Safety and Environmental Stewardship
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EOG’s Commitment to Health, Safety and the Environment

EOG is committed to responsible and safe exploration and production practices. Respect for the environment and a focus on adherence to sound health, safety and environmental practices are important facets of EOG’s corporate culture and reflect a company-wide commitment to the communities where EOG operates. Embedded in all aspects of EOG’s operations, this responsibility is shared by every employee throughout the United States, Canada, Trinidad, the United Kingdom, China and Argentina.

As one of the most active drillers in both the United States and Canada, EOG explores for and produces crude oil, condensate, natural gas liquids and clean-burning natural gas. EOG is recognized in the industry as innovative and creative, and as an organization that has a demonstrated track record of identifying and successfully extracting energy resources which have become increasingly more challenging to capture and produce. The company continually evaluates new technologies and environmental protection measures to improve operating practices and reduce its environmental footprint. For example, in its Pennsylvania Marcellus Shale operations, EOG has restored significant portions of well pads and, in doing so, has reduced the size of the pad to approximately one-third of the pad’s original footprint.

As the company strives to continually improve both its techniques and technology, employees maintain a sharp focus on sound health, safety and environmental practices and procedures. EOG is a highly collaborative organization, where employees constantly learn from each other. EOG employees adhere to rules and regulations not only because it is required by law, but, more importantly, because it’s the right thing to do. On a daily basis, EOG takes the necessary steps to help safeguard the health and well-being of its employees, contractors and neighbors, as well as the communities where EOG employees live and work.

A culture that promotes socially responsible actions is instrumental to EOG’s past and future success. It is also a key component in executing the EOG business strategy, and will continue to be just as important in the future.

As part of its normal business operations, EOG monitors health, safety and environmental incidents and works continuously to improve its performance. Safety and environmental performance, including trends and industry comparisons, is reviewed with EOG’s senior management team throughout the year and with the Board of Directors at least annually. Proactive steps are taken to comply with legal requirements, prevent incidents and protect the environment.

EOG demonstrates its commitment to sound health, safety and environmental best management practices through policies, programs and business processes that include:

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Safety and Environmental Policies

Every employee is familiar with EOG’s Code of Business Conduct and Ethics, which covers a wide range of business practices and procedures.

EOG’s Code of Business Conduct and Ethics includes a section on Workplace Safety and Security and Protection of the Environment. In addition to the requirements in this policy statement, specific objectives and activities are spelled out in EOG’s Safety and Environmental Policy.

EOG has a standing Compliance Committee that is responsible for implementing EOG’s Compliance Program and providing regular reports to the Audit Committee of the Board of Directors. EOG’s Compliance Program includes EOG’s Code of Business Conduct and Ethics, Safety and Environmental Policy and other policies related to legal compliance and ethics, together with related employee communications, education, training and compliance monitoring, including the investigation and resolution of complaints and inquiries. EOG’s Compliance Program, which includes strong “non-retaliation” policies, is intended to ensure that EOG’s business is conducted with high ethical standards and in compliance with the letter and spirit of the law. The standing members of the Compliance Committee are the Vice President, General Counsel and Corporate Secretary; the Vice President and Chief Financial Officer; the Vice President, Human Resources and Administration; the Vice President, Audit; and the Controller, Compliance and Controls.

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Safety and Environmental Management

Across the company, EOG has implemented programs and business processes for managing safety and environmental matters with a focus on the assignment of responsibilities, sound risk management and decision-making, efficient and cost-effective planning and operations, legal compliance and continuous improvement of programs and practices.

Our safety and environmental management processes are based on a goal-setting philosophy. The company sets safety and environmental expectations and provides a framework within which management can achieve safety and environmental goals in a systematic way.

EOG’s safety and environmental performance is also considered in evaluating employee performance and managing employee compensation throughout the organization.

EOG’s total recordable incident (injury) rate (TRIR) for 2012 and for 2013 in respect of its U.S. exploration and production operations (and including both EOG personnel and contractors) was 1.21 and 1.09, respectively. EOG utilizes the industry-standard measurement of injuries per 200,000 man hours worked in calculating TRIR.

In addition, as part of EOG’s ongoing commitment to environmentally responsible operations, EOG tracks and documents the volume and frequency of oil spills from its U.S. operations involving greater than five barrels as well as the volumes of spilled oil it is subsequently able to recover. For 2012, EOG’s oil spill rate for its U.S. operations was 0.014 barrels of crude oil for every one thousand barrels of crude oil equivalent (MBoe) of U.S. production. For 2013, EOG’s oil spill rate for its U.S. operations was 0.038 barrels of crude oil per MBoe of U.S. production. Taking into account the volumes of spilled oil subsequently recovered, EOG’s oil spill rate for 2012 and 2013 is reduced significantly to 0.0050 barrels and 0.0062 barrels of crude oil per MBoe of U.S. production, respectively.

EOG calculates the oil spill rate for a particular year by dividing the aggregate volume of oil spills involving greater than five barrels of oil from its U.S. operations during such year by EOG’s U.S. production for such year (on an MBoe basis).

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Safety and Environmental Training Programs

At EOG, knowing what to do and how to do it is critical to strong, consistent performance. That’s why the company provides initial, periodic and refresher safety and environmental training to employees, contractors, visitors, vendors and other personnel who may work at or visit EOG’s facilities. This training addresses operating procedures, safe work practices, emergency procedures, orientation programs and supervisor training. Also included is regulatory and system-specific training.

Examples of EOG’s training programs include:

  • Online Safety Training:  Basic, mandatory safety training courses and a number of optional safety and operational courses are available online to all EOG employees and to the contractors who work at EOG’s facilities. To maintain an emphasis on safety, refresher programs are offered on a regular basis.
  • Safety Team Building:  EOG provides safety team building training for contract crews across its operations.
  • Safety Leadership Training:  A two-day safety leadership training program for all EOG supervisors, as well as consultants and contractor supervisors, provides in-depth analysis and application of safety procedures, with a focus on how accidents can be prevented. A core element of the program is gaining an understanding of EOG’s commitment to safety matters. The program is updated regularly so that participants find it insightful and instructive each time they attend a session.
  • Safety and Environmental Conferences:  EOG hosts regular, internal two-day safety and environmental conferences for employees from across its operations. Topics are diverse, ranging from drug testing of contractors and employees and waste management plans, to discussions regarding flowline integrity and maintenance plans. Special sessions, such as those dealing with revisions to EOG’s safe practices manual, are included. In addition, employees from each operating area make presentations on recent safety and environmental developments in their respective area.
  • Safety and Environmental Excellence Awards:  Every year, EOG recognizes projects generated by operations employees that further enhance the environment or the safety of EOG’s workplace and the community with Safety and Environmental Excellence Awards. The winning entries demonstrate the positive impact new ideas are having on EOG’s business by promoting and increasing awareness of safety and environmental matters.
  • Safety and Environmental Leadership Council:  This internal leadership team comprised of senior management and legal, operations and safety and environmental personnel reviews EOG’s safety and environmental performance and develops strategies to improve ongoing safety and environmental programs.
  • Contractor Performance:  EOG field personnel responsible for safety and environmental matters continually monitor contractor performance in the areas of safety and environmental compliance. In addition, EOG verifies that contractors have appropriate safety programs in place; includes contractors in regular “tailgate” meetings where safety and best practices are discussed; and provides initial, periodic and refresher safety and environmental training to its contractors.

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Pollution Prevention Programs and Spill Contingency Plans

EOG staff continuously work to identify waste and hazardous materials and to understand and manage their associated risks. The company’s goal is to progressively eliminate the risks that waste and hazardous materials pose to EOG employees, contractors, the community and the environment.

Pollution prevention is addressed by EOG through various plans that are prepared and maintained by its staff across its operating areas. Developed with the primary goal of preventing the occurrence of pollution, the plans cover spill prevention and countermeasures, waste management and flowline integrity. EOG also works in conjunction with its operating partners and contractors to test and improve upon its emergency response capabilities. For example, EOG recently conducted a multi-company drill to test its offshore emergency plans and capabilities in the United Kingdom. EOG periodically conducts additional drills to test plans and procedures associated with its operations.

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Crisis Management Plan

Each of EOG’s operating areas develops and maintains a written plan that provides a framework for rapid and effective response to emergency situations. These plans tie into EOG’s corporate Crisis Management Plan, which addresses EOG’s overall corporate response. This framework helps provide a response to an incident that protects the public, EOG employees and contractors and the environment. These plans are frequently updated, and periodic drills are conducted to verify that EOG personnel are prepared to respond appropriately to incidents which might occur.

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Environmental Stewardship during Drilling Operations

EOG is conscientious about protecting the environment while conducting drilling operations. Surface disturbance at each well location is minimized through the use of directional and horizontal drilling. In addition, at many of EOG’s drill sites, more than one well is drilled from a single well pad. After wells are drilled, sites are often further downsized for use during production operations. When acreage is released because it is no longer needed, it is reclaimed to its natural state through re-vegetation or maintained pursuant to the terms of the specific lease agreement. EOG employees continually seek innovative ways to improve environmental stewardship during drilling operations.

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Environmental Stewardship during the Production Process

EOG employees continually evaluate and implement new technology that complements existing production operations. For example, EOG utilizes Supervisory Control and Data Acquisition (SCADA) systems at many facilities. Designed with multiple safety alarms, the SCADA systems monitor facilities remotely using a combination of detection criteria, including flow rate and differential pressure comparisons, high/low pressure assessments, tank level measurements and similar measurements. If an alarm is triggered, the operation can be shut down and alerts are sent to EOG personnel. In addition to safeguarding the environment and improving safety, these systems improve employee and overall company operating efficiency.

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Contractors and Suppliers

EOG’s Code of Business Conduct and Ethics for Vendors and Contractors obligates EOG’s contractors to provide their services to EOG in a safe manner and in compliance with applicable laws and regulations, including those relating to environmental, health and safety matters. In addition, by entering into EOG’s standard Master Service Agreement applicable to its U.S. operations, contractors agree to provide their services in a safe manner and in compliance with all such applicable federal, state and local laws and regulations.

As a means of reinforcing its Code of Business Conduct and Ethics for Vendors and Contractors, EOG periodically sends letters regarding business ethics and values to vendors, suppliers and other service providers who do business with the company.

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Gulf of Mexico Artificial Reef Project

During the decommissioning of its remaining operated assets in the Gulf of Mexico (which began in May 2011 and was completed in December 2012), EOG discovered that two of its drilling platforms were located near existing artificial reef sites designated by the Texas Parks and Wildlife Department (TPWD). Artificial reefs provide a breeding ground and permanent home to a variety of sea life. In addition, because the “jacket” portions of drilling platforms are constructed of durable and stable materials which can support a thriving reef ecosystem, such structures are considered ideal artificial reefs. In addition to these environmental benefits, EOG’s decision to donate the jacket structures to the TPWD’s artificial reef program resulted in cost savings to EOG and its stockholders (i.e., the cost of transporting the structures to shore and disposing of such structures). Pursuant to the TPWD’s program, EOG donated a portion of its cost savings to the TPWD; such donations are used by the TPWD to finance the research, maintenance and construction of new reefs.

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Wetland Mitigation Bank

In 1998, EOG established a 403-acre mitigation bank near Gladewater, Texas with approval from the U.S. Army Corps of Engineers, Texas Railroad Commission, U.S. Environmental Protection Agency (EPA) and U.S. Fish and Wildlife Service.

A mitigation bank, according to the EPA’s definition, is a wetland, stream or other aquatic resource area that has been restored, established, enhanced or (in certain circumstances) preserved for the purpose of compensating for unavoidable impacts to other aquatic resources under the applicable regulation.

EOG draws on the credits from the mitigation bank to offset such unavoidable impacts and, in turn, EOG verifies that measures undertaken to the raw land in the bank are completed, maintained and preserved. Such measures include establishing a pond and planting hardwood trees.

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Awards

2011

EOG was honored with a Product Stewardship Award from BNSF Railway Company for safe transportation of hazardous materials by rail. EOG shipped 148, 100-car unit trains of crude oil with zero non-accident releases during the previous year.

2012

EOG won a 2012 Business Friend of the Environment Award presented by the Wisconsin Manufacturers & Commerce, the state’s largest business organization. EOG won first place in the Pollution Prevention category for the wide array of state-of-the-art systems and emissions control equipment included in its Chippewa Falls sand processing plant and nearby mines.

2013

Former CEO Mark Papa was named by Harvard Business Review as one of the 100 best performing CEOs in the world based on the results he has delivered over his entire tenure in office. The ranking takes into account not only financial metrics, such as shareholder returns and increase in market capitalization, but also environmental and social ratings.

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