MERGERS - ACQUISITIONS / Devon Energy and Northstar Energy Announce
Completion of Merger
OKLAHOMA CITY and CALGARY, Alberta, Dec. 11 /CNW/ -- Devon Energy
Corporation (AMEX: DVN) and Canadian-based Northstar Energy Corporation
(Toronto: NEN) today announced that the merger of the two companies has been
completed. The merger, which was originally announced on June 29, 1998, was
overwhelmingly approved by the shareholders of both companies. At the special
shareholders meetings held this week, more than 95 percent of the shares voted
in each meeting were in favor of the merger.
Final Terms of Merger
Devon is issuing approximately 16.1 million common equivalent shares to
the Northstar shareholders. In addition, Devon is assuming US$312 million in
existing Northstar debt.
Northstar shareholders are receiving .235 exchangeable shares for each
Northstar share. The shares are exchangeable at the holder's option into
Devon common stock on a one-for-one basis. The exchangeable shares are
tradable on the Toronto Stock Exchange under the symbol NSX.
The Merged Company
With a total capitalization of US$1.9 billion, Devon Energy Corporation is
one of the top 15 US-based independent oil and gas producers. It is uniquely
positioned to take advantage of growth opportunities both in the US and in
Canada.
-- The company is balanced with 54 percent of its proved reserves in the
U.S. and 46 percent in Canada.
-- The company has total proved reserves of approximately 300 million
barrels of oil equivalent.
-- The company has considerable exposure to growing North American
natural gas markets. This is balanced by substantial oil reserves,
particularly in the Permian Basin of the US.
-- The company enjoys significant economies of scale in each of its five
producing regions. Accordingly, the company is a low cost producer in
both the US and Canada.
-- The company has a large inventory of drilling opportunities on its
2.6 million net acres of undeveloped leasehold.
-- The company has 48.4 million outstanding common and common equivalent
shares with approximately 36 million shares in public float.
-- The company is highly liquid with US$16 million in working capital,
only US$340 million in debt and substantial unused credit lines.
-- The company has proven management teams in place in both the US and
Canada.
J. Larry Nichols, President and CEO of Devon, stated: "This merger creates
a company with extraordinary growth opportunities in the US and Canada and the
financial strength to pursue them."
John A. Hagg, President and CEO of Northstar, added: "We are very excited
about the union of Devon and Northstar. The combination of Devon's financial
strength and the opportunities available today in the Canadian industry should
work to the benefit of both groups of shareholders."
Devon Expands Board by Two Directors
Simultaneous with the completion of the transaction, Devon expanded its
Board of Directors to 11 members to include John A. Hagg and Michael M.
Kanovsky. Mr. Hagg, the CEO of Northstar, and Mr. Kanovsky were both
directors of Northstar prior to the merger.
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