8-KAcquisitions & DispositionsMaterial AgreementsExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Mar 10, 2014)

Filed March 10, 2014For Securities:DVN

Summary

This 8-K filing by Devon Energy Corporation (DVN) on March 10, 2014, announces the completion of a significant strategic transaction: the combination of substantially all of its U.S. midstream assets with Crosstex Energy, Inc. and Crosstex Energy, L.P. This complex transaction, effective March 7, 2014, involved multiple mergers and contributions, ultimately leading to the creation of EnLink Midstream LLC and EnLink Midstream, LP. For investors, the key takeaway is Devon Energy's successful separation and combination of its midstream operations into a new, publicly traded entity. This move is expected to unlock value by allowing the midstream assets to be managed and valued independently, potentially providing a clearer focus for both Devon Energy (as an upstream producer) and the new EnLink entities. The filing also details the agreements governing the rights and obligations of Devon Energy and its subsidiaries concerning the new entities, including registration rights and unitholder agreements.

Key Highlights

  • 1Devon Energy Corporation completed the combination of its U.S. midstream business with Crosstex Energy, Inc. and Crosstex Energy, L.P. on March 7, 2014.
  • 2The transaction created EnLink Midstream LLC and EnLink Midstream, LP (formerly Crosstex MLP).
  • 3Crosstex Energy, Inc. shareholders received common units of EnLink Midstream LLC and a cash distribution.
  • 4Devon Energy received Class B common units of EnLink Midstream LLC and EnLink Midstream, LP for its contributed midstream assets.
  • 5Registration Rights Agreements and Unitholder Agreements were established to govern the potential future sale of units held by Devon entities in EnLink.
  • 6The transactions were structured through a series of mergers and contributions under agreements signed in October 2013 and closed in March 2014.

Frequently Asked Questions

This filing reports the completion of a major transaction where Devon Energy combined its U.S. midstream assets with Crosstex Energy, Inc. and Crosstex Energy, L.P. to form new entities, EnLink Midstream LLC and EnLink Midstream, LP.

Devon Energy, through its subsidiary Devon Gas Services, received Class B common units in EnLink Midstream LLC and EnLink Midstream, LP. These units represent ownership in the newly formed midstream entities.

These agreements grant Devon Energy and its subsidiaries rights to have their EnLink units registered for potential sale in the future, subject to certain conditions. They also outline other obligations such as information sharing and expense allocation.

By separating its midstream assets into EnLink, Devon Energy can focus more sharply on its upstream exploration and production activities, while allowing the midstream assets to be independently managed and potentially attract different investor bases.