Summary
EOG Resources, Inc. (EOG) filed an 8-K on May 26, 2010, detailing the closure of a significant debt issuance. The company successfully sold $1 billion in aggregate principal amount of Senior Notes, split equally between 2.95% notes due in 2015 and 4.40% notes due in 2020. This issuance, registered under a Form S-3, provides EOG with substantial capital, likely for operational expansion or general corporate purposes. The filing also provided an update on EOG's commodity price risk management strategies. While no new natural gas hedging contracts have been entered since the prior quarter, the company disclosed its crude oil financial price swap contracts. These hedges are in place for the latter part of 2010 and all of 2011, with average prices of $91.50/bbl for the remainder of 2010 and $93.18/bbl for 2011, offering investors visibility into the company's efforts to mitigate crude oil price volatility.
Key Highlights
- 1EOG Resources closed a $1 billion debt offering consisting of $500 million in 2.95% Senior Notes due 2015 and $500 million in 4.40% Senior Notes due 2020.
- 2The debt issuance was registered under a Form S-3 registration statement.
- 3EOG has not entered into new natural gas hedging contracts since its last 10-Q filing.
- 4The company has entered into crude oil financial price swap contracts to hedge against price volatility.
- 5These crude oil hedges cover the period from September 2010 through December 2011.
- 6The average hedged price for crude oil is $91.50 per barrel for the remainder of 2010 and $93.18 per barrel for 2011.