8-KMaterial AgreementsFinancial EventsExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Oct 9, 2018)

Filed October 9, 2018For Securities:DVN

Summary

Devon Energy Corporation (DVN) has entered into a new $3 billion revolving Credit Agreement, replacing its previous credit facility. This new agreement, effective October 5, 2018, provides significant financial flexibility for general corporate purposes. The facility has a maturity date of October 5, 2023, with options for two one-year extensions, and includes sub-limits for letters of credit and swing line loans. The Credit Agreement incorporates customary covenants and financial maintenance requirements, including a maximum consolidated funded indebtedness to total capitalization ratio of 65%. The termination of the prior credit agreement was effective on the same date, with no prepayment penalties incurred. This refinancing underscores the company's proactive approach to managing its debt structure and ensuring access to capital.

Key Highlights

  • 1Entry into a new $3 billion revolving Credit Agreement on October 5, 2018.
  • 2The new credit facility replaces the Company's previous credit agreement dated October 24, 2012.
  • 3Proceeds from the Credit Agreement are available for general corporate purposes of the Company and its subsidiaries.
  • 4The Credit Agreement has a maturity date of October 5, 2023, with potential for two one-year extensions.
  • 5The agreement includes a covenant requiring Devon Energy to maintain a consolidated funded indebtedness to total capitalization ratio not exceeding 65%.
  • 6Up to $500 million of the total commitments can be allocated as Canadian commitments.
  • 7No prepayment penalties were incurred upon the termination of the prior Credit Agreement.

Frequently Asked Questions

This 8-K filing announces Devon Energy Corporation's entry into a new $3 billion revolving Credit Agreement and the termination of its prior credit facility. It details the terms, maturity, and usage of the new credit line.

The new $3 billion revolving Credit Agreement significantly enhances financial flexibility by providing access to a substantial pool of capital for general corporate purposes. The ability to potentially extend the maturity date also offers long-term stability.

A key covenant requires the Company to maintain a ratio of consolidated funded indebtedness to consolidated total capitalization of no greater than 65% at the end of each fiscal quarter. The agreement also includes customary covenants regarding liens, mergers, and incurrence of indebtedness.

Devon Energy reported that no prepayment penalties were paid in connection with the termination of its prior Credit Agreement.