8-KOther Events

DEVON ENERGY CORP/DE 8-K Report (Jun 21, 2000)

Filed June 21, 2000For Securities:DVN

Summary

Devon Energy Corporation (Devon) announced on May 25, 2000, its intention to merge with Santa Fe Snyder Corporation. The terms of the merger stipulate that Santa Fe Snyder stockholders will receive 0.22 shares of Devon common stock for each share of Santa Fe Snyder common stock. This filing includes preliminary unaudited pro forma combined financial information reflecting the potential impact of this merger, which is subject to stockholder approval from both companies and is expected to be filed on Form S-4 with the SEC by June 23, 2000. The pro forma financial information presented is based on the historical financial statements of both companies and assumes the merger will be accounted for using the pooling-of-interests method. Key financial figures as of March 31, 2000, show a combined total asset base of $6.29 billion and stockholders' equity of $2.56 billion. The combined entity anticipates annual cost savings of $30 to $35 million from consolidating headquarters and eliminating duplicate expenses.

Key Highlights

  • 1Devon Energy Corporation and Santa Fe Snyder Corporation announced a merger agreement on May 25, 2000.
  • 2Santa Fe Snyder shareholders will receive 0.22 shares of Devon common stock per share of Santa Fe Snyder.
  • 3The merger is subject to the approval of stockholders from both companies.
  • 4Preliminary unaudited pro forma combined financial statements are included, reflecting the potential financial impact of the merger.
  • 5The merger is expected to be accounted for under the pooling-of-interests method.
  • 6Anticipated annual cost savings from the merger are estimated between $30 million and $35 million.
  • 7The filing also notes significant historical adjustments and merger-related costs for both companies in prior periods.

Frequently Asked Questions

Under the terms of the merger agreement, stockholders of Santa Fe Snyder Corporation will receive 0.22 shares of Devon Energy Corporation common stock for each share of Santa Fe Snyder common stock they hold.

Devon expects to account for the merger using the pooling-of-interests method. This means the historical financial statements of both companies will be combined as if they had always been one entity. The filing notes that if the purchase method were used, it could result in significantly higher depreciation, depletion, and amortization expenses and consequently lower net earnings in future periods.

Devon anticipates annual cost savings of $30 million to $35 million. These savings are expected to be realized through the consolidation of corporate headquarters and the elimination of duplicate staff and expenses.

Yes, the filing details several significant historical events for both companies. Devon merged with PennzEnergy Company in August 1999, and Santa Fe Snyder was formed from a merger of Santa Fe Energy Resources and Snyder Oil in May 1999. Both companies have also experienced significant reductions in the carrying value of their oil and gas properties due to full cost ceiling limitations in prior years. These events are noted to assist investors in analyzing the pro forma information.