<PAGE> 1
Filed pursuant to Rule 421(b)(2)
Registration No. 333-09919
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 12, 1996)
ENRON OIL & GAS COMPANY
$150,000,000
6.70% Notes Due November 15, 2006
Interest payable May 15 and November 15
ISSUE PRICE: 99.828%
Interest on the 6.70% Notes due November 15, 2006 (the "Notes") is payable
semi-annually on May 15 and November 15 of each year, commencing May 15, 1997.
The Notes will not be redeemable prior to maturity and will not be subject to
any sinking fund. See "Description of Notes."
The Notes will be represented by one global certificate registered in the name
of the nominee of The Depository Trust Company ("DTC") and such nominee will be
the sole holder of the Notes. The Notes will not be issued in definitive
registered form except in limited circumstances. Settlement for the Notes will
be made in immediately available funds. The Notes will trade in DTC's Same-Day
Funds Settlement System until maturity, and secondary market trading activity in
the Notes will therefore settle in immediately available funds. See "Description
of Notes -- Book-Entry Only System."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Per Note 99.828% .650% 99.178%
- ------------------------------------------------------------------------------------------------
Total $149,742,000 $975,000 $148,767,000
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from November 18, 1996.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $100,000.
The Notes are offered, subject to prior sale, when, as and if accepted by the
Underwriters and subject to approval of certain legal matters by Bracewell &
Patterson, L.L.P., counsel for the Underwriters. It is expected that delivery of
the Notes will be made through the book-entry facilities of DTC on or about
November 18, 1996 against payment therefor in immediately available funds.
J.P. MORGAN & CO.
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
INCORPORATED
SALOMON BROTHERS INC
November 13, 1996
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus Supplement or the Prospectus, and, if given or made, such information
or representations must not be relied upon as having been authorized. This
Prospectus Supplement and the Prospectus do not constitute an offer to sell or
the solicitation of an offer to buy any securities other than the securities to
which they relate or any offer to sell or the solicitation of any offer to buy
such securities in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this Prospectus Supplement or the Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the Company since
the date hereof or that the information contained herein is correct as of any
time subsequent to its date.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
Capitalization...................................................................... S-3
Use of Proceeds..................................................................... S-4
Ratio of Earnings to Fixed Charges.................................................. S-4
Description of Notes................................................................ S-4
Underwriting........................................................................ S-6
Validity of the Notes............................................................... S-6
PROSPECTUS
Available Information............................................................... 2
Incorporation of Certain Documents by Reference..................................... 2
Business of the Company............................................................. 3
Use of Proceeds..................................................................... 4
Ratio of Earnings to Fixed Charges.................................................. 4
Description of Debt Securities...................................................... 5
The Selling Stockholder............................................................. 12
Relationship Between the Company and Enron Corp..................................... 13
Description of Common Stock......................................................... 14
Plan of Distribution................................................................ 15
Validity of Securities.............................................................. 16
Experts............................................................................. 16
</TABLE>
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CAPITALIZATION
The following table sets forth the summary consolidated capitalization of Enron
Oil & Gas Company (the "Company") and its consolidated subsidiaries as of
September 30, 1996, and as adjusted for the issuance on October 9, 1996 of
$30,000,000 aggregate principal amount of notes due 1999 (which notes remain
outstanding) and the Notes offered hereby, the net proceeds of which are to be
used to retire the $67,000,000 of bank debt outstanding at September 30, 1996,
to retire $12,758,000 of bank debt incurred since September 30, 1996 to pay the
notes due to an affiliated company, and to retire other bank debt incurred since
September 30, 1996 to fund exploration and development expenditures and other
general corporate purposes. See "Use of Proceeds."
<TABLE>
<CAPTION>
AS
ACTUAL ADJUSTED
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt
Company:
Bank debt (floating)......................................... 67,000 -
Notes due 1997-1998 (9.1%)................................... 40,000 40,000
Notes due 1999 (floating).................................... - 30,000
Notes due 2006 (6.70%)....................................... - 150,000
Subsidiary companies:
Notes due 1998 (4.52%)....................................... 16,000 16,000
Notes due 1998 (floating).................................... 55,000 55,000
Notes due to affiliated company.............................. 12,758 --
Notes due 2001 (floating).................................... 105,000 105,000
Other........................................................ 4,936 4,936
Unamortized debt discount....................................... - (1,333)
---------- ----------
Total long-term debt.................................... 300,694 399,603
---------- ----------
Shareholders' equity
Common stock.................................................... 201,600 201,600
Additional paid-in capital...................................... 389,192 389,192
Unearned compensation........................................... (6,354) (6,354)
Cumulative foreign currency translation adjustment.............. (10,443) (10,443)
Retained earnings............................................... 667,221 667,221
Common stock held in treasury................................... (4,187) (4,187)
---------- ----------
Total shareholders' equity.............................. 1,237,029 1,237,029
---------- ----------
Total capitalization.................................. $1,537,723 $1,636,632
========== ==========
</TABLE>
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USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby will be used to
retire the $67,000,000 of bank debt outstanding at September 30, 1996, to retire
$12,758,000 of bank debt incurred since September 30, 1996 to pay notes due to
an affiliated company, and to retire other bank debt incurred since September
30, 1996 to fund exploration and development expenditures and other general
corporate purposes. As of November 12, 1996, the weighted average interest rate
on the debt to be retired was approximately 5.47%.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, ----------------------------------------
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............ 9.98 10.64 11.12 7.95 3.95 2.21
</TABLE>
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered hereby
(referred to in the Prospectus (the "Prospectus"), which this Prospectus
Supplement accompanies, as the "Offered Debt Securities") supplements, and to
the extent inconsistent therewith replaces, the description of the general terms
and provisions of Debt Securities set forth in the Prospectus, to which
description reference is hereby made.
GENERAL
The Notes will be limited to $150,000,000 aggregate principal amount and will
mature on November 15, 2006. The Notes will bear interest at the rate per annum
shown on the cover page of this Prospectus Supplement from November 18, 1996 or
from the most recent interest payment date to which interest has been paid or
provided for, payable semi-annually on May 15 and November 15 of each year,
commencing on May 15, 1997, to the person in whose name the Note (or any
predecessor Note) is registered at the close of business on the May 1 or
November 1, as the case may be, next preceding such interest payment date.
The Notes may not be redeemed prior to maturity, and are not entitled to any
sinking fund. With certain exceptions and pursuant to certain requirements set
forth in the Indenture, the Company may discharge its obligations under
Indenture with respect to the Notes as described under "Description of Debt
Securities - Discharge of Indenture" in the Prospectus. Prospective investors
are urged to consult their own advisors as to the tax consequences of any such
action.
BOOK-ENTRY ONLY SYSTEM
The Notes will be issuable only as Registered Securities and will be represented
by one certificate (the "Global Security") to be registered in the name of the
nominee of DTC or any successor depository (the "Depository"). The Depository
will maintain the Notes in denominations of $1,000 and integral multiples
thereof through its book-entry facilities. In accordance with its normal
procedures, the Depository will record the interests of each Depository
participating firm ("Participant") in the Notes, whether held for its own
account or as a nominee for another person.
So long as the nominee of the Depository is the registered owner of the Notes,
such nominee will be considered the sole owner or holder of the Notes for all
purposes under the Indenture and any applicable laws. Except as otherwise
provided below, a Beneficial Owner, as hereinafter defined, of interests in the
Notes will not be entitled to have the Notes represented by the Global Security
registered in their names, will not be entitled to receive a physical
certificate representing such ownership interest and will not be considered an
owner or holder of the Notes under the Indenture. A Beneficial Owner is the
person who has the right to sell, transfer or otherwise dispose of an interest
in the Notes and the right to receive the proceeds therefrom, as well as
interest, principal and premium (if any) payable in respect thereof. A
Beneficial Owner's interest in
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the Notes will be recorded, in integral multiples of $1,000, on the records of
the Participant that maintains such Beneficial Owner's account for such purpose.
In turn, the Participant's interest in such Notes will be recorded, in integral
multiples of $1,000, on the records of the Depository. Therefore, the Beneficial
Owner must rely on the foregoing arrangements to evidence its interest in the
Notes. Beneficial ownership of the Notes may be transferred only by compliance
with the procedures of a Beneficial Owner's Participant (e.g. brokerage firm)
and the Depository. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such laws may impair the ability to transfer or pledge beneficial
interests in the Global Security.
DTC has advised the Company that it will take any action permitted to be taken
by a holder of Notes only at the direction of one or more Participants to whose
account the DTC interests in the Global Security is credited and only in respect
of such portion of the aggregate principal amount of Notes as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC will exchange the Global Security
for certificated Notes, which it will distribute to its Participants in
accordance with its customary procedures.
The rights of ownership must be exercised through the Depository and the
book-entry system and notices that are to be given to registered owners by the
Company or the Trustee will be given only to the Depository. It is expected that
the Depository will forward the notices to the Participants by its usual
procedures, so that Participants may forward such notices to the Beneficial
Owners. Neither the Company nor the Trustee will have any responsibility or
obligation to assure that any notices are forwarded by the Depository to any
Participant or by any Participant to the Beneficial Owners.
DTC has advised the Company and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities of Participants and to facilitate the clearance and
settlement of securities transactions among Participants in such securities
through electronic book-entry changes in accounts of Participants, thereby
eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly. Persons who are
not Participants may beneficially own securities held by DTC only through
Participants. The rules applicable to DTC and its Participants are on file with
the Securities and Exchange Commission.
Settlement for the Notes will be made in immediately available funds. So long as
the Notes are subject to DTC's book-entry system, the Notes will trade in DTC's
Same-Day Funds Settlement system until maturity, and therefore DTC will require
that secondary trading activity in the Notes be settled in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in the Notes.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated the date hereof, the Company has agreed to sell to each of the
Underwriters named below, severally, and each of the Underwriters has severally
agreed to purchase, the principal amount of the Notes set forth opposite its
name below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NAME NOTES
---- -----------
<S> <C>
J.P. Morgan Securities Inc................................................ $37,500,000
Goldman, Sachs & Co....................................................... 37,500,000
Morgan Stanley & Co. Incorporated......................................... 37,500,000
Salomon Brothers Inc...................................................... 37,500,000
------------
Total................................................................ $150,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the Underwriters
are obligated to take and pay for all the Notes if any are taken.
The Underwriters initially propose to offer the Notes directly to the public at
the public offering prices set forth on the cover page of this Prospectus
Supplement and to certain securities dealers at such price less a concession not
in excess of .400% of the principal amount of the Notes. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of .250% of the
principal amount of the Notes to certain other dealers. After the initial public
offering the price and such concessions may be changed.
The Notes are a new issue of securities with no established trading market. The
Company does not intend to apply for listing of the Notes on a national
securities exchange. The Company has been advised by the Underwriters that the
Underwriters intend to make a market in the Notes but are not obligated to do so
and may discontinue market making at any time without notice. No assurance can
be given as to the liquidity of or any trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments the Underwriters may be required to make in respect
thereof.
In the ordinary course of their respective businesses, the Underwriters or their
affiliates have provided investment banking and financial advisory services to
the Company, its subsidiaries or affiliates in the past, for which they have
received customary compensation and expense reimbursement, and may do so again
in the future.
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for the Company by Vinson & Elkins
L.L.P. and for the Underwriters by Bracewell & Patterson, L.L.P. Bracewell &
Patterson, L.L.P. currently provides services to the Company and certain of its
subsidiaries and affiliates as outside counsel on matters unrelated to the
issuance of the Notes.
S-6
