Home
Jump to Risk Factors
Jump to Industries
Jump to Exposures
Jump to Event Codes
Jump to Wiki Summary

Industries
Oil and Gas Storage and Transportation
Oil and Gas Refining and Marketing and Transportation
Transportation
Health Care Facilities
Oil and Gas Exploration and Production
Oil and Gas Drilling
Investment Banking and Brokerage
Environmental Services
Application Software

Exposures
Rights
Express intent
Intelligence
Material Aid
Military
Regime
Political reform

Event Codes
Acknowledge responsibility
Endorse
Promise
Agree
Yield
Accident
Solicit support
Yield to order
Warn
Military blockade
Natural disaster
Riot
Human death
Sports contest
Host meeting
Threaten
Request
Reject

Wiki	Wiki Summary
Regulation	Regulation is the management of complex systems according to a set of rules and trends. In systems theory, these types of rules exist in various fields of biology and society, but the term has slightly different meanings according to context.
February Revolution	The February Revolution (Russian: Февра́льская револю́ция, tr. Fevral'skaya revolyutsiya, IPA: [fʲɪvˈralʲskəjə rʲɪvɐˈlʲutsɨjə]), known in Soviet historiography as the February Bourgeois Democratic Revolution and sometimes as the March Revolution, was the first of two revolutions which took place in Russia in 1917.
February 24	February 24 is the 55th day of the year in the Gregorian calendar; 310 days remain until the end of the year (311 in leap years).\n\n\n== Events ==\n\n\n=== Pre-1600 ===\n484 – King Huneric of the Vandals replaces Nicene bishops with Arian ones, and banishes some to Corsica.
February 6	February 3 is the 34th day of the year in the Gregorian calendar; 331 days remain until the end of the year (332 in leap years).\n\n\n== Events ==\n\n\n=== Pre-1600 ===\n1112 – Ramon Berenguer III, Count of Barcelona, and Douce I, Countess of Provence, marry, uniting the fortunes of those two states.
February 1	February is the second month of the year in the Julian and Gregorian calendars. The month has 28 days in common years or 29 in leap years, with the 29th day being called the leap day.
February 8	February 8 is the 39th day of the year in the Gregorian calendar; 326 days remain until the end of the year (327 in leap years).\n\n\n== Events ==\n\n\n=== Pre-1600 ===\n421 – Constantius III becomes co-Emperor of the Western Roman Empire.
Equity (finance)	In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets.
Common stock	Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States.
Series E bond	Series E United States Savings Bonds were government bonds marketed by the United States Department of the Treasury as war bonds during World War II from 1941 to 1945. After the war, they continued to be offered as retail investments until 1980, when they were replaced by other savings bonds.
E233 series	The E233 series (E233系) is a commuter and suburban electric multiple unit (EMU) train type developed by East Japan Railway Company (JR East) from the earlier E231 series and the E531 series design. The first train was introduced in December 2006 for use on the Chūō Line (Rapid), followed by the E233-1000 series variant in 2007 for use on the Keihin–Tōhoku and Negishi lines, the E233-3000 series outer-suburban variant in December 2007 for use on the Tōkaidō Main Line, and narrow-bodied E233-2000 series variant for Jōban Line and Tokyo Metro Chiyoda Line through services.
Walkman E Series	The Walkman E Series is a line of digital audio (DAP) and portable media (PMP) players, marketed by Sony as part of its Walkman range. E Series devices have been marketed since 2000, although in its current form since 2008 as entry-level, candybar styled players.
Matthiola incana	Matthiola incana is a species of flowering plant in the cabbage family Brassicaceae. Common names include Brompton stock, common stock, hoary stock, ten-week stock, and gilly-flower.
Stock market	A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.
Acquired taste	An acquired taste is an appreciation for something unlikely to be enjoyed by a person who has not had substantial exposure to it. It is the opposite of innate taste, which is the appreciation for things that are enjoyable by most persons without prior exposure to them.
Person to Person (film)	Person to Person is a 2017 American drama film directed and written by Dustin Guy Defa. The film stars Michael Cera, Tavi Gevinson, and Abbi Jacobson.The film had its world premiere at the Sundance Film Festival on January 20, 2017.
Acquired Taste	An acquired taste is an appreciation for something unlikely to be enjoyed by a person who has not had substantial exposure to it. It is the opposite of innate taste, which is the appreciation for things that are enjoyable by most persons without prior exposure to them.
Vocabulary	A vocabulary is a set of familiar words within a person's language. A vocabulary, usually developed with age, serves as a useful and fundamental tool for communication and acquiring knowledge.
Acquire BPO	Acquire Business Process Outsourcing (formerly Acquire Asia Pacific) is a global business process outsourcing firm that specializes in back office support, customer acquisition, customer service, technical support, lead generation and software development.\n\n\n== History ==\n\n\n=== Formation ===\nEstablished by Larry Kestelman in 2005, Acquire BPO was initially built to support the need for a better call center facility for Dodo Services, an Australian internet service provider.
Hart–Scott–Rodino Antitrust Improvements Act	The Hart–Scott–Rodino Antitrust Improvements Act of 1976 (Public Law 94-435, known commonly as the HSR Act) is a set of amendments to the antitrust laws of the United States, principally the Clayton Antitrust Act. The HSR Act was signed into law by president Gerald R. Ford on September 30, 1976.
Special Activities Center	The Special Activities Center (SAC) is a division of the Central Intelligence Agency responsible for covert operations and paramilitary operations. The unit was named Special Activities Division (SAD) prior to 2015.
Arithmetic	Arithmetic (from Ancient Greek ἀριθμός (arithmós) 'number', and τική [τέχνη] (tikḗ [tékhnē]) 'art, craft') is an elementary part of mathematics that consists of the study of the properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and extraction of roots. In the 19th century, Italian mathematician Giuseppe Peano formalized arithmetic with his Peano axioms, which are highly important to the field of mathematical logic today.
Operations management	Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in meeting customer requirements.
Special operations	Special operations (S.O.) are military activities conducted, according to NATO, by "specially designated, organized, selected, trained, and equipped forces using unconventional techniques and modes of employment". Special operations may include reconnaissance, unconventional warfare, and counter-terrorism actions, and are typically conducted by small groups of highly-trained personnel, emphasizing sufficiency, stealth, speed, and tactical coordination, commonly known as "special forces".
Emergency operations center	An emergency operations center (EOC) is a central command and control facility responsible for carrying out the principles of emergency preparedness and emergency management, or disaster management functions at a strategic level during an emergency, and ensuring the continuity of operation of a company, political subdivision or other organization.\nAn EOC is responsible for strategic direction and operational decisions and does not normally directly control field assets, instead leaving tactical decisions to lower commands.
Met Operations	Met Operations, also known as Met Ops, is one of the four business groups which forms the Metropolitan Police Service. It was created during the 2018-19 restructuring of the service, amalgamating many of its functions from the Operations side of the Specialist Crime & Operations Directorate formed in 2012, with the Specialist Crime side of that Directorate placed under the new Frontline Policing Directorate.
Natural gas	Natural law (Latin: ius naturale, lex naturalis) is a system of law based on a close observation of human nature, and based on values intrinsic to human nature that can be deduced and applied independently of positive law (the express enacted laws of a state or society). According to natural law theory, all people have inherent rights, conferred not by act of legislation but by "God, nature, or reason." Natural law theory can also refer to "theories of ethics, theories of politics, theories of civil law, and theories of religious morality."In the Western tradition it was anticipated by the Pre-Socratics, for example in their search for principles that governed the cosmos and human beings.
Liquefied natural gas	Liquefied natural gas (LNG) is natural gas (predominantly methane, CH4, with some mixture of ethane, C2H6) that has been cooled down to liquid form for ease and safety of non-pressurized storage or transport. It takes up about 1/600th the volume of natural gas in the gaseous state (at standard conditions for temperature and pressure).
Compressed natural gas	Compressed natural gas (CNG) is a fuel gas made of petrol which is mainly composed of methane (CH4), compressed to less than 1% of the volume it occupies at standard atmospheric pressure. It is stored and distributed in hard containers at a pressure of 20–25 MPa (2,900–3,600 psi), usually in cylindrical or spherical shapes.
Natural gas in Ukraine	Ukraine has been estimated to possess natural gas reserves of over 1 trillion cubic meters and in 2018 was ranked 26th among countries with proved reserves of natural gas. Its total gas reserves have been estimated at 5.4 trillion cubic meters.
Natural-gas processing	Natural-gas processing is a range of industrial processes designed to purify raw natural gas by removing impurities, contaminants and higher molecular mass hydrocarbons to produce what is known as pipeline quality dry natural gas. Natural gas has to be processed in order to prepare it for final use and ensure that elimination of contaminants.Natural-gas processing starts underground or at the well-head.
Regulation of therapeutic goods	The regulation of therapeutic goods, defined as drugs and therapeutic devices, varies by jurisdiction. In some countries, such as the United States, they are regulated at the national level by a single agency.
Queen's Regulations	The Queen's Regulations (first published in 1731 and known as the King's Regulations when the monarch is a king) is a collection of orders and regulations in force in the Royal Navy, British Army, Royal Air Force, and Commonwealth Realm Forces (where the same person as on the British throne is also their separate head of state), forming guidance for officers of these armed services in all matters of discipline and personal conduct. Originally, a single set of regulations were published in one volume.

Risk Factors
EOG RESOURCES INC covered by insurance
Please refer to Item 1A Risk Factors beginning on page 14 for further discussion of the risks to which EOG is subject
EOGapstas operations outside of the United States and Canada are subject to certain risks, including expropriation of assets, risks of increases in taxes and government royalties, renegotiation of contracts with foreign governments, political instability, payment delays, limits on allowable levels of production and currency exchange and repatriation losses, as well as changes in laws, regulations and policies governing operations of foreign companies
Texas Severance Tax Exemption
Natural gas production from qualifying Texas wells spudded or completed after August 31, 1996, is entitled to use a reduced severance tax rate for the first 120 consecutive months of production
However, the cumulative value of the tax reduction cannot exceed 50 percent of the drilling and completion costs incurred on a well-by-well basis
On February 14, 2000, EOGapstas Board of Directors declared a dividend of one preferred share purchase right (a &quote Right, &quote and the agreement governing the terms of such Rights, the &quote Rights Agreement &quote ) for each outstanding share of common stock, par value dlra0dtta01 per share
The Board of Directors has adopted this Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics
The dividend was distributed to the stockholders of record on February 24, 2000
In accordance with the Rights Agreement, each share of common stock issued in connection with the two-for-one stock split effective March 1, 2005, also had one Right associated with it
Each Right, expiring February 24, 2010, represents a right to buy from EOG one hundredth (1/100) of a share of Series E Junior Participating Preferred Stock (Series E) for dlra90, once the Rights become exercisable
This portion of a Series E share will give th e stockholder approximately the same dividend, voting, and liquidation rights as would one share of common stock
Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights
If issued, each one hundredth (1/100) of a Series E share (i) will not be redeemable; (ii) will entitle holders to quarterly dividend payments of dlra0dtta01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater; (iii) will entitle holders upon liquidation either to receive dlra1 per share or an amount equal to the payment made on one share of common stock, whichever is greater; (iv) will have the same voting power as one share of common stock; and (v) if shares of EOGapstas common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock
The Rights will not be exercisable until ten days after a public announcement that a person or group has become an acquiring person (Acquiring Person) by obtaining beneficial ownership of 10prca or more of EOGapstas common stock, or if earlier, ten business days (or a later date determined by EOGapstas Board of Directors before any person or group becomes an Acquiring Person) after a person or group begins a tender or exchange offer which, if consummated, would result in that person or group becoming an Acquiring Person
On February 24, 2005, the Rights Agreement was amended to create an exception to the definition of Acquiring Person to permit a qualified institutional investor to hold 10prca or more, but less than 20prca, of EOGapstas common stock without being deemed an Acquiring Person if the institutional investor meets the following requirements: (i) the institutional investor is described in Rule 13d-1(b)(1) promulgated under the Securities Exchange Act of 1934 and is eligible to report (and, if s uch institutional investor is the beneficial owner of greater than 5prca of EOGapstas common stock, does in fact report) beneficial ownership of common stock on Schedule 13G; (ii) the institutional investor is not required to file a Schedule 13D (or any successor or comparable report) with respect to its beneficial ownership of EOGapstas common stock; (iii) the institutional investor does not beneficially own 15prca or more of EOGapstas common stock (including in such calculation the holdings of all of the institutional investorapstas affiliates and associates other than those which, under published interpretations of the United States Securities and Exchange Commission or its staff, are eligible to file separate reports on Schedule 13G with respect to their beneficial ownership of EOGapstas common stock); and (iv) the institutional investor does not beneficially own 20prca or more of EOGapstas common stock (including in such calculation the holdings of all of the institutional investorapstas affiliates and associates)
On June 15, 2005, the R ights Agreement was amended again to revise the exception to the definition of Acquiring Person to permit a qualified institutional investor to hold 10prca or more but less than 30prca of EOGapstas common stock without being deemed an Acquiring Person if the institutional investor meets the other requirements described above
12 If a person or group becomes an Acquiring Person, all holders of Rights, except the Acquiring Person, may for dlra90, purchase shares of EOGapstas common stock with a market value of dlra180, based on the market price of the common stock prior to such acquisition
If EOG is later acquired in a merger or similar transaction after the Rights become exercisable, all holders of Rights except the Acquiring Person may, for dlra90, purchase shares of the acquiring corporation with a market value of dlra180 based on the market price of the acquiring corporationapstas stock, prior to such merger
EOGapstas Board of Directors may redeem the Rights for dlra0dtta005 per Right at any time before any person or group becomes an Acquiring Person
If the Board of Directors redeems any Rights, it must redeem all of the Rights
Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of dlra0dtta005 per Right
The redemption price has been adjusted for the two-for-one stock split effective March 1, 2005 and will be adjusted for any future stock split or stock dividends of EOGapstas common stock
After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50prca or more of EOGapstas outstanding common stock, the Board of Directors may exchange the Rights for common stock or equivalent security at an exchange ratio of one share of common stock or an equivalent security for each such Right, other than Rights held by the Acquiring Person
Preferred Stock
EOG currently has two authorized series of preferred stock
On February 14, 2000, EOGapstas Board of Directors, in connection with the Rights Agreement described above, authorized 1cmam500cmam000 shares of the Series E with the rights and preferences described above
On February 24, 2005, EOGapstas Board of Directors increased the authorized shares of Series E to 3cmam000cmam000 as a result of the two-for-one stock split of EOGapstas common stock effective March 1, 2005
Currently, there are no shares of the Series E outstanding
On July 19, 2000, EOGapstas Board of Directors authorized 100cmam000 shares of Fixed Rate Cumulative Perpetual Senior Preferred Stock, Series B, with a dlra1cmam000 Liquidation Preference per share (Series B)
Dividends are payable on the shares only if declared by EOGapstas Board of Directors and will be cumulative
If declared, dividends will be payable at a rate of dlra71dtta95 per share, per year on March 15, June 15, September 15 and December 15 of each year beginning September 15, 2000
EOG may redeem all or part of the Series B at any time beginning on December 15, 2009 at dlra1cmam000 per share, plus accrued and unpaid dividends
The Series B is not convertible into, or exchangeable for, common stock of EOG There are 100cmam000 shares of the Series B currently outstanding
Following the December 2004 redemption of all outstanding shares of EOGapstas Flexible Money Market Cumulative Preferred Stock, Series D, EOG filed a Certificate of Elimination with the Secretary of State of the State of Delaware on February 24, 2005 to eliminate the series from EOGapstas Restated Certificate of Incorporation, as amended
Current Executive Officers of the Registrant The current executive officers of EOG and their names and ages are as follows: Name Age Position Mark G Papa 59 Chairman of the Board and Chief Executive Officer; Director Edmund P Segner, III 52 President and Chief of Staff; Director Loren M Leiker 52 Executive Vice President, Exploration and Development Gary L Thomas 56 Executive Vice President, Operations Barry Hunsaker, Jr
55 Senior Vice President and General Counsel Timothy K Driggers 44 Vice President and Chief Accounting Officer 13 Mark G Papa was elected Chairman of the Board and Chief Executive Officer of EOG in August 1999, President and Chief Executive Officer and Director in September 1998, President and Chief Operating Officer in September 1997, President in December 1996 and was President-North America Operations from February 1994 to September 1998
Papa joined Belco Petroleum Corporation, a predecessor of EOG, in 1981
Papa is EOGapstas principal executive officer
Edmund P Segner, III became President and Chief of Staff and Director of EOG in August 1999
He became Vice Chairman and Chief of Staff of EOG in September 1997
Segner is EOGapstas principal financial officer
Loren M Leiker was elected Executive Vice President, Exploration in May 1998 and was subsequently named Executive Vice President, Exploration and Development
He was previously Senior Vice President, Exploration
Leiker joined EOG in April 1989 as International Exploration Manager
Gary L Thomas was elected Executive Vice President, North America Operations in May 1998 and was subsequently named Executive Vice President, Operations
He was previously Senior Vice President and General Manager of EOG in Midland
Thomas joined a predecessor of EOG in July 1978
Barry Hunsaker, Jr
has been Senior Vice President and General Counsel since he joined EOG in May 1996
Timothy K Driggers was elected Vice President and Controller of EOG in October 1999 and was subsequently named Vice President and Chief Accounting Officer in August 2003
He was previously Vice President, Accounting and Land Administration
Driggers is EOGapstas principal accounting officer
There are no family relationships among the officers listed, and there are no arrangements or understandings pursuant to which any of them were elected as officers
Officers are appointed or elected annually by the Board of Directors at its meeting immediately prior to the Annual Meeting of Shareholders, each to hold office until the corresponding meeting of the Board in the next year or until a successor shall have been duly elected or appointed and shall have qualified
Additional risks that we do not yet know of, or that we currently think are immaterial, may also impair our business operations or financial results
If any of the events or circumstances described below actually occurs, our business, financial condition or results of operations could suffer and the trading price of our common stock could decline
The following risk factors should be read in conjunction with the other information contained in this report, including the consolidated financial statements and the related notes
A substantial or extended decline in natural gas or crude oil prices would have a material adverse effect on us
Since we are primarily a natural gas company, we are more significantly affected by changes in natural gas prices than changes in the prices for crude oil, condensate or natural gas liquids
Among the factors that can cause these price fluctuations are: * the level of consumer demand; * weather conditions; * domestic drilling activity; * the price and availability of alternative fuels; * the proximity to, and capacity of, transportation facilities; * worldwide economic and political conditions; * the effect of worldwide energy conservation measures; and * the nature and extent of governmental regulation and taxation
Our cash flow and earnings depend to a great extent on the prevailing prices for natural gas and crude oil
Prolonged or substantial declines in these commodity prices may adversely affect our liquidity, the amount of cash flow we have available for capital expenditures and our ability to maintain our credit quality and access to the credit and capital markets
14 Our ability to sell our crude oil and natural gas production could be materially harmed if we fail to obtain adequate services such as transportation and processing
The sale of our crude oil and natural gas production depends on a number of factors beyond our control, including the availability, proximity and capacity of pipelines, natural gas gathering systems and processing facilities
Any significant change in market factors affecting these infrastructure facilities or our failure to obtain these services on acceptable terms could materially harm our business
We deliver crude oil and natural gas through gathering systems and pipelines that we do not own
These facilities may be temporarily unavailable due to market conditions or mechanical reasons, or may not be available to us in the future
Reserve estimates depend on many assumptions that may turn out to be inaccurate
Any material inaccuracies in our underlying assumptions could cause the quantities of our reserves to be overstated
Estimating quantities of proved crude oil and natural gas reserves is a complex process
It requires interpretations of available technical data and various assumptions, including assumptions relating to economic factors
Any significant inaccuracies in these interpretations or assumptions or changes of conditions could cause the quantities of our reserves to be overstated
To prepare estimates of economically recoverable crude oil and natural gas reserves and future net cash flows, we analyze many variable factors, such as historical production from the area compared with production rates from other producing areas
We also analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary
The process also involves economic assumptions relating to commodity prices, production costs, severance and excise taxes, capital expenditures and workover and remedial costs
Actual results most likely will vary from our estimates
Any significant variance could reduce our estimated quantities and present value of reserves
If we fail to acquire or find sufficient additional reserves, our reserves and production will decline from their current levels
The rate of production from crude oil and natural gas properties generally declines as reserves are depleted
Except to the extent that we conduct successful exploration and development activities, acquire additional properties containing proved reserves, or, through engineering studies, identify additional behind-pipe zones or secondary recovery reserves, our proved reserves will decline as reserves are produced
Future crude oil and natural gas production is, therefore, highly dependent upon our level of success in acquiring or finding additional reserves
Drilling crude oil and natural gas wells is a high-risk activity and subjects us to a variety of factors that we cannot control
Drilling crude oil and natural gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive crude oil and natural gas reservoirs
We may not recover all or any portion of our investment in new wells
The presence of unanticipated pressures or irregularities in formations, miscalculations or accidents may cause our drilling activities to be unsuccessful and result in a total loss of our investment
In addition, we often are uncertain as to the future cost or timing of drilling, completing and operating wells
Further, our drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including: * unexpected drilling conditions; * title problems; * pressure or irregularities in formations; * equipment failures or accidents; * adverse weather conditions; * compliance with environmental and other governmental requirements, which may increase our costs or restrict our activities; and * costs of, or shortages or delays in the availability of, drilling rigs, tubular materials and equipment
We incur certain costs to comply with government regulations, especially regulations relating to environmental protection, and could incur even greater costs in the future
15 Our exploration, production and marketing operations are regulated extensively at the federal, state and local levels, as well as by other countries in which we do business
We have and will continue to incur costs in our efforts to comply with the requirements of environmental and other regulations
Further, the crude oil and natural gas industry regulatory environment could change in ways that might substantially increase these costs
As an owner or lessee and operator of oil and gas properties, we are subject to various federal, state, local and foreign regulations relating to discharge of materials into, and protection of, the environment
These regulations may, among other things, impose liability on us for the cost of pollution clean-up resulting from operations, subject us to liability for pollution damages, and require suspension or cessation of operations in affected areas
Changes in or additions to regulations regarding the protection of the environment could hurt our business
We do not insure against all potential losses and could be seriously harmed by unexpected liabilities
Exploration for and production of crude oil and natural gas can be hazardous, involving natural disasters and other unforeseen occurrences such as blowouts, cratering, fires and loss of well control, which can damage or destroy wells or production facilities, injure or kill people, and damage property and the environment
Offshore operations are subject to usual marine perils, including hurricanes and other adverse weather conditions, and governmental regulations as well as interruption or termination by governmental authorities based on environmental and other considerations
We maintain insurance against many, but not all, potential losses or liabilities arising from our operations in accordance with what we believe are customary industry practices and in amounts that we believe to be prudent
Losses and liabilities arising from such events could reduce our revenues and increase our costs to the extent not covered by insurance
The occurrence of any of these events and any payments made as a result of such events and the liabilities related thereto, would reduce the funds available for exploration, drilling and production and could have a material adverse effect on our financial position or results of operations
Our hedging activities may prevent us from benefiting from price increases and may expose us to other risks
From time to time, we use derivative instruments (primarily collars and price swaps) to hedge the impact of market fluctuations on natural gas and crude oil prices and net income and cash flow
To the extent that we engage in hedging activities, we may be prevented from realizing the benefits of price increases above the levels of the hedges
In addition, we are subject to risks associated with differences in prices at different locations, particularly where transportation constraints restrict our ability to deliver oil and gas volumes to the delivery point to which the hedging transaction is indexed
If we acquire oil and gas properties, our failure to fully identify potential problems, to properly estimate reserves or production rates or costs, or to effectively integrate the acquired operations could seriously harm us
From time to time, we seek to acquire oil and gas properties
Although we perform reviews of acquired properties that we believe are consistent with industry practices, reviews of records and properties may not necessarily reveal existing or potential problems, nor do they permit a buyer to become sufficiently familiar with the properties to assess fully their deficiencies and potential
Even when problems with a property are identified, we often assume environmental and other risks and liabilities in connection with acquired properties
There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and actual future production rates and associated costs with respect to acquired properties
Actual results may vary substantially from those assumed in the estimates
In addition, acquisitions may have adverse effects on our operating results, particularly during the periods in which the operations of acquired properties are being integrated into our ongoing operations
Terrorist activities and military and other actions could adversely affect our business
Terrorist attacks and the threat of terrorist attacks, whether domestic or foreign, as well as the military or other actions taken in response to these acts, cause instability in the global financial and energy markets
The United States government has issued public warnings that indicate that energy assets might be specific targets of terrorist organizations
These actions could adversely affect us in unpredictable ways, including the disruption of fuel supplies and markets, increased volatility in crude oil and natural gas prices, or the possibility that the infrastructure on which we rely could be a direct target or an indirect casualty of an act of terror
16 Competition in the oil and gas exploration and production industry is intense, and many of our competitors have greater resources than we have
We compete with major integrated and other independent oil and gas companies for acquisition of oil and gas leases, properties and reserves, equipment and labor required to explore, develop and operate those properties and the marketing of crude oil and natural gas production
Higher recent crude oil and natural gas prices have increased the costs of properties available for acquisition and there are a greater number of companies with the financial resources to pursue acquisition opportunities
Many of our competitors have financial and other resources substantially larger than those we possess and have established strategic long-term positions and maintain strong governmental relationships in countries in which we may seek new or expanded entry
As a consequence, we may be at a competitive disadvantage in bidding for drilling rights
In addition, many of our larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil and natural gas production, such as changing worldwide prices and levels of production, the cost and availability of alternative fuels and the application of government regulations
We also compete in attracting and retaining personnel, including geologists, geophysicists, engineers and other specialists
We have substantial capital requirements, and we may be unable to obtain needed financing on satisfactory terms
We make, and will continue to make, substantial capital expenditures for the acquisition, development, production, exploration and abandonment of our oil and gas reserves
We intend to finance our capital expenditures primarily through cash flow from operations, commercial paper and to a lesser extent and if necessary, bank borrowings and public and private equity and debt offerings
Lower crude oil and natural gas prices, however, would reduce our cash flow and our access to the capital markets
Further, if the condition of the capital markets materially declines, we might not be able to obtain financing on terms we consider acceptable
In addition, a substantial rise in interest rates would decrease our net cash flows available for reinvestment