Chesapeake Energy 2015 Annual Report Download - page 145

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CHESAPEAKE ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
141
20. Asset Retirement Obligations
The components of the change in our asset retirement obligations are shown below.
Years Ended December 31,
2015 2014
($ in millions)
Asset retirement obligations, beginning of period .................................................... $ 465 $ 405
Additions ............................................................................................................. 6 29
Revisions(a) .......................................................................................................... 13 101
Settlements and disposals .................................................................................. (34) (92)
Accretion expense ............................................................................................... 23 22
Asset retirement obligations, end of period.............................................................. 473 465
Less current portion (b) ......................................................................................... 21 18
Asset retirement obligation, long-term ..................................................................... $ 452 $ 447
_________________________________________
(a) Revisions in estimated liabilities during the period relate primarily to changes in estimates of asset retirement
costs and include, but are not limited to, revisions of estimated inflation rates, changes in property lives and the
expected timing of settlement.
(b) Balance is included in other current liabilities on the consolidated balance sheet.
21. Major Customers and Segment Information
Sales to BP PLC constituted approximately 14% of our total revenues (before the effects of hedging) for the year
ended December 31, 2015. Sales to Exxon Mobil Corporation constituted approximately 12% of our total revenues
(before the effects of hedging) for the year ended December 31, 2014. There were no sales to individual customers
constituting 10% or more of total revenues (before the effects of hedging) for the year ended December 31, 2013.
As of December 31, 2015, we have two reportable operating segments, each of which is managed separately
because of the nature of its operations. The exploration and production operating segment is responsible for finding
and producing oil, natural gas and NGL. The marketing, gathering and compression operating segment is responsible
for marketing, gathering and compression of oil, natural gas and NGL. In addition, prior to the spin-off of our oilfield
services business in June 2014, our former oilfield services operating segment was responsible for drilling, oilfield
trucking, oilfield rentals, hydraulic fracturing and other oilfield services operations for both Chesapeake-operated wells
and wells operated by third parties. Our former oilfield services segment’s historical financial results for periods prior
to the spin-off continue to be included in our historical financial results as a component of continuing operations, as
reflected in the table below.
Management evaluates the performance of our segments based upon income (loss) before income taxes.
Revenues from the sale of oil, natural gas and NGL related to Chesapeake’s ownership interests by our marketing,
gathering and compression operating segment are reflected as revenues within our exploration and production
operating segment. These amounts totaled $4.372 billion, $8.565 billion and $7.570 billion for the years ended
December 31, 2015, 2014 and 2013, respectively. Revenues generated by our former oilfield services operating
segment for work performed for Chesapeake’s exploration and production operating segment were reclassified to the
full cost pool based on Chesapeake’s ownership interest. Revenues reclassified totaled $544 million and $1.309 billion
for the years ended December 31, 2014 and 2013, respectively. No income was recognized in our consolidated
statements of operations related to oilfield services performed for Chesapeake-operated wells.