Devon Energy Corporation (NYSE: DVN) (the “Company” or “Devon
Energy”) today announced that it has commenced tender offers
to purchase for cash (the “Tender
Offers”) up to an aggregate maximum repurchase amount of
$1.0 billion for the securities listed in the table below
(collectively, the “Securities”).
U.S.
Early Principal Acceptance Treasury
Bloomberg Tender Title of CUSIP
Series Tender Amount Priority Reference
Reference Fixed Payment Security
Number Cap
Outstanding Level
Security Page
Spread(a) (a)(b) 7.875% debentures due
2031(c) 25179SAD2 N/A
$1,058,648,000 1 2.75% UST due 2/15/28
FIT1 + 140 bps $30 7.950%
debentures due 2032(d) 251799AA0 N/A
$788,758,000 2 2.75% UST
due 2/15/28 FIT1 + 140 bps
$30 5.850% notes due 2025(d) 25179MAV5
N/A $485,232,000 3
2.75% UST due 2/15/28 FIT1 + 60 bps
$30 5.600% notes due 2041(d) 25179MAL7
N/A $1,250,000,000 4
2.75% UST due 11/15/47 FIT1
+ 135 bps $30 3.250% notes due 2022(d)
25179MAP8 $250,000,000
$1,000,000,000 5 2.625% UST due 2/28/23
FIT1 + 60 bps $30
(a) The Total Consideration (as defined below) for Securities
validly tendered prior to or at the Early Tender Date (as defined
below) and accepted for purchase is calculated using the applicable
Fixed Spread (as defined below) and includes the Early Tender
Payment (as defined below).
(b) Per $1,000 principal amount.
(c) Issuer: Devon Financing Company, L.L.C.
(d) Issuer: Devon Energy Corporation.
The Tender Offers consist of offers to purchase for cash the
Securities listed in the table above up to the aggregate maximum
repurchase amount, excluding accrued interest, of $1.0 billion (the
“Aggregate Maximum Repurchase
Amount”); provided that no more than $250,000,000 aggregate
principal amount of the 3.250% notes due 2022 will be purchased in
the Tender Offers (such cap, the “Series
Tender Cap”). Subject to applicable law, the Company may
increase or decrease the Aggregate Maximum Repurchase Amount or the
Series Tender Cap in its sole discretion.
In conjunction with the Tender Offers, the Company also
commenced a solicitation (the “Consent
Solicitations”) of consents (the “Consents”) to adopt certain proposed amendments to
the indentures governing the Securities to, among other things,
eliminate substantially all of the restrictive covenants, certain
affirmative covenants and events of default and other related
provisions (the “Proposed
Amendments”). In order for the Proposed Amendments with
respect to a series of Securities to become effective, (i) the
Proposed Amendments must be consented to by the holders of a
majority of the aggregate principal amount outstanding of the
Securities of such series and (ii) all of the Securities of such
series that have been validly tendered in the applicable Tender
Offer have been or will be accepted for purchase by the Company
without proration. Holders of Securities may not tender their
Securities without delivering Consents in the Consent Solicitation
relating to such Securities. The Company refers investors to the
Offer to Purchase and Consent Solicitation Statement, dated March
7, 2018 (the “Offer to Purchase”), for
the complete terms and conditions of the Tender Offers and Consent
Solicitations.
The Tender Offers will expire at 11:59 p.m., New York City time,
on April 3, 2018, unless extended or earlier terminated (such date
and time, as the same may be extended, the “Expiration Date”). Holders of Securities must
validly tender and not validly withdraw their Securities prior to
or at 5:00 p.m., New York City time, on March 20, 2018, unless
extended or earlier terminated (such date and time, as the same may
be extended, the “Early Tender Date”),
to be eligible to receive the Total Consideration, which includes
the early tender payment of $30 per $1,000 principal amount of
Securities (the “Early Tender
Payment”). Holders of Securities who validly tender their
Securities after the Early Tender Date but prior to or at the
Expiration Date will be eligible to receive an amount equal to the
Total Consideration minus the Early Tender Payment. All Securities
tendered prior to or at the Early Tender Date will have priority
over Securities tendered after the Early Tender Date.
The Consent Solicitations will expire at 11:59 p.m., New York
City time, on April 3, 2018, unless extended or earlier
terminated.
Securities may be validly withdrawn (and related Consents may be
revoked) at any time prior to or at 5:00 p.m., New York City time,
on March 20, 2018, unless such date and time is extended or earlier
terminated by the Company, but not thereafter.
The “Total Consideration” for each
$1,000 principal amount of each series of Securities validly
tendered and accepted for purchase pursuant to the applicable
Tender Offers will be determined in the manner described in the
Offer to Purchase by reference to a fixed spread specified for such
Securities (the “Fixed Spread”) in the
table above plus the yield to maturity based on the bid-side price
of the applicable U.S. Treasury Reference Security specified in the
table above at 2:00 p.m., New York City time, on March 21, 2018,
unless extended or earlier terminated.
Holders will also receive accrued and unpaid interest on
Securities validly tendered and accepted for purchase from the
applicable last interest payment date up to, but not including, the
date the Company makes payment for such Securities, which date is
anticipated to be (i) March 22, 2018, in the case of the Securities
tendered prior to or at the Early Tender Date and accepted for
purchase pursuant to a Tender Offer, and (ii) April 4, 2018, in the
case of the Securities tendered after the Early Tender Date and
prior to the Expiration Date and accepted for purchase pursuant to
a Tender Offer.
Devon Energy expects to fund the Tender Offers with cash flow
generated from operations and the net proceeds from previously
completed asset sales and financing transactions. The Tender Offers
are being made to reduce the Company’s outstanding debt, including
the debt of its subsidiaries.
The Tender Offers and Consent Solicitations are subject to the
satisfaction or waiver of certain conditions specified in the Offer
to Purchase but the Tender Offers are not subject to minimum tender
conditions. Following the completion of the Tender Offers, the
Company or its affiliates may purchase additional Securities in the
open market, in privately negotiated transactions, through tender
or exchange offers, or otherwise, or the applicable issuer may
redeem Securities that the issuer is permitted to redeem pursuant
to their terms. The Company is not obligated to redeem any
Securities that are not tendered and accepted in the Tender
Offers.
Information Relating to the Tender Offers and Consent
Solicitations
The Offer to Purchase is being distributed to holders of
Securities beginning today. Citigroup Global Markets Inc., Credit
Suisse Securities (USA) LLC and Wells Fargo Securities, LLC are the
Lead Dealer Managers and Solicitation Agents for the Tender Offers
and the Consent Solicitations and the Co-Dealer Managers and
Solicitation Agents are BMO Capital Markets Corp., Mizuho
Securities USA LLC and Scotia Capital (USA) Inc. Investors with
questions regarding the Tender Offers or Consent Solicitations may
contact Citigroup Global Markets Inc. at (800) 558-3745 (toll free)
or (212) 723-6106 (collect), Credit Suisse Securities (USA) LLC at
(800) 820-1653 (toll free) or (212) 538-1862 (collect) or Wells
Fargo Securities, LLC at (866) 309-6316 (toll free) or (704)
410-4760 (collect). D.F. King & Co., Inc. is the tender and
information agent for the Tender Offers and can be contacted at
(800) 967-4617 (toll-free) or (212) 269-5550 (collect).
None of the Company or its affiliates, their respective boards
of directors, the dealer managers and solicitation agents, the
tender and information agent or the trustee with respect to any
series of Securities is making any recommendation as to whether
holders should tender any Securities in response to any of the
Tender Offers or deliver Consents pursuant to the Consent
Solicitations, and neither the Company nor any such other person
has authorized any person to make any such recommendation. Holders
must make their own decision as to whether to tender any of their
Securities and deliver the related Consents, and, if so, the
principal amount of Securities to tender.
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 Securities and the Tender Offers do not constitute offers to
buy or the solicitation of offers to sell Securities in any
jurisdiction or in any circumstances in which such offers or
solicitations are unlawful. The full details of the Tender Offers
and Consent Solicitations, including complete instructions on how
to tender Securities and deliver Consents, are included in the
Offer to Purchase. Holders are strongly encouraged to read
carefully the Offer to Purchase, including materials incorporated
by reference therein, because it contains important information.
The Offer to Purchase may be 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) or
emailing dvn@dfking.com.
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 Tender Offers and Consent Solicitations and reduce its
outstanding indebtedness and the other risks identified in the
Offer to Purchase, 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 operates in several of the
most prolific oil and natural gas plays in the U.S. and Canada with
an emphasis on achieving strong returns and capital-efficient cash
flow growth. For more information, visit www.devonenergy.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180307006339/en/
Devon Energy CorporationInvestor ContactsScott Coody,
405-552-4735Chris Carr, 405-228-2496Media ContactJohn
Porretto, 405-228-7506
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