8-KMaterial AgreementsFinancial EventsExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Oct 29, 2012)

Filed October 29, 2012For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed an 8-K on October 29, 2012, to report the execution of a new, significant $3 billion revolving Credit Agreement, effective October 24, 2012. This agreement replaces a previous credit facility and aims to provide flexible funding for general corporate purposes for the company and its subsidiaries, including its Canadian operations. The new credit line offers a substantial borrowing capacity and includes provisions for potential increases, demonstrating the company's proactive approach to managing its liquidity and financial flexibility. The agreement matures in October 2017, with options for extensions, and is governed by covenants designed to maintain financial health, such as a debt-to-capitalization ratio limit.

Key Highlights

  • 1Entered into a new $3 billion revolving Credit Agreement on October 24, 2012.
  • 2The Credit Agreement replaces the company's prior credit facility.
  • 3Proceeds from the Credit Agreement can be used for general corporate purposes of the company and its subsidiaries.
  • 4Up to $500 million of loans may be denominated in Canadian Dollars.
  • 5The Credit Agreement has an initial maturity date of October 24, 2017, with potential extensions.
  • 6The agreement includes covenants such as a limitation on consolidated funded indebtedness to consolidated total capitalization of no greater than 65%.
  • 7Bank of America, N.A. serves as the Administrative Agent, Canadian Swing Line Lender, and U.S. Swing Line Lender.

Frequently Asked Questions

The new $3 billion revolving Credit Agreement is intended to provide Devon Energy Corporation and its subsidiaries with financial flexibility for general corporate purposes. This includes funding for operations, capital expenditures, or other strategic initiatives.

The Credit Agreement matures on October 24, 2017. However, the company has the option to extend the maturity date for up to two additional one-year periods, subject to lender agreement.

The proceeds are designated for general corporate purposes of the borrowers and their subsidiaries. The agreement does include customary covenants and restrictions, such as limitations on liens, mergers, affiliate transactions, and a requirement to maintain a consolidated funded indebtedness to consolidated total capitalization ratio of no greater than 65%.

The establishment of a new, larger credit facility suggests proactive financial management by Devon Energy to ensure adequate liquidity. The replacement of an older agreement with a new one, and the inclusion of specific financial covenants, indicates a focus on maintaining a healthy balance sheet and operational flexibility.