8-KMaterial AgreementsFinancial EventsExhibits & Filings

DEVON ENERGY CORP/DE 8-K Report, Material Agreement (Jun 9, 2021)

Filed June 9, 2021For Securities:DVN

Summary

Devon Energy Corporation (DVN) filed an 8-K on June 9, 2021, detailing the successful completion of its private exchange offers for WPX Energy, Inc. (WPX) notes. The company exchanged approximately $1.96 billion of WPX notes for $1.96 billion in new Devon notes, representing a 97.45% participation rate. This effectively consolidates the debt structure following the WPX merger. The filing also includes the execution of supplemental indentures and a registration rights agreement. A key outcome for investors is the modification of covenants within the WPX indenture, which were revised or eliminated through a consent solicitation. This action is aimed at streamlining financial flexibility. The new Devon notes issued have terms consistent with the original WPX notes, and the company has committed to registering these new notes under the Securities Act.

Key Highlights

  • 1Successfully exchanged approximately $1.96 billion of WPX Energy notes for new Devon Energy notes, achieving a 97.45% participation rate.
  • 2Issued new Devon Notes with an aggregate principal amount of $1.96 billion, reflecting the consolidation of WPX debt.
  • 3Entered into supplemental indentures to the Devon Indenture, governing the terms of the newly issued Devon Notes.
  • 4Completed a consent solicitation to amend the WPX Base Indenture, eliminating or revising restrictive covenants, including merger and asset sale restrictions, and reducing notice periods for redemptions.
  • 5Executed a Registration Rights Agreement, obligating Devon Energy to use commercially reasonable efforts to register the new Devon Notes with the SEC.
  • 6The new Devon Notes retain the interest payment dates, maturity dates, interest rates, and redemption provisions of the corresponding WPX Notes exchanged.
  • 7The exchange offers were conducted privately and offered to qualified institutional buyers and non-U.S. persons, with the new notes not registered under the Securities Act initially.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce the completion of Devon Energy's private exchange offers, where it exchanged substantially all outstanding WPX Energy notes for newly issued Devon Energy notes. It also detailed the related amendments to indentures and a registration rights agreement.

The debt exchange signifies a successful integration of WPX Energy's debt into Devon Energy's capital structure. For investors holding WPX notes, it means they now hold Devon notes with similar terms but potentially enhanced liquidity and are part of a larger, combined entity's debt profile. For Devon, it simplifies its debt obligations and potentially reduces future refinancing complexities.

Through a consent solicitation, several restrictive covenants in the WPX Base Indenture were eliminated or revised. This includes changes to covenants related to mergers, consolidations, asset sales, and events of default (excluding payment defaults). Additionally, the minimum notice period for redemption was reduced to three business days.

Yes, Devon Energy has entered into a Registration Rights Agreement that obligates the company to use commercially reasonable efforts to file a registration statement with the SEC to register the newly issued Devon Notes. This aims to allow for future resales or exchange offers under registered conditions.