==========================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 8-K
-----------------------------
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 14, 2001
---------------
EOG RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-9743 47-0684736
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or organization) Number) Identification No.)
333 CLAY STREET
SUITE 4200
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
713/651-7000
(Registrant's telephone number, including area code)
=============================================================================
2
EOG RESOURCES, INC.
Item 5. Other Events
I. Amendment of Rights Plan
On December 13, 2001, EOG Resources, Inc.(EOG), a Delaware
corporation, amended its Rights Agreement dated as of February
14, 2000 between EOG and First Chicago Trust Company of New York
(as Rights Agent) (the "Rights Amendment") to reduce the
beneficial ownership threshold at which a person becomes an
"Acquiring Person" under the Rights Agreement from 15% of the
outstanding shares of EOG's common stock, par value $.01 per
share ("EOG Common Stock"), to 10% of the outstanding shares of
EOG Common Stock, except as otherwise provided therein, and
amends the definition of "Distribution Date" in Section 3(a) of
the Rights Agreement to include the commencement of, or the
public announcement of an intention to commence, a tender or
exchange offer which, if consummated, would result in the
beneficial ownership of 10% or more of the outstanding shares of
EOG Common Stock, rather than 15%, as provided in the original
Rights Agreement.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(c) Exhibits
99.1 Amendment, dated as of December 13, 2001, to the
Rights Agreement, dated as of February 14, 2000, between EOG and
First Chicago Trust Company of New York (incorporated by reference
to Exhibit 2 to Amendment No. 1 to EOG's Registration Statement on
Form 8-A/A, filed with the Securities and Exchange Commission on
December 14, 2001).
Item 9. Regulation FD Disclosure
The fourth quarter and full year 2001 forecasts set forth
below are given as of the date of this document only and are
based on current available information and expectations.
I. Price Swaps
With the objective of enhancing the certainty of future
revenues, EOG enters into NYMEX-related commodity price swaps and
collars from time to time.
Summary of EOG's open commodity price swap positions at December
13, 2001:
. Crude Oil and Condensate Price Swaps - EOG had outstanding
price swaps covering notional volumes of 5 thousand barrels per
day (MBbl/d) for December 2001 at an average price of $19.13 per
barrel.
. Natural Gas Price Swaps - EOG had outstanding price swaps
covering notional volumes of 140,000 million British thermal
units per day (MMBtu/d) for the period January 2002 to May 2002
at an average price of $3.13 per million British thermal units
(MMBtu) and 100,000 MMBtu/d for the period June 2002 to December
2002 at an average price of $3.24 per MMBtu.
3
EOG accounts for these price swaps under mark-to-market
accounting and accordingly, current year earnings impact from
these contracts will be affected by the market prices at December
31, 2001.
During the quarter-to-date period ended December 13, 2001, EOG
settled the following price swaps and collars:
. Crude oil and condensate price swaps covering notional
volumes of 5 MBbl/d for October 2001 at an average price of
$27.86 per barrel, resulting in cash realized mark-to-market
gains of $0.9 million,
. Natural gas collars covering notional volumes of 200,000
MMBtu/d for October 2001 and November 2001 with a floor price of
$4.40 per MMBtu and ceiling prices that averaged $6.15 per MMBtu,
resulting in cash realized mark-to-market gains of $23.6 million,
and
. Natural gas swaps covering notional volumes of approximately
110,000 MMBtu/d for the period October 2001 to December 2001 at
an average price of $3.46 per MMBtu, resulting in cash realized
mark-to-market gains of $9.8 million.
II. Physical Contracts
At November 30, 2001, EOG had outstanding natural gas
physical contracts for 95,000 MMBtu/d at an average price of
$2.99 per MMBtu for the period December 2001 to February 2002 in
the U.S. and approximately 24,000 MMBtu/d at an average NYMEX
price of US$3.35 per MMBtu for the period December 2001 to
November 2002 in Canada.
III. Exposure to Enron Corp.
Enron Corp. and certain of its affiliates, including Enron
North America Corp., have filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code. EOG currently estimates exposure between $15 million to
$20 million relating to these Enron affiliates. Of this
estimated exposure, approximately $12 million relates to
natural gas and crude oil price swap contracts with Enron North
America Corp. that primarily related to 2002 and that have been
excluded from Section I above. EOG has other contractual
relationships including guarantees and indemnifications with
Enron Corp. and certain affiliates that have filed for
reorganization. Based on a preliminary review of these other
matters, EOG believes that the Chapter 11 proceedings will not
have a material adverse effect on EOG's financial position. EOG
has commodity sales contracts with Enron Canada Corp. and EOTT
Energy Partners L.P. that have not filed for reorganization.
Monthly activity levels have been approximately $5 million per
month under these latter contracts and all related payment
obligations are current.
IV. Capital Expenditures and Capital Structure
Current estimates of capital expenditures for the full year
2001 are between $1.025 billion and $1.125 billion, including
acquisitions of approximately $170 million. Due to estimates of
capital expenditures, working capital requirements, share repurchases
and reduced volumes during the fourth quarter due to lower natural
gas prices as discussed in the previous Form 8-K filing on
October 3, 2001, the estimated debt to total capital ratio at
December 31, 2001 is expected to be between 32% - 35%.
4
V. Fourth Quarter Natural Gas and Crude Oil Production
Based on EOG's quarter-to-date production through November
and estimated production for December, natural gas and crude oil
production for the fourth quarter is expected to be approximately
at the lower end of the ranges stated in a previous Form 8-K filing
on October 3, 2001. In the Form 8-K filing, the total fourth quarter
natural gas production range on a million cubic feet per day basis was
875 to 935 and the total fourth quarter crude oil on a thousand
barrels per day basis was 23.5 to 26.5.
Information Regarding Forward-Looking Statements
------------------------------------------------
This document includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements are not guarantees of performance. Although EOG
believes its 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: the timing and extent of changes in commodity
prices for crude oil, natural gas and related products and
interest rates; the extent and effect of any hedging activities
engaged in by EOG; the extent of EOG's success in discovering,
developing, marketing and producing reserves and in acquiring oil
and gas properties; the accuracy of reserve estimates, which by
their nature involve the exercise of professional judgment and
may therefore be imprecise; political developments around the
world, including terrorist activities and responses to terrorist
activities; and financial market conditions. In light of these
risks, uncertainties and assumptions, the events anticipated by
EOG's forward-looking statements might not occur. EOG undertakes
no obligations to update or revise its forward-looking
statements, whether as a result of new information, future events
or otherwise.
EXHIBIT INDEX
99.1 Amendment, dated as of December 13, 2001, to the Rights
Agreement, dated as of February 14, 2000, between EOG and
First Chicago Trust Company of New York (incorporated by
reference to Exhibit 2 to Amendment No. 1 to EOG's
Registration Statement on Form 8-A/A, filed with the
Securities and Exchange Commission on December 14, 2001).
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
EOG RESOURCES, INC.
(Registrant)
Date: December 14, 2001 By: /s/ TIMOTHY K. DRIGGERS
--------------------------------
Timothy K. Driggers
Vice President, Accounting
& Land Administration
(Principal Accounting Officer)