e424b2
The
information in this preliminary prospectus supplement is not
complete and may be changed. This preliminary prospectus
supplement is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
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Filed pursuant to Rule 424(b)(2)
Registration No. 333-156025
Subject to Completion,
January 6, 2009
PRELIMINARY
PROSPECTUS SUPPLEMENT dated January 6, 2009
(To Prospectus dated December 9, 2008)
$
Devon
Energy Corporation
$ % Senior
Notes due 2014
$ % Senior Notes due
2019
We are offering
$
aggregate principal amount of
our % senior notes
due ,
2014 and
$
aggregate principal amount of
our % senior notes
due ,
2019. We will pay interest on the notes semi-annually in arrears
on
and
of each year,
beginning ,
2009. We may redeem some or all of the notes at any time and
from time to time before their maturity date at our option at a
make-whole redemption price, together with accrued and unpaid
interest, if any, to the redemption date. See Description
of the Notes Optional Redemption. The notes
will be our general unsecured obligations and will rank equally
in right of payment with all our existing and future unsecured
and unsubordinated debt.
We do not intend to list the notes on any securities exchange.
Investing in the notes involves risks. You should carefully
read the entire accompanying prospectus and this prospectus
supplement, including the section entitled Risk
Factors beginning on
page S-1
of this prospectus supplement and in our Annual Report on
Form 10-K/A
for the year ended December 31, 2007.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these notes
or determined if this prospectus supplement and the accompanying
prospectus are truthful or complete. Any representation to the
contrary is a criminal offense.
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Per 2014 Note
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Total
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Per 2019 Note
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Total
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Price to public(1)
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%
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$
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%
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$
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Underwriting discount
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%
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$
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%
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$
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Proceeds, before expenses, to us(1)
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%
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$
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%
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$
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(1) |
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Plus accrued interest, if any, from January ,
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We expect that the notes will be delivered to investors on or
about ,
2009 in book-entry form only through the facilities of The
Depository Trust Company.
Joint
Book-Running Managers
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Banc of America
Securities LLC
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J.P. Morgan
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UBS Investment Bank
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No person is authorized to give any information or to make any
representations other than those contained or incorporated by
reference in this prospectus supplement or the accompanying
prospectus or in any free writing prospectus filed with the
Securities and Exchange Commission and, if given or made, such
information or representations must not be relied upon as having
been authorized. This prospectus supplement and the accompanying
prospectus do not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the
securities described in this prospectus supplement or an offer
to sell or the solicitation of an offer to buy those securities
in any circumstances in which such offer or solicitation is
unlawful. Neither the delivery of this prospectus supplement or
the accompanying prospectus, nor any sale made hereunder and
thereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of
Devon since the date hereof or that the information contained or
incorporated by reference herein or therein is correct as of any
time subsequent to the date of such information.
For purposes of this prospectus supplement and the accompanying
prospectus, unless the context otherwise indicates, references
to us, we, our,
ours, and Devon refer to Devon Energy
Corporation and its subsidiaries.
TABLE OF CONTENTS
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Prospectus Supplement
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S-1
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S-1
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S-2
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S-2
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S-6
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S-8
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S-9
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Prospectus
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About this Prospectus
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1
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Devon Energy Corporation
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1
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Use of Proceeds
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1
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Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed
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Charges and Preferred Stock Dividends
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1
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Description of Capital Stock
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2
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Description of Undesignated Preferred Stock
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3
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Description of Debt Securities
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4
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Book-Entry Securities
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13
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Plan of Distribution
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14
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Legal Matters
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15
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Experts
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15
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Where You Can Find More Information
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15
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DEVON
ENERGY CORPORATION
Devon is an independent energy company engaged primarily in oil
and gas exploration, development and production, the
transportation of oil, gas, and natural gas liquids, or NGLs,
and the processing of natural gas. We own oil and gas properties
principally in the United States and Canada and, to a lesser
degree, various regions located outside North America, including
Azerbaijan, Brazil and China. In addition to our oil and gas
operations, we have marketing and midstream operations primarily
in North America. These include marketing natural gas, crude oil
and NGLs, and constructing and operating pipelines, storage and
treating facilities and gas processing plants.
Our principal and administrative offices are located at 20 North
Broadway, Oklahoma City, Oklahoma
73102-8260.
Our telephone number at that location is
(405) 235-3611.
RISK
FACTORS
An investment in the notes is subject to risk. Before you decide
to invest in the notes, you should consider the risk factors
below as well as the risk factors discussed in our Annual Report
on
Form 10-K
for the year ended December 31, 2007, as amended by
Form 10-K/A
filed on June 9, 2008, incorporated by reference in the
accompanying prospectus.
An
active trading market for the notes may not
develop.
The notes of each series are a new issue of securities with no
established trading market, and we do not intend to list them on
any securities exchange or automated quotation system. As a
result, an active trading market for the notes may not develop,
or if one does develop, it may not be sustained. If an active
trading market fails to develop or cannot be sustained, you may
not be able to resell your notes at their fair market value or
at all.
The
notes do not restrict our ability to incur additional debt or
prohibit us from taking other actions that could negatively
impact holders of the notes.
We are not restricted under the terms of the notes or the
indenture governing the notes from incurring additional debt.
Although the indenture limits our ability to issue secured debt
without also securing the notes and to consolidate with or merge
into, or convey or otherwise transfer or lease our properties
and assets substantially as an entirety to, any person, these
limitations are subject to a number of exceptions. See
Description of Debt Securities Covenants
in the accompanying prospectus.
Our
ability to service our debt, including the notes, will be
dependent upon the earnings of our subsidiaries and the
distribution of those earnings to us.
The notes are obligations exclusively of Devon Energy
Corporation. Our operations are conducted almost entirely
through our subsidiaries. Accordingly, our cash flow and our
consequent ability to service our debt, including the notes, are
dependent upon the earnings of our subsidiaries and the
distribution of those earnings to us, whether by dividends,
loans or otherwise. The payment of dividends and the making of
loans and advances to us and our right to receive assets of any
of our subsidiaries upon their liquidation or reorganization,
and the consequent right of the holders of the notes to
participate in those assets, will be effectively subordinated to
the claims of that subsidiarys creditors, including trade
creditors, except to the extent that we are recognized as a
creditor of such subsidiary, in which case our claims would
still be subordinate to any liens on the assets of such
subsidiary and any indebtedness of such subsidiary senior to
ours. As of September 30, 2008, we had total consolidated
indebtedness with a carrying value of approximately
$4.8 billion, none of which was secured. This total
includes indebtedness of our subsidiaries of approximately
$3.6 billion, excluding intercompany debt and trade
payables.
Oil
and natural gas prices as of December 31, 2008 will likely
result in impairments of our asset carrying
values.
We follow the full cost method of accounting for our oil and gas
properties. This method subjects us to quarterly calculations of
a ceiling, or limitation on the carrying value of
oil and gas properties on our balance sheet. The ceiling is
equal to the estimated after-tax future net revenues, discounted
at 10% per annum, from proved
S-1
reserves, plus the cost of unproved properties not subject to
amortization. The ceiling limitation is calculated using prices
and costs as of the end of each quarter, and is imposed
separately for each country in which we have oil and gas
properties. If the net book value of our properties, less
related deferred income taxes, exceeds the ceiling limitation,
the excess is written off as an impairment expense. As of
September 30, 2008, our net property costs as calculated
pursuant to the ceiling test were less than the calculated
ceiling for all countries.
Our ceiling limitations as of December 31, 2008 cannot be
calculated until our estimates of year-end proved reserves are
completed. Such reserves estimates are not expected to be
completed until the end of January 2009. However, based on the
oil and natural gas prices that existed as of December 31,
2008, we expect to record non-cash impairment charges in the
fourth quarter of 2008 due to the full cost ceiling limitations.
The
actual quantities and present value of our proved reserves may
prove to be lower than we have estimated.
The documents incorporated by reference in the accompanying
prospectus contain estimates of our proved reserves and the
estimated future net revenues from our proved reserves. These
estimates are based upon various assumptions, including
assumptions required by the SEC relating to natural gas and oil
prices, drilling and operating expenses, capital expenditures
and taxes. The process of estimating natural gas and oil
reserves is complex. The process involves significant decisions
and assumptions in the evaluation of available geological,
geophysical, engineering and economic data for each reservoir.
Therefore, these estimates are inherently imprecise.
Actual future production, natural gas and oil prices, revenues,
taxes, development expenditures, operating expenses and
quantities of recoverable natural gas and oil reserves most
likely will vary from these estimates. Such variations may be
significant and could materially affect the estimated quantities
and present value of our proved reserves. In addition, we may
adjust estimates of proved reserves to reflect production
history, results of exploration and development drilling,
prevailing natural gas and oil prices and other factors, many of
which are beyond our control. Our properties may also be
susceptible to hydrocarbon drainage from production by operators
on adjacent properties.
You should not assume that the present values contained in the
documents incorporated by reference in the accompanying
prospectus represent the current market value of our estimated
natural gas and oil reserves. In accordance with SEC
requirements, the estimates of our present values are based on
prices and costs as of the date of the estimates. The
December 31, 2007 present value is based on weighted
average wellhead prices of $60.42 per barrel of oil, $6.01 per
Mcf of natural gas and $50.57 per barrel of NGLs. These wellhead
prices compare to the December 31, 2007, NYMEX cash price
of $96.00 per barrel of oil and the Henry Hub spot price of
$6.80 per MMBtu for natural gas. Actual future prices and costs
may be materially higher or lower than the prices and costs as
of the date of any estimate.
USE OF
PROCEEDS
The net proceeds of this offering, after discounts and expenses,
are estimated to be approximately
$ . We intend to use substantially
all of the net proceeds to repay approximately
$ of our outstanding commercial
paper and the remainder for general corporate purposes. The
commercial paper we intend to repay was incurred principally to
fund capital expenditures and working capital needs. As of
January 5, 2009, our outstanding commercial paper had a
weighted average interest rate of approximately 2.39% and
matured within 60 days.
DESCRIPTION
OF THE NOTES
The following description of the particular terms of the
$ % senior notes
due ,
2014 (the 2014 notes) and the
$ % senior notes
due ,
2019 (the 2019 notes and, collectively with the 2014
notes, the notes) (which each represent a new series
of, and are referred to in the accompanying prospectus as, the
debt securities), supplements and, to the extent
inconsistent therewith, replaces the description of the general
terms and provisions of the debt securities set forth in the
accompanying prospectus.
S-2
We will issue the notes under the indenture between us and The
Bank of New York Mellon (as successor to The Bank of New York),
as trustee, dated as of March 1, 2002, as supplemented by a
supplemental indenture to be dated as of
January , 2009. In this prospectus supplement,
we refer to that indenture as so supplemented as the
indenture. The terms of the notes include those set
forth in the indenture and those made a part of the indenture by
reference to the Trust Indenture Act of 1939, as amended.
The following description is a summary of the material
provisions of the notes and the indenture. It does not restate
the indenture in its entirety. We urge you to read the indenture
because it, and not this description, defines your rights as a
holder of notes. Copies of the indenture are available upon
request from us or the trustee. References to us,
we, ours, or Devon in this
section of the prospectus supplement are to Devon Energy
Corporation and not its subsidiaries.
General
The 2014 notes will:
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accrue interest at the rate of % per year;
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be initially limited to
$ aggregate
principal amount;
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be issued in denominations of $2,000 and integral multiples of
$1,000; and
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mature
on ,
2014.
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The 2019 notes will:
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accrue interest at the rate of % per year;
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be initially limited to
$ aggregate
principal amount;
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be issued in denominations of $2,000 and integral multiples of
$1,000; and
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mature
on ,
2019.
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Interest on the notes will:
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accrue from the date of issuance or the most recent interest
payment date;
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be payable in cash semiannually in arrears on
each
and commencing
on ,
2009;
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be payable to the holders of record
on
and immediately preceding the
related interest payment dates; and
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be computed on the basis of a
360-day year
consisting of twelve
30-day
months.
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There is no limit on the aggregate principal amount of notes
that we may issue. Also, we reserve the right, from time to
time, in compliance with the terms of the indenture and without
the consent of any holders of any of the notes, to reopen either
series of notes by issuing additional 2014 notes or 2019 notes,
as the case may be. Any such additional 2014 notes or 2019 notes
would have terms identical to the outstanding 2014 notes or 2019
notes, as the case may be (except the date of issuance, the date
interest begins to accrue and, in certain circumstances, the
first interest payment date), so that such additional 2014 notes
or 2019 notes shall be consolidated with, form a single series
with, and increase the aggregate principal amount of, the 2014
notes or 2019 notes, as the case may be.
If any interest payment date, maturity date or redemption date
falls on a day that is not a business day, the payment will be
made on the next business day with the same force and effect as
if made on the relevant interest payment date, maturity date or
redemption date. Unless we default on a payment, no interest
will accrue for the period from and after the applicable
interest payment date, maturity date or redemption date.
Subject to the exceptions, and subject to compliance with the
applicable requirements, set forth in the indenture, we may
discharge our obligations under the indenture with respect to
the notes as described under Description of Debt
Securities Defeasance in the accompanying
prospectus.
S-3
The notes will be our general unsecured obligations and will
rank equally in right of payment with all our other existing and
future unsecured and unsubordinated debt.
Payment
and Transfer
The notes will be issued in the form of one or more permanent
global securities as described in the accompanying prospectus
under Description of Debt Securities Global
Securities and registered in the name of a nominee of The
Depository Trust Company, as depositary for the notes. See
Book-Entry Securities in the accompanying
prospectus. Beneficial interests in notes in global form will be
shown on, and transfers of interest in notes in global form will
be made only through, records maintained by the depositary and
its participants. Notes in definitive form, if any, may be
registered, exchanged or transferred at the office or agency
maintained by us for such purpose (which initially will be the
corporate trust office of the trustee located at 101 Barclay
Street, New York, New York 10286). Payment of principal of,
premium, if any, and interest on notes in global form registered
in the name of or held by the depositary or its nominee will be
made in immediately available funds to the depositary or its
nominee, as the case may be, as the registered holder of such
global security. If any of the notes are no longer represented
by global securities, all payments on such notes will be made at
the corporate trust office of the trustee; however, any payment
of interest on such notes may be made, at our option, by check
mailed directly to registered holders at their registered
addresses.
No service charge will be made for any registration of transfer
or exchange of notes, but we may require payment of a sum
sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith. We are not
required to transfer or exchange any note selected for
redemption or any other note for a period of 15 days before
any mailing of notice of notes to be redeemed.
Optional
Redemption
The notes will be redeemable by us, in whole or in part, at any
time at a redemption price equal to the greater of:
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100% of the principal amount of the notes then outstanding to be
redeemed; or
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the sum of the present values of the remaining scheduled
payments of principal and interest thereon (exclusive of
interest accrued to the date of redemption) from the redemption
date to the maturity date computed by discounting such payments
to the redemption date on a semiannual basis, assuming a
360-day year
consisting of twelve
30-day
months, at a rate equal to the sum
of basis points in the case of the
2014 notes and basis points in the
case of the 2019 notes, plus the Adjusted Treasury Rate, as
determined by the Independent Investment Banker, on the third
business day prior to the redemption date;
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plus, in each case, accrued and unpaid interest, if any, to the
redemption date.
Adjusted Treasury Rate means, with respect to any
redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Optional
Redemption Comparable Treasury Issue, calculated using a
price for the Optional Redemption Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the
Optional Redemption Comparable Treasury Price for such
redemption date.
Independent Investment Banker means an independent
investment banking institution of national standing appointed by
Devon.
Optional Redemption Reference Treasury Dealer
means each of Banc of America Securities LLC, J.P. Morgan
Securities Inc. and UBS Securities LLC, and their respective
successors; provided that if any of the foregoing ceases to be,
and has no affiliate that is, a primary U.S. governmental
securities dealer, Devon will substitute for it another primary
U.S. governmental securities dealer.
Optional Redemption Comparable Treasury Issue
means the U.S. Treasury security selected by the
Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed that would be
utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of
the notes or, if, in the reasonable judgment of the Independent
Investment Banker, there is no such security, then the Optional
Redemption Comparable Treasury Issue will mean the
U.S. Treasury security or securities selected by the
Independent
S-4
Investment Banker as having an actual or interpolated maturity
or maturities comparable to the remaining term of the notes.
Optional Redemption Comparable Treasury Price
means the average of the Optional Redemption Reference
Treasury Dealer Quotations for the applicable redemption date.
Optional Redemption Reference Treasury Dealer
Quotations means, with respect to each Optional
Redemption Reference Treasury Dealer and any redemption
date for the notes, the average, as determined by the
Independent Investment Banker, of the bid and asked prices for
the Optional Redemption Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount)
quoted in writing to the Independent Investment Banker and the
trustee at 5:00 p.m., New York City time, on the third
business day preceding such redemption date.
We will mail notice of redemption at least 30 days but not
more than 60 days before the applicable redemption date to
each holder of the notes to be redeemed.
Upon the payment of the redemption price, plus accrued and
unpaid interest, if any, to the date of redemption, interest
will cease to accrue on and after the applicable redemption date
on the notes or portions thereof called for redemption.
In the case of any partial redemption, selection of the notes
for redemption will be made by the trustee by such method of
random selection as the trustee shall deem fair and appropriate.
Notes will only be redeemed in multiples of $1,000 in principal
amount. If any note is to be redeemed in part only, the notice
of redemption will state the portion of the principal amount to
be redeemed. A new note in principal amount equal to the
unredeemed portion of the original note will be issued upon the
cancellation of the original note.
No
Sinking Fund
We are not required to make mandatory redemption or sinking fund
payments with respect to the notes.
Covenants
The covenant limiting our ability to incur liens described in
the accompanying prospectus under the heading Description
of Debt Securities Covenants and the
restrictions on consolidation, merger or sale of assets
described in the accompanying prospectus under the heading
Description of Debt Securities Consolidation,
Merger and Sale of Assets will apply to the notes. The
indenture does not otherwise limit the amount of indebtedness or
other obligations that we may incur and does not give you the
right to require us to repurchase your notes upon a change of
control.
In addition, the indenture provides that the covenant limiting
our ability to incur liens, the restrictions on consolidation,
merger or sale of assets and certain other non-monetary
covenants included in the indenture may be waived or modified by
holders representing at least a majority of all debt securities,
including the notes, outstanding at any one time under the
indenture, and that, following an Event of Default
arising from a breach of any of these provisions, the trustee or
holders of not less than 25% in principal amount of all debt
securities, including the notes, outstanding under the indenture
to which these provisions are applicable may accelerate the
maturity of the debt securities under the indenture. As of the
issue date of the notes, $1 billion of our
7.95% senior debentures due 2032 will be outstanding under
the indenture.
Events of
Default
In addition to the Events of Default described in
the accompanying prospectus under the heading Description
of Debt Securities Events of Default, it shall
constitute an Event of Default under the indenture
in respect of each series of the notes if we default in the
payment of any principal of our Funded Debt (as defined in the
accompanying prospectus) outstanding in an aggregate principal
amount in excess of $50 million at the stated
S-5
final maturity thereof or the occurrence of any other default
the effect of which is to cause the stated final maturity of
this Funded Debt to be accelerated, and if:
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the default in payment is not cured within 60 days after
written notice of the default from the trustee or holders of at
least 25% in principal amount of the outstanding notes of such
series; or
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the acceleration is not rescinded or annulled or the default
that caused the acceleration is not cured within 60 days
after written notice of the default from the trustee or holders
of at least 25% in principal amount of the outstanding notes of
such series.
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Concerning
the Trustee
The Bank of New York Mellon is the trustee under the indenture
and has been appointed by us as security registrar and paying
agent with regard to the notes.
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain
U.S. federal income tax considerations relating to the
purchase, ownership and disposition of notes to holders who
purchase notes upon their original issuance at their initial
offering price and hold the notes as capital assets, within the
meaning of section 1221 of the Internal Revenue Code of
1986, as amended (the Code). This discussion is
based upon the Code, Treasury Regulations (including proposed
Treasury Regulations) issued thereunder, Internal Revenue
Service (the IRS) rulings and pronouncements, and
judicial decisions now in effect, all of which are subject to
change, possibly with retroactive effect.
This discussion does not address all aspects of
U.S. federal income taxation that may be relevant to a
holder in light of its particular circumstances, or (except as
otherwise set forth below) to holders subject to special tax
rules such as (1) banks, regulated investment companies,
insurance companies, real estate investment trusts, dealers in
securities or currencies or tax-exempt organizations,
(2) persons holding notes as part of a straddle, hedge,
conversion or other integrated transaction, (3) persons who
mark their securities to market for U.S. federal income tax
purposes or whose functional currency is not the
U.S. dollar, (4) U.S. expatriates,
(5) persons subject to alternative minimum taxes and
(6) persons who will own notes through partnerships or
other pass-through entities for U.S. federal income tax
purposes.
This discussion also does not address estate taxes, alternative
minimum tax consequences or state, local or foreign taxes.
Prospective investors are urged to consult their own tax
advisors with respect to the tax consequences of the purchase,
ownership and disposition of notes in light of their own
circumstances.
U.S.
Holders
As used in this discussion, the term
U.S. holder means a beneficial owner of the
notes that is, for U.S. federal income tax purposes,
(1) an individual citizen or resident of the United States,
(2) a corporation, or other entity taxable as a
corporation, created or organized in or under the laws of the
United States or any state thereof or the District of Columbia,
(3) an estate the income of which is subject to
U.S. federal income tax regardless of its source, or
(4) a trust with respect to which a court within the United
States is able to exercise primary supervision over its
administration and one or more U.S. persons have the
authority to control all of its substantial decisions, or an
electing trust that was in existence on August 19, 1996,
and was treated as a domestic trust on that date.
If an entity that is treated as a partnership for
U.S. federal income tax purposes holds a note, the
U.S. federal income tax treatment of a partner will
generally depend on the status and the activities of the partner
and the partnership. Each partner of a partnership (or entity
treated as a partnership for U.S. federal income tax
purposes) should consult their own advisors.
A
non-U.S. holder
means a beneficial owner of the notes that is neither a
U.S. holder nor a partnership (or other entity that is
treated as a partnership for U.S. federal income tax
purposes).
S-6
Interest
Income and Original Issue Discount
A U.S. holder will generally be taxed on the stated
interest on the notes as ordinary income at the time it is paid
or accrued, in accordance with the U.S. holders
regular method of accounting for U.S. federal income tax
purposes.
The notes will (i) bear interest at a single fixed rate and
(ii) not be issued at an issue price that is less than
their stated redemption price at maturity by more than the
statutory de minimis amount. As a result, the notes will
not be subject to the original issue discount (OID)
rules.
Sale,
Exchange, Retirement or Other Taxable Disposition of the
Notes
Upon the sale, exchange, retirement or other taxable disposition
of the notes, a U.S. holder will generally recognize
taxable gain or loss in an amount equal to the difference
between the amount realized by such U.S. holder (other than
amounts representing accrued but unpaid interest which will be
taxable as interest) and such U.S. holders adjusted
tax basis in the notes. Any gain or loss so recognized will
generally be capital gain or loss and will be long-term capital
gain or loss if the U.S. holder has held the notes for more
than one year at the time of disposition. A reduced tax rate on
long-term capital gain may apply to individual holders. The
deductibility of capital losses is subject to limitations.
Non-U.S.
Holders
Subject to the discussion of backup withholding below, payments
of principal and interest (including OID, if any) on a note to,
or on behalf of, a
non-U.S. holder
will not be subject to U.S. federal withholding tax,
provided, that, in the case of interest:
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the
non-U.S. holder
does not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock that are
entitled to vote;
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the
non-U.S. holder
is not a controlled foreign corporation (as defined
in the Code) that is related to us directly or constructively
through stock ownership for U.S. federal income tax
purposes;
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the
non-U.S. holder
is not a bank receiving interest as described under
section 881(c)(3)(A) of the Code; and
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the
non-U.S. holder
certifies, under penalties of perjury, that it is not a
U.S. person and provides its name and address and certain
other information (generally on IRS
Form W-8BEN
or a suitable substitute form or the appropriate successor).
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The Treasury Regulations provide alternative methods for
satisfying the requirement referred to in the fourth bullet
above, as well as special rules for certain types of entities.
If a
non-U.S. holder
cannot satisfy the requirements described above, payments of
interest to such
non-U.S. holder
will be subject to 30% U.S. federal withholding tax, unless
such
non-U.S. holder
provides us with a properly executed (1) IRS
Form W-8BEN
(or successor form) claiming an exemption from or reduction in
withholding under the benefit of an applicable tax treaty or
(2) IRS
Form W-8ECI
(or successor form) stating that interest paid on the note is
not subject to withholding tax because it is effectively
connected with such
non-U.S. holders
conduct of a trade or business in the United States. If a
non-U.S. holder
is engaged in a trade or business in the United States and
interest on a note is effectively connected with the conduct of
that trade or business, such
non-U.S. holder
will be subject to U.S. federal income tax on that interest
on a net income basis (although such
non-U.S. holder
will be exempt from the 30% withholding tax, provided such
non-U.S. holder
satisfies the certification requirements described above) in the
same manner as if such
non-U.S. holder
were a U.S. person as defined under the Code.
Any capital gain realized by a
non-U.S. holder
upon the sale, exchange, redemption or other disposition of a
note generally will not be subject to U.S. federal income
or withholding taxes if such gain is not effectively connected
with a U.S. trade or business of the
non-U.S. holder
and, in the case of an individual, such
non-U.S. holder
is not present in the United States for 183 days or more in
the taxable year of the sale or other disposition. Any capital
gain effectively connected with the conduct of a U.S. trade
or business of the
non-U.S. holder
is taxed in the same manner as if such person were a
U.S. person as defined under the Code.
S-7
If a
non-U.S. holder
is engaged in a trade or business in the United States and is a
foreign corporation, such
non-U.S. holder
may be subject to a branch profits tax equal to 30% (or lower
applicable treaty rate) of its earnings and profits for the
taxable year, subject to adjustments, that are effectively
connected with such
non-U.S. holders
conduct of a trade or business in the United States.
Backup
Withholding and Information Reporting
U.S. Holders. A U.S. holder of a
note may be subject to backup withholding at applicable rates
with respect to interest (and OID, if any) or principal paid on
a note, unless the U.S. holder (a) is an entity
(including corporations, tax-exempt organizations and certain
qualified nominees) that is exempt from withholding and, when
required, demonstrates this fact, or (b) provides its
taxpayer identification number (TIN) (which for an
individual would be the U.S. holders Social Security
number), certifies that the TIN provided is correct and that the
U.S. holder has not been notified by the IRS that it is
subject to backup withholding due to underreporting of interest
or dividends, and otherwise complies with applicable
requirements of the backup withholding rules. In addition, such
payments of principal and interest to U.S. holders that are
not corporations, tax-exempt organizations or qualified nominees
may be subject to information reporting requirements.
Non-U.S. Holders. Under
Treasury Regulations, backup withholding and information
reporting on IRS Form 1099 do not apply to payments made to
a
non-U.S. holder
if such
non-U.S. holder
has provided the required certification that it is a
non-U.S. holder
and the payor does not have actual knowledge that the holder is
a U.S. holder. If the foreign office of a foreign
broker (as defined in applicable Treasury
Regulations) pays the proceeds of the sale of a note to the
seller thereof, backup withholding and information reporting
will not apply. Information reporting requirements (but not
backup withholding) will apply, however, to any such payments by
a foreign office of a broker that is, for U.S. federal
income tax purposes, a U.S. person, or a foreign person
that derives 50% or more of its gross income for certain periods
from the conduct of a trade or business in the United States, or
a controlled foreign corporation with respect to the United
States, unless the broker has documentary evidence in its
records that the holder is a
non-U.S. holder
and certain other conditions are met, or the holder otherwise
establishes an exemption. Any such payments by a
U.S. office of a custodian, nominee or agent of a
U.S. office of a broker are subject to both backup
withholding at applicable rates and information reporting unless
the holder certifies under penalties of perjury that it is a
non-U.S. holder
or otherwise establishes an exemption and the payor does not
have actual knowledge or reason to know that the beneficial
owner is a U.S. person. Each
non-U.S. holder
should consult such holders tax advisor regarding the
application to such holder of the backup withholding and
reporting rules.
Backup withholding is not an additional tax. The amount of any
backup withholding from a payment to a holder will be allowed as
a credit against such holders U.S. federal income tax
liability and may entitle such holder to a refund, provided that
the required information is timely furnished to the IRS.
UNDERWRITING
We are selling the notes to the underwriters named in the table
below pursuant to an underwriting agreement dated as of the date
of this prospectus supplement. We have agreed to sell to each of
the underwriters, and each of the underwriters have severally
agreed to purchase, the principal amount of notes set forth
opposite that underwriters name in the table below:
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Principal amount
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Principal amount
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Underwriter
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of 2014 notes
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of 2019 notes
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Banc of America Securities LLC
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$
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$
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J.P. Morgan Securities Inc.
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$
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$
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UBS Securities LLC
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$
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$
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Total
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$
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$
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Under the terms and conditions of the underwriting agreement,
the underwriters must buy all of the notes if they buy any of
them. The underwriting agreement provides that the obligations
of the underwriters pursuant thereto are subject to certain
conditions. In the event of a default by an underwriter, the
underwriting agreement provides
S-8
that, in certain circumstances, the purchase commitments of the
non-defaulting underwriters may be increased or the underwriting
agreement may be terminated. The underwriters will sell the
notes to the public when and if the underwriters buy the notes
from us.
The notes of each series are a new issue of securities with no
established trading market. We do not intend to apply for
listing of the notes on any national securities exchange. We
have been advised by the underwriters that the underwriters
intend to make a market in the notes but are not obligated to do
so and may stop their market-making at any time without
providing any notice. Liquidity of the trading market for the
notes cannot be assured.
The notes sold by the underwriters to the public will initially
be offered at the public offering price set forth on the cover
of this prospectus supplement. Any notes sold by the
underwriters to securities dealers may be sold at a discount
from the initial public offering price of up to % of
the principal amount of the 2014 notes and up to % of
the principal amount of the 2019 notes. Any such securities
dealers may resell any notes purchased from the underwriters to
certain other brokers or dealers at a discount from the initial
public offering price of up to % of the principal
amount of the 2014 notes and % of the principal
amount of the 2019 notes. If all of the notes are not sold at
the initial offering price, the underwriters may change the
offering price and other selling terms.
In order to facilitate the offering of the notes, the
underwriters may engage in transactions that stabilize, maintain
or otherwise affect the price of the notes. Specifically, the
underwriters may over-allot in connection with the offering,
creating a short position in the notes for their own accounts.
In addition, to cover short positions or to stabilize the price
of the notes, the underwriters may bid for, and purchase, the
notes in the open market. Finally, the underwriters may reclaim
selling concessions allowed to a particular underwriter or
dealer for distributing the notes in the offering if the
underwriter or dealer repurchases previously distributed notes
in transactions to cover short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the notes above independent
market levels. The underwriters are not required to engage in
these activities and may end any of these activities at any
time. These transactions may be effected in the over-the-counter
market or otherwise.
We estimate that our expenses in connection with the sale of the
notes, other than the underwriting discounts, will be
$ .
We have agreed to indemnify the underwriters against certain
liabilities, including liabilities under the Securities Act of
1933, as amended.
In the ordinary course of their businesses, the underwriters and
their affiliates have from time to time provided, and may in the
future provide, investment banking, financial advisory and other
services to us and our affiliates for which they have received,
or expect to receive, customary fees. Affiliates of each of the
underwriters are, among other things, lenders to us under our
bank credit facilities.
LEGAL
MATTERS
The validity of the notes will be passed upon for us by Mayer
Brown LLP of Chicago, Illinois. Davis Polk & Wardwell
of New York, New York will pass on certain legal matters on
behalf of the underwriters.
S-9
PROSPECTUS
Devon Energy
Corporation
COMMON STOCK, PREFERRED STOCK
AND
DEBT SECURITIES
By this prospectus, Devon Energy Corporation may offer, from
time to time, its common stock, preferred stock and debt
securities. We will provide more specific information regarding
these securities in supplements to this prospectus. You should
read this prospectus and any supplement carefully before
investing.
Our common stock, par value $0.10 per share, is listed on the
New York Stock Exchange and its trading symbol is
DVN.
Investing in securities involves risks. You should carefully
read the risk factors included in the applicable prospectus
supplement and in our periodic reports and other information
filed with the Securities and Exchange Commission before
investing in our securities.
We may sell these securities to or through underwriters, to
other purchasers
and/or
through agents. The supplements to this prospectus will specify
the names of and arrangements with any underwriters or agents.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities, or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this Prospectus is December 9, 2008.
You should rely only on the information contained in or
incorporated by reference in this prospectus. We have not
authorized anyone to provide you with different information. You
should not assume that the information provided by this
prospectus is accurate as of any date other than the date on the
front of this prospectus.
TABLE OF
CONTENTS
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Page
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1
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1
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1
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2
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3
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4
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13
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14
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15
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15
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15
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ABOUT
THIS PROSPECTUS
This prospectus may not be used to sell securities unless it is
accompanied by a prospectus supplement.
This prospectus is part of a registration statement we filed
with the SEC utilizing a shelf registration process. Under this
shelf registration process, we may sell the securities described
in this prospectus in one or more offerings.
This prospectus provides you with a general description of the
securities we may offer. Each time we sell offered securities,
we will provide a prospectus supplement that will contain
specific information about the terms of that offering. The
prospectus supplement may include additional risk factors or
other special considerations applicable to those securities. The
prospectus supplement may also add, update or change information
contained in this prospectus. If there is any inconsistency
between the information in this prospectus and any prospectus
supplement, you should rely on the information in the prospectus
supplement. You should read both this prospectus and any
prospectus supplement together with additional information
described under Where You Can Find More Information.
Unless the context otherwise indicates, the terms
Devon, we, us and
our in this prospectus mean Devon Energy
Corporation, a Delaware corporation, and its consolidated
subsidiaries.
DEVON
ENERGY CORPORATION
Devon is an independent energy company engaged primarily in oil
and gas exploration, development and production, the
transportation of oil, gas, and natural gas liquids, or NGLs,
and the processing of natural gas. We own oil and gas properties
principally in the United States and Canada and, to a lesser
degree, various regions located outside North America, including
Azerbaijan, Brazil and China. In addition to our oil and gas
operations, we have marketing and midstream operations primarily
in North America. These include marketing natural gas, crude oil
and NGLs, and constructing and operating pipelines, storage and
treating facilities and gas processing plants.
Our principal and administrative offices are located at 20 North
Broadway, Oklahoma City, Oklahoma
73102-8260.
Our telephone number at that location is
(405) 235-3611.
USE OF
PROCEEDS
Unless otherwise indicated in an accompanying prospectus
supplement, we expect to use the net proceeds from the sale of
the securities offered by this prospectus for general corporate
purposes, which may include, among other things:
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the repayment of outstanding indebtedness;
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working capital;
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capital expenditures; and
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acquisitions.
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The precise amount and timing of the application of such
proceeds will depend upon our funding requirements and the
availability and cost of other funds.
RATIOS OF
EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The ratios of earnings to fixed charges and earnings to combined
fixed charges and preferred stock dividends for each of the
periods set forth below have been completed on a consolidated
basis and should be read in conjunction with Devons
consolidated financial statements, including the accompanying
notes thereto, incorporated by reference in this prospectus.
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Nine Months
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Ended
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Sept. 30,
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Year Ended December 31,
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2008
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2007
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2006
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2005
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2004
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2003
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Ratio of earnings to fixed charges
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17.49
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8.78
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8.08
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8.34
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6.65
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4.84
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Ratio of earnings to combined fixed charges and preferred stock
dividends
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17.06
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8.54
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7.85
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8.13
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6.48
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4.72
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Our ratios of earnings to fixed charges and earnings to combined
fixed charges and preferred stock dividends were computed based
on:
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earnings, which consist of earnings from
continuing operations before income taxes, plus fixed charges;
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fixed charges, which consist of interest
expense, dividends on subsidiarys preferred stock and
one-third of rental expense estimated to be attributable to
interest; and
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preferred stock dividends, which consist of
the amount of pre-tax earnings required to pay dividends on the
outstanding preferred stock.
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DESCRIPTION
OF CAPITAL STOCK
General
Devons authorized capital stock consists of:
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1.0 billion shares of common stock, par value $0.10 per
share, and
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4.5 million shares of preferred stock, par value $1.00 per
share.
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As of October 31, 2008, there were 441.5 million
shares of common stock outstanding and no shares of preferred
stock outstanding.
Common
Stock
Holders of common stock will be entitled to receive dividends
out of legally available funds when and if declared by our board
of directors. Subject to the rights of the holders of any
outstanding shares of preferred stock, holders of shares of
common stock will be entitled to cast one vote for each share
held of record on all matters submitted to a vote of
stockholders. They will not be entitled to cumulative voting
rights for the election of directors. Except pursuant to our
rights agreement, the shares of common stock have no preemptive,
conversion or other rights to subscribe for or purchase any of
our securities. Upon our liquidation or dissolution, the holders
of shares of common stock are entitled to share ratably in any
of our assets that remain after payment or provision for payment
to creditors and holders of preferred stock.
Preferred
Stock
The preferred stock may be issued in one or more series. Our
board may establish attributes of any series, including the
designation and number of shares in the series, dividend rates
(cumulative or noncumulative), voting rights, redemptions,
conversion or preference rights, and any other rights and
qualifications, preferences and limitations or restrictions on
shares of a series. The issuance of preferred stock may have the
effect of delaying, deferring or preventing a change in control
of Devon without any vote or action by the stockholders and may
adversely affect the voting and other rights of the holders of
shares of common stock. The specific terms of a particular
series of preferred stock will be described in a certificate of
designation relating to that series.
Series A Junior Participating Preferred
Stock. We have designated 2.9 million shares
of preferred stock as series A junior participating
preferred stock in connection with our rights agreement.
2
Anti-takeover
and Other Provisions
Rights Agreement. Under our rights agreement,
holders of shares of common stock have one-half of one right for
each share of common stock that they hold. The certificates
representing outstanding shares of common stock also evidence
one-half of one right for each share. Initially, the rights
trade with the shares of common stock. If events generally
associated with an unsolicited takeover attempt of Devon or
transactions involving a change of control occur, including an
acquisition or a tender or exchange offer that would result in a
bidder acquiring 15% or more of our voting securities, the
rights will be distributed, will become exercisable and will
trade separately from the shares of common stock.
The rights will have anti-takeover effects. They will cause
substantial dilution to any person or group that attempts to
acquire us in a manner that causes the rights to become
exercisable. We believe, however, that the rights should not
affect any prospective offeror willing to negotiate with our
board nor interfere with any merger or other business
combination approved by our board. Our board may redeem the
rights for $0.01 per right. Our board may amend the terms of the
rights agreement without the consent of our stockholders or the
holders of the rights. The rights expire on August 17, 2009.
Classified Board. Devons certificate of
incorporation and bylaws contain provisions for a staggered
board of directors with only one-third of the board standing for
election each year. A staggered board makes it more difficult
for shareholders to change the majority of directors. At the
2008 Annual Meeting of Stockholders, our stockholders approved
an amendment to our Certificate of Incorporation to eliminate
the staggered board of directors over a three-year transition
period. Beginning in 2011, all of our directors will be elected
annually.
DESCRIPTION
OF UNDESIGNATED PREFERRED STOCK
This summary of the undesignated preferred stock discusses terms
and conditions that we expect may apply to any series of the
preferred stock that may be offered under this prospectus. The
applicable prospectus supplement will describe the particular
terms of each series of preferred stock actually offered. If
indicated in the prospectus supplement, the terms of any series
may differ from the terms described below.
We expect the prospectus supplement for any preferred stock that
we actually offer pursuant to this prospectus to include some or
all of the following terms:
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the designation of the series of preferred stock;
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the number of shares of preferred stock offered, the liquidation
preference per share and the offering price of the preferred
stock;
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the dividend rate or rates of the shares, the method or methods
of calculating the dividend rate or rates, the dates on which
dividends, if declared, will be payable, and whether or not the
dividends are to be cumulative and, if cumulative, the date or
dates from which dividends shall be cumulative;
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the amounts payable on shares of the preferred stock in the
event of our voluntary or involuntary liquidation, dissolution
or winding up;
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the redemption rights and price or prices, if any, for the
shares of preferred stock;
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the terms, and the amount, of any sinking fund or analogous fund
providing for the purchase or redemption of the shares of
preferred stock;
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any restrictions on our ability to make payments on any of our
capital stock if dividend or other payments are not made on the
preferred stock;
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any voting rights granted to the holders of the shares of
preferred stock in addition to those required by Delaware law or
our certificate of incorporation;
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whether the shares of preferred stock will be convertible into
shares of our common stock or any other class of our capital
stock, and, if convertible, the conversion price or prices, and
any adjustment or other terms and conditions upon which the
conversion shall be made;
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any other rights, preferences, restrictions, limitations or
conditions relative to the shares of preferred stock permitted
by Delaware law or our certificate of incorporation;
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any listing of the preferred stock on any securities
exchange; and
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the federal income tax considerations applicable to the
preferred stock.
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Subject to our certificate of incorporation and to any
limitations imposed by any then outstanding preferred stock, we
may issue additional series of preferred stock, at any time or
from time to time, with such powers, preferences, rights and
qualifications, limitations or restrictions as our board of
directors determines, and without further action of the
stockholders, including holders of our then outstanding
preferred stock, if any.
DESCRIPTION
OF DEBT SECURITIES
The following description of the debt securities sets forth
certain general terms and provisions of the debt securities to
which this prospectus and any prospectus supplement may relate.
The particular terms of any series of debt securities and the
extent to which the general provisions may apply to a particular
series of debt securities will be described in a prospectus
supplement relating to that series. References in this section
to Devon mean Devon Energy Corporation and not its
subsidiaries.
Any debt securities offered by this prospectus will be issued
under one or more indentures between Devon and a trustee. We
have summarized selected provisions of the indentures below.
Devon senior debt securities are to be issued under an indenture
dated as of March 1, 2002 between Devon and The Bank of New
York Mellon (as successor to The Bank of New York), as trustee
(the Devon senior indenture), a copy of which is
incorporated by reference as an exhibit to the registration
statement of which this prospectus forms a part. Devon
subordinated debt securities are to be issued under an indenture
(the Devon subordinated indenture), the form of
which is filed as an exhibit to the registration statement of
which this prospectus forms a part. The Devon senior indenture
and the Devon subordinated indenture are sometimes referred to
herein, collectively, as the indentures and each,
individually, as an indenture. You should read the
indentures for provisions that may be important to you.
Because we have included only a summary of the indenture terms,
you must read the indentures in full to understand every detail
of the terms of the debt securities.
The indentures will not limit the amount of debt securities we
may issue under them, and will provide that additional debt
securities of any series may be issued up to the aggregate
principal amount that we authorize from time to time.
Unless otherwise indicated in the applicable prospectus
supplement, we will issue the debt securities in denominations
of $1,000 or integral multiples of $1,000.
Principal and any premium and interest in respect of the debt
securities will be payable, and the debt securities will be
transferable, at the corporate trust office of the trustee,
unless we specify otherwise in the applicable prospectus
supplement. At our option, however, we may pay interest by
mailing checks to the registered holders of the debt securities
at their registered addresses.
We will describe any special U.S. federal income tax and
other considerations relating to debt securities in the
applicable prospectus supplement.
General
The prospectus supplement relating to the particular series of
debt securities being offered will specify the amounts, prices
and terms of those debt securities. These terms may include:
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the designation, aggregate principal amount and authorized
denominations of the debt securities;
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the date or dates on which the debt securities will mature;
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the percentage of the principal amount at which the debt
securities will be issued;
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the date on which the principal of the debt securities will be
payable;
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whether the debt securities will be issued as registered
securities, bearer securities or a combination of the two;
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whether the debt securities will be issued in the form of one or
more global securities and whether such global securities will
be issued in a temporary global form or permanent global form;
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the currency or currencies or currency unit or units of two or
more currencies in which debt securities are denominated, for
which they may be purchased, and in which principal and any
premium and interest is payable;
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whether the currency or currencies or currency unit or units for
which debt securities may be purchased or in which principal and
any premium interest may be paid is at our election or at the
election of a purchaser, the manner in which an election may be
made and its terms;
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the annual rate or rates, which may be fixed or variable, or the
method of determining the rate or rates at which the debt
securities will bear any interest, whether by remarketing,
auction, formula or otherwise;
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the date or dates from which any interest will accrue and the
date or dates on which such interest will be payable;
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a description of any provisions providing for redemption,
exchange or conversion of the debt securities at our option, at
holders option or otherwise, and the terms and provisions
of such a redemption, exchange or conversion;
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information with respect to book-entry procedures relating to
global debt securities;
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any sinking fund terms;
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whether and under what circumstances we will pay
additional amounts, as defined in the indenture, on
the debt securities to any holder; the term
interest, as used in this prospectus, includes any
additional amounts;
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any events of default or covenants of Devon with respect to the
debt securities of a certain series that are different from
those described in this prospectus;
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whether and under what circumstances any covenants in the
indenture shall be subject to covenant defeasance;
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any deletions from, or modifications or additions to, the
provisions of the indenture relating to satisfaction and
discharge in respect of the debt securities;
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any index or other method used to determine the amount of
payments of principal of and any premium and interest on the
debt securities; and
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any other specific terms of the debt securities.
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We are not obligated to issue all debt securities of any one
series at the same time. The debt securities of any one series
may not bear interest at the same rate or mature on the same
date.
If we sell any of the debt securities for foreign currencies or
foreign currency units or if the principal of, or any premium or
interest on, any series of debt securities is payable in foreign
currencies or foreign currency units, we will describe the
restrictions, elections, tax consequences, specific terms and
other information with respect to those debt securities in the
applicable prospectus supplement.
Except as may be described in the applicable prospectus
supplement, the indenture will not limit our ability to incur
indebtedness or afford holders of debt securities protection in
the event of a decline in our credit quality or if we are
involved in a takeover, recapitalization or highly leveraged or
similar transaction. The prospectus supplement relating to the
particular series of debt securities, to the extent not
otherwise described in this prospectus, will include any
information with respect to any deletions from, modifications of
or additions to the covenants or events of default described
below and contained in the indenture, including any addition of
a covenant or other provision providing event risk or similar
protection.
5
Unless otherwise indicated in the applicable prospectus
supplement, Devons obligation to pay the principal of, and
any premium and interest on, its senior debt securities will be
unsecured and will rank equally with all of Devons other
unsecured unsubordinated indebtedness.
Interest
Rates and Discounts
The debt securities will earn interest at a fixed or floating
rate or rates for the period or periods of time specified in the
applicable prospectus supplement. Unless otherwise specified in
the applicable prospectus supplement, the debt securities will
bear interest on the basis of a
360-day year
consisting of twelve
30-day
months.
We may sell debt securities at a substantial discount below
their stated principal amount, bearing no interest or interest
at a rate that at the time of issuance is below market rates. We
will describe the federal income tax consequences and special
considerations that apply to those debt securities in the
applicable prospectus supplement.
Exchange,
Registration and Transfer
Unless otherwise specified, debt securities of any series will
be exchangeable for other debt securities of the same series and
of like aggregate principal amount and tenor in different
authorized denominations.
You may present debt securities for registration of transfer,
together with a duly executed form of transfer, at the office of
the security registrar or at the office of any transfer agent
designated by us for that purpose with respect to any series of
debt securities and referred to in the applicable prospectus
supplement. This may be done without service charge but upon
payment of any taxes and other governmental charges as described
in the indenture. The security registrar or the transfer agent
will effect the transfer or exchange upon being satisfied with
the documents of title and identity of the person making the
request. We may at any time designate additional transfer agents
with respect to any series of debt securities.
In the event of any redemption, we will not be required to:
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execute, register the transfer of or exchange debt securities of
any series during a period beginning at the opening of business
15 days before any selection of debt securities of that
series to be redeemed and ending at the close of business on the
day of mailing of the relevant notice of redemption; or
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execute, register the transfer of or exchange any debt security,
or portion thereof, called for redemption, except the unredeemed
portion of any debt security being redeemed in part.
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Payment
and Paying Agents
Unless we specify otherwise in the applicable prospectus
supplement, we will pay the principal of, and any premium and
interest on, debt securities at the office of the paying agent
or paying agents that we designate at various times. However, at
our option, we may make interest payments by check mailed to the
address, as it appears in the security register, of the person
entitled to the payments. Unless we specify otherwise in the
applicable prospectus supplement, the Corporate
Trust Office of the trustee in New York, New York, will be
designated as our sole paying agent for payments with respect to
debt securities that are issuable solely as registered
securities.
All monies we pay to a paying agent for the payment of principal
of, and any premium and interest on, any debt security or coupon
that remains unclaimed at the end of two years after becoming
due and payable will be repaid to us. After that time, the
holder of the debt security or coupon will look only to us for
payments out of those repaid amounts.
Global
Securities
The debt securities of a series may be issued in whole or in
part in the form of one or more global certificates that we will
deposit with a depository identified in the applicable
prospectus supplement, or a custodian for such depository.
Global securities may be issued in either registered or bearer
form and in either temporary or permanent
6
form. Unless and until it is exchanged in whole or in part for
the individual debt securities it represents, a global security
may not be transferred except as a whole:
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by the applicable depositary to a nominee of the depositary;
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by any nominee to the depositary itself or another
nominee; or
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by the depositary or any nominee to a successor depositary or
any nominee of the successor.
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We will describe the specific terms of the depositary
arrangement with respect to a series of debt securities in the
applicable prospectus supplement. We anticipate that the
following provisions will generally apply to depositary
arrangements.
When we issue a global security in registered form, the
depositary for the global security or its nominee will credit,
on its book-entry registration and transfer system, the
respective principal amounts of the individual debt securities
represented by that global security to the accounts of
participants that have accounts with the depositary. Those
accounts will be designated by the dealers, underwriters or
agents with respect to the underlying debt securities or by us
if those debt securities are offered and sold directly by us.
Ownership of beneficial interests in a global security will be
limited to participants or persons that may hold interests
through participants. For interests of participants, ownership
of beneficial interests in the global security will be shown on
records maintained by the applicable depositary or its nominee.
For interests of persons other than participants, that ownership
information will be shown on the records of participants.
Transfer of that ownership will be effected only through those
records.
The laws of some states require that certain purchasers of
securities take physical delivery of securities in definitive
form. These limits and laws may impair your ability to transfer
beneficial interests in a global security.
As long as the depositary for a global security, or its nominee,
is the registered owner of that global security, the depositary
or nominee will be considered the sole owner or holder of the
debt securities represented by the global security for all
purposes under the applicable indenture. Except as provided
below, owners of beneficial interests in a global security:
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will not be entitled to have any of the underlying debt
securities registered in their names;
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will not receive or be entitled to receive physical delivery of
any of the underlying debt securities in definitive
form; and
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will not be considered the owners or holders under the indenture
relating to those debt securities.
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We will make payments of principal of, and any premium and
interest on, individual debt securities represented by a global
security registered in the name of a depositary or its nominee
to the depositary or its nominee as the registered owner of the
global security representing such debt securities. Neither we,
the trustee, any paying agent nor the registrar for the debt
securities will be responsible for any aspect of the records
relating to or payments made by the depositary or any
participants on account of beneficial interests of the global
security.
We expect that the depositary or its nominee, upon receipt of
any payment of principal, premium or interest relating to a
permanent global security representing any series of debt
securities, immediately will credit participants accounts
with the payments. Those payments will be credited in amounts
proportional to the respective beneficial interests of the
participants in the principal amount of the global security as
shown on the records of the depositary or its nominee. We also
expect that payments by participants to owners of beneficial
interests in the global security held through those participants
will be governed by standing instructions and customary
practices. This is now the case with securities held for the
accounts of customers in bearer form or registered in
street name. Those payments will be the sole
responsibility of those participants.
If the depositary for a series of debt securities is at any time
unwilling, unable or ineligible to continue as depositary and we
do not appoint a successor depositary within 90 days, we
will issue individual debt securities of that series in exchange
for the global security or securities representing that series.
In addition, we may at any time in our sole discretion determine
not to have any debt securities of a series represented by one
or more global securities. In that event, we will issue
individual debt securities of that series in exchange for the
global security or securities. Further, if we specify, an owner
of a beneficial interest in a global security may, on terms
acceptable to us,
7
the trustee and the applicable depositary, receive individual
debt securities of that series in exchange for those beneficial
interests. The foregoing is subject to any limitations described
in the applicable prospectus supplement. In that instance, the
owner of the beneficial interest will be entitled to physical
delivery of individual debt securities equal in principal amount
to the beneficial interest and to have the debt securities
registered in its name. Those individual debt securities will be
issued in denominations, unless we specify otherwise, of $1,000
or integral multiples of $1,000.
For a description of the depositary arrangements for global
securities held by The Depository Trust Company, also known
as DTC, see Book-Entry Securities.
Events of
Default
Unless otherwise specified in the applicable prospectus
supplement, any one of the following events will constitute an
event of default under the indentures with respect
to the debt securities of any series issued under the indentures:
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if we fail to pay any interest on any debt security of that
series when due, and the failure continues for 30 days;
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if we fail to pay principal of or any premium on the debt
securities of that series when due and payable, either at
maturity or otherwise;
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if we fail to perform or we breach any of our other covenants or
warranties in the applicable indentures or in the debt
securities of that series, other than a covenant or warranty
included in the applicable indenture solely for the benefit of a
series of securities other than the debt securities of that
series, and that breach or failure continues for 60 days
(subject to extension under certain circumstances for another
120 days) after written notice as provided in the
applicable indenture;
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certain events of bankruptcy, insolvency or reorganization
involving us or certain of our subsidiaries; and
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any other event of default provided with respect to the debt
securities of that series.
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If we fail to pay the principal of, or premium or interest on,
the debt securities of any series or we fail to perform or
breach any of the other covenants or warranties applicable to
the debt securities of that series but not applicable to all
outstanding debt securities, and such event of default is
continuing, either the trustee or the holders of not less than
25% in aggregate principal amount of the outstanding debt
securities of that series may declare the principal amount of,
and any premium and interest on, the debt securities of that
series to be due and payable immediately. If an event of default
occurs due to default in the performance of any other of the
covenants and warranties applicable to all outstanding debt
securities or pertaining to certain events of bankruptcy,
insolvency or reorganization, and the event of default is
continuing, either the trustee or the holders of not less than
25% in principal amount of all debt securities then outstanding
(considered as one class), may declare the principal amount of,
and any premium and interest on, all debt securities to be due
and payable immediately. There is no automatic acceleration,
even in the event of our bankruptcy, insolvency or
reorganization. At any time after a declaration of acceleration
has been made, but before a judgment or decree for payment of
money has been obtained by the trustee, we may cause such
declaration of acceleration to be rescinded and annulled with
respect to the debt securities of any series if we deposit with
the trustee an amount sufficient to pay all overdue interest on
the debt securities of that series, the principal of and
premium, if any, on the debt securities of that series that have
become due and payable otherwise than by such declaration of
acceleration and all amounts due to the trustee and if all other
events of default with respect to the debt securities of that
series have been cured or waived.
Within 90 days after the occurrence of any event of default
under the indentures with respect to the debt securities of any
series issued under that indenture, the trustee must transmit
notice of the event of default to the holders of the debt
securities of that series unless the event of default has been
cured or waived. The trustee may withhold the notice, however,
except in the case of a payment default, if and so long as the
board of directors, the executive committee or a trust committee
of directors or responsible officers of the trustee has in good
faith determined that the withholding of the notice is in the
interest of the holders of debt securities of that series.
8
If an event of default occurs and is continuing with respect to
the debt securities of any series, the trustee may in its
discretion proceed to protect and enforce its rights and the
rights of the holders of debt securities of that series by all
appropriate judicial proceedings.
Subject to the duty of the trustee during any default to act
with the required standard of care, the trustee is under no
obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of
debt securities issued under that indenture, unless the holders
offer the trustee reasonable indemnity. Subject to indemnifying
the trustee, and subject to applicable law and certain other
provisions of the indenture, the holders of a majority in
aggregate principal amount of the outstanding debt securities of
a series issued under that indenture may direct the time, method
and place of conducting any proceeding for any remedy available
to the trustee, or exercising any trust or power conferred on
the trustee, with respect to the debt securities of that series.
Defeasance
Unless the applicable prospectus supplement provides otherwise,
any debt securities, or portion of the principal amount of the
debt securities, will be deemed to have been paid for purposes
of the applicable indentures, and, at our election, our entire
indebtedness with respect to the debt securities, or portion
thereof, will be deemed to have been satisfied and discharged,
if we have irrevocably deposited with the trustee or any paying
agent other than us, in trust, money, certain eligible
obligations, as defined in the applicable indentures, or a
combination of the two, sufficient to pay principal of and any
premium and interest due and to become due on the debt
securities or portions thereof.
The applicable prospectus supplement will describe, if
applicable, our ability to be released from any of our covenant
obligations under the indentures.
Modification
and Waiver
The trustee and Devon may, without the consent of holders,
modify or waive provisions of each indenture for certain
purposes, including, among other things, curing ambiguities and
maintaining the qualification of the applicable indenture under
the Trust Indenture Act. The trustee and Devon may modify
or waive certain provisions of each indenture with the consent
of the holders of not less than a majority in aggregate
principal amount of the debt securities of each series issued
under that indenture affected by the modification or waiver.
However, the provisions of any indenture may not be waived or
modified without the consent of the holders of each debt
security affected thereby if the modification or waiver would:
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change the stated maturity of the principal of, or any
installment of principal of or interest on, any debt security
issued under that indenture;
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reduce the principal amount of, or interest on, any debt
security issued under the indenture, or change the method of
calculating the interest on, or reduce any premium payable upon
the redemption of, any such debt security;
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change the coin or currency (or other property) in which any
debt security issued under that indenture or any premium or any
interest on that debt security or any additional amounts with
respect to that debt security is payable;
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impair the right to institute suit for the enforcement of any
payment on or after the stated maturity of any debt securities
issued under that indenture or, in the case of redemption, on or
after the redemption date;
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reduce the percentage and principal amount of the outstanding
debt securities, the consent of the holders of which is required
under that indenture in order to take certain actions; or
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modify any of the provisions of Sections 12.02, 6.07 (6.06
in the case of the Devon subordinated indenture) and 8.13 of
each indenture relating to modifying the indenture, waiving
certain covenants and waiving past defaults, respectively.
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The holders of at least a majority in aggregate principal amount
of outstanding debt securities of any series issued under an
indenture may, on behalf of the holders of all debt securities
of that series, waive our compliance
9
with certain restrictive provisions of that indenture. The
holders of not less than a majority in aggregate principal
amount of debt securities of any series issued under either of
the indentures may, on behalf of all holders of debt securities
of that series, waive any past default and its consequences
under that indenture with respect to the debt securities of that
series, except:
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a payment default with respect to debt securities of that
series; or
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a default of a covenant or provision of that indenture that
cannot be modified or amended without the consent of the holder
of the debt securities of that series.
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Consolidation,
Merger and Sale of Assets
We may not consolidate with or merge into, or convey, transfer
or lease our properties and assets substantially as an entirety
to, any person (as defined in the applicable indenture) unless:
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the entity formed by the consolidation or into which we are
merged, or the person which acquires by conveyance or transfer,
or which leases, substantially all of our properties and assets:
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is organized and validly existing under the laws of the United
States, any domestic jurisdiction or the District of
Columbia; and
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expressly assumes our obligations on the debt securities and
under the applicable indenture;
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immediately after the transaction becomes effective, no event of
default, and no event that would become an event of default,
will have occurred and be continuing; and
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we have delivered to the trustee an officers certificate
and opinion of counsel as provided in the applicable indenture.
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Covenants
Unless otherwise specified in the prospectus supplement, the
following covenants will apply to the senior debt securities
issued by Devon. Various capitalized terms used within this
Covenants subsection are defined at the end of this
subsection.
Liens
Neither Devon nor any of its Restricted Subsidiaries may incur,
issue, assume or guarantee any Debt that is secured by a
Mortgage on any Principal Property or on any shares of stock or
Indebtedness of any Restricted Subsidiary of Devon, without
first effectively providing that the securities (together with,
if Devon so determines, any other indebtedness of Devon or its
Restricted Subsidiaries that is not subordinate in right of
payment to the prior right of payment in full of the securities)
will be secured equally and ratably with, or prior to, the
incurred, issued, assumed or guaranteed secured Debt, for so
long as this secured Debt remains so secured.
This limitation on the incurrence, issuance, assumption or
guarantee of any Debt secured by a Mortgage will not apply to,
and there will be excluded from any secured Debt in any
computation under this covenant, Debt secured by:
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Mortgages existing at the date of the indenture;
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Mortgages on property of, or on any shares of stock or
Indebtedness of, any entity existing at the time the entity is
merged into or consolidated with Devon or becomes a Restricted
Subsidiary of Devon;
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Mortgages in favor of Devon or any of its Restricted
Subsidiaries;
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Mortgages on property, shares of stock or Indebtedness:
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existing at the time of acquisition thereof, including
acquisitions through merger, consolidation or other
reorganization;
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to secure the payment of all or any part of the purchase price
thereof or construction thereon; or
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to secure any Debt incurred prior to, at the time of, or within
one year after the later of the acquisition, the completion of
construction or the commencement of full operation of the
property or within one year after the acquisition of the shares
or Indebtedness for the purpose of financing all or any part of
the purchase price thereof or construction thereon;
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provided that, if a commitment for the financing is obtained
prior to or within this one-year period, the applicable Mortgage
will be deemed to be included in this clause whether or not the
Mortgage is created within this one-year period;
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Mortgages in favor of the United States, any state thereof,
Canada, or any province thereof, or any department, agency or
instrumentality or political subdivision of any of the
foregoing, or in favor of any other country or any political
subdivision thereof;
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Mortgages on minerals or geothermal resources in place, or on
related leasehold or other property interests, that are incurred
to finance development, production or acquisition costs,
including, but not limited to, Mortgages securing advance sale
obligations;
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Mortgages on equipment used or usable for drilling, servicing or
operating oil, gas, coal or other mineral properties or
geothermal properties;
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Mortgages required by any contract or statute in order to permit
Devon or any of its subsidiaries to perform any contract or
subcontract made with or at the request of the United States,
any state thereof, Canada, any province thereof, or in favor of
any other country or any political subdivision thereof, or any
department, agency or instrumentality of any of the foregoing;
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any Mortgage resulting from the deposit of moneys or evidence of
indebtedness in trust for the purpose of defeasing Debt of Devon
or any of its Restricted Subsidiaries or secured Debt of Devon
or any of its Restricted Subsidiaries the net proceeds of which
are used, substantially concurrent with the funding thereof, and
taking into consideration, among other things, required notices
to be given to the holders of the outstanding securities in
connection with the refunding, refinancing or repurchase
thereof, and the required corresponding durations thereof, to
refund, refinance or repurchase all of the outstanding
securities, including the amount of all accrued interest thereon
and reasonable fees and expenses and premiums, if any, incurred
by Devon or any of its Restricted Subsidiaries in connection
therewith; and
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any extension, renewal or replacement, or successive extensions,
renewals or replacements, of any Mortgage referred to in the
foregoing clauses of this covenant, so long as the extension,
renewal or replacement Mortgage is limited to all or a part of
the same property, including any improvements on the property,
shares of stock or Indebtedness that secured the Mortgage so
extended, renewed or replaced.
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Notwithstanding anything mentioned above, Devon and any one or
more of its Restricted Subsidiaries may incur, issue, assume or
guarantee Debt secured by Mortgages that would otherwise be
subject to the above restrictions if the aggregate amount of the
Debt secured by the Mortgages, together with the outstanding
principal amount of all other secured Debt of Devon and its
Restricted Subsidiaries that would otherwise be subject to the
above restrictions, does not exceed 10% of Consolidated Net
Tangible Assets.
The following transactions shall not be deemed to create Debt
secured by a Mortgage:
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the sale or other transfer of oil, gas, coal or other minerals
in place for a period of time until, or in an amount such that,
the transferee will realize therefrom a specified amount of
money, however determined, or a specified amount of oil, gas,
coal or other minerals, or the sale or other transfer of any
other interest in property of the character commonly referred to
as an oil, gas, coal or other mineral payment or a production
payment, and including, in any case, overriding royalty
interests, net profit interests, reversionary interests and
carried interests and other similar burdens on
production; and
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the sale or other transfer by Devon or any of its Restricted
Subsidiaries of properties to a partnership, joint venture or
other entity whereby Devon or the Restricted Subsidiary would
retain partial ownership of the properties.
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Definitions
Consolidated Net Tangible Assets means,
calculated as of the date of the financial statements for the
most recently ended fiscal quarter or fiscal year, as
applicable, prior to the date of determination, the aggregate
amount of assets of Devon, less applicable reserves and other
properly deductible items but including investments in
non-consolidated entities, after deducting therefrom:
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all current liabilities, excluding any portion thereof
constituting Funded Debt by reason of being renewable or
extendible at the option of the obligor beyond 12 months
from the date of determination; and
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all goodwill, trade names, trademarks, patents, unamortized debt
discount and expenses and other like intangibles, all as set
forth on a consolidated balance sheet of Devon and computed in
accordance with accounting principles generally accepted in the
United States.
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Debt means indebtedness for money borrowed.
Funded Debt means all Debt of Devon or any of
its subsidiaries for money borrowed which is not by its terms
subordinated in right of payment to the prior payment in full of
the securities or to Devons full and unconditional
guarantee in respect thereof, as applicable, having a maturity
of more than 12 months from the date as of which the amount
thereof is to be determined or having a maturity of fewer than
12 months but by its terms being:
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renewable or extendible beyond 12 months from such date at
the option of the obligor; or
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issued in connection with a commitment by a bank or other
financial institution to lend so that the indebtedness is
treated as though it had a maturity in excess of 12 months
pursuant to accounting principles generally accepted in the
United States.
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Indebtedness means Debt and the deferred
purchase price of property or assets purchased.
Mortgage means and includes any mortgage,
pledge, lien, security interest, conditional sale or other title
retention agreement or other similar encumbrance.
Offshore means the lands beneath the
navigable waters of the U.S. or Canada, or the continental
shelf of the U.S. or Canada.
Principal Property means any oil, gas or
mineral producing property, or any refining, processing,
smelting or manufacturing facility located in the U.S., Canada
or Offshore, other than:
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property employed in transportation, distribution or marketing;
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information and electronic data processing equipment; or
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any property that, in the opinion of the Board of Directors of
Devon, is not materially important to the total business
conducted by Devon and its subsidiaries as an entirety.
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Restricted Subsidiary means Devon Financing
Corporation, U.L.C. and any other subsidiary of Devon:
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a substantial portion of the property of which is located, or a
substantial portion of the business of which is carried on,
within the U.S., Canada or Offshore;
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that owns or leases under a capital lease any Principal
Property; and
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that has Stockholders Equity exceeding 2% of Consolidated
Net Tangible Assets.
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Stockholders Equity means, with respect
to any corporation, partnership, joint venture, association,
joint stock company, limited liability company, unlimited
liability company, trust, unincorporated organization or
government, or any agency or political subdivision thereof,
stockholders equity, as computed in accordance with
accounting principles generally accepted in the United States.
The
Trustee
We may appoint a separate trustee for any series of debt
securities. In the description of a series of debt securities,
the term trustee refers to the trustee appointed
with respect to such series of debt securities. The trustee
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may be a depository for funds and perform other services for,
and may transact other banking business with, Devon and its
subsidiaries in the normal course of business.
BOOK-ENTRY
SECURITIES
Unless otherwise specified in the applicable prospectus
supplement, we will issue securities, other than our common
stock, to investors in the form of one or more book-entry
certificates registered in the name of a depository or a nominee
of a depository. Unless otherwise specified in the applicable
prospectus supplement, the depository will be DTC. We have been
informed by DTC that its nominee will be Cede & Co.
Accordingly, Cede is expected to be the initial registered
holder of all securities that are issued in book-entry form.
No person that acquires a beneficial interest in securities
issued in book-entry form will be entitled to receive a
certificate representing those securities, except as set forth
in this prospectus or in the applicable prospectus supplement.
Unless and until definitive securities are issued under the
limited circumstances described below, all references to actions
by holders or beneficial owners of securities issued in
book-entry form will refer to actions taken by DTC upon
instructions from its participants, and all references to
payments and notices to holders or beneficial owners will refer
to payments and notices to DTC or Cede, as the registered holder
of such securities.
DTC has informed us that it is:
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a limited-purpose trust company organized under New York banking
laws;
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a banking organization within the meaning of the New
York banking laws;
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a member of the Federal Reserve System;
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a clearing corporation within the meaning of the New
York Uniform Commercial Code; and
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a clearing agency registered under the Securities
Exchange Act.
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DTC has also informed us that it was created to:
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hold securities for participants; and
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facilitate the computerized settlement of securities
transactions among participants through computerized electronic
book-entry changes in participants accounts, thereby
eliminating the need for the physical movement of securities
certificates.
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Participants have accounts with DTC and include securities
brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is
available to indirect participants such as banks, brokers,
dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or
indirectly.
Persons that are not participants or indirect participants but
desire to buy, sell or otherwise transfer ownership of or
interests in securities may do so only through participants and
indirect participants. Under the book-entry system, beneficial
owners may experience some delay in receiving payments, as
payments will be forwarded by our agent to Cede, a nominee for
DTC. These payments will be forwarded to DTCs
participants, which thereafter will forward them to indirect
participants or beneficial owners. Beneficial owners will not be
recognized by the applicable registrar, transfer agent, trustee
or depositary as registered holders of the securities entitled
to the benefits of the certificate, the indenture or any deposit
agreement. Beneficial owners that are not participants will be
permitted to exercise their rights as an owner only indirectly
through participants and, if applicable, indirect participants.
Under the current rules and regulations affecting DTC, DTC will
be required to make book-entry transfers of securities among
participants and to receive and transmit payments to
participants. Participants and indirect participants with whom
beneficial owners of securities have accounts are also required
by these rules to make book-entry transfers and receive and
transmit such payments on behalf of their respective account
holders.
Because DTC can act only on behalf of participants, who in turn
act only on behalf of other participants or indirect
participants, and on behalf of certain banks, trust companies
and other persons approved by it, the ability of
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a beneficial owner of securities issued in book-entry form to
pledge those securities to persons or entities that do not
participate in the DTC system may be limited due to the
unavailability of physical certificates for the securities.
DTC has advised us that it will take any action permitted to be
taken by a registered holder of any securities under the
certificate, the indenture or any deposit agreement only at the
direction of one or more participants to whose accounts with DTC
the securities are credited.
According to DTC, it has provided information with respect to
DTC to its participants and other members of the financial
community for informational purposes only and is not intended to
serve as a representation, warranty or contract modification of
any kind.
Unless otherwise specified in the applicable prospectus
supplement, a book-entry security will be exchangeable for
definitive securities registered in the names of persons other
than DTC or its nominee only if:
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DTC notifies us that it is unwilling or unable to continue as
depository for the book-entry security or DTC ceases to be a
clearing agency registered under the Securities Exchange Act at
a time when DTC is required to be so registered; or
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we execute and deliver to the applicable registrar, transfer
agent, trustee
and/or
depositary an order complying with the requirements of the
certificate, the indenture or any deposit agreement that the
book-entry security will be so exchangeable.
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Any book-entry security that is exchangeable in accordance with
the preceding sentence will be exchangeable for securities
registered in such names as DTC directs.
If one of the events described in the immediately preceding
paragraph occurs, DTC is generally required to notify all
participants of the availability through DTC of definitive
securities. Upon surrender by DTC of the book-entry security
representing the securities and delivery of instructions for
re-registration, the registrar, transfer agent, trustee or
depositary, as the case may be, will reissue the securities as
definitive securities. After reissuance of the securities, such
persons will recognize the beneficial owners of such definitive
securities as registered holders of securities.
Except as described above:
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a book-entry security may not be transferred except as a whole
book-entry security by or among DTC, a nominee of DTC
and/or a
successor depository appointed by us; and
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DTC may not sell, assign or otherwise transfer any beneficial
interest in a book-entry security unless the beneficial interest
is in an amount equal to an authorized denomination for the
securities evidenced by the book-entry security.
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None of Devon, the trustees, any registrar and transfer agent or
any depository, or any agent of any of them, will have any
responsibility or liability for any aspect of DTCs or any
participants records relating to, or for payments made on
account of, beneficial interests in a book-entry security.
PLAN OF
DISTRIBUTION
We may sell the securities through agents, underwriters or
dealers, or directly to one or more purchasers without using
underwriters or agents.
We may designate agents who agree to use their reasonable
efforts to solicit purchases for the period of their appointment
or to sell securities on a continuing basis.
If we use underwriters for a sale of securities, the
underwriters will acquire the securities for their own accounts.
The underwriters may resell the securities in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the
time of sale. The obligations of the underwriters to purchase
the securities will be subject to the conditions set forth in
the applicable underwriting agreement. The underwriters will be
obligated to purchase all the securities offered if any of those
securities are
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purchased. Any initial public offering price and any discounts
or concessions allowed or re-allowed or paid to dealers will be
described in the applicable prospectus supplement and may be
changed from time to time.
Underwriters, dealers and agents that participate in the
distribution of the securities may be underwriters as defined in
the Securities Act and any discounts or commissions they receive
from us and any profit on their resale of the securities may be
treated as underwriting discounts and commissions under the
Securities Act. The applicable prospectus supplement will
identify any underwriters, dealers or agents and will describe
their compensation. We may have agreements with the
underwriters, dealers and agents to indemnify them against
certain civil liabilities, including liabilities under the
Securities Act. Underwriters, dealers and agents may engage in
transactions with or perform services for us or our subsidiaries
in the ordinary course of their businesses.
Unless otherwise specified in the applicable prospectus
supplement, each class or series of securities will be a new
issue with no established trading market, other than the common
stock, which is listed on the New York Stock Exchange. We may
elect to list any other class or series of securities on any
exchange, but we are not obligated to do so. It is possible that
one or more underwriters may make a market in a class or series
of securities, but the underwriters will not be obligated to do
so and may discontinue any market making at any time without
notice. We cannot give any assurance as to the liquidity of the
trading market for any of the securities.
LEGAL
MATTERS
Certain legal matters in connection with the securities will be
passed upon for us by Mayer Brown LLP and for any underwriter by
legal counsel named in the prospectus supplement.
EXPERTS
The consolidated financial statements of Devon and its
subsidiaries as of December 31, 2007 and 2006 and for each
of the years in the three-year period ended December 31,
2007, and managements assessment of the effectiveness of
internal control over financial reporting as of
December 31, 2007, have been incorporated by reference
herein in reliance upon the report of KPMG LLP, independent
registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in
accounting and auditing. The audit report on the consolidated
financial statements refers to the 2007 changes in accounting
principle related to adoption of fair value accounting
standards, the recognition of income tax contingencies, and a
change in measurement date of defined benefit pension and other
postretirement benefit plan assets and liabilities and refers to
the 2006 changes in accounting principle related to the fair
value of share-based payments and the balance sheet
classification of defined benefit pension and other
postretirement benefit plan assets and liabilities.
Certain information with respect to Devons oil and gas
reserves derived from the reports of LaRoche Petroleum
Consultants, Ltd., Ryder Scott Company, L.P. and AJM Petroleum
Consultants, independent consulting petroleum engineers, has
been included and incorporated by reference herein upon the
authority of said firms as experts with respect to matters
covered by such reports and in giving such reports.
WHERE YOU
CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange
Commission. You may read and copy any reports, statements or
other information we file at the SECs Public Reference
Room at 100 F Street, N.E., Washington, D.C.
20549. Please call the SEC at
1-800-SEC-0330
for further information on the public reference rooms. Our SEC
filings are also available to the public from commercial
document retrieval services and at the website maintained by the
SEC at
http://www.sec.gov.
We filed with the SEC a registration statement on
Form S-3
with respect to the securities offered by this prospectus. This
prospectus is a part of that registration statement. As allowed
by SEC rules, this prospectus does not contain all the
information you can find in the registration statement or the
exhibits to the registration statement. Instead, the SEC allows
us to incorporate by reference information into this
prospectus, which means that we can disclose important
information to you by referring you to another document filed
separately with the SEC. The
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information incorporated by reference is deemed to be part of
this prospectus, except for any information superseded by
information in, or incorporated by reference in, this prospectus.
This prospectus incorporates by reference the documents set
forth below that we have previously filed with the SEC. These
documents contain important information about Devon.
(a) Our Annual Report on
Form 10-K
for the year ended December 31, 2007, as amended by
Form 10-K/A
filed on June 9, 2008.
(b) Our Quarterly Reports on
Form 10-Q
for the quarters ended March 31, 2008, June 30, 2008
and September 30, 2008.
(c) Our Current Reports on
Form 8-K
filed February 6, 2008, June 4, 2008 (as amended by a
Current Report on
Form 8-K/A
filed June 18, 2008), June 4, 2008, August 6,
2008, October 9, 2008 and November 4, 2008.
(d) The description of our Common Stock set forth in
Exhibit 4.9 to our Current Report on
Form 8-K,
filed August 18, 1999, including any amendment or report
filed for the purposes of updating such description.
We are also incorporating by reference additional documents that
we file with the SEC pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus
but before the completion of the offering. Current Reports on
Form 8-K
containing only disclosure furnished under Items 2.02 and
7.01 of
Form 8-K
are not incorporated herein by reference.
We will provide documents incorporated by reference in this
prospectus without charge, excluding all exhibits unless we have
specifically incorporated by reference an exhibit in this
prospectus. You may obtain documents incorporated by reference
in this prospectus (at no cost) by requesting them in writing,
by e-mail or
by telephone from us at the following address:
Devon Energy Corporation, 20 North Broadway, Oklahoma City,
Oklahoma
73102-8260
Attention: Corporate Secretary, Telephone:
(405) 235-3611,
janice.dobbs@dvn.com
You can also get more information by visiting our website at
http://www.devonenergy.com.
Website materials are not part of this prospectus.
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$
Devon
Energy Corporation
$ % Senior
Notes due 2014
$ % Senior Notes due
2019
PROSPECTUS
SUPPLEMENT
January ,
2009
Joint
Book-Running Managers
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Banc of America Securities LLC
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J.P. Morgan
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UBS Investment Bank
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