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Debt And Related Expenses | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Debt and Related Expenses | Debt and Re lated Expenses See below for a summary of debt instruments and balances. The notes, debentures and Term Loan reflected below are senior, unsecured obligations of Devon.
|  | September 30, 2024 |  |  | December 31, 2023 |
5.25% due September 15, 2024 |  | $ | — |  |  | $ | 472 |
5.85% due December 15, 2025 |  |  | 485 |  |  |  | 485 |
7.50% due September 15, 2027 |  |  | 73 |  |  |  | 73 |
5.25% due October 15, 2027 |  |  | 390 |  |  |  | 390 |
5.875% due June 15, 2028 |  |  | 325 |  |  |  | 325 |
4.50% due January 15, 2030 |  |  | 585 |  |  |  | 585 |
7.875% due September 30, 2031 |  |  | 675 |  |  |  | 675 |
7.95% due April 15, 2032 |  |  | 366 |  |  |  | 366 |
5.20% due September 15, 2034 |  |  | 1,250 |  |  |  | — |
5.60% due July 15, 2041 |  |  | 1,250 |  |  |  | 1,250 |
4.75% due May 15, 2042 |  |  | 750 |  |  |  | 750 |
5.00% due June 15, 2045 |  |  | 750 |  |  |  | 750 |
5.75% due September 15, 2054 |  |  | 1,000 |  |  |  | — |
Term Loan due September 25, 2026 |  |  | 1,000 |  |  |  | — |
Net premium on debentures and notes |  |  | 41 |  |  |  | 64 |
Debt issuance costs |  |  | (56 | ) |  |  | (30 | )
Total debt |  | $ | 8,884 |  |  | $ | 6,155 |
Less amount classified as short-term debt |  |  | — |  |  |  | 483 |
Total long-term debt |  | $ | 8,884 |  |  | $ | 5,672 |
Credit Lines In 2023, Devon amended and restated its 2018 Senior Credit Facility to provide for a new $3.0 billion revolving 2023 Senior Credit Facility. In the first quarter of 2024, Devon exercised its option to extend the 2023 Senior Credit Facility maturity date from March 24, 2028 to March 24, 2029. Devon has the option to extend the March 24, 2029 maturity date by two additional one-year periods subject to lender consent. As of September 30, 2024, Devon had no outstanding borrowings under the 2023 Senior Credit Facility and had issued $4 million in outstanding letters of credit under this facility. The 2023 Senior Credit Facility contains only one material financial covenant. This covenant requires Devon's ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back non-cash financial write-downs such as impairments. As of September 30, 2024, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 26.7% Term Loan Credit Agreement On August 12, 2024, Devon entered into a delayed draw term loan credit agreement (the “Term Loan Credit Agreement”), providing for delayed draw term loans in an aggregate principal amount not to exceed $2.0 billion, including a 364-day tranche of $500 million and a two-year tranche of $1.5 billion. On September 27, 2024, Devon borrowed $1.0 billion on the two-year tranche (the “Term Loan”) to partially fund the closing of the Grayson Mill acquisition. In connection with the borrowing of the Term Loan, the undrawn commitments under the Term Loan Credit Agreement automatically terminated. The Term Loan bears interest at a rate based on term SOFR plus a spread adjustment that varies based on Devon's credit ratings. The interest rate on the Term Loan was 6.33% as of September 30, 2024. The Term Loan Credit Agreement contains substantially the same financial covenant as the 2023 Senior Credit Facility. As of September 30, 2024, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 26.7%. Issuance of Senior Notes On August 28, 2024, Devon issued $1.25 billion of 5.20% senior notes due 2034 and $1.0 billion of 5.75% senior notes due 2054. Devon used the net proceeds to partially fund the Grayson Mill acquisition. For additional information, see Note 2. Retirement of Senior Notes On September 15, 2024 and August 1, 2023, Devon repaid the $472 million of 5.25% senior notes and $242 million of 8.25% senior notes at maturity, respectively. Net Financing Costs The following schedule includes the components of net financing costs.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Interest based on debt outstanding |  | $ | 98 |  |  | $ | 93 |  |  | $ | 273 |  |  | $ | 282 |
Interest income |  |  | (19 | ) |  |  | (11 | ) |  |  | (46 | ) |  |  | (43 | )
Other |  |  | 9 |  |  |  | (1 | ) |  |  | 13 |  |  |  | (8 | )
Total net financing costs |  | $ | 88 |  |  | $ | 81 |  |  | $ | 240 |  |  | $ | 231 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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