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 borrowings or 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
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.
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