8-KLeadership ChangesAcquisitions & DispositionsMaterial Agreements+2

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Jan 7, 2021)

Filed January 7, 2021For Securities:DVN

Summary

Devon Energy Corporation (DVN) has filed an 8-K on January 7, 2021, reporting the completion of its previously announced merger of equals with WPX Energy, Inc. This filing details the material definitive agreements entered into as part of the merger, including a Stockholders' Agreement with EnCap Energy Capital Fund X, L.P. and Felix Investment Holdings II, LLC, which grants EnCap the right to nominate a director to the Board, subject to certain ownership thresholds and other conditions. Additionally, a Registration Rights Agreement was established, requiring DVN to file registration statements for shares issued to EnCap and to facilitate certain underwritten offerings. The merger effectively converted each share of WPX common stock into 0.5165 shares of DVN common stock. The report also outlines significant changes to the Board of Directors and senior leadership team following the merger. Several former WPX directors have been appointed to the DVN Board, including D. Martin Phillips as the initial Investor Director nominated by EnCap. Conversely, four directors have resigned from the DVN Board. Key leadership positions in the combined entity have been confirmed, with Richard E. Muncrief serving as President and CEO, and employment agreements for certain 'Legacy WPX Officers' have been finalized, preserving their existing compensation structures.

Key Highlights

  • 1Completion of the merger between Devon Energy Corporation (DVN) and WPX Energy, Inc., effective January 7, 2021.
  • 2WPX stockholders will receive 0.5165 shares of DVN common stock for each share of WPX common stock they held.
  • 3A Stockholders' Agreement has been executed, granting EnCap Energy Capital Fund X, L.P. the right to nominate one director to DVN's Board, contingent on holding at least 10% of outstanding shares.
  • 4A Registration Rights Agreement allows for the registration of DVN shares issued to EnCap and includes provisions for underwritten offerings.
  • 5The DVN Board has been reconstituted with the addition of former WPX directors, including D. Martin Phillips as the initial Investor Director nominated by EnCap.
  • 6Four directors have resigned from the DVN Board following the merger.
  • 7Key leadership roles in the combined company are confirmed, with Richard E. Muncrief appointed as President and CEO.

Frequently Asked Questions

This 8-K filing announces the closing of the merger between Devon Energy Corporation (DVN) and WPX Energy, Inc. It details the material definitive agreements entered into as part of the merger, changes in the Board of Directors and executive management, and confirms the completion of the acquisition.

Each share of WPX common stock was converted into the right to receive 0.5165 shares of Devon Energy Corporation common stock. No fractional shares will be issued; shareholders will receive cash in lieu of any fractional shares.

The Stockholders' Agreement allows EnCap Energy Capital Fund X, L.P. to nominate one director to DVN's Board of Directors as long as EnCap collectively holds at least 10% of DVN's outstanding common stock. This director must be reasonably acceptable to the Board's Governance committee and comply with legal requirements. The agreement also imposes restrictions on EnCap's ability to transfer two-thirds of its newly acquired DVN shares for 180 days post-closing.

Yes, the merger has led to changes. Five former WPX directors have been appointed to the DVN Board, including D. Martin Phillips as the initial Investor Director nominated by EnCap. Concurrently, four existing DVN directors have resigned.