Long-Term Debt and Common Stock

9 Months Ended

Sep. 30, 2011

Notes To Financial Statements [Abstract]

Long-Term Debt and Common Stock [Text Block]

11.      Long-Term Debt and Common Stock

Long-Term Debt.  EOG utilizes commercial paper and short-term borrowings from uncommitted credit facilities, bearing market interest rates, for various corporate financing purposes.  EOG had no outstanding borrowings from commercial paper issuances or uncommitted credit facilities at September 30, 2011.  The average borrowings outstanding under the commercial paper program were $2 million during the nine months ended September 30, 2011.  The weighted average interest rate for commercial paper borrowings for the nine months ended September 30, 2011 was 0.32%.

At September 30, 2011, EOG had two $1.0 billion senior unsecured Revolving Credit Agreements with domestic and foreign lenders.  There were no borrowings or letters of credit outstanding under either of these agreements at September 30, 2011.  The first $1.0 billion unsecured Revolving Credit Agreement (2005 Agreement) was scheduled to mature on June 28, 2012.  Advances under the 2005 Agreement accrue interest based, at EOG's option, on either the London Interbank Offering Rate (LIBOR) plus an applicable margin (Eurodollar rate) or the base rate (as defined in the 2005 Agreement).  At September 30, 2011, the Eurodollar rate and applicable base rate, had there been any amounts borrowed under the 2005 Agreement, would have been 0.43% and 3.25%, respectively.

The second $1.0 billion senior unsecured Revolving Credit Agreement (2010 Agreement) was scheduled to mature on September 10, 2013.  Advances under the 2010 Agreement accrue interest based, at EOG's option, on either the Eurodollar rate or the base rate (as defined in the 2010 Agreement) plus an applicable margin.  At September 30, 2011, the Eurodollar rate and applicable base rate, had there been any amounts borrowed under the 2010 Agreement, would have been 1.81% and 3.83%, respectively.

On October 11, 2011, EOG entered into a $2.0 billion senior unsecured Revolving Credit Agreement (New Facility) with domestic and foreign lenders (Banks).  The New Facility replaces the 2005 Agreement and 2010 Agreement described above.  Unamortized fees related to the 2005 Agreement and 2010 Agreement will be written off in the fourth quarter of 2011.

The New Facility has a scheduled maturity date of October 11, 2016 and includes an option for EOG to extend, on up to two occasions, the term for successive one-year periods.  The New Facility commits the Banks to provide advances up to an aggregate principal amount of $2.0 billion at any one time outstanding, with an option for EOG to request increases in the aggregate commitments to an amount not to exceed $3.0 billion, subject to certain terms and conditions.  Advances under the New Facility will accrue interest based, at EOG's option, on either the LIBOR plus an applicable margin, or the base rate (as defined in the New Facility) plus an applicable margin.  Consistent with terms in the 2005 Agreement and the 2010 Agreement, the New Facility contains representations, warranties, covenants and events of default that are customary for investment grade, senior unsecured commercial bank credit agreements, including a financial covenant for the maintenance of a total debt-to-total capitalization ratio of no greater than 65%.

Fair Value of Debt.  At both September 30, 2011 and December 31, 2010, EOG had outstanding $5,260 million aggregate principal amount of debt, which had estimated fair values of approximately $5,816 million and $5,602 million, respectively.  The estimated fair value of debt was based upon quoted market prices and, where such prices were not available, upon interest rates available to EOG at the end of each respective period.

Common Stock.  On March 7, 2011, EOG completed the sale of 13,570,000 shares of EOG common stock, par value $0.01 per share (Common Stock), at the public offering price of $105.50 per share.  Net proceeds from the sale of the Common Stock were approximately $1,388 million after deducting the underwriting discount and offering expenses.  Proceeds from the sale were used for general corporate purposes, including funding capital expenditures.

On February 17, 2011, the EOG Board of Directors increased the quarterly cash dividend on the Common Stock from the previous $0.155 per share to $0.16 per share effective with the dividend paid on April 29, 2011 to stockholders of record as of April 15, 2011.