Note 4. Debt

Our debt consists of the following:

	June 30,						December 31,
	2011						2010
	Debt			Interest Rate			Debt			Interest Rate
(millions, except percentages)
Credit Facility, due December 9, 2012	$	-			-		$	350			0.57	%
5¼% Senior Notes, due April 15, 2014		200			5.25	%		200			5.25	%
8¼% Senior Notes, due March 1, 2019		1,000			8.25	%		1,000			8.25	%
7¼% Notes, due October 15, 2023		100			7.25	%		100			7.25	%
8% Senior Notes, due April 1, 2027		250			8.00	%		250			8.00	%
6% Senior Notes, due March 1, 2041		850			6.00	%		-			-
7¼% Senior Debentures, due August 1, 2097		84			7.25	%		84			7.25	%
FPSO Lease Obligation (1)		346			-			295			-
Total		2,830						2,279
Unamortized Discount		(12	)					(7	)
Total Debt, Net of Discount		2,818						2,272
Less Amounts Due Within One Year (1)		(21	)					-
Long-Term Debt Due After One Year	$	2,797					$	2,272

(1)

We have entered into an agreement to lease a floating production, storage and offloading vessel (FPSO) to be used in the development of the Aseng field, offshore Equatorial Guinea. The amount of the FPSO lease obligation is based on the discounted present value of future minimum lease payments and the percentage of construction activities completed as of the reporting dates, and therefore does not reflect future minimum lease payments. The increase in the FPSO lease obligation is a non-cash financing activity. Amounts due within one year equal the amount by which the FPSO lease obligation is expected to be reduced during the next 12 months as lease payments begin. We currently expect production to commence at year end 2011.

Debt Issuance On February 18, 2011, we closed an offering of $850 million senior unsecured notes receiving net proceeds of $836 million, after deducting discount and underwriting fees. The notes are due March 1, 2041, and pay interest semi-annually at 6%. Total debt issuance costs of approximately $9 million were incurred and are being amortized to expense over the term of the notes. Approximately $470 million of the net proceeds were used to repay outstanding indebtedness under our revolving credit facility and the balance of the proceeds will be used for general corporate purposes. The notes are senior unsecured debt and rank pari passu with any of our other senior unsecured indebtedness with respect to the payment of both principal and interest.

Annual Debt Maturities and FPSO Lease Payments Annual maturities of outstanding debt and estimated annual FPSO lease payments are as follows:

	Debt Principal Payments		FPSO Lease Payments
(millions)
June 30, 2011
2011	$	-	$	-
2012		-		72
2013		-		72
2014		200		72
2015		-		72
Thereafter		2,284		209
Total	$	2,484	$	497