S&P rates EOG notes A-

Standard & Poor's said it assigned its A- rating to the proposed $600 million senior notes offering of EOG Resources Inc. and affirmed the A- corporate credit rating.

EOG has corporate credit and senior unsecured ratings of A-, a preferred stock rating of BBB and a commercial paper rating of A-2.

The outlook is stable.

The company will use proceeds to repay commercial paper and borrowings under other uncommitted credit facilities.

EOG's satisfactory business risk score reflects the company's geographically diverse and relatively low-risk reserve base, good organic growth prospects, excellent cost structure and strong technical team, S&P said.

The scale of the company's reserve base is limited relative to that of peers at the A- rating level and EOG is very leveraged to the North American natural gas market, which S&P views as highly volatile, the agency said.

The company's debt-to-EBITDAX (EBITDA plus exploration expense) ratio is roughly 0.5 times, S&P said.

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