Devon Energy Corporation

Due to an audio issue on the webcast, this replay only includes the Q&A portion of the conference call. Please visit Devon's website for a transcript of the prepared remarks from the Devon management team.

Hi, good morning, guys. I don't know if you can hear me because the voice is breaking up pretty bad on my phone. I think two questions. One, can you tell us what's the mechanism of the 1.5 billion dollars debt reduction since that you have no maturity. Is that going to be a tender or that you're just going to buy from the public market? And secondly, that on the special dividend and why we are not using that money for buyback given how cheap is the valuation the stock is currently? Yes. Thank you.

Hi. Yeah, this is Jeff. So as it relates to the debt repurchase, the $1.5 billion, that we've highlighted. Our expectation is to do probably a mix between open market and tender. That's going to be dependent upon market conditions, so we're going to evaluate the maturities across the curve and where the best value sits, and then we'll enact that as we work our way through the rest of this year and likely into next year as well. So it's likely going to be a mixed bag. We certainly want to see interest costs come down, as we've highlighted as our new annual run rate, but we also are going to have a focus on reducing absolute leverage. So it's going to be a balance between the two. As it relates to the special dividend, as I mentioned in my prepared remarks, which you all probably could not hear, the feedback from our investors has been incredibly clear. They're looking for a continuation of cash dividends from the space and specifically from Devon. And so we think with the work that we've done around our cost structure, lowering our break-even, we're uniquely positioned within the sector to provide those cash returns to shareholders. So it's really consistent with what we're hearing from our largest shareholders, and we're excited to move forward with not only our quarterly dividend, but the potential for variable dividends as we move through the next couple of years and evaluate market conditions.