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Debt And Related Expenses | 12 Months Ended
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Dec. 31, 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 unless otherwise noted in the table below.
|  | December 31, 2024 |  |  | December 31, 2023 |
5.25% due September 15, 2024 (1) |  | $ | — |  |  | $ | 472 |
5.85% due December 15, 2025 |  |  | 485 |  |  |  | 485 |
7.50% due September 15, 2027 (2) |  |  | 73 |  |  |  | 73 |
5.25% due October 15, 2027 (1) |  |  | 390 |  |  |  | 390 |
5.875% due June 15, 2028 (1) |  |  | 325 |  |  |  | 325 |
4.50% due January 15, 2030 (1) |  |  | 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 |  |  | 37 |  |  |  | 64 |
Debt issuance costs |  |  | (53 | ) |  |  | (30 | )
Total debt |  | $ | 8,883 |  |  | $ | 6,155 |
Less amount classified as short-term debt |  |  | 485 |  |  |  | 483 |
Total long-term debt |  | $ | 8,398 |  |  | $ | 5,672 |
(1) These instruments were assumed by Devon in January 2021 in conjunction with the merger with WPX. Approximately $27 million of these instruments remain the unsecured and unsubordinated obligation of WPX, a wholly-owned subsidiary of Devon. (2) This instrument was assumed by Devon in April 2003 in conjunction with the merger with Ocean Energy. The fair value and effective rate of this note at the time assumed was $169 million and 6.5%, respectively. This instrument is the unsecured and unsubordinated obligation of Devon OEI Operating, L.L.C. and is guaranteed by Devon Energy Production Company, L.P. Each of these entities is a wholly-owned subsidiary of Devon. Debt maturities as of December 31, 2024, excluding debt issuance costs, premiums and discounts, are as follows:
|  | Total |
2025 |  | $ | 485 |
2026 |  |  | 1,000 |
2027 |  |  | 463 |
2028 |  |  | 325 |
2029 |  |  | — |
Thereafter |  |  | 6,626 |
Total |  | $ | 8,899 |
On or after the dates in the following schedule, Devon has the option to redeem the notes, in whole or in part, at the applicable redemption prices set forth in the indenture documents, plus accrued and unpaid interest thereon to the redemption date as more fully described in the indenture documents governing the notes to be redeemed. At any time prior to the dates in the following schedule, Devon has the option to redeem some or all of the notes at a specified “make whole” premium as described in such documents. Other than with respect to the notes identified in the schedule below, Devon's senior notes generally include more limited redemption provisions, such as "par call" rights near the maturity date or “make whole” redemption rights.
|  | Optional Redemption
5.25% due October 15, 2027 |  | October 15, 2022
5.875% due June 15, 2028 |  | June 15, 2023
4.50% due January 15, 2030 |  | January 15, 2025
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 December 31, 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. Interest rates on borrowings under the 2023 Senior Credit Facility are determined based on the applicable loan type elected by Devon and a pricing grid set forth in the credit agreement and vary according to the credit ratings of the Company. The 2023 Senior Credit Facility currently provides for an annual facility fee of approximately $5 million. 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 December 31, 2024, Devon was in compliance with this covenant with a debt-to capitalization ratio of 26.5%. Commercial Paper Devon’s 2023 Senior Credit Facility supports its $3.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. As of December 31, 2024, Devon had no outstanding commercial paper borrowings. Term Loan Credit Agreement In August 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 5.81% as of December 31, 2024. The Term Loan Credit Agreement contains substantially the same financial covenant as the 2023 Senior Credit Facility. As of December 31, 2024, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 26.5%. Issuance of Senior Notes In August 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.
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Net financing costs: |  |  |  |  |  |  |  |  |
Interest based on debt outstanding |  | $ | 401 |  |  | $ | 369 |  |  | $ | 370 |
Interest income |  |  | (62 | ) |  |  | (55 | ) |  |  | (38 | )
Other |  |  | 24 |  |  |  | (6 | ) |  |  | (23 | )
Total net financing costs |  | $ | 363 |  |  | $ | 308 |  |  | $ | 309 |

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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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