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 the Plains Offshore senior
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 borrowings under the Plains Offshore senior credit facility are guaranteed on a senior basis by
PXP and certain of our subsidiaries, and are secured on a
pari passu
basis by liens on the same
collateral that secures PXP’s senior revolving credit facility. The Plains Offshore senior credit facility
contains certain affirmative and negative covenants, including limiting Plains Offshore’s ability, among
other things, to create liens, incur other indebtedness, make dividends (excluding dividends on
preferred stock) or other distributions, make investments, change the nature of Plains Offshore’s
business and merge or consolidate, sell assets, enter into certain types of swap agreements and enter
into certain transaction with affiliates, as well as other customary events of default, including a cross-
default to PXP’s senior revolving credit facility. If an event of default (as defined in our senior revolving
credit facility) has occurred and is continuing under our senior revolving credit facility that has not been
cured or waived by the lenders thereunder then the Plains Offshore lenders could accelerate and
demand repayment of the Plains Offshore senior credit facility.
Short-term Credit Facility.
We have an uncommitted short-term unsecured credit facility, or short-
term facility, under which we may make borrowings from time to time until June 1, 2012, not to exceed
at any time the maximum principal amount of $75.0 million. No advance under the short-term facility
may have a term exceeding 14 days and all amounts outstanding are due and payable no later than
June 1, 2012. Each advance under the short-term facility shall bear interest at a rate per annum
mutually agreed on by the bank and us.
We borrow under our short-term facility to fund our working capital needs. The funding
requirements are typically generated due to the timing differences between payments and receipts
associated with our oil and gas production. We generally pay off the short-term facility with receipts
from the sales of our oil and gas production or borrowings under our senior revolving credit facility. No
amounts were outstanding under the short-term facility at December 31, 2011. The daily average
outstanding balance for the quarter and year ended December 31, 2011 was $43.0 million and $52.6
million, respectively. The weighted average interest rate on borrowings under our short-term credit
facility was 1.5% for the years ended December 31, 2011 and 2010.
6
3
⁄
4
% Senior Notes.
In November 2011, we issued $1 billion of 6
3
⁄
4
% Senior Notes due 2022, or
the 6
3
⁄
4
% Senior Notes, at par. We received approximately $984 million of net proceeds, after
deducting the underwriting discount and offering expenses. We used the net proceeds to reduce
indebtedness outstanding under our senior revolving credit facility and for general corporate purposes.
We may redeem all or part of the 6
3
⁄
4
% Senior Notes on or after February 1, 2017 at specified
redemption prices and prior to such date at a “make-whole” redemption price. In addition, prior to
February 1, 2015 we may, at our option, redeem up to 35% of the 6
3
⁄
4
% Senior Notes with the
proceeds of certain equity offerings.
6
5
⁄
8
% Senior Notes.
In March 2011, we issued $600 million of 6
5
⁄
8
% Senior Notes due 2021, or
the 6
5
⁄
8
% Senior Notes, at par. We received approximately $590 million of net proceeds, after
deducting the underwriting discount and offering expenses. We used the net proceeds to reduce
indebtedness outstanding under our senior revolving credit facility and for general corporate purposes.
We may redeem all or part of the 6
5
⁄
8
% Senior Notes on or after May 1, 2016 at specified redemption
prices and prior to such date at a “make-whole” redemption price. In addition, prior to May 1, 2014 we
may, at our option, redeem up to 35% of the 6
5
⁄
8
% Senior Notes with the proceeds of certain equity
offerings.
F-19