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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.
Table of Contents
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 Devon’s 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. Devon’s
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.
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