8-KOther Events

DEVON ENERGY CORP/DE 8-K Report (Nov 13, 2000)

Filed November 13, 2000For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed this Current Report (8-K) on November 13, 2000, to report the completion of its merger with Santa Fe Snyder Corporation on August 29, 2000. This report provides supplemental financial disclosures that retroactively include Santa Fe Snyder's results for periods prior to the merger, as the combination was accounted for using the pooling-of-interests method. The filing also includes detailed financial data for the years 1995 through 1999, highlighting significant operational and financial changes driven by strategic mergers and market conditions. The company experienced substantial growth and transformation during this period, marked by the acquisitions of PennzEnergy Company and Northstar Energy Corporation, alongside the Santa Fe Snyder merger. These transactions significantly expanded Devon's asset base, reserves, and operational scope, positioning it among the top U.S. independent oil and gas producers. The financial statements reflect the impact of these consolidations, including increased revenues, production volumes, and debt levels, alongside fluctuations in commodity prices and the associated financial performance.

Key Highlights

  • 1Devon Energy completed its merger with Santa Fe Snyder Corporation on August 29, 2000, accounting for the transaction using the pooling-of-interests method.
  • 2The filing includes supplemental financial data retroactively combining Devon and Santa Fe Snyder for periods prior to the merger's closing date.
  • 3Significant growth drivers during 1997-1999 included the mergers with PennzEnergy Company (August 1999) and Northstar Energy Corporation (December 1998), alongside the Santa Fe Snyder combination.
  • 4These mergers substantially increased Devon's production, reserves, and leasehold acreage, elevating its position within the oil and gas industry.
  • 5The company reported net losses for the years 1997, 1998, and 1999, influenced by commodity price volatility, significant merger-related expenses, and substantial reductions in the carrying value of oil and gas properties.
  • 6Devon's capital expenditures in 1999 totaled approximately $883.4 million, primarily for oil and gas property acquisition, drilling, and development.
  • 7The company had a company-wide Year 2000 readiness project completed on schedule with minimal reported issues.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce and provide supplemental financial disclosures related to the completion of Devon Energy's merger with Santa Fe Snyder Corporation on August 29, 2000. The filing retroactively incorporates Santa Fe Snyder's financial results using the pooling-of-interests method, as required by accounting standards.

The mergers, particularly with PennzEnergy and Northstar, significantly expanded Devon's operations, reserves, and assets. The pooling-of-interests method used for the Northstar and Santa Fe Snyder mergers meant that financial statements for periods prior to the merger closing were restated to include the combined results. The purchase method used for PennzEnergy meant its results were only included from the merger date in 1999. These combinations, along with market price volatility, contributed to significant changes in revenues, expenses, and ultimately, net earnings or losses.

Devon Energy experienced net losses in 1997 ($218.2 million), 1998 ($235.9 million), and 1999 ($154.1 million). This period was marked by significant strategic acquisitions that increased the company's scale, but also by volatile commodity prices, substantial merger-related expenses, and large reductions in the carrying value of oil and gas properties due to full cost ceiling limitations. While total revenues increased significantly from 1998 to 1999, driven by mergers and improved commodity prices, the company remained unprofitable on a net basis.

Devon managed its market risk primarily through commodity price hedging activities, including financial price swaps and fixed-price gas contracts, to support oil and natural gas prices and manage exposure to price fluctuations. The company also utilized foreign currency exchange rate swaps to mitigate the impact of currency volatility on its Canadian oil revenues. Additionally, Devon managed its interest rate risk by refinancing debt and altering its mix of fixed versus floating-rate debt.