8-KMaterial AgreementsRegulation FDExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Jun 7, 2018)

Filed June 7, 2018For Securities:DVN

Summary

Devon Energy Corporation (DVN) announced a significant divestiture through a Purchase Agreement entered into on June 5, 2018. The company is selling substantially all of its midstream assets, including common units in EnLink Midstream, LLC (ENLC) and EnLink Midstream Partners, LP (MLP), along with its interest in EnLink Midstream Manager, LLC (Manager), to affiliates of Global Infrastructure Partners for an aggregate consideration of $3.125 billion. This strategic move indicates a clear shift in Devon Energy's operational focus, likely towards its upstream oil and gas exploration and production business. The sale includes a substantial portion of Devon's involvement in the midstream sector, represented by the transfer of over 115 million ENLC common units and approximately 87 million MLP common units, in addition to the Manager entity. The transaction is subject to customary closing conditions, including antitrust approvals and financing-related matters, with a target closing date of September 4, 2018. Investors should view this as a deleveraging event and a simplification of the company's business structure, potentially freeing up capital for core operations or shareholder returns.

Key Highlights

  • 1Devon Energy (DVN) entered into a Purchase Agreement on June 5, 2018, to sell substantially all of its midstream assets.
  • 2The transaction involves the sale of common units in EnLink Midstream, LLC (ENLC) and EnLink Midstream Partners, LP (MLP), along with the Manager entity, to affiliates of Global Infrastructure Partners.
  • 3The aggregate purchase price for these assets is $3.125 billion.
  • 4The sale includes 115,495,669 common units of ENLC and 87,128,717 common units of the MLP.
  • 5Closing of the transaction is subject to customary conditions, including regulatory approvals (Hart-Scott-Rodino) and matters related to credit facilities.
  • 6The agreement includes standard representations, warranties, and indemnity obligations.
  • 7The target closing date for the transaction is September 4, 2018, with potential extension rights.

Frequently Asked Questions

Devon Energy is selling substantially all of its midstream assets, which include common units in EnLink Midstream, LLC (ENLC) and EnLink Midstream Partners, LP (MLP), as well as its entire interest in EnLink Midstream Manager, LLC (Manager).

The buyer is a combination of affiliates of Global Infrastructure Partners: GIP III Stetson I, L.P. (MLP Acquiror) and GIP III Stetson II, L.P. (ENLC Acquiror).

The aggregate consideration for the sale of these midstream assets is $3.125 billion.

The closing of the transactions is expected by September 4, 2018, subject to certain conditions and possible extension rights.