Property Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2011

Notes To Financial Statements [Abstract]

Acquisitions and Divestitures

16.  Acquisitions and Divestitures

During 2011, EOG received proceeds of approximately $1.4 billion from sales of producing properties and acreage and certain midstream assets, primarily in the Rocky Mountain area and Texas, and the sale of a portion of EOG's interest in the planned Kitimat liquefied natural gas (LNG) Terminal and the proposed Pacific Trail Pipelines (PTP).  During 2010, EOG received proceeds of approximately $673 million from the sale of producing properties and acreage, primarily Canadian shallow natural gas assets and properties in the Rocky Mountain area, Texas, and Pennsylvania.

During the fourth quarter of 2010, EOG's wholly-owned Canadian subsidiary, EOG Resources Canada Inc. (EOGRC), paid $210 million to acquire Galveston LNG Inc., a Calgary-based corporation which owned 49% of the LNG export terminal to be located at Bish Cove, near the Port of Kitimat, north of Vancouver, British Columbia.  In addition, Galveston LNG Inc. also owned a 24.5% interest in the PTP originating at Summit Lake, British Columbia.  The pipeline is intended to link Western Canada's natural gas producing regions to the Kitimat LNG Terminal.  At the time EOG completed the acquisition, an affiliate of Apache Corporation (Apache) owned 51% of the Kitimat LNG Terminal and a 25.5% interest in PTP.  In connection with the acquisition, EOG recorded intangible assets related to certain leases, permits and other contracts. Such intangible assets are included in Other Assets on the Consolidated Balance Sheets.  During the first quarter of 2011, EOGRC purchased an additional 24.5% interest in PTP for $25.2 million.  A portion of the purchase price ($15.3 million) was paid at closing with the remaining amount to be paid contingent on the decision to proceed with the construction of the Kitimat LNG Terminal.  Additionally, in March 2011, EOGRC and Apache, through a series of transactions, sold a portion of their interests in the Kitimat LNG Terminal and PTP to an affiliate of Encana Corporation (Encana).  Subsequent to these transactions, ownership interests in both the Kitimat LNG Terminal and PTP are:  Apache (operator) 40%, EOGRC 30% and Encana 30%.  All future costs of the project will be paid by each party in proportion to its respective ownership percentage.

In the fourth quarter of 2010, EOG completed the sales of certain of its Canadian shallow natural gas assets in three separate transactions.  Proceeds from the sales were approximately $344 million.  In 2010, EOG recorded a pretax impairment of $280 million to adjust the shallow natural gas assets sold to estimated fair value less estimated cost to sell.

In December 2009, EOG and a third party entered into an asset exchange agreement whereby the two parties exchanged certain natural gas related properties in the Rocky Mountain area.  In accordance with the provisions of the Business Combinations Topic of the ASC, EOG realized a pretax gain of $390 million on the exchange to reflect the excess of the fair value of the properties received over the book basis of the properties given up in the transaction.

In December 2009, EOG sold its crude oil and natural gas related assets located in California for consideration of $202 million.  EOG realized a pretax gain in 2009 of approximately $146 million on the sale.

In October 2009, EOG entered into an agreement to acquire unproved acreage located in Nacogdoches County, Texas, within the Haynesville and Bossier Shale formations (Haynesville Assets).  EOG acquired the unproved acreage at principal, supplemental and final closings held in October 2009, December 2009 and February 2010, respectively.  The acquisition agreement provides for an additional one-time supplemental cash payment to the sellers of the Haynesville Assets that is contingent on the satisfaction of certain conditions (within a five-year period beginning on the principal closing date) set forth in the acquisition agreement with respect to future natural gas prices.  The aggregate consideration recorded in 2009 and 2010 for the acquisition of the Haynesville Assets was $134 million and $18 million, respectively.

During the third quarter of 2009, EOG completed three transactions to acquire certain crude oil and natural gas properties and related assets located in Montague and Cooke Counties, Texas.  The aggregate purchase price of the transactions totaled $197 million, consisting of cash consideration of $107 million and 1,450,000 shares of EOG Common Stock valued at $89.6 million on the closing date of the applicable transaction.