XML 31 R19.htm IDEA: XBRL DOCUMENT v3.24.3
Debt And Related Expenses
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt and Related Expenses Debt and Related 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