14. INVESTMENT IN CARIBBEAN NITROGEN COMPANY LIMITED AND NITROGEN (2000) UNLIMITED
    EOG, through certain wholly owned subsidiaries, owns equity interests in two Trinidadian companies: CNCL and N2000. During the first quarters of 2003 and 2004, EOG completed separate share sale agreements whereby a portion of the EOG subsidiaries’ shareholdings in CNCL and N2000 was sold to a third party energy company. The sales left EOG with equity interests of 12% in CNCL and 23% in N2000 and did not result in any gain or loss.
    In February 2005, a portion of EOG’s shareholdings in N2000 was sold to a subsidiary of one of the other shareholders. The sale resulted in a pre-tax gain of approximately $2 million. EOG’s equity interest in N2000 is now 10%.
    The other shareholders in CNCL are Ferrostaal AG, Clico Energy Company Limited, KBRDC CNC (Cayman) Ltd. and Koch CNC (Nevis) LLC. At December 31, 2004, investment in CNCL was $15 million. CNCL commenced production in June 2002, and at December 31, 2004, was producing approximately 1,850 metric tons of ammonia daily. At December 31, 2004, CNCL had a long-term debt balance of $203 million, which is non-recourse to CNCL’s shareholders. EOG will be liable for its share of any postcompletion deficiency funds, loans to fund the costs of operation, payment of principal and interest to the principal creditor and other cash deficiencies of CNCL up to $30 million, approximately $4 million of which is net to EOG’s interest. The Shareholders’ Agreement requires the consent of the holders of 90% or more of the shares to take certain material actions. Accordingly, given its current level of equity ownership, EOG is able to exercise significant influence over the operating and financial policies of CNCL and therefore, it accounts for the investment using the equity method. During 2004, EOG recognized equity income of $5 million and received cash dividends of $5 million from CNCL.
    The other shareholders in N2000 are FS Petrochemicals (St. Kitts) Limited, CE Limited, KBRDC Nitrogen 2000 (St. Lucia) Ltd. and Koch N2000 (Nevis) LLC. At December 31, 2004, investment in N2000 was $26 million. N2000 commenced production in August 2004, and at December 31, 2004, was producing approximately 1,950 metric tons of ammonia daily. At December 31, 2004, N2000 had a long-term debt balance of $228 million, which is non-recourse to N2000’s shareholders. At December 31, 2004, EOG was liable for its share of any post-completion deficiency funds, loans to fund the costs of operation, payment of principal and interest to the principal creditor and other cash deficiencies of N2000 up to $30 million, approximately $7 million of which is net to EOG’s interest. The Shareholders’ Agreement requires the consent of the holders of 100% of the shares to take certain material actions. Accordingly, given its current level of equity ownership, EOG is able to exercise significant influence over the operating and financial policies of N2000 and therefore, it accounts for the investment using the equity method. During 2004, EOG recognized equity income of $6 million.

15. PROPERTY ACQUISITIONS
    On October 1, 2003, a Canadian subsidiary of EOG closed an asset purchase of natural gas properties in the Wintering Hills, Drumheller East and Twining areas of southeast Alberta from a subsidiary of Husky Energy Inc. for approximately US$320 million. These properties are essentially adjacent to existing EOG operations or are properties in which EOG already had a working interest. The transaction was partially funded by commercial paper borrowings of US$140.5 million on October 1, 2003. The remainder of the purchase price, US$179.5 million, was funded by EOG’s available cash balance. Subsequent to the closing, the purchase price was reduced by exercised preferential rights on the properties which totaled approximately US$5 million. In late December 2003, a Canadian subsidiary of EOG closed another property acquisition for US$46 million.