Devon Energy Corporation (NYSE: DVN) (the “Company” or “Devon
Energy”) today announced the consideration payable in
connection with its previously announced tender offers (the
“Maximum Tender Offers”) to purchase
for cash up to an aggregate principal amount of the debt securities
listed in the table below (collectively, the “Notes”) that would not result in the aggregate
amount that all holders of the Notes are entitled to receive,
excluding accrued and unpaid interest, for their Notes that are
validly tendered and accepted for purchase in the Maximum Tender
Offers, exceeding the Aggregate Maximum Repurchase Amount (as
defined below). In addition, the Company has amended the Maximum
Tender Offers to increase the previously announced Aggregate
Maximum Repurchase Amount from approximately $535.4 million (which
gives effect to the Company’s purchase of certain of the 8.250%
notes due 2018, issued by Devon OEI Operating, L.L.C., and the
6.300% notes due 2019, issued by the Company, for total
consideration of approximately $664.6 million in the Company’s
previously consummated tender offers (the “Any and All Offers”) for such notes) to such
aggregate amount necessary to pay the Total Consideration (as
defined below) for all of the 2.250% notes due 2018 (the
“2018 Notes”) validly tendered and not
validly withdrawn in the Maximum Tender Offers as of the Early
Tender Date (as defined below), which Total Consideration is equal
to approximately $652.1 million (as amended, the “Aggregate Maximum Repurchase Amount”). All other
terms of the Maximum Tender Offers, as previously announced, remain
unchanged. The Maximum Tender Offers were made pursuant to the
terms and conditions set forth in the offer to purchase, dated
August 4, 2016, and the related letter of transmittal (the
“Tender Offer Documents”).
The table below sets forth the Total Consideration for the 2018
Notes that will be accepted for purchase.
Title of Security
CUSIP Number
PrincipalAmountOutstanding
AcceptancePriorityLevel
U.S. TreasuryReference
Security
BloombergReferencePage
FixedSpread
EarlyTenderPayment(a)(b)
TotalConsideration(a)(b)
2.250% notes due 2018(c) 25179MAT0 $750,000,000
1 0.750% UST due 7/31/2018 FIT1 +65 bps
$30 $1,019.56 7.500% notes due 2027(d)
812007AE2 $150,000,000 2 1.625% UST due
5/15/2026 FIT1 +290 bps $30 —(f) 7.875%
debentures due 2031(e) 25179SAD2 $1,250,000,000
3 2.500% UST due 5/15/2046 FIT1 +325
bps $30 —(f) 7.950% debentures due 2032(c)
251799AA0 $1,000,000,000 4 2.500% UST due
5/15/2046 FIT1 +335 bps $30 —(f) 4.000%
notes due 2021(c) 25179MAK9 $500,000,000 5
1.125% UST due 7/31/2021 FIT1 +185 bps
$30 —(f) 5.600% notes due 2041(c) 25179MAL7
$1,250,000,000 6 2.500% UST due 5/15/2046 FIT1
+340 bps $30 —(f)
(a) Per $1,000 principal amount.
(b) The Total Consideration was calculated on the basis of pricing
for the U.S. Treasury Reference Security as of 2:00 p.m., New York
City time, on August 18, 2016, and is inclusive of the Early Tender
Payment set forth in the table above. (c) Issuer: Devon Energy
Corporation. (d) Issuer: Devon OEI Operating, L.L.C. (e) Issuer:
Devon Financing Company, L.L.C. (f) Notes from such series will not
be accepted for purchase by the Company.
The “Total Consideration” listed in
the table above for each $1,000 principal amount of the 2018 Notes
was determined at 2:00 p.m., New York City time, on August 18,
2016. Only holders of the 2018 Notes who validly tendered and did
not validly withdraw such 2018 Notes at or prior to the previously
announced early tender date and time of 5:00 p.m., New York City
time, on August 17, 2016 (the “Early Tender
Date”) are eligible to receive the Total Consideration for
such 2018 Notes accepted for purchase.
The Company will accept for purchase all of the 2018 Notes that
have been validly tendered and not validly withdrawn. Since the
Total Consideration payable with respect to such 2018 Notes will
equal the Aggregate Maximum Repurchase Amount, none of the tendered
Notes from any other series will be accepted for purchase pursuant
to the Maximum Tender Offers. Holders will also receive accrued and
unpaid interest on the 2018 Notes validly tendered and accepted for
purchase from the last interest payment date up to, but not
including, the date the Company makes payment for such 2018 Notes,
which date is anticipated to be August 19, 2016.
The Maximum Tender Offers will expire at 11:59 p.m., New York
City time, on August 31, 2016, unless extended or earlier
terminated. Because the Maximum Tender Offers have been fully
subscribed as of the Early Tender Date, holders who tender Notes
after the Early Tender Date will not have any of their Notes
accepted for purchase. Any Notes tendered after the Early Tender
Date, together with all Notes (other than the 2018 Notes) tendered
at or prior to the Early Tender Date, will be returned to the
holders thereof as described in the Tender Offer Documents.
Devon Energy will fund the Maximum Tender Offers with the net
proceeds from previously completed asset sales and financing
transactions. The Maximum Tender Offers are being made to reduce
the Company’s outstanding debt, including the debt of its
subsidiaries. After giving effect to the purchase by the Company of
the Notes validly tendered and accepted for purchase in the Maximum
Tender Offers, as well as the Company’s previously consummated Any
and All Offers, the Company estimates that its total cash interest
expense will be reduced by approximately $54 million on an
annualized basis.
Information Relating to the Maximum Tender Offers
Citigroup Global Markets Inc., J.P. Morgan Securities LLC and
RBC Capital Markets, LLC are the Lead Dealer Managers for the
Maximum Tender Offers and the Co-Dealer Managers are CIBC World
Markets Corp., TD Securities (USA) LLC and U.S. Bancorp
Investments, Inc. Investors with questions regarding the Maximum
Tender Offers may contact Citigroup Global Markets Inc. at (800)
558-3745 (toll-free) or (212) 723-6106 (collect), J.P. Morgan
Securities LLC at (866) 834-4666 (toll free) or (212) 834-3424
(collect) or RBC Capital Markets, LLC at (877) 381-2099 (toll free)
or (212) 618-7822 (collect). D.F. King & Co., Inc. is the
tender and information agent for the Maximum Tender Offers and can
be contacted at (800) 967-4617 (toll-free) or (212) 269-5550
(collect).
This press release is for informational purposes only and is not
an offer to buy, or the solicitation of an offer to sell, any of
the Notes, and the Maximum Tender Offers do not constitute offers
to buy or the solicitation of offers to sell Notes in any
jurisdiction or in any circumstances in which such offers or
solicitations are unlawful. The full details of the Maximum Tender
Offers are included in the Tender Offer Documents. Holders are
strongly encouraged to read carefully the Tender Offer Documents,
including materials incorporated by reference therein, because they
will contain important information. The Tender Offer Documents may
be downloaded from D.F. King & Co., Inc.’s website at
www.dfking.com/dvn or obtained from D.F. King & Co., Inc., free
of charge, by calling toll-free at (800) 967-4617 (bankers and
brokers can call collect at (212) 269-5550).
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company. These risks
include, but are not limited to, the Company’s ability to complete
any of the Maximum Tender Offers and reduce its outstanding
indebtedness and the other risks identified in the offer to
purchase relating to the Maximum Tender Offers, the Company’s
Annual Report on Form 10-K and its other filings with the
Securities and Exchange Commission. Investors are cautioned that
any such statements are not guarantees of future performance and
that actual results or developments may differ materially from
those projected in the forward-looking statements. The
forward-looking statements in this press release are made as of the
date hereof, and the Company does not undertake any obligation to
update the forward-looking statements as a result of new
information, future events or otherwise.
About Devon
Devon Energy is a leading independent energy company engaged in
finding and producing oil and natural gas. Based in Oklahoma City
and included in the S&P 500, Devon Energy operates in several
of the most prolific oil and natural gas plays in the U.S. and
Canada with an emphasis on a balanced portfolio. The Company is the
second-largest oil producer among North American onshore
independents. For more information, visit www.devonenergy.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160818006262/en/
Devon Energy CorporationInvestor ContactsHoward Thill,
405-552-3693Scott Coody, 405-552-4735Chris Carr,
405-228-2496Media ContactJohn Porretto, 405-228-7506
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