e424b5
The
information in this preliminary prospectus supplement and the
accompanying prospectus is not complete and may be changed. This
preliminary prospectus supplement and the accompanying
prospectus are not an offer to sell these securities and are not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
|
Filed pursuant to Rule 424(b)(5)
Registration
No. 333-137341
SUBJECT
TO COMPLETION, DATED SEPTEMBER 5, 2007
Preliminary Prospectus
Supplement
(To Prospectus dated
September 15, 2006)
EOG RESOURCES, INC.
$
% Senior
Notes due 2017
Interest on the notes is payable on
March
and
September
of each year, beginning on March , 2008. The
notes will mature on September , 2017. We may
redeem some or all of the notes at any time and from time to
time prior to their maturity. The make-whole redemption prices
are discussed under Description of NotesOptional
Redemption.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of the notes or
determined that this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
Investing in the notes involves risks. Please read Risk
Factors beginning on
page S-5.
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Public
offering
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Underwriting
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Proceeds
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price(1)
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discount
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to
us
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Per note
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%
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%
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%
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Total
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$
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$
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$
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(1)
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Plus accrued interest, if any, from
September , 2007.
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The underwriters expect that delivery of the notes will be made
to investors in book-entry form through the facilities of The
Depository Trust Company on or about
September , 2007.
Joint Book-Running Managers
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Citi
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JPMorgan
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Lehman Brothers
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September , 2007
You should rely only on the information contained or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not, and the underwriters have
not, authorized anyone to provide you with different
information. We are not offering to sell these securities in any
jurisdiction where the offer or sale is not permitted. You
should not assume that the information contained in this
prospectus supplement, the accompanying prospectus or the
documents incorporated by reference in this prospectus
supplement or the accompanying prospectus is accurate as of any
date other than the date on the front of those documents.
Table of
contents
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Page
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Prospectus Supplement
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S-ii
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S-1
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S-5
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S-7
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S-7
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S-8
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S-9
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S-14
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S-19
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S-20
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S-21
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Prospectus
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Where You Can Find Additional
Information
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1
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Oil and Gas Terms
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2
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Business
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3
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Cautionary Statement Regarding
Forward-Looking Statements
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3
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Use of Proceeds
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4
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Ratio of Earnings to Fixed Charges
and Earnings to Fixed Charges and Preferred Stock Dividends
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4
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Description of Debt Securities
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5
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Description of Capital Stock
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13
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Book-Entry Issuance
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18
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Selling Stockholders
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20
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Plan of Distribution
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20
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Legal Matters
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22
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Experts
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22
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Unless the context requires otherwise, references to
EOG, we, us or
our each refers to EOG Resources, Inc., a Delaware
corporation, and our subsidiaries.
S-i
About
this prospectus supplement and the
accompanying prospectus
This document is in two parts. The first part is the prospectus
supplement, which describes the terms of this notes offering.
The second part, the accompanying prospectus dated
September 15, 2006, gives more general information, some of
which may not apply to this offering.
This prospectus supplement may add to, update or change the
information in the accompanying prospectus. If information in
this prospectus supplement is inconsistent with information in
the accompanying prospectus, this prospectus supplement will
apply and will supersede that information in the accompanying
prospectus.
It is important for you to read and consider all information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus in making your
investment decision. You should also read and consider the
information in the documents to which we have referred you below
and in Where You Can Find Additional Information in
the accompanying prospectus.
Available
information
We file annual, quarterly and other reports and other
information with the Securities and Exchange Commission, or
SEC. You may read and copy any document we file at
the SECs public reference room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for information on the public reference room. You can also find
our filings at the SECs website at
http://www.sec.gov
and on our website at
http://www.eogresources.com.
Information contained on our website, except for the SEC filings
referred to below, is not part of this prospectus supplement or
the accompanying prospectus. In addition, our reports and other
information concerning us can be inspected at the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
The SEC allows us to incorporate by reference the
information we have filed with the SEC, which means that we can
disclose important information to you by referring you to those
documents without actually including the specific information in
this prospectus supplement or the accompanying prospectus. The
information incorporated by reference is an important part of
this prospectus supplement and the accompanying prospectus, and
information that we file later with the SEC will automatically
update and may replace this information and information
previously filed with the SEC. We incorporate by reference the
documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the Exchange
Act), until we sell all of the securities offered by this
prospectus supplement, other than information furnished to the
SEC under Items 2.02 or 7.01, or the exhibits related
thereto under Item 9.01, of
Form 8-K
and which is not deemed filed under the Exchange Act, and is not
incorporated by reference in this prospectus supplement and the
accompanying prospectus:
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Our Annual Report on
Form 10-K
for the year ended December 31, 2006, filed with the SEC on
February 28, 2007;
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Our Quarterly Report on
Form 10-Q
for the quarterly period ended March 31, 2007, filed with
the SEC on April 30, 2007;
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S-ii
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Our Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2007, filed with
the SEC on August 2, 2007; and
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Our Current Reports on
Form 8-K
filed with the SEC on April 16, 2007, May 14, 2007,
and May 23, 2007 (specifically excluding information
furnished under Item 7.01 therein).
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You may request a copy of these filings at no cost by writing or
telephoning our Corporate Secretary, at our principal executive
office, which is 1111 Bagby, Sky Lobby 2, Houston, Texas 77002
or
713-651-7000.
S-iii
Prospectus
supplement summary
This summary highlights selected information about us and
this offering. It does not contain all of the information that
may be important to you in deciding whether to purchase notes.
We encourage you to read the entire prospectus supplement, the
accompanying prospectus and the documents that we have filed
with the SEC that are incorporated by reference prior to
deciding whether to purchase notes.
Our
company
We are one of the largest independent, non-integrated, oil and
natural gas companies in the United States with proved reserves
in the United States, Canada, offshore Trinidad and the United
Kingdom North Sea. Our business strategy is to maximize the rate
of return on investment of capital by managing operating and
capital costs. This strategy is intended to enhance the
generation of cash flow and earnings from each unit of
production on a cost-effective basis. We focus our drilling
activity toward natural gas deliverability in addition to
natural gas reserve replacement and to a lesser extent crude oil
exploration and exploitation. Advanced technologies are used, as
appropriate, throughout our operations, to reduce the risks
associated with all aspects of oil and gas exploration,
development and exploitation.
We implement our strategy by emphasizing the drilling of
internally generated prospects in order to find and develop low
cost reserves. Maintaining the lowest possible operating cost
structure that is consistent with prudent and safe operations is
also an important goal in the implementation of our strategy.
Management continues to believe that we have one of the
strongest prospect inventories in our history.
At December 31, 2006, our total estimated net proved
reserves were 6,802 billion cubic feet equivalent (Bcfe),
of which 6,095 billion cubic feet (Bcf) were natural gas
reserves and 118 million barrels (MMBbl), or 707 Bcfe,
were crude oil, condensate and natural gas liquids reserves.
Approximately 60% of our reserves (on a natural gas equivalent
basis) were located in the United States, 20% in Canada and 20%
in Trinidad.
Offices
We are a Delaware corporation organized in 1985. Our principal
executive offices are located at 1111 Bagby, Sky Lobby 2,
Houston, Texas 77002, and our telephone number at that address
is:
(713) 651-7000.
S-1
The
offering
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Issuer |
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EOG Resources, Inc. |
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Securities Offered |
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$ aggregate principal amount
of % Senior Notes
due 2017. |
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Maturity |
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, 2017. |
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Interest Rate |
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% per year. |
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Interest Payment Dates |
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Interest will be paid on
March
and
September
of each year, beginning on March , 2008.
Interest on the notes will accrue from
September , 2007. |
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Use of Proceeds |
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We estimate that we will receive approximately
$ million from the sale of
the notes, after deducting underwriting discounts and
commissions and estimated offering expenses. We will use the net
proceeds from this offering for general corporate purposes,
including repayment of outstanding commercial paper and
borrowings under other uncommitted credit facilities. |
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Ranking |
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The notes will be our senior unsecured obligations and will rank
equally in right of payment with all of our other unsecured and
unsubordinated indebtedness from time to time outstanding. |
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The notes will be effectively subordinated to any of our secured
indebtedness, to the extent of the value of the assets securing
such indebtedness, unless the notes are also secured by those
assets. The indenture contains restrictions on our ability to
incur secured debt unless the same security is also provided for
the benefit of holders of the notes. See Description of
Debt SecuritiesLimitations on Liens in the
accompanying prospectus. The notes will be junior to the claims
of creditors and holders of any preferred securities of our
subsidiaries. |
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Optional Redemption |
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We may redeem the notes in whole at any time or in part from
time to time at a make-whole redemption price, as described
under the heading Description of NotesOptional
Redemption in this prospectus supplement. |
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Covenants |
|
The notes will be issued under an indenture with The Bank of New
York Trust Company, N.A. (as successor in interest to
JPMorgan Chase Bank, N.A. (formerly, Texas Commerce Bank
National Association)), as trustee. The indenture contains
various covenants, including limitations on securing
indebtedness by liens on principal properties. |
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These covenants are subject to important exceptions and
qualifications described under Description of Debt
Securities in the accompanying prospectus. |
S-2
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Additional Issuances |
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We may at any time and from time to time, without notice to or
the consent of the holders of the notes, create and issue
additional debt securities having the same terms as and ranking
equally and ratably with the notes in all respects (except for
the public offering price and issue date), as described under
Description of NotesGeneral. |
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Book-Entry |
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The notes will be issued in book-entry form and will be
represented by one or more global notes deposited with, or on
behalf of, The Depository Trust Company, or
DTC, and registered in the name of Cede &
Co., DTCs nominee. Beneficial interests in the notes will
be shown on, and transfers will be effected only through,
records maintained by DTC or its nominee. See Description
of NotesBook-Entry System. |
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Trustee |
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The Bank of New York Trust Company, N.A. (as successor in
interest to JPMorgan Chase Bank, N.A. (formerly, Texas Commerce
Bank National Association)). |
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Governing Law |
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The notes and the indenture relating to the notes will be
governed by Texas law. |
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Risk Factors |
|
You should carefully consider the information under the headings
Risk Factors and Cautionary Statement
Regarding Forward-Looking Statements and all other
information in this prospectus supplement and the accompanying
prospectus, including the information incorporated by reference,
before deciding to invest in the notes. |
For additional information regarding the notes, please read
Description of Notes in this prospectus supplement
and Description of Debt Securities in the
accompanying prospectus.
S-3
Summary
consolidated financial information
The table shown below presents our summary consolidated
financial information at the dates and for the periods
indicated. The summary financial information as of and for each
of the years ended December 31, 2006, 2005 and 2004 have
been derived from our audited consolidated financial statements
and related notes. The summary financial information as of
June 30, 2007 and 2006 and for the six month periods then
ended have been derived from our unaudited consolidated
financial statements, which, in the opinion of management,
include all adjustments necessary for a fair statement of the
data. The results for the six month period ended June 30,
2007 are not necessarily indicative of the results that may be
expected for the full fiscal year. You should read the data set
forth below in conjunction with Managements
Discussion and Analysis of Financial Condition and Results of
Operations and our consolidated financial statements and
the related notes to those financial statements appearing in our
Annual Report on
Form 10-K
for the year ended December 31, 2006 and our Quarterly
Report on
Form 10-Q
for the quarterly period ended June 30, 2007, all of which
are incorporated by reference in this prospectus supplement and
the accompanying prospectus.
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Six Months Ended
June 30,
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Year Ended
December 31,
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(In
thousands)
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2007
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2006
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2006
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2005
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2004
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Income Statement Data:
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Operating revenues
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$
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1,930,456
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$
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2,003,624
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$
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3,904,415
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$
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3,620,213
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$
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2,271,225
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Operating expenses
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1,145,803
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920,362
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2,008,989
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1,628,398
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1,292,030
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Operating income
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|
|
784,653
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1,083,262
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|
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1,895,426
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1,991,815
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979,195
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Other income, net
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34,993
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36,400
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|
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60,373
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35,828
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|
|
9,945
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Net income
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524,720
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758,124
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1,299,885
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1,259,576
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624,855
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Balance Sheet Data (at end of
specified period):
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Total assets
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$
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10,524,264
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$
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8,642,157
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$
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9,402,160
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$
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7,753,320
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$
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5,798,923
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Current and long-term debt
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|
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883,842
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892,517
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733,442
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985,067
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1,077,622
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Shareholders equity
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|
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6,292,589
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|
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5,148,396
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|
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5,599,671
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|
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4,316,292
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|
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2,945,424
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|
|
S-4
You should carefully consider the following risk factors and
the matters identified under the headings Risk
Factors and Cautionary Statement Regarding
Forward-Looking Statements in our Exchange Act reports,
which are incorporated by reference in this prospectus
supplement and the accompanying prospectus, as well as the other
information included or incorporated by reference in this
prospectus supplement and the accompanying prospectus, before
making an investment decision.
Risks Related to
the Notes
The notes will
be unsecured and, therefore, will be effectively subordinated to
any of our secured debt, to the extent of the value of assets
securing such debt.
The notes will not be secured by any of our assets. As a result,
the notes are effectively subordinated to any secured debt we
may incur to the extent of the value of the assets securing such
debt. In any liquidation, dissolution, bankruptcy or other
similar proceeding, the holders of any of our secured debt may
assert rights against the secured assets in order to receive
full payment of their debt before the assets may be used to pay
the holders of the notes. The notes also will be junior to the
claims of creditors and holders of any preferred securities of
our subsidiaries. None of our subsidiaries are guarantors of the
notes, and some subsidiaries have outstanding indebtedness. See
Capitalization.
Our credit
ratings may not reflect all risks of your investments in the
notes and there is no protection in the indenture for holders of
notes in the event of a ratings downgrade. Moreover, we may be
able to incur substantially more indebtedness.
Our credit ratings are an assessment by rating agencies of our
ability to pay our debts when due. Consequently, real or
anticipated changes in our credit ratings will generally affect
the market value of the notes. These credit ratings may not
reflect the potential impact of risks relating to structure or
marketing of the notes. Agency ratings are not a recommendation
to buy, sell or hold any security, and may be revised or
withdrawn at any time by the issuing organization. Each
agencys rating should be evaluated independently of any
other agencys rating.
The indenture does not limit our ability to incur additional
indebtedness or contain provisions that would afford holders of
notes protection in the event of a sudden and significant
decline in our credit quality or a take-over, recapitalization
or highly-leveraged or similar transaction. Accordingly, we
could, in the future, enter into transactions that could
increase the amount of indebtedness outstanding at that time or
otherwise adversely affect our capital structure or credit
rating.
If an active
trading market does not develop for the notes, you may be unable
to sell your notes or to sell your notes at a price that you
deem sufficient.
The notes are a new issue of securities for which there
currently is no established trading market. We do not intend to
list the notes on a national securities exchange or to apply for
quotation of the notes on any automated dealer quotation system.
While the underwriters of the notes have advised us that they
intend to make a market in the notes, the underwriters will
S-5
not be obligated to do so and may stop their market making at
any time. No assurance can be given:
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that a market for the notes will develop or continue;
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as to the liquidity of any market that does develop; or
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as to your ability to sell any notes you may own or the price at
which you may be able to sell your notes.
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S-6
We estimate that the net proceeds received from this offering,
after payment of underwriting discounts and commissions and
estimated offering expenses, will be approximately
$ million. We will use the
net proceeds from this offering for general corporate purposes,
including repayment of outstanding commercial paper and
borrowings under other uncommitted credit facilities. As of
September 4, 2007, our outstanding commercial paper and
borrowings under other uncommitted credit facilities totaled
approximately $473 million and the weighted average
interest rate on such borrowings was 6.18%.
Ratio
of earnings to fixed charges
The following table sets forth our ratio of earnings to fixed
charges for the periods indicated.
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Six Months
Ended
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June 30,
|
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Year Ended
December 31,
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2007
|
|
|
2006
|
|
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2005
|
|
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2004
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2003
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2002
|
|
|
|
|
Ratio of Earnings to Fixed Charges
|
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20.25
|
|
|
|
24.64
|
|
|
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22.45
|
|
|
|
12.01
|
|
|
|
9.26
|
|
|
|
2.43
|
|
|
|
In calculating the ratio of earnings to fixed charges, earnings
represent the sum of income before cumulative effect of change
in accounting principle, income tax provision and fixed charges,
less capitalized interest. Fixed charges represent interest
(including capitalized interest), amortization of debt costs and
the portion of rental expense representing the interest factor.
S-7
The following table sets forth our unaudited cash and cash
equivalents and capitalization at June 30, 2007, and our
adjusted capitalization as of June 30, 2007 after giving
effect to the issuance of the notes in this offering and the
application of the net proceeds of this offering as described
under Use of Proceeds. You should read this table in
conjunction with Managements Discussion and Analysis
of Financial Condition and Results of Operations and our
consolidated financial statements and the notes thereto, which
are incorporated by reference in this prospectus supplement and
the accompanying prospectus.
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As
of June 30, 2007
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|
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(dollars in
thousands, except per share amounts)
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|
Actual
|
|
|
As
Adjusted
|
|
|
|
|
|
Cash and cash equivalents
|
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$
|
58,534
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
Commercial paper and borrowings
under other uncommitted credit facilities
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|
$
|
170,400
|
|
|
$
|
|
(1)
|
|
|
6.50% notes due 2007
|
|
|
98,442
|
|
|
|
98,442
|
|
|
|
6.65% notes due 2028
|
|
|
140,000
|
|
|
|
140,000
|
|
|
|
Subsidiary senior unsecured term
loan facility due 2008
|
|
|
30,000
|
|
|
|
30,000
|
|
|
|
Subsidiary revolving credit
facility due 2009
|
|
|
75,000
|
|
|
|
75,000
|
|
|
|
7.00% subsidiary debt due 2011
|
|
|
220,000
|
|
|
|
220,000
|
|
|
|
4.75% subsidiary debt due 2014
|
|
|
150,000
|
|
|
|
150,000
|
|
|
|
% senior
notes due 2017 offered hereby
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt
|
|
|
883,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock (par value $0.01
per share)
|
|
|
52,951
|
|
|
|
52,951
|
|
|
|
Common stock (par value $0.01 per
share)
|
|
|
202,495
|
|
|
|
202,495
|
|
|
|
Additional paid in capital
|
|
|
162,594
|
|
|
|
162,594
|
|
|
|
Accumulated other comprehensive
income
|
|
|
328,918
|
|
|
|
328,918
|
|
|
|
Retained earnings
|
|
|
5,640,660
|
|
|
|
5,640,660
|
|
|
|
Common stock held in treasury
|
|
|
(95,029
|
)
|
|
|
(95,029
|
)
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
6,292,589
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6,292,589
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Total capitalization
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$
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7,176,431
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$
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(1)
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Since June 30, 2007, we have
incurred additional commercial paper debt and borrowings under
other uncommitted credit facilities and expect that a portion of
the net proceeds from this offering will be used to repay such
subsequently incurred debt.
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S-8
The notes will constitute a new series of debt securities under
an indenture dated as of September 1, 1991, by and between
EOG Resources, Inc., as issuer, and The Bank of New York
Trust Company, N.A. (as successor in interest to JPMorgan
Chase Bank, N.A. (formerly, Texas Commerce Bank National
Association)), as trustee. We will issue the notes under an
officers certificate pursuant to such indenture setting
forth the specific terms applicable to the notes. References to
the indenture in this description mean such
indenture as so supplemented by such certificate.
This description is intended to be an overview of the material
provisions of the notes and the indenture. This summary is not
complete and is qualified in its entirety by reference to the
indenture. You should carefully read the summary below, the
description of the general terms and provisions of our debt
securities set forth in the accompanying prospectus under
Description of Debt Securities and the provisions of
the indenture that may be important to you before investing in
the notes. We have filed with the SEC a copy of the indenture as
an exhibit to our Registration Statement on
Form S-3
filed on September 6, 1991. This summary supplements, and
to the extent inconsistent therewith replaces, the description
of the general terms and provisions of our debt securities set
forth in the accompanying prospectus. Capitalized terms defined
in the accompanying prospectus or in the indenture have the same
meanings when used in this prospectus supplement unless updated
herein. In this description, all references to we,
us or our are to EOG Resources, Inc.
only, and not its subsidiaries, unless otherwise indicated.
General
We will issue the notes in the original principal amount of
$ million. Although only
$ million principal amount of
the notes is initially offered hereby, we may issue and sell
additional notes in the future with the same terms as the notes
offered hereby (except for the public offering price and issue
date) without the consent of the holders of the notes. Any
additional notes, together with these notes, will trade
interchangeably with these notes and constitute a single series
of notes under the indenture. The notes will mature on
September , 2017. The notes will bear interest
at a rate of % per year from
September , 2007, and interest will be computed
on the basis of a
360-day year
comprised of twelve
30-day
months. The first interest payment date on the notes will be
March , 2008. Interest is payable semi-annually
on
March
and
September
to holders of record at the close of business
on
and
(whether or not those dates are business days), as the case may
be, immediately preceding such interest payment date, and on the
maturity date. If any interest payment date would otherwise be a
day that is not a business day, that interest payment date will
be postponed to the next date that is a business day. If the
maturity date of the notes falls on a day that is not a business
day, the related payment of principal and interest will be made
on the next business day as if it were made on the date such
payment was due, and no interest will accrue on the amounts so
payable for the period from and after such date to the next
business day.
The notes will be issued in denominations of $1,000 and integral
multiples of $1,000 in book-entry form only.
S-9
Ranking
The notes will be our senior, unsecured obligations and will
rank equally in right of payment with all of our unsecured and
unsubordinated debt from time to time outstanding. Under the
circumstances described under Description of Debt
SecuritiesLimitations on Liens, in the accompanying
prospectus, we may be required to secure the notes.
The notes will be effectively subordinated to any of our secured
indebtedness, to the extent of the value of the assets securing
such indebtedness, unless the notes are also secured by those
assets. The indenture contains restrictions on our ability to
incur secured debt unless the same security is also provided for
the benefit of holders of the notes. See Description of
Debt SecuritiesLimitations on Liens in the
accompanying prospectus. Holders of the notes will generally
have a junior position to claims of creditors and holders of any
preferred securities of our subsidiaries. None of our
subsidiaries are guarantors of the notes, even though some of
them have outstanding indebtedness. The indebtedness of our
subsidiaries is set forth under Capitalization.
Optional
Redemption
We may redeem the notes in whole at any time or in part from
time to time, at our option, at a redemption price equal to the
greater of:
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100% of the principal amount of the notes then outstanding to be
redeemed; or
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the sum of the present values of the remaining scheduled
payments of principal and interest on the notes to be redeemed
(not including any portion of such payments of interest accrued
to the date of redemption) discounted to the date of redemption
on a semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the applicable treasury rate
plus
basis points
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plus, in each case, accrued and unpaid interest on the principal
amount being redeemed to the redemption date.
treasury rate means, with respect to any redemption
date:
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the yield, under the heading which represents the average for
the immediately preceding week, appearing in the most recently
published statistical release designated H.15(519)
or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which
establishes yields on actively traded U.S. Treasury
securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity
corresponding to the comparable treasury issue (if no maturity
is within three months before or after the remaining life (as
defined below), yields for the two published maturities most
closely corresponding to the comparable treasury issue will be
determined and the treasury rate will be interpolated or
extrapolated from such yields on a straight line basis, rounding
to the nearest month); or
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if such release (or any successor release) is not published
during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the comparable treasury issue,
calculated using a price for the comparable treasury issue
(expressed as a percentage of its principal amount) equal to the
comparable treasury price for such redemption date.
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S-10
The treasury rate will be calculated on the third business day
preceding the date fixed for redemption.
comparable treasury issue means the
U.S. Treasury security selected by an independent
investment banker as having a maturity comparable to the
remaining term (remaining life) of the notes to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to
the remaining term of such notes.
comparable treasury price means (1) the average
of five reference treasury dealer quotations for such redemption
date, after excluding the highest and lowest reference treasury
dealer quotations, or (2) if the independent investment
banker obtains fewer than four such reference treasury dealer
quotations, the average of all such quotations.
independent investment banker means any of Citigroup
Global Markets Inc., J.P. Morgan Securities Inc. or Lehman
Brothers Inc. as specified by us, or, if these firms are
unwilling or unable to select the comparable treasury issue, an
independent investment banking institution of national standing
appointed by us.
reference treasury dealer means (1) Citigroup
Global Markets Inc., J.P. Morgan Securities Inc. or Lehman
Brothers Inc. and their respective successors, provided,
however, that if any of the foregoing shall cease to be a
primary U.S. government securities dealer in New York City
(a primary treasury dealer), we will substitute
therefor another primary treasury dealer and (2) any three
other primary treasury dealers selected by us after consultation
with the independent investment banker.
reference treasury dealer quotations means, with
respect to each reference treasury dealer and any redemption
date, the average, as determined by the independent investment
banker, of the bid and asked prices for the comparable treasury
issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the independent investment banker
at 5:00 p.m., New York City time, on the third business day
preceding such redemption date.
Notice of any redemption will be mailed first-class,
postage-prepaid at least 30 days but not more than
60 days before the redemption date to each holder of the
notes to be redeemed. Unless we default in payment of the
redemption price, on and after the redemption date, interest
will cease to accrue on the notes or portions thereof called for
redemption. If less than all of the notes are to be redeemed,
the notes to be redeemed shall be selected by lot by the trustee
or by such other method as the trustee deems to be fair and
appropriate.
Sinking
Fund
The notes will not be entitled to any sinking funds.
Book-Entry
System
The notes will be issued in the form of one or more fully
registered global notes which will be deposited with, or on
behalf of, The Depository Trust Company, or
DTC, New York, New York, and registered in the name
of Cede & Co., as nominee of DTC. Unless and until
exchanged, in whole or in part, for notes in definitive
registered form, a global note may not be transferred except as
a whole to another nominee of DTC, or to a successor of DTC or
its nominee.
S-11
Purchases of the notes within the DTC system must be made by or
through direct participants, which will receive a credit for the
notes on DTCs records. The ownership interest of each
beneficial owner of the notes will be recorded on the direct and
indirect participants records. Beneficial owners will not
receive written confirmation from DTC of their purchases, but
beneficial owners are expected to receive written confirmations
providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect
participants through which the beneficial owners entered into
the transaction. Transfers of ownership interests in the notes
are to be accomplished by entries made on the books of
participants acting on behalf of beneficial owners.
To facilitate subsequent transfers, all notes deposited by
participants with DTC are registered in the name of DTCs
nominee, Cede & Co. The deposit of the notes with DTC
and their registration in the name of Cede & Co.
effect no change in beneficial ownership. DTC has no knowledge
of the actual beneficial owners of the notes. DTCs records
reflect only the identity of the direct participants to whose
accounts such notes are credited, which may or may not be the
beneficial owners. The participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants
and by direct and indirect participants to beneficial owners
will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from
time to time.
We will make payments due on the notes to Cede & Co.,
as nominee of DTC, in immediately available funds. DTCs
practice is to credit direct participants accounts, upon
DTCs receipt of funds and corresponding detailed
information, on the relevant payment date in accordance with
their respective holdings shown on DTCs records. Payments
by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case
with securities held for the account of customers in bearer form
or registered in street name, and will be the
responsibility of such participant and not our responsibility or
the responsibility of any underwriter or DTC, subject to any
statutory or regulatory requirements as may be in effect from
time to time. Payment to Cede & Co. is our
responsibility. Disbursement of such payments to direct
participants is the responsibility of Cede & Co.
Disbursement of such payments to the beneficial owners is the
responsibility of direct and indirect participants.
Except as provided herein, a beneficial owner of an interest in
a global note will not be entitled to receive physical delivery
of the notes. Accordingly, each beneficial owner must rely on
the procedures of DTC to exercise any rights under the notes.
The laws of some jurisdictions require that certain purchasers
of securities take physical delivery of securities in definitive
form. Such laws may impair the ability to transfer beneficial
interests in a global note.
As long as the depositary, or its nominee, is the registered
holder of a global note, the depositary or such nominee will be
considered the sole owner and holder of the notes represented
thereby for all purposes under the notes and the indenture.
Accordingly, each person owning a beneficial interest in such
global note must rely on the procedures of the depositary and,
if such person is not a participant, on the procedures of the
participant through which such person owns its interest to
exercise any rights of a holder under the indenture.
DTC reserves the right to exchange the global notes for
certificates representing the notes and to distribute such
certificates to each person owning a beneficial interest in such
global notes.
S-12
DTC is a limited-purpose trust company organized under the New
York Banking Law, a banking organization within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a clearing corporation within the
meaning of the New York Uniform Commercial Code and a
clearing agency registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was
created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions, such as
transfers and pledges, among its participants in such securities
through electronic computerized book-entry changes in accounts
of the participants, thereby eliminating the need for physical
movement of securities certificates. DTCs participants
include securities brokers and dealers (including the
underwriters), banks, trust companies, clearing corporations and
certain other organizations, some of whom own DTC. Access to
DTCs book-entry system is also available to others, such
as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a participant,
either directly or indirectly. The rules applicable to DTC and
its participants are on file with the SEC.
Although DTC has agreed to the procedures provided above in
order to facilitate transfers, it is under no obligation to
perform these procedures, and these procedures may be modified
or discontinued at any time.
S-13
Material
U.S. federal income tax considerations
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED HEREIN
SOLELY FOR INFORMATION PURPOSES. THIS SUMMARY IS NOT INTENDED TO
BE, AND SHOULD NOT BE, CONSTRUED TO BE LEGAL OR TAX ADVICE. NO
REPRESENTATION WITH RESPECT TO THE CONSEQUENCES TO ANY
PARTICULAR PURCHASER OF THE NOTES IS MADE. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR OWN ADVISORS WITH RESPECT TO
THEIR PARTICULAR CIRCUMSTANCES.
The following is a summary of certain United States federal
income tax considerations relevant to U.S. Holders and
Non-U.S. Holders
(both as defined below) relating to the purchase (at the
original issue price), ownership and disposition of the notes.
This summary is based upon current provisions of the Internal
Revenue Code of 1986, as amended (the Internal Revenue
Code), existing and proposed Treasury Regulations
promulgated thereunder, rulings, pronouncements, judicial
decisions and administrative interpretations of the Internal
Revenue Service, all as in effect on the date hereof, and all of
which are subject to change, possibly on a retroactive basis, at
any time by legislative, judicial or administrative action. We
cannot assure you that the Internal Revenue Service will not
challenge the conclusions stated below, and no ruling from the
Internal Revenue Service or an opinion of counsel has been (or
will be) sought on any of the matters discussed below.
The following summary does not purport to be a complete analysis
of all the potential U.S. federal income tax considerations
relating to the purchase, ownership, and disposition of the
notes. Without limiting the generality of the foregoing, this
summary does not address the effect of any special rules
applicable to certain types of beneficial owners, including,
without limitation, dealers in securities or currencies,
insurance companies, financial institutions, thrifts, regulated
investment companies, tax-exempt entities, U.S. Holders
whose functional currency is not the U.S. dollar,
U.S. expatriates, persons who hold notes as part of a
straddle, hedge, conversion transaction, or other risk reduction
or integrated investment transaction, investors in securities
that elect to use a mark-to-market method of accounting for
their securities holdings, individual retirement accounts or
qualified pension plans, controlled foreign corporations,
passive foreign investment companies, or investors in pass
through entities, including partnerships and Subchapter
S corporations. In addition, this summary is limited to
holders who are the initial purchasers of the notes at their
original issue price and hold the notes as capital assets within
the meaning of Section 1221 of the Internal Revenue Code.
This summary does not address the effect of any U.S. state
or local income or other tax laws, any U.S. federal estate
and gift tax laws, or any foreign tax laws.
If a partnership holds notes, the tax treatment of a partner
will generally depend on the tax status of the partner and the
tax treatment of the partnership. A partner of a partnership
holding notes should consult its tax advisors.
U.S.
Holders
The term U.S. Holder means a beneficial owner
of a note that is:
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an individual who is a citizen of the United States or who is a
resident alien of the United States for U.S. federal income
tax purposes;
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a corporation or other entity taxable for U.S. federal
income tax purposes as a corporation created or organized in or
under the laws of the United States, any state thereof or the
District of Columbia;
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S-14
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one
or more United States persons have the authority to control all
substantial decisions of the trust, or if a valid election is in
effect under applicable Treasury Regulations to be treated as a
United States person.
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Taxation of InterestWe do not intend to issue the
notes at a discount that will exceed a de minimis amount
of original issue discount. Accordingly, interest on a note will
generally be includable in income of a U.S. Holder as
ordinary income at the time a U.S. Holder receives the
interest or the interest accrues, in accordance with the
U.S. Holders regular method of accounting for
U.S. federal income tax purposes. A U.S. Holder using
the accrual method of accounting for federal income tax purposes
must include interest on the notes in ordinary income as
interest accrues. A U.S. Holder using the cash receipts and
disbursements method of accounting for U.S. federal income
tax purposes must include interest in ordinary income when
payments are received, or made available for receipt, by the
U.S. Holder.
Sale, Exchange, or Retirement of a NoteA
U.S. Holder will generally recognize capital gain or loss
on a sale, exchange, redemption, retirement or other taxable
disposition of a note measured by the difference, if any,
between:
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the amount of cash and the fair market value of any property
received, except to the extent that the cash or other property
received in respect of a note is attributable to accrued
interest on the note not previously included in income, which
amount will be taxable as ordinary income; and
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the U.S. Holders adjusted tax basis in the note.
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Such capital gain or loss will be treated as a long-term capital
gain or loss if, at the time of the sale or exchange, the note
has been held by the U.S. Holder for more than one year;
otherwise, the capital gain or loss will be short-term.
Non-corporate taxpayers may be subject to a lower federal income
tax rate on their net long-term capital gains than that
applicable to ordinary income. U.S. Holders are subject to
certain limitations on the deductibility of their capital
losses. U.S. Holders of notes should consult their tax
advisors regarding the treatment of capital gains and losses.
In addition, under certain circumstances, a U.S. holder
will recognize capital gain or loss on the defeasance of a note.
Information Reporting and Backup
WithholdingU.S. Holders of notes may be subject,
under certain circumstances, to information reporting and backup
withholding (currently at a rate of 28%) on payments of
interest, principal, gross proceeds from disposition of notes,
and redemption premium, if any. Backup withholding applies if,
among other things, the U.S. Holder:
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fails to furnish its social security or other taxpayer
identification number;
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furnishes an incorrect taxpayer identification number;
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fails to report interest properly; or
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fails, under certain circumstances, to provide a certified
statement on a properly completed Internal Revenue Service
Form W-9
(or the appropriate substitute or successor form), signed
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S-15
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under penalty of perjury, that the taxpayer identification
number provided is its correct number and that the
U.S. Holder is not subject to backup withholding.
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Backup withholding is not an additional tax. Any amount withheld
from a payment to a U.S. Holder under the backup
withholding rules is allowable as a credit against such
U.S. Holders U.S. federal income tax liability
and may entitle such U.S. Holder to a refund provided such
U.S. Holder timely furnishes the required information to
the Internal Revenue Service. Certain persons are exempt from
backup withholding, including corporations and financial
institutions. U.S. Holders of notes should consult their
tax advisors as to their qualification for exemption from backup
withholding and the procedure for obtaining such exemption. We
cannot refund amounts once withheld.
We will furnish annually to the Internal Revenue Service, and to
record holders of the notes to whom we are required to furnish
such information, information relating to the amount of interest
and the amount of backup withholding, if any, with respect to
applicable payments made in connection with the notes.
Non-U.S.
Holders
The following summary is limited to the U.S. federal income
tax consequences relevant to a beneficial owner of a note who is
not classified for U.S. federal income tax purposes as a
partnership or as a disregarded entity and who is
not a U.S. Holder (a
Non-U.S. Holder).
In the case of a
Non-U.S. Holder
who is an individual, the following summary assumes that this
individual was not formerly a United States citizen, and was not
formerly a resident of the United States for U.S. federal
income tax purposes.
Taxation of InterestSubject to the summary of
backup withholding rules below, payments of interest on a note
to any
Non-U.S. Holder
will not generally be subject to U.S. federal income or
withholding tax provided we or the person otherwise responsible
for withholding U.S. federal income tax from payments on
the notes receives a required certification (in the form
provided below) from the
Non-U.S. Holder
(as discussed below) and the
Non-U.S. Holder
is not:
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an actual or constructive owner of 10% or more of the total
combined voting power of all our voting stock;
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a controlled foreign corporation related, directly or
indirectly, to us through stock ownership;
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a bank receiving interest described in Section 881(c)(3)(A)
of the Internal Revenue Code;
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receiving such interest as contingent interest within the
meaning of the portfolio debt provisions; or
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receiving such interest payments as income effectively connected
with the conduct by the
Non-U.S. Holder
of a trade or business within the United States.
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In order to satisfy the certification requirement, the
Non-U.S. Holder
must provide a properly completed Internal Revenue Service
Form W-8BEN
(or substitute
Form W-8BEN
or the appropriate successor form) under penalties of perjury
that provides the
Non-U.S. Holders
name and address and certifies that the
Non-U.S. Holder
is not a U.S. person. Alternatively, in a case where a
security clearing organization, bank or other financial
institution holds the notes in the ordinary course of its trade
or business on behalf of the
Non-U.S. Holder,
certification requires that we or the person who otherwise would
be required to withhold U.S. federal income tax
S-16
receive from the financial institution a certification (an
Internal Revenue Service
Form W-8IMY
(or the appropriate successor form)) under penalties of perjury
that a properly completed
Form W-8BEN
(or substitute
Form W-8BEN
or the appropriate successor form) has been received by it, or
by another such financial institution, from the
Non-U.S. Holder,
and a copy of such a form is furnished to the payor. Special
rules apply to foreign partnerships, estates and trusts, and in
certain circumstances, certifications as to foreign status of
partners, trust owners, or beneficiaries may be required to be
provided to our paying agent or to us. In addition, special
rules apply to payments made through a qualified intermediary,
which must provide a certificate to us under penalties of
perjury on Internal Revenue Service
Form W-8IMY
(or the appropriate successor form).
A
Non-U.S. Holder
that does not qualify for exemption from withholding under the
preceding paragraphs generally will be subject to withholding of
U.S. federal income tax at the rate of 30%, or lower
applicable treaty rate, on payments of interest on the notes
that are not effectively connected with the conduct by the
Non-U.S. Holder
of a trade or business in the United States.
If the payments of interest on a note are effectively connected
with the conduct by a
Non-U.S. Holder
of a trade or business in the United States (or, in the event
that an income tax treaty is applicable, if the payments of
interest are attributable to a U.S. permanent establishment
maintained by the
Non-U.S. Holder),
such payments will be subject to U.S. federal income tax on
a net basis at the rates applicable to U.S. persons
generally. If the
Non-U.S. Holder
is a corporation for U.S. federal income purposes, such
payments also may be subject to a branch profits tax at the rate
of 30%, or lower applicable treaty rate. If payments are subject
to U.S. federal income tax on a net basis in accordance
with the rules described in the preceding two sentences, such
payments will not be subject to U.S. withholding tax so
long as the holder provides us, or the person who otherwise
would be required to withhold U.S. federal income tax, with
the appropriate certification on Internal Revenue Service
Form W-8ECI
(or the appropriate successor form).
Non-U.S. Holders
should consult their tax advisors regarding any applicable
income tax treaties, which may provide for a lower rate of
withholding tax, exemption from or reduction of branch profits
tax, or other rules different from those described above.
Sale, Exchange, or DispositionSubject to the
summary of backup withholding rules below, any gain realized by
a
Non-U.S. Holder
on the sale, exchange, retirement or other disposition of a note
generally will not be subject to U.S. federal income tax,
unless:
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such gain is effectively connected with the conduct by such
Non-U.S. Holder
of a trade or business within the United States (or, in the
event that an income tax treaty is applicable, such gain is
attributable to a U.S. permanent establishment maintained
by the
Non-U.S. Holder); or
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the
Non-U.S. Holder
is an individual who is present in the United States for
183 days or more in the taxable year of the disposition and
certain other conditions are satisfied.
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Information Reporting and Backup WithholdingAny
payments of interest on the notes to a
Non-U.S. Holder
will generally be reported to the Internal Revenue Service and
to the
Non-U.S. Holder.
Copies of these information returns also may be made available
under the provisions of a specific treaty or other agreement to
the tax authorities of the country in which the
Non-U.S. Holder
resides.
The backup withholding tax and certain additional information
reporting generally will not apply to payments of interest with
respect to which either the requisite certification, as
S-17
described above, has been received or an exemption otherwise has
been established, provided that neither we nor the person who
otherwise would be required to withhold U.S. federal income
tax has actual knowledge or reason to know that the holder is,
in fact, a United States person or that the conditions of any
other exemption are not, in fact, satisfied.
The payment of proceeds from the disposition of the notes by or
through the United States office of any broker, U.S. or
foreign, will be subject to information reporting and backup
withholding unless the
Non-U.S. Holder
certifies as to its
non-U.S. status
under penalties of perjury or otherwise establishes an
exemption, provided that the broker does not have actual
knowledge or reason to know that the holder is a
U.S. person or that the conditions of any other exemption
are not, in fact, satisfied. The payment of proceeds from the
disposition of the notes by or through a
non-U.S. office
of a
non-U.S. broker
will not be subject to information reporting or backup
withholding unless the
non-U.S. broker
has certain types of relationships with the United States (a
U.S. related person). In the case of the
payment of the proceeds from the disposition of the notes by or
through a
non-U.S. office
of a broker that is either a United States person or a
U.S. related person, the Treasury Regulations require
information reporting, but not backup withholding, on the
payment unless the broker has documentary evidence in its files
that the beneficial owner is a
Non-U.S. Holder
and the broker has no knowledge or reason to know to the
contrary.
Backup withholding is not an additional tax. Any amounts
withheld under the backup withholding rules may be refunded or
credited against the
Non-U.S. Holders
U.S. federal income tax liability provided such
Non-U.S. Holder
timely furnishes the required information to the Internal
Revenue Service. We cannot refund amounts once withheld.
THE PRECEDING SUMMARY OF CERTAIN U.S. FEDERAL INCOME TAX
CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT LEGAL OR
TAX ADVICE. ACCORDINGLY, PROSPECTIVE PURCHASERS SHOULD CONSULT
THEIR OWN ADVISORS ON THE U.S. FEDERAL, STATE AND LOCAL,
AND FOREIGN TAX CONSEQUENCES OF THEIR PURCHASE, OWNERSHIP, AND
DISPOSITION OF THE NOTES, AND ON THE CONSEQUENCES OF ANY CHANGES
IN APPLICABLE LAW.
S-18
Subject to the terms and conditions contained in an underwriting
agreement, dated the date of this prospectus supplement, we have
agreed to sell to the underwriters, for whom Citigroup Global
Markets Inc., J.P. Morgan Securities Inc. and Lehman
Brothers Inc. are acting as representatives, and these
underwriters have agreed, severally and not jointly, to purchase
from us, the principal amount of the notes listed opposite their
names below:
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Principal
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Amount of
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Underwriters
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Notes
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Citigroup Global Markets Inc.
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$
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J.P. Morgan Securities Inc.
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Lehman Brothers Inc.
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Total
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$
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The underwriters have agreed to purchase all of the notes sold
pursuant to the underwriting agreement if any of such notes are
purchased.
We have agreed to indemnify the underwriters against certain
liabilities or to contribute to payments the underwriters may be
required to make in respect of those liabilities.
The underwriters are offering the notes, subject to prior sale,
when, as and if issued to and accepted by them, subject to
approval of legal matters by their counsel, including the
validity of the notes, and other conditions contained in the
underwriting agreement, such as the receipt by the underwriters
of officers certificates and legal opinions. The
underwriters reserve the right to withdraw, cancel or modify
offers to the public and to reject orders in whole or in part.
Commissions and
Discounts
The underwriters have advised us that they propose initially to
offer the notes to the public at the public offering price on
the cover page of this prospectus supplement, and may offer the
notes to dealers at such price less a concession not in excess
of % of the principal amount of the
notes. The underwriters may allow, and the dealers may reallow,
a discount not in excess of % of
the principal amount of the notes to other dealers. After the
initial public offering, the public offering price, concession
and discount may be changed.
The following table summarizes the compensation to be paid by us
to the underwriters.
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Per
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Note
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Total
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Underwriting discount paid by us
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%
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$
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The expenses of the offering, not including the underwriting
discount, are estimated to be $
and are payable by us.
New Issue of
Notes
The notes are a new issue of securities with no established
trading market. We do not intend to apply for listing of the
notes on any national securities exchange or for quotation of
the notes
S-19
on any automated dealer quotation system. We have been advised
by the underwriters that they presently intend to make a market
in the notes after completion of the offering. However, they are
under no obligation to do so and may discontinue any
market-making activities at any time without any notice, and we
cannot assure the liquidity of the trading market for the notes
or that an active market for the notes will develop. If an
active trading market for the notes does not develop, the market
price and liquidity of the notes may be adversely affected.
Price
Stabilization and Short Positions
In connection with the offering, the underwriters are permitted
to engage in transactions that stabilize the market price of the
notes. Such transactions consist of bids or purchases to peg,
fix or maintain the price of the notes. If the underwriters
create a short position in the notes in connection with the
offering, i.e. if they sell more notes than are on the cover
page of this prospectus supplement, the underwriters may reduce
that short position by purchasing notes in the open market.
Purchases of a security to stabilize the price or to reduce a
short position could cause the price of the security to be
higher than it might be in the absence of such purchases.
We do not, nor do any of the underwriters, make any
representation or prediction as to the direction or magnitude of
any effect that the transactions described above may have on the
price of the notes. In addition, neither we nor any of the
underwriters make any representation that the underwriters will
engage in these transactions or that these transactions, once
commenced, will not be discontinued without notice.
Other
Relationships
Some of the underwriters and their affiliates have engaged in,
and may in the future engage in, investment banking, commercial
banking and other commercial dealings with us in the ordinary
course of business for which they received or will receive
customary fees and expense reimbursement. Affiliates of each of
Citigroup Global Markets Inc., J.P. Morgan Securities Inc.
and Lehman Brothers Inc. are lenders to us. As described under
Use of Proceeds, we intend to use part of the net
proceeds from this offering to repay outstanding commercial
paper and borrowings under other uncommitted credit facilities.
Several of the underwriters and their affiliated and associated
persons may receive proceeds from this offering if they hold
such debt on or after the closing of this offering. Because it
is possible that the underwriters or their affiliated or
associated persons could receive more than 10% of the proceeds
of this offering in repayment of such debt, the offering is made
in compliance with the applicable provisions of
Section 2710(h)(1) and Rule 2720 of the NASD Conduct
Rules. Because the notes are investment-grade rated by one or
more nationally recognized statistical rating agencies,
compliance with these rules only requires the disclosure set
forth in this paragraph.
Certain legal matters in connection with the offering of the
notes, including their validity, will be passed upon for us by
Fulbright & Jaworski L.L.P., Houston, Texas. As of
August 31, 2007, lawyers at Fulbright & Jaworski
L.L.P. working on this offering owned 2,600 shares of EOGs
common stock. Bracewell & Giuliani LLP, Houston,
Texas, will pass upon certain legal matters for the underwriters
in connection with this offering. Bracewell & Giuliani
LLP performs legal services for us from time to time on matters
unrelated to the offering of the notes.
S-20
The consolidated financial statements, the related financial
statement schedule, and managements report on the
effectiveness of internal control over financial reporting
incorporated in this prospectus by reference from our Annual
Report on
Form 10-K
for the year ended December 31, 2006 have been audited by
Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report, which is
incorporated herein by reference (which report
(1) expressed an unqualified opinion on the consolidated
financial statements and financial statement schedule and
includes an explanatory paragraph relating to our adoption of
Statement of Financial Accounting Standards No. 123(R),
Share-Based Payment, effective January 1, 2006,
(2) expressed an unqualified opinion on managements
assessment regarding the effectiveness of internal control over
financial reporting, and (3) expressed an unqualified
opinion on the effectiveness of internal control over financial
reporting), and has been so incorporated in reliance upon the
report of such firm given upon their authority as experts in
accounting and auditing.
The letter report of DeGolyer & MacNaughton,
independent petroleum consultants, included as an exhibit to our
Annual Report on
Form 10-K
for the year ended December 31, 2006 and the estimates from
the reports of that firm appearing in such Annual Report, are
incorporated herein by reference on the authority of said firm
as experts in petroleum engineering.
S-21
PROSPECTUS
EOG Resources, Inc.
$688,237,500
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
We may offer from time to time
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our unsecured debt securities consisting of notes, debentures or
other evidences of indebtedness, which may be convertible into
our common stock,
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shares of our preferred stock, which also may be convertible
into our common stock, and/or
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shares of our common stock.
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The aggregate initial offering price of the debt securities,
preferred stock and common stock to be offered by us will not
exceed $688,237,500. We may offer these securities in amounts,
at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in a prospectus
supplement.
We may offer the preferred stock and debt securities as separate
series. The terms of each series of debt securities, including,
where applicable, the specific designation, aggregate principal
amount, authorized denominations, maturity, rate or rates and
time or times of payment of any interest or dividends, any terms
for optional or mandatory redemption, which may include
redemption at the option of holders on the occurrence of certain
events, any terms for conversion to common stock or payment of
additional amounts or any sinking fund provisions, and any other
specific terms in connection with the offering and sale of such
securities will be set forth in a prospectus supplement.
We may sell the debt securities, preferred stock and common
stock directly, through agents designated from time to time or
to or through underwriters or dealers. See Plan of
Distribution. If any underwriters are involved in the sale
of any debt securities, preferred stock or common stock in
respect of which this prospectus is being delivered, the names
of such underwriters and any applicable commissions or discounts
will be set forth in a prospectus supplement. The net proceeds
to us from such sale also will be set forth in a prospectus
supplement.
We may also allow selling stockholders to offer and sell common
stock under this prospectus.
The common stock is listed on the New York Stock Exchange under
the symbol EOG. On September 13, 2006, the last
reported sale price of common stock on the New York Stock
Exchange Composite Tape was $60.78 per share.
You should carefully consider the information under the
heading Risk Factors in the applicable prospectus
supplement or the documents we incorporate by reference before
considering an investment in any debt securities, preferred
stock or common stock.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is
September 15, 2006.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the SEC. Our SEC filings are
available to the public over the Internet at the SECs web
site at
http://www.sec.gov.
You may also read and copy any document we file at the
SECs public reference rooms located at
100 F Street, N.E., Washington, D.C. 20549.
Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms and their
copy charges.
Our common stock has been listed and traded on the New York
Stock Exchange since 1989. Accordingly, you may inspect the
information we file with the SEC at the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The SEC allows us to incorporate by reference the
information we file with it, which means that we can disclose
important information to you by referring to those documents.
The information incorporated by reference is an important part
of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information as
well as information contained in this prospectus. We incorporate
by reference the documents listed below and any future filings
made with the SEC under Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act until all of the debt securities, preferred
stock and common stock covered by this prospectus have been sold:
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our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2005;
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our Quarterly Report on
Form 10-Q
for the quarter ended March 31, 2006;
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our Quarterly Report on
Form 10-Q
for the quarter ended June 30, 2006;
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our Current Report on
Form 8-K
filed on April 18, 2006; and
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our Current Report on
Form 8-K
filed on August 31, 2006.
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Our SEC file number is
001-09743.
You may request a copy of these filings, excluding exhibits, at
no cost by writing or telephoning Patricia L. Edwards, Corporate
Secretary, at our principal executive office, which is:
EOG Resources, Inc.
333 Clay St., Suite 4200
Houston, Texas 77002
(713) 651-7000
In this prospectus, references to EOG,
we, us, and our each refers
to EOG Resources, Inc. and, unless otherwise stated, our
subsidiaries.
You should rely only on the information incorporated by
reference or provided in this prospectus. We have not authorized
anyone to provide you with different information.
We are not making an offer of the securities covered by this
prospectus where the offer is not permitted. You should not
assume that the information in this prospectus or in any other
document incorporated by reference in this prospectus is
accurate as of any date other than the date on the front of
those documents. Our business, financial condition, results of
operations and prospectus may have changed since those dates.
1
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When describing commodities
produced and sold:
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gas
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=
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natural gas
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oil
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=
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crude oil
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liquids
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=
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crude oil, condensate, and natural
gas liquids
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When describing natural gas:
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Mcf
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=
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thousand cubic feet
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MMcf
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=
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million cubic feet
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Bcf
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=
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billion cubic feet
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MMBtu
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=
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million British Thermal Units
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When describing oil and liquids:
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Bbl
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=
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barrel
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MBbl
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=
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thousand barrels
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MMBbl
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=
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million barrels
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When comparing oil and liquids to
natural gas:
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1 Bbl of oil
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=
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6 Mcf of natural gas
equivalent
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Mcfe
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=
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thousand cubic feet equivalent
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MMcfe
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=
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million cubic feet equivalent
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Bcfe
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=
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billion cubic feet equivalent
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2
EOG Resources, Inc. (EOG), a Delaware corporation organized in
1985, together with its subsidiaries, explores for, develops,
produces and markets natural gas and crude oil primarily in
major producing basins in the United States of America (United
States), Canada, offshore Trinidad, the United Kingdom North Sea
and, from time to time, select other international areas. At
December 31, 2005, EOGs total estimated net proved
reserves were 6,194 Bcfe, of which 5,557 Bcf were
natural gas reserves and 106 MMBbl, or 637 Bcfe, were
crude oil, condensate and natural gas liquids reserves. At such
date, approximately 56% of EOGs reserves (on a natural gas
equivalent basis) were located in the United States, 22% in
Canada, 21% in Trinidad and 1% in the United Kingdom North Sea.
As of December 31, 2005, EOG employed approximately
1,400 persons, including foreign national employees.
CAUTIONARY
STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference
contain forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of
the Exchange Act. All statements other than statements of
historical fact, including, among others, statements regarding
our future financial position, business strategy, budgets,
reserve information, projected levels of production, projected
costs and plans and objectives of management for future
operations, are forward-looking statements.
We typically use words such as expect,
anticipate, estimate,
strategy, intend, plan,
target, and believe or the negative of
those terms or other variations of them or by comparable
terminology to identify our forward-looking statements. In
particular, statements, express or implied, concerning future
operating results, the ability to replace or increase reserves
or to increase production, or the ability to generate income or
cash flows are forward-looking statements.
Forward-looking statements are not guarantees of performance.
Although we believe our expectations reflected in
forward-looking statements are based on reasonable assumptions,
no assurance can be given that these expectations will be
achieved. Important factors that could cause actual results to
differ materially from the expectations reflected in the
forward-looking statements include, among others:
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the timing and extent of changes in commodity prices for crude
oil, natural gas and related products, foreign currency exchange
rates and interest rates;
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the timing and impact of liquefied natural gas imports and
changes in demand or prices for ammonia or methanol;
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the extent and effect of any hedging activities we engage in;
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the extent of our success in discovering, developing, marketing
and producing reserves and in acquiring oil and gas properties;
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the accuracy of reserve estimates, which by their nature involve
the exercise of professional judgment and may therefore be
imprecise;
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the availability and cost of drilling rigs, experienced drilling
crews, materials and equipment used in well completions, and
tubular steel;
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the availability, terms and timing of governmental and other
permits and rights of way;
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3
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the availability of pipeline transportation capacity;
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the availability of compression uplift capacity;
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the extent to which we can economically develop our Barnett
Shale acreage outside of Johnson County, Texas;
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whether we are successful in our efforts to more densely develop
our acreage in the Barnett Shale and other production areas;
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political developments around the world;
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acts of war and terrorism and responses to these acts;
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weather; and
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financial market conditions.
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When considering forward-looking statements, you should keep
these factors in mind. In light of these risks, uncertainties
and assumptions, the events anticipated by our forward-looking
statements might not occur. Forward-looking statements speak
only as of the date made and we undertake no obligation to
update or revise our forward-looking statements, whether as a
result of new information, future events or otherwise.
Unless otherwise indicated in an accompanying prospectus
supplement, we intend to apply any net proceeds that we receive
from the sale of the debt securities, the preferred stock or the
common stock to our general funds to be used for general
corporate purposes, including in certain circumstances to retire
outstanding indebtedness.
We will not receive any proceeds from any sale of shares of our
common stock by selling stockholders.
RATIOS
OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
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Six months
ended
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June 30,
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Year ended
December 31,
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2006
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2001
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2002
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2003
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2004
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2005
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Ratio of Earnings to Fixed Charges
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26.83
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10.99
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2.43
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9.26
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12.01
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22.45
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Ratio of Earnings to Fixed Charges
and Preferred Stock Dividends
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23.79
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8.59
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2.04
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7.64
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10.06
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19.41
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4
DESCRIPTION
OF DEBT SECURITIES
The following description highlights the general terms and
provisions of the debt securities. When debt securities are
offered in the future, which we call the Offered Debt
Securities, the prospectus supplement will explain the
particular terms of the Offered Debt Securities and the extent
to which these general provisions may apply.
The Offered Debt Securities will be senior unsecured obligations
of EOG. The Offered Debt Securities will be issued under an
indenture (the Indenture) between EOG and JPMorgan
Chase Bank, N.A. (formerly known as Texas Commerce Bank,
National Association), as trustee (the Trustee),
dated as of September 1, 1991. The form of the Indenture is
filed as an exhibit to the registration statement of which this
prospectus is a part. The following statements are summaries of
certain of the provisions contained in the Indenture and do not
purport to be complete statements of all the terms and
provisions of the Indenture. We encourage you to refer to the
Indenture for full and complete statements of such terms and
provisions, including the definitions of certain terms used in
this prospectus, because those provisions and not these
summaries define your rights as a holder of the Offered Debt
Securities. We have italicized numbers in the following
discussion to refer to section numbers of the Indentures, so you
can easily locate these provisions.
When we refer to EOG, we or
us in this section, we mean only EOG Resources, Inc.
and not its subsidiaries.
General. The Indenture does not limit the aggregate
principal amount of unsecured debentures, notes or other
evidences of indebtedness we may issue under the Indenture from
time to time in one or more series. We may in the future issue
securities in addition to the Offered Debt Securities. The terms
of the Offered Debt Securities that are listed below will be
contained in the prospectus supplement relating to such Offered
Debt Securities:
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the title of the Offered Debt Securities;
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any limit on the aggregate principal amount of the Offered Debt
Securities;
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the date or dates on which the principal of the Offered Debt
Securities is payable;
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the rate or rates, which may be fixed or variable, or the method
by which such rate or rates shall be determined, at which the
Offered Debt Securities shall bear interest, if any, the date or
dates from which such interest shall accrue, or the method by
which such date or dates shall be determined, the interest
payment dates on which such interest shall be payable and the
regular record date for the interest payable on any interest
payment date;
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the place or places where the principal of and premium, if any,
and interest on Offered Debt Securities shall be payable;
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the period or periods within which, the price or prices at which
and the terms and conditions upon which Offered Debt Securities
may be redeemed, in whole or in part, at our option, if we have
that option;
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our obligation, if any, and our option, if any, to redeem,
purchase or repay Offered Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of a
holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which
Offered Debt Securities shall be redeemed, purchased or repaid
in whole or in part, pursuant to such obligation or option;
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5
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whether the Offered Debt Securities are to be issued in whole or
in part in the form of one or more permanent global securities
and, if so, the identity of the depositary for such permanent
global securities;
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any trustees, paying agents, transfer agents or registrars with
respect to Offered Debt Securities; and
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any other term of the Offered Debt Securities not inconsistent
with the provisions of the Indenture. (Section 301.)
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We will maintain in each place we specify for payment of any
series of Offered Debt Securities an office or agency where
Offered Debt Securities of that series may be presented or
surrendered for payment, where Offered Debt Securities of that
series may be surrendered for registration of transfer or
exchange and where notices and demands to or on us in respect of
the Offered Debt Securities of that series and each Indenture
may be served.
Unless otherwise indicated in the prospectus supplement relating
to the Offered Debt Securities, the Offered Debt Securities will
be issued only in fully registered form, without coupons, in
denominations of $1,000 or integral multiples thereof.
(Section 302.) No service charge will be made for
any transfer or exchange of such Offered Debt Securities, but we
may require payment of a sum sufficient to cover any tax or
other governmental charge payable in relation thereto.
(Section 305.)
Debt securities may be issued under each Indenture as original
issue discount securities to be offered and sold at a
substantial discount below their principal amount. Special
federal income tax, accounting and other considerations
applicable to any such original issue discount securities will
be described in any prospectus supplement relating to such
securities. Original issue discount securities means
any security that provides for an amount less than the principal
amount thereof to be due and payable on an event of default and
the continuation of an event of default.
(Section 101.)
Unless otherwise indicated in a prospectus supplement, the
covenants contained in the Indenture and the debt securities
would not necessarily afford holders of the debt securities
protection in the event of a highly leveraged or other
transaction involving us that may adversely affect holders.
Permanent Global Debt Securities. If any Offered
Debt Securities are issuable in permanent global form, the
applicable prospectus supplement will describe the
circumstances, if any, under which beneficial owners of
interests in any such permanent global debt security may
exchange such interests for debt securities of such series and
of like tenor and principal amount in any authorized form and
denomination. (Section 305.) Principal of and any
premium and interest on a permanent global debt security will be
payable in the manner described in the applicable prospectus
supplement.
Modification of the Indenture. With certain
exceptions, the Indenture provides that, with the consent of the
holders of more than 50% in principal amount of all outstanding
securities issued under such Indenture (the Indenture
Securities), including, where applicable, the debt
securities affected thereby, we and the Trustee may enter into a
supplemental indenture for the purpose of adding to, changing or
eliminating any of the provisions of the Indenture or modifying
in any manner the rights of the holders of Indenture Securities.
Notwithstanding the
6
above, the consent of the holder of each outstanding Indenture
Security affected by the modification will be required to:
(a) change the stated maturity of the principal of, or any
installment of principal of or interest on, any security issued
under the Indenture, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable upon the
redemption thereof, or change any place of payment where, or
change the coin or currency in which, any Indenture Security or
any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(b) reduce the percentage in principal amount of the
outstanding Indenture Securities of any series, the consent of
whose holders is required for any supplemental indenture or for
any waiver provided for in each Indenture; or
(c) with certain exceptions, modify any of the provisions
of the section of each Indenture which concern waiver of past
defaults, waiver of certain covenants or consent to supplemental
indentures, except to increase the percentage of principal
amount of Indenture Securities of any series, the holders of
which are required to effect such waiver or consent or to
provide that certain other provisions of the Indenture cannot be
modified or waived without the consent of the holder of each
outstanding Indenture Security affected thereby. Each Indenture
provides that a supplemental indenture which changes or
eliminates any covenant or other provision of such Indenture
which has expressly been included solely for the benefit of one
or more particular series of Indenture Securities, or which
modifies the rights of the holders of Indenture Securities of
such series with respect to such covenant or other provision
shall be deemed not to affect the rights under such Indenture of
the holder of Indenture Securities of any other series.
(Section 902.)
Events of Default and Rights Upon Default. Under the
Indenture, the term Event of Default with respect to
any series of Indenture Securities, means any one of the
following events which shall have occurred and is continuing:
(a) default in the payment of any interest upon any
Indenture Security of that series when it becomes due and
payable or default in the payment of any mandatory sinking fund
payment provided for by the terms of any series of Indenture
Securities, and continuance of such default for a period of
30 days;
(b) default in the payment of the principal of (or premium,
if any, on) any Indenture Security of that series at its
Maturity;
(c) default in the performance, or breach, of any of our
covenants or warranties in the Indenture (other than a covenant
or warranty a default in whose performance or whose breach is
otherwise specifically dealt with in such Indenture or which has
been expressly included in such Indenture solely for the benefit
of one or more series of Indenture Securities other than that
series), and continuance of such default or breach for
60 days after we have been given by the Trustee, or the
holders of at least 25% in principal amount of all outstanding
Indenture Securities have given to us and the Trustee, a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a Notice of
Default under the Indenture; or
(d) certain events involving us in bankruptcy, receivership
or other insolvency proceedings or an assignment for the benefit
of creditors. (Section 501.)
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If an Event of Default described in clause (a) or
(b) in the foregoing paragraph has occurred and is
continuing with respect to Indenture Securities of any series,
each Indenture provides that the Trustee or the holders of not
less than 25% in principal amount of the outstanding Indenture
Securities of that series may declare the principal amount of
all of the Indenture Securities of that series to be due and
payable immediately, and upon any such declaration such
principal amount shall become immediately due and payable. If an
Event of Default described in clause (c) or (d) of the
foregoing paragraph occurs and is continuing, the Trustee or the
holders of not less that 25% in principal amount of all of the
Indenture Securities then outstanding may declare the principal
amount of all of the Indenture Securities to be due and payable
immediately, and upon any such declaration such principal amount
shall become immediately due and payable.
(Section 502.)
A default under our other indebtedness is not an Event of
Default under the Indenture, and an Event of Default under one
series of Indenture Securities will not necessarily be an Event
of Default under another series issued under the same Indenture.
At any time after a declaration of acceleration with respect to
Indenture Securities of any series (or of all series, as the
case may be) has been made and before judgment or decree for
payment of the money due has been obtained by the Trustee, the
holders of a majority in principal amount of the outstanding
Indenture Securities of that series (or of all series, as the
case may be) may rescind and annul such declaration and its
consequences, if subject to certain conditions, all Events of
Default with respect to Indenture Securities of that series (or
of all series, as the case may be), other than the non-payment
of the principal of the Indenture Securities due solely by such
declaration of acceleration, have been cured or waived and all
payments due (other than by acceleration) have been paid or
deposited with the Trustee. (Section 502.) With
certain exceptions, the holders of not less than a majority in
principal amount of the outstanding Indenture Securities of any
series, on behalf of the holders of all the Indenture Securities
of such series, may waive any past default described in
clause (a) or (b) of the first paragraph of this
heading Events of Default and Rights Upon Default
(or, in the case of a default described in clause (c) or
(d) of such paragraph, the holders of a majority in
principal amount of all outstanding Indenture Securities may
waive any such past default), and its consequences, except a
default (a) in the payment of the principal of (or premium,
if any) or interest on any Indenture Security, or (b) in
respect to a covenant or provision of the Indenture which under
the Indenture cannot be modified or amended without the consent
of the holder of each outstanding Indenture Security of such
series affected. (Section 513.)
The holders of not less than a majority in principal amount of
the Indenture Securities of any series at the time outstanding
are empowered under the terms of the Indenture, subject to
certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the
Trustee. (Section 512.)
The Indenture further provides that no holder of an Indenture
Security of any series may enforce the Indenture except in the
case of failure by the Trustee to act for 60 days after
notice of a continuing Event of Default with respect to the
Indenture Securities of that series and after request by the
holders of not less than 25% in principal amount of the
outstanding Indenture Securities of such series and the offer to
the Trustee of reasonable indemnity, but this provision will not
prevent a holder of any Indenture Security from enforcing the
payment of the principal of, and interest on, such holders
Indenture Security. (Sections 507 and 508.)
The Indenture requires that we deliver to the Trustee, within
120 days after the end of each fiscal year, an
Officers Certificate, stating whether to the best
knowledge of the signers we are
8
in default in the performance and observance of certain of the
terms of the Indenture, and if so, specifying each such default
and the nature and status thereof of which the signers may have
knowledge. (Section 1008.)
Discharge of Indenture. With certain exceptions, we
may discharge our obligations under the Indenture with respect
to any series of Indenture Securities by
(a) paying or causing to be paid the principal of (and
premium, if any) and interest on all the Indenture Securities of
such series outstanding, as and when the same shall become due
and payable;
(b) delivering to the Trustee all outstanding Indenture
Securities of such series for cancellation; or
(c) entering into an agreement in form and substance
satisfactory to us and the Trustee providing for the creation of
an escrow fund and depositing in trust with the Trustee, as
escrow agent of such fund, sufficient funds in cash
and/or
Eligible Obligations
and/or
U.S. Government Obligations, maturing as to principal and
interest in such amounts and at such times, as will be
sufficient to pay at the Stated Maturity or Redemption Date
all such Indenture Securities of such series not previously
delivered to the Trustee for cancellation, including principal
(and premium, if any) and interest to the Stated Maturity or
Redemption Date. (Section 401.)
The Indenture defines Eligible Obligations to mean
interest bearing obligations as a result of the deposit of which
the Indenture Securities are rated in the highest generic
long-term debt rating category assigned to legally defeased debt
by one or more nationally recognized rating agencies.
(Section 101).
For federal income tax purposes, there is a substantial risk
that a legal defeasance of a series of Indenture Securities by
the deposit of cash, Eligible Obligations, or
U.S. Government Obligations in a trust would be
characterized by the Internal Revenue Service or a court as a
taxable exchange by the holders of the Indenture Securities of
that series for either
(a) an issue of obligations of the defeasance trust or
(b) a direct interest in the cash
and/or
Eligible Obligations
and/or
U.S. Government Obligations held in the defeasance trust.
If the defeasance were so characterized, then a holder of an
Indenture Security of the series defeased would be:
(a) required to recognize gain or loss (which would be
capital gain or loss if the Indenture Securities were held as a
capital asset) at the time of the defeasance as if the Indenture
Security had been sold at such time for an amount equal to the
amount of cash and the fair market value of the Eligible
Obligations
and/or
U.S. Government Obligations held in the defeasance trust;
(b) required to include in income in each taxable year the
interest and any original issue discount or gain or loss
attributable to either such defeasance trust obligations or such
securities, as the case may be; and
(c) subject to the market discount provisions of the
Internal Revenue Code as they may pertain to such defeasance
trust obligations or such securities.
As a result, a holder of an Indenture Security may be required
to pay taxes on any such gain or income even though such holder
may not have received any cash. Prospective investors are
9
urged to consult their own advisors as to the tax consequences
of an actual or legal defeasance, including the applicability
and effect of tax laws other than federal income tax law.
Concerning the Trustee. The Trustee may from time to
time also act as a depository of funds for, make loans to, and
perform other services for, us in the normal course of business.
The holders of a majority in principal amount of the outstanding
securities issued under the Indenture will have the right to
direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that if an Event of
Default occurs (and is not cured), the Trustee will be required,
in the exercise of its power, to use the degree of care of a
prudent person in the conduct of such persons own affairs.
Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the
Indenture at the request of any holder of securities issued
under such Indenture, unless such holder shall have offered to
the Trustee security and indemnity satisfactory to it against
any loss, liability or expense and then only to the extent
required by the terms of such Indenture. The Trustee may resign
at any time or may be removed by us. If the Trustee resigns, is
removed or becomes incapable of acting as Trustee or if a
vacancy occurs in the office of the Trustee for any cause, a
successor Trustee shall be appointed in accordance with the
provisions of the applicable Indenture.
If the Trustee shall have or acquire any conflicting
interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and the Indenture.
(Section 608.) The Trust Indenture Act also
contains certain limitations on the right of the Trustee, as our
creditor, to obtain payment of claims in certain cases, or to
realize on certain property received by it in respect of such
claims, as security or otherwise. (Section 613.)
Limitations on Liens. The Indenture provides that so
long as any of the securities issued under the Indenture
(including the debt securities) are outstanding, we will not,
and will not permit any of our subsidiaries to, create or suffer
to exist, except in favor of us or any subsidiary, any lien on
any principal property at any time owned by it, to secure any of
our or any of our subsidiaries funded debt, unless
effective provision is made whereby outstanding securities
issued under the Indenture (including the debt securities) will
be equally and ratably secured with any and all such funded debt
and with any other indebtedness similarly entitled to be equally
and ratably secured. This restriction does not apply to prevent
the creation or existence of any (1) acquisition lien or
permitted encumbrance; or (2) lien created or assumed by us
or a subsidiary in connection with the issuance of debt
securities the interest on which is excludable from gross income
of the holder of such security pursuant to the Internal Revenue
Code of 1986, as amended, for the purpose of financing, in whole
or in part, the acquisition or construction of property or
assets to be used by us or a subsidiary. In case we or any
subsidiary propose to create or permit to exist a lien on any
principal property at any time owned by it to secure any funded
debt, other than funded debt permitted to be secured under
clauses (1) or (2) above, we will give prior written
notice thereof to the Trustee. We also will, or will cause our
subsidiary to, prior to or simultaneously with such creation or
permission to exist, by supplemental indenture executed to the
Trustee (or to the extent legally necessary to another trustee
or additional or separate trustee), in form satisfactory to the
Trustee, effectively secure all the securities issued under the
Indenture equally and ratably with such funded debt and any
other indebtedness entitled to be equally and ratably secured.
Notwithstanding the above, we or a subsidiary may issue, assume
or guarantee funded debt secured by a lien which would otherwise
be subject to the foregoing restrictions in an
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aggregate amount which, together with all other funded debt of
ours or a subsidiary secured by a lien which, if originally
issued, assumed or guaranteed at such time, would otherwise be
subject to the foregoing restrictions, not including funded debt
permitted to be secured under the foregoing exception, does not
at the time exceed 10% of our consolidated net tangible assets,
as shown on our audited consolidated financial statements of as
of the end of the fiscal year preceding the date of
determination. (Section 1007.)
The holder of more than 50% in principal amount of the
outstanding securities issued under the Indenture (including the
debt securities) may waive compliance by us with the covenant
contained in Section 1007 of the Indenture and certain
other covenants. (Section 1009.)
The Indenture defines the term subsidiary to mean a
corporation more than 50% of the outstanding voting stock of
which is owned, directly or indirectly, by us or by one or more
other subsidiaries, or by us and one or more other subsidiaries.
The term principal property is defined to mean any
property interest in oil and gas reserves located in the United
States or offshore the United States and owned by us or any
subsidiary and which is capable of producing crude oil,
condensate, natural gas, natural gas liquids or other similar
hydrocarbon substances in paying quantities, the net book value
of which property interest exceeds 2% of consolidated net
tangible assets, except any such property interest or interests
that in the opinion of our board of directors is not of material
importance to the total business conducted by us and our
subsidiaries as a whole. Without limitation, the term
principal property does not include
(1) accounts receivable and other obligations of any
obligor under a contract for the sale, exploration, production,
drilling, development, processing or transportation of crude
oil, condensate, natural gas, natural gas liquids or other
similar hydrocarbon substances by us or any of our subsidiaries,
and all related rights of us or any of our subsidiaries, and all
guarantees, insurance, letters of credit and other agreements or
arrangements of whatever character supporting or securing
payment of such receivables or obligations, or
(2) the production or any proceeds from production of crude
oil, condensate, natural gas, natural gas liquids or other
similar hydrocarbon substances. (Section 101.)
The term indebtedness, as applied to us or any of
our subsidiaries, is defined to mean bonds, debentures, notes
and other instruments representing obligations created or
assumed by any such corporation for the repayment of money
borrowed (other than unamortized debt discount or premium). All
indebtedness secured by a lien upon property owned by us or any
subsidiary and upon which indebtedness any such corporation
customarily pays interest, although any such corporation has not
assumed or become liable for the payment of such indebtedness,
is also deemed to be indebtedness of any such corporation. All
indebtedness for money borrowed incurred by other persons which
is directly guaranteed as to payment of principal by us or any
subsidiary is for all purposes of the Indenture deemed to be
indebtedness of any such corporation, but no other contingent
obligation of any such corporation in respect of indebtedness
incurred by other persons is for any purpose deemed indebtedness
of such corporation. Indebtedness does not include:
(1) any amount representing capitalized lease obligations;
(2) indirect guarantees or other contingent obligations in
connection with the indebtedness of others, including
agreements, contingent or otherwise, with such persons or with
third persons, with respect to, or to permit or ensure the
payment of, obligations of such other persons, including,
without limitation, agreements to purchase or repurchase
obligations of
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such other persons, to advance or supply funds to or to invest
in such other persons, or agreements to pay for property,
products or services of such other persons, whether or not
conferred, delivered or rendered, and any demand charge,
throughput, take-or-pay, keep-well, make-whole, cash deficiency,
maintenance of working capital or earnings or similar
agreements; and
(3) any guarantees with respect to lease or other similar
periodic payments to be made by other persons.
(Section 101.)
The term funded debt as applied to us or any
subsidiary is defined to mean all indebtedness incurred,
created, assumed or guaranteed by us or any subsidiary, or upon
which such corporation customarily pays interest charges, which
matures, or is renewable by such corporation to a date, more
than one year after the date as of which funded debt is being
determined. (Section 101.)
Lien is defined to mean any mortgage, pledge,
lien, security interest or similar charge or encumbrance.
(Section 101.) Acquisition lien is
defined to mean any (1) lien on any property acquired
before or after the date of the Indenture, created at the time
of acquisition or within one year thereafter to secure all or a
portion of the purchase price thereof, or existing thereon at
the date of acquisition, whether or not assumed by us or any
subsidiary, provided that any such lien applies only to the
property so acquired and fixed improvements thereon,
(2) lien on any property acquired before or after the date
of the Indenture by any corporation that is or becomes a
subsidiary after the date of the Indenture (Acquired
Entity), provided that any such lien
(1) shall either (A) exist prior to the time the
Acquired Entity becomes a subsidiary or (B) be created at
the time the Acquired Entity becomes a subsidiary or within one
year thereafter to secure all or a portion of the acquisition
price thereof,
(2) shall only apply to those properties owned by the
Acquired Entity at the time it becomes a subsidiary or
thereafter acquired by it from sources other than us or any
other subsidiary, and
(3) any extension, renewal or refunding, in whole or in
part, of any lien permitted by clause (1) or
(2) above, if limited to the same property or any portion
thereof subject to, and securing not more than the amount
secured by, the Lien extended, renewed or refunded.
(Section 101.)
Permitted encumbrance is defined to mean any
(1) lien reserved in any oil, gas or other mineral lease
for rent, royalty or delay rental under such lease and for
compliance with the terms of such lease;
(2) lien for any judgments or attachments in an aggregate
amount not in excess of $10,000,000, or Lien for any judgment or
attachment the execution or enforcement of which has been stayed
or which has been appealed and secured, if necessary, by the
filing of an appeal bond;
(3) sale or other transfer of crude oil, condensate,
natural gas, natural gas liquids or other similar hydrocarbon
substances in place, or the future production thereof, for a
period of time until, or in an amount such that, the transferee
will realize therefrom a specified amount, however determined,
of money or a specified amount of such crude oil, condensate,
natural gas, natural gas liquids or other similar hydrocarbon
substances or the sale or other transfer of any other interest
in property of the character commonly referred to as a
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production payment, overriding royalty,
net profits interest, royalty or similar
burden on any oil and gas property or mineral interest owned by
us or any subsidiary;
(4) lien consisting of or reserved in any (A) grant or
conveyance in the nature of a farm-out or conditional assignment
to us or any subsidiary entered into in the ordinary course of
business to secure any undertaking of ours or any subsidiary in
such grant or conveyance, (B) interest of an assignee in
any proved undeveloped lease or proved undeveloped portion of
any producing property transferred to such assignee for the
purpose of the development of such lease or property,
(C) unitization or pooling agreement or declaration,
(D) contract for the sale, purchase, exchange or processing
of production, or (E) operating agreement, area of mutual
interest agreement and other agreement which is customary in the
oil and gas business and which agreement does not materially
detract from the value, or materially impair the use of, the
properties affected thereby;
(5) lien arising out of any forward contract, futures
contract, swap agreement or other commodities contract entered
into by us or any subsidiary;
(6) lien on any oil and gas property of ours or any
subsidiary thereof, or on production therefrom, to secure any
liability of ours or such subsidiary for all or part of the
development cost for such property under any joint operating,
drilling or similar agreement for exploration, drilling or
development of such property, or any renewal or extension of
such lien; or
(7) certain other liens as described in the Indenture.
(Section 101.)
DESCRIPTION
OF CAPITAL STOCK
Authorized and
Outstanding Capital Stock
Our authorized capital stock consists of 10,000,000 shares
of preferred stock, $.01 par value:
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100,000 of which have been designated as Fixed Rate Cumulative
Perpetual Senior Preferred Stock, Series B, with a
liquidation preference of $1,000 per share (Series B),
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3,000,000 of which have been designated Series E Junior
Participating Preferred Stock, with a liquidation preference of
$1 per share or an amount equal to the payment made on one share
of common stock, whichever is greater, issuable upon exercise of
EOGs preferred share purchase rights, and
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640,000,000 shares of common stock, $.01 par value.
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At September 11, 2006, there were 243,131,434 shares
of our common stock and 100,000 shares of our Series B
preferred stock outstanding. The following summary description
of our common stock is qualified in its entirety by reference to
our Restated Certificate of Incorporation, as amended. A copy of
our certificate of incorporation is filed as an exhibit to the
registration statement of which this prospectus is a part.
Common
Stock
Our common stock possesses ordinary voting rights for the
election of directors and in respect to other corporate matters,
each share being entitled to one vote. The common stock has no
cumulative voting rights, meaning that the holders of a majority
of the shares voting for the election of directors can elect all
the directors if they choose to do so. The common stock carries
13
no preemptive rights and is not convertible, redeemable,
assessable or entitled to the benefits of any sinking fund. The
holders of common stock are entitled to dividends in such
amounts and at such times as may be declared by the board of
directors out of legally available funds.
Upon our liquidation or dissolution, the holders of our common
stock are entitled to share ratably in all net assets available
for distribution to stockholders after payment of any corporate
debts and liquidation and any liquidation preference established
for the preferred stock. All outstanding shares of common stock
are duly authorized, validly issued, fully paid and
non-assessable.
The transfer agent and registrar of the common stock is
Computershare Trust Company, N.A., Providence, Rhode Island.
Preferred
Stock
Under our Restated Certificate of Incorporation, as amended, the
Board of Directors may provide for the issuance of up to
10,000,000 shares of preferred stock in one or more series.
The Board of Directors already has designated
100,000 shares of Fixed Rate Cumulative Perpetual Senior
Preferred Stock, Series B, with a liquidation preference of
$1,000 per share and 3,000,000 shares of Series E
Junior Participating Preferred Stock, with a liquidation
preference of $1 per share or an amount equal to the payment
made on one share of common stock, whichever is greater
(issuable upon exercise of EOGs preferred share purchase
rights). The rights, preferences, privileges and restrictions,
including liquidation preferences, of the preferred stock of
each additional series will be fixed or designated by the Board
of Directors pursuant to a certificate of designation without
any further vote or action by our stockholders. The issuance of
preferred stock could have the effect of delaying, deferring or
preventing a change in control of the Company. Upon issuance
against full payment of the purchase price therefor, shares of
preferred stock offered hereby will be fully paid and
nonassessable.
The specific terms of a particular series of preferred stock
offered by this prospectus will be described in a prospectus
supplement relating to such series and will include the
following:
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the maximum number of shares to constitute the series and the
distinctive designation of the series;
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the annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or
dates from which dividends will begin to accrue or accumulate
and whether dividends will be cumulative;
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whether the shares of the series will be redeemable and, if so,
the price at and the terms and conditions on which the shares of
the series may be redeemed, including the time during which
shares of the series may be redeemed and any accumulated
dividends thereon that the holders of shares of the series shall
be entitled to receive upon the redemption thereof;
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the liquidation preference, if any, applicable to shares of the
series;
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whether the shares of the series will be subject to operation of
a retirement or sinking fund and, if so, the extent and manner
in which any such fund shall be applied to the purchase or
redemption of the shares of the series for retirement or for
other corporate purposes, and the terms and provisions relating
to the operation of such fund;
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the terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of
any other class or classes of capital stock of ours or any
series of any other class or classes, or of any other series of
the same class, including the price or prices
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or the rate or rates of conversion or exchange and the method,
if any, of adjustment the same;
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the voting rights, if any, on the shares of the series; and
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any other preferences and relative, participating, optional or
other special rights or qualifications, limitations or
restrictions thereof.
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Rights
Plan
On February 14, 2000, our Board of Directors declared a
dividend of one preferred share purchase right (a
Right) for each outstanding share of common stock,
par value $.01 per share. The dividend was paid on
February 24, 2000 to the stockholders of record on that
date. The description and terms of the Rights are set forth in a
Rights Agreement, dated February 14, 2000, as amended,
between EquiServe Trust Company, N.A., as Rights Agent (the
Rights Agent), and us(the Rights
Agreement). In accordance with the Rights Agreement, each
share of common stock issued in connection with the two-for-one
stock split effective March 1, 2005, also had one Right
associated with it.
Our Board has adopted this Rights Agreement to protect
stockholders from coercive or otherwise unfair takeover tactics.
In general terms, it works by imposing a significant penalty
upon any person or group which acquires 10% or more (with
certain exceptions) of our outstanding common stock without the
approval of our Board. The Rights Agreement should not interfere
with any merger or other business combination approved by our
Board.
For those interested in the specific terms of the Rights
Agreement, we provide the following summary description. Please
note, however, that this description is only a summary, and is
not complete, and should be read together with the entire Rights
Agreement and its amendments, which have been filed with the
Securities and Exchange Commission as an exhibit to this
Registration Statement and are incorporated herein by reference.
The Rights. Our Board authorized the issuance of a
Right with respect to each issued and outstanding share of
common stock on February 24, 2000. The Rights will
initially trade with, and will be inseparable from, the common
stock. The Rights are evidenced only by certificates that
represent shares of common stock. New Rights will accompany any
new shares of common stock we issue after February 24, 2000
until the Distribution Date described below.
Exercise Price. Each Right will allow its holder to
purchase from our Company one one-hundredth of a share of
Series E Junior Participating Preferred Stock
(Preferred Share) for $90, once the Rights become
exercisable. This portion of a Preferred Share will give the
stockholder approximately the same dividend, voting, and
liquidation rights as would one share of common stock. Prior to
exercise, the Right does not give its holder any dividend,
voting, or liquidation rights.
Exercisability. The Rights will not be exercisable
until:
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10 days after the public announcement that a person or
group has become an Acquiring Person by obtaining
beneficial ownership of 10% or more of our outstanding common
stock, or, if earlier,
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10 business days (or a later date determined by our Board before
any person or group becomes an Acquiring Person) after a person
or group begins a tender or exchange offer which, if
consummated, would result in that person or group becoming an
Acquiring Person.
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Notwithstanding the above, there is an exception to the
definition of Acquiring Person to permit a qualified
institutional investor to hold 10% or more, but less than 30%,
of our common stock without being deemed an Acquiring Person if
the institutional investor meets the following requirements:
(i) the institutional investor is described in
Rule 13d-1(b)(1)
promulgated under the Securities Exchange Act of 1934 and is
eligible to report (and, if such institutional investor is the
beneficial owner of greater than 5% of our common stock, does in
fact report) beneficial ownership of common stock on
Schedule 13G; (ii) the institutional investor is not
required to file a Schedule 13D (or any successor or
comparable report) with respect to its beneficial ownership of
our common stock; (iii) the institutional investor does not
beneficially own 15% or more of our common stock (including in
such calculation the holdings of all of the institutional
investors affiliates and associates other than those
which, under published interpretations of the United States
Securities and Exchange Commission or its staff, are eligible to
file separate reports on Schedule 13G with respect to their
beneficial ownership of our common stock); and (iv) the
institutional investor does not beneficially own 30% or more of
our common stock (including in such calculation the holdings of
all of the institutional investors affiliates and
associates).
We refer to the date when the Rights become exercisable as the
Distribution Date. Until that date, the common stock
certificates will also evidence the Rights, and any transfer of
shares of common stock will constitute a transfer of Rights.
After that date, the Rights will separate from the common stock
and be evidenced by book-entry credits or by Rights certificates
that we will mail to all eligible holders of common stock. Any
Rights held by an Acquiring Person are void and may not be
exercised.
Consequences of a Person or Group Becoming an Acquiring
Person.
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Flip In. If a person or group becomes an Acquiring
Person, all holders of Rights except the Acquiring Person may,
for $90, purchase shares of our common stock with a market value
of $180, based on the market price of the common stock prior to
such acquisition.
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Flip Over. If we are later acquired in a merger or
similar transaction after the Distribution Date, all holders of
Rights except the Acquiring Person may, for $90, purchase shares
of the acquiring corporation with a market value of $180 based
on the market price of the acquiring corporations stock,
prior to such merger.
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Preferred Share Provisions. Each one one-hundredth
of a Preferred Share, if issued:
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will not be redeemable.
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will entitle holders to quarterly dividend payments of $.01 per
share, or an amount equal to the dividend made on one share of
common stock, whichever is greater.
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will entitle holders upon liquidation either to receive $1 per
share or an amount equal to the payment made on one share of
common stock, whichever is greater.
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will have the same voting power as one share of common stock.
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if shares of our common stock are exchanged via merger,
consolidation, or a similar transaction, will entitle holders to
a per share payment equal to the payment made on one share of
common stock.
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The value of one one-hundredth interest in a Preferred Share
should approximate the value of one share of common stock.
Expiration. The Rights will expire on
February 24, 2010.
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Redemption. Our Board may redeem the Rights for
$.005 per Right at any time before any person or group becomes
an Acquiring Person. If our Board redeems any Rights, it must
redeem all of the Rights. Once the Rights are redeemed, the only
right of the holders of Rights will be to receive the redemption
price of $.005 per Right. The redemption price has been adjusted
for the two-for-one stock split effective March 1, 2005 and
will be adjusted if we have any future stock splits or stock
dividends of our common stock.
Exchange. After a person or group becomes an
Acquiring Person, but before an Acquiring Person owns 50% or
more of our outstanding common stock, our Board may extinguish
the Rights by exchanging one share of common stock or an
equivalent security for each Right, other than Rights held by
the Acquiring Person.
Anti-Dilution Provisions. Our Board may adjust the
purchase price of the Preferred Shares, the number of Preferred
Shares issuable and the number of outstanding Rights to prevent
dilution that may occur from a stock dividend, a stock split, a
reclassification of the Preferred Shares or common stock. No
adjustments to the Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights Agreement may be
amended by our Board without the consent of the holders of the
Rights. However, our Board may not amend the Rights Agreement to
lower the threshold at which a person or group becomes an
Acquiring Person to below 10% of our outstanding common stock.
In addition, the Board may not cause a person or group to become
an Acquiring Person by lowering this threshold below the
percentage interest that such person or group already owns.
After a person or group becomes an Acquiring Person, our Board
may not amend the Rights Agreement in a way that adversely
affects holders of the Rights.
Limitation on
Directors Liability
Delaware corporation law authorizes corporations to limit or
eliminate the personal liability of directors to corporations
and their stockholders for monetary damages for breach of
directors fiduciary duty of care. The duty of care
requires that, when acting on behalf of the corporation,
directors must exercise an informed business judgment based on
all material information reasonably available to them. Absent
the limitations authorized by such laws, directors are
accountable to corporations and their stockholders for monetary
damages for conduct constituting gross negligence in the
exercise of their duty of care. The Delaware laws enable
corporations to limit available relief to equitable remedies
such as injunction or recission. Our Restated Certificate of
Incorporation, as amended, limits the liabilities of our
directors to us or our stockholders, in their capacity as
directors but not in their capacity as officers, to the fullest
extent permitted by Delaware law. Specifically, our directors
will not be personally liable for monetary damages for breach of
a directors fiduciary duty as a director, except for
liability:
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for any breach of the directors duty of loyalty to us or
to our stockholders;
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for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
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for unlawful payments of dividends or unlawful stock repurchases
or redemptions as provided in Section 174 of the Delaware
General Corporation Law; or
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for any transaction from which the director derived an improper
personal benefit.
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This provision in the Restated Certificate of Incorporation, as
amended, may have the effect of reducing the likelihood of
derivative litigation against directors, and may discourage or
deter stockholders or management from bringing a lawsuit against
directors for breach of their duty of care, even though such an
action, if successful, might otherwise have benefited us and our
stockholders.
Except as otherwise stated in the applicable prospectus
supplement, the debt securities and preferred stock that we
offer initially will be represented by one or more registered,
global certificates (collectively the Global
Security), which will be deposited upon issuance with, or
on behalf of, The Depository Trust Company, in New York,
New York, and registered in the name of a nominee of DTC, in
each case for credit to an account of a direct or indirect
participant in DTC as described below. This means that, except
as provided below, holders of the debt securities and preferred
stock (1) will not receive a certificate for the debt
securities and preferred stock, (2) will not have debt
securities and preferred stock registered in their name and
(3) will not be considered the registered owners or holders
of the debt securities and preferred stock for any purpose.
Accordingly, each person owning a beneficial interest in the
Global Security must rely on the procedures of the DTC and, if
such person is not one of DTCs participating organizations
(collectively, the Participants), on the procedures
of the Participant through which the person owns its interest,
to exercise any rights of a holder of the debt securities and
preferred stock.
Except as set forth below, the Global Security certificate may
be transferred, in whole and not in part, only to another
nominee of DTC or to a successor of DTC or its nominee.
Beneficial interests in the Global Security may not be exchanged
for certificates representing debt securities and preferred
stock except in the limited circumstances described below.
DTC has advised us that DTC is a limited-purpose trust company
organized under the laws of the State of New York, a
banking organization within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a
clearing corporation within the meaning of the New
York Uniform Commercial Code and a clearing agency
registered under the Securities Exchange Act of 1934. DTC was
created to hold securities for its Participants and to
facilitate the clearance and settlement of transactions in those
securities between Participants through electronic book-entry
changes in accounts of its Participants, by eliminating the need
for physical movement of securities certificates. The
Participants include securities brokers and dealers, including
the initial purchasers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a
number of its participants and by the New York Stock Exchange,
Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to DTCs
book-entry system is also available to other entities such as
banks, brokers, dealers and trust companies (collectively, the
Indirect Participants) that clear transactions
through or maintain a direct or indirect custodial relationship
with a Participant. Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of DTC
are recorded on the records of the Participants and the Indirect
Participants.
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DTC has also advised us that, pursuant to procedures established
by it:
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upon deposit of the Global Security, DTC will credit the
accounts of Participants designated by the initial purchasers
with the applicable portion of the shares of preferred stock or
the principal amount of debt securities represented by the
Global Security; and
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ownership of such shares or principal amount represented by the
Global Security will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by
DTC, with respect to the Participants, or by the Participants
and the Indirect Participants, with respect to the other owners
of beneficial interests in the Global Security.
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DTC has no knowledge of the actual beneficial owners of the debt
securities and preferred stock. Beneficial owners will not
receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic
statements of their holdings, from the Participants through
which the beneficial owners acquired the preferred stock or debt
securities. All interests in a Global Security are subject
to the procedures and requirements of DTC. The laws of some
states require that certain persons take physical delivery in
certificated form of securities that they own. Consequently, the
ability to transfer beneficial interests in the Global Security
to such persons will be impaired to that extent. Because DTC can
act only on behalf of Participants, which in turn act on behalf
of Indirect Participants and certain banks, the ability of a
person having beneficial interests in a Global Security to
pledge such interests to persons or entities that do not
participate in the DTC system, or otherwise take actions in
respect of such interests, may be adversely affected by the lack
of a physical certificate evidencing such interests.
Payments in respect of the debt securities and preferred stock
registered in the name of DTC or its nominee will be payable by
us through the paying agent to DTC in its capacity as the
registered holder. We will treat the persons in whose names the
debt securities and preferred stock, including the Global
Security, are registered as the owners of the debt securities
and preferred stock for the purpose of receiving such payments
and for any and all other purposes whatsoever. Consequently,
neither we, nor the Trustee, nor any agent of ours has or will
have any responsibility or liability for
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any aspect of DTCs records or any Participants or
Indirect Participants records relating to, or payments
made on account of, beneficial ownership interests in the Global
Security, or for maintaining, supervising or reviewing any of
DTCs records or any Participants or Indirect
Participants records relating to the beneficial ownership
interests in the Global Security or
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any other matter relating to the actions and practices of DTC or
any of its Participants or Indirect Participants. DTC has
advised us that its current practice, upon receipt of any
payment in respect of securities such as the Global Security, is
to credit the accounts of the relevant Participants with payment
on the payment due dates in amounts proportionate to their
respective beneficial interests in the Global Security as shown
on DTCs records.
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Payments by the Participants and the Indirect Participants to
the beneficial owners of the debt securities and preferred stock
will be governed by standing instructions and customary
practices, as is now the case with securities held for the
accounts of customers registered in street name, and
will be the sole responsibility of the Participants or the
Indirect Participants, subject to any statutory or regulatory
requirements as may be in effect from time to time. Neither we,
nor the Trustee, nor any agent of ours will be liable for any
delay by DTC or any of the Participants in identifying the
beneficial owners of the debt securities and preferred stock,
and each may conclusively rely on, and will be protected in
relying on, instructions from DTC or its nominee for all
purposes.
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DTC has advised us that it will take any action permitted to be
taken by a holder of the debt securities and preferred stock
only at the direction of one or more Participants to whose
account with DTC interests in the Global Security are credited.
However, DTC reserves the right to exchange the Global Security
for certificates representing debt securities and preferred
stock and to distribute those certificates to its Participants.
In addition to covering the offering of debt securities,
preferred stock and common stock by us, this prospectus covers
the offering for resale of common stock by selling stockholders.
The applicable prospectus supplement will set forth, with
respect to each selling stockholder,
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the name of the selling stockholder,
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the nature of any position, office or other material
relationship which the selling stockholder will have had during
the prior three years with us or any of our predecessors or
affiliates,
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the number of shares of common stock owned by the selling
stockholder prior to the offering,
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the number of shares to be offered for the selling
stockholders account, and
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the number of shares and (if one percent or more) the percentage
of common stock to be owned by the selling stockholder after
completion of the offering.
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We may sell the debt securities, preferred stock or common stock
offered by this prospectus
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through underwriters, brokers, dealers or agents;
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directly to purchasers; or
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pursuant to delayed delivery contracts or forward contracts.
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Any underwriters, dealers, brokers or agents may sell the debt
securities, preferred stock or common stock to institutional
purchasers in one or more transactions, including block
transactions, on the NYSE or otherwise. Any sales of the debt
securities, preferred stock or common stock may be made at
market prices prevailing at the time of sale, at prices related
to prevailing market prices or at negotiated prices. The
prospectus supplement relating to the securities will set forth
the terms of the offering of such securities, including the name
or names of any underwriters or agents, the purchase price of
the securities and the proceeds to us from such sale, any
delayed delivery arrangements, any underwriting discounts and
commissions and other items constituting underwriters
compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to
dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time. If we use underwriters in the sale of
any securities, the underwriters will acquire such securities
for their own account and may resell them from time to time in
one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at
the time of sale. In connection with the sale of the debt
securities, preferred stock and common stock, underwriters,
brokers, dealers or agents may be deemed to have received
compensation from us in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of
the debt securities, preferred stock or common stock for whom
they may act as agent or to whom they may sell as principal.
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Underwriters or agents may sell the debt securities, preferred
stock or common stock to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions
or commissions from the underwriters or commissions from the
purchasers for whom they may act as agent. The debt securities,
preferred stock or common stock may be offered to the public
either through underwriting syndicates represented by one or
more managing underwriters or directly by one or more firms
acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of debt
securities, preferred stock or common stock will be named in the
prospectus supplement relating to that offering and, if an
underwriting syndicate is used the name or names of the managing
underwriter or underwriters will be set forth on the cover of
such prospectus supplement. Unless otherwise set forth in the
prospectus supplement relating to such securities, the
obligations of the underwriters to purchase the debt securities,
preferred stock or common stock will be subject to certain
conditions precedent, and the underwriters will be obligated to
purchase all the securities offered if any are purchased.
If dealers are used in the sale of debt securities, preferred
stock or common stock, we will sell such securities to the
dealers as principals. The dealers may then resell such
securities to the public at varying prices to be determined by
such dealers at the time of resale. The names of dealers or
brokers acting as dealers and the terms of the transaction will
be set forth in the prospectus supplement relating to such
securities. We may sell the debt securities, preferred stock or
common stock directly or through agents designated by us from
time to time. Any agent involved in the offer or sale of the
securities in respect to which this prospectus is delivered will
be named, and any commissions that we pay to such agent will be
set forth, in the prospectus supplement relating to such
securities. Unless otherwise indicated in the prospectus
supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the prospectus supplement, we will authorize
agents, underwriters, brokers or dealers to solicit offers from
certain types of institutions to purchase debt securities,
preferred stock or common stock at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date
in the future. Such contracts will be subject only to those
conditions set forth in the prospectus supplement, and the
prospectus supplement will set forth the commission payable for
solicitation of such contracts.
Debt securities, preferred stock or common stock may also be
sold directly by us. In this case, no underwriters or agents
will be involved. We may use electronic media, including the
Internet, to sell these securities directly.
The debt securities and the preferred stock, when first issued,
will have no established trading market. Any underwriters or
agents to or through whom we sell debt securities or preferred
stock for public offering and sale may make a market in such
debt securities or preferred stock, but such underwriters or
agents will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for any such
debt securities or preferred stock.
Agents, brokers, dealers and underwriters may be entitled under
agreements with us to indemnification by us against certain
civil liabilities, including liabilities under the Securities
Act of 1933, or to contribution with respect to payments which
such agents, brokers, dealers or underwriters may be required to
make in that respect. Agents, brokers, dealers and underwriters
may be customers of, engage in transactions with or perform
services for us in the ordinary course of business.
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The validity of the debt securities, preferred stock and common
stock offered by this prospectus will be passed on for us by
Fulbright & Jaworski L.L.P. and will be passed upon
for any agents, dealers or underwriters by counsel named in the
applicable prospectus supplement. As of August 31, 2006,
lawyers at Fulbright & Jaworski L.L.P. working on this
offering owned 2,600 shares of EOGs common stock.
The consolidated financial statements, the related financial
statement schedule, and managements report on the
effectiveness of internal control over financial reporting
incorporated in this prospectus by reference from our Annual
Report on
Form 10-K
for the year ended December 31, 2005 have been audited by
Deloitte & Touche LLP, an independent registered
public accounting firm, as stated in their report, which is
incorporated herein by reference (which report
(1) expressed an unqualified opinion on the consolidated
financial statements and financial statement schedule and
includes an explanatory paragraph referring to our adoption of
Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations,
(2) expressed an unqualified opinion on managements
assessment regarding the effectiveness of internal control over
financial reporting, and (3) expressed an unqualified
opinion on the effectiveness of internal control over financial
reporting), and has been so incorporated in reliance upon the
report of such firm given upon their authority as experts in
accounting and auditing.
The letter report of DeGolyer & MacNaughton,
independent petroleum consultants, included as an exhibit to our
Annual Report on
Form 10-K
for the year ended December 31, 2005 and the estimates from
the reports of that firm appearing in such Annual Report, are
incorporated by reference herein on the authority of said firm
as experts in petroleum engineering in giving such reports.
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