DEVON ENERGY CORP/DE, 424B3, 2000-12-08

DEVON ENERGY CORP/DE
424B3, 2000-12-08
CRUDE PETROLEUM & NATURAL GAS

Previous: LANIER WORLDWIDE INC, SC 14D9, EX-99.(E)(11), 2000-12-08

Next: DIGITAL BRIDGE INC, S-8, 2000-12-08

<PAGE>

Filed pursuant to Rule 424(b)(3)
SEC File No. 333-50036

PROSPECTUS Dated December 1, 2000

[DEVON LOGO]

$760,000,000 Principal Amount at Maturity of
Zero Coupon Convertible Senior Debentures Due 2020 and
Shares of Common Stock
Issuable upon Conversion of the Debentures

This prospectus relates to the offering for resale of Devon's zero coupon
convertible senior debentures due 2020 and the shares of Devon's common stock
issuable upon conversion of the debentures. The debentures and common stock may
be offered by certain selling security holders which acquired the securities in
connection with a private placement of the debentures on June 27, 2000. Devon
will not receive the proceeds from the sale of the securities offered by this
prospectus.

The debentures are senior unsecured indebtedness of Devon. Subject to
adjustment in the occurrence of certain events, holders of the debentures may
convert the debentures into shares of Devon common stock at any time prior to
maturity or their earlier redemption at a conversion rate of 5.7593 shares per
$1,000 principal amount at maturity. On November 14, 2000, the last reported
sale price of our common stock on the American Stock Exchange was $52.25. Our
common stock is traded on the American Stock Exchange under the symbol "DVN."

The debentures were issued at a price of $464.13 per $1,000 principal amount
at maturity, which represented an original issue discount of 53.587% from the
principal amount payable at maturity. The issue price represented a yield to
maturity of 3.875% per year, compounded semiannually.

On or after June 27, 2005, Devon may redeem all or part of the debentures for
cash at any time at redemption prices equal to the issue price plus accrued
original issue discount to the date of redemption.

Each debenture holder may require us to purchase such holder's debentures on
June 27, 2005, June 27, 2010 and June 27, 2015 for a purchase price equal to the
issue price plus accrued original issue discount to the date of repurchase.
Subject to certain conditions, we may elect to pay all or a portion of the
purchase price in common stock instead of cash.

We may amend or supplement this prospectus from time to time by filing
amendments or supplements, as required. You should read this entire prospectus
and any amendments or supplements carefully before you make your investment
decision. In particular, read the risk factors beginning on page 3.

The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

---------------

December 1, 2000
<PAGE>

You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. You should not assume that the information provided by
this prospectus is accurate as of any date other than the date on the front
cover of this prospectus.

<TABLE>
<CAPTION>
TABLE OF CONTENTS

Page
---------------
<S> <C>
ABOUT THIS PROSPECTUS........................................................................... i
SUMMARY......................................................................................... 1
RISK FACTORS.................................................................................... 3
USE OF PROCEEDS................................................................................. 5
RATIO OF EARNINGS TO FIXED CHARGES.............................................................. 5
SELLING SECURITY HOLDERS........................................................................ 5
ABOUT OUR CAPITAL STOCK......................................................................... 9
DESCRIPTION OF DEBENTURES....................................................................... 10
PLAN OF DISTRIBUTION............................................................................ 21
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS................................................. 22
LEGAL MATTERS................................................................................... 28
EXPERTS......................................................................................... 28
WHERE YOU CAN FIND MORE INFORMATION............................................................. 28
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS...................................... 29
GLOSSARY........................................................................................ 29
</TABLE>

ABOUT THIS PROSPECTUS

This prospectus may not be used to sell securities unless it is accompanied
by a prospectus supplement.

This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process or continuous offering process.
Under this shelf registration process, the selling security holders may, from
time to time, sell the securities described in this prospectus in one or more
offerings.

This prospectus provides you with a general description of the securities
which may be offered by the selling security holders. Each time a selling
security holder sells securities, the selling security holder is required to
provide you with a prospectus and a prospectus supplement containing specific
information about the selling security holder and the terms of the securities
being offered. That prospectus supplement may include additional risk factors or
other special considerations applicable to those securities. Any prospectus
supplement may also add, update or change information in this prospectus. If
there is any inconsistency between the information in this prospectus and any
prospectus supplement, you should rely on the information in that prospectus
supplement. You should read both this prospectus and any prospectus supplement
together with additional information described under "Where You Can Find More
Information."

In this prospectus, the terms "Devon," "we," "us" and "our" generally mean
Devon Energy Corporation, a Delaware corporation, and its consolidated
subsidiaries.

Unless otherwise indicated, all dollar amounts in this prospectus are
expressed in U.S. dollars.

i
<PAGE>

SUMMARY

You should read the following summary together with the more detailed
information contained in this prospectus and the other information incorporated
by reference into this prospectus.

Overview

Devon is an independent energy company engaged primarily in oil and gas
exploration, development and production, and in the acquisition of producing
properties. On December 31, 1999, prior to our merger with Santa Fe Snyder
Corporation, we owned proved oil and gas reserves of 669.8 million barrels of
oil equivalent. Approximately 47% of these reserves were natural gas and 53%
were oil and natural gas liquids.

Our Merger with Santa Fe Snyder

On August 29, 2000, Devon completed a merger with Santa Fe Snyder Corporation.
Devon after the merger, which we sometimes refer to as "the combined company,"
ranks among the five largest U.S. based independent oil and gas companies in
terms of oil and gas reserves, oil and gas production, equity market
capitalization and enterprise value. At the end of 1999, Devon and Santa Fe
Snyder combined had aggregate proved reserves of approximately 1.1 billion
barrels of oil equivalent. Approximately 47% of these reserves were natural gas
and 53% oil and natural gas liquids. The combined company's North American
proved reserves, including the United States and Canada, totaled 800 million
barrels of oil equivalent, weighted 58% to natural gas. The combined company's
North American reserves are concentrated in four operating divisions:

. the Gulf Division, which includes oil and gas properties located primarily
in the onshore South Texas and South Louisiana areas and offshore in the
Gulf of Mexico;

. the Rocky Mountain Division, which includes oil and gas properties located
in the Rocky Mountains area of the United States stretching from the
Canadian border south into northern New Mexico;

. the Permian/Mid-Continent Division, which includes oil and gas properties
located in the United States other than those included in the Gulf Division
and Rocky Mountain Division; and

. Canada, which includes properties in the Western Canadian Sedimentary Basin
in Alberta and British Columbia.

The combined company's proved reserves outside of North America totaled
approximately 256 million barrels of oil equivalent. International activities
are concentrated in three core areas:

. South America, which includes Argentina, Brazil and Venezuela;

. Southeast Asia, which includes Indonesia, China, Malaysia and Thailand; and

. Azerbaijan.

The combined company also has activities in Congo, Cote d'Ivoire, Egypt,
Gabon, Ghana and Qatar.

In addition to proved oil and gas properties, the combined company had a
substantial inventory of exploration acreage totaling approximately 32.0 million
net acres, including 5.6 million net acres in North America.

The Offering

Securities Offered. We issued and sold $760,000,000 aggregate principal
amount at maturity of zero coupon convertible senior debentures due June 27,
2020 to Morgan Stanley & Co. Incorporated and Salomon Smith Barney Inc. Morgan
Stanley and Salomon Smith Barney simultaneously sold the debentures to the
selling security holders. We will not pay periodic interest on the debentures,
except as described under "Description of Debentures-Optional Conversion to
Semiannual Coupon Debentures Upon a Tax Event."

Yield to Maturity of Debentures. The yield to maturity on the debentures is
3.875% per year compounded semiannually, calculated from June 27, 2000.

1
<PAGE>

Conversion. Debenture holders have the option to convert the debentures into
shares of Devon common stock at any time prior to maturity or their earlier
redemption at a fixed conversion rate of 5.7593 shares per $1,000 principal
amount at maturity. The conversion rate will be subject to adjustment if certain
events occur. See "Description of Debentures-Conversion of Debentures by
Holders."

In lieu of delivering shares of common stock upon conversion of any
debentures, we may elect to pay debenture holders cash for their debentures in
an amount equal to the last reported sales price of our common stock on the
trading day preceding the conversion date, multiplied by the applicable
conversion rate.

Debenture holders may only exercise the option to convert before the
debentures reach maturity and before we redeem or repurchase the debentures.

Original Issue Discount. The debentures were sold at original issue discount
for United States federal income tax purposes equal to the excess of their
principal amount at maturity over the amount of their issue price. We will not
make periodic cash payments of interest on the debentures, except as described
under "Description of Debentures-Optional Conversion to Semiannual Coupon
Debentures Upon a Tax Event." Nonetheless, accrued original issue discount will
be included periodically in each debenture holder's gross income for United
States federal income tax purposes. See "Material U.S. Federal Income Tax
Considerations."

Debenture holders will be responsible for the payment of taxes that may be due
even though they may not receive any cash payment at the time original issue
discount is included in their respective gross incomes.

Sinking Fund. There is no sinking fund for the debentures.

Redemption at the Option of Devon. We cannot redeem the debentures before
June 27, 2005. On or after June 27, 2005, we can redeem all or part of the
debentures for cash at any time. Debenture holders can convert the debentures
after they are called for redemption at any time up to the redemption date.

Redemption prices are equal to the issue price plus accrued original issue
discount to the date of redemption. See "Description of Debentures-Redemption
of Debentures at Devon's Option."

Fundamental Change. Debenture holders may require us to repurchase the
debentures if we experience a fundamental change, as described in "Description
of Debentures." The fundamental change purchase price is equal to the issue
price plus accrued original issue discount to the date of repurchase, subject to
adjustment in certain circumstances. See "Description of Debentures-Repurchase
at the Option of the Holder Upon a Fundamental Change."

Repurchase at the Option of the Holder. Debenture holders may elect to
require us to repurchase the debentures on June 27, 2005, June 27, 2010 and June
27, 2015 for a purchase price equal to the issue price plus accrued original
issue discount to the date of repurchase. We may elect to pay all or a portion
of the purchase price in common stock instead of cash. See "Description of
Debentures-Repurchase of Debentures at the Option of the Holder."

Conversion to Semiannual Coupon Debenture. If a tax event, as defined in the
glossary, prevents us from deducting original issue discount payable on the
debentures, we can elect to pay debenture holders interest in cash and terminate
the further accrual of original issue discount. See "Description of Debentures-
Optional Conversion to Semiannual Coupon Debentures Upon a Tax Event."

Risk Factors

The "Risk Factors" section of this prospectus, beginning on page 3, discusses
potential risks associated with an investment in Devon. You should consider
these potential risks before you decide to invest in the securities offered by
this prospectus.

-----------

Our principal executive offices are located at 20 North Broadway, Suite 1500,
Oklahoma City, Oklahoma 73102-8260. Our telephone number at that location is
(405) 235-3611.

2
<PAGE>

RISK FACTORS

You should carefully consider the following factors, in addition to the other
information contained or incorporated by reference in this prospectus, before
deciding to invest in our securities.

Risks Relating to an Investment in Devon

Devon has charter and other provisions that may make it difficult to cause a
change of control

Some provisions of Devon's certificate of incorporation and by-laws and of
the Delaware General Corporation Law, as well as Devon's stockholder rights
plan, may make it difficult for stockholders to cause a change of control of
Devon and replace incumbent management. These provisions include:

. a classified board, the members of which serve staggered three-year terms
and may be removed by stockholders only for cause;

. a prohibition on stockholders calling special meetings and acting by
written consent; and

. rights issued under its rights plan, which would "flip in" if a hostile
bidder acquired 15% of Devon's common stock.

Devon's offshore operations are exposed to the additional risks of tropical
weather disturbances

Some of our production and reserves are located offshore in the Gulf of
Mexico. Operations in this area are subject to tropical weather disturbances.
Some of these disturbances can be severe enough to cause substantial damage to
facilities and possibly interrupt production. In accordance with customary
industry practices, Devon maintains insurance against some, but not all, of
these risks. Losses could occur for uninsurable or uninsured risks or in amounts
in excess of existing insurance coverage. We cannot assure you that Devon will
be able to maintain adequate insurance in the future at rates it considers
reasonable or that any particular types of coverage will be available. An event
that is not fully covered by insurance could have a material adverse effect on
Devon's financial position and results of operations.

We are subject to uncertainties of foreign operations

We have international operations in Argentina, Azerbaijan, Brazil, Canada,
China, Congo, Cote d'Ivoire, Egypt, Gabon, Ghana, Indonesia, Malaysia, Qatar,
Thailand and Venezuela. Local political, economic and other uncertainties may
adversely affect these operations. These uncertainties include:

. the risk of war, general strikes, civil unrest, expropriation, forced
renegotiation or modification of existing contracts, and import, export and
transportation regulations and tariffs;

. taxation policies, including royalty and tax increases and retroactive tax
claims;

. exchange controls, currency fluctuations, devaluation or other activities
that limit or disrupt markets and restrict payments or the movement of
funds, and other uncertainties arising out of foreign government
sovereignty over international operations;

. laws and policies of the United States affecting foreign trade, taxation
and investment;

. the possibility of being subject to the exclusive jurisdiction of foreign
courts in connection with legal disputes and the possible inability to
subject foreign persons to the jurisdiction of courts in the United States;
and

. difficulties in enforcing our rights against a governmental agency because
of the doctrine of sovereign immunity.

3
<PAGE>

We are subject to federal acreage limitations and as a result may be required to
reduce our acreage in Wyoming

Current United States law restricts the amount of federal acreage that can be
controlled by individual parties within each state. This controlled acreage is
considered "chargeable" to individual parties. The current federal limit within
Wyoming is approximately 246,000 chargeable acres. Controlled leasehold acreage
that is part of a federally authorized drilling or production unit is, however,
not considered chargeable acreage for the purposes of this limitation.

As a result of the merger, we have approximately 443,000 chargeable acres
within Wyoming. Assuming that no changes are made to the current law, we will be
required to reduce our chargeable acreage within 180 days after the merger. We
may petition the Bureau of Land Management for additional time to restructure
our leasehold acreage. However, we cannot assure you that any extra time would
be allowed. Currently there are only two ways available to reduce our chargeable
acreage. One way is to sell or divest a portion of its acreage. The other way is
to apply to the Bureau of Land Management to "unitize" a portion of the acreage.
If approved, the acreage included in these federally authorized drilling or
production units would not be counted as chargeable acreage. If we have to sell
or divest acreage to reduce our total acreage in Wyoming, we will have less
acreage in Wyoming on which to drill, which could have a negative impact on
future production, cash flow and earnings.

Devon may incur a tax liability for a prior PennzEnergy transaction as a result
of the 1999 merger of Devon with PennzEnergy

On August 17, 1999 we completed a merger with PennzEnergy Company. If
PennzEnergy's distribution to its stockholders of the stock of Pennzoil-Quaker
State Company in December 1998 were to be considered part of a plan or series of
related transactions that includes the merger of Devon with PennzEnergy, Devon
would recognize gain under Section 355(e) of the Internal Revenue Code. Devon
believes the distribution and the merger with PennzEnergy should not be
considered part of such a plan or series of related transactions because, among
other things, prior to the distribution neither party contemplated a business
combination with the other and until April 1999 the parties had no discussions
regarding a business combination. However, any transaction within a four-year
period beginning two years before the distribution is presumed to be a part of
such a plan. We cannot assure you we will be able to overcome this presumption.
We currently estimate Devon's potential tax liability upon such transaction at
$16 million in additional tax for 1998 and the elimination of approximately $183
million in net operating loss carryovers.

Risks Relating to the Debentures

Although the debentures are referred to as "senior debentures," they are
effectively subordinated to any future secured debt and debt of our subsidiaries

The debentures are obligations exclusively of Devon. We are a holding
company and, accordingly, substantially all operations are conducted by our
subsidiaries. As a result, our cash flow and our ability to service our debt,
including the debentures, is dependent upon the earnings of our subsidiaries. In
addition, we are dependent on the distribution of earnings, loans or other
payments by our subsidiaries to us.

Our subsidiaries are separate and distinct legal entities and as a result,
have no obligation to pay any amounts due on the debentures or to provide us
with funds. In addition, any payment of funds by our subsidiaries to us could
be subject to statutory or contractual restrictions. Payments to us by our
subsidiaries will also be contingent upon their earnings and business conditions
in the areas in which they operate.

Our right to receive any assets of any of our subsidiaries upon their
liquidation or reorganization, and therefore the right of the debenture holders
to participate in those assets, will be effectively subordinated to the claims
of that subsidiary's creditors, including trade creditors. In addition, even if
we were a creditor of any of our subsidiaries, our rights as a creditor would be
subordinate to any security interest in the assets of our subsidiaries and any
indebtedness of our subsidiaries senior to that held by us.

The debentures are unsecured and therefore are effectively subordinated to
any indebtedness of our subsidiaries and future secured indebtedness to the
extent of the value of the assets securing such indebtedness. If we default on
the debentures, become bankrupt, liquidate or reorganize, any secured creditors
could use their collateral to satisfy their secured indebtedness before you
would receive any payment on the debentures. If the value of such collateral is
not sufficient to pay any secured indebtedness in full, our secured creditors
would share the value of our other assets, if any, with you and the holders of
other claims against us which rank equally with the debentures.

4
<PAGE>

We cannot assure you that an active trading market will develop for the
debentures

There is no established trading market for the debentures. We have no plans
to list the debentures on a securities exchange.

USE OF PROCEEDS

All of the securities covered by this prospectus are being sold by the
selling security holders. We will not receive any of the proceeds from the sale
of debentures offered by this prospectus or the common stock issuable upon
conversion of the debentures.

RATIO OF EARNINGS TO FIXED CHARGES

The ratio of earnings to fixed charges for each of the periods set forth
below has been computed on a consolidated basis and should be read in
conjunction with Devon's consolidated financial statements, including the notes
thereto, as restated for the pooling accounting method of the Santa Fe Snyder
merger, filed in a Form 8-K on November 13, 2000 for the three-year period ended
December 31, 1999 and Devon's quarterly report on Form 10-Q for the fiscal
quarter ended September 30, 2000.

<TABLE>
<CAPTION>
Year Ended December 31
Nine Months Ended ---------------------------------------------------------
September 30, 2000 1999 1998 1997 1996 1995
---------------------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges..... 6.35 N/A N/A N/A 5.41 2.77
</TABLE>

For the years 1999, 1998 and 1997 earnings were insufficient to cover fixed
charges by $199.4 million, $362.0 million and $340.2 million, respectively.

Our ratio of earnings to fixed charges was computed based on:

. "earnings," which consist of earnings before income taxes, plus fixed
charges; and

. "fixed charges," which consist of interest expense, including the
amortization of costs relating to the indebtedness and the amortization of
premiums recorded, deferred effect of changes in foreign currency exchange
rate on long-term debt, distributions on preferred securities of subsidiary
trust, amortization of costs relating to the offering of the preferred
securities of subsidiary trust, and the estimated portion of rental expense
attributable to interest.

SELLING SECURITY HOLDERS

All of the debentures, and any shares of common stock issued upon conversion
of the debentures, are being offered by the selling security holders listed in
the table beginning on page 6 or referred to in a prospectus supplement. The
common stock which may be issued directly by us upon conversion of debentures
which were purchased in a sale contemplated by this prospectus is not being
offered by the selling security holders. Only those shares of common stock
issued upon conversion of the debentures may be offered by the selling security
holders or us. We issued and sold the debentures in a private placement to
Morgan Stanley & Co. Incorporated and Salomon Smith Barney Inc., and the
debentures were simultaneously sold by Morgan Stanley and Salomon Smith Barney
Inc. to the selling security holders in transactions exempt from registration
under the Securities Act.

No offer or sale under this prospectus may be made by a holder of the
securities unless listed in the table in this prospectus or until that holder
has notified us and a supplement to this prospectus has been filed or an
amendment to the related registration statement has become effective, or unless
it is with respect to common stock issued by us as described in the immediately
preceding paragraph. We will supplement or amend this prospectus to include
additional selling security holders upon request and upon provision of all
required information to us.

The selling security holders may offer and sell, from time to time, any or
all of their debentures or common stock issued upon conversion of those
debentures. Because the selling security holders may offer all or only some
portion of the securities listed in the table, no estimate can be given as to
the amount or percentage of these securities that will be held by the selling
security holders upon termination of the offering.

5
<PAGE>

The following table lists:

. the name of each selling security holder which has provided us information
to the date of this prospectus;

. the amount of the debentures and common stock beneficially owned by that
security holder before the offering; and

. the amount of debentures and common stock being offered for sale by that
selling security holder.

We obtained the information in the table below from the identified selling
security holders. Unless otherwise disclosed in the footnotes to the table, no
selling security holder has indicated that it has held any position, office or
other material relationship with us or our affiliates during the past three
years. Except as otherwise indicated in the notes to the following table, no
selling security holder will own in excess of one percent of any shares of
debentures or common stock once the shares offered hereby are sold. As of the
date of this prospectus no shares of common stock have been issued as a result
of any conversion or exchange of any debentures.

<TABLE>
<CAPTION>
Shares of
Convertible Debentures Common Stock
------------------------ --------------
Held Offered Offered
Before by this by this
Selling Security Holder Offering Prospectus Prospectus (1)
----------------------- ----------- ----------- --------------
<S> <C> <C> <C>
1976 Distribution Trust FBO A.R. Lauder/Zinternofer................... $ 30,000 $ 30,000 173
1976 Distribution Trust FBO Jane A. Lauder............................ 31,000 31,000 179
Allstate Life Insurance Company....................................... 11,000,000 11,000,000 63,352
Aloha Airlines Non-Pilots Pension Trust............................... 250,000 250,000 1,440
Aloha Pilots Retirement Trust......................................... 150,000 150,000 864
Arapahoe County, Colorado............................................. 106,000 106,000 610
Argent Classic Convertible Arbitrage Fund (Bermuda) L.P............... 50,000,000 50,000,000 287,965
Argent Classic Convertible Arbitrage Fund, L.P........................ 20,000,000 20,000,000 115,186
Argent Convertible Arbitrage Fund Ltd................................. 6,000,000 6,000,000 34,556
Associated Electric & Gas Insurance Services Limited.................. 1,250,000 1,250,000 7,199
Aventis Pension Master Trust.......................................... 500,000 500,000 2,880
Bear, Stearns & Co. Inc............................................... 20,000,000 20,000,000 115,186
Black Diamond Offshore, Ltd........................................... 1,189,000 1,189,000 6,848
Boilermaker-Blacksmith Pension Trust.................................. 3,150,000 3,150,000 18,142
British Virgin Islands Social Security Board.......................... 82,000 82,000 472
C&H Sugar Company..................................................... 400,000 400,000 2,304
CALAMOS Convertible Fund-CALAMOS Investment Trust..................... 4,300,000 4,300,000 24,765
CALAMOS Convertible Growth and Income Fund-CALAMOS
Investment Trust.................................................... 1,250,000 1,250,000 7,199
CALAMOS Convertible Portfolio-CALAMOS Advisors Trust.................. 135,000 135,000 778
CALAMOS Global Convertible Fund-CALAMOS Investment Trust.............. 310,000 310,000 1,785
Champion International Corporation Master Retirement Trust............ 1,375,000 1,375,000 7,919
CIBC World Markets.................................................... 15,000,000 15,000,000 86,390
City of Albany Pension Plan........................................... 285,000 285,000 1,641
City of Knoxville Pension System...................................... 780,000 780,000 4,492
City University of New York........................................... 204,000 204,000 1,175
CNCA/SCT BRUNOY....................................................... 700,000 700,000 4,032
Credit Suisse First Boston Corporation................................ 19,750,000 19,750,000 113,746
The Cockrell Foundation............................................... 175,000 175,000 1,008
Delta Airlines Master Trust........................................... 5,800,000 5,800,000 33,404
Dorinco Reinsurance Company........................................... 1,000,000 1,000,000 5,759
Double Black Diamond Offshore, LDC.................................... 4,097,000 4,097,000 23,596
The Dow Chemical Company Employees' Retirement Plan................... 6,200,000 6,200,000 35,708
ECT Investments, Inc.................................................. 5,000,000 5,000,000 28,797
The Fondren Foundation................................................ 190,000 190,000 1,094
Forest Global Convertible Fund A-5.................................... 18,473,000 18,473,000 106,392

</TABLE>
---------
(1) Assumes conversion of the full amount of debentures by each holder at the
initial conversion rate of 5.7593 shares of common stock per $1,000 principal
amount of debentures at maturity.

6
<PAGE>

<TABLE>
<CAPTION>
Shares of
Convertible Debentures Common Stock
---------------------- --------------
Held Offered Offered
Before by this by this
Selling Security Holder Offering Prospectus Prospectus (1)
----------------------- ---------- ---------- --------------
<S> <C> <C> <C>
Global Bermuda Limited Partnership.................................... 3,500,000 3,500,000 20,158
Goldman Sachs & Company............................................... 300,000 300,000 1,728
The Grable Foundation................................................. 219,000 219,000 1,261
Grady Hospital Foundation............................................. 234,000 234,000 1,348
Granville Capital Corporation......................................... 20,000,000 20,000,000 115,186
Greek Catholic Union.................................................. 50,000 50,000 288
Greek Catholic Union II............................................... 40,000 40,000 230
H. K. Porter Company, Inc............................................. 80,000 80,000 461
Hamilton Partners Limited............................................. 10,000,000 10,000,000 57,593
Hawaiian Airlines Employees Pension Plan - IAM........................ 125,000 125,000 720
Hawaiian Airlines Pension Plan for Salaried Employees................. 25,000 25,000 144
Hawaiian Airlines Pilots Retirement Plan.............................. 225,000 225,000 1,296
Healthcare Underwriters Mutual Insurance Company...................... 1,000,000 1,000,000 5,759
Highbridge International LLC.......................................... 49,250,000 49,250,000 283,646
Independence Blue Cross............................................... 226,000 226,000 1,302
J.P. Morgan Securities, Inc........................................... 15,200,000 15,200,000 87,541
KBC Financial Products USA Inc........................................ 3,000,000 3,000,000 17,278
Kettering Medical Center Funded Depreciation Account.................. 190,000 190,000 1,094
Knoxville Utilities Board Retirement System........................... 465,000 465,000 2,678
Lakeshore International Limited....................................... 6,500,000 6,500,000 37,435
LLT Limited........................................................... 1,600,000 1,600,000 9,215
Local Initiatives Union............................................... 106,000 106,000 610
Louisiana Workers' Compensation Corporation........................... 450,000 450,000 2,592
Lydian Overseas Partners Master Fund.................................. 37,500,000 37,500,000 215,974
Lyxor Mastor Fund..................................................... 16,000,000 16,000,000 92,149
MAG Mutual Insurance Company.......................................... 400,000 400,000 2,304
Medical Liability Mutual Insurance Company............................ 30,000,000 30,000,000 172,779
Merrill Lynch Insurance Group......................................... 556,000 556,000 3,202
MFS Total Refurn Fund................................................. 3,300,000 3,300,000 19,006
Morgan Stanley & Company.............................................. 75,000,000 75,000,000 431,948
Nabisco Holdings...................................................... 62,000 62,000 357
NCMIC Insurance Company............................................... 600,000 600,000 3,456
New Orleans Firefighters Pension/Relief Fund.......................... 248,000 248,000 1,428
Occidental Petroleum Company.......................................... 418,000 418,000 2,407
OHIC Insurance Company................................................ 600,000 600,000 3,456
Ohio Bureau of Workers Compensation................................... 291,000 291,000 1,676
Post Authority of Allenheny County Retirement and Disability
Allowance Plan for the Employees Represented by Local 85 of the
Amalgamated Transit Unit............................................ 3,250,000 3,250,000 18,718
Quattro Global Capital LLC............................................ 2,000,000 2,000,000 11,519
Queen's Health Plan................................................... 85,000 85,000 490
Raytheon Master Pension Trust......................................... 854,000 854,000 4,918
RJR Reynolds 108,000 108,000 622
Salomon Brothers Asset Management Inc................................. 15,000,000 15,000,000 86,390
Salomon Brothers Asset Management Inc................................. 1,500,000 1,500,000 8,639
Salomon Brothers Asset Management Inc................................. 3,000,000 3,000,000 17,278
Salomon Brothers Asset Management Inc................................. 600,000 600,000 3,456
Salomon Brothers Asset Management Inc................................. 665,000 665,000 3,830
Salomon Brothers Asset Management Inc................................. 222,000 222,000 1,279
Salomon Brothers Asset Management Inc................................. 1,113,000 1,113,000 6,410
Salomon Brothers Asset Management Inc................................. 3,000,000 3,000,000 17,278
Shell Pension Trust................................................... 600,000 600,000 3,456
Southern Farm Bureau Life Insurance Company........................... 1,000,000 1,000,000 5,759
Spear, Leads & Kellogg................................................ 4,000,000 4,000,000 23,037
SPT................................................................... 2,600,000 2,600,000 14,974
State of Maryland Retirement Agency................................... 5,625,000 5,625,000 32,396
State of Oregon/SAIF Corporation...................................... 10,100,000 10,100,000 58,169
Sylvan IMA Ltd........................................................ 5,000,000 5,000,000 28,797
Taliac-Flex Legacy Total Return Strategy.............................. 14,000,000 14,000,000 80,630
Teachers Insurance and Annuity Association............................ 17,000,000 17,000,000 97,908
The Travelers Insurance Company - Life................................ 10,800,000 10,800,000 62,200
The Virginia Insurance Reciprocal..................................... 600,000 600,000 3,456
</TABLE>

7
<PAGE>

Total of all Ownership............................................ $630,788,000 $630,788,000 3,632,898
</TABLE>

8
<PAGE>

ABOUT OUR CAPITAL STOCK

General

Our authorized capital stock consists of 400,000,000 shares of common stock,
par value $0.10 per share; 4,500,000 shares of preferred stock, par value $1.00
per share; and one share of special voting stock, par value $0.10 per share. As
of December 1, 2000 there were 128,487,242 shares of common stock and one share
of special voting stock issued and outstanding. There are 1,500,000 shares of
6.49% cumulative preferred stock presently issued and outstanding.

In this prospectus, when we refer to "the securities," unless we indicate
otherwise, we are referring to the zero coupon convertible senior debentures
offered by this prospectus and the shares of Devon common stock issuable upon
conversion of the debentures, and the related rights.

Common Stock

Holders of Devon's common stock are entitled to receive dividends out of
legally available funds, when and if declared by our board of directors;
provided, however, that the board of directors may not pay, declare or set aside
for payment any dividends upon the common stock unless full cumulative dividends
on Devon's 6.49% series A preferred stock have been paid through the most
recently completed quarterly dividend period. Subject to the rights of the
holders of any outstanding shares of preferred stock, holders of shares of
common stock are entitled to cast one vote for each share held of record on all
matters submitted to a vote of stockholders. Holders of common stock are not
entitled to cumulative voting rights for the election of directors. Except
pursuant to Devon's rights agreement, the shares of common stock have no
preemptive, conversion or other rights to subscribe for or purchase any
securities of Devon. Upon liquidation or dissolution of Devon, the holders of
shares of common stock are entitled to share ratably in any of Devon's assets
that remain after payment or provision for payment to creditors and holders of
preferred stock. All outstanding shares of common stock are fully paid and
nonassessable.

Preferred Stock

The preferred stock may be issued in one or more series. The Devon board may
establish attributes of any series, including the designation and number of
shares in the series, dividend rates (cumulative or noncumulative), voting
rights, redemptions, conversion or preference rights, and any other rights and
qualifications, preferences and limitations or restrictions on shares of a
series. The issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of Devon without any vote or action
by the stockholders and may adversely affect the voting and other rights of the
holders of shares of Devon common stock. The specific terms of a particular
series of preferred stock will be described in a certificate of designations to
that series. The Devon board has also designated 1,000,000 shares of preferred
stock as series A junior participating preferred stock in connection with
Devon's rights agreement.

Devon has issued 1,500,000 shares of preferred stock as Devon 6.49%
cumulative preferred stock, series A. Dividends on the preferred stock are
cumulative from the date of original issue and are payable quarterly, in cash,
when declared by the Devon board of directors. The preferred stock is
redeemable at our option at any time on or after June 2, 2008, in whole or in
part, at a redemption price of $100 per share, plus accrued and unpaid dividends
to the redemption date.

Special Voting Stock

One share of special voting stock, par value $0.10 per share, is authorized
for issuance by Devon and is outstanding. Except as otherwise required by law
or Devon's restated certificate of incorporation, the special voting share will
possess a number of votes equal to the number of outstanding exchangeable shares
from time to time not owned by Devon or any entity controlled by Devon for the
election of directors and on all other matters submitted to a vote of Devon
stockholders. The holders of shares of Devon common stock and the holder of the
special voting share will vote together as a single class on all matters. In
the event of a Devon liquidation event, all outstanding exchangeable shares will
automatically be exchanged for shares of Devon common stock, and the holder of
the special voting share will not be entitled to receive any assets of Devon
available for distribution to its stockholders. The holder of the special
voting share will not be entitled to receive dividends. At such time as the
special voting share has no votes attached to it because there are no
exchangeable shares outstanding not owned by Devon or an

9
<PAGE>

entity controlled by Devon, the special voting share will be canceled. Our
wholly-owned subsidiary, Northstar Energy Corporation, has 3,989,255
exchangeable shares outstanding.

Anti-takeover and Other Provisions

Rights Agreement. Under our rights agreement, holders of shares of common
stock have one right for each share of common stock that they hold. The
certificates representing outstanding shares of common stock also evidence one
right for each share. Initially, the rights trade with the shares of common
stock. Holders of exchangeable shares will receive one right with each share of
common stock they receive upon exchange of their exchangeable shares. If events
generally associated with an unsolicited takeover attempt of Devon or
transactions involving a change of control occur (including an acquisition, or a
tender or exchange offer that would result in a bidder acquiring 15% or more of
Devon's voting securities), the rights will be distributed, will become
exercisable and will trade separately from the shares of common stock.

The rights will have anti-takeover effects. They will cause substantial
dilution to a person or group that attempts to acquire Devon in a manner that
causes the rights to become exercisable. We believe, however, that the rights
should not affect any prospective offeror willing to negotiate with Devon's
board of directors or interfere with any merger or other business combination
approved by our board. The board of directors may redeem the rights for $0.01
per right. The terms of the rights agreement may be amended by our board
without the consent of the Devon stockholders or the holders of the rights.

Classified Board. Our certificate of incorporation and by-laws contain
provisions for a staggered board of directors with only one-third of the board
standing for election each year. Stockholders may only remove directors for
cause. A staggered board makes it more difficult for stockholders to change the
majority of directors.

DESCRIPTION OF DEBENTURES

The debentures were issued under an indenture dated as of June 27, 2000,
between Devon and The Bank of New York, as trustee. We have summarized the
material terms and provisions of the indenture in this section. You should read
the indenture for additional information before you buy any of these debentures.
References in this section to Devon are solely to Devon Energy Corporation and
not to its subsidiaries.

General

The debentures are unsecured obligations of Devon, ranking equal in right of
payment with all other senior unsecured indebtedness of Devon. The debentures
are limited to $760,000,000 aggregate principal amount at maturity. The
debentures are scheduled to mature on June 27, 2020. The debentures were offered
at a substantial discount from their principal amount at maturity and therefore
have original issue discount for U.S. federal income tax purposes. See "Material
U.S. Federal Income Tax Considerations."

Devon will make no periodic cash payments of interest on the debentures,
except as described under "-Optional Conversion to Semiannual Coupon Debentures
Upon a Tax Event." The calculation of the accrual of original issue discount,
the difference between the issue price of a debenture and the principal amount
at maturity of a debenture, in the period during which a debenture remains
outstanding will be compounded semi-annually using a year composed of twelve 30-
day months. The accrual of original issue discount commenced on the issue date
of the debentures. Original issue discount or, if the debentures are converted
to semiannual coupon debentures following the occurrence of a tax event,
interest on the debentures, will cease to accrue on the debentures upon
conversion, repurchase or redemption under the terms and subject to the
conditions of the indenture.

The principal amount at maturity of each debenture is payable at the office
or agency of the paying agent, initially the trustee, in the Borough of
Manhattan, The City of New York, or any other office of the paying agent
maintained for this purpose. Debentures may be presented for conversion into
common stock at the office of the conversion agent. Debentures in definitive
form may be presented for exchange for other debentures or registration of
transfer at the office of the registrar. Initially, the trustee will be the
paying agent, the conversion agent and the registrar. Devon will not charge a
service charge for any registration, transfer or exchange of debentures.
However, Devon may require the holder to pay for any tax, assessment or other
governmental charge to be paid in connection with any registration, transfer or
exchange of debentures.

10
<PAGE>

Conversion of Debentures by Holders

Debenture holders may convert the debentures into shares of Devon's common
stock at any time prior to maturity. However, if Devon elects to redeem a
debenture, the holder may convert it only until the close of business on the
last trading day prior to a redemption date, unless Devon defaults in the
payment of the redemption price. If a holder has delivered a repurchase notice
exercising its option to require Devon to repurchase its debenture, the holder
may not convert the debenture unless it withdraws the notice in accordance with
the terms of the indenture. Similarly, if a holder exercises its option to
require Devon to repurchase its debenture upon a fundamental change, that
debenture may be converted only if the holder withdraws its election to exercise
its option in accordance with the terms of the indenture. A holder may convert
its debentures in part so long as the holder converts debentures of $1,000
principal amount at maturity or an integral multiple of $1,000.

The initial conversion rate is 5.7593 shares of common stock per $1,000
principal amount at maturity of debentures, subject to adjustment upon the
occurrence of the events described below. A holder entitled to a fractional
share of common stock will receive cash equal to the then current market value
of the fractional share.

On conversion of a debenture, a holder will not receive any cash payment
representing accrued original issue discount. Devon's delivery to the holder of
the fixed number of shares of common stock into which the debenture is
convertible, together with the cash payment, if any, in lieu of a fractional
share of common stock, will be deemed to satisfy Devon's obligation to pay the
principal amount at maturity of the debenture including the accrued original
issue discount attributable to the period from the issue date to the conversion
date.

In lieu of delivering shares of common stock upon notice of conversion of any
debentures, for all or any portion of such debentures, Devon may elect to pay
holders surrendering debentures an amount in cash per debenture equal to the
last reported sale price of a share of its common stock on the trading day
immediately prior to the applicable conversion date, multiplied by the
conversion rate in effect on that trading day, subject to adjustment upon the
occurrence of the events described below. Devon will inform the holders through
the trustee no later than two business days following the conversion date of its
election to deliver shares of common stock or to pay cash in lieu of delivery of
the shares, unless Devon has already informed holders of its election in
connection with our optional redemption as described under "-Redemption of
Debentures at Devon's Option." If Devon elects to deliver all or a portion of
such payment in shares of common stock, the shares will be delivered through the
trustee no later than the seventh business day following the conversion date. If
Devon elects to pay all or a portion of such payment in cash, the payment will
be made to holders surrendering debentures no later than the seventh business
day following the applicable conversion date. If an event of default, as
described under the caption entitled "-Events of Default; Notice and Waiver"
below, other than a default in a cash payment upon conversion of the debentures,
has occurred or is continuing, Devon may not pay cash upon conversion of any
debentures, other than cash in lieu of fractional shares.

Pursuant to the indenture, the date on which all of the requirements for
delivery of the debenture for conversion have been satisfied is the conversion
date.

The conversion rate is subject to adjustment under formulae as set forth in the
indenture in certain events, including:

(1) the issuance of Devon common stock as a dividend or distribution on the
common stock;

(2) certain subdivisions and combinations of the common stock;

(3) the issuance to all holders of common stock of certain rights or
warrants to purchase common stock at less than the current market value;

(4) the distribution to all holders of common stock of capital stock, other
than Devon common stock, or evidences of Devon's indebtedness or of assets. This
includes securities other than common stock, but excludes those rights,
warrants, dividends and distributions referred to in clauses (1) and (3) above
or paid in cash;

(5) distributions consisting of cash, excluding any quarterly cash dividend
on the common stock to the extent that the aggregate cash dividend per share of
common stock in any quarter does not exceed the greater of:

. the amount per share of common stock of the next preceding quarterly cash
dividend on the common stock to the extent that the preceding quarterly
dividend did not require an adjustment of the conversion rate pursuant to
this clause, as adjusted to reflect subdivisions or combinations of the
common stock; or

11
<PAGE>

. 3.75% of the average of the last reported sales price of the common stock
during the ten trading days immediately prior to the date of declaration of
the dividend, and excluding any dividend or distribution in connection with
the liquidation, dissolution or winding up of Devon; and

(6) payment in respect of a tender offer or exchange offer by Devon or any
subsidiary of Devon for the common stock to the extent that the per share
consideration exceeds 110% of the current market price per share of common stock
on the trading day next succeeding the last date on which tenders or exchanges
may be made.

If an adjustment is required to be made as set forth in clause (5) above as a
result of a distribution that is a quarterly dividend, the adjustment would be
based upon the amount by which the distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant to clause (5) above.
If an adjustment is required to be made as set forth in clause (5) above as a
result of a distribution that is not a quarterly dividend, the adjustment would
be based upon the full amount of the distribution.

No adjustment in the conversion rate will be required unless the adjustment
would require a change of at least 1% in the rate then in effect; provided that
any adjustment that would otherwise be required to be made will be carried
forward and taken into account in any subsequent adjustment.

Except as stated above, the conversion rate will not be adjusted for the
issuance of common stock or any securities convertible into or exchangeable for
common stock or carrying the right to purchase any of the foregoing.

In the case of either:

(1) any reclassification of the common stock, or

(2) a consolidation or merger involving Devon or a conveyance, transfer or
lease to another entity of the property and assets of Devon substantially as
an entirety,

if holders of common stock would be entitled to receive any form of
consideration with respect to or in exchange for common stock, the holders of
the debentures then outstanding would be entitled to convert their debentures
into the kind and amount of consideration which they would have owned or been
entitled to receive had their debentures been converted immediately prior to the
applicable transaction. This assumes that the debenture holder would not have
exercised any rights of election as to the consideration receivable in
connection with the transaction.

In the event of a taxable distribution to holders of common stock or in
certain other circumstances requiring an adjustment to the conversion rate, the
debenture holder may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend. In certain other
circumstances, the absence of an adjustment may result in a taxable dividend to
the holders of common stock. See "Material U.S. Federal Income Tax
Considerations."

To the extent permitted by law, Devon, from time to time, may increase the
conversion rate by any amount for any period of at least 20 business days, if
the board of directors has made a determination that the increase would be in
Devon's best interests. Subsequent to such increase, Devon may, from time to
time, lower the conversion rate to any rate that is not lower than the
conversion rate that would have been applicable had such increase not occurred,
if the board of directors has determined that the decrease would be in Devon's
best interests. For purposes of this paragraph, a determination by the board of
directors will be conclusive. If Devon increases or decreases the conversion
rate, Devon will give at least seven days' notice of the increase or decrease.
Devon may, at its option, make increases in the conversion rate, in addition to
those described above, as the board of directors deems advisable to avoid or
diminish any income tax to holders of common stock resulting from any dividend
or distribution of stock, or rights to acquire stock, or from any event treated
as a dividend distribution or a right to acquire stock for income tax purposes.
See "Material U.S. Federal Income Tax Considerations."

In the event Devon exercises its option to have interest in lieu of original
issue discount accrue on a debenture following a tax event, the holder will be
entitled on conversion to receive the same number of shares of common stock that
the holder would have received if Devon had not exercised its option. If Devon
exercises its option, debentures surrendered for conversion during the period
from the close of business on the record date next preceding the next interest
payment date to the opening of business on the next interest payment date,
except debentures to be redeemed on the next interest payment date, must also be
accompanied by an amount equal to the accrued and unpaid interest on the
debenture that the registered holder is to receive. Except where debentures
surrendered for conversion must be accompanied by the payment described in this
paragraph, no interest on converted debentures

12
<PAGE>

will be payable by Devon on any interest payment date subsequent to the date of
conversion. See "-Optional Conversion to Semiannual Coupon Debentures Upon a Tax
Event."

Redemption of Debentures at Devon's Option

Devon may not redeem the debentures prior to June 27, 2005. Beginning on June
27, 2005, Devon may redeem the debentures for cash in whole or in part at any
time, by giving by mail to debenture holders not less than 20 days' nor more
than 60 days' notice of redemption prior to the redemption date for an amount in
cash equal to 100% of the sum of (1) the debenture issue price and (2) accrued
original issue discount through the date of redemption. The notice of redemption
will inform the holders of Devon's election to deliver shares of common stock or
to pay cash in lieu of delivery of the shares with respect to any debentures
converted prior to the redemption date. The debentures will be redeemable in
multiples of $1,000 principal amount at maturity. No sinking fund is provided
for the debentures.

The table below shows redemption prices of debentures per $1,000 principal
amount at maturity, at June 27, 2005, and at each June 27 thereafter prior to
maturity and at maturity on June 27, 2020, which prices reflect the accrued
original issue discount calculated to each date. The redemption price of a
debenture redeemed between any two dates below would include an additional
amount reflecting the additional original issue discount accrued since the date
in the table preceding the actual redemption date.

<TABLE>
(1) (2) (3)
Debenture Accrued Original Redemption
Issue Issue Discount Price (1) + (2)
Price at 3.875% ------------------
----- ---------
<S> <C> <C> <C>
June 27, 2005...................................... $464.13 $ 98.19 $ 562.32
June 27, 2006...................................... 464.13 120.19 584.32
June 27, 2007...................................... 464.13 143.05 607.18
June 27, 2008...................................... 464.13 166.81 630.94
June 27, 2009...................................... 464.13 191.49 655.62
June 27, 2010...................................... 464.13 217.14 681.27
June 27, 2011...................................... 464.13 243.80 707.93
June 27, 2012...................................... 464.13 271.49 735.62
June 27, 2013...................................... 464.13 300.27 764.40
June 27, 2014...................................... 464.13 330.18 794.31
June 27, 2015...................................... 464.13 361.26 825.39
June 27, 2016...................................... 464.13 393.56 857.69
June 27, 2017...................................... 464.13 427.11 891.24
June 27, 2018...................................... 464.13 461.98 926.11
June 27, 2019...................................... 464.13 498.22 962.35
June 27, 2020...................................... 464.13 535.87 1,000.00
</TABLE>

If Devon elects to convert the debentures to semiannual coupon debentures
following a tax event, the debentures will be redeemable at the restated
principal amount, as defined in the glossary, plus accrued and unpaid interest,
if any, to the applicable redemption date.

If less than all of the outstanding debentures held in certificated form are
to be redeemed, the trustee will select the debentures held in certificated form
to be redeemed in principal amounts at maturity of $1,000 or integral multiples
thereof by lot, pro rata or by another method the trustee considers fair and
appropriate. If a portion of a holder's certificated debentures is selected for
partial redemption and the holder converts a portion of its debentures, the
converted portion will be deemed to be the portion selected for redemption.
Debentures registered in the name of DTC or its nominee will be redeemed as
described under the caption entitled "-Form, Denomination and Registration-
Global Debenture; Book-Entry Form."

Repurchase at the Option of the Holder Upon a Fundamental Change

If a fundamental change occurs at any time prior to June 27, 2020 each holder
will have the right, at the holder's option, to require Devon to repurchase any
or all of the holder's debentures. The debentures may be repurchased in
multiples of $1,000 principal amount at maturity. Devon will repurchase the
debentures at a price

13
<PAGE>

equal to the issue price plus accrued original issue discount to the repurchase
date. See the table under "-Redemption of Debentures at Devon's Option." If,
prior to the repurchase date, Devon elects to convert the debentures to
semiannual coupon debentures following a tax event, the purchase price will be
equal to the restated principal amount plus accrued and unpaid interest to the
repurchase date. See the discussion under the caption entitled "-Optional
Conversion to Semiannual Coupon Debentures Upon a Tax Event."

On or before the 30th day after the occurrence of a fundamental change, Devon
will mail to all holders of record of the debentures a notice of the occurrence
of the fundamental change and of the resulting repurchase right. Devon will also
deliver to the trustee a copy of the notice. To exercise the repurchase right,
holders of debentures must deliver, on or before the 60th day after the date of
Devon's notice of a fundamental change, the debentures to be repurchased, duly
endorsed for transfer, together with the form entitled "Option to Elect
Repurchase Upon a Fundamental Change" on the reverse side of the debenture duly
completed, to Devon, or an agent designated by Devon.

A fundamental change occurs if:

. we consolidate or merge with or into another person other than a
subsidiary,

. we sell, convey, transfer or lease our properties and assets substantially
as an entirety to any person other than a subsidiary, or

. any person, other than a subsidiary, consolidates with or merges with or
into Devon, and our outstanding common stock is reclassified into, exchanged for
or converted into the right to receive any other property or security, provided
that none of these circumstances will be a fundamental change if at least 50% of
the aggregate fair market value as determined by Devon's board of directors of
such other property and securities, other than cash payments for fractional
shares, consists of shares of voting common stock of the surviving person that
are, or upon issuance will be, traded on the London, Toronto or another
internationally recognized securities exchange or a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States.

Devon will comply with the provisions of Rule 13e-4 and any other tender
offer rules under the Securities Exchange Act which may then be applicable in
connection with the repurchase of the debentures in the event of a fundamental
change.

The repurchase rights of the debenture holders could discourage a potential
acquirer of Devon. The fundamental change repurchase feature, however, is not
the result of management's knowledge of any specific effort to obtain control of
Devon by any means or part of a plan by management to adopt a series of anti-
takeover provisions.

The term fundamental change is limited to specified transactions and may not
include other events that might adversely affect Devon's financial condition. In
addition, holders may not be protected by the requirement that Devon offers to
repurchase the debentures upon a fundamental change in the event of a highly
leveraged transaction, reorganization, merger or similar transaction involving
Devon.

No debentures may be repurchased at the option of holders upon a fundamental
change if there has occurred and is continuing an event of default described
under "-Events of Default; Notice and Waiver" below. However, debentures may be
repurchased if the event of default is in the payment of the fundamental change
purchase price with respect to the debentures.

Repurchase of Debentures at the Option of the Holder

On June 27, 2005, June 27, 2010 and June 27, 2015, Devon will be obligated to
repurchase, at the option of the debenture holders, all or any portion of the
outstanding debentures. The purchase price payable in respect of a debenture
will be equal to the issue price plus accrued original issue discount to the
repurchase date. If, prior to the repurchase date, Devon elects to convert the
debentures to semiannual coupon debentures following a tax event, the purchase
price will be equal to the restated principal amount plus accrued and unpaid
interest to the repurchase date. See the discussion under the caption entitled
"-Optional Conversion to Semiannual Coupon Debentures Upon a Tax Event."

14
<PAGE>

The table below shows the purchase prices of a debenture as of the specified
repurchase dates. Devon may elect to pay the purchase price payable, as of any
repurchase date, in cash or common stock or any combination of cash or common
stock.

Repurchase Date Price
--------------- -----

June 27, 2005................................. $562.32
June 27, 2010................................. $681.27
June 27, 2015................................. $825.39

Devon will have the option to pay the purchase price, in whole or in part, in
common stock. If Devon elects to pay the purchase price, in whole or in part, in
common stock, the number of shares to be delivered in respect of the portion of
the purchase price to be paid in common stock will be equal to the portion of
the purchase price divided by the market price of the common stock. However, no
fractional shares of common stock will be delivered upon any repurchase by Devon
of debentures through the delivery of common stock in payment, in whole or in
part, of the purchase price. Instead, Devon will pay cash based on the market
price for all fractional shares of common stock.

The holder's right to require Devon to repurchase debentures is exercisable
by delivery during the repurchase period of a written repurchase notice by the
holder to the office of the paying agent. The paying agent will initially be the
trustee. The repurchase period will begin at any time from the opening of
business on the date that is 20 business days prior to the applicable repurchase
date until the close of business on the applicable repurchase date. If the
repurchase notice is withdrawn during the period, Devon will not be obligated to
repurchase the debentures. Devon's repurchase obligation is subject to
additional conditions set forth in the indenture.

The repurchase notice will state:

(1) the certificate numbers of the debentures to be delivered by the holder
for repurchase by Devon;

(2) the portion of the principal amount at maturity of debentures to be
repurchased, which must be $1,000 or in multiples of $1,000;

(3) that the debentures are to be repurchased by Devon pursuant to the
applicable provisions of the debentures and the indenture; and

(4) in the event that Devon elects to pay the purchase price in common stock
but does not end up satisfying the conditions to payment and ultimately has to
pay the holder in cash, whether the holder would choose:

. to withdraw the repurchase notice as to some or all of the debentures
to which it relates; or

. to receive cash in respect of the entire purchase price for all
debentures subject to the repurchase notice.

If the holder fails to indicate the holder's choice with respect to the
election described in clause (4) above, the holder will be deemed to have
elected to receive cash for the entire purchase price for all debentures subject
to the repurchase notice. For a discussion of the tax treatment of a holder
receiving cash or common stock pursuant to its election to tender its debentures
to Devon on a repurchase date, see the discussion under "Material U.S. Federal
Income Tax Considerations."

Any repurchase notice may be withdrawn by the holder by a written notice of
withdrawal delivered to the paying agent prior to the close of business on the
repurchase date. The notice of withdrawal will state the principal amount at
maturity and the certificate numbers of the debentures as to which the
withdrawal notice relates and the principal amount at maturity, if any, which
remains subject to the repurchase notice.

Devon will give notice not less than 20 business days prior to the repurchase
date to all holders at their addresses shown in the register of the registrar.
Devon will also give notice to beneficial owners as required by applicable law.
This notice will state, among other things:

. whether Devon will pay the purchase price of the debentures in cash or
common stock, or any combination of cash or common stock, in which case
the notice will specify the percentage of each; and

15
<PAGE>

. if Devon elects to pay in common stock, in whole or in part, the method of
calculating the market price of the common stock.

Upon determination of the actual number of shares of common stock in
accordance with the foregoing provisions, Devon will notify the securities
exchange(s) on which Devon common stock is then listed and disseminate such
determination by news release in accordance with Devon's customary practices.

Devon's right to repurchase debentures with common stock is subject to the
satisfaction of various conditions, including:

. the registration of the common stock under the Securities Act, if
required, and

. compliance with other applicable federal and state securities laws, if
any.

If the conditions are not satisfied by a repurchase date, Devon will pay the
purchase price of the debentures to be purchased on the repurchase date entirely
in cash. Devon will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Securities Exchange Act which may then be
applicable in connection with any offer by Devon to repurchase debentures at the
option of holders.

Payment of the repurchase price for a debenture for which a repurchase notice
has been delivered and not withdrawn is conditioned upon book-entry transfer or
delivery of the debenture, together with necessary endorsements, to the paying
agent at its office in the Borough of Manhattan, The City of New York, or any
other office of the paying agent, at any time after delivery of the repurchase
notice. Payment of the purchase price for the debenture will be made promptly
following the later of the repurchase date or the time of book-entry transfer or
delivery of the debenture. If the paying agent holds money or securities
sufficient to pay the purchase price of the debenture on the business day
following the repurchase date, then, on and after the date, the debenture will
cease to be outstanding and original issue discount on the debenture or, if the
debentures are converted to semiannual coupon debentures following the
occurrence of a tax event, interest on the debentures, will cease to accrue.
This will be the case whether or not book-entry transfer of the debenture is
made or the debenture is delivered to the paying agent, and all other rights of
the holder will terminate, other than the right to receive the purchase price
upon delivery of the debenture.

No debentures may be repurchased at the option of the holder for cash if
there has occurred, prior to, on or after the giving by the holders of the
debentures of the required repurchase notice, and is continuing an event of
default described under "-Events of Default; Notice and Waiver" below, other
than a default in the payment of the purchase price with respect to the
debentures.

Even though Devon becomes obligated to repurchase any outstanding debenture
on a repurchase date, Devon may not have sufficient funds to pay the purchase
price on that repurchase date. If this were to occur, Devon could be required to
issue shares of common stock to pay the purchase price at valuations based on
then prevailing market prices for all the debentures tendered by the holders.

Mergers and Sales of Assets by Devon

Devon may not consolidate with or merge into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to
another person, unless, among other items:

. the successor person assumes all of Devon's obligations under the
debentures and the indenture; and

. Devon or the successor person will not immediately thereafter be in
default under the indenture.

Upon the assumption of Devon's obligations by a successor as described above,
subject to certain exceptions, Devon will be discharged from all obligations
under the debentures and the indenture. If these transactions constitute a
fundamental change, each holder may require Devon to repurchase their debentures
as described under "-Repurchase at Option of the Holder Upon a Fundamental
Change."

16
<PAGE>

Optional Conversion to Semiannual Coupon Debentures Upon a Tax Event

From and after the date of the occurrence of a tax event, Devon may elect to
have interest in lieu of future original interest discount accrue at 3.875% per
annum on a principal amount per debenture equal to the issue price plus original
issue discount accrued to the date immediately prior to the later of:

. the tax event date; or

. the date on which Devon makes its election,

which is referred to as the option exercise date. The resulting amount would be
the restated principal amount. Interest would accrue from the option exercise
date and will be payable semiannually on the interest payment date, which would
be June 27 and December 27 of each year. The interest would be payable to
holders of record of the debentures at the close of business on the regular
record date, immediately preceding the interest payment date.

Interest would be computed on the basis of a 360-day year comprised of
twelve 30-day months. Interest would accrue from the most recent date to which
interest had been paid or, if no interest had been paid, from the option
exercise date.

Events of Default; Notice and Waiver

The indenture provides that, if an event of default specified in the
indenture has happened and is continuing, either the trustee or the holders of
not less than 25% in aggregate principal amount at maturity of the debentures
then outstanding may declare due and payable:

. the issue price of the debentures or, if the debentures are converted to
semiannual coupon debentures following the occurrence of a tax event, the
restated principal amount; plus

. the original issue discount on the debentures or, if the debentures are
converted to semiannual coupon debentures following the occurrence of a
tax event, interest on the debentures, in each case accrued and unpaid to
the date of the declaration.

In the case of certain events of bankruptcy or insolvency, the issue price
plus the original issue discount on the debentures or, if the debentures are
converted to semiannual coupon debentures following the occurrence of a tax
event, the restated principal amount plus interest on the debentures, accrued
and unpaid to the occurrence of the event will automatically become and be
immediately due and payable in each case.

Under certain circumstances, the holders of a majority in aggregate principal
amount at maturity of the outstanding debentures may rescind any acceleration
with respect to the debentures and its consequences.

Interest will accrue at the rate of 3.875% per annum and be payable on demand
upon a default in the payment of any redemption price or purchase price and,
after acceleration, of the issue price and accrued original issue discount or,
if the debentures are converted to semiannual coupon debentures following the
occurrence of a tax event, interest, to the extent that payment of the interest
is legally enforceable. Original issue discount or, if the debentures are
converted to semiannual coupon debentures following the occurrence of a tax
event, interest on the debentures, will cease to accrue after declaration of
acceleration.

Under the indenture, events of default are defined as:

(1) default in payment of:

. principal, including issue price and accrued original issue discount,
when due, upon maturity, redemption or on a repurchase date,

. if the debentures are converted to semiannual coupon debentures
following the occurrence of a tax event, accrued and unpaid interest
on the debentures, if the default continues for 30 days past the date
when due, or

. liquidated damages owing, if the default continues for 30 days;

17
<PAGE>

(2) Devon's failure for 20 days to deliver shares of its common stock,
including cash in lieu of fractional shares, or, if it elects, cash in lieu of
shares of its common stock, when common stock or cash is required to be
delivered following the conversion of a debenture;

(3) Devon's failure to comply with any of its other agreements in the
debentures or the indenture upon the receipt by Devon of notice of the default
by the trustee or by holders of not less than 25% in aggregate principal amount
at maturity of the debentures then outstanding and Devon's failure to cure the
default within 90 days after receipt by Devon of the notice; or

(4) certain events of bankruptcy or insolvency.

The trustee will give notice to holders of the debentures of any continuing
default known to the trustee within 90 days after the trustee becomes aware of
such default provided that, except in the case of a default as described in
clause (1) above, the trustee may withhold notice if it determines in good faith
that withholding the notice is in the interests of the holders.

The holders of a majority in aggregate principal amount at maturity of the
outstanding debentures may direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising any trust or
power conferred on the trustee; provided that the direction may not conflict
with any law or the indenture and will be subject to certain other limitations.
Before proceeding to exercise any right or power under the indenture at the
direction of the holders, the trustee will be entitled to receive from the
holders reasonable security or indemnity satisfactory to it against the costs,
expenses and liabilities incurred by it in complying with the direction. No
debenture holder will have any right to pursue any remedy with respect to the
indenture or the debentures unless:

. the holder has previously given Devon and the trustee written notice of a
continuing event of default;

. the holders of at least 25% in aggregate principal amount at maturity of
the outstanding debentures have made a written request to the trustee to
pursue the remedy;

. the holder or holders have offered to the trustee reasonable indemnity
satisfactory to the trustee;

. the holders of a majority in aggregate principal amount at maturity of the
outstanding debentures have not given the trustee a direction inconsistent
with the request within 60 days after receipt of the request; and

. the trustee has failed to comply with the request within the 60-day
period. However, the right of any holder:

. to receive payments of principal including issue price and accrued
original. issue discount, liquidated damages owing or interest, and any
interest in respect of a default in the payment of any amounts due in
respect of a debenture, on or after the due date of the debenture;

. to institute suit for the enforcement of any payments or conversion; or

. to convert debentures

will not be impaired or adversely affected without the holder's consent.

The holders of at least a majority in aggregate principal amount at maturity
of the outstanding debentures may waive an existing default and its
consequences, other than:

. any default in any payment on the debentures;

. any default with respect to the conversion rights of the debentures; or

. any default in respect of certain covenants or provisions in the indenture
which may not be modified without the consent of the holder of each
debenture as described under the caption entitled "-Modification" below.

Devon will be required to furnish a statement to the trustee annually as to
any default by Devon in the performance and observance of its obligations under
the indenture.

18
<PAGE>

Modification

Modification and amendment of the indenture or the debentures may be effected
by Devon and the trustee with the consent of the holders of not less than a
majority in aggregate principal amount at maturity of the debentures then
outstanding. Notwithstanding the foregoing, no amendment may, without the
consent of each holder affected:

. reduce the principal amount at maturity, issue price, redemption price or
purchase price, or extend the stated maturity of any debenture or alter
the manner or rate of accrual of original issue discount or interest, or
make any debenture payable in money or securities other than that stated
in the debenture;

. make any change to the principal amount at maturity of debentures whose
holders must consent to an amendment or any waiver under the indenture or
modify the indenture provisions relating to amendments or waivers with
respect to the payment of principal at maturity;

. make any change that adversely affects the right to convert any debenture
or the right to require Devon to repurchase a debenture or the right to
require Devon to repurchase a debenture upon a fundamental change; or

. impair the right to institute suit for the enforcement of any payment with
respect to, or conversion of, the debentures.

The indenture also provides for certain modifications of its terms without
the consent of the holders.

Form, Denomination and Registration

The debentures are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount at maturity and multiples of $1,000.
Devon may not reissue a debenture that has matured or been converted, redeemed,
repurchased by Devon at the option of a holder or otherwise canceled, except for
the transfer, exchange or replacement of the debenture.

Global Debenture; Book-Entry Form. We issued the debentures in the form of
two global debentures. When we reference a global debenture, we are talking
about both global debentures that were used. The global debenture was deposited
with, or on behalf of, The Depository Trust Company and registered in the name
of Cede & Co., DTC's nominee. Except as set forth below, the global debenture
may be transferred, in whole or in part, only to another nominee of DTC or to a
successor of DTC or its nominee.

Purchasers of the debentures may hold their interests in the global debenture
directly through DTC, if the holder is a participant in DTC, or indirectly
through organizations which are participants in DTC. Transfers between
participants will be effected in the ordinary way in accordance with DTC rules
and will be settled in clearing house funds. The laws of some states require
that certain persons take physical delivery of securities in definitive form. As
a result, the ability to transfer beneficial interests in the global debenture
to those persons may be limited.

Persons who are not DTC participants may beneficially own interests in the
global debenture held by DTC only through participants, or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a participant either directly or
indirectly. So long as Cede & Co., as the nominee of DTC, is the registered
owner of the global debenture, Cede & Co. for all purposes will be considered
the sole holder of the global debenture. Except as provided below, owners of
beneficial interests in the global debenture will not be entitled to have
certificates registered in their names. These owners will not receive or be
entitled to receive physical delivery of certificates in definitive registered
form and will not be considered the holders of the global debenture.

We will pay the principal amount at maturity or the redemption price or the
purchase price of the global debenture to Cede & Co., the nominee for DTC, as
the registered owner of the global debenture. We will make payments by wire
transfer of immediately available funds on the payment date. Devon, the trustee
and any paying agent will have no responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in the global debenture. In addition, Devon, the trustee and any
paying agent will have no responsibility or liability for maintaining,
supervising or reviewing any records relating to any beneficial ownership
interests.

19
<PAGE>

DTC has informed us that, with respect to any payment of principal amount at
maturity or the redemption price or the purchase price of the global debenture,
DTC's practice is to credit participants' accounts on the payment date. These
payments will be in amounts proportionate to the participants' respective
beneficial interests in the principal amount represented by the global debenture
as shown on the records of DTC. DTC will not credit participants' accounts if
DTC has reason to believe that it will not receive payment on the applicable
payment date. Payments by participants to owners of beneficial interests in the
principal amount represented by the global debenture held through participants
will be the responsibility of the participants. This is currently the case with
securities held for the accounts of customers registered in street name.

Because DTC can only act on behalf of participants, who in turn act on behalf
of indirect participants and certain banks, the ability of a person having a
beneficial interest in the principal amount represented by the global debenture
to pledge its interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of its interest, may be affected by
the lack of physical certificates evidencing its interest.

Devon, the trustee and any registrar, paying agent or conversion agent under
the indenture, will have no responsibility for the performance by DTC or its
participants or indirect participants of their operations. DTC has advised Devon
that it will take any action permitted to be taken by a debenture holder,
including, without limitation, the presentation of debentures for exchange as
described below, only at the direction of one or more participants to whose DTC
account interests in the global debenture are credited. In addition, DTC will
only take action in respect of the principal amount of the debentures
represented by the global debenture as to which a participant or participants
has or have given direction.

DTC has further advised Devon that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a clearing corporation within the meaning of the Uniform
Commercial Code and a clearing agency registered pursuant to the provisions of
Section 17A of the Securities Exchange Act. DTC was created to hold securities
for its participants and to facilitate the clearance and settlement of
securities transactions between participants through electronic book-entry
changes to the accounts of its participants. This practice eliminates the need
for physical movement of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and may include
certain other organizations. Some of the participants, or their representatives,
together with other entities, own DTC. Indirect access to the DTC system is
available to others such as banks, brokers, dealers and trust companies that
clear through, or maintain a custodial relationship with, a participant, either
directly or indirectly.

Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global debenture among participants, it is under
no obligation to perform or continue to perform these procedures, and these
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed by
Devon within 90 days, Devon will cause the debentures to be issued in definitive
registered form in exchange for the global debenture.

Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants and indirect participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time. Redemption
notices will be sent to Cede & Co., as nominee of DTC. If less than all of the
debentures are being redeemed, DTC will reduce the amount of interest of each
participant in the debentures in accordance with its procedures.

Certificated Debentures. Holders of debentures may not request certificated
debentures and certificated debentures will not be issued, except at the option
of Devon or in exchange for debentures represented by the global debenture if no
successor depositary is appointed by Devon as set forth above under "-Global
Debenture, Book-Entry Form."

Taxation of Debentures

See the description under "Material U.S. Federal Income Tax Considerations"
for a discussion of certain tax considerations relevant to a holder of
debentures.

20
<PAGE>

Registration Rights

We have filed a shelf registration statement with the Securities and Exchange
Commission covering resales of the debentures and the common stock issuable on
conversion of the debentures. We will use reasonable best efforts to keep the
shelf registration statement until the earlier of:

. the sale, pursuant to the resale registration statement, of all the
securities registered thereunder;

. the expiration of the holding period applicable to these securities held
by persons that are not affiliates of Devon under Rule 144(k) under the
Securities Act of 1933, or any successor provision, subject to specified
permitted exceptions;

. June 27, 2002; and

. the date on which all of the debentures and common stock issuable upon the
conversion of the debentures cease to be outstanding.

Devon has the right to suspend use of the shelf registration statement and
this prospectus during specified periods of time relating to pending corporate
developments and public filings with the SEC and similar events. In order to
suspend this prospectus, Devon must notify the selling security holders within
two business days after our board of directors determines to suspend this
prospectus. The suspension of this prospectus may last up to 60 consecutive
days in a 90-day period for a total of up to 90 days in any year.

If the suspension of this prospectus exceeds this timeframe, Devon is
required to pay liquidated damages equal to 0.5% per year on (1) the total
principal amount on the debentures, and (2) the number of common shares
underlying the debentures outstanding multiplied by the conversion rate.

Information Concerning the Trustee

Devon has appointed The Bank of New York as trustee under the indenture, and
as paying agent, conversion agent, registrar and custodian with regard to the
debentures.

PLAN OF DISTRIBUTION

We are registering the common stock and debentures offered by this prospectus
for the selling security holders. These securities may be sold to purchasers
from time to time directly by the selling security holders identified in this
prospectus or, alternatively, through underwriters, broker-dealers, or agents.
In addition, if a security holder has purchased debentures in a sale
contemplated by this prospectus, we may issue the common stock issuable upon
conversion of such debentures directly to such security holder pursuant to this
prospectus. The selling security holders may sell the securities in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of the sale or in negotiated
transactions. These sales may be effected in transactions, which may involve
crosses or block transactions:

. on any national securities exchange or quotation service on which these
securities may be listed or quoted at the time of sale;

. in the over-the-counter market;

. in transactions otherwise than on an exchange or over-the-counter market;
and

. through the writing of options.

The participating selling security holders and any underwriters, brokers or
dealers engaged in sales of the securities and any underwriters, brokers or
dealers engaged by them may be deemed underwriters, and any profits on sales of
the securities by them and any discounts, commissions or concessions received by
any selling security holder or underwriter, broker or dealer may be deemed to be
underwriting discounts or commissions under the Securities Act. To our
knowledge, there are no arrangements or agreements with any underwriters,
brokers or dealers regarding the sale of the securities prior to the effective
date of this prospectus.

21
<PAGE>

At any time a particular offer of the securities is made, a prospectus and a
prospectus or supplement, if required, will be distributed which will set forth
the aggregate amount and type of securities being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
any discounts, commissions and other items constituting compensation from the
seller security holders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers. Any supplement and, if necessary, a post-
effective amendment to the registration statement of which this prospectus is a
part, will be filed with the Securities and Exchange Commission to reflect the
disclosure of additional information with respect to the distribution of the
securities. In addition, the securities covered by this prospectus may be sold
in private transactions or under Rule 144 rather than under this prospectus or a
supplement.

We have agreed to indemnify the selling security holders against certain
liabilities relating to the sale of the securities under the Securities Act.
These agreements provide for rights of contribution if indemnification is not
available. We have agreed to pay the fees and expenses of registering the
common stock and debentures offered by this prospectus, including the reasonable
fees and disbursements of persons retained by us; however, the selling security
holders will pay any underwriting discounts or any brokerage commissions.

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

The following is a general discussion of material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of the
debentures and common stock by U.S. holders, and certain material U.S. federal
income, withholding and estate tax considerations relating to the purchase,
ownership and disposition of the debentures and common stock by non-U.S.
holders. The discussion is a summary only and does not purport to be a complete
analysis of all the potential tax considerations relating to the purchase,
ownership and disposition of the debentures and common stock. We have based this
summary on the U.S. federal income tax laws, regulations, rulings and judicial
decisions as of the date of this prospectus. These laws may change, possibly
retroactively, thereby changing the federal tax consequences discussed herein.
There can be no assurance that the IRS will not challenge one or more of the tax
consequences described herein, and we have not obtained, nor do we intend to
obtain, a ruling from the IRS or an opinion of counsel with respect to the U.S.
federal tax consequences of purchasing, owning or disposing of debentures and
common stock.

The discussion does not address all tax consequences that may be important to
you in light of your specific circumstances. For instance, this discussion does
not address the alternative minimum tax provisions of the tax code, or special
rules applicable to certain categories of investors, such as certain financial
institutions, partnerships or other flow-through entities, insurance companies,
tax-exempt organizations, dealers in securities, or persons who hold debentures
or common stock as part of a hedge, conversion or constructive sale transaction,
straddle or other risk reduction transaction, that may be subject to special
rules. This discussion is limited to any person who holds the debentures and any
common stock into which the debentures are converted as capital assets within
the meaning of Section 1221 of the Internal Revenue Code. This discussion also
does not address the tax consequences arising under the laws of any foreign,
state or local jurisdiction or U.S. estate and gift tax law as applicable to
U.S. holders.

Persons considering the purchase of a debenture should consult their own tax
advisors as to the particular tax consequences to them of acquiring, holding,
converting or otherwise disposing of the debentures and common stock, including
the effect and applicability of state, local or foreign tax laws and the
potential for a Tax Event to occur.

U.S. Holders

As used in this discussion, the term U.S. holder means a holder of a
debenture or common stock that is:

(1) for United States federal income tax purposes, a citizen or resident of
the United States;

(2) a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any state or the District of Columbia;

(3) an estate, the income of which is subject to United States federal
income taxation regardless of its source; or

(4) a trust, the administration of which is subject to the primary
supervision of a court within the United States and which has one or more United
States persons with authority to control all substantial decisions, or if the
trust was in existence on August 20, 1996, and has properly elected to continue
to be treated as a United States trust.

A non-U.S. holder is any holder of debentures or common stock other than a
U.S. holder.

22
<PAGE>

Original Issue Discount or Interest on the Debentures. The debentures were
issued at a substantial discount from their stated redemption price at maturity.
For U.S. federal income tax purposes, the excess of the stated redemption price
at maturity of each debenture over its issue price constitutes original issue
discount. The issue price of the debentures is $464.13 per $1,000 principal
amount at maturity. Thus, the original issue discount of the debentures equals
$535.87 per $1,000 principal amount at maturity.

A U.S. holder of a debenture will be required to include original issue
discount in income as ordinary interest income as it accrues before receipt of
the cash attributable to such income, regardless of such U.S. holder's regular
method of accounting for U.S. federal income tax purposes. A U.S. holder of a
debenture must include in gross income for federal income tax purposes the sum
of the daily portions of original issue discount with respect to the debenture
for each day during the taxable year or portion of a taxable year on which such
U.S. holder holds the debenture. The daily portion is determined by allocating
to each day of each accrual period a pro rata portion of an amount equal to the
adjusted issue price of the debenture at the beginning of the accrual period
multiplied by the yield to maturity of the debenture, determined by compounding
at the close of each accrual period and adjusted for the length of the accrual
period. The adjusted issue price of a debenture at the start of any accrual
period will be the issue price of the debenture increased by the accrued
original issue discount included in the U.S. holder's income for all prior
accrual periods. Under these rules, U.S. holders will have to include in gross
income increasingly greater amounts of original issue discount in each accrual
period. A U.S. holder's original tax basis for determining gain or loss on the
sale or other disposition of a debenture will be increased by any accrued
original issue discount includable in such U.S. holder's gross income.

There are circumstances under which we could make a payment on a debenture
which would affect the yield to maturity of a debenture, including, as described
under "Description of Securities Being Offered-Convertible Debentures-Events of
Default; Notice and Waiver," in the event of certain defaults. According to
Treasury Regulations, the possibility of a change in the yield will not be
treated as affecting the amount of original issue discount required to be
recognized by a holder, or the timing of such recognition, if the likelihood of
the change, as of the date the debt obligations are issued, is remote. We intend
to take the position that the likelihood of any change in the yield on the
debentures is remote. We also intend to take the position that there is no
alternative payment schedule that would minimize the yield on the debentures to
Devon.

The modification of the terms of the debentures by us upon a Tax Event as
described in "Description of Securities Being Offered-Convertible Debentures-
Optional Conversion to Semiannual Coupon Debenture upon a Tax Event," could
possibly alter the timing of income recognition by the holders with respect to
the semiannual payments of interest due after the option exercise date.

We or our paying agent will be required to furnish annually to the IRS and
each U.S. holder information regarding the amount of original issue discount
attributable to that year.

Acquisition Premium. A subsequent U.S. holder of a debenture is generally
subject to the rules for accruing original issue discount described above.
However, if the U.S. holder's purchase price for the debenture exceeds the
adjusted issue price but is less than or equal to the sum of all amounts payable
on the debenture after the purchase date, the excess is acquisition premium and
is subject to special rules. Acquisition premium ratably offsets the amount of
accrued original issue discount otherwise includible in the U.S. holder's
taxable income, that is, the U.S. holder may reduce the daily portions of
original issue discount by a fraction, the numerator of which is the excess of
the U.S. holder's purchase price for the debenture over the adjusted issue
price, and the denominator of which is the excess of the sum of all amounts
payable on the debenture after the purchase date over the debenture's adjusted
issue price. As an alternative to reducing the amount of original issue discount
otherwise includible in income by this fraction, the U.S. holder may elect to
compute original issue discount accruals by treating the purchase as a purchase
at original issue and applying the rules described above under "-Original Issue
Discount or Interest on the Debentures."

Market Discount. Under the market discount rules of the Internal Revenue
Code, a U.S. holder who purchases a debenture at market discount will generally
be required to treat any gain recognized on the disposition of the debenture as
ordinary income to the extent of the lesser of the gain or the portion of the
market discount that accrued during the period that the U.S. holder held the
debenture. Market discount is generally defined as the amount by which a U.S.
holder's purchase price for a debenture is less than the revised issue price of
the debenture on the date of purchase, subject to a statutory de minimis
exception. A debenture's revised issue price equals the sum of the issue price
of the debenture and the aggregate amount of the original issue discount
includible in the gross income of all holders of the debenture for periods
before the acquisition of the debenture by the holder, likely reduced, although
the Internal Revenue Code does not expressly so provide, by any cash payment in
respect of the

23
<PAGE>

debenture. A U.S. holder who acquires a debenture at a market discount may be
required to defer a portion of any interest expense that otherwise may be
deductible on any indebtedness incurred or continued to purchase or carry the
debenture until the U.S. holder disposes of the debenture in a taxable
transaction. A U.S. holder who has elected under applicable Internal Revenue
Code provisions to include market discount in income annually as the discount
accrues will not, however, be required to treat any gain recognized as ordinary
income or to defer any deductions for interest expense under these rules. A U.S.
holder's tax basis in a debenture is increased by each accrual of amounts
treated as market discount. This election to include market discount in income
currently, once made, applies to all market discount obligations acquired on or
after the first day of the taxable year to which the election applies and may
not be revoked without the consent of the IRS. Holders should consult their tax
advisors as to the portion of any gain that would be taxable as ordinary income
under these provisions and any other consequences of the market discount rules
that may apply to them in particular.

Election to Treat All Interest as Original Issue Discount. U.S. holders may
elect to include in gross income all amounts in the nature of interest that
accrue on a debenture, including any stated interest, acquisition discount,
original issue discount, market discount, de minimis original issue discount, de
minimis market discount and unstated interest, as adjusted by amortizable bond
premium and acquisition premium, by using the rules described above under "-
Original Issue Discount or Interest on the Debentures." An election for a
debenture with amortizable bond premium results in a deemed election to amortize
bond premium for all debt instruments owned and later acquired by the U.S.
holder with amortizable bond premium and may be revoked only with the permission
of the IRS. Similarly, an election for a debenture with market discount results
in a deemed election to accrue market discount in income currently for the
debenture and for all other bonds acquired by the U.S. holder with market
discount on or after the first day of the taxable year to which the election
first applies, and may be revoked only with the permission of the IRS. A U.S.
holder's tax basis in a debenture is increased by each accrual of the amounts
treated as original issue discount under the election described in this
paragraph.

Sale, Exchange or Retirement of the Debentures. Upon the sale, exchange or
retirement of a debenture, including as a result of a tender upon the occurrence
of a fundamental change, and, except as discussed in the next paragraph on a
purchase date, a U.S. holder will generally recognize gain or loss equal to the
difference between the sale or redemption proceeds and the U.S. holder's
adjusted tax basis in the debenture. Any such gain will be treated as ordinary
income to the extent such gain represents accrued but unrecognized market
discount.

If a U.S. holder elects to exercise its option to tender the debentures to us
on a purchase date and we issue common stock in satisfaction of all or part of
the purchase price, the exchange of the debentures for common stock should
qualify as a reorganization for federal income tax purposes. If the purchase
price is paid solely in common stock, except in the case of a fractional share
described below, a U.S. holder should not recognize any gain or loss realized.
If the purchase price is paid in a combination of common stock and cash, other
than cash received in lieu of a fractional share, gain, but not loss, realized
by the U.S. holder should be recognized, but only to the extent of the cash
received. A U.S. holder's initial tax basis in the common stock received should
be equal to such U.S. holder's adjusted tax basis in the debenture tendered,
except for any portion allocable to a fractional share of common stock,
increased by the amount of gain recognized, other than with respect to a
fractional share, and decreased by the amount of any cash received, except cash
received in lieu of a fractional share. The holding period for common stock
received in the exchange should include the holding period of the debenture
tendered to us in exchange for common stock. Subject to the market discount
rules discussed above, the receipt of cash in lieu of a fractional share of
common stock should generally result in capital gain or loss, measured by the
difference between the amount of cash received for the fractional share and the
U.S. holder's tax basis in the fractional share interest. To the extent the
debentures tendered in exchange for common stock have accrued market discount,
the amount of the unrecognized accrued market discount will carry over to such
common stock and will be treated as ordinary income upon disposition of such
common stock. A U.S. holder's adjusted tax basis in a debenture generally will
equal the holder's cost of the debenture increased by any original issue
discount or market discount previously included in income by such holder with
respect to such debenture and decreased by any payments received thereon.
Subject to the market discount rules discussed above, gain or loss recognized on
the sale, exchange or retirement of a debenture generally will be capital gain
or loss and will be long-term capital gain or loss if the debenture has been
held for more than one year. Long-term capital gain recognized by an individual
U.S. holder is generally subject to a maximum U.S. federal rate of tax of 20%.

Conversion of Debentures. A U.S. holder's conversion of a debenture into
common stock will generally not be a taxable event, except with respect to cash
received in lieu of a fractional share. To the extent the debentures converted
into common stock have accrued market discount the amount of the unrecognized
accrued market discount will carry over to such common stock and will be treated
as ordinary income upon disposition of such common stock. A U.S. holder's basis
in the common stock received on conversion of a debenture will be the same as

24
<PAGE>

the U.S. holder's basis in the debenture at the time of conversion, exclusive of
any tax basis allocable to a fractional share, and the holding period for the
common stock received on conversion will include the holding period of the
debenture converted. Subject to the market discount rules discussed above, the
receipt of cash in lieu of a fractional share of common stock should generally
result in capital gain or loss, measured by the difference between the cash
received in lieu of the fractional share interest and the portion of the U.S.
holder's tax basis in the debenture that is allocable to the fractional share
interest. If we elect to pay cash in lieu of issuing common stock upon the
tender of a debenture for conversion, the U.S. holder will recognize gain or
loss equal to the difference between the proceeds received and the U.S. holder's
adjusted tax basis in the debenture. Any such gain will be treated as ordinary
income to the extent such gain represents accrued by unrecognized market
discount.

Dividends; Adjustment of Conversion Price. Dividends, if any, paid on the
common stock generally will be includable in the income of a U.S. holder of
common stock as ordinary income to the extent of our current and accumulated
earnings and profits as determined for U.S. federal income tax purposes. If at
any time we make a distribution of property to shareholders that would be
taxable to such shareholders as a dividend for federal income tax purposes and,
pursuant to the anti-dilution provisions of the indenture, the conversion rate
of the debentures is increased, such increase may be deemed to be the payment of
a taxable dividend to U.S. holders of debentures. If the conversion rate is
increased at our discretion or in certain other circumstances, or if we
implement a shareholder rights plan, such increase or implementation also may be
deemed to be the payment of a taxable dividend to U.S. holders of debentures.
The absence of such an adjustment to the conversion rate also may, in certain
circumstances, be treated as a taxable dividend to U.S. holders of common stock.

Certain Modifications or Assumptions. The terms of the debentures may be
modified with the consent of a specified percentage of holders and, in some
instances, without consent of the holders. In addition, the debentures may be
assumed upon certain transactions in which we are involved. The modification or
assumption of a debenture could, in certain instances, give rise to a deemed
exchange of a debenture for a new debenture for U.S. federal income tax
purposes. If an exchange is deemed to occur by reason of a modification or
assumption, the amount and timing of taxable income required to be recognized by
a U.S. holder with respect to a debenture could be affected.

Sale of Common Stock. Subject to the market discount rules discussed above,
upon the sale or exchange of common stock, a U.S. holder generally will
recognize capital gain or capital loss equal to the difference between the
amount realized on such sale or exchange and the holder's adjusted tax basis in
such common stock. Such capital gain or loss will be long-term capital gain or
loss if the cumulative holding period of the common stock, including the holding
period of a debenture converted to such common stock as described above, is more
than one year.

Long-term capital gain of individuals will generally be taxed at a maximum U.S.
federal tax rate of 20%. See "-Sale, Exchange or Retirement of the Debentures."

Non-U.S. Holders

The following discussion is a summary of the principal U.S. federal income
and estate tax consequences resulting from the ownership of the debentures or
common stock by non-U.S. holders.

Withholding Tax on Payments of Principal and Original Issue Discount on
Debentures. Except as described below with respect to effectively connected
original issue discount, the payment of principal, including any original issue
discount included therein, of a debenture by us or any of our paying agents to
any non-U.S. holder will not be subject to U.S. federal income tax or
withholding tax, provided that in the case of payment of cash in respect of
original issue discount:

(1) the non-U.S. holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of our stock,

(2) the non-U.S. holder is not a controlled foreign corporation that is
related to us within the meaning of the U.S. federal income tax code, and

(3) either

. the beneficial owner of the debenture certifies to the applicable payor
or its agent, under penalties of perjury, that it is not a U.S. holder
and provides its name and address on United States Treasury Form W-8BEN
or a suitable substitute or successor form, or

25
<PAGE>

. a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business, and holds the debenture certifies under penalties of perjury
that such a Form W-8BEN, or suitable substitute form, has been received
from the beneficial owner by it or by a financial institution between it
and the beneficial owner and furnishes the payor with a copy thereof.

Except to the extent otherwise provided under an applicable tax treaty, a
non- U.S. holder generally will be subject to U.S. federal income tax in the
same manner as a U.S. holder with respect to original issue discount on a
debenture if such original issue discount is effectively connected with a U.S.
trade or business conducted by the non-U.S. holder. Effectively connected
original issue discount received by a corporate non-U.S. holder may also, under
certain circumstances, be subject to an additional "branch profits tax" at a 30%
rate, or, if applicable, a lower treaty rate. Such effectively connected
original issue discount will not be subject to withholding tax if the holder
delivers an IRS Form W-8ECI to the payor.

Dividends. Dividends, if any, paid on the common stock to a non-U.S.
holder, and, after December 31, 2000, any deemed dividends resulting from an
adjustment to the conversion rate, see "U.S. Holders-Dividends; Adjustment of
Conversion Price" above, generally will be subject to a 30% U.S. federal
withholding tax unless such non-U.S. holder is eligible for a lower rate under
an applicable income tax treaty. Currently, for purposes of determining whether
tax is to be withheld at the 30% rate or at a reduced treaty rate, we will
ordinarily presume that dividends paid to an address in a foreign country are
paid to a resident of such country absent knowledge that such presumption is not
warranted. A non-U.S. holder is required to satisfy certain certification
requirements to claim treaty benefits. Except as otherwise provided under an
applicable tax treaty, a non-U.S. holder will be taxed in the same manner as a
U.S. holder on dividends paid, or deemed paid, that:

(1) are effectively connected with the conduct of a U.S. trade or business
by such non-U.S. holder, or

(2) if a tax treaty applies, are attributable to a U.S. permanent
establishment of the non-U.S. holder.

Such dividends generally are not subject to the 30% withholding rate,
provided that the non-U.S. holder timely files the appropriate form with the
paying agent. If such dividends are received by a non-U.S. holder that is a
foreign corporation, the non-U.S. holder may also be required to pay U.S. branch
profits tax on such effectively connected income at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty.

Gain on Disposition of the Debentures and Common Stock. A non-U.S. holder
generally will not be required to pay U.S. federal income tax on gain realized
on the sale, exchange or redemption of a debenture, including the exchange of a
debenture for common stock, or the sale or exchange of common stock unless:

(1) in the case of an individual non-U.S. holder, such holder is present
in the United States for 183 days or more in the year of such sale,
exchange or redemption and either:

. has a tax home in the United States and certain other requirements are
met, or

. the gain from the disposition is attributable to an office or other
fixed place of business in the United States;

(2) the non-U.S. holder is required to pay tax pursuant to the provisions
of U.S. tax law applicable to certain U.S. expatriates;

(3) the gain is effectively connected with the conduct of a U.S. trade or
business of or, if a tax treaty applies, is attributable to a U.S.
permanent establishment of, the non-U.S. holder; or

(4) we are or have been during certain periods a "U.S. real property
holding corporation" for U.S. federal income tax purposes.

If we are or have been a U.S. real property holding corporation, a non-U.S.
holder will generally not be subject to U.S. federal income tax on gain
recognized on a sale or other disposition of our common stock provided that:

(1) the non-U.S. holder does not hold, and has not held during certain
periods, directly or indirectly, more than 5% of our outstanding common
stock, and

26
<PAGE>

(2) our common stock is and continues to be traded on an established
securities market for U.S. federal income tax purposes.

We believe that our common stock will be traded on an established securities
market for this purpose in any quarter during which it is listed on the American
Stock Exchange.

If we are or have been during certain periods a U.S. real property holding
corporation and the above exception does not apply, a non-U.S. holder will be
subject to U.S. federal income tax with respect to gain realized on any sale or
other disposition of our common stock as well as to a withholding tax, generally
at a rate of 10% of the proceeds. Any amount withheld pursuant to a withholding
tax will be creditable against a non-U.S. holder's U.S. federal income tax
liability.

U.S. Federal Estate Tax. A debenture held by an individual who at the time of
death is not a citizen or resident of the United States, as specifically defined
for U.S. federal estate tax purposes, will not be included in such holder's
gross estate for U.S. federal estate tax purposes if the individual did not
actually or constructively own 10% or more of the total combined voting power of
all classes of our stock and, at the time of the individual's death, payments
with respect to such debenture would not have been effectively connected with
the conduct by such individual of a trade or business in the United States.
Common stock held by an individual who at the time of death is not a citizen or
resident of the United States, as specifically defined for U.S. federal estate
tax purposes, will be included in such individual's gross estate for U.S.
federal estate tax purposes, unless an applicable estate tax treaty otherwise
applies.

Backup Withholding and Information Reporting

U.S. Holders. Information reporting will apply to original issue discount and
any payments of interest or dividends on or the proceeds of the sale or other
disposition of the debentures or shares of common stock with respect to certain
noncorporate U.S. holders, and backup withholding at a rate of 31% may apply to
such payments unless the recipient of such payment supplies a taxpayer
identification number, certified under penalties of perjury, as well as certain
other information or otherwise establishes an exemption from backup withholding.
Any amount withheld under the backup withholding rules is allowable as a credit
against the U.S. holder's federal income tax, provided that the required
information is provided to the IRS on a timely basis.

Non-U.S. Holders. We must report annually to the IRS and to each non-U.S.
holder the amount of any dividends paid to, and the tax withheld with respect
to, such non-U.S. holder, regardless of whether any tax was actually withheld.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities of the
country in which the non-U.S. holder resides.

Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments of principal, including cash payments in
respect of original issue discount, on the debentures by us or our agent to a
non-U.S. holder if the non-U.S. holder certifies as to its non-U.S. holder
status under penalties of perjury or otherwise establishes an exemption,
provided that neither we nor our agents have actual knowledge that the holder is
a U.S. person or that the conditions of any other exemptions are not in fact
satisfied. The payment of the proceeds on the disposition of debentures or
shares of common stock to or through the United States office of a United States
or foreign broker will be subject to information reporting and backup
withholding unless the owner provides the certification described above or
otherwise establishes an exemption. The proceeds of the disposition by a non-
U.S. holder of debentures or shares of common stock to or through a foreign
office of a broker will not be subject to backup withholding or information
reporting. However, if the broker is a U.S. person, a controlled foreign
corporation for U.S. tax purposes, or a foreign person, 50% or more of whose
gross income from all sources for certain periods is from activities that are
effectively connected with a U.S. trade or business, or, in the case of payments
made after December 31, 2000, a foreign partnership with certain connections to
the United States, information reporting requirements will apply unless the
broker has documentary evidence in its files of the holder's non-U.S. status and
has no actual knowledge to the contrary or unless the holder otherwise
establishes an exemption.

The Treasury Department recently promulgated final regulations regarding the
withholding and information reporting rules discussed above. In general, these
regulations do not significantly alter the substantive withholding and
information reporting requirements but rather unify current certification
procedures and forms and clarify reliance standards. In addition, these
regulations impose more stringent conditions on the ability of financial
intermediaries acting for a non-U.S. holder to provide certifications on behalf
of the holder, which may include entering into an agreement with the IRS to
audit certain documentation with respect to such certifications. These

27
<PAGE>

regulations are generally effective for payments made after December 31, 2000,
subject to certain transition rules. You should consult your own tax advisor to
determine the effects of the application of these regulations to your particular
circumstances.

LEGAL MATTERS

Certain legal matters in connection with the securities will be passed upon
for us by McAfee & Taft A Professional Corporation and for any underwriter by
legal counsel named in the prospectus supplement.

EXPERTS

The supplemental consolidated financial statements of Devon as of December
31, 1999, and 1998 and for each of the years in the three-year period ended
December 31, 1999 have been incorporated by reference herein in reliance upon
the report of KPMG LLP, independent certified public accountants, incorporated
by reference in this document, and upon the authority of said firm as experts in
accounting and auditing. The report of KPMG LLP, as of December 31, 1999 and
1998 and for each of the years in the three-year period ended December 31, 1999
is based in part in reliance upon the reports of Deloitte & Touche LLP,
chartered accountants, and PricewaterhouseCoopers LLP, independent accountants,
incorporated by reference in this document, and upon the authority of said
firms, as experts in accounting and auditing.

The audited consolidated financial statements of PennzEnergy and its
subsidiaries as of December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998 incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.

Certain information with respect to Devon's and PennzEnergy's oil and gas
reserves derived from the reports of LaRoche Petroleum Consultants, Ltd., Ryder
Scott Company, L.P., AMH Group Ltd., Paddock Lindstrom & Associates, Ltd. and
John P. Hunter & Associates, Ltd., independent consulting petroleum engineers,
has been included and incorporated by reference herein upon the authority of
said firms as experts with respect to matters covered by the reports and in
giving the reports.

Certain information with respect to the oil and gas reserves of Santa Fe
Snyder derived from the report of Ryder Scott Company, L.P., independent
consulting petroleum engineers, has been included and incorporated by reference
herein upon the authority of said firm as experts with respect to matters
covered by the report and in giving the report.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the SEC's public
reference rooms in Washington, D.C., New York, New York and Chicago, Illinois.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at "http://www.sec.gov."

We filed with the SEC a registration statement on Form S-3 with respect to
the securities offered by this prospectus. This prospectus is a part of that
registration statement. As allowed by SEC rules, this prospectus does not
contain all the information you can find in the registration statement or the
exhibits to the registration statement. Instead, the SEC allows us to
"incorporate by reference" information into this prospectus, which means that we
can disclose important information to you by referring you to another document
filed separately with the SEC. The information incorporated by reference is
deemed to be part of this prospectus, except for any information superseded by
information in, or incorporated by reference in, this prospectus or a prospectus
supplement.

This prospectus incorporates by reference the documents set forth below that
were previously filed with the SEC. These documents contain important
information about Devon and its subsidiaries and their finances.

(a) Items 1 through 5 and 9 through 14 of our Annual Report on Form 10-K for
the year ended December 31, 1999.
(b) Our Current Reports on Form 8-K filed January 27, 2000, May 26, 2000,
June 5, 2000, June 21, 2000,

28
<PAGE>

June 22, 2000, July 12, 2000, July 27, 2000, August 29, 2000, September
12, 2000, September 13, 2000, September 19, 2000, October 26, 2000 and
November 13, 2000, and Current Reports on Form 8-K/A filed August 1,
2000 and September 22, 2000.
(c) Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000.
(d) The description of our Common Stock set forth in Exhibit 4.9 to our
Form 8-K, dated August 18, 1999, including any amendment or report filed
for the purposes of updating such description.
(e) Our Proxy Statement on Schedule 14A filed April 13, 2000.
(f) Part I of Santa Fe Snyder's Annual Report on Form 10-K for the year
ended December 31, 1999 (File No. 001-07667).
(g) Santa Fe Snyder's Current Reports on Form 8-K filed on May 30, 2000 and
September 13, 2000 (File No. 001-07667).
(h) Santa Fe Snyder's Proxy Statement on Schedule 14A filed March 22, 2000
(File No. 001-07667).
(i) PennzEnergy's Annual Report on Form 10-K for the year ended December 31,
1998 (File No. 001-05591).
(j) PennzEnergy's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1999 and June 30, 1999 (File No. 001-05591).

We are also incorporating by reference any documents that we file with the
SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this prospectus but before the completion of the offering.

We will provide documents incorporated by reference in this prospectus
without charge, excluding all exhibits unless we have specifically incorporated
by reference an exhibit in this prospectus. You may obtain documents
incorporated by reference in this prospectus by requesting them in writing, by
e-mail or by telephone from us at the following address:

Devon Energy Corporation 20 North Broadway, Suite 1500 Oklahoma City,
Oklahoma 73102-8260 Attention: Assistant Corporate Secretary, Telephone:
(405) 235-3611, [email protected]

You can also get more information by visiting our web site at
"http://www.devonenergy.com." Web site materials are not part of this
prospectus.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this document and in the documents
incorporated by reference into this document, which are subject to risks and
uncertainties, including those discussed under the caption "Risk Factors." These
statements are based on the beliefs and assumptions of our management and on the
information currently available to them.

Statements and calculations concerning oil and gas reserves and their present
value also may be deemed to be forward-looking statements in that they reflect
the determination, based on estimates and assumptions, that oil and gas reserves
may be profitably exploited in the future. When used or referred to in this
document, these forward-looking statements may be preceded by, followed by, or
otherwise include the words "believes," "expects," "anticipates," "intends,"
"plans," "estimates," "projects" or similar expressions, or statements that
certain events or conditions "will" or "may" occur.

Except for our ongoing obligations to disclose material information as
required by the federal securities laws, we do not have any obligation and do
not plan to update forward-looking statements after we distribute this document.

GLOSSARY

"Initial purchasers" means Morgan Stanley & Co. Incorporated and Salomon
Smith Barney Inc.

"Market price" means the average of the sale prices of the common stock of
Devon for the five trading day period ending on the third business day prior to
the applicable purchase date, if the third business day prior to the applicable
purchase date is a trading day or, if it is not a trading day, then on the last
trading day prior to such third business day, appropriately adjusted to take
into account the occurrence during the period commencing on the first of such
trading days during such five trading day period and ending on such purchase
date of certain events that

29
<PAGE>

would result in an adjustment of the conversion rate under the indenture with
respect to the common stock. Because the market price of the common stock is
determined prior to the applicable purchase date, holders of debentures bear the
market risk with respect to the value of the common stock to be received from
the date of determination of such market price to such purchase date. Devon may
elect to pay the purchase price in common stock only if the information
necessary to calculate the market price is reported in a daily newspaper of
national circulation.

"Restated principal amount". From and after the date (referred to as the
tax event date) of the occurrence of a tax event, Devon may elect to have
interest in lieu of future original interest discount accrue at 3.875% per annum
on a principal amount per debenture equal to the issue price plus original issue
discount accrued to the date immediately prior to the later of:

(1) the tax event date; or

(2) the date on which Devon makes its election,

which is referred to as the option exercise date. The resulting amount would
be the restated principal amount.

"Sale price of the common stock" means, on any date, the closing per share
sale price, or if no closing sale price is reported, the average bid and ask
prices or, if more than one, in either case, the average of the average bid and
average ask prices, on such date as reported in the composite transactions for
the principal United States securities exchange on which the common stock is
traded or, if the common stock is not listed on a United States national or
regional stock exchange, as reported by The NASDAQ National Market.

"Tax event" means that Devon has received an opinion from independent tax
counsel experienced in such matters to the effect that, as a result of:

(1) an amendment to, or change or announced prospective change in, the laws
or regulations of the U.S. or any political subdivision or taxing
authority thereof or therein; or

(2) any amendment to, or change in, an interpretation or application of such
laws or regulations by any legislative body, court, governmental agency
or regulatory authority, in each case which amendment or change is
enacted, promulgated, issued or announced or which interpretation is
issued or announced or which action is taken, on or after June 22, 2000,
there is more than an insubstantial risk that interest, including
original issue discount, payable on the debentures either (a) would not
be deductible on a current accrual basis or (b) would not be deductible
under any other method, in either case in whole or in part, by Devon by
reason of deferral, disallowance or otherwise for U.S. federal income
tax purposes.

30
<PAGE>

$760,000,000

[DEVON LOGO]