0001609253-19-000154 | 10-Q | XBRL Viewer | California Resources Corp

EQUITY (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurement Inputs and Valuation Techniques

The fair value of the first tranche of 0.2 million shares was approximately $2 million on the grant date using the Black-Scholes pricing model based on the assumptions below:



Volatility	85.00		%
Risk-free interest rate	1.80		%
Dividend yield	—		%
Expected term (in years)	5.19
Fair value of underlying common stock	$	14.94

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash	$ 22	$ 17
Trade receivables	248	299
Inventories	66	69
Other current assets, net	174	255
Total current assets	510	640
PROPERTY, PLANT AND EQUIPMENT	22,828	22,523
Accumulated depreciation, depletion and amortization	(16,425)	(16,068)
Total property, plant and equipment, net	6,403	6,455
OTHER ASSETS	122	63
TOTAL ASSETS	7,035	7,158
CURRENT LIABILITIES
Current maturities of long-term debt	100	0
Accounts payable	316	390
Accrued liabilities	305	217
Total current liabilities	721	607
LONG-TERM DEBT	4,896	5,251
DEFERRED GAIN AND ISSUANCE COSTS, NET	158	216
OTHER LONG-TERM LIABILITIES	679	575
MEZZANINE EQUITY
Redeemable noncontrolling interests	789	756
EQUITY
Preferred stock (20 million shares authorized at $0.01 par value) no shares outstanding at September 30, 2019 and December 31, 2018	0	0
Common stock (200 million shares authorized at $0.01 par value) outstanding shares (September 30, 2019 - 49,118,451 and December 31, 2018 - 48,650,420)	0	0
Additional paid-in capital	5,000	4,987
Accumulated deficit	(5,303)	(5,342)
Accumulated other comprehensive loss	(5)	(6)
Total equity attributable to common stock	(308)	(361)
Equity attributable to noncontrolling interests	100	114
Total equity	(208)	(247)
TOTAL LIABILITIES AND EQUITY	$ 7,035	$ 7,158

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

3 Months Ended

9 Months Ended

Sep. 30, 2019

Sep. 30, 2018

Sep. 30, 2019

Sep. 30, 2018

Statement of Comprehensive Income [Abstract]

Net income

$ 127

$ 91

$ 124

$ 37

Net income attributable to noncontrolling interests

(33)

(25)

(85)

(55)

Other comprehensive income:

Reclassification of realized losses on pension and postretirement benefits to income(a)

^[1]

Comprehensive income (loss) attributable to common stock

$ 94

$ 66

$ 40

$ (15)

[1]	No associated tax for the three and nine months ended September 30, 2019 and 2018. See Note 10 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=118930883&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)
-URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669625-108580

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-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
-SubTopic 10
-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
-SubTopic 10
-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=116874947&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=118932676&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=116874947&loc=SL4591552-111686

+ Details

PENSION AND POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net periodic benefit costs:
Employer contributions to pension plan	$ 1	$ 6	$ 2	$ 8
Pension Benefit
Net periodic benefit costs:
Service cost	0	0	1	1
Interest cost	0	0	2	1
Expected return on plan assets	(1)	(1)	(2)	(2)
Recognized actuarial loss	1	1	1	1
Settlement loss	0	0	1	4
Total	0	0	3	5
Postretirement Benefit
Net periodic benefit costs:
Service cost	1	1	3	3
Interest cost	1	1	3	3
Expected return on plan assets	0	0	0	0
Recognized actuarial loss	0	0	0	0
Settlement loss	0	0	0	0
Total	$ 2	$ 2	$ 6	$ 6

Condensed Consolidated Statements of Equity - USD ($) $ in Millions	Total	Additional Paid-in Capital	Accumulated (Deficit) Earnings	Accumulated Other Comprehensive (Loss) Income	Equity Attributable to Common Stock	Equity Attributable to Noncontrolling Interests
Beginning balance at Dec. 31, 2017	$ (720)	$ 4,879	$ (5,670)	$ (23)	$ (814)	$ 94
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(34)		(18)		(18)	(16)
Contribution from noncontrolling interest holders, net	82					82
Distributions to noncontrolling interest holders	(40)					(40)
Issuance of common stock	101	101			101
Other comprehensive income	3			3	3
Share-based compensation, net	3	3			3
Ending balance at Sep. 30, 2018	(605)	4,983	(5,688)	(20)	(725)	120
Beginning balance at Jun. 30, 2018	(645)	4,985	(5,754)	(20)	(789)	144
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	63		66		66	(3)
Distributions to noncontrolling interest holders	(21)					(21)
Share-based compensation, net	(2)	(2)			(2)
Ending balance at Sep. 30, 2018	(605)	4,983	(5,688)	(20)	(725)	120
Beginning balance at Dec. 31, 2018	(247)	4,987	(5,342)	(6)	(361)	114
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	37		39		39	(2)
Contribution from noncontrolling interest holders, net	49					49
Distributions to noncontrolling interest holders	(61)					(61)
Other comprehensive income	1			1	1
Warrant	2	2			2
Share-based compensation, net	11	11			11
Ending balance at Sep. 30, 2019	(208)	5,000	(5,303)	(5)	(308)	100
Beginning balance at Jun. 30, 2019	(279)	4,994	(5,397)	(5)	(408)	129
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	97		94		94	3
Distributions to noncontrolling interest holders	(32)					(32)
Warrant	2	2			2
Share-based compensation, net	4	4			4
Ending balance at Sep. 30, 2019	$ (208)	$ 5,000	$ (5,303)	$ (5)	$ (308)	$ 100

CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Cash Flow Statement (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Condensed Cash Flow Statements, Captions [Line Items]
Net cash (used) provided by operating activities	$ 540	$ 393
Net cash used in investing activities	(291)	(965)
Net cash provided (used) by financing activities	(244)	583
Increase in cash	5	11
Cash—beginning of period	17	20
Cash—end of period	22	31
Eliminations
Condensed Cash Flow Statements, Captions [Line Items]
Net cash (used) provided by operating activities	0	0
Net cash used in investing activities	0	0
Net cash provided (used) by financing activities	0	0
Increase in cash	0	0
Cash—beginning of period	0	0
Cash—end of period	0	0
Parent \| Reportable Legal Entities
Condensed Cash Flow Statements, Captions [Line Items]
Net cash (used) provided by operating activities	(470)	(433)
Net cash used in investing activities	(9)	(3)
Net cash provided (used) by financing activities	479	429
Increase in cash	0	(7)
Cash—beginning of period	0	7
Cash—end of period	0	0
Combined Guarantor Subsidiaries \| Reportable Legal Entities
Condensed Cash Flow Statements, Captions [Line Items]
Net cash (used) provided by operating activities	649	645
Net cash used in investing activities	(271)	(921)
Net cash provided (used) by financing activities	(373)	278
Increase in cash	5	2
Cash—beginning of period	7	8
Cash—end of period	12	10
Combined Non-Guarantor Subsidiaries \| Reportable Legal Entities
Condensed Cash Flow Statements, Captions [Line Items]
Net cash (used) provided by operating activities	361	181
Net cash used in investing activities	(11)	(41)
Net cash provided (used) by financing activities	(350)	(124)
Increase in cash	0	16
Cash—beginning of period	10	5
Cash—end of period	$ 10	$ 21

DERIVATIVES - Interest-Rate Risk (Details) - Interest-rate contract $ in Billions	May 31, 2018 USD ($)
Derivatives
Derivative, amount of hedged item	$ 1.3
One month LIBOR
Derivatives
Interest rate to be in place to receive payment	2.75%

LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	9 Months Ended
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES	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, 2019 and December 31, 2018 were not material to our 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.

CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Balance Sheet (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Assets [Abstract]
Total current assets	$ 510		$ 640
Total property, plant and equipment, net	6,403		6,455
Investments in consolidated subsidiaries	0		0
OTHER ASSETS	122		63
TOTAL ASSETS	7,035		7,158
Liabilities and Equity [Abstract]
Total current liabilities	721		607
LONG-TERM DEBT	4,896		5,251
DEFERRED GAIN AND ISSUANCE COSTS, NET	158		216
OTHER LONG-TERM LIABILITIES	679		575
Amounts due to (from) affiliates	0		0
Mezzanine equity	789		756
Total equity	(208)	$ (279)	(247)	$ (605)	$ (645)	$ (720)
TOTAL LIABILITIES AND EQUITY	7,035		7,158
Eliminations
Assets [Abstract]
Total current assets	(11)		(13)
Total property, plant and equipment, net	0		0
Investments in consolidated subsidiaries	(6,054)		(5,536)
OTHER ASSETS	0		0
TOTAL ASSETS	(6,065)		(5,549)
Liabilities and Equity [Abstract]
Total current liabilities	(11)		(13)
LONG-TERM DEBT	0		0
DEFERRED GAIN AND ISSUANCE COSTS, NET	0		0
OTHER LONG-TERM LIABILITIES	0		0
Amounts due to (from) affiliates	0		0
Mezzanine equity	0		0
Total equity	(6,054)		(5,536)
TOTAL LIABILITIES AND EQUITY	(6,065)		(5,549)
Parent \| Reportable Legal Entities
Assets [Abstract]
Total current assets	6		7
Total property, plant and equipment, net	26		23
Investments in consolidated subsidiaries	5,850		5,440
OTHER ASSETS	2		4
TOTAL ASSETS	5,884		5,474
Liabilities and Equity [Abstract]
Total current liabilities	259		143
LONG-TERM DEBT	4,896		5,251
DEFERRED GAIN AND ISSUANCE COSTS, NET	158		216
OTHER LONG-TERM LIABILITIES	137		140
Amounts due to (from) affiliates	742		85
Mezzanine equity	0		0
Total equity	(308)		(361)
TOTAL LIABILITIES AND EQUITY	5,884		5,474
Combined Guarantor Subsidiaries \| Reportable Legal Entities
Assets [Abstract]
Total current assets	453		590
Total property, plant and equipment, net	5,889		5,913
Investments in consolidated subsidiaries	204		96
OTHER ASSETS	90		32
TOTAL ASSETS	6,636		6,631
Liabilities and Equity [Abstract]
Total current liabilities	464		465
LONG-TERM DEBT	0		0
DEFERRED GAIN AND ISSUANCE COSTS, NET	0		0
OTHER LONG-TERM LIABILITIES	538		431
Amounts due to (from) affiliates	(743)		(86)
Mezzanine equity	0		0
Total equity	6,377		5,821
TOTAL LIABILITIES AND EQUITY	6,636		6,631
Combined Non-Guarantor Subsidiaries \| Reportable Legal Entities
Assets [Abstract]
Total current assets	62		56
Total property, plant and equipment, net	488		519
Investments in consolidated subsidiaries	0		0
OTHER ASSETS	30		27
TOTAL ASSETS	580		602
Liabilities and Equity [Abstract]
Total current liabilities	9		12
LONG-TERM DEBT	0		0
DEFERRED GAIN AND ISSUANCE COSTS, NET	0		0
OTHER LONG-TERM LIABILITIES	4		4
Amounts due to (from) affiliates	1		1
Mezzanine equity	789		756
Total equity	(223)		(171)
TOTAL LIABILITIES AND EQUITY	$ 580		$ 602
Maximum
Condensed Balance Sheet Statements, Captions [Line Items]
Percentage of holding assets by subsidiaries in consolidated assets	1.00%

REVENUE RECOGNITION - Commodity Sales Contracts and Marketing (Details)	9 Months Ended
	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
Typical term of payment following invoicing	30 days

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

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, 2019 and December 31, 2018 and the condensed consolidating statements of operations and statements of cash flows for the three and nine months ended September 30, 2019 and 2018, 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 the Company 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
As of September 30, 2019 and December 31, 2018
(in millions)

	As of September 30, 2019
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total current assets	$	6		$	453		$	62		$	(11	)	$	510
Total property, plant and equipment, net	26			5,889			488			—			6,403
Investments in consolidated subsidiaries	5,850			204			—			(6,054		)	—
Other assets	2			90			30			—			122
TOTAL ASSETS	$	5,884		$	6,636		$	580		$	(6,065	)	$	7,035

Total current liabilities	259			464			9			(11		)	721
Long-term debt	4,896			—			—			—			4,896
Deferred gain and issuance costs, net	158			—			—			—			158
Other long-term liabilities	137			538			4			—			679
Amounts due to (from) affiliates	742			(743		)	1			—			—
Mezzanine equity	—			—			789			—			789
Total equity	(308		)	6,377			(223		)	(6,054		)	(208		)
TOTAL LIABILITIES AND EQUITY	$	5,884		$	6,636		$	580		$	(6,065	)	$	7,035



	As of December 31, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total current assets	$	7		$	590		$	56		$	(13	)	$	640
Total property, plant and equipment, net	23			5,913			519			—			6,455
Investments in consolidated subsidiaries	5,440			96			—			(5,536		)	—
Other assets	4			32			27			—			63
TOTAL ASSETS	$	5,474		$	6,631		$	602		$	(5,549	)	$	7,158

Total current liabilities	143			465			12			(13		)	607
Long-term debt	5,251			—			—			—			5,251
Deferred gain and issuance costs, net	216			—			—			—			216
Other long-term liabilities	140			431			4			—			575
Amounts due to (from) affiliates	85			(86		)	1			—			—
Mezzanine equity	—			—			756			—			756
Total equity	(361		)	5,821			(171		)	(5,536		)	(247		)
TOTAL LIABILITIES AND EQUITY	$	5,474		$	6,631		$	602		$	(5,549	)	$	7,158



Condensed Consolidating Statements of Operations
For the three and nine months ended September 30, 2019 and 2018
(in millions)

	For the three months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues and other	$	—		$	624	$	130		$	(73	)	$	681
Total costs and other	43			502		61			(73		)	533
Non-operating (loss) income	(25		)	4		—			—			(21		)
NET (LOSS) INCOME	(68		)	126		69			—			127
Net income attributable to noncontrolling interests	—			—		(33		)	—			(33		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(68	)	$	126	$	36		$	—		$	94



	For the three months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
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 (LOSS) INCOME	(161		)	189		63			—			91
Net income attributable to noncontrolling interest	—			—		(25		)	—			(25		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(161	)	$	189	$	38		$	—		$	66



	For the nine months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues and other	$	—		$	1,878	$	366		$	(220	)	$	2,024
Total costs and other	150			1,574		193			(220		)	1,697
Non-operating (loss) income	(211		)	8		—			—			(203		)
NET INCOME (LOSS)	(361		)	312		173			—			124
Net income attributable to noncontrolling interests	—			—		(85		)	—			(85		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(361	)	$	312	$	88		$	—		$	39



	For the nine months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
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 (LOSS) INCOME	(440		)	341		136			—			37
Net income attributable to noncontrolling interest	—			—		(55		)	—			(55		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(440	)	$	341	$	81		$	—		$	(18	)



Condensed Consolidating Statements of Cash Flows
For the nine months ended September 30, 2019 and 2018
(in millions)

	For the nine months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used) provided by operating activities	$	(470	)	$	649		$	361		$	—	$	540
Net cash used in investing activities	(9		)	(271		)	(11		)	—		(291		)
Net cash provided (used) by financing activities	479			(373		)	(350		)	—		(244		)
Increase in cash	—			5			—			—		5
Cash—beginning of period	—			7			10			—		17
Cash—end of period	$	—		$	12		$	10		$	—	$	22



	For the nine months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations		Consolidated
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
(Decrease) increase in cash	(7		)	2			16			—		11
Cash—beginning of period	7			8			5			—		20
Cash—end of period	$	—		$	10		$	21		$	—	$	31

DEBT - Fair Value (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Estimated fair value of long-term debt	$ 3,900	$ 4,500
Debt carrying value	$ 4,996	$ 5,251

CONDENSED CONSOLIDATING FINANCIAL INFORMATION - Condensed Income Statement (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Condensed Income Statements, Captions [Line Items]
Total revenues and other	$ 681	$ 828	$ 2,024	$ 1,986
Total costs and other	533	643	1,697	1,682
Non-operating (loss) income	(21)	(94)	(203)	(267)
INCOME BEFORE INCOME TAXES	127	91	124	37
Net income attributable to noncontrolling interests	(33)	(25)	(85)	(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	94	66	39	(18)
Eliminations
Condensed Income Statements, Captions [Line Items]
Total revenues and other	(73)	(73)	(220)	(186)
Total costs and other	(73)	(73)	(220)	(186)
Non-operating (loss) income	0	0	0	0
INCOME BEFORE INCOME TAXES	0	0	0	0
Net income attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	0	0	0	0
Parent \| Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Total revenues and other	0	0	0	1
Total costs and other	43	62	150	169
Non-operating (loss) income	(25)	(99)	(211)	(272)
INCOME BEFORE INCOME TAXES	(68)	(161)	(361)	(440)
Net income attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	(68)	(161)	(361)	(440)
Combined Guarantor Subsidiaries \| Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Total revenues and other	624	766	1,878	1,878
Total costs and other	502	582	1,574	1,542
Non-operating (loss) income	4	5	8	5
INCOME BEFORE INCOME TAXES	126	189	312	341
Net income attributable to noncontrolling interests	0	0	0	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	126	189	312	341
Combined Non-Guarantor Subsidiaries \| Reportable Legal Entities
Condensed Income Statements, Captions [Line Items]
Total revenues and other	130	135	366	293
Total costs and other	61	72	193	157
Non-operating (loss) income	0	0	0	0
INCOME BEFORE INCOME TAXES	69	63	173	136
Net income attributable to noncontrolling interests	(33)	(25)	(85)	(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$ 36	$ 38	$ 88	$ 81

EQUITY

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

EQUITY

In connection with our Alpine JV, Colony received a warrant to purchase up to 1.25 million shares of our common stock at an exercise price of $40 per share. Colony may exercise the warrant in tranches as funding milestones are met. Each tranche will have a five-year term commencing on the date on which such tranche becomes exercisable. Colony may elect, in its sole discretion, to pay cash or to exercise on a cashless basis, pursuant to which Colony will not be required to pay cash for shares of common stock upon exercise of the warrant but will instead receive fewer shares.

The fair value of the first tranche of 0.2 million shares was approximately $2 million on the grant date using the Black-Scholes pricing model based on the assumptions below:



Volatility	85.00		%
Risk-free interest rate	1.80		%
Dividend yield	—		%
Expected term (in years)	5.19
Fair value of underlying common stock	$	14.94

The first tranche was initially measured at fair value and will not be subsequently remeasured. The warrant was classified as additional paid-in-capital in equity on the condensed consolidated balance sheet as of September 30, 2019. The first tranche was not exercisable as of September 30, 2019.

DERIVATIVES - Fair Value (Details) - Commodity Contracts - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value of Derivatives
Gross Amounts Offset in the Balance Sheet	$ 0	$ 0
Total derivatives	101	178
Other current assets
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	132	252
Gross Amounts Offset in the Balance Sheet	(35)	(84)
Net Fair Value Presented in the Balance Sheet	97	168
Other assets
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	8	23
Gross Amounts Offset in the Balance Sheet	(3)	(9)
Net Fair Value Presented in the Balance Sheet	5	14
Accrued liabilities
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	(36)	(87)
Gross Amounts Offset in the Balance Sheet	35	84
Net Fair Value Presented in the Balance Sheet	(1)	(3)
Other long-term liabilities
Fair Value of Derivatives
Gross Amounts Recognized at Fair Value	(3)	(10)
Gross Amounts Offset in the Balance Sheet	3	9
Net Fair Value Presented in the Balance Sheet	$ 0	$ (1)

LEASES - Operating lease costs (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Operating lease costs
Operating lease cost	$ 14	$ 40
Short-term lease cost	18	56
Variable lease cost	6	15
Total operating lease costs	$ 38	$ 111

LEASES - Supplemental Cash Flows (Details) $ in Millions	3 Months Ended	9 Months Ended
LEASES - Supplemental Cash Flows (Details) $ in Millions	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows	$ 4	$ 9
Investing cash flows	$ 11	32
ROU asset obtained in exchange for lease obligations (in millions)		$ 81
Weighted-average remaining lease term (in years)	2 years 10 months 13 days	2 years 10 months 13 days
Weighted-average discount rate	11.40%	11.40%
ROU asset obtained in exchange for lease obligations (in millions)		$ 2
Weighted-average remaining lease term (in years)	2 years 6 months 29 days	2 years 6 months 29 days
Weighted-average discount rate	8.50%	8.50%

NONCONTROLLING INTERESTS - Mezzanine Equity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Mezzanine Equity - Redeemable Noncontrolling Interests
Beginning balance			$ 756
Net (loss) income attributable to noncontrolling interests	$ 30	$ 28	87	$ 71
Ending balance	789		789
Mezzanine Equity - Redeemable Noncontrolling Interest - Ares
Mezzanine Equity - Redeemable Noncontrolling Interests
Beginning balance			756	0
Net (loss) income attributable to noncontrolling interests			87	71
Contributions from noncontrolling interest holders, net			0	714
Distributions to noncontrolling interest holders			(54)	(40)
Ending balance	$ 789	$ 745	$ 789	$ 745

RECENT EVENTS - Development Joint Venture (Details) $ in Millions	Jul. 31, 2019 USD ($) well
Schedule of Equity Method Investments [Line Items]
Joint venture working interest before counterparty return	10.00%
Joint venture working interest after counterparty return	82.50%
Alpine JV
Schedule of Equity Method Investments [Line Items]
Initial investment commitment in joint venture	$ 320
Contributions from noncontrolling interest holders, net	$ 500
Joint venture, investment period	3 years
Quantity of wells to be drilled \| well	275
Joint venture investment funding percentage	100.00%
Joint venture working interest acquired	90.00%

PENSION AND POSTRETIREMENT BENEFIT PLANS

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

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 for the three and nine months ended September 30, 2019 and 2018:



	Three months ended September 30,
	2019					2018
	Pension Benefit			Postretirement Benefit		Pension Benefit			Postretirement Benefit
	(in millions)
Service cost	$	—		$	1	$	—		$	1
Interest cost	—			1		—			1
Expected return on plan assets	(1		)	—		(1		)	—
Recognized actuarial loss	1			—		1			—
Settlement loss	—			—		—			—
Total	$	—		$	2	$	—		$	2



	Nine months ended September 30,
	2019					2018
	Pension Benefit			Postretirement Benefit		Pension Benefit			Postretirement Benefit
	(in millions)
Service cost	$	1		$	3	$	1		$	3
Interest cost	2			3		1			3
Expected return on plan assets	(2		)	—		(2		)	—
Recognized actuarial loss	1			—		1			—
Settlement loss	1			—		4			—
Total	$	3		$	6	$	5		$	6

We contributed $1 million and $6 million to our defined benefit pension plans in each of the three months ended September 30, 2019 and 2018, respectively. We contributed $2 million and $8 million in the nine months ended September 30, 2019 and 2018, respectively. We do not expect to make any additional contributions to our defined benefit pension plans during the remainder of 2019. The 2019 and 2018 settlement losses, which were reclassified from accumulated other comprehensive income, were associated with early retirements.

DERIVATIVES - Commodity Price Risk (Details) bbl / d in Thousands	Sep. 30, 2019 bbl / d $ / bbl
Puts \| Purchased \| Q4 2019
Derivatives
Barrels per day (in Bbl) \| bbl / d	35
Weighted-average price (in dollars per barrel) \| $ / bbl	75.71
Puts \| Purchased \| Q1 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	30
Weighted-average price (in dollars per barrel) \| $ / bbl	70.83
Puts \| Purchased \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	15
Weighted-average price (in dollars per barrel) \| $ / bbl	68.33
Puts \| Purchased \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	10
Weighted-average price (in dollars per barrel) \| $ / bbl	65.00
Puts \| Purchased \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	65.00
Puts \| Sold \| Q4 2019
Derivatives
Barrels per day (in Bbl) \| bbl / d	35
Weighted-average price (in dollars per barrel) \| $ / bbl	60.00
Puts \| Sold \| Q1 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	30
Weighted-average price (in dollars per barrel) \| $ / bbl	56.67
Puts \| Sold \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	15
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Puts \| Sold \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	10
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Puts \| Sold \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Swap \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	70.05
Swap \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	0
Weighted-average price (in dollars per barrel) \| $ / bbl	0
Swap \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	0
Weighted-average price (in dollars per barrel) \| $ / bbl	0

DEBT

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

DEBT

As of September 30, 2019 and December 31, 2018, our long-term debt consisted of the following credit agreements, Second Lien Notes and Senior Notes:



	Outstanding Principal					Interest Rate	Maturity	Security
	September 30, 2019			December 31, 2018
Credit Agreements	(in millions)
2014 Revolving Credit Facility	$	514		$	540	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	1,838			2,067		8%	December 15, 2022^(b)	Second-Priority Lien
Senior Notes
5% Senior Notes due 2020	100			100		5%	January 15, 2020	Unsecured
5½% Senior Notes due 2021	100			100		5.5%	September 15, 2021	Unsecured
6% Senior Notes due 2024	144			144		6%	November 15, 2024	Unsecured
Total Debt	4,996			5,251
Less: Current Maturities	(100		)	—
Long-Term Debt	$	4,896		$	5,251


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, 2018.


(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 $290 million in June 2021, $58 million in December 2021, $61 million in June 2022 and $1,429 million in December 2022.

Deferred Gain and Issuance Costs

As of September 30, 2019, net deferred gain and issuance costs were $158 million, consisting of $230 million of a deferred gain offset by $72 million of deferred issuance costs and original issue discounts. The December 31, 2018 net deferred gain and issuance costs were $216 million, consisting of $313 million of a deferred gain offset by $97 million of deferred issuance costs and original issue discounts.

2014 Revolving Credit Facility

As of September 30, 2019, we had $320 million of available borrowing capacity under our $1 billion revolving credit facility (2014 Revolving Credit Facility), before a $150 million month-end minimum liquidity requirement. Effective November 1, 2019, the borrowing base under this facility was reaffirmed at $2.3 billion. Our 2014 Revolving Credit Facility also includes a sub-limit of $400 million for the issuance of letters of credit. As of September 30, 2019 and December 31, 2018, we had letters of credit outstanding of $166 million and $162 million, respectively. These letters of credit were issued to support ordinary course marketing, insurance, regulatory and other matters.

In August 2019, we entered into a ninth amendment to our 2014 Revolving Credit Facility to provide us with flexibility in connection with potential royalty transactions.

Note Repurchases

In the third quarter of 2019, we repurchased $153 million in face value of our 8% senior secured second lien notes due December 15, 2022 (Second Lien Notes) for $90 million in cash resulting in a pre-tax gain of $82 million, including the effect of unamortized deferred gain and issuance costs. In the nine months ended September 30, 2019, we repurchased approximately $229 million in face value of our Second Lien Notes for $149 million in cash resulting in a pre-tax gain of $108 million, including the effect of unamortized deferred gain and 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, 2019 and December 31, 2018, including the fair value of the variable-rate portion, was $3.9 billion and $4.5 billion, respectively, compared to a carrying value of $5.0 billion and $5.3 billion, respectively.

Other

At September 30, 2019, 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.

INCOME TAXES	9 Months Ended
INCOME TAXES	Sep. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES For the nine months ended September 30, 2019 and 2018, 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 can achieve.

NONCONTROLLING INTERESTS

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

NONCONTROLLING INTERESTS

The following table presents the changes in noncontrolling interests for our consolidated JVs, which is reported in equity and mezzanine equity on the condensed consolidated balance sheets for the nine months ended September 30, 2019 and 2018:



	Equity Attributable to Noncontrolling Interest									Mezzanine Equity - Redeemable Noncontrolling Interests
	Ares JV			BSP JV			Total			Ares JV
	(in millions)
Balance, December 31, 2018	$	15		$	99		$	114		$	756
Net (loss) income attributable to noncontrolling interests	(9		)	7			(2		)	87
Contributions from noncontrolling interest holders, net	—			49			49			—
Distributions to noncontrolling interest holders	(6		)	(55		)	(61		)	(54		)
Balance, September 30, 2019	$	—		$	100		$	100		$	789

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 JV

Our condensed consolidated statements of operations reflect the operations of our midstream JV with ECR Corporate Holdings L.P. (ECR), a portfolio company of Ares, with ECR's share of net income (loss) reported in net income attributable to noncontrolling interests. ECR's redeemable noncontrolling interests are reported in mezzanine equity due to an embedded optional redemption feature.

BSP JV

Our condensed consolidated results reflect the operations of our development JV with BSP, with BSP's preferred interest reported in equity on our condensed consolidated balance sheets and BSP’s share of net income (loss) being reported in net income attributable to noncontrolling interests in our condensed consolidated statements of operations.

REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of revenue
Oil and gas sales	$ 541	$ 700	$ 1,720	$ 1,932
Other revenue	103	182	335	313
Net derivative gain (loss) from commodity contracts	37	(54)	(31)	(259)
Total revenues and other	681	828	2,024	1,986
Oil
Disaggregation of revenue
Oil and gas sales	457	568	1,433	1,587
NGLs
Disaggregation of revenue
Oil and gas sales	34	71	132	195
Natural gas
Disaggregation of revenue
Oil and gas sales	50	61	155	150
Electricity
Disaggregation of revenue
Other revenue	38	42	88	87
Marketing, trading and other
Disaggregation of revenue
Other revenue	65	140	247	225
Interest income
Disaggregation of revenue
Other revenue	$ 0	$ 0	$ 0	$ 1

INVENTORIES (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Materials and supplies	$ 64	$ 65
Finished goods	2	4
Total	$ 66	$ 69

LEASES (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of operating lease costs, including amounts capitalized to property, plant and equipment

Cash flow related to our operating leases for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating cash flows	$	4	$	9
Investing cash flows	$	11	$	32

Our operating lease costs, including amounts capitalized to property, plant and equipment, for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating lease cost	$	14	$	40
Short-term lease cost	18		56
Variable lease cost	6		15
Total operating lease costs	$	38	$	111

Schedule of other operating and finance lease information

Other information related to our operating and finance leases as of September 30, 2019 was as follows:



	September 30, 2019
Operating Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	81
Weighted-average remaining lease term (in years)	2.87
Weighted-average discount rate	11.4		%

Finance Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	2
Weighted-average remaining lease term (in years)	2.58
Weighted-average discount rate	8.5		%

Schedule of supplemental balance sheet information related to operating leases

Balance sheet information related to our operating and finance leases as of September 30, 2019 was as follows:



		September 30,
	Balance Sheet Location	2019
		(in millions)
Assets
Operating lease, net	Other assets	$	66
Finance lease, net	PP&E	1
Total lease assets		$	67

Liabilities
Current
Operating lease	Accrued liabilities	$	38
Finance lease	Accrued liabilities	1
Long-term
Operating lease	Other long-term liabilities	30
Finance lease	Other long-term liabilities	1
Total lease liabilities		$	70

Schedule of maturities of our operating lease liabilities

Maturities of our operating and finance lease liabilities at September 30, 2019 are as follows:



	Operating			Finance
	Leases			Leases
	(in millions)
2019	$	19		$	—
2020	34			1
2021	10			1
2022	7			—
2023	6			—
Thereafter	9			—
Less: Interest	(17		)	—
Present value of lease liabilities	$	68		$	2

Schedule of maturities of our financing lease liabilities

Maturities of our operating and finance lease liabilities at September 30, 2019 are as follows:



	Operating			Finance
	Leases			Leases
	(in millions)
2019	$	19		$	—
2020	34			1
2021	10			1
2022	7			—
2023	6			—
Thereafter	9			—
Less: Interest	(17		)	—
Present value of lease liabilities	$	68		$	2

Schedule of future minimum lease payments for noncancelable operating leases

At December 31, 2018, future minimum lease payments for noncancelable operating leases under ASC 840 (excluding oil and natural gas and other mineral leases, utilities, taxes, insurance and common area maintenance expenses) were:



	December 31,
	2018
	(in millions)
2019	$	12
2020	8
2021	7
2022	7
2023	6
Thereafter	28
Total	$	68

DEBT - Deferred Gain and Issuance Costs (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Net deferred gain and issuance costs	$ 158	$ 216
Deferred gains	230	313
Deferred issuance costs and original issue discounts	$ (72)	$ (97)

Cover Page	9 Months Ended
Cover Page	Sep. 30, 2019 shares
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	001-36478
Entity Registrant Name	California Resources Corp
Entity Central Index Key	0001609253
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-5670947
Entity Address, Address Line One	27200 Tourney Road
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Santa Clarita
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91355
City Area Code	888
Local Phone Number	848-4754
Title of 12(b) Security	Common Stock
Trading Symbol	CRC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	49,118,451

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Calculation of basic and diluted EPS

The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2019 and 2018:



	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
	(in millions, except per-share amounts)
Net income	$	127		$	91		$	124		$	37
Net income attributable to noncontrolling interests	(33		)	(25		)	(85		)	(55		)
Net income (loss) attributable to common stock	94			66			39			(18		)
Less: net income allocated to participating securities	(1		)	(1		)	(1		)	—
Net income (loss) available to common stockholders	$	93		$	65		$	38		$	(18	)
Weighted-average common shares outstanding — basic	49.1			48.5			48.9			47
Basic EPS	$	1.89		$	1.34		$	0.78		$	(0.38	)

Net income	$	127		$	91		$	124		$	37
Net income attributable to noncontrolling interests	(33		)	(25		)	(85		)	(55		)
Net income (loss) attributable to common stock	94			66			39			(18		)
Less: net income allocated to participating securities	(1		)	(1		)	(1		)	—
Net income (loss) available to common stockholders	$	93		$	65		$	38		$	(18	)
Weighted-average common shares outstanding — basic	49.1			48.5			48.9			47
Dilutive effect of potentially dilutive securities	0.1			0.6			0.3			—
Weighted-average common shares outstanding — diluted	49.2			49.1			49.2			47
Diluted EPS	$	1.89		$	1.32		$	0.77		$	(0.38	)
Weighted-average anti-dilutive shares	3.2			1.1			2.3			2.8

LEASES

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

LEASES

On January 1, 2019, we adopted ASC 842 using the modified retrospective approach that requires us to determine our lease balances as of the date of adoption. Prior periods continue to be reported under accounting standards in effect for those periods. We also elected to carry forward our accounting treatment for land easements on existing agreements. Mineral leases, including oil and natural gas leases, are not included in the scope of ASC 842.

We have long-term operating leases for commercial office space, drilling rigs, fleet vehicles and certain facilities. In considering whether a contract contains a lease, we first considered whether there was an identifiable asset and then considered how and for what purpose the asset would be used over the contract term.

Our lease liability was determined by measuring the present value of the remaining fixed minimum lease payments as of the date of adoption discounted using our incremental borrowing rate (IBR). In determining our IBR, we considered the average cost of borrowing for publicly traded corporate bond yields, which were adjusted to reflect our credit rating, remaining lease term and frequency of payments.

We elected to combine lease and non-lease components in determining fixed minimum lease payments for our drilling rigs and commercial office space. If applicable, fixed minimum lease payments were reduced by lease incentives for our commercial buildings and increased by mobilization and demobilization fees related to our drilling rigs. Certain of our lease agreements include options to renew, which we exercise at our sole discretion, and we did not include these options in determining our fixed minimum lease payments over the lease term. Our lease liability does not include options to extend or terminate our leases. Our leases do not include options to purchase the leased property. Lease agreements for our fleet vehicles include residual value guarantees, none of which are recognized in our financial statements until the underlying contingency is resolved.

For all of our asset classes, we elected to keep leases with an initial term of 12 months or less off the balance sheet and have included costs related to these contracts in our short-term lease cost disclosure below. Contracts with terms of one month or less are excluded from our disclosure of short-term lease costs.

For our long-term contracts, variable lease costs were not included in the measurement of our lease balances. Variable lease costs for our drilling rigs included costs to operate, move and repair the rigs. Variable lease costs for certain of our commercial office buildings included utilities and common area maintenance charges. Variable lease costs for our fleet vehicles included other-than-routine maintenance and other various amounts in excess of our fixed minimum rental fee.

Our operating lease costs, including amounts capitalized to property, plant and equipment, for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating lease cost	$	14	$	40
Short-term lease cost	18		56
Variable lease cost	6		15
Total operating lease costs	$	38	$	111

During the second quarter of 2019, we entered into contracts treated as finance leases, which were not material to our condensed consolidated results of operations.

We sublease certain commercial office space to third parties where we are the primary obligor under the head lease. The lease terms on those subleases never extend past the term of the head lease and the subleases contain no extension options or residual value guarantees. Sublease income is recognized based on the contract terms and included as a reduction of operating lease cost under our head lease. For the three and nine months ended September 30, 2019, sublease income was not material to our condensed consolidated financial statements.

Cash flow related to our operating leases for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating cash flows	$	4	$	9
Investing cash flows	$	11	$	32

Our cash flows from finance leases were not significant for the three and nine months ended September 30, 2019.

Other information related to our operating and finance leases as of September 30, 2019 was as follows:



	September 30, 2019
Operating Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	81
Weighted-average remaining lease term (in years)	2.87
Weighted-average discount rate	11.4		%

Finance Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	2
Weighted-average remaining lease term (in years)	2.58
Weighted-average discount rate	8.5		%

Balance sheet information related to our operating and finance leases as of September 30, 2019 was as follows:



		September 30,
	Balance Sheet Location	2019
		(in millions)
Assets
Operating lease, net	Other assets	$	66
Finance lease, net	PP&E	1
Total lease assets		$	67

Liabilities
Current
Operating lease	Accrued liabilities	$	38
Finance lease	Accrued liabilities	1
Long-term
Operating lease	Other long-term liabilities	30
Finance lease	Other long-term liabilities	1
Total lease liabilities		$	70

As part of our company-wide consolidation of office space, we are vacating certain office space in 2019, some of which we may sublease. If we enter into a sublease agreement, we will evaluate the carrying value of our ROU asset, along with the carrying value of related tenant improvements, for impairment based on future identifiable cash flows. For the three months ended September 30, 2019, we did not recognize material impairment charges. For the nine months ended September 30, 2019, we recognized impairment charges of $3 million. We may terminate leases for vacated office space before the expiration of the lease term. Where we have decided to not sublease vacated commercial office space, we will shorten the useful life of the ROU assets and related tenant improvements to recover our remaining costs over our expected period of use. Once the leased office space is abandoned, lease costs will be classified as other non-operating expenses on our condensed consolidated statements of operations.

Maturities of our operating and finance lease liabilities at September 30, 2019 are as follows:



	Operating			Finance
	Leases			Leases
	(in millions)
2019	$	19		$	—
2020	34			1
2021	10			1
2022	7			—
2023	6			—
Thereafter	9			—
Less: Interest	(17		)	—
Present value of lease liabilities	$	68		$	2

We have entered into contracts for commercial office space and facilities that are under construction as of September 30, 2019. These leases are not included in our lease population at September 30, 2019 as the lease terms have not commenced because we do not control the assets during construction. We will apply the new lease standard when the asset is placed in service by us, which is expected to be in January and June 2020. Payments for these contracts were included in the table of our future minimum lease payments as of December 31, 2018, which is shown below.



	December 31,
	2018
	(in millions)
2019	$	12
2020	8
2021	7
2022	7
2023	6
Thereafter	28
Total	$	68

Rent expense for operating leases under ASC 840 was $3 million and $9 million for the three and nine months ended September 30, 2018, respectively. Rental income from subleases for the three and nine months ended September 30, 2018 was not significant.

LEASES

Our operating lease costs, including amounts capitalized to property, plant and equipment, for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating lease cost	$	14	$	40
Short-term lease cost	18		56
Variable lease cost	6		15
Total operating lease costs	$	38	$	111

During the second quarter of 2019, we entered into contracts treated as finance leases, which were not material to our condensed consolidated results of operations.

Cash flow related to our operating leases for the three and nine months ended September 30, 2019 were as follows:



	Three months ended September 30, 2019		Nine months ended September 30, 2019
	(in millions)
Operating cash flows	$	4	$	9
Investing cash flows	$	11	$	32

Our cash flows from finance leases were not significant for the three and nine months ended September 30, 2019.

Other information related to our operating and finance leases as of September 30, 2019 was as follows:



	September 30, 2019
Operating Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	81
Weighted-average remaining lease term (in years)	2.87
Weighted-average discount rate	11.4		%

Finance Leases
ROU asset obtained in exchange for lease obligations (in millions)	$	2
Weighted-average remaining lease term (in years)	2.58
Weighted-average discount rate	8.5		%

Balance sheet information related to our operating and finance leases as of September 30, 2019 was as follows:



		September 30,
	Balance Sheet Location	2019
		(in millions)
Assets
Operating lease, net	Other assets	$	66
Finance lease, net	PP&E	1
Total lease assets		$	67

Liabilities
Current
Operating lease	Accrued liabilities	$	38
Finance lease	Accrued liabilities	1
Long-term
Operating lease	Other long-term liabilities	30
Finance lease	Other long-term liabilities	1
Total lease liabilities		$	70

Maturities of our operating and finance lease liabilities at September 30, 2019 are as follows:



	Operating			Finance
	Leases			Leases
	(in millions)
2019	$	19		$	—
2020	34			1
2021	10			1
2022	7			—
2023	6			—
Thereafter	9			—
Less: Interest	(17		)	—
Present value of lease liabilities	$	68		$	2



	December 31,
	2018
	(in millions)
2019	$	12
2020	8
2021	7
2022	7
2023	6
Thereafter	28
Total	$	68

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, authorized shares (in shares)	20,000,000	20,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, outstanding shares (in shares)	0	0
Common stock, authorized shares (in shares)	200,000,000	200,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, outstanding shares (in shares)	49,118,451	48,650,420

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOW FROM OPERATING ACTIVITIES
Net income	$ 124	$ 37
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	357	372
Net derivative loss from commodity contracts	31	259
Net proceeds (payments) on settled commodity derivatives	68	(178)
Net gain on early extinguishment of debt	(108)	(26)
Amortization of deferred gain	(54)	(58)
Gain on asset divestiture	0	(4)
Other non-cash charges to income, net	60	78
Dry hole expenses	7	4
Changes in operating assets and liabilities, net	55	(91)
Net cash provided by operating activities	540	393
CASH FLOW FROM INVESTING ACTIVITIES
Capital investments	(393)	(504)
Changes in capital investment accruals	(49)	40
Asset divestitures	164	17
Acquisitions	(6)	(514)
Other	(7)	(4)
Net cash used in investing activities	(291)	(965)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from 2014 Revolving Credit Facility	1,749	1,822
Repayments of 2014 Revolving Credit Facility	(1,776)	(1,843)
Debt repurchases	(149)	(149)
Debt transaction costs	2	4
Contributions from noncontrolling interest holders, net	49	796
Distributions paid to noncontrolling interest holders	(115)	(80)
Issuance of common stock	3	52
Shares canceled for taxes	(3)	(11)
Net cash (used) provided by financing activities	(244)	583
Increase in cash	5	11
Cash—beginning of period	17	20
Cash—end of period	$ 22	$ 31

OTHER INFORMATION (Details) - USD ($) shares in Thousands, $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Jul. 31, 2019	Dec. 31, 2018
Other Information [Line Items]
Cash restricted for capital investments and distributions to a joint venture (JV) partner	$ 2
Other Current Assets
Derivative assets	97			$ 168
Amounts due from joint interest partners	59			68
Prepaid expenses	18			16
Other	0			3
Other current assets, net	174			255
Accrued Liabilities
Accrued employee-related costs	93			109
Accrued taxes other than on income	57			38
Accrued interest	49			15
Lease liability	39
Asset retirement obligation	31			31
Other	36			24
Accrued liabilities	305			217
Interest paid, net of capitalized amounts	290	$ 278
Common stock, value, issued	2	$ 51
Common stock, shares, issued		2,850
Other long-term liabilities
Accrued Liabilities
Non-current asset retirement obligation	$ 480			$ 402
Colony Capital, Inc.
Accrued Liabilities
Warrant outstanding (in shares)	200		1,250

THE SPIN-OFF AND BASIS OF PRESENTATION (Policies)	9 Months Ended
THE SPIN-OFF AND BASIS OF PRESENTATION (Policies)	Sep. 30, 2019
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, 2019 and December 31, 2018 and the statements of operations, comprehensive income, cash flows and equity for the three and nine months ended September 30, 2019 and 2018, as applicable. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and gas exploration and development 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 condensed consolidated balance sheets, statements of operations, equity and cash flows. We have prepared this report in accordance with generally accepted accounting principles in the United States (U.S.) and the rules and regulations of the U.S. Securities and Exchange Commission 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, 2018.

REVENUE RECOGNITION (Tables)

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule of disaggregated revenue

The following table provides disaggregated revenue for the three and nine months ended September 30, 2019 and 2018:



	Three months ended September 30,					Nine months ended September 30,
	2019		2018			2019			2018
	(in millions)
Oil and gas sales:
Oil	$	457	$	568		$	1,433		$	1,587
NGLs	34		71			132			195
Natural gas	50		61			155			150
	541		700			1,720			1,932
Other revenue:
Electricity	38		42			88			87
Marketing, trading and other	65		140			247			225
Interest income	—		—			—			1
	103		182			335			313
Net derivative gain (loss) from commodity contracts	37		(54		)	(31		)	(259		)
Total revenues and other	$	681	$	828		$	2,024		$	1,986

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

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, 2019 and 2018:



	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
	(in millions, except per-share amounts)
Net income	$	127		$	91		$	124		$	37
Net income attributable to noncontrolling interests	(33		)	(25		)	(85		)	(55		)
Net income (loss) attributable to common stock	94			66			39			(18		)
Less: net income allocated to participating securities	(1		)	(1		)	(1		)	—
Net income (loss) available to common stockholders	$	93		$	65		$	38		$	(18	)
Weighted-average common shares outstanding — basic	49.1			48.5			48.9			47
Basic EPS	$	1.89		$	1.34		$	0.78		$	(0.38	)

Net income	$	127		$	91		$	124		$	37
Net income attributable to noncontrolling interests	(33		)	(25		)	(85		)	(55		)
Net income (loss) attributable to common stock	94			66			39			(18		)
Less: net income allocated to participating securities	(1		)	(1		)	(1		)	—
Net income (loss) available to common stockholders	$	93		$	65		$	38		$	(18	)
Weighted-average common shares outstanding — basic	49.1			48.5			48.9			47
Dilutive effect of potentially dilutive securities	0.1			0.6			0.3			—
Weighted-average common shares outstanding — diluted	49.2			49.1			49.2			47
Diluted EPS	$	1.89		$	1.32		$	0.77		$	(0.38	)
Weighted-average anti-dilutive shares	3.2			1.1			2.3			2.8

OTHER INFORMATION (Tables)

9 Months Ended

Sep. 30, 2019

OTHER INFORMATION

Schedule of other current assets, net

Other current assets, net as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Derivative assets	$	97	$	168
Amounts due from joint interest partners	59		68
Prepaid expenses	18		16
Other	—		3
Other current assets, net	$	174	$	255

Schedule of accrued liabilities

Accrued liabilities as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Accrued employee-related costs	$	93	$	109
Accrued taxes other than on income	57		38
Accrued interest	49		15
Lease liability	39		—
Asset retirement obligation	31		31
Other	36		24
Accrued liabilities	$	305	$	217

DERIVATIVES

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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 and interest-rate movements. 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 did not have any derivative instruments designated as accounting hedges as of and during the three and nine months ended September 30, 2019 and 2018. 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 accounted for as accounting hedges.

Commodity Price Risk

We held the following Brent-based crude oil contracts as of September 30, 2019:



	Q4 2019		Q1 2020		Q2 2020			Q3 2020		Q4 2020
Purchased Puts:
Barrels per day	35,000		30,000		15,000			10,000		5,000
Weighted-average price per barrel	$	75.71	$	70.83	$	68.33		$	65.00	$	65.00

Sold Puts:
Barrels per day	35,000		30,000		15,000			10,000		5,000
Weighted-average price per barrel	$	60.00	$	56.67	$	55.00		$	55.00	$	55.00

Swaps:
Barrels per day	—		—		5,000		^(a)	—		—
Weighted-average price per barrel	$	—	$	—	$	70.05		$	—	$	—


(a)	Counterparties have the option to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.05 for the second quarter of 2020.

The BSP JV entered into crude oil derivatives and natural gas swaps for insignificant volumes through 2021 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 BSP's noncontrolling interest.

Interest-Rate Risk

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 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 the relationship between our existing positions, 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, 2019 and December 31, 2018 (in millions):



September 30, 2019
Balance Sheet Classification	Gross Amounts Recognized at Fair Value			Gross Amounts Offset in the Balance Sheet			Net Fair Value Presented in the Balance Sheet
Assets:
Other current assets, net	$	132		$	(35	)	$	97
Other assets	8			(3		)	5

Liabilities:
Accrued liabilities	(36		)	35			(1		)
Other long-term liabilities	(3		)	3			—
Total derivatives	$	101		$	—		$	101



December 31, 2018
Balance Sheet Classification	Gross Amounts Recognized at Fair Value			Gross Amounts Offset in the Balance Sheet			Net Fair Value Presented in the Balance Sheet
Assets:
Other current assets, net	$	252		$	(84	)	$	168
Other assets	23			(9		)	14

Liabilities:
Accrued liabilities	(87		)	84			(3		)
Other long-term liabilities	(10		)	9			(1		)
Total derivatives	$	178		$	—		$	178

Interest-Rate Contracts

The fair values of our interest-rate derivatives and the impact of the changes in those values on our condensed consolidated statements of operations were immaterial for all periods presented.

RECENT EVENTS	9 Months Ended
RECENT EVENTS	Sep. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]
RECENT EVENTS	RECENT EVENTS Asset Divestiture On May 1, 2019, we sold 50% of our working interest and transferred operatorship in certain zones within our Lost Hills field, located in the San Joaquin basin, for total consideration in excess of $200 million, consisting of approximately $168 million and a carried 200-well development program to be drilled through 2023 with an estimated value of $35 million (Lost Hills divestiture). We received cash proceeds of $165 million after transaction costs and purchase price adjustments, which were used to pay down our 2014 Revolving Credit Facility. The partial sale of proved property was accounted for as a normal retirement with no gain or loss recognized. The partial sale of unproved property was recorded as a recovery of cost. Development Joint Venture In July 2019, we entered into a development agreement with Alpine Energy Capital, LLC (Alpine) to develop portions of our Elk Hills field (Alpine JV). Alpine is a joint venture between subsidiaries of Colony Capital, Inc. (Colony) and Equity Group Investments. Alpine committed to invest $320 million, which may be increased to a total investment of $500 million, subject to the mutual agreement of the parties. The initial commitment will cover multiple development opportunities and is intended to be invested over approximately three years in accordance with a 275-well development plan. Alpine will fund 100% of the development wells and will earn a 90% working interest in those wells. If Alpine receives an agreed upon return, our working interest in those wells will increase from 10% to 82.5%. Our financial statements reflect only our working interest share in the developed wells. See Note 15 Equity for information regarding a warrant issued to Colony in connection with this JV. Organizational Changes We have implemented organizational and operational efficiencies that resulted in a recent reduction in our headcount to approximately 1,250 employees. We expect to incur a charge in the range of $35 million to $40 million in the fourth quarter of 2019, which will be recorded in other non-operating expenses on the consolidated statement of operations.

Condensed Consolidated Statements of Operations - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
REVENUES AND OTHER
Oil and gas sales	$ 541	$ 700	$ 1,720	$ 1,932
Net derivative gain (loss) from commodity contracts	37	(54)	(31)	(259)
Other revenue	103	182	335	313
Total revenues and other	681	828	2,024	1,986
COSTS AND OTHER
Production costs	221	236	684	679
General and administrative expenses	66	81	228	234
Depreciation, depletion and amortization	118	128	357	372
Taxes other than on income	42	45	119	120
Exploration expense	5	4	25	18
Other expenses, net	81	149	284	259
Total costs and other	533	643	1,697	1,682
OPERATING INCOME	148	185	327	304
NON-OPERATING (LOSS) INCOME
Interest and debt expense, net	(95)	(95)	(293)	(281)
Net gain on early extinguishment of debt	82	2	108	26
Gain on asset divestitures	0	3	0	4
Other non-operating expenses	(8)	(4)	(18)	(16)
INCOME BEFORE INCOME TAXES	127	91	124	37
Income tax	0	0	0	0
NET INCOME	127	91	124	37
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
Mezzanine equity	(30)	(28)	(87)	(71)
Equity	(3)	3	2	16
Net income attributable to noncontrolling interests	(33)	(25)	(85)	(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	$ 94	$ 66	$ 39	$ (18)
Net income (loss) attributable to common stock per share
Basic (in dollars per share)	$ 1.89	$ 1.34	$ 0.78	$ (0.38)
Diluted (in dollars per share)	$ 1.89	$ 1.32	$ 0.77	$ (0.38)

LEASES - Finance lease liabilities (Details) $ in Millions	9 Months Ended
LEASES - Finance lease liabilities (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
Impairment on right-of-use asset	$ 3
Operating lease liabilities
2019	19
2020	34
2021	10
2022	7
2023	6
Thereafter	9
Less: Interest	(17)
Present value of lease liabilities	68
Finance lease liabilities
2019	0
2020	1
2021	1
2022	0
2023	0
Thereafter	0
Less: Interest	0
Present value of lease liabilities	$ 2

REVENUE RECOGNITION

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

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. Transportation and processing fees incurred by us prior to control being transferred to customers are recorded 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 delivery of the product.

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 (PPA) expiring in December 2023, which includes a fixed capacity payment and a variable monthly charge based on usage. Revenue is recognized when obligations under the terms of contracts with our customers 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. Payments under our PPA 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. In addition, we may from time-to-time enter into natural gas purchase and sale agreements with third parties to take advantage of market dislocations. We consider our performance obligations to be satisfied upon transfer of control of the commodity.

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, 2019 and 2018:



	Three months ended September 30,					Nine months ended September 30,
	2019		2018			2019			2018
	(in millions)
Oil and gas sales:
Oil	$	457	$	568		$	1,433		$	1,587
NGLs	34		71			132			195
Natural gas	50		61			155			150
	541		700			1,720			1,932
Other revenue:
Electricity	38		42			88			87
Marketing, trading and other	65		140			247			225
Interest income	—		—			—			1
	103		182			335			313
Net derivative gain (loss) from commodity contracts	37		(54		)	(31		)	(259		)
Total revenues and other	$	681	$	828		$	2,024		$	1,986

INCOME TAXES (Details)	9 Months Ended
INCOME TAXES (Details)	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Effective tax rate	0.00%	0.00%

DEBT (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Schedule of Debt

As of September 30, 2019 and December 31, 2018, our long-term debt consisted of the following credit agreements, Second Lien Notes and Senior Notes:



	Outstanding Principal					Interest Rate	Maturity	Security
	September 30, 2019			December 31, 2018
Credit Agreements	(in millions)
2014 Revolving Credit Facility	$	514		$	540	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	1,838			2,067		8%	December 15, 2022^(b)	Second-Priority Lien
Senior Notes
5% Senior Notes due 2020	100			100		5%	January 15, 2020	Unsecured
5½% Senior Notes due 2021	100			100		5.5%	September 15, 2021	Unsecured
6% Senior Notes due 2024	144			144		6%	November 15, 2024	Unsecured
Total Debt	4,996			5,251
Less: Current Maturities	(100		)	—
Long-Term Debt	$	4,896		$	5,251


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, 2018.


(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 $290 million in June 2021, $58 million in December 2021, $61 million in June 2022 and $1,429 million in December 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.

+ References

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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
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+ Details

THE SPIN-OFF AND BASIS OF PRESENTATION	9 Months Ended
THE SPIN-OFF AND BASIS OF PRESENTATION	Sep. 30, 2019
THE SPIN-OFF AND BASIS OF PRESENTATION
THE SPIN-OFF AND BASIS OF PRESENTATION	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 exclusively within California. We were incorporated in Delaware as a wholly owned subsidiary of Occidental Petroleum Corporation (Occidental) on April 23, 2014, and we became an independent, publicly traded company on December 1, 2014. 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. 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, 2019 and December 31, 2018 and the statements of operations, comprehensive income, cash flows and equity for the three and nine months ended September 30, 2019 and 2018, as applicable. We have eliminated all significant intercompany transactions and accounts. We account for our share of oil and gas exploration and development 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 condensed consolidated balance sheets, statements of operations, equity and cash flows. We have prepared this report in accordance with generally accepted accounting principles in the United States (U.S.) and the rules and regulations of the U.S. Securities and Exchange Commission 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, 2018.

OTHER INFORMATION

9 Months Ended

Sep. 30, 2019

OTHER INFORMATION

OTHER INFORMATION

Cash at September 30, 2019 and December 31, 2018 included $2 million for each period which was restricted for capital investments and distributions to a joint venture (JV) partner.

Other current assets, net as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Derivative assets	$	97	$	168
Amounts due from joint interest partners	59		68
Prepaid expenses	18		16
Other	—		3
Other current assets, net	$	174	$	255

Accrued liabilities as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Accrued employee-related costs	$	93	$	109
Accrued taxes other than on income	57		38
Accrued interest	49		15
Lease liability	39		—
Asset retirement obligation	31		31
Other	36		24
Accrued liabilities	$	305	$	217

Other long-term liabilities included asset retirement obligations of $480 million and $402 million at September 30, 2019 and December 31, 2018, 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, 2019 and 2018. Interest paid, net of capitalized amounts, totaled $290 million and $278 million for the nine months ended September 30, 2019 and 2018, respectively.

Non-cash financing activities for the nine months ended September 30, 2019 included the first tranche of a warrant to purchase 0.2 million shares of our common stock (valued at $2 million) issued in connection with a development joint venture. See Note 14 Recent Transactions and Note 15 Equity for more information. Non-cash financing activities for the nine months ended September 30, 2018 included 2.85 million shares of common stock (valued at $51 million) issued in connection with an acquisition.

LEASES - Noncancelable operating leases (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2018	Dec. 31, 2018
Noncancelable operating leases
2019			$ 12
2020			8
2021			7
2022			7
2023			6
Thereafter			28
Total			$ 68
Rental expense for operating leases	$ 3	$ 9

NONCONTROLLING INTERESTS - Changes in Noncontrolling Interests (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Equity Attributable to Noncontrolling Interest
Beginning balance	$ (279)	$ (645)	$ (247)	$ (720)
Net (loss) income attributable to noncontrolling interests	3	(3)	(2)	(16)
Contribution from noncontrolling interest holders, net			49	82
Distributions to noncontrolling interest holders	(32)	(21)	(61)	(40)
Ending balance	(208)	(605)	(208)	(605)
Equity Attributable to Noncontrolling Interests
Equity Attributable to Noncontrolling Interest
Beginning balance	129	144	114	94
Net (loss) income attributable to noncontrolling interests			(2)	(16)
Contribution from noncontrolling interest holders, net			49	82
Distributions to noncontrolling interest holders	(32)	(21)	(61)	(40)
Ending balance	100	120	100	120
Equity Attributable to Noncontrolling Interests \| Ares JV
Equity Attributable to Noncontrolling Interest
Beginning balance			15	0
Net (loss) income attributable to noncontrolling interests			(9)	(8)
Contribution from noncontrolling interest holders, net			0	33
Distributions to noncontrolling interest holders			(6)	(5)
Ending balance	0	20	0	20
Equity Attributable to Noncontrolling Interests \| BSP JV
Equity Attributable to Noncontrolling Interest
Beginning balance			99	94
Net (loss) income attributable to noncontrolling interests			7	(8)
Contribution from noncontrolling interest holders, net			49	49
Distributions to noncontrolling interest holders			(55)	(35)
Ending balance	$ 100	$ 100	$ 100	$ 100

NONCONTROLLING INTERESTS (Tables)

9 Months Ended

Sep. 30, 2019

Noncontrolling Interest [Abstract]

Schedule of changes in noncontrolling interests



	Equity Attributable to Noncontrolling Interest									Mezzanine Equity - Redeemable Noncontrolling Interests
	Ares JV			BSP JV			Total			Ares JV
	(in millions)
Balance, December 31, 2018	$	15		$	99		$	114		$	756
Net (loss) income attributable to noncontrolling interests	(9		)	7			(2		)	87
Contributions from noncontrolling interest holders, net	—			49			49			—
Distributions to noncontrolling interest holders	(6		)	(55		)	(61		)	(54		)
Balance, September 30, 2019	$	—		$	100		$	100		$	789

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

LEASES - Supplement balance sheet information (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases [Abstract]
Operating lease, net	$ 66
Finance lease, net	1
Total lease assets	67
Operating lease	38
Finance lease	1
Operating lease	30
Finance lease	1
Total lease liabilities	$ 70

INVENTORIES (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Materials and supplies	$	64	$	65
Finished goods	2		4
Total	$	66	$	69

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Pension and postretirement income, associated tax	$ 0	$ 0	$ 0	$ 0

DEBT - Schedule of long-term debt (Details) - USD ($)	9 Months Ended
DEBT - Schedule of long-term debt (Details) - USD ($)	Sep. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Debt
Total Debt	$ 4,996,000,000		$ 5,251,000,000
Less: Current Maturities	(100,000,000)		0
Long-Term Debt	4,896,000,000		5,251,000,000
2014 Revolving Credit Facility (Shared First Priority Lien)
Debt
Total Debt	$ 514,000,000		540,000,000
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on LIBOR loans \| Minimum
Debt
Interest rate added to variable rate basis	3.25%
2014 Revolving Credit Facility (Shared First Priority Lien) \| Applicable margin on LIBOR loans \| Maximum
Debt
Interest rate added to variable rate basis	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	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	3.00%
2017 Credit Agreement (Shared First Priority Lien)
Debt
Total Debt	$ 1,300,000,000		1,300,000,000
Outstanding amount of 2016 Credit Agreement notes that triggers accelerated payment	$ 100,000,000
Period before maturity of the 2016 Credit Agreement notes that triggers accelerated payment	91 days
2017 Credit Agreement (Shared First Priority Lien) \| Applicable margin on LIBOR loans
Debt
Interest rate added to variable rate basis	4.75%
2017 Credit Agreement (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans
Debt
Interest rate added to variable rate basis	3.75%
2016 Credit Agreement (Shared First Priority Lien)
Debt
Total Debt	$ 1,000,000,000		1,000,000,000
2016 Credit Agreement (Shared First Priority Lien) \| Applicable margin on LIBOR loans
Debt
Interest rate added to variable rate basis	10.375%
2016 Credit Agreement (Shared First Priority Lien) \| Applicable margin on Alternate Base Rate loans
Debt
Interest rate added to variable rate basis	9.375%
Second Lien Notes (Second Priority Lien)
Debt
Total Debt	$ 1,838,000,000		$ 2,067,000,000
Debt instrument, interest rate, stated percentage	8.00%	8.00%	8.00%
Principal amount due by June 2021	$ 290,000,000
Principal amount due by December 2021	58,000,000
Principal amount due by June 2022	61,000,000
Principal amount due by December 2022	1,429,000,000
Senior Notes (Unsecured) \| 5% Notes Due 2020
Debt
Total Debt	$ 100,000,000		$ 100,000,000
Debt instrument, interest rate, stated percentage	5.00%
Senior Notes (Unsecured) \| 5.5% Notes Due 2021
Debt
Total Debt	$ 100,000,000		100,000,000
Debt instrument, interest rate, stated percentage	5.50%
Senior Notes (Unsecured) \| 6% Senior Notes due 2024
Debt
Total Debt	$ 144,000,000		$ 144,000,000
Debt instrument, interest rate, stated percentage	6.00%

PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables)

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Components of the net periodic benefit costs



	Three months ended September 30,
	2019					2018
	Pension Benefit			Postretirement Benefit		Pension Benefit			Postretirement Benefit
	(in millions)
Service cost	$	—		$	1	$	—		$	1
Interest cost	—			1		—			1
Expected return on plan assets	(1		)	—		(1		)	—
Recognized actuarial loss	1			—		1			—
Settlement loss	—			—		—			—
Total	$	—		$	2	$	—		$	2



	Nine months ended September 30,
	2019					2018
	Pension Benefit			Postretirement Benefit		Pension Benefit			Postretirement Benefit
	(in millions)
Service cost	$	1		$	3	$	1		$	3
Interest cost	2			3		1			3
Expected return on plan assets	(2		)	—		(2		)	—
Recognized actuarial loss	1			—		1			—
Settlement loss	1			—		4			—
Total	$	3		$	6	$	5		$	6

DEBT - 2014 Revolving Credit Facility (Details) - USD ($)	May 01, 2019	Sep. 30, 2019	Dec. 31, 2018
Debt
Line of credit facility, maximum borrowing capacity		$ 1,000,000,000
2014 Revolving Credit Facility
Debt
Available borrowing capacity before a month-end minimum liquidity requirement		320,000,000
Financial covenant minimum month end liquidity		150,000,000
Borrowing base	$ 2,300,000,000
Letters of Credit \| 2014 Revolving Credit Facility
Debt
Maximum sub-limit on borrowing capacity for issuance of letters of credit		400,000,000	$ 400,000,000
Aggregate letters of credit issued		$ 166,000,000	$ 162,000,000

EQUITY (Details) $ / shares in Units, shares in Thousands, $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares shares	Jul. 31, 2019 $ / shares shares
Colony Capital, Inc.
Schedule of Equity Method Investments [Line Items]
Warrant outstanding (in shares) \| shares	200	1,250
Investment warrants, exercise price (in dollars per share)		$ 40
Tranche term	5 years
Estimated fair value of warrant \| $	$ 2
Volatility
Schedule of Equity Method Investments [Line Items]
Fair value measurement input, warrants	0.8500
Risk-free interest rate
Schedule of Equity Method Investments [Line Items]
Fair value measurement input, warrants	0.0180
Dividend yield
Schedule of Equity Method Investments [Line Items]
Fair value measurement input, warrants	0
Expected term (in years)
Schedule of Equity Method Investments [Line Items]
Expected term (in years)	5 years 2 months 8 days
Fair value of underlying common stock
Schedule of Equity Method Investments [Line Items]
Fair value measurement input, warrants	14.94

CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

Schedule of condensed balance sheet

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
As of September 30, 2019 and December 31, 2018
(in millions)

	As of September 30, 2019
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total current assets	$	6		$	453		$	62		$	(11	)	$	510
Total property, plant and equipment, net	26			5,889			488			—			6,403
Investments in consolidated subsidiaries	5,850			204			—			(6,054		)	—
Other assets	2			90			30			—			122
TOTAL ASSETS	$	5,884		$	6,636		$	580		$	(6,065	)	$	7,035

Total current liabilities	259			464			9			(11		)	721
Long-term debt	4,896			—			—			—			4,896
Deferred gain and issuance costs, net	158			—			—			—			158
Other long-term liabilities	137			538			4			—			679
Amounts due to (from) affiliates	742			(743		)	1			—			—
Mezzanine equity	—			—			789			—			789
Total equity	(308		)	6,377			(223		)	(6,054		)	(208		)
TOTAL LIABILITIES AND EQUITY	$	5,884		$	6,636		$	580		$	(6,065	)	$	7,035



	As of December 31, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total current assets	$	7		$	590		$	56		$	(13	)	$	640
Total property, plant and equipment, net	23			5,913			519			—			6,455
Investments in consolidated subsidiaries	5,440			96			—			(5,536		)	—
Other assets	4			32			27			—			63
TOTAL ASSETS	$	5,474		$	6,631		$	602		$	(5,549	)	$	7,158

Total current liabilities	143			465			12			(13		)	607
Long-term debt	5,251			—			—			—			5,251
Deferred gain and issuance costs, net	216			—			—			—			216
Other long-term liabilities	140			431			4			—			575
Amounts due to (from) affiliates	85			(86		)	1			—			—
Mezzanine equity	—			—			756			—			756
Total equity	(361		)	5,821			(171		)	(5,536		)	(247		)
TOTAL LIABILITIES AND EQUITY	$	5,474		$	6,631		$	602		$	(5,549	)	$	7,158

Schedule of condensed income statement



Condensed Consolidating Statements of Operations
For the three and nine months ended September 30, 2019 and 2018
(in millions)

	For the three months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues and other	$	—		$	624	$	130		$	(73	)	$	681
Total costs and other	43			502		61			(73		)	533
Non-operating (loss) income	(25		)	4		—			—			(21		)
NET (LOSS) INCOME	(68		)	126		69			—			127
Net income attributable to noncontrolling interests	—			—		(33		)	—			(33		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(68	)	$	126	$	36		$	—		$	94



	For the three months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
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 (LOSS) INCOME	(161		)	189		63			—			91
Net income attributable to noncontrolling interest	—			—		(25		)	—			(25		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(161	)	$	189	$	38		$	—		$	66



	For the nine months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenues and other	$	—		$	1,878	$	366		$	(220	)	$	2,024
Total costs and other	150			1,574		193			(220		)	1,697
Non-operating (loss) income	(211		)	8		—			—			(203		)
NET INCOME (LOSS)	(361		)	312		173			—			124
Net income attributable to noncontrolling interests	—			—		(85		)	—			(85		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(361	)	$	312	$	88		$	—		$	39



	For the nine months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries			Eliminations			Consolidated
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 (LOSS) INCOME	(440		)	341		136			—			37
Net income attributable to noncontrolling interest	—			—		(55		)	—			(55		)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCK	$	(440	)	$	341	$	81		$	—		$	(18	)

Schedule of condensed cash flow statement



Condensed Consolidating Statements of Cash Flows
For the nine months ended September 30, 2019 and 2018
(in millions)

	For the nine months ended September 30, 2019
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net cash (used) provided by operating activities	$	(470	)	$	649		$	361		$	—	$	540
Net cash used in investing activities	(9		)	(271		)	(11		)	—		(291		)
Net cash provided (used) by financing activities	479			(373		)	(350		)	—		(244		)
Increase in cash	—			5			—			—		5
Cash—beginning of period	—			7			10			—		17
Cash—end of period	$	—		$	12		$	10		$	—	$	22



	For the nine months ended September 30, 2018
	Parent			Combined Guarantor Subsidiaries			Combined Non-Guarantor Subsidiaries			Eliminations		Consolidated
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
(Decrease) increase in cash	(7		)	2			16			—		11
Cash—beginning of period	7			8			5			—		20
Cash—end of period	$	—		$	10		$	21		$	—	$	31

EARNINGS PER SHARE - Calculation of EPS (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Basic EPS calculation
Net income	$ 127	$ 91	$ 124	$ 37
Net income attributable to noncontrolling interests	(33)	(25)	(85)	(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	94	66	39	(18)
Less: net income allocated to participating securities	(1)	(1)	(1)	0
Net income (loss) available to common stockholders	$ 93	$ 65	$ 38	$ (18)
Weighted-average common shares outstanding — basic	49.1	48.5	48.9	47.0
Basic (in dollars per share)	$ 1.89	$ 1.34	$ 0.78	$ (0.38)
Diluted EPS calculation
Net income	$ 127	$ 91	$ 124	$ 37
Net income attributable to noncontrolling interests	(33)	(25)	(85)	(55)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK	94	66	39	(18)
Less: net income allocated to participating securities	(1)	(1)	(1)	0
Net income (loss) available to common stockholders	$ 93	$ 65	$ 38	$ (18)
Weighted-average common shares outstanding — basic	49.1	48.5	48.9	47.0
Dilutive effect of potentially dilutive securities (in shares)	0.1	0.6	0.3	0.0
Weighted-average common shares outstanding — diluted	49.2	49.1	49.2	47.0
Diluted (in dollars per share)	$ 1.89	$ 1.32	$ 0.77	$ (0.38)
Weighted-average anti-dilutive shares	3.2	1.1	2.3	2.8

RECENT EVENTS - Asset Divestiture (Details) $ in Millions		3 Months Ended		9 Months Ended
RECENT EVENTS - Asset Divestiture (Details) $ in Millions	May 01, 2019 USD ($) well	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Equity Method Investments and Joint Ventures [Abstract]
Working interest in Lost Hills field sold	50.00%
Total consideration of the sale of Lost Hills field 50% interest	$ 200
Proceeds from divestiture of businesses	$ 168
Number of well development plan included in the sale of Lost Host field \| well	200
Minimum value of well development plan of Lost Hills field	$ 35
Proceeds from sale of assets	165			$ 164	$ 17
Gain on asset divestitures	$ 0	$ 0	$ 3	$ 0	$ 4

ACCOUNTING AND DISCLOSURE CHANGES	9 Months Ended
ACCOUNTING AND DISCLOSURE CHANGES	Sep. 30, 2019
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
ACCOUNTING AND DISCLOSURE CHANGES	ACCOUNTING AND DISCLOSURE CHANGES Recently Adopted Accounting and Disclosure Changes We adopted the Financial Accounting Standards Board's new lease accounting rules (ASC 842), as of January 1, 2019, using the modified retrospective approach where the new lease standard is not applied to prior comparative periods, which continue to be presented under accounting standards in effect for those prior periods. Under the modified retrospective approach, we recognized right-of-use (ROU) assets and lease liabilities of $66 million as of the adoption date. The adoption of the new lease accounting rules did not materially impact our consolidated results of operations and had no impact on cash flows or beginning retained earnings. The new lease standard does not affect our liquidity and has no impact on our debt-covenant calculations under our 2014 Revolving Credit Facility, 2016 Credit Agreement and 2017 Credit Agreement. See Note 12 Leases for more information.

ACCOUNTING AND DISCLOSURE CHANGES (Details) - USD ($) $ in Millions	Sep. 30, 2019	Jan. 01, 2019
Recently Issued Accounting and Disclosure Changes
ROU asset obtained in exchange for lease obligations	$ 66
Operating lease liability	$ 68
Accounting Standards Update 2016-02
Recently Issued Accounting and Disclosure Changes
ROU asset obtained in exchange for lease obligations		$ 66
Operating lease liability		$ 66

RECENT EVENTS - Organizational Changes (Details) - Organizational Changes $ in Millions	3 Months Ended
	Sep. 30, 2019 employee	Dec. 31, 2019 USD ($)
Restructuring Cost and Reserve [Line Items]
Number of employees \| employee	1,250
Subsequent Event \| Minimum
Restructuring Cost and Reserve [Line Items]
Expected restructuring and related costs to be incurred		$ 35
Subsequent Event \| Maximum
Restructuring Cost and Reserve [Line Items]
Expected restructuring and related costs to be incurred		$ 40

DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of oil hedge positions

We held the following Brent-based crude oil contracts as of September 30, 2019:



	Q4 2019		Q1 2020		Q2 2020			Q3 2020		Q4 2020
Purchased Puts:
Barrels per day	35,000		30,000		15,000			10,000		5,000
Weighted-average price per barrel	$	75.71	$	70.83	$	68.33		$	65.00	$	65.00

Sold Puts:
Barrels per day	35,000		30,000		15,000			10,000		5,000
Weighted-average price per barrel	$	60.00	$	56.67	$	55.00		$	55.00	$	55.00

Swaps:
Barrels per day	—		—		5,000		^(a)	—		—
Weighted-average price per barrel	$	—	$	—	$	70.05		$	—	$	—

(a)

Counterparties have the option to increase swap volumes by up to 5,000 barrels per day at a weighted-average Brent price of $70.05 for the second quarter of 2020.

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, 2019 and December 31, 2018 (in millions):



September 30, 2019
Balance Sheet Classification	Gross Amounts Recognized at Fair Value			Gross Amounts Offset in the Balance Sheet			Net Fair Value Presented in the Balance Sheet
Assets:
Other current assets, net	$	132		$	(35	)	$	97
Other assets	8			(3		)	5

Liabilities:
Accrued liabilities	(36		)	35			(1		)
Other long-term liabilities	(3		)	3			—
Total derivatives	$	101		$	—		$	101



December 31, 2018
Balance Sheet Classification	Gross Amounts Recognized at Fair Value			Gross Amounts Offset in the Balance Sheet			Net Fair Value Presented in the Balance Sheet
Assets:
Other current assets, net	$	252		$	(84	)	$	168
Other assets	23			(9		)	14

Liabilities:
Accrued liabilities	(87		)	84			(3		)
Other long-term liabilities	(10		)	9			(1		)
Total derivatives	$	178		$	—		$	178

- 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.

+ References

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+ Details

INVENTORIES

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

INVENTORIES

Inventories as of September 30, 2019 and December 31, 2018 consisted of the following:



	September 30,		December 31,
	2019		2018
	(in millions)
Materials and supplies	$	64	$	65
Finished goods	2		4
Total	$	66	$	69

DEBT - Note Repurchases (Details) - Second Lien Notes (Second Priority Lien) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Repurchases of debt
Debt instrument, repurchased face amount	$ 153	$ 229
Debt instrument, interest rate, stated percentage	8.00%	8.00%	8.00%	8.00%
Repurchase value of the principal amounts	$ 90	$ 149
Pre-tax gain on extinguishment of debt, net of a reduction in deferred issuance costs	$ 82	$ 108

DERIVATIVES - Commodity Price Risk (Details) bbl / d in Thousands	Sep. 30, 2019 bbl / d $ / bbl
Puts \| Purchased \| Q4 2019
Derivatives
Barrels per day (in Bbl) \| bbl / d	35
Weighted-average price (in dollars per barrel) \| $ / bbl	75.71
Puts \| Purchased \| Q1 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	30
Weighted-average price (in dollars per barrel) \| $ / bbl	70.83
Puts \| Purchased \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	15
Weighted-average price (in dollars per barrel) \| $ / bbl	68.33
Puts \| Purchased \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	10
Weighted-average price (in dollars per barrel) \| $ / bbl	65.00
Puts \| Purchased \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	65.00
Puts \| Sold \| Q4 2019
Derivatives
Barrels per day (in Bbl) \| bbl / d	35
Weighted-average price (in dollars per barrel) \| $ / bbl	60.00
Puts \| Sold \| Q1 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	30
Weighted-average price (in dollars per barrel) \| $ / bbl	56.67
Puts \| Sold \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	15
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Puts \| Sold \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	10
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Puts \| Sold \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	55.00
Swap \| Q2 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	5
Weighted-average price (in dollars per barrel) \| $ / bbl	70.05
Swap \| Q3 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	0
Weighted-average price (in dollars per barrel) \| $ / bbl	0
Swap \| Q4 2020
Derivatives
Barrels per day (in Bbl) \| bbl / d	0
Weighted-average price (in dollars per barrel) \| $ / bbl	0