8-KOther Events

DEVON ENERGY CORP/DE 8-K Report, Corporate Update (Jun 27, 2019)

Filed June 27, 2019For Securities:DVN

Summary

Devon Energy Corporation (DVN) announced on June 27, 2019, its intention to redeem its entire outstanding principal amount of two series of senior notes: the $500 million 4.00% Senior Notes due 2021 and the $1 billion 3.250% Senior Notes due 2022. The redemption is scheduled to occur on July 27, 2019, with payment to holders on July 29, 2019. This action indicates a proactive approach by Devon Energy to manage its debt obligations. Investors should note that the redemption price will be determined based on the terms of the indenture, and will be the greater of 100% of the principal amount or the present value of remaining payments, plus accrued interest. This move suggests the company may be seeking to refinance at potentially lower interest rates or to simplify its capital structure.

Key Highlights

  • 1Devon Energy to redeem all outstanding 4.00% Senior Notes due 2021 ($500 million principal).
  • 2Devon Energy to redeem all outstanding 3.250% Senior Notes due 2022 ($1 billion principal).
  • 3Redemption date for the notes is set for July 27, 2019.
  • 4Payment date to noteholders is scheduled for July 29, 2019.
  • 5Redemption price will be calculated based on the terms of the indenture, ensuring holders receive at least principal plus accrued interest.
  • 6The company is managing its debt by calling these specific notes.
  • 7The Chief Financial Officer, Jeffrey L. Ritenour, signed the filing, indicating executive-level approval.

Frequently Asked Questions

Devon Energy is redeeming a total of $1.5 billion in principal amount, comprising $500 million of 4.00% Senior Notes due 2021 and $1 billion of 3.250% Senior Notes due 2022.

Noteholders are scheduled to receive their payment on July 29, 2019. The redemption itself is intended to take place on July 27, 2019.

The redemption price will be the greater of (1) 100% of the principal amount of the notes, or (2) the sum of the present values of the remaining scheduled payments of principal and interest from the redemption date to the maturity date. Additionally, holders will receive any accrued and unpaid interest up to, but not including, the redemption date. The exact price will be calculated three business days before the redemption date.

Companies typically redeem debt when they believe they can refinance at a lower interest rate, or if they have excess cash flow and want to reduce interest expense and simplify their debt structure. This action suggests Devon Energy may be optimizing its capital structure.