This excerpt taken from the DVN 10-K filed Feb 28, 2007.
Credit Facilities with Banks
Devon has a $2.5 billion five-year, syndicated, unsecured revolving line of credit (the Senior Credit Facility). The Senior Credit Facility includes a five-year revolving Canadian subfacility in a maximum amount of U.S. $500 million.
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Senior Credit Facility matures on April 7, 2011, and all amounts outstanding will be due and payable at that time unless the maturity is extended. Prior to each April 7 anniversary date, Devon has the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. Devon is working to obtain lender approval to extend the current maturity date of April 7, 2011 to April 7, 2012. If successful, this maturity date extension will be effective on April 7, 2007, provided Devon has not experienced a material adverse effect, as defined in the Senior Credit Facility agreement, at that date.
Amounts borrowed under the Senior Credit Facility may, at the election of Devon, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. Devon may also elect to borrow at the prime rate. The Senior Credit Facility currently provides for an annual facility fee of $2.3 million that is payable quarterly in arrears.
The agreement governing the Senior Credit Facility contains certain covenants and restrictions, including a maximum allowed debt-to-capitalization ratio of 65% as defined in the agreement. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in Devons consolidated financial statements. Per the agreement, total funded debt excludes the debentures that are exchangeable into shares of Chevron Corporation common stock. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling property impairments or goodwill impairments. At December 31, 2006, Devon was in compliance with such covenants and restrictions. Devons debt-to-capitalization ratio at December 31, 2006, as calculated pursuant to the terms of the agreement, was 27.3%.
As of December 31, 2006, there were no borrowings under the Senior Credit Facility. The available capacity under the Senior Credit Facility as of December 31, 2006, net of $284 million of outstanding letters of credit and $1.8 billion of outstanding commercial paper, was approximately $408 million.