v3.26.1
Risk Management (Notes)
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Risk Management
5.  Risk Management

Certain of our business activities expose us to risks associated with unfavorable changes in the market price of natural gas, NGL, and crude oil. We also have exposure to interest rate and foreign currency risk as a result of the issuance of our debt obligations. Pursuant to our management’s approved risk management policy, we use derivative contracts to hedge or reduce our exposure to some of these risks.

Energy Commodity Price Risk Management

As of March 31, 2026, we had the following outstanding commodity forward contracts to hedge our forecasted energy commodity purchases and sales:
Net open position long/(short)
Derivatives designated as hedging contracts
Crude oil fixed price(15.1)MMBbl
Derivatives not designated as hedging contracts
Crude oil fixed price(0.9)MMBbl
Crude oil basis(3.5)MMBbl
Natural gas fixed price(59.5)Bcf
Natural gas basis(131.8)Bcf
NGL fixed price(1.7)MMBbl

As of March 31, 2026, the maximum length of time over which we have hedged, for accounting purposes, our exposure to the variability in future cash flows associated with energy commodity price risk is through December 2028.

Interest Rate Risk Management

We utilize interest rate derivatives to hedge our exposure to both changes in the fair value of our fixed rate debt instruments and variability in expected future cash flows attributable to variable interest rate payments. The following table summarizes our outstanding interest rate contracts as of March 31, 2026:
Notional amountAccounting treatmentMaximum term
(In millions)
Derivatives designated as hedging instruments
Fixed-to-variable interest rate contracts(a)
$3,750 Fair value hedge
February 2041
(a)The principal amount of hedged senior notes is included in “Long-term debt” on our accompanying consolidated balance sheets.
Foreign Currency Risk Management

We utilize foreign currency derivatives to hedge our exposure to variability in foreign exchange rates. The following table summarizes our outstanding foreign currency contracts as of March 31, 2026:
Notional amountAccounting treatment
Maturity
(In millions)
Derivatives designated as hedging instruments
EUR-to-USD cross currency swap contracts(a)$543 Cash flow hedgeMarch 2027
(a)These swaps eliminate the foreign currency risk associated with our Euro-denominated debt which matures in March 2027.

Impact of Derivative Contracts on Our Consolidated Financial Statements

The following table summarizes the fair values of our derivative contracts included on our accompanying consolidated balance sheets:
Fair Value of Derivative Contracts
LocationDerivatives AssetDerivatives Liability
March 31,
2026		December 31,
2025		March 31,
2026		December 31,
2025
(In millions)
Derivatives designated as hedging instruments
Energy commodity derivative contracts
Other current assets/(Other current liabilities)$— $56 $(110)$— 
Deferred charges and other assets/(Other long-term liabilities and deferred credits)— 36 (28)— 
Subtotal— 92 (138)— 
Interest rate contracts
Other current assets/(Other current liabilities)4 4 (37)(25)
Deferred charges and other assets/(Other long-term liabilities and deferred credits)27 32 (112)(111)
Subtotal31 36 (149)(136)
Foreign currency contracts
Other current assets/(Other current liabilities)29 — — (2)
Deferred charges and other assets/(Other long-term liabilities and deferred credits)— 41 — — 
Subtotal29 41 — (2)
Total60 169 (287)(138)
Derivatives not designated as hedging instruments
Energy commodity derivative contracts
Other current assets/(Other current liabilities)45 75 (116)(74)
Deferred charges and other assets/(Other long-term liabilities and deferred credits)4 4 (13)(1)
Total49 79 (129)(75)
Total derivatives
$109 $248 $(416)$(213)
The following two tables summarize the fair value measurements of our derivative contracts based on the three levels established by the ASC. The tables also identify the impact of derivative contracts which we have elected to present on our accompanying consolidated balance sheets on a gross basis that are eligible for netting under master netting agreements.
Balance sheet asset
fair value measurements by level		Contracts available for nettingCash collateral held(a)
Level 1Level 2Level 3Gross amountNet amount
(In millions)
As of March 31, 2026
Energy commodity derivative contracts(b)$30 $19 $— $49 $(40)$— $9 
Interest rate contracts— 31 — 31 (7)— 24 
Foreign currency contracts— 29 — 29 — — 29 
As of December 31, 2025
Energy commodity derivative contracts(b)$20 $151 $— $171 $(68)$— $103 
Interest rate contracts— 36 — 36 (6)— 30 
Foreign currency contracts— 41 — 41 — — 41 
Balance sheet liability
fair value measurements by level		Contracts available for nettingCash collateral posted(a)
Level 1Level 2Level 3Gross amountNet amount
(In millions)
As of March 31, 2026
Energy commodity derivative contracts(b)$(10)$(257)$— $(267)$40 $52 $(175)
Interest rate contracts— (149)— (149)7 — (142)
As of December 31, 2025
Energy commodity derivative contracts(b)$(12)$(63)$— $(75)$68 $(2)$(9)
Interest rate contracts— (136)— (136)6 — (130)
Foreign currency contracts— (2)— (2)— — (2)
(a)Any cash collateral paid or received is reflected in this table, but only to the extent that it represents variation margins. Any amount associated with derivative prepayments or initial margins that are not influenced by the derivative asset or liability amounts or those that are determined solely on their volumetric notional amounts are excluded from this table.
(b)Level 1 consists primarily of NYMEX natural gas futures. Level 2 consists primarily of OTC WTI swaps, NGL swaps, and crude oil basis swaps.

The following tables summarize the pre-tax impact of our derivative contracts on our accompanying consolidated statements of income and comprehensive income:
Derivatives in fair value hedging relationshipsLocation
Gain/(loss) recognized in income
 on derivatives and related hedged item
Three Months Ended
March 31,
20262025
(In millions)
Interest rate contracts
Interest, net$(17)$80 
Hedged fixed rate debt(a)
Interest, net$16 $(79)
(a)As of March 31, 2026, the cumulative amount of fair value hedging adjustments resulted in a decrease of $117 million in the carrying value of our hedged fixed rate debt balance and is included in “Debt fair value adjustments” on our accompanying consolidated balance sheet.
Derivatives in cash flow hedging relationships
Gain/(loss) recognized in OCI on derivatives(a)
Location
Gain/(loss) reclassified from Accumulated OCI into income
Three Months Ended
March 31,		Three Months Ended
March 31,
2026202520262025
(In millions)(In millions)
Energy commodity derivative contracts
$(246)$(30)
Revenues—Commodity sales
$(16)$(16)
Costs of sales
— (1)
Foreign currency contracts
(9)20 
Other, net
(10)23 
Total$(255)$(10)Total$(26)$6 
(a)We expect to reclassify an approximate $70 million loss associated with cash flow hedge price risk management activities included in our accumulated other comprehensive loss balance as of March 31, 2026 into earnings during the next twelve months (when the associated forecasted transactions are also expected to impact earnings); however, actual amounts reclassified into earnings could vary materially as a result of changes in market prices.

Derivatives not designated as accounting hedgesLocationGain/(loss) recognized in income on derivatives
Three Months Ended
March 31,
20262025
(In millions)
Energy commodity derivative contracts
Revenues—Commodity sales
$(11)$3 
Costs of sales
(105)(84)
Earnings from equity investments1 (2)
Interest rate contractsInterest, net— (2)
Total(a)$(115)$(85)
(a)The amounts for the three months ended March 31, 2026 and 2025 include approximate losses of $31 million and $1 million, respectively, associated with natural gas, crude, and NGL derivative contract settlements.

Credit Risks

In conjunction with certain derivative contracts, we are required to provide collateral to our counterparties, which may include posting letters of credit or placing cash in margin accounts. As of March 31, 2026 and December 31, 2025, we had no outstanding letters of credit supporting our commodity price risk management program. As of March 31, 2026 and December 31, 2025, we had cash margins of $94 million and $24 million, respectively, posted with our counterparties by us and reported within “Restricted deposits” on our accompanying consolidated balance sheets. The cash margin balance at March 31, 2026 represents the initial margin requirements of $42 million and variation margin requirements of $52 million. We also use industry standard commercial agreements that allow for the netting of exposures associated with transactions executed under a single commercial agreement. Additionally, we generally utilize master netting agreements to offset credit exposure across multiple commercial agreements with a single counterparty.
We also have agreements with certain counterparties to our derivative contracts that contain provisions requiring the posting of additional collateral upon a decrease in our credit rating. As of March 31, 2026, based on our current mark-to-market positions and posted collateral, we estimate that if our credit rating were downgraded one or two notches, we would not be required to post additional collateral.