2. Stock-Based Compensation

As more fully discussed in Note 6 to the Consolidated Financial Statements included in EOG's 2011 Annual Report, EOG maintains various stock-based compensation plans. Stock-based compensation expense is included in the Consolidated Statements of Income and Comprehensive Income based upon the job function of the employee receiving the grants as follows (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011

Lease and Well	$	8.0	$	7.2	$	16.5	$	14.9
Gathering and Processing Costs		0.3		0.2		0.5		0.4
Exploration Costs		6.3		5.5		12.9		11.6
General and Administrative		12.5		13.1		25.5		26.5
Total	$	27.1	$	26.0	$	55.4	$	53.4

______________________________________________________________________________________________________________________________________

The EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan, as amended (2008 Plan), provides for grants of stock options, stock-settled stock appreciation rights (SARs), restricted stock, restricted stock units and other stock-based awards. At June 30, 2012, approximately 5.0 million common shares remained available for grant under the 2008 Plan. EOG's policy is to issue shares related to the 2008 Plan from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

Stock Options and Stock-Settled Stock Appreciation Rights and Employee Stock Purchase Plan. The fair value of stock option and SAR grants is estimated using the Hull-White II binomial option pricing model. The fair value of all Employee Stock Purchase Plan (ESPP) grants is estimated using the Black-Scholes-Merton model. Stock-based compensation expense related to stock option, SAR and ESPP grants totaled $10.5 million during both the three months ended June 30, 2012 and 2011 and $21.3 million and $19.9 million during the six months ended June 30, 2012 and 2011, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants during the six-month periods ended June 30, 2012 and 2011 are as follows:

	Stock Options/SARs						ESPP
	Six Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011

Weighted Average Fair Value of Grants	$	35.65		$	36.57		$	28.24		$	21.55
Expected Volatility		39.97	%		37.13	%		46.42	%		30.26	%
Risk-Free Interest Rate		0.49	%		1.12	%		0.06	%		0.18	%
Dividend Yield		0.7	%		0.6	%		0.6	%		0.6	%
Expected Life	5.5 yrs			5.4 yrs			0.5 yrs			0.5 yrs

______________________________________________________________________________________________________________________________________

Expected volatility is based on an equal weighting of historical volatility and implied volatility from traded options in EOG's common stock. The risk-free interest rate is based upon United States Treasury yields in effect at the time of grant. The expected life is based upon historical experience and contractual terms of stock option, SAR and ESPP grants.

- 7 -

EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

The following table sets forth stock option and SAR transactions for the six-month periods ended June 30, 2012 and 2011 (stock options and SARs in thousands):

	Six Months Ended					Six Months Ended
	June 30, 2012					June 30, 2011
				Weighted					Weighted
	Number of			Average		Number of			Average
	Stock			Grant		Stock			Grant
	Options/SARs			Price		Options/SARs			Price

Outstanding at January 1		8,374		$	70.01		8,445		$	64.49
Granted		46			106.00		80			110.36
Exercised ⁽¹⁾		(920	)		60.34		(1,016	)		51.11
Forfeited		(82	)		88.85		(99	)		87.22
Outstanding at June 30 ⁽²⁾		7,418		$	71.23		7,410		$	66.51

Vested or Expected to Vest ⁽³⁾		7,179		$	70.69		7,183		$	65.84

Exercisable at June 30 ⁽⁴⁾		4,379		$	60.20		4,510		$	52.53

_____________________________________________________________________________________________________________________________________

(1)

The total intrinsic value of stock options/SARs exercised for the six months ended June 30, 2012 and 2011 was $45.4 million and $59.9 million, respectively. The intrinsic value is based upon the difference between the market price of EOG's common stock on the date of exercise and the grant price of the stock options/SARs.

(2)	The total intrinsic value of stock options/SARs outstanding at June 30, 2012 and 2011 was $147.8 million and $283.6 million, respectively. At June 30, 2012 and 2011, the weighted average remaining contractual life was 3.4 years and 3.6 years, respectively.

(3)	The total intrinsic value of stock options/SARs vested or expected to vest at June 30, 2012 and 2011 was $146.7 million and $279.8 million, respectively. At June 30, 2012 and 2011, the weighted average remaining contractual life was 3.3 years and 3.5 years, respectively.

(4)	The total intrinsic value of stock options/SARs exercisable at June 30, 2012 and 2011 was $134.3 million and $235.5 million, respectively. At June 30, 2012 and 2011, the weighted average remaining contractual life was 2.0 years and 2.4 years, respectively.

At June 30, 2012, unrecognized compensation expense related to non-vested stock option and SAR grants totaled $70.5 million. This unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.4 years.

Restricted Stock and Restricted Stock Units. Employees may be granted restricted (non-vested) stock and/or restricted stock units without cost to them. Stock-based compensation expense related to restricted stock and restricted stock units totaled $16.6 million and $15.5 million for the three months ended June 30, 2012 and 2011, respectively, and $34.1 million and $33.5 million for the six months ended June 30, 2012 and 2011, respectively.

- 8 -

EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(Unaudited)

The following table sets forth restricted stock and restricted stock units transactions for the six-month periods ended June 30, 2012 and 2011 (shares and units in thousands):

	Six Months Ended					Six Months Ended
	June 30, 2012					June 30, 2011
				Weighted					Weighted
	Number of			Average		Number of			Average
	Shares and			Grant Date		Shares and			Grant Date
	Units			Fair Value		Units			Fair Value

Outstanding at January 1		4,240		$	82.93		4,009		$	79.13
Granted		290			112.08		292			106.14
Released ⁽¹⁾		(490	)		70.97		(213	)		69.29
Forfeited		(75	)		88.78		(97	)		80.09
Outstanding at June 30 ⁽²⁾		3,965		$	86.42		3,991		$	81.61

_____________________________________________________________________________________________________________________________________

(1)

The total intrinsic value of restricted stock and restricted stock units released for the six months ended June 30, 2012 and 2011 was $55.7 million and $22.6 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date restricted stock and restricted stock units are released.

(2)	The total intrinsic value of restricted stock and restricted stock units outstanding at June 30, 2012 and 2011 was $357.3 million and $417.3 million, respectively.

At June 30, 2012, unrecognized compensation expense related to restricted stock and restricted stock units totaled $124.9 million. Such unrecognized expense will be recognized on a straight-line basis over a weighted average period of 2.4 years.