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.
Cash Tender Offers for 7
3
⁄
4
% Senior Notes, 10% Senior Notes and 7% Senior Notes.
In
December 2011, we made payments totaling $542.2 million to retire $520.7 million of the $600 million
outstanding principal amount of our 7
3
⁄
4
% Senior Notes, $429.5 million to retire $380.1 million of the
$565 million outstanding principal amount of our 10% Senior Notes and $442.1 million to retire
$423.1 million of the $500 million outstanding principal amount of our 7% Senior Notes.
During 2011, we recognized $121.0 million of debt extinguishment costs, including $30.9 million of
unamortized debt issue costs and original issue discount, in connection with our debt retirement
transactions.
The 7
3
⁄
4
% Senior Notes, 10% Senior Notes, 7% Senior Notes, 7
5
⁄
8
% Senior Notes due 2018,
8
5
⁄
8
% Senior Notes, 7
5
⁄
8
% Senior Notes due 2020, 6
5
⁄
8
% Senior Notes and 6
3
⁄
4
% Senior Notes
(together, the Senior Notes) are our general unsecured senior obligations. The Senior Notes are jointly
and severally guaranteed by certain of our existing domestic subsidiaries. In the future, the guarantees
may be released or terminated under the following circumstances: (i) in connection with any sale or
other disposition of all or substantially all of the assets of that subsidiary guarantor; (ii) in connection
with any sale or other disposition of all the capital stock of a subsidiary guarantor; (iii) if designated to
be an unrestricted subsidiary; (iv) upon legal defeasance or satisfaction and discharge of the indenture;
(v) upon the liquidation or dissolution of such subsidiary guarantor provided no default or event of
default has occurred or is continuing; or (vi) at such time as such subsidiary guarantor does not have
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