Senior Revolving Credit Facility.
As of December 31, 2011, our borrowing base is $1.8 billion and
commitments are $1.4 billion. In May 2011, we entered into an amendment to our senior revolving
credit facility, adjusting our borrowing rates and extending the maturity date to May 4, 2016. In
connection with the EIG preferred stock private placement, we further amended our senior revolving
credit facility in November 2011. See
Plains Offshore Senior Credit Facility
. The amendment requires,
among other things, that we make a mandatory prepayment if the combined total borrowings under
both our senior revolving credit facility and the Plains Offshore senior credit facility exceed the
borrowing base, which remained at $1.8 billion. In connection with our divestments in December 2011,
we further amended our senior revolving credit facility. The amendment provided for no reduction to
our borrowing base. The borrowing base will be redetermined on an annual basis, with us and the
lenders each having the right to one annual interim unscheduled redetermination, and adjusted based
on our oil and gas properties, reserves, other indebtedness and other relevant factors. Additionally, our
senior revolving credit facility contains a $250 million limit on letters of credit and a $50 million
commitment for swingline loans. At December 31, 2011, we had $1.2 million in letters of credit
outstanding under our senior revolving credit facility.
Amounts borrowed under our senior revolving credit facility, as amended, bear an interest rate, at
our election, equal to either: (i) the Eurodollar rate, which is based on LIBOR, plus an additional
variable amount ranging from 1.50% to 2.50%; (ii) a variable amount ranging from 0.50% to 1.50% plus
the greater of (1) the prime rate, as determined by JPMorgan Chase Bank, (2) the federal funds rate,
plus
1
⁄
2
of 1%, and (3) the adjusted LIBOR plus 1%; or (iii) the overnight federal funds rate plus an
additional variable amount ranging from 1.50% to 2.50% for swingline loans. The additional variable
amount of interest payable is based on the utilization rate as a percentage of (a) the total amount of
funds borrowed under both our senior revolving credit facility and the Plains Offshore senior credit
facility and (b) the borrowing base under our senior revolving credit facility. Letter of credit fees under
our senior revolving credit facility are based on the utilization rate and range from 1.50% to 2.50%.
Commitment fees range from 0.375% to 0.50% of amounts available for borrowing. The effective
interest rate on borrowings under our senior revolving credit facility was 2.08% at December 31, 2011.
Our senior revolving credit facility is secured by 100% of the shares of stock in certain of our
domestic subsidiaries, 65% of the shares of stock in certain foreign subsidiaries and mortgages
covering at least 75% of the total present value of our domestic proved oil and gas properties. Our
senior revolving credit facility contains negative covenants that limit our ability, as well as the ability of
our restricted subsidiaries to, among other things, incur additional debt, pay dividends on stock, make
distributions of cash or property, change the nature of our business or operations, redeem stock or
redeem subordinated debt, make investments, create liens, enter into leases, sell assets, sell capital
stock of subsidiaries, guarantee other indebtedness, enter into agreements that restrict dividends from
subsidiaries, enter into certain types of swap agreements, enter into take-or-pay or other prepayment
arrangements, merge or consolidate and enter into transactions with affiliates. In addition, we are
required to maintain a ratio of debt to EBITDAX (as defined) of no greater than 4.50 to 1.
Plains Offshore Senior Credit Facility.
The aggregate commitments of the lenders under the Plains
Offshore senior credit facility are $300 million. The Plains Offshore senior credit facility contains a $50
million limit on letters of credit and matures on November 18, 2016. At December 31, 2011, Plains
Offshore had no letters of credit outstanding under its senior credit facility.
Amounts borrowed under the Plains Offshore senior credit facility bear an interest rate, at Plains
Offshore’s election, equal to either: (i) the Eurodollar rate, which is based on LIBOR, plus an additional
variable amount ranging from 1.50% to 2.50%; (ii) a variable amount ranging from 0.50% to 1.50% plus
the greater of (1) the prime rate, as determined by JPMorgan Chase Bank, (2) the federal funds rate,
plus
1
⁄
2
of 1%, and (3) the adjusted LIBOR plus 1%. The additional variable amount of interest payable
is based on the utilization rate as a percentage of (a) the total amount of funds borrowed under both
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