Filed by Devon Energy Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Devon Energy Corporation
Commission File No. 0-30176
INVESTOR NOTICE
The following communication contains "forward-looking statements" as defined by
the Securities and Exchange Commission. Such statements are those concerning the
companies' merger and strategic plans, expectations and objectives for future
operations. All statements, other than statements of historical facts, included
in the following communication that address activities, events or developments
that the companies expect, believe or anticipate will or may occur in the future
are forward-looking statements. This includes completion of the proposed merger,
reserve estimates, future financial performance, future equity issuance and
other matters. These statements are based on certain assumptions made by the
companies based on their experience and perception of historical trends, current
conditions, expected future developments and other factors they believe are
appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
the companies. Statements regarding future production are subject to all of the
risks and uncertainties normally incident to the exploration for and development
and production of oil and gas. These risks include, but are not limited to,
inflation or lack of availability of goods and services, environmental risks,
drilling risks and regulatory changes. Investors are cautioned that any such
statements are not guarantees of future performance and that actual results or
developments may differ materially from those projected in the forward-looking
statements.
Investors and security holders are advised to read the joint proxy statement/
prospectus included in the Registration Statement on Form S-4 filed with the SEC
in connection with the proposed merger because it contains important
information. The joint proxy statement/prospectus has been filed with the SEC by
Devon and Santa Fe Snyder. Investors and security holders may obtain a free copy
of the joint proxy statement/prospectus and other documents filed by Devon and
Santa Fe Snyder with the SEC at the SEC's web site at www.sec.gov. The joint
proxy statement/prospectus and such other documents (relating to Devon) may also
be obtained for free from Devon by directing such request to: Devon Energy
Corporation, 20 North Broadway, Suite 1500, Oklahoma City, Oklahoma 73102-8260,
Attention: Investor Relations, telephone: (405) 552-4570, e-mail:
[email protected]. The joint proxy statement/prospectus and such other
documents (relating to Santa Fe Snyder) may also be obtained for free from Santa
Fe Snyder by directing such request to: Santa Fe Snyder Corporation, 840
Gessner, Suite 1400, Houston, Texas 10023, Attention: Investor Relations,
telephone: (713) 507-5307, e-mail: [email protected].
Devon, its directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" of proxies from
Devon's shareholders in connection with the merger. Information regarding such
persons and a description of their interests in the merger is contained in
Devon's filing with the SEC under Rule 425 on May 26, 2000.
Santa Fe Snyder, its directors, executive officers and certain members of
management and employees may be considered "participants in the solicitation" of
proxies from Santa Fe Snyder's shareholders in connection with the merger.
Information regarding such persons and a description of their interests in the
merger is contained in Santa Fe Snyder's filing with the SEC under Rule 14a-12
on May 26, 2000.
<PAGE>
SLIDE SHOW PRESENTATION
AUGUST 10, 2000
Slide 1 - Risk Factors
"For representative risk factors that could cause Devon's actual results to
differ materially from the estimates contained herein, see forms 8-K dated
January 26 and June 5, 2000, form 10-K dated March 30, 2000 and the
Definitive Proxy dated July 21, 2000."
Slide 2 - Devon Overview
o Top 10 among U.S.-based independents
o Proved oil and gas reserves of 670 MMBOE (12/31/99)
o 81% North America / 19% International
o Production mix: 62% gas / 38% oil
o Enterprise value approximating $6 billion
o Investment grade credit
Slide 3 - Total Proved Reserves
(Bar graph showing Devon's proved reserves from 1987 to 1993 in MMBoe at
year-end)
1987 1988 1989 1990 1991 1992 1993
----------------------------------------------------------
8 22 30 32 36 61 78
Note: 1987-1993 represents historical Devon as reported prior to 1998
Northstar merger.
Slide 4 - Total Proved Reserves
(Bar graph showing Devon's proved reserves from 1993 to 1999 in MMBoe at
year-end)
1993 1994 1995 1996 1997 1998 1999
----------------------------------------------------------
78 106 115 179 184 299 670
Note: 1993-1997 represents historical Devon as reported prior to 1998
Northstar merger.
Slide 5 - Reserves Per Common Share
(Bar graph showing Devon's Reserves per common share from 1987 to 1999 in
Boe)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1987 1988 1989 1990* 1991* 1992* 1993 1994 1995 1996* 1997* 1998* 1999
----------------------------------------------------------------------------------------
1.31 2.56 2.61 2.82 3.13 2.96 3.76 4.79 5.18 4.84 4.94 5.61 7.78
</TABLE>
Note: 1987-1997 represents historical Devon as reported prior to 1998
Northstar merger.
* Fully Diluted
<PAGE>
Slide 6 - Net Debt Per Boe
(Bar graph showing Devon's net debt per Boe from 1987 to 1999) (Long term
debt less working capital)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------------------------------------------------------------------------------------
1.16 1.33 0.19 0.74 0.78 0.68 0.83 0.85 1.17 -0.07 -0.34 1.25 1.47
</TABLE>
Note: 1987-1997 represents historical Devon as reported prior to 1998
Northstar merger. (1) Presented net of the book value of Devon's 7.1
million shares of Chevron common stock.
Slide 7 - Devon's Operating Results
Cash Margin Per Share* Earnings Per Share*
1987 1999 1987 1999
------------- -------------
1.15 6.03 -0.17 1.46
* Fully Diluted
Slide 8 - Drilling Activity
o 1988 - 1999
> 2,400 wells drilled
o Historically high success rates
Note: Excludes activity of Northstar Energy prior to 1998 merger with
Devon.
Slide 9 - Reserve Growth from M & A
(Bar graph showing the percentage of reserve growth through mergers and
acquisitions.)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------------------------------------------------------------------------------------
3% 114% 27% 18% 2% 80% 21% 38% 15% 57% 1% 63% 135%
</TABLE>
Note: 1987-1997 represents historical Devon as reported prior to 1998
Northstar merger.
Slide 10 - Mergers & Acquisitions
Devon Resource Investors, 1988
Alta Energy Corporation, 1994
Kerr McGee Corporation, 1996
Northstar Energy, 1998
<PAGE>
Slide 11 - For Immediate Release
May 25, 2000 -- Devon Energy and Santa Fe Snyder to merge creating a top 5
U.S. independent oil and gas company.
Slide 12 - Transaction Summary
o Structure: non-taxable merger
o Equity Ownership: 68% Devon
32% Santa Fe Snyder
o Exchange Ratio: approximately 40.3 MM
common shares, or .22 DVN per SFS share
o Board of Directors: proportional representation
o Devon's management remains; strengthened by SFS
Slide 13 - The Combined Company
Proved Reserves: 1,056 MMBoe
Reserve profile: 76% North America
24% International
Production Mix - N.A. 61% gas/39% oil
- Int'l 14% gas/86% oil
Undeveloped Acreage (net) 32 million
R/P Ratio: 8.9 years
Enterprise Value: $9 Billion
Credit Rating: Investment Grade
Slide 14 - U.S. Peer Comparison
(Bar Graph, reserves in MMBoe @ 6:1)
APC/UPR BR UCL DVN KMG APA PXD EOG OEI MUR
----------------------------------------------------------------
1942 1709 1653 1056 915 807 605 602 415 401
Note: Reflects proved reserves at 12/31/99 adjusted for material
acquisitions and divestitures. Represents Pro-forma Devon/Santa Fe Snyder.
Slide 15 - Time Line
o May 26: DVN and SFS announce merger
o June 23: File preliminary proxy materials
o July 21: File definitive proxy materials
o August 29: Shareholder meetings
o Early Sept.: Close merger
<PAGE>
Slide 16 - Strategic Rationale
Positive financial impact:
o Per share accretion
o $30 - $35 million annual cost savings
o Maintains/strengthens financial capacity
Compelling property fit:
o U.S. core area overlap
o Broader international growth platform
Slide 17 - Reserves Per Common Share
(Bar graph showing Devon's Reserves per common share from 1987 to 1999 in
Boe)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1987 1988 1989 1990* 1991* 1992* 1993 1994 1995 1996* 1997* 1998* 1999 1999ProForma
-------------------------------------------------------------------------------------------------------
1.31 2.56 2.61 2.82 3.13 2.96 3.76 4.79 5.18 4.84 4.94 5.61 7.78 8.36
</TABLE>
Note: 1987-1997 represents historical Devon as reported prior to 1998
Northstar merger.
* Fully Diluted
Slide 18 - Six Months Operating Results
Cash Margin Per Share* Earnings Per Share*
DVN Pro Forma DVN Pro Forma
------------------ ------------------
5.04 5.61 1.67 1.97
Note: Operating results from six months ended June 30, 2000.
* Fully Diluted
Slide 19 - Pro Forma Financial Strength
Net Debt / Total Capitalization 42%
Net Debt / Enterprise Value 23%
Net Debt / Annualized EBITDA* 1.12x
* Annualized pro forma results from six months ended June 30, 2000.
Note: Net debt presented net of the market value of Devon's 7.1 million
share of Chevron common stock.
<PAGE>
Slide 20 - Core Area Overlap
DVN SFS Pro Forma % Change
Permian/Mid-Continent 223.3 95.0 318.3 42.5%
Rocky Mountains 113.8 105.3 219.1 92.5%
Gulf of Mexico/Gulf Coast 85.0 57.0 142.0 67.0%
Canada 120.5 - 120.5 0.0%
International 127.2 129.0 256.2 101.4%
----- ----- ------ ------
Totals 669.8 386.3 1056.1 57.7%
(MMBOE @ 12/31/99)
Slide 21 - Reserve % by Division
Permian/Mid-Continent 30.2%
Rocky Mountains 20.7%
Gulf of Mexico/Gulf Coast 13.4%
Canada 11.4%
International 24.3%
Slide 22 - Permian Basin
Map showing New Mexico and Texas with an outline of the Permian Basin.
o 215 MMBoe Pro Forma
o Long reserve life index
o Oil leveraged
o 2nd largest oil producer in New Mexico
o 2000 capital budget - $122 MM
Slide 23 - Rocky Mountains
Map showing the Powder River, Green River, Raton and San Juan Basins.
o 219 MMBoe Pro Forma
- 163 MMBoe Conventional
- 56 MMBoe CBM
o Gas leveraged
o Significant CBM upside
o 2000 capital budget - $112 MM
<PAGE>
Slide 24 - Gulf of Mexico/Gulf Coast
Map showing South Texas, South Louisiana and the Gulf of Mexico.
o 142 MMBoe Pro Forma
o 110 MMBoe offshore
o Top 10 shelf operator
o 172 untested blocks; 90 deep water
o 2000 capital budget - $330 MM
Slide 25 - Western Canada
Map showing Devon's key properties in Alberta Canada.
o 121 MMBoe Pro Forma
o Gas leveraged
o < $2.80 per Boe operating costs
o 2.2 million net undeveloped acres
o 2000 capital budget - $107 MM
Slide 26 - International Operations
International map showing the countries in which Devon and Santa Fe Snyder
have production and/or exploration.
Slide 27 - International Reserves Position
Reserves at % Total
Company 12/31/99 Company
------- ----------- -------
Azerbaijan DVN 107.7 10.2%
Indonesia SFS 62.4 5.9%
Argentina SFS 33.2 3.1%
Brazil SFS 13.9 1.3%
Gabon SFS 10.4 1.0%
Other DVN/SFS 28.7 2.7%
Totals 256.3 24.2%
Slide 28 - Azerbaijan
Middle East map showing Azerbaijan and pipelines in the area.
Slide 29 - Southeast Asia
Southeast Asia map showing the general location of the following areas:
B7/38, PM308, Jabung, Jambi B, Tuban
Slide 30 - South America
South America map showing the general location of the following basins:
Cuyo Basin, Neuquen Basin, Potiguar Basin, Sergipe-Alagoas Basin, Espirito
Santo Basin, Campos Basin, San Jorge Basin
<PAGE>
Slide 31 - Capital Expenditures (Exploration & Development)
($MM)
1996 1997 1998 1999 2000E 2000E
--------------------------------------------------
77 115 275 217 500 900
Note: 1996-1997 represents historical Devon as reported prior to 1998
Northstar merger.
Slide 32 - A Decade of Opportunities
o 2000 - 1st significant Powder River CBM production
o 2001 - 1st significant production from Carauna Field
o 2001 - 2002 - Canadian Foothills discovery on stream
o 2002 - 2003 - Initial South Sumatra gas production
o 2003 - Powder River CBM fully on stream
- Initial Pearl River Basin production
o 2004 - 2006 - Raton Basin CBM peak production
o 2005 - 2010 - Azerbaijan peak production
Slide 33 - Investment Merits
o Consistent per share growth
o Financial and operational discipline
o High impact M & A expertise
o Multiple large scale projects
o Crown Jewel producing properties
