Item 1.01 Entry into a Material Definitive Agreement.
Issuance of New Notes
On June 9, 2021, Devon Energy Corporation (the "Company") completed its
previously announced private offers to exchange (the "Exchange Offers") any and
all (to the extent held by eligible noteholders, as described below) of the
approximately $2.0 billion aggregate principal amount of outstanding notes of
WPX Energy, Inc. (the "WPX Notes") for new notes issued by the Company (the
"Devon Notes"), and, of the total aggregate principal amount of WPX Notes
outstanding, approximately $1.96 billion, or 97.45%, were exchanged for Devon
Notes. The Devon Notes were issued pursuant to an indenture, dated as of
July 12, 2011 (the "Devon Base Indenture"), between the Company and UMB Bank,
National Association, as trustee (the "Devon Trustee"), as supplemented by
Supplemental Indenture No. 6 and Supplemental Indenture No. 7, each dated as of
June 9, 2021 (the "Devon Supplemental Indentures" and, together with the Base
Indenture, the "Devon Indenture"), between the Company and the Devon Trustee.
The Indenture limits the ability of the Company to incur liens, consolidate,
merge or sell its assets, in each case subject to certain exceptions and
qualifications set forth in the Indenture. In connection with the Exchange
Offers, the Company also paid cash consideration of $1,963,219 in the aggregate,
to holders of WPX Notes that validly tendered WPX Notes in the Exchange Offers.
Each of the Devon Notes issued in the Exchange Offers have the same interest
payment and maturity dates, interest rate and, except as set forth in the Offer
to Exchange and Consent Solicitation Agreement, dated May 10, 2021 (the "Offer
to Exchange"), redemption provisions, as the corresponding series of WPX Notes
exchanged. The aggregate principal amount of each series of Devon Notes issued
in the Exchange Offers are as follows:
Aggregate
Principal
Devon Notes Series and Interest Rates Amount
8.250% Notes due 2023 $ 224,079,000
5.250% Notes due 2024 $ 465,268,000
5.250% Notes due 2027 $ 377,557,000
5.875% Notes due 2028 $ 322,488,000
4.500% Notes due 2030 $ 573,827,000The Exchange Offers have expired, and are no longer open to participation by any
holders of the WPX Notes. The Devon Notes were offered for exchange to qualified
institutional buyers as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act and to non-U.S.
persons outside the United States in reliance on Regulation S under the
Securities Act. The Devon Notes were not registered under the Securities Act or
any state securities laws and may not be offered or sold in the United States
absent an effective registration statement or in a transaction not subject to
the registration requirements of the Securities Act or any state securities
laws.
In connection with the Exchange Offers and as described in greater detail in the
Offer to Exchange, the Company entered into a registration rights agreement,
dated as of June 9, 2021 (the "Registration Rights Agreement"), with BofA
Securities, Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC,
pursuant to which the Company is obligated to use commercially reasonable
efforts to file with the U.S. Securities and Exchange Commission and cause to
become effective a registration statement with respect to an offer to exchange
each series of Devon Notes for new notes registered under the Securities Act and
to use commercially reasonable efforts to file a shelf registration statement to
cover resales of the Devon Notes under the Securities Act in the event that the
Company determines that a registered exchange offer is not available or may not
be completed.
The above description is qualified in its entirety by reference to the terms of
the Devon Base Indenture (incorporated by reference to Exhibit 4.1 of the
Company's Current Report on Form 8-K filed on July 12, 2011), the Devon
Supplemental Indentures and the Registration Rights Agreement. The Devon
Supplemental Indentures and Registration Rights Agreement are filed as Exhibits
4.2, 4.3 and 10.1, respectively, to this report.
Consent Solicitation - Supplemental Indenture
In connection with the Exchange Offer, the Company solicited the consent of the
holders of the WPX Notes (the "Consent Solicitation") to adopt certain proposed
amendments to the indenture dated as of September 8, 2014 (the "WPX Base
Indenture"), between WPX Energy, Inc. ("WPX") and The Bank of New York Mellon
Trust Company, N.A., as trustee (the "WPX Trustee"), governing the WPX Notes
(collectively, the "Proposed Amendments"). The Proposed Amendments eliminated or
revised certain of the restrictive covenants in the WPX Base Indenture and the
supplemental indentures relating to the WPX Notes, including the merger covenant
and events of default other than payment-related events of default, and reduced
to three business days the minimum period for notices of redemption. The Company
received the requisite consents from holders of each series of WPX Notes and WPX
entered into a supplemental indenture, dated as of June 9, 2021 (the "WPX
Supplemental Indenture"), by and among WPX and the WPX Trustee to effect the
Proposed Amendments.
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The foregoing summary of the WPX Supplemental Indenture is qualified in its
entirety by reference to the terms of the WPX Base Indenture (incorporated by
reference to Exhibit 4.1 of WPX's Current Report on Form 8-K filed on
September 8, 2014) and the WPX Supplemental Indenture. The WPX Supplemental
Indenture is filed as Exhibit 4.5 to this report.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information in Item 1.01 above is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description of Exhibits
4.1 Indenture, dated as of July 12, 2011, between the Company and the
Devon Trustee (incorporated by reference to Exhibit 4.1 to the
Company's Form 8-K filed July 12, 2011; File No. 001-32318).
4.2 Supplemental Indenture No. 6, dated as of June 9, 2021, between the
Company and the Devon Trustee.
4.3 Supplemental Indenture No. 7, dated as of June 9, 2021, between the
Company and the Devon Trustee.
4.4 Indenture, dated as of September 8, 2014, between WPX. and the WPX
Trustee (incorporated herein by reference to Exhibit 4.1 to WPX's Form
8-K filed September 8, 2014; File No. 001-35322).
4.5 Supplemental Indenture No. 7, dated as of June 9, 2021, between WPX
and the WPX Trustee.
10.1 Registration Rights Agreement, dated June 9, 2021, by and among the
Company, BofA Securities, Inc., Citigroup Global Markets Inc. and
Morgan Stanley & Co. LLC.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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