| Item 2.01 | Completion of Acquisition or Disposition of Assets |
As previously disclosed in the Current Report on Form 8-K filed by Devon Energy Corporation on January 7, 2021 (the “Initial Form 8-K”), on January 7, 2021, East Merger Sub, Inc. (“Merger Sub”), a Delaware corporation and wholly owned, direct, subsidiary of Devon Energy Corporation, a Delaware corporation (“Devon” or the “Company”), completed its merger (the “Merger”) with and into WPX Energy, Inc., a Delaware corporation (“WPX”), as a result of which WPX became a wholly-owned, direct, subsidiary of the Company. The Merger was effected pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated September 26, 2020, by and among the Company, Merger Sub and WPX.
This Amendment No. 1 to the Initial Form 8-K amends the Initial Form 8-K to include certain financial statements, certain pro forma financial information and certain other information. The WPX historical consolidated financial statements include amounts related to the Felix assets acquired on March 6, 2020. Due to immateriality, no adjustments are included in the Pro Forma Financial Statements to incorporate revenues and expenses for Felix prior to March 6, 2020. Except as provided herein, the disclosures made in the Initial Form 8-K remain unchanged.
| Item 2.05 | Costs Associated with Exit or Disposal Activates |
In conjunction with closing of the Merger, Devon anticipates that it will incur approximately $160 million to $200 million of restructuring and transaction costs, which are comprised of the following amounts:
| | • | | Employee severance and termination benefits of $100 million to $125 million; |
| | • | | Remaining merger transaction costs such as bank, legal and accounting fees of $50 million; and |
| | • | | Contract termination and other office lease abandonment charges of approximately $10 million to $20 million. |
Devon expects to recognize the majority of these restructuring charges in the first quarter of 2021 and will recognize the remaining costs throughout 2021 as merger integration activities complete. Actual charges will vary if integration activities and related employee terminations do not occur as projected. Including approximately $85 million of employee retirement plan distributions triggered by the Merger previously included in Devon’s recorded balance sheet liabilities, Devon estimates that $220 million to $255 million of the estimated total costs will result in future cash expenditures. The majority of the costs that will not result in future cash expenditures consist of employee severance costs related to accelerated vesting of employee stock awards.
| Item 9.01 | Financial Statements and Exhibits |
(a) Financial Statements of Business Acquired
The audited consolidated balance sheets of WPX as of December 31, 2020 and 2019, the related consolidated statements of operations, cash flows and changes in equity for each of the years in the three-year period ended December 31, 2020, and the related notes to the consolidated financial statements, are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and is incorporated herein.
(b) Pro Forma Financial Information
The unaudited pro forma combined financial information of the Company giving effect to the transactions described in Item 2.01 above is filed as Exhibit 99.2 to this Current Report on Form 8-K/A and is incorporated herein.
