8-KMaterial AgreementsFinancial EventsExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Dec 19, 2013)

Filed December 19, 2013For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed an 8-K on December 19, 2013, to report the closing of a significant public offering of senior notes totaling $2.2 billion. This offering included both floating rate and fixed rate notes with various maturities extending to 2018. The proceeds from this debt issuance are likely intended to support the company's strategic objectives, including its previously announced acquisition of Eagle Ford Shale assets from GeoSouthern. This debt issuance effectively provides Devon Energy with substantial capital, underpinning its growth initiatives. Investors should note the terms of these notes, including their interest rates, maturity dates, and covenants which limit the company's ability to incur further liens or sell assets, subject to specific conditions. A key contingency tied to these notes is a special mandatory redemption provision at a premium (101%) if the GeoSouthern acquisition does not close by June 30, 2014, or if the acquisition agreement is terminated.

Key Highlights

  • 1Devon Energy closed a $2.2 billion public offering of senior notes on December 19, 2013.
  • 2The offering comprised $1.0 billion in Floating Rate Senior Notes (due 2015 and 2016) and $1.2 billion in Fixed Rate Senior Notes (due 2016 and 2018).
  • 3Floating Rate Notes bear interest at three-month LIBOR plus a spread (0.45% for 2015, 0.54% for 2016).
  • 4Fixed Rate Notes have coupon rates of 1.200% (due 2016) and 2.250% (due 2018).
  • 5The notes are general, unsecured, and unsubordinated obligations of the company.
  • 6The debt issuance is linked to the pending acquisition of Eagle Ford Shale assets from GeoSouthern, with a special mandatory redemption clause if the acquisition does not close by June 30, 2014.
  • 7In case of a special mandatory redemption, the notes will be redeemed at 101% of the principal amount plus accrued interest.

Frequently Asked Questions

This Form 8-K is filed to report the closing of Devon Energy's public offering of $2.2 billion in senior notes and to provide details regarding the associated indenture.

Devon Energy issued an aggregate principal amount of $2.2 billion in senior notes, consisting of $1.0 billion in floating rate notes and $1.2 billion in fixed rate notes.

The notes are subject to a special mandatory redemption at a premium (101% of principal plus accrued interest) if the acquisition of GeoSouthern's Eagle Ford Shale assets is not completed by June 30, 2014, or if the purchase agreement is terminated before that date.

The Floating Rate Senior Notes due 2015 and 2016 bear interest at three-month LIBOR plus 0.45% and 0.54% respectively. The Fixed Rate Senior Notes due 2016 bear interest at 1.200%, and the Fixed Rate Senior Notes due 2018 bear interest at 2.250%. Maturities range from December 2015 to December 2018.