Devon Energy Provides Barnett Update, Announces Special Dividend and Outlines Next Steps in Cost-Reduction Plan

KEY HIGHLIGHTS

• Accelerating Barnett Shale closing to Oct. 1, 2020, from previously scheduled date of Dec. 31, 2020
• Board of directors declares a $100 million special dividend in conjunction with Barnett closing
• Expect to achieve $300 million of sustainable cash cost savings by year-end
• Plan to use cash on hand to repurchase up to $1.5 billion of additional debt

OKLAHOMA CITY, Aug. 04, 2020 (GLOBE NEWSWIRE) -- In conjunction with its second-quarter earnings announcement, Devon Energy Corp. (NYSE: DVN) provided an update on the timing of its Barnett Shale divestiture closing and outlined details on the next phase of its strategic plan. These strategic initiatives include the return of cash directly to shareholders, a plan to streamline corporate and operating costs across the organization and the resumption of its debt reduction program.

BARNETT SHALE DIVESTITURE TO CLOSE AHEAD OF PLAN

Devon and Banpu Kalnin Ventures plan to accelerate the scheduled closing date of the Barnett Shale asset sale to Oct. 1, 2020, from the previously arranged date of Dec. 31, 2020. After accounting for purchase-price adjustments, which include an upfront deposit of $170 million and allocated revenues and expenses from the effective date, Devon expects to receive a net cash payment of more than $300 million at closing.

The Barnett Shale sale agreement also provides Devon the opportunity for contingent cash payments of up to $260 million based upon future commodity prices, with upside participation beginning at either a $2.75 Henry Hub natural gas price or a $50 West Texas Intermediate oil price. The contingent payment period commences on Jan. 1, 2021, and has a term of four years. The contingent payments are earned and paid on an annual basis.

BOARD AUTHORIZES $100 MILLION SPECIAL DIVIDEND

With the accelerated closing of the Barnett Shale divestiture, Devon’s board of directors has declared a special dividend in the amount of $0.26 per share of Devon common stock. Based on the current number of outstanding shares, this special dividend will result in an aggregate payment of $100 million to shareholders by Devon. The special dividend is payable on Oct. 1, 2020, to shareholders of record at the close of business on Aug. 14, 2020. This special dividend is in addition to the regular quarterly cash dividend of $0.11 per share.