Devon and Crosstex to Create New Midstream Business October 21, 2013 NYSE: DVN www.devonenergy.com NASDAQ: XTEX / XTXI www.crosstexenergy.com
Transaction Overview John Richels Devon President and CEO NYSE: DVN NASDAQ: XTEX & XTXI
Strategic Combination Devon and Crosstex to combine midstream assets to form new general partner (New GP) and master limited partnership (MLP) Creates new midstream business with high-quality upstream sponsorship Combined 2014e…
Strategic Highlights Immediate and meaningful value accretion for both Devon and Crosstex equity holders Increased scale and diversification Devon upstream sponsorship Enhanced financial strength Improved cash flow stability…
Transaction Overview Devon Energy Corporation Devon forms and contributes (NYSE: DVN) substantially all of its U.S. based midstream assets to Devon Form Holdings Holdings. Devon contributes 100 million in Devon Midstream cash and…
Pro Forma Ownership Structure Devon Energy Corporation (NYSE: DVN) New GP Public Unitholders 70% 53% LP 30% General Partner 100% Incentive Distribution Rights (IDRs) (New GP) General Partner, MLP 7% LP and Public IDRs…
Governance Board of Directors: 5 Devon, 1 management and 3 independent Chairman of the Board: John Richels (Devons President and CEO) President and CEO: Barry Davis (Crosstexs President and CEO) Chief Financial Officer: Mike…
Benefits to Devon Accretive to shareholders 4.8 billion transaction is highly accretive (15x distributable cash flow; 11x adjusted EBITDA) Provides immediate market-based valuation for Devons U.S. midstream business Publicly held…
Strategic Highlights Barry E. Davis Crosstex President and CEO NYSE: DVN NASDAQ: XTEX & XTXI
Benefits to Crosstex Immediately accretive to distributable cash flow and shareholder returns Significantly increases scale and diversification Partners Crosstex with high-quality upstream sponsor Significantly enhances financial…
Accretive to Investor Returns Financial Benefits to Crosstex Combined 2014e adjusted EBITDA 700 million (pre-synergies) Increased capacity for cash distributions Potential for significant Upstream Sponsored MLP Yields equity…
Increased Scale & Diversification Diversity of Midstream Services & Geographies PA Gas Gathering and Transportation OH 6,500 miles of gathering and MARCELLUS transmission lines CANA-WOODFORD OK Gas Processing UTICA 13 plants…
Strong Sponsorship Devon is Committed to the New Companys Success Devon has dedicated 800,000 net Devons Upstream Portfolio & Remaining Midstream Assets acres to partnership Horn River Long-term contracts in place to Greater…
Improved Cash Flow Stability High Quality & Diversified Revenue Streams Upstream Producers Devon is largest customer ( 50% of combined 2014e adjusted EBITDA) Diversified industry customer base Growth projects focused on liquids…
Enhanced Financial Strength Devon contributes assets without debt Initial MLP pro forma leverage is 2.1x(1) 2013e EBITDA (MLP & GP…
Enhanced Growth Outlook Maximizing Earnings & Distribution Growth Execute on growth projects underway Exploit sponsor-related opportunities Support Devons upstream growth needs Potential to acquire additional Devon assets Right…
Enhanced Growth Outlook 2014e Financial Outlook 2014e adjusted EBITDA (pre-synergies) Pro Forma 2014e 700 MM combined Outlook 500 MM at the MLP Combined Adjusted EBITDA 700 MM Synergies contribute to distributable cash MLP Adjusted…
Summary John Richels Devon President and CEO NYSE: DVN NASDAQ: XTEX & XTXI
Summary Immediate and meaningful value accretion for both Devon and Crosstex equity holders Increased scale and diversification Devon upstream sponsorship Enhanced financial strength Improved cash flow stability Enhanced…
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