-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CofMA0kzOGhWFf66SWq9dStsdlk9pQUj97PhPcoeMv4iO7eNk/o5UGpEIqKdSFlW R8F7KEYS5Euk7exG+JowPA== /in/edgar/work/20000531/0000950129-00-002699/0000950129-00-002699.txt : 20000919 0000950129-00-002699.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950129-00-002699 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000531 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SANTA FE SNYDER CORP CENTRAL INDEX KEY: 0000086772 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 362722169 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 001-07667 FILM NUMBER: 647265 BUSINESS ADDRESS: STREET 1: 840 GESSNER STREET 2: SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 7135075000 MAIL ADDRESS: STREET 1: 840 GESSNER CITY: HOUSTON STATE: TX ZIP: 77024 FORMER COMPANY: FORMER CONFORMED NAME: SANTA FE ENERGY RESOURCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SANTA FE NATURAL RESOURCES INC DATE OF NAME CHANGE: 19900111 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SANTA FE SNYDER CORP CENTRAL INDEX KEY: 0000086772 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 362722169 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 840 GESSNER STREET 2: SUITE 1400 CITY: HOUSTON STATE: TX ZIP: 77024 BUSINESS PHONE: 7135075000 MAIL ADDRESS: STREET 1: 840 GESSNER CITY: HOUSTON STATE: TX ZIP: 77024 FORMER COMPANY: FORMER CONFORMED NAME: SANTA FE ENERGY RESOURCES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: SANTA FE NATURAL RESOURCES INC DATE OF NAME CHANGE: 19900111 425 1 0001.txt SANTA FE SNYDER CORPORATION 1 Filer: Santa Fe Snyder Corporation Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Santa Fe Snyder Corporation Commission File No. 1-7667 DEVON ENERGY & SANTA FE SNYDER [Slide Presentation] Pursuant to the May 26, 2000 announcement of the proposed merger of Devon Energy Corporation and Santa Fe Snyder Corporation, the following is a slide presentation that will be presented at investor conferences with regard to the proposed merger. SLIDE 1 - TITLE SLIDE "DEVON ENERGY & SANTA FE SNYDER" SLIDE 2 - RISK FACTORS "For representative risk factors that could cause Devon's actual results to differ materially from the estimates contained herein, see Form 8-K dated January 26, 2000 and form 10-K dated March 30, 2000. All data presented assumes an effective merger date of December 31, 1999 adjusted for certain subsequent acquisitions, divestitures and financial transactions." SLIDE 3 - 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 $5 billion o Investment grade credit SLIDE 4 - TOTAL PROVED RESERVES (Bar graph showing Devon's proved reserves from 1987 to 1999 in MMBoe at year-end)
- ------------------------------------------------------------------------------------------------------------- 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 - ------------------------------------------------------------------------------------------------------------- 8 22 30 32 36 61 78 106 115 179 184 299 670 - -------------------------------------------------------------------------------------------------------------
Note: 1987-1997 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)
- -------------------------------------------------------------------------------------------------------------------------------- 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 - --------------------------------------------------------------------------------------------------------------------------------
Note: 1987-1997 represents historical Devon as reported prior to 1998 Northstar merger. *Fully Diluted 2 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)
- ----------------------------------------------------------------------------------------------------------------- 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 - -----------------------------------------------------------------------------------------------------------------
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 SLIDE 9 - MERGERS & ACQUISITIONS PennzEnergy Company, 1999, $2.6Bn Northstar Energy, 1998, $759MM Kerr McGee Corp, North American Onshore Assets, 1996, $254MM SLIDE 10 - 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 11 - 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 SLIDE 12 - STRATEGIC RATIONALE o Critical mass o Per share accretion o Core area overlap o International growth platform o $30 - $35 million annual cost savings 3 SLIDE 13 - THE COMBINED COMPANY Proved Reserves: 1,056 MMBoe Reserve profile: 76% North America 24% International Proved Developed: 72% Production Mix: 57% gas/43% oil R/P Ratio: 8.9 years Credit Rating: Investment Grade Undeveloped Acreage (net) 31.9 million SLIDE 14 - PROVED RESERVES - YEAR-END 1999 (Bar Graph, reserves in MMBoe)
- ------------------------------------------------------------------------------------------------------------- APC/UPR BR DVN KMG APA PXD EOG OEI MUR XTO - ------------------------------------------------------------------------------------------------------------- 1942 1709 1056 915 807 605 602 415 401 337 - -------------------------------------------------------------------------------------------------------------
Note: Reflects proved reserves at 12/31/99 adjusted for material acquisitions and divestitures. Represents Pro-forma Devon. SLIDE 15 - RESERVES PER COMMON SHARE (Bar graph showing Devon's Reserves per common share from 1987 to 1999 in Boe)
- ---------------------------------------------------------------------------------------------------------------------------- 1999 1987 1988 1989 1990* 1991* 1992* 1993 1994 1995 1996* 1997* 1998* 1999 Pro Forma - ---------------------------------------------------------------------------------------------------------------------------- 1.31 2.56 2.61 2.82 3.13 2.96 3.76 4.79 5.18 4.84 4.94 5.61 7.78 8.36 - ----------------------------------------------------------------------------------------------------------------------------
Note: 1987-1997 represents historical Devon as reported prior to 1998 Northstar merger. *Fully Diluted SLIDE 16 - OPERATING RESULTS Quarter Ended March 31, 2000 Actual Pro Forma Cost Savings(1) EBITDA ($MM) $255 $396 $404 Cash Margin to Common $200 $321 $327 Shares O/S (MM) 86.2 126.3 126.3 Cash Margin/Share $ 2.32 $ 2.54 $ 2.59 (1) Includes estimated annual G&A and LOE savings of $30 million taxed at 40%. 4 SLIDE 17 - FINANCIAL STRENGTH Quarter Ended March 31, 2000 Actual Pro Forma Cost Savings(1) EBITDA ($MM) $255 $396 $404 Total Net Debt(2) $1,046 $2,149 $2,149 EBITDA/Interest 10.1x 10.2x 10.4x Net Debt/Annualized EBITDA 1.0x 1.4x 1.3x (1) Includes estimated annual G&A and LOE savings of $30 million taxed at 40%. (2) Net of the market value of Devon's 7.1 million shares of Chevron common stock. SLIDE 18 - CORE AREA OVERLAP
DVN SFS Pro Forma % Total --- --- --------- ------- Rocky Mountains 113.8 105.3 219.1 20.7% Permian Basin 120.3 95.0 215.3 20.4% Gulf of Mexico/Gulf Coast 85.0 57.0 142.0 13.4% Canada 120.5 - 120.5 11.4% Mid-Continent 103.0 - 103.0 9.8% International 127.2 129.0 256.2 24.3% Totals 669.8 386.3 1056.1 100.0%
SLIDE 19 - NORTH AMERICAN OPERATIONS Bar charts and map showing Devon's reserves growth (year-end vs. pro forma year-end) in the Rocky Mountains, Permian Basin and the Gulf of Mexico/Gulf Coast. SLIDE 20 - ROCKY MOUNTAINS Map showing Devon and Santa Fe Snyder key properties in the Rocky Mountains. o 219 MMBoe Pro Forma o Gas leveraged o Improving differentials o Shared coalbed methane technologies SLIDE 21 - GULF OF MEXICO Map showing Devon and Santa Fe Snyder offshore blocks in the Gulf of Mexico. SLIDE 22 - INTERNATIONAL OPERATIONS International map showing the countries in which Devon and Santa Fe Snyder have production and/or exploration. 5 SLIDE 23 - 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 24 - AZERBAIJAN Middle East map showing Azerbaijan and pipelines in the area. SLIDE 25 - SOUTHEAST ASIA Southeast Asia map showing the general location of the following areas: B7/38, PM308, Jabung, Jambi B, Tuban SLIDE 26 - 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, San Jorge Basin SLIDE 27 - PEARL RIVER BASIN South China/South China Sea map showing the general location of the following offshore areas: Bootes Discovery, Ursa Discovery SLIDE 28 - WEST AFRICA West Africa map showing the general location of the following offshore areas: CI-24/202, Keta, Agali, Kowe, Marine IX SLIDE 29 - CAPITAL EXPENDITURES (Bar graph showing Devon's proved reserves from 1987 to 1999 in MMBoe at year-end) 1996 1997 1998 1999 2000E 2000E Pro Forma ----------------------------------------------------------- 77 115 275 217 500 850 Note: 1996-1997 represents historical Devon as reported prior to 1998 Northstar merger. 6 SLIDE 30 - DECADE OF OPPORTUNITIES o 2000 - 1st significant Powder River CBM production o 2001 - Foothills development/tie-in o 2002 - 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 31 - TIME LINE o May 26: DVN and SFS announce merger o Late June: File preliminary proxy materials o Early Sept: File definitive proxy materials o Early Oct: Shareholder meetings o Early Oct: Close merger SLIDE 32 - TITLE SLIDE "DEVON ENERGY & SANTA FE SNYDER" ******************** The following is preliminary pro forma information used by participants in the solicitation on behalf of Santa Fe Snyder Corporation. Devon Energy Corporation Unaudited Pro Forma Capitalization As of March 31, 2000 (In Thousands)
------------------------------------------------------------------------ Devon Santa Fe Adjustments Pro Forma ------------------------------------------------------------------------ Net working capital surplus (deficit) $ 68,422 $ (10,200) $ 58,222 Borrowings under credit facilities with banks 355,560 495,300 $ 57,000 907,860 Debentures exchangeable into Chevron common stock 4.90%, due 8/15/2008 443,807 443,807 4.95%, due 8/15/2008 316,506 316,506 Market value of Chevron common stock (2) (661,631) Other debentures 10.25%, due 11/1/2005 250,000 250,000 10.125%, due 11/15/2009 200,000 200,000 Unamortized premium on debentures 36,444 36,444 Other unsecured notes Senior notes, 8.05%, due 6/15/2004 125,000 125,000 Unaccreted discount on note (1,300) Senior subordinated notes, 8.75%, due 6/15/2007 175,000 175,000 Other long-term obligations Deferred revenue associated with forward sale (3) 152,000 152,000 Other 173,680 89,900 263,580 ------------------------------------------------------------------------ Total indebtedness net of working capital (Net Debt) 1,045,944 1,046,100 57,000 2,149,044 ------------------------------------------------------------------------ Preferred stock (perpetual preferred, 6.5% coupon) 150,000 150,000 ----------- ---------- Total Net Debt plus preferred $ 1,195,944 $ 1,046,100 $ 57,000 $2,299,044 ========================================================================
(1) This adjustment represents the total estimated transaction costs (e.g., severance, relocation, professional fees, etc.). (2) Devon owns 7.1 million shares of Chevron common stock, which underlie the exchangeable debentures. The market value is based on the share price of Chevron common stock on May 25, 2000, of $93 3/16. (3) Santa Fe entered into two crude oil forward sales contracts in August 1999 and January 2000. This amount of deferred revenue represents the remaining obligation of Santa Fe to deliver a total of 9.0 million barrels of oil during the period April 2000 through August 2002, deliverable straight-line at 311,000 barrels per month. 7 Devon Energy Corporation Pro Forma Combined Reserve Data
Estimated reserves as of 12/31/99 (1) Devon Santa Fe Snyder Combined Amount Portion Amount Portion Amount Portion ------ ------- ------ ------- ------ ------- Reserve Breakdown: Oil (MMBo) 303.9 45.4% 192.8 49.9% 496.7 47.0% NGLs (MMBo) 49.8 7.4% 18.0 4.7% 67.8 6.4% Gas (Bcf) 1,896.5 47.2% 1,053.1 45.4% 2,949.6 46.5% Total (MMBoe) 669.8 386.3 1,056.1 Contribution 63.4% 36.6% 100.0% PD (MMBoe) 510.5 76.2% 259.4 67.2% 769.9 72.9% PUD (MMBoe) 159.3 23.8% 126.9 32.8% 286.2 27.1% Principal Areas (in MMBoes): Permian Basin 120.3 18.0% 95.0 24.6% 215.3 20.4% GOM/Gulf Coast and Other Offshore 85.0 12.7% 57.0 14.8% 142.0 13.4% Rocky Mountain 113.8 17.0% 105.3 27.3% 219.1 20.7% Mid-Continent & Other 103.0 15.4% 103.0 9.8% Canada 120.5 18.0% 120.5 11.4% Subtotal North America 542.6 81.0% 257.3 66.6% 799.9 75.7% Azerbaijan 107.7 16.1% 107.7 10.2% Argentina/Brazil 47.0 12.2% 47.0 4.5% Southeast Asia 71.6 18.5% 71.6 6.8% West Africa 10.4 2.7% 10.4 1.0% Egypt 2.3 0.3% 2.3 0.2% Venezuela 17.2 2.6% 17.2 1.6% Subtotal International 127.2 19.0% 129.0 33.4% 256.2 24.3% Grand Total 669.8 100.0% 386.3 100.0% 1,056.1 100.0% Pre-tax SEC PV 10% (in millions) (1) $3,634 $2,178 $5,812 - -------------------------------------- Contribution 62.5% 37.5% 100.0% - ------------------------------------------------------------------------------------------------------------------------------
(1) Reserve data taken from the Annual Reports and Form 10-K filings of the companies. 8 INVESTOR NOTICES The foregoing information includes "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 this press release 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 that will be included in the Registration Statement on Form S-4 to be filed with the SEC in connection with the proposed merger because it will contain important information. The joint proxy statement/prospectus will be 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 (when available) 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) 552-4505, e-mail: nakita.rizzo@dvn.com. 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 77024, Attention: Investor Relations, telephone: (713) 507-5775, e-mail: jokeefe@santafe-snyder.com. 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. ******************** -----END PRIVACY-ENHANCED MESSAGE-----