 2018, we repurchased $128 million and $49 million in aggregate principal amount of our Second Lien Notes and our 2024 Notes, respectively, for $149 million in cash resulting in a pre-tax gain of $26 million, net of a reduction in deferred issuance costs.

Fair Value

We estimate the fair value of fixed-rate debt, which is classified as Level 1, based on prices from known market transactions for our instruments. The estimated fair value of our debt at September 30, 2018 and December 31, 2017, including the fair value of variable-rate debt, was approximately $5.0 billion and $4.8 billion, respectively, compared to a carrying value of approximately $5.1 billion and $5.3 billion, respectively.

Amendments

On August 20, 2018, we entered into an amendment to the 2014 Credit Agreement. The 2014 Credit Agreement was amended to, among other things:

permit us to draw on our revolver to repurchase our Second Lien Notes and Senior Notes at a discount to par in an amount up to $300 million;

permit us to draw on our revolver to repurchase our Second Lien Notes and Senior Notes at a discount to par, without regard to time limit, in an amount not to exceed a specified portion of proceeds from future dispositions of certain assets;

in connection with any repurchase of certain of our indebtedness, increase the minimum liquidity required to make such repurchase (calculated on a pro forma basis after giving effect to the repurchase) from $250 million to $300 million; and

enhance our ability to refinance our outstanding term loans under our 2017 Credit Agreement and 2016 Credit Agreement, Second Lien Notes and Senior Notes, in each case by allowing the use of permitted refinancing indebtedness for such refinancing so long as certain conditions are met.

On September 18, 2018, we entered into an amendment to the 2017 Credit Agreement. The 2017 Credit Agreement was amended to, among other things:

permit us to repurchase our Second Lien Notes and Senior Notes at a discount to par, without regard to time limit, in an amount not to exceed a specified portion of proceeds from dispositions of certain assets; and

enhance our ability to refinance our outstanding Second Lien Notes, Senior Notes and 2016 Credit Agreement, in each case by allowing the use of permitted refinancing indebtedness for such refinancing so long as certain conditions are met.

Other

At September 30, 2018, we were in compliance with all financial and other debt covenants.

All obligations under our 2014 Revolving Credit Facility, 2017 Credit Agreement and 2016 Credit Agreement (collectively, Credit Facilities) as well as our Second Lien Notes and Senior Notes are guaranteed both fully and unconditionally and jointly and severally by all of our material wholly owned subsidiaries.

A one-eighth percent change in the variable interest rates on the borrowings under our Credit Facilities on September 30, 2018 would result in a $3 million change in annual interest expense.

JOINT VENTURES

9 Months Ended

Sep. 30, 2018

JOINT VENTURES

JOINT VENTURES

NOTE 6 JOINT VENTURES

Noncontrolling Interests

The following table presents the changes in noncontrolling interests by joint venture partners (described in greater detail below), reported in equity and mezzanine equity on the condensed consolidated balance sheets, for the nine months ended September 30, 2018 (in millions):


							Mezzanine
					Equity		Equity –
					Attributable to		Redeemable
					Noncontrolling		Noncontrolling
					Interest		Interest
	Ares JV		BSP JV		Total		Ares JV
Balance, December 31, 2017	$	—	$	94	$	94	$	—
Net (loss) income attributable to noncontrolling interests		(8)		(8)		(16)		71
Contributions from noncontrolling interest holders, net		33		49		82		714
Distributions to noncontrolling interest holders		(5)		(35)		(40)		(40)
Balance, September 30, 2018	$	20	$	100	$	120	$	745

Ares Management L.P. (Ares)

In February 2018, we entered into a midstream JV with ECR Corporate Holdings L.P. (ECR), a portfolio company of Ares Management L.P. (Ares). This JV (Ares JV) holds the Elk Hills power plant ( a 550-megawatt natural gas fired power plant) and a 200 million cubic foot per day cryogenic gas processing plant. We hold 50% of the Class A common interest and 95.25% of the Class C common interest in the Ares JV. ECR holds 50% of the Class A common interest, 100% of the Class B preferred interest and 4.75% of the Class C common interest. We received $750 million in proceeds upon entering into the Ares JV, before $3 million for transaction costs.

The Class A common and Class B preferred interests held by ECR are reported as redeemable noncontrolling interest in mezzanine equity due to an embedded optional redemption feature. The Class C common interest held by ECR is reported in equity on our condensed consolidated balance sheets.

The Ares JV is required to make monthly distributions to the Class B holders. The Class B preferred interest has a deferred payment feature whereby a portion of the monthly distributions may be deferred for the first three years to the fourth and fifth year. The deferred amounts accrue an additional return. Distributions to the Class B preferred interest holders are reported as a reduction to mezzanine equity on our condensed consolidated balance sheets. Monthly, the Ares JV is also required to distribute its excess cash flow over its working capital requirements to the Class C common interests, on a pro-rata basis.

We can cause the Ares JV to redeem ECR's Class A and Class B interests, in whole, but not in part, at any time by paying $750 million for the Class B interest and $60 million for the Class A interest, plus any previously accrued but unpaid preferred distributions and a make-whole payment if the redemption happens prior to five years from inception. We have the option to extend the redemption period for up to an additional two and one-half years, in which case the interests can be redeemed for $750 million for the Class B interest and $80 million for the Class A interest, plus any previously accrued but unpaid preferred distributions and a make-whole payment if the redemption happens prior to seven and one-half years from inception. If we do not cause a redemption at the end of the seven and one-half year period, ECR can either sell its Class A and Class B interests or cause the sale or lease of the Ares JV assets.

Our condensed consolidated statements of operations reflect the full operations of our Ares JV, with ECR's share of net income reported in net income attributable to noncontrolling interests.

Additionally, in the first quarter of 2018, an Ares-led investor group purchased approximately 2.3 million shares of our common stock in a private placement for an aggregate purchase price of $50 million.

Benefit Street Partners (BSP)

In February 2017, we entered into a joint venture with BSP (BSP JV) where BSP will contribute up to $250 million, subject to agreement of the parties, in exchange for a preferred interest in the BSP JV. BSP is entitled to preferential distributions and, if BSP receives cash distributions equal to a predetermined threshold, the preferred interest is automatically redeemed in full with no additional payment. BSP funded $150 million in three equal tranches, before transaction costs, in March 2017, July 2017 and June 2018. The funds contributed by BSP are used to develop certain of our oil and gas properties.

The BSP JV holds net profits interests (NPI) in existing and future cash flow from certain of our properties and the proceeds from the NPI are used by the BSP JV to (1) pay quarterly minimum distributions to BSP, (2) pay for development costs within the project area, upon mutual agreement between members, and (3) make distributions to BSP until the predetermined threshold is achieved.

Our consolidated results reflect the full operations of our BSP JV, with BSP's share of net income being reported in net income attributable to noncontrolling interests on our condensed consolidated statements of operations.

Other

Macquarie Infrastructure and Real Assets Inc. (MIRA)

Our consolidated results include our working interest share in a joint venture we entered into with Macquarie Infrastructure and Real Assets Inc. (MIRA) in April 2017. Subject to the agreement of the parties, MIRA will invest up to $300 million to develop certain of our oil and gas properties in exchange for a 90% working interest in the related properties. MIRA will fund 100% of the development cost of such properties. Our 10% working interest increases to 75% if MIRA receives cash distributions equal to a predetermined threshold return. MIRA initially committed $160 million. In June 2018, the parties amended the initial joint development program to $140 million. The agreement provides for a commitment of up to 110% of the program amount. MIRA invested $58 million in 2017 and $46 million in the nine months ended September 30, 2018. MIRA expects to contribute $11 million for drilling projects in the fourth quarter of 2018 and the balance of the committed amount in 2019.

Subsequent Events

In October 2018, we entered into three joint ventures where our partners carry a portion of our costs. The JV partners have committed capital of approximately $35 million and could provide additional capital if certain milestones are met. We have committed $13 million over a three-year period in connection with these joint ventures.

ACQUISITIONS AND DIVESTITURES

9 Months Ended

Sep. 30, 2018

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

NOTE 7 ACQUISITIONS AND DIVESTITURES

Acquisitions

On April 9, 2018, we acquired the remaining working, surface and mineral interests in the 47,000-acre Elk Hills unit from Chevron U.S.A., Inc. (Chevron) (the Elk Hills transaction) for approximately $518 million, including $7 million of liabilities assumed relating to asset retirement obligations and favorable customary purchase price adjustments of $2 million. We accounted for the Elk Hills transaction as a business combination. After the transaction, we hold all of the working, surface and mineral interests in the Elk Hills unit. The effective date of the transaction was April 1, 2018.

As part of the Elk Hills transaction, Chevron reduced its royalty interest in one of our oil and gas properties by half and extended the time frame to invest the remainder of our capital commitment on that property by two years, to the end of 2020. As of September 30, 2018, the remaining commitment was approximately $18 million. Any deficiency in meeting this capital investment obligation will be paid in cash. We expect to fulfill the capital investment requirement within the extended period. In addition, the parties mutually agreed to release each other from pending claims with respect to the Elk Hills unit.

The following table summarizes the total consideration, including customary closing adjustments, and the allocation of the consideration based on the fair value of the assets acquired as of the acquisition date (in millions):


Consideration:
Cash	$	462
Purchase price adjustments		(2)
Common stock issued (2.85 million shares)		51
Liabilities assumed		7
	$	518

Identifiable assets acquired:
Proved properties	$	435
Other property and equipment		77
Materials and supplies		6
	$	518

The results of operations for the Elk Hills transaction were included in our condensed consolidated financial statements subsequent to the closing date.

On April 2, 2018, we acquired an office building in Bakersfield, California for $48.4 million, which we believe is significantly less than the estimated replacement value of the property and the land. We currently have approximately 500 employees using eight different locations in Bakersfield across multiple leases. We expect that the new building will create significant value by bringing our Bakersfield employees together into a single location over the next 12 to 15 months, which will increase the efficiency, effectiveness and collaboration of these employees. This building was the only available office space in the Bakersfield area large enough to allow us to consolidate our workforce into a single location. For the initial eight months, a former owner of the building will occupy most of the space as a tenant, from which we expect to generate rental income of approximately $4 million in 2018. In December 2018, this tenant will downsize the space they are leasing, with a corresponding reduction in rent, until December 2022. The vacated space will be available to lease to other tenants to generate additional income. In addition, the unimproved land may be monetized in the future. Approximately $6 million of the purchase price was allocated to the in-place leases, which is included in other assets and is being amortized into other expenses, net.

Divestitures

During the nine months ended September 30, 2018, we divested non-core assets resulting in $17 million of proceeds and a $4 million gain. During the nine months ended September 30, 2017, we divested non-core assets resulting in $33 million of proceeds and a $21 million gain.

LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	9 Months Ended
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	Sep. 30, 2018
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	NOTE 8 LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES We, or certain of our subsidiaries, are involved, in the normal course of business, in lawsuits, environmental and other claims and other contingencies that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. We accrue reserves for currently outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Reserve balances at September 30, 2018 and December 31, 2017 were not material to our condensed consolidated balance sheets as of such dates. We also evaluate the amount of reasonably possible losses that we could incur as a result of these matters. We believe that reasonably possible losses that we could incur in excess of reserves accrued would not be material to our consolidated financial position or results of operations. We have indemnified various parties against specific liabilities those parties might incur in the future in connection with the Spin-off, purchases and other transactions that they have entered into with us. These indemnities include indemnities made to Occidental against certain tax-related liabilities that may be incurred by Occidental relating to the Spin-off and liabilities related to operation of our business while it was still owned by Occidental. As of September 30, 2018, we are not aware of material indemnity claims pending or threatened against the company. In October 2018, we settled the examination by the Internal Revenue Service (IRS) of our U.S. federal income tax returns for the post-Spin-off period in 2014 and calendar year 2015. There were no changes to our tax filings as a result of the examination. We remain subject to examination by the IRS for calendar years 2016 and 2017 as well as for all periods subsequent to the Spin-off by the state of California.

DERIVATIVES

9 Months Ended

Sep. 30, 2018

DERIVATIVES

DERIVATIVES

NOTE 9 DERIVATIVES

General

We use a variety of derivative instruments to protect our cash flow, operating margin and capital program from the cyclical nature of commodity prices. These derivatives are intended to help us maintain adequate liquidity and improve our ability to comply with the covenants of our Credit Facilities in case of price deterioration. We will continue to be strategic and opportunistic in implementing our hedging program as market conditions permit. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty.

Commodity Contracts

As of September 30, 2018, we did not have any derivatives designated as hedges. Unless otherwise indicated, we use the term "hedge" to describe derivative instruments that are designed to achieve our hedging program goals, even though they are not necessarily accounted for as cash-flow or fair-value hedges. As part of our hedging program, we entered into a number of derivative transactions that resulted in the following Brent-based crude oil contracts as of September 30, 2018:


	Q4		Q1			Q2		Q3		Q4
	2018		2019			2019		2019		2019
Sold Calls:
Barrels per day		15,000		15,000			5,000		—		—
Weighted-average price per barrel	$	58.83	$	66.15		$	68.45	$	—	$	—

Purchased Calls:
Barrels per day		—		2,000			—		—		—
Weighted-average price per barrel	$	—	$	71.00		$	—	$	—	$	—

Purchased Puts:
Barrels per day		—		33,000			35,000		30,000		20,000
Weighted-average price per barrel	$	—	$	63.48		$	68.29	$	71.67	$	75.00

Sold Puts:
Barrels per day		19,000		35,000			30,000		30,000		20,000
Weighted-average price per barrel	$	45.00	$	50.71		$	55.00	$	56.67	$	60.00

Swaps:
Barrels per day		48,000		7,000	(1)		—		—		—
Weighted-average price per barrel	$	60.35	$	67.71		$	—	$	—	$	—

Note: Additional hedges for 2019 and 2020 were put in place after September 30, 2018 that are not included in the table above.

(1)

Certain of our counterparties have options to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.00 for the first quarter of 2019.

The BSP JV entered into crude oil derivatives that are included in our consolidated results but not in the above table. The hedges entered into by the BSP JV could affect the timing of the redemption of the JV interest. The BSP JV sold calls for up to approximately 1,000 barrels per day at a weighted-average price per barrel of $60.00 per barrel for 2018 through 2020. The BSP JV purchased puts for up to approximately 2,000 barrels per day at a weighted-average price per barrel of approximately $50.00 for 2018 through 2021. This joint venture also entered into natural gas swaps for insignificant volumes for periods through May 2021.

The outcomes of the derivative instruments are as follows:

Sold calls – we make settlement payments for prices above the indicated weighted-average price per barrel.

Purchased calls – we receive 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.

Sold puts – we make settlement payments for prices below the indicated weighted-average price per barrel.

From time to time, we may use combinations of these and other derivative instruments to increase the efficacy of our commodity hedging program.

Interest-Rate Contracts

In May 2018, we entered into derivative contracts that limit our interest rate exposure with respect to $1.3 billion of our variable-rate indebtedness. These interest-rate contracts reset monthly and require the counterparties to pay any excess interest owed on such amount in the event the one-month LIBOR exceeds 2.75% for any monthly period prior to May 4, 2021.

Fair Value of Derivatives

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. We recognize fair value changes on derivative instruments in each reporting period. The changes in fair value result from new positions and settlements that occurred during the period, as well as the relationship between contract prices or interest rates and the associated forward curves.

Commodity Contracts

The following table presents the fair values (at gross and net) of our outstanding commodity derivatives as of September 30, 2018 and December 31, 2017 (in millions):


September 30, 2018
	Gross		Gross		Net Fair Value
	Amounts		Amounts		Presented in
	Recognized at		Offset in the		the Balance
Balance Sheet Classification	Fair Value		Balance Sheet		Sheet
Assets:
Other current assets	$	34	$	—	$	34
Other assets		13		—		13
Liabilities:
Accrued liabilities		(191)		—		(191)
Other long-term liabilities		(9)		—		(9)
Total derivatives	$	(153)	$	—	$	(153)


December 31, 2017
	Gross		Gross		Net Fair Value
	Amounts		Amounts		Presented in
	Recognized at		Offset in the		the Balance
Balance Sheet Classification	Fair Value		Balance Sheet		Sheet
Assets:
Other current assets	$	39	$	(16)	$	23
Other assets		1		—		1
Liabilities:
Accrued liabilities		(170)		16		(154)
Other long-term liabilities		(3)		—		(3)
Total derivatives	$	(133)	$	—	$	(133)

Interest-Rate Contracts

As of September 30, 2018, we reported the fair value of our interest rate derivatives of $9 million in other assets on our condensed consolidated balance sheets. For the three months ended September 30, 2018, we reported a $1 million gain on these contracts in other non-operating expense on our condensed consolidated statements of operations.

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2018

EARNINGS PER SHARE

EARNINGS PER SHARE

NOTE 10 EARNINGS PER SHARE

We compute basic and diluted earnings per share (EPS) using the two-class method required for participating securities. Certain of our restricted and performance stock awards are considered participating securities because they have non-forfeitable dividend rights at the same rate as our common stock.

Under the two-class method, undistributed earnings allocated to participating securities are subtracted from net income attributable to common stock in determining net income available to common stockholders. In loss periods, no allocation is made to participating securities because participating securities do not share in losses. For basic EPS, the weighted-average number of common shares outstanding excludes outstanding shares related to unvested restricted stock awards. For diluted EPS, the basic shares outstanding are adjusted by adding all potentially dilutive securities.

The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2018 and 2017:


	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
	(in millions, except per-share amounts)
Net income (loss)	$	91	$	(132)	$	37	$	(127)
Net income attributable to noncontrolling interest		(25)		(1)		(55)		(1)
Net income (loss) attributable to common stock		66		(133)		(18)		(128)
Less: net income allocated to participating securities		(1)		—		—		—
Net income (loss) available to common stockholders	$	65	$	(133)	$	(18)	$	(128)
Weighted-average common shares outstanding - basic		48.5		42.7		47		42.5
Basic EPS	$	1.34	$	(3.11)	$	(0.38)	$	(3.01)

Net income (loss)	$	91	$	(132)	$	37	$	(127)
Net income attributable to noncontrolling interest		(25)		(1)		(55)		(1)
Net income (loss) attributable to common stock		66		(133)		(18)		(128)
Less: net income allocated to participating securities		(1)		—		—		—
Net income (loss) available to common stockholders	$	65	$	(133)	$	(18)	$	(128)
Weighted-average common shares outstanding - basic		48.5		42.7		47		42.5
Dilutive effect of potentially dilutive securities		0.6		—		—		—
Weighted-average common shares outstanding - diluted		49.1		42.7		47		42.5
Diluted EPS	$	1.32	$	(3.11)	$	(0.38)	$	(3.01)
Weighted-average anti-dilutive shares(a)		1.1		2.5		2.8		2.6

(a)

Anti-dilutive shares represent potentially dilutive securities that are excluded from the computation of diluted EPS. In periods of income, anti-dilutive shares primarily include the effect of out-of-the-money stock options. In periods of loss, anti-dilutive shares include stock options and unvested awards.

PENSION AND POSTRETIREMENT BENEFIT PLANS

9 Months Ended

Sep. 30, 2018

PENSION AND POSTRETIREMENT BENEFIT PLANS

PENSION AND POSTRETIREMENT BENEFIT PLANS

NOTE 11 PENSION AND POSTRETIREMENT BENEFIT PLANS

The following table sets forth the components of the net periodic benefit costs for our defined benefit pension and postretirement benefit plans:


	Three months ended September 30,
	2018				2017
	Pension		Postretirement		Pension		Postretirement
	Benefit		Benefit		Benefit		Benefit
	(in millions)
Service cost	$	—	$	1	$	—	$	1
Interest cost		—		1		1		1
Expected return on plan assets		(1)		—		(1)		—
Recognized actuarial loss		1		—		—		—
Settlement loss		—		—		1		—
Total	$	—	$	2	$	1	$	2


	Nine months ended September 30,
	2018				2017
	Pension		Postretirement		Pension		Postretirement
	Benefit		Benefit		Benefit		Benefit
	(in millions)
Service cost	$	1	$	3	$	1	$	3
Interest cost		1		3		2		3
Expected return on plan assets		(2)		—		(2)		—
Recognized actuarial loss		1		—		1		—
Settlement loss		4		—		4		—
Total	$	5	$	6	$	6	$	6

We contributed $6 million and $1, respectively, to our defined benefit pension plans in the three months ended September 30, 2018 and 2017. We contributed $8 million and $6 million, respectively, to our defined benefit pension plans in the nine months ended September 30, 2018 and 2017. We do not expect to make any additional contributions to our defined benefit plans during the remainder of 2018. The 2018 and 2017 settlement losses were associated with early retirements.

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2018

REVENUE RECOGNITION

REVENUE RECOGNITION

NOTE 12 REVENUE RECOGNITION

We account for revenue in accordance with ASC 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018, using the modified retrospective method, which was applied to all contracts that were not completed as of that date. Prior period results were not adjusted and continue to be reported under the accounting standards in effect for the prior period. The new standard did not affect the timing of our revenue recognition and did not impact net income; accordingly, we did not record an adjustment to the opening balance of retained earnings.

We derive substantially all of our revenue from sales of oil, natural gas and natural gas liquids (NGLs), with the remaining revenue generated from sales of electricity and marketing activities related to storage and managing excess pipeline capacity.

The following is a description of our principal activities from which we generate revenue. Revenues are recognized when control of promised goods is transferred to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods.

Commodity Sales Contracts

We recognize revenue from the sale of our oil, natural gas and NGL production when delivery has occurred and control passes to the customer. Our commodity contracts are short term, typically less than a year. We consider our performance obligations to be satisfied upon transfer of control of the commodity. In certain instances, transportation and processing fees are incurred by us prior to control being transferred to customers. These costs were previously offset against oil and gas sales. Upon adoption of ASC 606, we are recording these costs as a component of other expenses, net on our condensed consolidated statements of operations.

Our commodity sales contracts are indexed to a market price or an average index price. We recognize revenue in the amount that we have a right to invoice once we are able to adequately estimate the consideration (i.e., when market prices are known). Our contracts with customers typically require payment within 30 days following invoicing.

Electricity

The electrical output of the Elk Hills power plant that is not used in our operations is sold to the wholesale power market and to a utility under a power purchase and sales agreement, which includes a capacity payment. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally, this occurs upon delivery of the electricity. We report electricity sales as other revenue on our condensed consolidated statements of operations. Revenue is measured as the amount of consideration we expect to receive based on average index pricing with payment due the month following delivery. Capacity payments are based on a fixed annual amount per kilowatt hour and monthly rates vary based on seasonality, which is consistent with how we earn the capacity payment. Capacity payments are settled monthly. We consider our performance obligations to be satisfied upon delivery of electricity or as the contracted amount of energy is made available to the customer in the case of capacity payments.

Marketing, Trading and Other

Marketing, trading and other revenue primarily includes our activities associated with storing, transporting and marketing our production as well as third-party volumes.

To transport our natural gas as well as third-party volumes, we have entered into firm pipeline commitments. Depending on market conditions, we may have excess capacity, in which case we may enter into natural gas purchase and sale agreements with third parties. We consider our performance obligations to be satisfied upon transfer of control of the commodity. We have not incurred any significant fees or penalties related to excess capacity on these commitments.

We report our marketing and trading activities on a gross basis with purchases and costs reported in other expenses, net and sales recorded in other revenue on our condensed consolidated statements of operations.

Disaggregation of Revenue

The following table provides disaggregated revenue for the three and nine months ended September 30, 2018 (in millions):


	Three months ended		Nine months ended
	September 30, 2018		September 30, 2018
Oil and gas sales:
Oil	$	568	$	1,587
NGLs		71		195
Natural gas		61		150
		700		1,932
Other revenue:
Electricity		42		87
Marketing, trading and other		140		225
Interest income		—		1
		182		313
Net derivative loss from commodity contracts		(54)		(259)
Total revenues and other	$	828	$	1,986

The impact of the adoption of ASC 606 on our condensed consolidated statements of operations for the three and nine months ended September 30, 2018 was as follows (in millions):


	Three months ended						Nine months ended
	September 30, 2018						September 30, 2018
	As						As
	Reported		Previous				Reported		Previous
	ASC 606		GAAP		Change		ASC 606		GAAP		Change
REVENUES AND OTHER
Oil and gas sales	$	700	$	695	$	5	$	1,932	$	1,915	$	17
Net derivative loss from commodity contracts		(54)		(54)		—		(259)		(259)		—
Other revenue		182		177		5		313		242		71
Total revenues and other		828		818		10		1,986		1,898		88

COSTS AND OTHER
Production costs		236		236		—		679		679		—
General and administrative expenses		81		81		—		234		234		—
Depreciation, depletion and amortization		128		128		—		372		372		—
Taxes other than on income		45		45		—		120		120		—
Exploration expenses		4		4		—		18		18		—
Other expenses, net		149		139		10		259		171		88
Total costs and other		643		633		10		1,682		1,594		88
OPERATING INCOME		185		185		—		304		304		—

NON-OPERATING (LOSS) INCOME
Interest and debt expense, net		(95)		(95)		—		(281)		(281)		—
Net gain on early extinguishment of debt		2		2		—		26		26		—
Gain on asset divestitures		3		3		—		4		4		—
Other non-operating expenses		(4)		(4)		—		(16)		(16)		—
INCOME BEFORE INCOME TAXES		91		91		—		37		37		—
Income tax		—		—		—		—		—		—
NET INCOME		91		91		—		37		37		—
Net income attributable to noncontrolling interests		(25)		(25)		—		(55)		(55)		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	66	$	66	$	—	$	(18)	$	(18)	$	—

The adoption of ASC 606 did not have an impact on our condensed consolidated balance sheets as of September 30, 2018 and December 31, 2017.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2018
INCOME TAXES
INCOME TAXES	NOTE 13 INCOME TAXES For the three and nine months ended September 30, 2018 and 2017, we did not provide any current or deferred tax provision or benefit. The difference between our statutory tax rate and our effective tax rate of zero for the periods presented includes changes to maintain our full valuation allowance against our net deferred tax assets given our recent and anticipated future earnings trends. We believe that there is a reasonable possibility that some or all of this allowance could be released in the foreseeable future. However, the amount of the net deferred tax assets considered realizable depends on the level of profitability that we are able to actually achieve. The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and included significant changes to corporate tax provisions such as a reduction in the corporate tax rate, limitations on certain corporate deductions and favorable capital recovery provisions. The California Franchise Tax Board released its summary of Federal Income Tax Changes for 2017 on April 19, 2018, which identified how these U.S. federal changes interact with California law. California law was not conformed to the corporate provisions that are the most significant to our business.

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2018

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

NOTE 14 CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Our Credit Facilities, Second Lien Notes and Senior Notes are guaranteed both fully and unconditionally and jointly and severally by our material wholly owned subsidiaries (Guarantor Subsidiaries). Certain of our subsidiaries do not guarantee our Credit Facilities, Second Lien Notes and Senior Notes (Non-Guarantor Subsidiaries) either because they hold assets that are less than 1% of our total consolidated assets or because they are not considered a "subsidiary" under the applicable financing agreement. The following condensed consolidating balance sheets as of September 30, 2018 and December 31, 2017 and the condensed consolidating statements of operations and statements of cash flows for the three and nine months ended September 30, 2018 and 2017, as applicable, reflect the condensed consolidating financial information of our parent company, CRC (Parent), our combined Guarantor Subsidiaries, our combined Non-Guarantor Subsidiaries and the elimination entries necessary to arrive at the information for CRC on a consolidated basis.

The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the Guarantor Subsidiaries operated as independent entities.

Condensed Consolidating Balance Sheets


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
As of September 30, 2018
Total current assets	$	5	$	475	$	81	$	(15)	$	546
Total property, plant and equipment, net		32		5,823		531		—		6,386
Investments in consolidated subsidiaries		5,858		178		—		(6,036)		—
Other assets		10		29		13		—		52
TOTAL ASSETS	$	5,905	$	6,505	$	625	$	(6,051)	$	6,984

Total current liabilities		187		682		17		(15)		871
Long-term debt		5,108		—		—		—		5,108
Deferred gain and issuance costs, net		253		—		—		—		253
Other long-term liabilities		152		451		9		—		612
Amounts due to (from) affiliates		929		(929)		—		—		—
Mezzanine equity		—		—		745		—		745
Total equity		(724)		6,301		(146)		(6,036)		(605)
TOTAL LIABILITIES AND EQUITY	$	5,905	$	6,505	$	625	$	(6,051)	$	6,984


As of December 31, 2017
Total current assets	$	13	$	464	$	12	$	(6)	$	483
Total property, plant and equipment, net		24		5,580		92		—		5,696
Investments in consolidated subsidiaries		5,105		606		—		(5,711)		—
Other assets		—		27		1		—		28
TOTAL ASSETS	$	5,142	$	6,677	$	105	$	(5,717)	$	6,207

Total current liabilities		122		613		3		(6)		732
Long-term debt		5,306		—		—		—		5,306
Deferred gain and issuance costs, net		287		—		—		—		287
Other long-term liabilities		154		445		3		—		602
Amounts due to (from) affiliates		87		(87)		—		—		—
Total equity		(814)		5,706		99		(5,711)		(720)
TOTAL LIABILITIES AND EQUITY	$	5,142	$	6,677	$	105	$	(5,717)	$	6,207

Condensed Consolidating Statements of Operations


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the three months ended September 30, 2018
Total revenues and other	$	—	$	766	$	135	$	(73)	$	828
Total costs and other		62		582		72		(73)		643
Non-operating (loss) income		(99)		5		—		—		(94)
NET INCOME (LOSS)		(161)		189		63		—		91
Net income attributable to noncontrolling interests		—		—		(25)		—		(25)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(161)	$	189	$	38	$	—	$	66


For the three months ended September 30, 2017
Total revenues and other	$	5	$	446	$	5	$	(11)	$	445
Total costs and other		58		439		4		(11)		490
Non-operating (loss) income		(87)		—		—		—		(87)
NET (LOSS) INCOME		(140)		7		1		—		(132)
Net income attributable to noncontrolling interest		—		—		(1)		—		(1)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(140)	$	7	$	—	$	—	$	(133)

Condensed Consolidating Statements of Operations


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the nine months ended September 30, 2018
Total revenues and other	$	1	$	1,878	$	293	$	(186)	$	1,986
Total costs and other		169		1,542		157		(186)		1,682
Non-operating (loss) income		(272)		5		—		—		(267)
NET INCOME (LOSS)		(440)		341		136		—		37
Net income attributable to noncontrolling interests		—		—		(55)		—		(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(440)	$	341	$	81	$	—	$	(18)


For the nine months ended September 30, 2017
Total revenues and other	$	22	$	1,551	$	10	$	(32)	$	1,551
Total costs and other		165		1,298		9		(32)		1,440
Non-operating (loss) income		(256)		18		—		—		(238)
NET (LOSS) INCOME		(399)		271		1		—		(127)
Net income attributable to noncontrolling interest		—		—		(1)		—		(1)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(399)	$	271	$	—	$	—	$	(128)

Condensed Consolidating Statements of Cash Flows


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the nine months ended September 30, 2018
Net cash (used) provided by operating activities	$	(433)	$	645	$	181	$	—	$	393
Net cash used in investing activities		(3)		(921)		(41)		—		(965)
Net cash provided (used) by financing activities		429		278		(124)		—		583
Increase in cash		(7)		2		16		—		11
Cash—beginning of period		7		8		5		—		20
Cash—end of period	$	—	$	10	$	21	$	—	$	31


For the nine months ended September 30, 2017
Net cash (used) provided by operating activities	$	(403)	$	621	$	7	$	—	$	225
Net cash used in investing activities		(2)		(90)		(82)		—		(174)
Net cash provided (used) by financing activities		409		(536)		92		—		(35)
Increase (decrease) in cash		4		(5)		17		—		16
Cash—beginning of period		—		12		—		—		12
Cash—end of period	$	4	$	7	$	17	$	—	$	28

THE SPIN-OFF AND BASIS OF PRESENTATION (Policies)	9 Months Ended
THE SPIN-OFF AND BASIS OF PRESENTATION (Policies)	Sep. 30, 2018
THE SPIN-OFF AND BASIS OF PRESENTATION
Basis of Presentation	Basis of Presentation In the opinion of our management, the accompanying financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present our financial position as of September 30, 2018 and December 31, 2017 and the statements of operations, comprehensive income, cash flows and equity for the three and nine months ended September 30, 2018 and 2017, as applicable. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and gas exploration and production ventures in which we have a direct working interest by reporting our proportionate share of assets, liabilities, revenues, costs and cash flows within the relevant lines on our balance sheets, statements of operations and cash flows. We have prepared this report pursuant to the rules and regulations of the United States (U.S.) Securities and Exchange Commission (SEC) applicable to interim financial information, which permit the omission of certain disclosures to the extent they have not changed materially since the latest annual financial statements. We believe our disclosures are adequate to make the information not misleading. This Form 10-Q should be read in conjunction with the consolidated financial statements and the notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2017. Certain prior year amounts have been reclassified to conform to the 2018 presentation. On the statements of operations, we reclassified interest cost, expected return on assets, amortization of prior service costs and settlements/curtailments, all associated with defined benefit pension plans, from general and administrative expenses to other non-operating expenses, net in accordance with new accounting rules. See Note 2 Accounting and Disclosure Changes for more information.

OTHER INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

OTHER INFORMATION

Schedule of other current assets, net


	September 30,		December 31,
	2018		2017
	(in millions)
Amounts due from joint interest partners	$	87	$	76
Derivative assets from commodities contracts		34		23
Prepaid expenses		23		19
Asset held for sale		—		12
Other		9		—
Other current assets, net	$	153	$	130

Schedule of accrued liabilities


	September 30,		December 31,
	2018		2017
	(in millions)
Derivative liabilities from commodities contracts	$	191	$	154
Accrued taxes other than on income		65		130
Accrued employee-related costs		106		86
Accrued interest		60		23
Other		100		82
Accrued liabilities	$	522	$	475

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2018

INVENTORIES

Schedule of Inventories


	September 30,		December 31,
	2018		2017
		(in millions)
Materials and supplies	$	64	$	53
Finished goods		5		3
Total	$	69	$	56

DEBT (Tables)

9 Months Ended

Sep. 30, 2018

DEBT

Schedule of Debt


	Outstanding Principal
	(in millions)
	September 30,		December 31,
	2018		2017		Interest Rate	Maturity	Security
Credit Agreements
2014 Revolving Credit Facility	$	342	$	363	LIBOR plus 3.25%-4.00% ABR plus 2.25%-3.00%	June 30, 2021	Shared First-Priority Lien
2017 Credit Agreement		1,300		1,300	LIBOR plus 4.75% ABR plus 3.75%	December 31, 2022(a)	Shared First-Priority Lien
2016 Credit Agreement		1,000		1,000	LIBOR plus 10.375% ABR plus 9.375%	December 31, 2021	First-Priority Lien
Second Lien Notes
Second Lien Notes		2,122		2,250	8%	December 15, 2022(b)	Second-Priority Lien
Senior Notes
5% Senior Notes due 2020		100		100	5%	January 15, 2020	Unsecured
51/2% Senior Notes due 2021		100		100	5.5%	September 15, 2021	Unsecured
6% Senior Notes due 2024		144		193	6%	November 15, 2024	Unsecured
Total	$	5,108	$	5,306

Note: For a detailed description of our credit agreements, second lien notes and senior notes, please see our most recent Form 10-K for the year ended December 31, 2017.

(a)

(b)

The Second Lien Notes require principal repayments of approximately $335 million in June 2021, $67 million in December 2021 and $70 million in June 2022.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

JOINT VENTURES (Tables)

9 Months Ended

Sep. 30, 2018

JOINT VENTURES

Schedule of changes in noncontrolling interests


							Mezzanine
					Equity		Equity –
					Attributable to		Redeemable
					Noncontrolling		Noncontrolling
					Interest		Interest
	Ares JV		BSP JV		Total		Ares JV
Balance, December 31, 2017	$	—	$	94	$	94	$	—
Net (loss) income attributable to noncontrolling interests		(8)		(8)		(16)		71
Contributions from noncontrolling interest holders, net		33		49		82		714
Distributions to noncontrolling interest holders		(5)		(35)		(40)		(40)
Balance, September 30, 2018	$	20	$	100	$	120	$	745

ACQUISITIONS AND DIVESTITURES (Tables)

9 Months Ended

Sep. 30, 2018

Elk Hills

ACQUISITIONS AND DIVESTITURES

Summary of total consideration, including customary closing adjustments, and allocation of the consideration based on fair value of assets acquired as of acquisition date


Consideration:
Cash	$	462
Purchase price adjustments		(2)
Common stock issued (2.85 million shares)		51
Liabilities assumed		7
	$	518

Identifiable assets acquired:
Proved properties	$	435
Other property and equipment		77
Materials and supplies		6
	$	518

DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2018

DERIVATIVES

Schedule of oil hedge positions


	Q4		Q1			Q2		Q3		Q4
	2018		2019			2019		2019		2019
Sold Calls:
Barrels per day		15,000		15,000			5,000		—		—
Weighted-average price per barrel	$	58.83	$	66.15		$	68.45	$	—	$	—

Purchased Calls:
Barrels per day		—		2,000			—		—		—
Weighted-average price per barrel	$	—	$	71.00		$	—	$	—	$	—

Purchased Puts:
Barrels per day		—		33,000			35,000		30,000		20,000
Weighted-average price per barrel	$	—	$	63.48		$	68.29	$	71.67	$	75.00

Sold Puts:
Barrels per day		19,000		35,000			30,000		30,000		20,000
Weighted-average price per barrel	$	45.00	$	50.71		$	55.00	$	56.67	$	60.00

Swaps:
Barrels per day		48,000		7,000	(1)		—		—		—
Weighted-average price per barrel	$	60.35	$	67.71		$	—	$	—	$	—

Note: Additional hedges for 2019 and 2020 were put in place after September 30, 2018 that are not included in the table above.

(1)

Certain of our counterparties have options to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.00 for the first quarter of 2019.

Schedule of fair value (at gross and net) of outstanding derivatives

The following table presents the fair values (at gross and net) of our outstanding commodity derivatives as of September 30, 2018 and December 31, 2017 (in millions):


September 30, 2018
	Gross		Gross		Net Fair Value
	Amounts		Amounts		Presented in
	Recognized at		Offset in the		the Balance
Balance Sheet Classification	Fair Value		Balance Sheet		Sheet
Assets:
Other current assets	$	34	$	—	$	34
Other assets		13		—		13
Liabilities:
Accrued liabilities		(191)		—		(191)
Other long-term liabilities		(9)		—		(9)
Total derivatives	$	(153)	$	—	$	(153)


December 31, 2017
	Gross		Gross		Net Fair Value
	Amounts		Amounts		Presented in
	Recognized at		Offset in the		the Balance
Balance Sheet Classification	Fair Value		Balance Sheet		Sheet
Assets:
Other current assets	$	39	$	(16)	$	23
Other assets		1		—		1
Liabilities:
Accrued liabilities		(170)		16		(154)
Other long-term liabilities		(3)		—		(3)
Total derivatives	$	(133)	$	—	$	(133)

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

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+ Details

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2018

EARNINGS PER SHARE

Calculation of basic and diluted EPS


	Three months ended				Nine months ended
	September 30,				September 30,
	2018		2017		2018		2017
	(in millions, except per-share amounts)
Net income (loss)	$	91	$	(132)	$	37	$	(127)
Net income attributable to noncontrolling interest		(25)		(1)		(55)		(1)
Net income (loss) attributable to common stock		66		(133)		(18)		(128)
Less: net income allocated to participating securities		(1)		—		—		—
Net income (loss) available to common stockholders	$	65	$	(133)	$	(18)	$	(128)
Weighted-average common shares outstanding - basic		48.5		42.7		47		42.5
Basic EPS	$	1.34	$	(3.11)	$	(0.38)	$	(3.01)

Net income (loss)	$	91	$	(132)	$	37	$	(127)
Net income attributable to noncontrolling interest		(25)		(1)		(55)		(1)
Net income (loss) attributable to common stock		66		(133)		(18)		(128)
Less: net income allocated to participating securities		(1)		—		—		—
Net income (loss) available to common stockholders	$	65	$	(133)	$	(18)	$	(128)
Weighted-average common shares outstanding - basic		48.5		42.7		47		42.5
Dilutive effect of potentially dilutive securities		0.6		—		—		—
Weighted-average common shares outstanding - diluted		49.1		42.7		47		42.5
Diluted EPS	$	1.32	$	(3.11)	$	(0.38)	$	(3.01)
Weighted-average anti-dilutive shares(a)		1.1		2.5		2.8		2.6

PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2018

PENSION AND POSTRETIREMENT BENEFIT PLANS

Components of the net periodic benefit costs


	Three months ended September 30,
	2018				2017
	Pension		Postretirement		Pension		Postretirement
	Benefit		Benefit		Benefit		Benefit
	(in millions)
Service cost	$	—	$	1	$	—	$	1
Interest cost		—		1		1		1
Expected return on plan assets		(1)		—		(1)		—
Recognized actuarial loss		1		—		—		—
Settlement loss		—		—		1		—
Total	$	—	$	2	$	1	$	2


	Nine months ended September 30,
	2018				2017
	Pension		Postretirement		Pension		Postretirement
	Benefit		Benefit		Benefit		Benefit
	(in millions)
Service cost	$	1	$	3	$	1	$	3
Interest cost		1		3		2		3
Expected return on plan assets		(2)		—		(2)		—
Recognized actuarial loss		1		—		1		—
Settlement loss		4		—		4		—
Total	$	5	$	6	$	6	$	6

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2018

Revenue recognition

Schedule of disaggregated revenue

The following table provides disaggregated revenue for the three and nine months ended September 30, 2018 (in millions):


	Three months ended		Nine months ended
	September 30, 2018		September 30, 2018
Oil and gas sales:
Oil	$	568	$	1,587
NGLs		71		195
Natural gas		61		150
		700		1,932
Other revenue:
Electricity		42		87
Marketing, trading and other		140		225
Interest income		—		1
		182		313
Net derivative loss from commodity contracts		(54)		(259)
Total revenues and other	$	828	$	1,986

ASU 2014-09

Revenue recognition

Schedule of the impact of the adoption of ASC 606 on our condensed consolidated statements of operations

The impact of the adoption of ASC 606 on our condensed consolidated statements of operations for the three and nine months ended September 30, 2018 was as follows (in millions):


	Three months ended						Nine months ended
	September 30, 2018						September 30, 2018
	As						As
	Reported		Previous				Reported		Previous
	ASC 606		GAAP		Change		ASC 606		GAAP		Change
REVENUES AND OTHER
Oil and gas sales	$	700	$	695	$	5	$	1,932	$	1,915	$	17
Net derivative loss from commodity contracts		(54)		(54)		—		(259)		(259)		—
Other revenue		182		177		5		313		242		71
Total revenues and other		828		818		10		1,986		1,898		88

COSTS AND OTHER
Production costs		236		236		—		679		679		—
General and administrative expenses		81		81		—		234		234		—
Depreciation, depletion and amortization		128		128		—		372		372		—
Taxes other than on income		45		45		—		120		120		—
Exploration expenses		4		4		—		18		18		—
Other expenses, net		149		139		10		259		171		88
Total costs and other		643		633		10		1,682		1,594		88
OPERATING INCOME		185		185		—		304		304		—

NON-OPERATING (LOSS) INCOME
Interest and debt expense, net		(95)		(95)		—		(281)		(281)		—
Net gain on early extinguishment of debt		2		2		—		26		26		—
Gain on asset divestitures		3		3		—		4		4		—
Other non-operating expenses		(4)		(4)		—		(16)		(16)		—
INCOME BEFORE INCOME TAXES		91		91		—		37		37		—
Income tax		—		—		—		—		—		—
NET INCOME		91		91		—		37		37		—
Net income attributable to noncontrolling interests		(25)		(25)		—		(55)		(55)		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	66	$	66	$	—	$	(18)	$	(18)	$	—

CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Schedule of Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheets


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
As of September 30, 2018
Total current assets	$	5	$	475	$	81	$	(15)	$	546
Total property, plant and equipment, net		32		5,823		531		—		6,386
Investments in consolidated subsidiaries		5,858		178		—		(6,036)		—
Other assets		10		29		13		—		52
TOTAL ASSETS	$	5,905	$	6,505	$	625	$	(6,051)	$	6,984

Total current liabilities		187		682		17		(15)		871
Long-term debt		5,108		—		—		—		5,108
Deferred gain and issuance costs, net		253		—		—		—		253
Other long-term liabilities		152		451		9		—		612
Amounts due to (from) affiliates		929		(929)		—		—		—
Mezzanine equity		—		—		745		—		745
Total equity		(724)		6,301		(146)		(6,036)		(605)
TOTAL LIABILITIES AND EQUITY	$	5,905	$	6,505	$	625	$	(6,051)	$	6,984


As of December 31, 2017
Total current assets	$	13	$	464	$	12	$	(6)	$	483
Total property, plant and equipment, net		24		5,580		92		—		5,696
Investments in consolidated subsidiaries		5,105		606		—		(5,711)		—
Other assets		—		27		1		—		28
TOTAL ASSETS	$	5,142	$	6,677	$	105	$	(5,717)	$	6,207

Total current liabilities		122		613		3		(6)		732
Long-term debt		5,306		—		—		—		5,306
Deferred gain and issuance costs, net		287		—		—		—		287
Other long-term liabilities		154		445		3		—		602
Amounts due to (from) affiliates		87		(87)		—		—		—
Total equity		(814)		5,706		99		(5,711)		(720)
TOTAL LIABILITIES AND EQUITY	$	5,142	$	6,677	$	105	$	(5,717)	$	6,207

Schedule of Condensed Consolidating statement of Operations

Condensed Consolidating Statements of Operations


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the three months ended September 30, 2018
Total revenues and other	$	—	$	766	$	135	$	(73)	$	828
Total costs and other		62		582		72		(73)		643
Non-operating (loss) income		(99)		5		—		—		(94)
NET INCOME (LOSS)		(161)		189		63		—		91
Net income attributable to noncontrolling interests		—		—		(25)		—		(25)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(161)	$	189	$	38	$	—	$	66


For the three months ended September 30, 2017
Total revenues and other	$	5	$	446	$	5	$	(11)	$	445
Total costs and other		58		439		4		(11)		490
Non-operating (loss) income		(87)		—		—		—		(87)
NET (LOSS) INCOME		(140)		7		1		—		(132)
Net income attributable to noncontrolling interest		—		—		(1)		—		(1)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(140)	$	7	$	—	$	—	$	(133)

Condensed Consolidating Statements of Operations


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the nine months ended September 30, 2018
Total revenues and other	$	1	$	1,878	$	293	$	(186)	$	1,986
Total costs and other		169		1,542		157		(186)		1,682
Non-operating (loss) income		(272)		5		—		—		(267)
NET INCOME (LOSS)		(440)		341		136		—		37
Net income attributable to noncontrolling interests		—		—		(55)		—		(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$	(440)	$	341	$	81	$	—	$	(18)


For the nine months ended September 30, 2017
Total revenues and other	$	22	$	1,551	$	10	$	(32)	$	1,551
Total costs and other		165		1,298		9		(32)		1,440
Non-operating (loss) income		(256)		18		—		—		(238)
NET (LOSS) INCOME		(399)		271		1		—		(127)
Net income attributable to noncontrolling interest		—		—		(1)		—		(1)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(399)	$	271	$	—	$	—	$	(128)

Schedule of Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statements of Cash Flows


					Combined
			Combined		Non-
			Guarantor		Guarantor
	Parent		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(in millions)
For the nine months ended September 30, 2018
Net cash (used) provided by operating activities	$	(433)	$	645	$	181	$	—	$	393
Net cash used in investing activities		(3)		(921)		(41)		—		(965)
Net cash provided (used) by financing activities		429		278		(124)		—		583
Increase in cash		(7)		2		16		—		11
Cash—beginning of period		7		8		5		—		20
Cash—end of period	$	—	$	10	$	21	$	—	$	31


For the nine months ended September 30, 2017
Net cash (used) provided by operating activities	$	(403)	$	621	$	7	$	—	$	225
Net cash used in investing activities		(2)		(90)		(82)		—		(174)
Net cash provided (used) by financing activities		409		(536)		92		—		(35)
Increase (decrease) in cash		4		(5)		17		—		16
Cash—beginning of period		—		12		—		—		12
Cash—end of period	$	4	$	7	$	17	$	—	$	28

THE SPIN-OFF AND BASIS OF PRESENTATION - Separation and Spin off (Details)	Nov. 30, 2014
Occidental Petroleum
Separation and Spin Off Transactions
Percentage of outstanding shares of common stock initially retained by Occidental	18.50%

OTHER INFORMATION (Details) - USD ($) shares in Thousands, $ in Millions	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Cash restricted under our joint venture agreements	$ 13		$ 5
Amounts due from joint interest partners	87		76
Derivative assets from commodities contracts	34		23
Prepaid expenses	23		19
Asset held for sale			12
Other	9
Other current assets, net	153		130
Derivative liabilities from commodities contracts	191		154
Accrued taxes other than on income	65		130
Accrued employee-related costs	106		86
Accrued interest	60		23
Other	100		82
Accrued liabilities	522		475
Interest paid, net of capitalized amounts	$ 278	$ 249
Chevron
Stock issued in connection with acquisition ( in shares )	2,850
Value of common stock at issuance	$ 51
Other long-term liabilities
Non-current asset retirement obligation	$ 417		$ 403

INVENTORIES (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
INVENTORIES
Materials and supplies	$ 64	$ 53
Finished goods	5	3
Total	$ 69	$ 56

DEBT - Schedule of long-term debt (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt
Long-term debt	$ 5,108	$ 5,306
2014 Revolving Credit Facility (Shared First Priority Lien)
Debt
Long-term debt	$ 342	$ 363
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on LIBOR loans \| Minimum
Debt
Interest rate added to variable rate basis (as a percent)	3.25%	3.25%
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on LIBOR loans \| Maximum
Debt
Interest rate added to variable rate basis (as a percent)	4.00%	4.00%
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans \| Minimum
Debt
Interest rate added to variable rate basis (as a percent)	2.25%	2.25%
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans \| Maximum
Debt
Interest rate added to variable rate basis (as a percent)	3.00%	3.00%
2017 Credit Agreement (Shared First Priority Lien)
Debt
Long-term debt	$ 1,300	$ 1,300
2017 Credit Agreement (Shared First Priority Lien) \| 91 days prior to maturity of 2016 Credit Agreement
Debt
Period before maturity of the 2016 Credit Agreement notes that triggers accelerated payment	91 days	91 days
Outstanding amount of 2016 Credit Agreement notes that triggers accelerated payment	$ 100	$ 100
2017 Credit Agreement (Shared First Priority Lien) \| Applicable margin on LIBOR loans
Debt
Interest rate added to variable rate basis (as a percent)	4.75%	4.75%
2017 Credit Agreement (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans
Debt
Interest rate added to variable rate basis (as a percent)	3.75%	3.75%
2016 Credit Agreement (Shared First Priority Lien)
Debt
Long-term debt	$ 1,000	$ 1,000
2016 Credit Agreement (Shared First Priority Lien) \| Applicable margin on LIBOR loans
Debt
Interest rate added to variable rate basis (as a percent)	10.375%	10.375%
2016 Credit Agreement (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans
Debt
Interest rate added to variable rate basis (as a percent)	9.375%	9.375%
Second Lien Notes (Second Priority Lien)
Debt
Long-term debt	$ 2,122	$ 2,250
Debt instrument interest rate stated percentage	8.00%	8.00%
Principal amount due by June 2021	$ 335
Principal amount due by December 2021	67
Principal amount due by June 2022	70
Senior Notes (Unsecured) \| 5% Notes Due 2020
Debt
Long-term debt	$ 100	$ 100
Debt instrument interest rate stated percentage	5.00%	5.00%
Senior Notes (Unsecured) \| 5.5% Notes Due 2021
Debt
Long-term debt	$ 100	$ 100
Debt instrument interest rate stated percentage	5.50%	5.50%
Senior Notes (Unsecured) \| 6% Senior Notes due 2024
Debt
Long-term debt	$ 144	$ 193
Debt instrument interest rate stated percentage	6.00%	6.00%

DEBT - Deferred Gain and Issuance Costs (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
DEBT
Net deferred gain and issuance costs	$ 253	$ 287
Deferred gains	357	415
Deferred issuance costs and original issue discounts	$ 104	$ 128

DEBT - 2014 Revolving Credit Facility (Details) - 2014 Revolving Credit Facility - USD ($) $ in Millions	1 Months Ended
	Oct. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Debt
Available borrowing capacity, subject to minimum liquidity requirement		$ 490
Minimum month end liquidity		150
Borrowing base	$ 2,300
Letters of Credit
Debt
Maximum sub-limit on borrowing capacity for issuance of letters of credit		400	$ 400
Aggregate letters of credit issued		$ 167	$ 148

DEBT - Note Repurchases (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
DEBT - Note Repurchases (Details) - USD ($) $ in Millions	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2017
Second Lien Notes and 6% Senior Notes due 2024
Repurchases of debt
Repurchase value of the principal amounts	$ 30	$ 149
Pre-tax gain on extinguishment of debt, net of a reduction in deferred issuance costs	2	26
Second Lien Notes (Second Priority Lien)
Repurchases of debt
Principal amount of debt reduction through payment or repurchase	$ 31	$ 128
Debt instrument interest rate stated percentage	8.00%	8.00%	8.00%
Senior Notes (Unsecured) \| 6% Senior Notes due 2024
Repurchases of debt
Principal amount of debt reduction through payment or repurchase	$ 1	$ 49
Debt instrument interest rate stated percentage	6.00%	6.00%	6.00%

DEBT - Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
DEBT
Estimated fair value of long-term debt	$ 5,000	$ 4,800
Debt carrying value	$ 5,108	$ 5,306

DEBT - Amendments (Details) - 2014 Revolving Credit Facility - USD ($) $ in Millions	Aug. 20, 2018	Aug. 19, 2018
Debt
Amount that can be drawn to repurchase Second Lien Notes and Senior Notes at a discount to par	$ 300
Minimum liquidity to repurchase indebtedness	$ 300	$ 250

DEBT - Other (Details) - Credit Agreements $ in Millions	Sep. 30, 2018 USD ($)
Debt
Percentage of change in the variable interest rates	0.125%
Effect of 1/8 percent change in annual interest expense	$ 3

JOINT VENTURES - Changes in Noncontrolling Interests (Details) - USD ($)
$ in Millions

9 Months Ended

Sep. 30, 2018

Sep. 30, 2017

Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]

Contributions from noncontrolling interest holders, net

$ (720)

$ (557)

^[1]

Distributions paid to noncontrolling interest holders

(40)

^[1]

(6)

Equity Attributable to Noncontrolling Interest

(605)

^[1]

(574)

Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]

Net income (loss) attributable to noncontrolling interest

(16)

Contributions from noncontrolling interest holders, net

Distributions paid to noncontrolling interest holders

(40)

(6)

Equity Attributable to Noncontrolling Interest | Ares JV

120

$ 93

Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]

Net income (loss) attributable to noncontrolling interest

(8)

Contributions from noncontrolling interest holders, net

Distributions paid to noncontrolling interest holders

(5)

Equity Attributable to Noncontrolling Interest | BSP JV

Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]

Net income (loss) attributable to noncontrolling interest

(8)

Contributions from noncontrolling interest holders, net

Distributions paid to noncontrolling interest holders

(35)

$ 100

[1]	Excludes redeemable noncontrolling interest recorded in mezzanine equity. See Note 6 Joint Ventures for more information.

JOINT VENTURES - Mezzanine Equity (Details) $ in Millions	9 Months Ended
JOINT VENTURES - Mezzanine Equity (Details) $ in Millions	Sep. 30, 2018 USD ($)
Mezzanine Equity - Redeemable Noncontrolling Interest - Ares
Balance	$ 745
Mezzanine Equity - Redeemable Noncontrolling Interest
Mezzanine Equity - Redeemable Noncontrolling Interest - Ares
Net income (loss) attributable to noncontrolling interest	71
Contributions from noncontrolling interest holders, net	714
Distributions to noncontrolling interest holders	(40)
Balance	$ 745

JOINT VENTURES - Ares (Details) shares in Millions, $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended
	Feb. 28, 2018 USD ($) MW MMcf	Mar. 31, 2018 USD ($) shares	Sep. 30, 2018 USD ($) shares	Sep. 30, 2017 USD ($)
JOINT VENTURES
Net proceeds received by CRC from the transaction			$ 796	$ 98
Ares JV
JOINT VENTURES
Net proceeds received by CRC from the transaction	$ 750
Joint venture transaction cost	$ 3
Ares JV \| Ares-led investor group
JOINT VENTURES
CRC shares issued to Ares-led investor group in a private placement \| shares		2.3	2.3
Purchase price of the CRC shares issued to Ares-led investor group in a private placement		$ 50
Class A common interest \| Ares JV
JOINT VENTURES
Period in which monthly distributions can be deferred	3 years
Natural gas power and Gas processing plants \| Ares JV
JOINT VENTURES
Power plant capacity \| MW	550
Gas processing plant capacity \| MMcf	200
ECR Corporate Holdings L.P. \| Class A common interest \| Ares JV
JOINT VENTURES
Percentage of common interest held by ECR	50.00%
ECR Corporate Holdings L.P. \| Class B preferred interest \| Ares JV
JOINT VENTURES
Percentage of common interest held by ECR	100.00%
ECR Corporate Holdings L.P. \| Class C common interest \| Ares JV
JOINT VENTURES
Percentage of common interest held by ECR	4.75%
ECR \| Redemption prior to fifth year
JOINT VENTURES
Redemption period	5 years
ECR \| Redemption prior to fifth year \| Class A common interest
JOINT VENTURES
Redemption price	$ 60
ECR \| Redemption prior to fifth year \| Class B preferred interest
JOINT VENTURES
Redemption price	$ 750
ECR \| Redemption prior to seven and a half years
JOINT VENTURES
Maximum extension period of redemption	2 years 6 months
Make-whole payment redemption period	7 years 6 months
ECR \| Redemption prior to seven and a half years \| Class A common interest
JOINT VENTURES
Redemption price	$ 80
ECR \| Redemption prior to seven and a half years \| Class B preferred interest
JOINT VENTURES
Redemption price	$ 750
Ares JV \| Class A common interest
JOINT VENTURES
Percentage of common interest held by CRC	50.00%
Ares JV \| Class C common interest
JOINT VENTURES
Percentage of common interest held by CRC	95.25%

JOINT VENTURES - BSP (Details) - Joint venture with BSP - BSP JV $ in Millions	16 Months Ended
	Jun. 30, 2018 USD ($) item	Feb. 28, 2017 USD ($)
JOINT VENTURES
Maximum commitment contribution		$ 250
Commitment contributed	$ 150
Number of equal funding \| item	3

JOINT VENTURES - MIRA (Details) - Joint venture with MIRA - MIRA $ in Millions	1 Months Ended		3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($)	Apr. 30, 2017 USD ($)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)
JOINT VENTURES
Maximum commitment contribution		$ 300
Working interest acquired by MIRA (as a percent)		90.00%
Funding provided by MIRA for development of properties (as a percent)		100.00%
Working interest retained by CRC (as a percent)		10.00%
CRC's working interest if MIRA receives cash distributions equal to a predetermined threshold return (as a percent)		75.00%
Initial commitment		$ 160
Reduced commitment amount	$ 140
Maximum percentage of program amount	110
Commitment contributed				$ 46	$ 58
Expected
JOINT VENTURES
Commitment contributed			$ 11

JOINT VENTURES - Subsequent Events (Details) - Subsequent Events $ in Millions	1 Months Ended
	Oct. 31, 2018 USD ($) item
JOINT VENTURES
Number of joint ventures entered into \| item	3
Maximum commitment contribution	$ 13
Investment commitment period	3 years
Exploration joint ventures partners
JOINT VENTURES
Maximum commitment contribution	$ 35

ACQUISITIONS AND DIVESTITURES - Elk Hills Transaction Paragraph (Details) $ in Millions		9 Months Ended
	Apr. 09, 2018 USD ($) a	Sep. 30, 2018 USD ($)
Working, surface and mineral interests in the Elk Hills field
ACQUISITIONS AND DIVESTITURES
Area of land \| a	47,000
Purchase price	$ 518
Liabilities assumed	7
Purchase price adjustment	$ 2
Other oil and gas property
ACQUISITIONS AND DIVESTITURES
Reduction of Chevron royalty interest in one of CRCs oil and gas properties	50.00%
Extension period capital commitment	2 years
Other oil and gas property \| Capital commitment
ACQUISITIONS AND DIVESTITURES
Long-term Purchase Commitment, Amount		$ 18

ACQUISITIONS AND DIVESTITURES - Elk Hills Table (Details) - Working, surface and mineral interests in the Elk Hills field shares in Thousands, $ in Millions	Apr. 09, 2018 USD ($) shares
Consideration:
Cash	$ 462
Purchase price adjustment	(2)
Common stock issued (2.85 million shares)	51
Liabilities assumed	7
Consideration	$ 518
Stock issued in connection with acquisition ( in shares ) \| shares	2,850
Identifiable assets acquired:
Proved properties	$ 435
Other property and equipment	77
Materials and supplies	6
Recognized amounts of identifiable assets acquired	$ 518

ACQUISITIONS AND DIVESTITURES - Office Building (Details) $ in Millions		9 Months Ended	12 Months Ended
	Apr. 02, 2018 USD ($)	Sep. 30, 2018 USD ($) location employee	Dec. 31, 2018 USD ($)
ACQUISITIONS AND DIVESTITURES
Acquisition cost		$ 514.0
Number of employees in Bakersfield \| employee		500
Number of different locations in Bakersfield \| location		8
Amount allocated to in-place leases	$ 6.0
Minimum
ACQUISITIONS AND DIVESTITURES
Expected period to bring all Bakersfield employees into single location	12 months
Maximum
ACQUISITIONS AND DIVESTITURES
Expected period to bring all Bakersfield employees into single location	15 months
Office building
ACQUISITIONS AND DIVESTITURES
Acquisition cost	$ 48.4
Term of occupying space as a tenant by former owner	8 months
Office building \| Expected
ACQUISITIONS AND DIVESTITURES
Rental income expected			$ 4.0

ACQUISITIONS AND DIVESTITURES - Divestitures (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Divestitures
Proceeds from sale of non-core assets		$ 17	$ 33
Gain on non-core assets divestitures	$ 3	$ 4	$ 21

DERIVATIVES - Commodity Contracts (Details)	Sep. 30, 2018 bbl / d $ / bbl bbl
Calls \| Purchased \| Q1 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	2,000
Weighted-average price (in dollars per barrel)	71.00
Calls \| Sold \| Q4 2018
Derivatives
Daily Volume (in Bbl) \| bbl / d	15,000
Weighted-average price (in dollars per barrel)	58.83
Calls \| Sold \| Q1 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	15,000
Weighted-average price (in dollars per barrel)	66.15
Calls \| Sold \| Q2 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	5,000
Weighted-average price (in dollars per barrel)	68.45
Puts \| Purchased \| Q1 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	33,000
Weighted-average price (in dollars per barrel)	63.48
Puts \| Purchased \| Q2 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	35,000
Weighted-average price (in dollars per barrel)	68.29
Puts \| Purchased \| Q3 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	30,000
Weighted-average price (in dollars per barrel)	71.67
Puts \| Purchased \| Q4 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	20,000
Weighted-average price (in dollars per barrel)	75.00
Puts \| Sold \| Q4 2018
Derivatives
Daily Volume (in Bbl) \| bbl / d	19,000
Weighted-average price (in dollars per barrel)	45.00
Puts \| Sold \| Q1 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	35,000
Weighted-average price (in dollars per barrel)	50.71
Puts \| Sold \| Q2 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	30,000
Weighted-average price (in dollars per barrel)	55.00
Puts \| Sold \| Q3 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	30,000
Weighted-average price (in dollars per barrel)	56.67
Puts \| Sold \| Q4 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	20,000
Weighted-average price (in dollars per barrel)	60.00
Swaps \| Q4 2018
Derivatives
Daily Volume (in Bbl) \| bbl / d	48,000
Weighted-average price (in dollars per barrel)	60.35
Swaps \| Q1 2019
Derivatives
Daily Volume (in Bbl) \| bbl / d	7,000
Weighted-average price (in dollars per barrel)	67.71
Maximum increase in volume per quarter of crude oil counter-party swaps (in barrels per day) \| bbl	5,000
Weighted-average Brent price (in dollars per barrel)	70.00

DERIVATIVES - BSP JV (Details) - Purchased	Sep. 30, 2018 bbl / d $ / bbl
Puts \| 2018 through 2021
Derivatives
Weighted-average price (in dollars per barrel) \| $ / bbl	50.00
BSP JV \| Calls \| 2018 through 2020
Derivatives
Daily Volume (in Bbl) \| bbl / d	1,000
Weighted-average price (in dollars per barrel) \| $ / bbl	60.00
BSP JV \| Puts \| 2018 through 2021
Derivatives
Daily Volume (in Bbl) \| bbl / d	2,000

DERIVATIVES - Interest Rate Contracts (Details) - Interest rate contract $ in Billions	May 31, 2018 USD ($)
Derivatives
Hedged amount for variable-rate indebtedness	$ 1.3
One month LIBOR
Derivatives
Interest rate to be in place to receive payment	2.75%

DERIVATIVES - Fair Value (Details) - USD ($) $ in Millions	3 Months Ended
DERIVATIVES - Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Interest Rate Contracts
Fair Value of Derivatives
Gain on interest rate contracts	$ 1
Interest Rate Contracts \| Other assets
Fair Value of Derivatives
Net Fair Value Presented in the Balance Sheet	9
Presented in the Balance Sheet \| Commodity Contracts
Fair Value of Derivatives
Total derivatives	(153)	$ (133)
Presented in the Balance Sheet \| Commodity Contracts \| Other current assets
Fair Value of Derivatives
Net Fair Value Presented in the Balance Sheet	34	23
Presented in the Balance Sheet \| Commodity Contracts \| Other assets
Fair Value of Derivatives
Net Fair Value Presented in the Balance Sheet	13	1
Presented in the Balance Sheet \| Commodity Contracts \| Accrued liabilities
Fair Value of Derivatives
Net Fair Value Presented in the Balance Sheet	(191)	(154)
Presented in the Balance Sheet \| Commodity Contracts \| Other long-term liabilities
Fair Value of Derivatives
Net Fair Value Presented in the Balance Sheet	(9)	(3)
Recognized Fair Value \| Commodity Contracts
Fair Value of Derivatives
Total derivatives	(153)	(133)
Recognized Fair Value \| Commodity Contracts \| Other current assets
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	34	39
Gross Amounts Offset in the Balance Sheet		(16)
Recognized Fair Value \| Commodity Contracts \| Other assets
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	13	1
Recognized Fair Value \| Commodity Contracts \| Accrued liabilities
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	(191)	(170)
Gross Amounts Offset in the Balance Sheet		16
Recognized Fair Value \| Commodity Contracts \| Other long-term liabilities
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	$ (9)	$ (3)

EARNINGS PER SHARE - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Basic EPS calculation
Net income (loss)	$ 91	$ (132)	$ 37	$ (127)
Net income attributable to noncontrolling interests	(25)	(1)	(55)	(1)
Net income (loss) attributable to common stock	66	(133)	(18)	(128)
Less: net income allocated to participating securities	(1)	0	0	0
Net income (loss) available to common stockholders	$ 65	$ (133)	$ (18)	$ (128)
Weighed-average common shares outstanding - basic	48.5	42.7	47.0	42.5
Basic EPS (in dollars per share)	$ 1.34	$ (3.11)	$ (0.38)	$ (3.01)
Diluted EPS calculation
Net income (loss)	$ 91	$ (132)	$ 37	$ (127)
Net income attributable to noncontrolling interests	(25)	(1)	(55)	(1)
Net income (loss) attributable to common stock	66	(133)	(18)	(128)
Less: net income allocated to participating securities	(1)	0	0	0
Net (loss) income available to common stockholders	$ 65	$ (133)	$ (18)	$ (128)
Weighed-average common shares outstanding - basic	48.5	42.7	47.0	42.5
Dilutive effect of potentially dilutive securities	0.6
Weighted-average common shares outstanding - diluted	49.1	42.7	47.0	42.5
Diluted EPS (in dollars per share)	$ 1.32	$ (3.11)	$ (0.38)	$ (3.01)
Weighted-average anti-dilutive shares	1.1	2.5	2.8	2.6

PENSION AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Net periodic benefit costs:
Employer contributions to pension plan	$ 6	$ 1	$ 8	$ 6
Pension Benefit
Net periodic benefit costs:
Service cost			1	1
Interest cost		1	1	2
Expected return on plan assets	(1)	(1)	(2)	(2)
Recognized actuarial loss	1		1	1
Settlement loss		1	4	4
Net periodic benefit costs		1	5	6
Postretirement Benefit
Net periodic benefit costs:
Service cost	1	1	3	3
Interest cost	1	1	3	3
Net periodic benefit costs	$ 2	$ 2	$ 6	$ 6

REVENUE RECOGNITION - Commodity Sales Contracts and Marketing (Details)	9 Months Ended
	Sep. 30, 2018
REVENUE RECOGNITION
Term of payment following invoicing	30 days

REVENUE RECOGNITION - Disaggregation of revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Disaggregation of revenue
Revenue from contract with customers	$ 700	$ 461	$ 1,932	$ 1,387
Other revenue	182	49	313	113
Interest income			1
Net derivative loss from commodity contracts	(54)	(65)	(259)	51
Total revenues and other	828	$ 445	1,986	$ 1,551
Oil
Disaggregation of revenue
Revenue from contract with customers	568		1,587
NGLs
Disaggregation of revenue
Revenue from contract with customers	71		195
Natural gas
Disaggregation of revenue
Revenue from contract with customers	61		150
Electricity
Disaggregation of revenue
Other revenue	42		87
Marketing, trading and other
Disaggregation of revenue
Other revenue	$ 140		$ 225

REVENUE RECOGNITION - Statements of operations (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
REVENUES AND OTHER
Oil and gas sales	$ 700	$ 461	$ 1,932	$ 1,387
Net derivative loss from commodity contracts	(54)	(65)	(259)	51
Other revenue	182	49	313	113
Total revenues and other	828	445	1,986	1,551
COSTS AND OTHER
Production costs	236	222	679	649
General and administrative expenses	81	61	234	183
Depreciation, depletion and amortization	128	134	372	412
Taxes other than on income	45	39	120	103
Exploration expenses	4	5	18	17
Other expenses, net	149	29	259	76
Total costs and other	643	490	1,682	1,440
OPERATING (LOSS) INCOME	185	(45)	304	111
NON-OPERATING (LOSS) INCOME
Interest and debt expense, net	(95)	(85)	(281)	(252)
Net gain on early extinguishment of debt	2		26	4
Gain on asset divestitures	3		4	21
Other non-operating expenses	(4)	(2)	(16)	(11)
INCOME BEFORE INCOME TAXES	91	(132)	37	(127)
Income tax	0	0	0	0
NET INCOME	91	(132)	37	(127)
Net income attributable to noncontrolling interests	(25)	(1)	(55)	(1)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	66	$ (133)	(18)	$ (128)
ASU 2014-09 \| Previous U.S. GAAP
REVENUES AND OTHER
Oil and gas sales	695		1,915
Net derivative loss from commodity contracts	(54)		(259)
Other revenue	177		242
Total revenues and other	818		1,898
COSTS AND OTHER
Production costs	236		679
General and administrative expenses	81		234
Depreciation, depletion and amortization	128		372
Taxes other than on income	45		120
Exploration expenses	4		18
Other expenses, net	139		171
Total costs and other	633		1,594
OPERATING (LOSS) INCOME	185		304
NON-OPERATING (LOSS) INCOME
Interest and debt expense, net	(95)		(281)
Net gain on early extinguishment of debt	2		26
Gain on asset divestitures	3		4
Other non-operating expenses	(4)		(16)
INCOME BEFORE INCOME TAXES	91		37
NET INCOME	91		37
Net income attributable to noncontrolling interests	(25)		(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	66		(18)
ASU 2014-09 \| Change
REVENUES AND OTHER
Oil and gas sales	5		17
Other revenue	5		71
Total revenues and other	10		88
COSTS AND OTHER
Other expenses, net	10		88
Total costs and other	$ 10		$ 88

INCOME TAXES (Details)	3 Months Ended		9 Months Ended
INCOME TAXES (Details)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
INCOME TAXES
Effective tax rate (as a percent)	0.00%	0.00%	0.00%	0.00%

CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Balance sheets (Details) - USD ($)
$ in Millions

9 Months Ended

Sep. 30, 2018

Dec. 31, 2017

Sep. 30, 2017

Dec. 31, 2016

Assets

$ 546

$ 483

6,386

5,696

6,984

6,207

Deferred gain and issuance costs, net

871

732

Long-term debt

5,108

5,306

253

287

612

602

Mezzanine equity

745

(605)

^[1]

(720)

$ (574)

$ (557)

Reportable Legal Entity | Parent

6,984

6,207

Assets

Investments in consolidated subsidiaries

5,858

5,105

5,905

5,142

Deferred gain and issuance costs, net

187

122

Long-term debt

5,108

5,306

253

287

Amounts due to (from) affiliates

152

154

929

(724)

(814)

Reportable Legal Entity | Combined Guarantor Subsidiaries

5,905

5,142

Assets

475

464

Investments in consolidated subsidiaries

5,823

5,580

178

606

6,505

6,677

682

613

Amounts due to (from) affiliates

451

445

(929)

(87)

6,301

5,706

Reportable Legal Entity | Combined Non-Guarantor Subsidiaries

6,505

6,677

Assets

531

625

105

Mezzanine equity

745

(146)

625

105

Eliminations

Assets

Investments in consolidated subsidiaries

(15)

(6)

(6,036)

(5,711)

(6,051)

(5,717)

(15)

(6)

(6,036)

(5,711)