[Editor's note: This story was updated at 10:09 a.m. CDT June 28, 2019.]
After completing its multibillion-dollar Canadian exit, Devon Energy Corp. said June 27 it will redeem $1.5 billion of its outstanding senior notes early.
The redemption covers all of the Oklahoma City-based company’s outstanding 4% notes due 2021 and 3.25% notes due 2022. The company said it will redeem the notes at 100% of the principal amount, plus accrued and unpaid interest, as well as a make-whole premium.
Additionally, Devon said June 27 it completed the sale of its Canadian business, which it had previously announced in late May.
The sale, which marked Devon’s exit from Canada, consisted of heavy oil assets primarily located in Alberta, with net production averaging 113,000 barrels of oil equivalent in first-quarter 2019. Calgary, Alberta-based Canadian Natural Resources Ltd. agreed to purchase the assets for $2.8 billion (C$3.8 billion).
Devon’s Canada sale also officially kicked off the Oklahoma City-based company’s transformation into a high-return U.S. oil growth business.
In the announcement of its planned transformation in February, Devon said it would look to either sell or spin off its Barnett Shale and Canada assets this year leaving the company with positions in the Permian’s Delaware Basin, Stack play, Powder River Basin and Eagle Ford Shale.
“The sale of Canada is an important step in executing Devon’s transformation to a U.S. oil growth business,” Dave Hager, president and CEO of Devon, said in a statement on May 29. “This transaction creates value for our shareholders by achieving a clean and timely exit from Canada, while accelerating efforts to focus exclusively on our high-return U.S. oil portfolio.”
As for Devon’s remaining position in the Barnett Shale, the company said June 27 the assets are currently being marketed. Devon added it still expects to exit the assets by the end of 2019.
J.P. Morgan Securities LLC was lead financial adviser to Devon on the Canada transaction. Goldman Sachs also acted as a financial adviser.
Canadian Natural Resources planned to fund the acquisition of Devon’s Canadian business through a new C$3.25 billion committed term facility provided by TD Securities as sole underwriter and book-runner. TD Securities also acted as financial adviser to the company on the transaction.
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