Devon Energy Corporation (NYSE: DVN) (the “Company”
or “Devon Energy”) today announced the
pricing, as set forth in the table below, and expiration of its
previously announced tender offers (the “Offers”)
to purchase for cash any and all of its outstanding 8.250% notes due
2018 and 6.300% notes due 2019.
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Title of
Security
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CUSIP
Number
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Principal Amount
Outstanding
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U.S. Treasury
Reference
Security
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Bloomberg
Reference
Page
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Fixed
Spread
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Principal
Amount
Tendered
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Total
Consideration(a)
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8.250% notes due 2018(b)(c)
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674812AK8
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$125,000,000
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0.750% UST
due 7/31/2018
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FIT1
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+65 bps
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$96,689,000
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$1,128.44
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6.300% notes due 2019(d)
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25179MAH6
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$700,000,000
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0.750% UST
due 7/15/2019
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FIT1
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+95 bps
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$519,725,000
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$1,107.70
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(a)
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Per $1,000 principal amount. Total Consideration (as defined below)
calculated on the basis of pricing for the U.S. Treasury Reference
Security as of 2:00 p.m., New York City time, on August 10, 2016.
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(b)
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Issuer: Devon OEI Operating, L.L.C.
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(c)
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Includes approximately $48 million principal amount of privately
placed notes.
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(d)
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Issuer: Devon Energy Corporation.
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The Offers were made pursuant to the terms and conditions set forth in
the offer to purchase, dated August 4, 2016, and the related letter of
transmittal and notice of guaranteed delivery (the “Tender
Offer Documents”) to purchase for cash any and all of the 8.250%
notes due 2018 (the “2018 Notes”) and the
6.300% notes due 2019 (the “2019 Notes”
and, together with the 2018 Notes, the “Notes”)
listed in the table above.
The Offers expired at 5:00 p.m., New York City time, on August 10, 2016
(such time and date, the “Expiration Date”).
Holders of Notes were required to validly tender and not validly
withdraw their Notes prior to or at the Expiration Date to be eligible
to receive the Total Consideration.
The “Total Consideration” listed in the
table above for each $1,000 principal amount of each series of Notes
validly tendered and accepted for purchase pursuant to the Offers was
determined in the manner described in the Tender Offer Documents by
reference to a fixed spread specified in the table above plus the yield
to maturity based on the bid-side price of the applicable U.S. Treasury
Reference Security specified in the table above at 2:00 p.m., New York
City time, on August 10, 2016.
According to information provided by D.F. King & Co., Inc., the tender
and information agent for the Offers, $96,689,000 aggregate principal
amount of the 2018 Notes and $519,725,000 aggregate principal amount of
the 2019 Notes were validly tendered prior to or at the Expiration Date
and not validly withdrawn. These amounts include $48,015,000 aggregate
principal amount of 2018 Notes and $18,539,000 aggregate principal
amount of the 2019 Notes tendered pursuant to the guaranteed delivery
procedures described in the Tender Offer Documents, which remain subject
to the holders’ performance of the delivery requirements under such
procedures. The Company has accepted for purchase all Notes validly
tendered and not validly withdrawn at or prior to the Expiration Date.
The Settlement Date is expected to be August 11, 2016, although the
settlement of Notes tendered pursuant to guaranteed delivery procedures
is expected to be August 15, 2016.
Holders will also receive accrued and unpaid interest on Notes validly
tendered and accepted for purchase from the applicable last interest
payment date up to, but not including, the date the Company makes
payment for such Notes, which date is anticipated to be August 11, 2016
(the “Settlement Date”). The Company
intends to make payment on Notes tendered by the guaranteed delivery
procedures on August 15, 2016, but accrued interest will cease to accrue
on the Settlement Date for all Notes accepted in the Offers, including
those tendered by the guaranteed delivery procedures.
Devon Energy will fund the Offers with the net proceeds from previously
completed asset sales and financing transactions. The Offers are being
made to reduce the Company’s outstanding debt, including the debt of its
subsidiaries.
Information Relating to the Offers
Citigroup Global Markets Inc., J.P. Morgan Securities LLC and RBC
Capital Markets, LLC are the Lead Dealer Managers for the Offers and the
Co-Dealer Managers are CIBC World Markets Corp., TD Securities (USA) LLC
and U.S. Bancorp Investments, Inc. Investors with questions regarding
the Offers may contact Citigroup Global Markets Inc. at (800) 558-3745
(toll-free) or (212) 723-6106 (collect), J.P. Morgan Securities LLC at
(866) 834-4666 (toll free) or (212) 834-3424 (collect) or RBC Capital
Markets, LLC at (877) 381-2099 (toll free) or (212) 618-7822 (collect).
D.F. King & Co., Inc. is the tender and information agent for the Offers
and can be contacted at (800) 967-4617 (toll-free) or (212) 269-5550
(collect).
This press release is for informational purposes only and is not an
offer to buy, or the solicitation of an offer to sell, any of the Notes,
and the Offers do not constitute offers to buy or the solicitation of
offers to sell Notes in any jurisdiction or in any circumstances in
which such offers or solicitations are unlawful. The full details of the
Offers, including complete instructions on how to tender Notes, are
included in the Tender Offer Documents. Holders are strongly encouraged
to read carefully the Tender Offer Documents, including materials
incorporated by reference therein, because they will contain important
information. The Tender Offer Documents may be downloaded from D.F. King
& Co., Inc.’s website at www.dfking.com/dvn
or obtained from D.F. King & Co., Inc., free of charge, by calling
toll-free at (800) 967-4617 (bankers and brokers can call collect at
(212) 269-5550).
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
the control of the Company. These risks include, but are not limited to,
the Company’s ability to complete any of the Offers and reduce its
outstanding indebtedness and the other risks identified in the offer to
purchase relating to the Offers, the Company’s Annual Report on Form
10-K and its other filings with the Securities and Exchange Commission.
Investors are cautioned that any such statements are not guarantees of
future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements. The
forward-looking statements in this press release are made as of the date
hereof, and the Company does not undertake any obligation to update the
forward-looking statements as a result of new information, future events
or otherwise.
About Devon
Devon Energy is a leading independent energy company engaged in finding
and producing oil and natural gas. Based in Oklahoma City and included
in the S&P 500, Devon Energy operates in several of the most prolific
oil and natural gas plays in the U.S. and Canada with an emphasis on a
balanced portfolio. The Company is the second-largest oil producer among
North American onshore independents. For more information, visit www.devonenergy.com.
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