1
================================================================================
OFFER TO PURCHASE FOR CASH
ANY AND ALL OUTSTANDING UNITS OF BENEFICIAL INTEREST
OF
BURLINGTON RESOURCES
COAL SEAM GAS ROYALTY TRUST
AT
$8.75 NET PER UNIT
BY
DEVON ACQUISITION CORPORATION
A WHOLLY-OWNED SUBSIDIARY OF
DEVON ENERGY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 13, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING
TENDERED OR UPON THE OBTAINING OF FINANCING. THE OFFER IS SUBJECT TO CERTAIN
OTHER CONDITIONS THAT ARE CONTAINED IN THIS OFFER TO PURCHASE. SEE "THE TENDER
OFFER -- 14. CERTAIN CONDITIONS OF THE OFFER."
IMPORTANT
Any Unit holder desiring to tender all or any portion of his or her Units
should either (1) complete and sign the Letter of Transmittal or a facsimile
copy thereof in accordance with the instructions in the Letter of Transmittal,
have such Unit holder's signature thereon guaranteed if required by Instruction
1 to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or
facsimile thereof), or, in the case of a book-entry transfer effected pursuant
to the procedure set forth in "THE TENDER OFFER -- 2. Procedures for Tendering
Units," an Agent's Message (as defined herein), and any other required documents
to ▇▇▇▇▇▇ Trust Company of New York (the "Depositary") and either deliver the
certificates for such Units to the Depositary along with the Letter of
Transmittal (or facsimile thereof) or deliver such Units pursuant to the
procedure for book-entry transfer set forth in "THE TENDER OFFER -- 2.
Procedures for Tendering Units," or (2) request his or her broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
him or her. A Unit holder having Units registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if he or she
desires to tender such Units.
A Unit holder who desires to tender Units and whose certificates for such
Units are not immediately available, or who cannot comply with the procedures
for book-entry transfer on a timely basis, may tender such Units by following
the procedure for guaranteed delivery set forth in "THE TENDER OFFER -- 2.
Procedures for Tendering Units."
Requests for assistance or for additional copies of this Offer to Purchase,
the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed
to ▇.▇. ▇▇▇▇ & Co., Inc. (the "Information Agent") or ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (now
associated with Salomon Brothers Inc and collectively with Salomon Brothers Inc
doing business as ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and sometimes referred to herein as the
"Dealer Manager") at their respective addresses and telephone numbers set forth
on the back cover of this Offer to Purchase. A Unit holder may also contact
brokers, dealers, commercial banks or trust companies for assistance concerning
the Offer.
---------------------
The Dealer Manager for the Offer is:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY
February 13, 1998
================================================================================
2
TABLE OF CONTENTS
PAGE
----
Introduction................................................ 1
The Tender Offer............................................ 2
1. Terms of Offer........................................ 2
2. Procedures for Tendering Units........................ 3
3. Withdrawal Rights..................................... 5
4. Acceptance for Payment and Payment for Units.......... 6
5. Certain U.S. Federal Income Tax Considerations........ 7
6. Certain Information Concerning the Trust.............. 8
7. Certain Information Concerning the Purchaser and
Devon................................................. 10
8. Price Range of Units; Cash Distributions.............. 12
9. Distributions......................................... 13
10. Financing of the Offer................................ 13
11. Background of the Offer; Past Contacts, Transactions
or Negotiations with the Trust........................ 14
12. Purpose and Structure of the Offer; Plans for the
Trust................................................. 14
13. Effect of the Offer on the Market for Units; NYSE
Listing and Exchange Act Registration; Margin
Regulations........................................... 15
14. Certain Conditions of the Offer....................... 16
15. Appraisal Rights...................................... 17
16. Certain Transactions.................................. 17
17. Certain Legal Matters................................. 20
18. Fees and Other Expenses............................... 20
19. Miscellaneous......................................... 21
i
3
TO THE OWNERS OF UNITS OF BENEFICIAL INTEREST OF
BURLINGTON RESOURCES COAL SEAM GAS ROYALTY TRUST:
INTRODUCTION
Devon Acquisition Corporation, a Delaware corporation (the "Purchaser") and
a wholly-owned subsidiary of Devon Energy Corporation, an Oklahoma corporation
("Devon"), hereby offers to purchase any and all outstanding Units of Beneficial
Interest ("Units") of Burlington Resources Coal Seam Gas Royalty Trust (the
"Trust"), at a price of $8.75 per Unit, net to the seller in cash, without
interest (the "Purchase Price"), upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal,
both as amended from time to time (which together constitute the "Offer").
Tendering Unit holders will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Letter of Transmittal, stock transfer
taxes on the purchase of the Units by the Purchaser pursuant to the Offer. The
Purchaser will pay all charges and expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, as Dealer
Manager (the "Dealer Manager"), ▇▇▇▇▇▇ Trust Company of New York, as Depositary
(the "Depositary"), and ▇.▇. ▇▇▇▇ & Co., Inc., as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See "THE TENDER
OFFER -- 18. Fees and Other Expenses."
If the record date for the regular March 1998 quarterly cash distribution
and associated tax credits declared by the Trust precedes the transfer to the
Purchaser on the Trust's transfer records of the Units purchased pursuant to the
Offer, holders of record of Units on such record date (including holders who
have tendered Units pursuant to the Offer) will be entitled to receive and
retain such regular quarterly cash distribution and associated tax credits on
such Units. The Purchaser anticipates that March 13, 1998 (the date on which the
Offer is initially scheduled to expire) will be after the record date for the
Trust's normal quarterly distribution in March 1998. See "THE TENDER
OFFER -- 8. Price Range of Units; Cash Distributions."
The purpose of the Offer is for the Purchaser to acquire a significant
number of the outstanding Units as an investment.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING
TENDERED OR UPON THE OBTAINING OF FINANCING. THE OFFER IS SUBJECT TO CERTAIN
OTHER CONDITIONS THAT ARE CONTAINED IN THIS OFFER TO PURCHASE. SEE "THE TENDER
OFFER -- 14. CERTAIN CONDITIONS OF THE OFFER."
Based on a Schedule 14D-1 filed with the Commission on or about January 20,
1998 by San ▇▇▇▇ Partners, L.L.C. ("SJP") and certain other parties named
therein, as of February 12, 1998, the Purchaser believes that (i) SJP is
offering to purchase 5,446,860 Units at a price of $8.25 per Unit (the "SJP
Offer") and (ii) the SJP Offer is scheduled to expire at 12:00 Midnight, New
York City time, on Tuesday, February 17, 1998. Holders of Units who have
previously tendered Units pursuant to the SJP Offer and who now wish to tender
such Units pursuant to the Offer will first need to withdraw such Units from the
SJP Offer before such Units can be tendered pursuant to the Offer. Holders of
Units who desire assistance in withdrawing Units tendered pursuant to the SJP
Offer may contact the Dealer Manager or the Information Agent at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase.
The Purchaser and Devon have filed a Schedule 14D-1 with the Securities and
Exchange Commission (the "Commission") in connection with the Offer (the
"Purchaser Schedule 14D-1"). The Purchaser Schedule 14D-1 contains additional
information, including exhibits, relating to the Offer, the Purchaser and Devon
and may be inspected and copies of such document may be obtained at the same
places and in the same manner as set forth in "THE TENDER OFFER -- 6. Certain
Information Concerning the Trust."
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1
4
THE TENDER OFFER
1. TERMS OF OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any such extension or amendment), the Purchaser will accept for payment and
pay for all Units that are validly tendered prior to the Expiration Date (as
hereinafter defined) and not properly withdrawn in accordance with the
procedures set forth in "THE TENDER OFFER -- 3. Withdrawal Rights." The term
"Expiration Date" means 12:00 midnight, New York City time, on Friday, March 13,
1998, unless and until the Purchaser, in its sole discretion, shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date on which the Offer,
as so extended by the Purchaser, shall expire.
SATISFACTION OF CERTAIN CONDITIONS. The Offer is subject to certain
conditions. See "THE TENDER OFFER -- 14. Certain Conditions of the Offer." If
any or all of the conditions set forth in "THE TENDER OFFER -- 14. Certain
Conditions of the Offer" are not satisfied prior to the Expiration Date, the
Purchaser reserves the right (but shall not be obligated) in its sole discretion
to (i) decline to purchase any of the Units tendered in the Offer, terminate the
Offer and return all tendered Units to the tendering Unit holders, (ii) waive or
amend any or all conditions to the Offer to the extent permitted by applicable
law and, subject to complying with applicable rules and regulations of the
Commission, purchase all Units validly tendered, (iii) extend the Offer and,
subject to the right of the Unit holders to withdraw Units until the Expiration
Date, retain the Units that have been tendered during the period or periods for
which the Offer is extended or (iv) amend the Offer.
MODIFICATION OF CONSIDERATION. The Purchaser also reserves the right to
decrease the number of Units being sought or to increase or decrease the
consideration being offered in the Offer, subject to any requirement to extend
the period of time during which the Offer is open. Any such decrease in the
number of Units being sought or such increase or decrease in the consideration
being offered will be applicable to all Unit holders whose Units are accepted
for payment pursuant to the Offer. The Purchaser has no present intention of
exercising any such right, except that it is likely that the Purchaser would
reduce the consideration offered in the Offer if the Offer is extended beyond
the record date for the regular second quarter 1998 cash distribution and
associated tax credits declared by the Trust.
RIGHT TO EXTEND OR AMEND OFFER. Subject to the applicable rules of the
Commission, the Purchaser expressly reserves the right, in its sole discretion,
at any time or from time to time, (i) to extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the payment
for, all Units validly tendered by giving oral or written notice of such
extension to the Depositary and (ii) to amend the Offer in any respect, by
giving oral or written notice of such amendment to the Depositary. The rights
reserved by the Purchaser in this paragraph are in addition to the Purchaser's
rights to terminate the Offer pursuant to "THE TENDER OFFER -- 14. Certain
Conditions of the Offer." UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED UNITS, WHETHER OR NOT THE PURCHASER EXERCISES ITS
RIGHTS TO EXTEND THE OFFER.
RESULT OF MATERIAL MODIFICATION. If the Purchaser makes a material change
in the terms of the Offer or in the information concerning the Offer or waives a
material condition of the Offer, the Purchaser will disseminate additional
tender offer materials and extend the Offer to the extent required by Rules
14d-4(c) and 14d-6(d) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The minimum period during which an offer must
remain open following material changes in the terms of the offer or information
concerning the offer, other than a change in price or a change in percentage of
securities sought, will depend upon the facts and circumstances, including the
relative materiality of the terms or information changed. With respect to a
change in price or a change in percentage of securities sought, if at the time
notice of such change is first published, sent or given to holders of such
Units, the Offer is scheduled to expire at any time earlier than the period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer will be extended at least until the
expiration of a ten business day period from the last such notice given. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
2
5
ANNOUNCEMENTS. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rule 14d-4(c)
promulgated under the Exchange Act. Without limiting the obligation of the
Purchaser under such rule or the manner in which the Purchaser may choose to
make any public announcement, the Purchaser currently intends to make
announcements by issuing a release to the PR Newswire.
DELAY OF PAYMENTS. If the Purchaser extends the Offer, or if the Purchaser
(whether before or after its acceptance for payment of Units) is delayed in its
purchase of or payment for Units or is unable to pay for Units pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, the Depositary may retain tendered Units on behalf of the Purchaser,
and such Units may not be withdrawn except to the extent tendering Unit holders
are entitled to withdrawal rights as described in "THE TENDER
OFFER -- 3. Withdrawal Rights." However, the ability of the Purchaser to delay
the payment for Units that the Purchaser has accepted for payment is limited by
Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of the
holders of securities promptly after the termination or withdrawal of such
bidder's offer.
REQUEST FOR UNIT HOLDER LIST. A request has been made to NationsBank of
Texas, N.A. as Trustee of the Trust (the "Trustee"), for the use of the Trust's
Unit holder list and security position listings for the purpose of disseminating
the Offer to holders of Units. Once the Trust has provided such list and
listings or otherwise complied with such request, this Offer to Purchase and the
Letter of Transmittal and other relevant materials will be mailed to record
holders of Unit. Such materials will also be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Unit holder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Units by the Purchaser.
2. PROCEDURES FOR TENDERING UNITS.
VALID TENDER OF UNITS. Except as set forth below, for Units to be validly
tendered pursuant to the Offer, a Letter of Transmittal (or manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry delivery of Units, and any other documents required
by the Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth on the back cover page of this Offer to Purchase prior to
the Expiration Date. In addition, either (i) certificates for Units representing
tendered Units must be received by the Depositary along with the Letter of
Transmittal, or such Units must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation (as defined
below) must be received by the Depositary, or (ii) the tendering Unit holder
must comply with the guaranteed delivery procedures set forth below, in each
case prior to the Expiration Date.
BOOK-ENTRY TRANSFER. The Depositary will make a request to establish an
account with respect to the Units at each of The Depository Trust Company and
the Philadelphia Depository Trust Company (each a "Book-Entry Transfer Facility"
and collectively, the "Book-Entry Transfer Facilities") for purposes of the
Offer within two business days after the date of this Offer to Purchase, and any
financial institution which is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of Units by causing such Book-Entry Transfer
Facility to transfer such units into the Depositary's account at such Book-Entry
Transfer Facility in accordance with its procedures for transfer. However,
although delivery of Units may be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or an Agent's Message in connection with
a book-entry transfer, and any other required documents must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover page of this Offer to Purchase prior to the Expiration Date,
or the guaranteed delivery procedures described below must be complied with.
Delivery of documents to a Book-Entry Transfer Facility in accordance with
its procedures does not constitute delivery to the Depositary. None of the
Purchaser, Devon, the Depositary, the Dealer Manager, the
3
6
Information Agent or any other person will assume any responsibility for, or
will be under any duty to give notification of, the failure by any Book-Entry
Transfer Facility to forward documents to the Depositary.
SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm that is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agent's Medallion Program (each, an "Eligible Institution"), unless the
Units tendered thereby are tendered (i) by a registered holder of Units who has
not completed either the box labeled "Special Delivery Instructions" or the box
labeled "Special Payment Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution. See Instruction 1 of the Letter of
Transmittal.
If the certificates for Units are registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made to, or
certificates for unpurchased Units are to be issued or returned to, a person
other than the registered owner, then the tendered certificates must be endorsed
or accompanied by appropriate transfer powers, in either case signed exactly as
the name or names of the registered owner or owners appear on the certificates,
with the signatures on the certificates or transfer powers guaranteed by an
Eligible Institution as described above. See Instructions 1 and 5 of the Letter
of Transmittal.
GUARANTEED DELIVERY. If a Unit holder desires to tender Units pursuant to
the Offer and certificates for such Units are not immediately available, or time
will not permit all required documents to reach the Depositary prior to the
Expiration Date, or the procedures for book-entry transfer cannot be completed
on a timely basis, such Units may nevertheless be tendered if all of the
following guaranteed delivery procedures are duly complied with:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates (or a Book-Entry Confirmation (as hereinafter
defined)) representing all tendered Units, in proper form for transfer,
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message) and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three New York Stock Exchange ("NYSE") trading days after the date
of the execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram or facsimile transmission or mailed to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF UNITS, THE LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS IS AT THE OPTION AND RISK OF THE TENDERING UNIT HOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED.
Notwithstanding any other provision hereof, payment for the Units accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of certificates for, or of Book-Entry Confirmation
with respect to, such Units, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal. Accordingly, payment might not
be made to all tendering Unit holders at the same time and will depend upon when
the foregoing materials are actually received by the Depositary.
BACKUP FEDERAL TAX WITHHOLDING. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain Unit holders pursuant to the Offer. TO PREVENT BACKUP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR UNITS SOLD
PURSUANT TO THE OFFER, A TENDERING
4
7
UNIT HOLDER MUST PROVIDE THE DEPOSITARY WITH HIS OR HER CORRECT TAXPAYER
IDENTIFICATION NUMBER, CERTIFY THAT HE OR SHE IS NOT SUBJECT TO BACKUP FEDERAL
INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE
LETTER OF TRANSMITTAL OR OTHERWISE ESTABLISH AN EXEMPTION TO BACKUP WITHHOLDING
IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF TRANSMITTAL.
APPOINTMENT AS PROXY. By executing a Letter of Transmittal as set forth
above, a tendering Unit holder irrevocably appoints designees of the Purchaser
as such Unit holder's attorneys-in-fact and proxies, in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such Unit holder's rights with respect to the Units tendered by the
Unit holder and accepted for payment by the Purchaser and with respect to any
and all other Units or other securities, rights or distributions, other than
regular cash distributions and associated tax credits declared by the Trust
having a record date prior to the date of transfer to the Purchaser on the
Trust's transfer records of the Units tendered (such Units or other securities,
rights or distributions other than such regular cash distributions and
associated tax credits being referred to herein as "Special Distributions"),
issued or issuable in respect of such Units on or after the date of this Offer
to Purchase. All such powers of attorney and proxies shall be considered
irrevocable and coupled with an interest in the tendered Units. This appointment
will be effective if, when, and only to the extent that, the Purchaser accepts
Units for payment pursuant to the Offer. Upon such acceptance for payment, all
powers of attorney and proxies given by such Unit holder with respect to such
Units and any Special Distributions will, without further action, be revoked,
and no subsequent powers of attorney or proxies may be given by such Unit holder
(and, if given, will not be deemed effective). The designees of the Purchaser
will, with respect to the Units and any Special Distributions, be empowered to
exercise all voting and other rights of such Unit holder with respect to such
Units and any Special Distributions as they, in their sole discretion, may deem
proper at any meeting of the Unit holders, or any adjournment or postponement
thereof, or by written consent or otherwise. The Purchaser reserves the right to
require that, in order for Units to be deemed validly tendered, immediately upon
the Purchaser's acceptance for payment of such Units, the Purchaser must be able
to exercise full voting rights with respect to such Units, including voting at
any meeting of Unit holders.
DETERMINATION OF VALIDITY. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for payment of
any tender of Units pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, whose determination will be
final and binding. The Purchaser reserves the absolute right to reject any or
all tenders of any Units determined by it not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any of the conditions of the Offer or any defect or irregularity in any tender
of Units of any particular Unit holder, whether or not similar defects or
irregularities are waived in the case of other Unit holders.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. No tender will be deemed to have been validly made until all
defects and irregularities with respect to such tender have been cured or
waived. None of the Purchaser, Devon, the Depositary, the Dealer Manager, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give such notification.
A tender of Units pursuant to any one of the procedures described above
will constitute the tendering Unit holder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Units
tendered pursuant to the Offer will constitute a binding agreement between the
tendering Unit holder and the Purchaser upon the terms and subject to the
conditions of the Offer.
3. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 3,
tenders of Units made pursuant to the Offer are irrevocable. Units tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Purchaser as provided
herein, may also be withdrawn at any time after April 13, 1998.
5
8
If, for any reason whatsoever, acceptance for payment of Units tendered
pursuant to the Offer is delayed, or the Purchaser is unable to accept for
payment or pay for Units tendered pursuant to the Offer, then, without prejudice
to the Purchaser's rights set forth herein, the Depositary may, nevertheless, on
behalf of the Purchaser, retain tendered Units, and such Units may not be
withdrawn except to the extent that the tendering Unit holder is entitled to and
duly exercises withdrawal rights as described in this Section 3. Any such delay
will be by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses specified on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Units to be withdrawn, the number of Units to be withdrawn, and (if certificates
for Units have been tendered) the name of the registered holder of the Units as
set forth in the certificate for the Units, if different from the name of the
person who tendered such Units. If certificates for Units to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Units have been tendered by an
Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Units have been tendered pursuant to
the procedure for book-entry transfer as set forth in "THE TENDER OFFER -- 2.
Procedures for Tendering Units," any notice of withdrawal must also specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Units and otherwise comply with such Book-Entry
Transfer Facility's procedures.
Withdrawals of tenders of Units may not be rescinded and any Units properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Units may be retendered by again following one of the
procedures described in "THE TENDER OFFER -- 2. Procedures for Tendering Units"
at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Devon, the Depositary, the Dealer Manager, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR UNITS. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of any such extension or amendment), the Purchaser will
accept for payment, and will pay for, all Units validly tendered prior to the
Expiration Date (and not properly withdrawn in accordance with "THE TENDER
OFFER -- 3. Withdrawal Rights") promptly after the Expiration Date.
The Purchaser expressly reserves the right, in its sole discretion, to
delay acceptance for payment of, or, subject to the requirements of Rule
14e-1(c) referred to in "THE TENDER OFFER -- 1. Terms of the Offer," payment
for, Units in order to comply in whole or in part with any applicable law or
condition. See "THE TENDER OFFER -- 14. Certain Conditions of the Offer." In all
cases, payment for Units purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates for such Units or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Units into the Depositary's account at a Book-Entry Transfer Facility pursuant
to the procedures set forth in "THE TENDER OFFER -- 2. Procedures for Tendering
Units," (ii) the Letter of Transmittal (or manually signed facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message (as defined below) in connection with a book-entry transfer,
and (iii) any other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Units which are the subject of such Book-Entry
Confirmation that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
6
9
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Units validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Units for payment pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Units accepted for payment pursuant to the Offer will be made by deposit of
the Purchase Price therefor with the Depositary, which will act as agent for
tendering Unit holders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering Unit holders. Under no circumstances will
interest on the Purchase Price be paid by the Purchaser by reason of any delay
in making such payment.
If any tendered Units are not accepted for payment pursuant to the Offer
for any reason, or if certificates are submitted representing more Units than
are tendered, certificates for tendered Units not purchased or tendered will be
returned, without expense to the tendering Unit holder (or, in the case of Units
tendered by book-entry transfer into the Depositary's account at a Book-Entry
Transfer Facility pursuant to the procedures set forth in "THE TENDER
OFFER -- 2. Procedures for Tendering Units," such Units will be credited to an
account maintained at such Book-Entry Transfer Facility), as promptly as
practicable after the expiration or termination of the Offer.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS. The following summary of
certain U.S. federal income tax considerations is based upon laws, regulations,
interpretive rulings and judicial decisions in effect on the date hereof, all of
which are subject to change (possibly with retroactive effect). This summary
does not discuss all aspects of U.S. federal income taxation that may be
relevant to a particular taxpayer in light of his or her personal investment
circumstances or to certain types of taxpayers subject to special treatment
under the U.S. federal income tax laws (such as life insurance companies, banks,
tax-exempt organizations, nonresident aliens and foreign corporations). THIS
SUMMARY ALSO DOES NOT DISCUSS ANY ASPECT OF STATE, LOCAL OR FOREIGN TAXATION.
ACCORDINGLY, EACH UNIT HOLDER IS URGED TO CONSULT WITH HIS OR HER TAX ADVISOR AS
TO THE TAX CONSEQUENCES OF TENDERING UNITS PURSUANT TO THE OFFER.
TENDERING UNIT HOLDERS. Each tendering Unit holder will be treated, for
U.S. federal income tax purposes, as having disposed of an undivided interest in
each of the assets of the Trust. As a result, each tendering Unit holder will
recognize gain or loss, for U.S. federal income tax purposes, measured by the
difference between the amount realized on the sale and the Unit holder's tax
basis in the Units sold. A Unit holder's tax basis in his or her Units will
generally include the amount paid by such Unit holder for such Units and an
allocable share of the debts of the Trust, if any, and such tax basis must be
reduced, but not below zero, by any depletion deductions that the Unit holder
has been allowed. A Unit holder's amount realized will generally include an
allocable share of the debts of the Trust, if any, at the time the Units are
sold pursuant to the Offer. The character of the gain or loss as ordinary income
or loss or as capital gain or loss (and, if capital gain or loss, as long-term
or short-term) will be determined by reference to the Royalty Interests (as
defined in "THE TENDER OFFER -- 6. Certain Information Concerning the Trust"),
rather than by reference to the Units (with the result, inter alia, that the
depletion recapture rules will generally require a Unit holder to
recharacterize, as ordinary income, any capital gain realized in connection with
the sale of Units, but not in excess of the depletion deductions previously
allowed to the Unit holder that were applied to reduce tax basis). A tendering
Unit holder who has taken a tax credit under Section 29 of the Internal Revenue
Code of 1986, as amended (the "Code"), will not have to recapture as ordinary
income any amount previously taken as a credit. While net capital gains are
taxed, in the case of corporate taxpayers, at the same rates that apply to
ordinary income, such gains are taxed, in the case of individual taxpayers, at a
maximum rate of (i) 28% if the relevant holding period is more than 12 months
but no more than 18 months and (ii) 20% if the relevant holding period is more
than 18 months. Capital losses may be used, for federal income tax purposes, to
offset only capital gains and may not be used to offset ordinary income (subject
to a $3,000 exemption in the case of individual taxpayers).
The Trust will allocate its income, gain, loss, deduction and credits under
Section 29 of the Code for 1998 between a tendering Unit holder and the
Purchaser based on the number of quarterly record dates established for
distributions by the Trust during the portion of the calendar year that each
such person held the Unit.
7
10
NON-TENDERING UNIT HOLDERS. Consummation of the Offer will not alter the
Trust's classification as a grantor trust and will not require the Trust to
close its taxable year, change its method of accounting or otherwise be
adversely affected.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY. UNIT HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS
WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE EFFECTS
OF FEDERAL, STATE AND LOCAL TAX CONSEQUENCES THEREOF.
6. CERTAIN INFORMATION CONCERNING THE TRUST. According to the Trust's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 (the
"Trust 10-K"), the Trust was created under the laws of the State of Delaware
pursuant to the Trust Agreement, among Meridian Oil Production Inc., Burlington
Resources Inc., Mellon Bank (DE) National Association and the Trustee dated May
1, 1993 (the "Trust Agreement"). According to the Trust's Quarterly Report on
Form 10-Q for the fiscal quarter ended September 30, 1997 (the "Trust 10-Q"),
the Trust maintains its principal offices at the offices of the Trustee, located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. According to the Trust
10-K, the Trust has been formed to acquire and hold certain net profits
interests (the "Royalty Interests") in Meridian Oil Production Inc.'s interest
in the Fruitland coal formation underlying the Northeast ▇▇▇▇▇▇ Unit (the
"Underlying Properties"). The Purchaser believes that the name of Meridian Oil
Production Inc. has been changed to Burlington Resources Oil & Gas Company
("BROG"). Devon's single largest reserve position is its interest in the same
Northeast ▇▇▇▇▇▇ Unit ("NEBU"). The interests of all of the owners of interests
in the Northeast ▇▇▇▇▇▇ Unit are collectively referred to herein as the "NEBU
Interests."
The Trust is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith files reports and other information
with the Commission relating to its properties, financial condition and other
matters. These reports and other information are available for inspection at the
Commission's public reference facilities at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇, and also should be available for inspection and copying at the
regional offices of the Commission located at Seven World Trade Center, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Copies of such material may also be
obtained by mail, upon payment of the Commission's customary fees, from the
Commission's principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
In addition, the Commission maintains a web site on the Internet that can be
accessed at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇ and that contains information filed
electronically regarding the Trust. Reports and other information concerning the
Trust can also be inspected at the offices of the NYSE, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The selected financial data set forth below relating to the Trust have been
taken or derived from the audited financial statements contained in the Trust
10-K or the unaudited financial statements contained in the Trust 10-Q. More
comprehensive financial information is included in the Trust 10-K, the Trust
10-Q and the other documents filed by the Trust with the Commission, and the
financial data set forth below are qualified in their entirety by reference to
such reports and other documents including the financial statements and related
notes contained therein.
8
11
BURLINGTON RESOURCES
COAL SEAM GAS ROYALTY TRUST
SELECTED FINANCIAL DATA
CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
DECEMBER 31,
SEPTEMBER 30, ---------------------------
1997 1996 1995
------------- ------------ ------------
(UNAUDITED)
Assets
Cash and cash equivalents.............................. $ 77,522 $ 158,251 $ 31,260
Net royalty interests in oil and gas properties........ 95,634,222 107,371,880 123,603,700
----------- ------------ ------------
Total assets................................. $95,711,744 $107,530,131 $123,634,960
=========== ============ ============
Liabilities and Trust Corpus
Trust expenses payable................................. $ 96,836 $ 201,966 $ 100,220
Trust corpus (8,800,000 Units authorized and
outstanding)......................................... 95,614,908 107,328,165 123,534,740
----------- ------------ ------------
Total liabilities and trust corpus........... $95,711,744 $107,530,131 $123,634,960
=========== ============ ============
CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- -------------------------
1997 1996 1996 1995
---------- ---------- ----------- -----------
(UNAUDITED)
Royalty income.............................. $5,077,755 $8,376,309 $10,671,428 $14,076,780
Interest income............................. 12,826 22,184 28,339 37,576
---------- ---------- ----------- -----------
$5,090,581 $8,398,493 $10,699,767 $14,114,356
General and administrative expenses......... (538,911) (532,286) (659,226) (711,959)
---------- ---------- ----------- -----------
Distributable income........................ $4,551,670 $7,866,207 $10,040,541 $13,402,397
========== ========== =========== ===========
Distributable income per Unit (8,800,000
Units).................................... $ .52 $ .89 $ 1.14 $ 1.52
========== ========== =========== ===========
CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------------- ----------------------------
1997 1996 1996 1995
------------ ------------ ------------ ------------
(UNAUDITED)
Trust corpus, beginning of
period.......................... $107,328,165 $123,534,740 $123,534,740 $147,459,837
Amortization and impairment of
royalty interests............... (11,737,658) (15,008,321) (16,231,820) (23,913,096)
Distributable income.............. 4,551,670 7,866,207 10,040,541 13,402,397
Distributions to Unit holders..... (4,527,269) (7,806,576) (10,015,296) (13,414,398)
Trust corpus, end of period....... $ 95,614,908 $108,586,050 $107,328,165 $123,534,740
The information concerning the Trust contained herein has been taken from
or is based upon reports and other documents on file with the Commission or
otherwise publicly available. None of the Purchaser, Devon, the Dealer Manager,
the Information Agent or the Depositary takes any responsibility for the
accuracy or completeness of the information contained in such reports and other
documents or for any failure by the Trust to disclose events that may have
occurred and may affect the significance or accuracy of any such information but
that are unknown to such persons.
9
12
7. CERTAIN INFORMATION CONCERNING THE PURCHASER AND DEVON. The Purchaser is
a wholly-owned subsidiary of Devon and was recently organized and has not
engaged in any business since its organization other than that incident to its
organization and in connection with the Offer. The principal executive offices
of the Purchaser are located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ (telephone 405/▇▇▇-▇▇▇▇).
Devon is an independent energy company engaged primarily in oil and gas
exploration, development and production, and in the acquisition of producing
properties. Through its predecessors, Devon began operations in 1971. In 1988
Devon's common stock began trading publicly on the American Stock Exchange under
the symbol DVN. The principal executive offices of Devon are located at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (telephone 405/▇▇▇-▇▇▇▇).
Devon currently owns interests in approximately 2,200 oil and gas
properties concentrated in five operating areas: the Permian Basin in
southeastern New Mexico and western Texas; the San ▇▇▇▇ Basin in northwestern
New Mexico; the Rocky Mountain region in Wyoming; the Mid-continent region in
Oklahoma and the Texas Panhandle; and the Western Canada Sedimentary Basin in
Alberta, Canada.
10
13
Set forth below is certain selected consolidated financial information with
respect to Devon and its subsidiaries for the nine month periods ended September
30, 1997 and 1996 and the fiscal years ended December 31, 1996, 1995 and 1994.
Such financial information has been taken from the periodic reports and other
documents filed by Devon with the Commission. More comprehensive information
concerning Devon is included in such reports and other documents and all of the
financial information and notes contained therein.
DEVON ENERGY CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
YEAR ENDED DECEMBER 31,
--------------------------------------------
1997 1996 1995 1994
-------- -------- -------- --------
INCOME STATEMENT DATA:
Total revenues.................................. $313,140 $164,017 $113,303 $100,773
Lease operating expenses........................ 65,655 31,568 27,289 24,521
Production taxes................................ 17,924 10,658 6,832 6,899
Depreciation, depletion and amortization........ 85,307 43,361 38,090 34,132
General and administrative expenses............. 12,922 9,101 8,419 8,425
Interest expense................................ 274 5,277 7,051 5,439
Distributions on preferred securities of
subsidiary trust.............................. 9,717 4,753 -- --
Net earnings.................................... $ 75,292 $ 34,801 $ 14,502 $ 13,745
AT DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
BALANCE SHEET DATA:
Total assets............................................... $846,403 $746,251 $421,564
Long-term debt............................................. -- 8,000 143,000
Convertible preferred securities of subsidiary trust....... 149,500 149,500 --
Stockholders' equity....................................... $543,576 $472,404 $219,041
Devon is subject to the informational and reporting requirements of the
Exchange Act and is required to file reports and other information with the
Commission relating to its business, financial condition and other matters.
Information as of particular dates concerning Devon's directors and officers,
their remuneration, stock options granted to them, the principal holders of
Devon's securities, any material interests of such persons in transactions with
Devon and other matters is required to be disclosed in proxy statements
distributed to Devon's stockholders and filed with the Commission. These
reports, proxy statements and other information should be available for
inspection and copies may be obtained in the same manner as set forth for the
Trust in "THE TENDER OFFER -- 6. Certain Information Concerning the Trust,"
except that Devon's common stock is traded on the American Stock Exchange, and
reports, proxy statements and other information concerning Devon should also be
on file at the American Stock Exchange, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇.
The name, citizenship, business address, principal occupation or employment
and five-year employment history for each of the directors and executive
officers of the Purchaser and Devon are set forth in Schedule I hereto.
Except as set forth in this Offer to Purchase (including, without
limitation, Schedule I hereto): (i) none of Purchaser or Devon or, to the
knowledge of Purchaser or Devon, any of the persons listed on Schedule I hereto
or any associate or majority-owned subsidiary of the Purchaser, Devon or any of
the persons so listed, beneficially owns or has any right to acquire any Units;
(ii) none of the Purchaser or Devon or, to the knowledge of Purchaser or Devon,
any of the other persons or entities referred to in clause (i) above or any of
their executive officers, directors or subsidiaries, has effected any
transaction in the Units during the last 60 days; (iii) none of the Purchaser or
Devon or, to the knowledge of the Purchaser or Devon, any of the persons listed
on Schedule I hereto has any contract, arrangement, understanding or
relationship with any
11
14
other person with respect to any securities of the Trust, including, but not
limited to any contract, arrangement, understanding or relationship concerning
the transfer or voting thereof, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies; (iv) since January 1, 1995, there have been no
transactions which would require reporting under the rules and regulations of
the Commission between any of the Purchaser or Devon or, to the best knowledge
of the Purchaser or Devon, any of the persons listed on Schedule I hereto, on
the one hand, and the Trust or any of its executive officers, directors or
affiliates, on the other hand; and (v) since January 1, 1995, there have been no
contracts, negotiations or transactions between any of the Purchaser or Devon or
any of their respective subsidiaries or, to the best knowledge of the Purchaser
or Devon, any of the persons listed on Schedule I hereto, on the one hand, and
the Trust or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets of the Trust.
8. PRICE RANGE OF UNITS; CASH DISTRIBUTIONS. The Units are listed and
traded on the NYSE under the symbol BRU. The following table sets forth for the
periods indicated, the reported high and low closing sales prices for the Units
and the cash distributions per Unit, as reported in the Trust 10-K with respect
to the fiscal years 1995 and 1996 and the high and low closing sale prices for
the Units and the cash distributions per Unit reported in published financial
sources for the periods indicated thereafter.
PRICE CASH
----------------- DISTRIBUTIONS
1995 HIGH LOW PER UNIT
---- ------- ------- -------------
First Quarter.................................. $17.375 $15.250 $0.364168
Second Quarter................................. 17.000 14.750 0.399989
Third Quarter.................................. 15.500 14.500 0.385197
Fourth Quarter................................. 15.375 12.375 0.375008
PRICE CASH
----------------- DISTRIBUTIONS
1996 HIGH LOW PER UNIT
---- ------- ------- -------------
First Quarter.................................. $13.625 $10.125 $0.332900
Second Quarter................................. 11.750 8.750 0.298843
Third Quarter.................................. 10.000 8.750 0.255385
Fourth Quarter................................. 10.000 8.250 0.250990
PRICE CASH
----------------- DISTRIBUTIONS
1997 HIGH LOW PER UNIT
---- ------- ------- -------------
First Quarter.................................. $ 9.750 $ 7.625 $0.147801
Second Quarter................................. 8.250 6.750 0.160766
Third Quarter.................................. 8.000 7.125 0.205895
Fourth Quarter................................. 7.9375 5.375 0.125486
PRICE CASH
----------------- DISTRIBUTIONS
1998 HIGH LOW PER UNIT
---- ------- ------- -------------
First Quarter (through February 12, 1998)...... $8.9375 $5.9375 *
---------------
* This information had not been publicly announced as of February 12, 1998.
On February 10, 1998, the last full trading day prior to the public
announcement of the Purchaser's intention to commence the Offer, the closing
sales price for the Units on the NYSE was $8.125 per Unit. On February 12, 1998,
the last full trading day prior to the commencement of the Offer, the closing
sales price for the Units on the NYSE was $8.875 per Unit. UNIT HOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE UNITS.
12
15
Cash distributions are made by the Trustee on a quarterly basis. According
to the Trust 10-K, the quarterly distribution is payable to Unit holders of
record on the 63rd day following the end of such calendar quarter unless such
day is not a business day in which case the record date will be the next
business day thereafter. The Trustee distributes the quarterly distribution on
or prior to 75 days after the end of each calendar quarter to each person who
was a Unit holder of record on the associated record date, together with
interest estimated to be earned on such amount from the date of receipt thereof
by the Trustee to the payment date. The Purchaser believes that the amount of
each quarterly distribution is generally announced before the quarterly record
date.
9. DISTRIBUTIONS. If, on or after the date of this Offer to Purchase, the
Trust should split, combine or otherwise change the Units or its capitalization,
or disclose that it has taken such action, then, without prejudice to the
Purchaser's rights under applicable law and subject to the provisions in "THE
TENDER OFFER -- 14. Certain Conditions of the Offer," the Purchaser, in its sole
discretion, may make such adjustments in the Purchase Price and other terms of
the Offer as it deems appropriate to reflect such split, combination or other
change including, without limitation, the number of Units to be purchased.
If, on or after the date of this Offer to Purchase, the Trust should
declare or pay any distribution with respect to the Units, other than the
regular quarterly cash distributions and associated tax credits (see "THE TENDER
OFFER -- 8. Price Range of Units; Cash Distributions"), that is payable or
distributable to record holders as of a date prior to the transfer to the
Purchaser on the Trust's transfer records of the Units purchased pursuant to the
Offer, then without prejudice to the Purchaser's rights under applicable law and
subject to the provisions in "THE TENDER OFFER -- 14. Certain Conditions of the
Offer," (i) in the case of any cash distribution, the Purchase Price will be
reduced by the amount of such cash distribution and (ii) in the case of any
non-cash distribution, such non-cash distribution shall be received and held by
the tendering Unit holders for the account of the Purchaser and will be required
to be promptly remitted and transferred by each tendering Unit holder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, the Purchaser will be entitled to all rights and privileges as owner of any
such non-cash distribution and may withhold the entire Purchase Price or deduct
from the Purchase Price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
10. FINANCING OF THE OFFER. The total amount of funds required by the
Purchaser to purchase all outstanding Units pursuant to the Offer and to pay
related fees and expenses is expected to be approximately $78 million. The
Purchaser expects to obtain all such necessary funds from loans and/or capital
contributions from Devon. Devon expects to obtain such funds from cash on hand
and/or from borrowings under Devon's existing committed credit lines. As of
December 31, 1997, Devon had cash balances of approximately $42 million and $208
million available on its U. S. lines of credit.
Devon has long-term lines of credit with participating banks, including
NationsBank of Texas, N.A. (agent), Bank One, Texas, N.A., Bank of Montreal,
First Union National Bank of North Carolina and Bank of Oklahoma, N.A. Devon can
borrow up to an amount determined by the banks based on their evaluation of the
assets and cash flow (the "Borrowing Base") of Devon. The established Borrowing
Base at December 31, 1997, was $208 million. Amounts borrowed under the credit
lines bear interest at various fixed rate options which Devon may elect for
periods up to 90 days. Such rates are generally less than the prime rate. Devon
may also elect to borrow at the prime rate. No amounts were borrowed under the
credit lines at the end of 1997.
Debt under the credit lines is unsecured. No principal payments are
required until maturity unless the unpaid balance exceeds the maximum loan
amount. The maximum loan amount is equal to the Borrowing Base until August 31,
2000. Thereafter, the maximum loan amount will be reduced by 8.33% every three
months until August 31, 2003. The loan agreements contain certain covenants and
restrictions, among which are limitations on additional borrowings and annual
sales of properties valued at more than $25 million, and working capital and net
worth maintenance requirements. At December 31, 1997, Devon was in compliance
with such covenants and restrictions.
Devon anticipates that its operating cash flow will be sufficient to repay
any borrowings incurred as a result of the Offer.
13
16
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
WITH THE TRUST. Since 1988, Devon has been the "Operator" of the NEBU Interests.
See "THE TENDER OFFER -- 16. Certain Transactions." On February 11, 1998, Devon
issued a press release announcing the intention to commence the Offer. On
February 12, 1998, representatives of the Purchaser requested the Trustee to
provide, and the Trustee indicated that it would provide, the Purchaser with the
Trust's Unit holder list and security position listings. On February 13, 1998,
the Purchaser commenced the Offer.
12. PURPOSE AND STRUCTURE OF THE OFFER; PLANS FOR THE TRUST. The purpose of
the Offer is for the Purchaser to acquire a significant number of Units as an
investment.
The Purchaser has no current plan or intention of seeking to terminate the
Trust. However, if the Purchaser acquired 66 2/3% of the outstanding Units
(pursuant to the Offer or otherwise), the Purchaser would have the power to
cause the termination of the Trust without the affirmative vote of any other
Unit holders. Conversely, if the Purchaser obtains more than 33 1/3% of the
outstanding Units, it would have the voting power necessary to defeat any
proposal to terminate the Trust (since termination of the Trust requires the
affirmative vote of at least 66 2/3% of the outstanding Units).
Although the Purchaser has no current plans to cause the termination of the
Trust, there can be no assurance that the Purchaser will not consider proposing
and/or voting for termination of the Trust at some time in the future. In the
event that the Trust is terminated, the Purchaser or its affiliates may submit
an offer to purchase the Trust's interests in the Underlying Properties in
connection with the Trustee's auction of the Trust assets or otherwise.
The information in the following paragraphs of this Section 12 has been
taken or derived from the Trust Agreement, which has been filed as an exhibit to
the Trust 10-K. More comprehensive information concerning meetings of Unit
holders and the termination of the Trust is included in the Trust Agreement, and
the information set forth below is qualified in its entirety by reference to the
Trust Agreement.
According to the terms of the Trust Agreement, the Trust may terminate
prior to January 1, 2003 only upon the affirmative vote in favor of termination
of the Trust by the holders of at least 66 2/3% of the outstanding Units. A
meeting of the Unit holders may be called by Unit holders owning of record not
less than 10% of the then outstanding Units. The notice of such meeting must be
distributed at least 20, but not more than 60, days prior to the date of the
meeting. At such meeting, if the holders of at least 66 2/3% of the Units vote
to terminate the Trust, the Trustee will commence the liquidation process. The
Trust will still continue until all of the affairs of the Trust are liquidated
and wound up.
Within five business days of the date the Unit holders vote to terminate
the Trust (the "Termination Date"), the Trustee must (i) provide BROG,
Burlington Resources Inc. and Mellon Bank (DE) National Association (the
"Delaware Trustee") or its successor with written notice of the termination of
the Trust and (ii) engage an investment banking firm (the "Advisor") to assist
the Trustee in selling the remaining Royalty Interests then owned by the Trust
(the "Remaining Royalty Interests").
BROG may, but is not obligated to, make a written cash offer to purchase
the Remaining Royalty Interests, which offer must be delivered to the Trustee
within 60 days following the Termination Date (the "Option Period Termination
Date"). If BROG does make an offer to purchase the Remaining Royalty Interests,
the Trustee must decide, based on the recommendation of the Advisor, whether to
accept the offer. The Trustee must provide written notice to BROG of the
decision by the later of (i) the Option Period Termination Date or (ii) the
tenth business day after the date the Trustee receives BROG's offer. The
Trustee's notice must state that the Trustee (i) accepts the offer (which
acceptance is conditional on the receipt of an opinion of the Advisor of the
fairness of BROG's offer to the Unit holders from a financial point of view) or
(ii) defers action on the offer. If the Trustee accepts BROG's offer, BROG and
the Trustee must use their best efforts to close the purchase within 30 days of
BROG's receipt of notice of acceptance.
14
17
If the Trustee defers action on BROG's offer, the Trustee must use its best
efforts, with the Advisor's assistance, to obtain other cash offers for the
Remaining Royalty Interests. The Trustee must notify BROG of the highest offer,
if any, received by the Trust within 120 days following the Termination Date. If
the highest offer is more than 105% of BROG's original offer, or if BROG did not
make an offer, BROG may, but is not obligated to, purchase all of the Remaining
Royalty Interests for a cash purchase price equal to 105% of the highest offer.
If the highest offer is equal to or less than 105% of BROG's original offer,
BROG may, but is not obligated to, purchase all of the Remaining Royalty
Interests for a cash purchase price equal to the highest offer. BROG must
provide written notice of its election to purchase the Remaining Royalty
Interests within five business days of BROG's receipt of notice of the highest
offer. BROG and the Trustee must use their best efforts to close the purchase
within 30 days of BROG's receipt of notice of the highest offer.
If no other acceptable cash offers are received for the Remaining Royalty
Interests, the Trustee may request that BROG submit another offer. If BROG makes
an offer, and the Trustee accepts it, the acceptance will be conditional upon
receipt of an opinion of the Advisor of the fairness of the offer to the Unit
holders. BROG and the Trustee must use their best efforts to close the purchase
within 30 days of BROG's receipt of notice of acceptance of the offer.
If any assets or property of the Trust estate have not been sold, or no
definitive agreement for their sale has been entered into, within one year after
the Termination Date, the Trustee will cause the property to be sold at public
auction to the highest bidder (which may be BROG or any of its affiliates).
Notice of such auction must be mailed to each Unit holder at least 30 days prior
to the sale.
The Purchaser and its affiliates also reserve the right, following
termination of the Offer, to purchase additional Units, either in open market or
privately negotiated transactions, in one or more additional tender offers or
otherwise, or to sell all or any portion of the Units owned by them. Any such
sales or purchases would depend upon current market prices for the Units,
prevailing industry and general economic and market conditions, the business,
financial condition and results of operations of the Trust and other relevant
factors, and would be on such terms and at such prices as the Purchaser or its
affiliates may then determine.
The Trust Agreement provides that, under certain circumstances, the Trustee
and the Delaware Trustee may be removed by a majority vote of the Unit holders.
The Purchaser has no present plans to vote its Units for the removal of either
the Trustee or the Delaware Trustee.
Currently, the Purchaser has no intention to seek to materially change the
distributions of the Trust.
13. EFFECT OF THE OFFER ON THE MARKET FOR UNITS; NYSE LISTING AND EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS. The purchase of Units pursuant to the
Offer will reduce the number of Units that might otherwise trade publicly and
the number of holders of Units and could adversely affect the liquidity and
market value of the remaining Units held by the public. The purchase of Units
pursuant to the Offer can also be expected to reduce the number of holders of
Units.
STOCK EXCHANGE LISTING. According to the NYSE's published guidelines, the
NYSE would consider delisting the Units if, among other things, the number of
record holders of at least 100 Units should fall below 1,200 (the number of
beneficial holders of Units held in nominee form through an NYSE member being
considered for such purpose), the number of publicly held Units (exclusive of
holdings of officers, directors, their immediate families and other concentrated
holdings of 10% or more ("NYSE Excluded Holdings")) should fall below 600,000,
or the aggregate market value of such Units should fall below $5,000,000.
Depending on the number of Units purchased pursuant to the Offer, the Units
may no longer meet the requirements of the NYSE for continued listing and may,
therefore, be delisted from such exchange. If, as a result of the purchase of
Units pursuant to the Offer or otherwise, the Units no longer meet the
requirements of the NYSE for continued listing and/or trading and such trading
of the Units were discontinued, the market for such Units could be adversely
affected.
In the event of the delisting of the Units by the NYSE (which the Purchaser
intends to cause the Trust to seek following the Offer if the continued listing
criteria of the NYSE are no longer satisfied), it is possible that the Units
would continue to trade on another securities exchange or in the
over-the-counter market and
15
18
that price quotations would be reported by such exchange, by the National
Association of Securities Dealers, Inc. (the "NASD") through the NASD Automated
Quotation System ("Nasdaq") or by other sources. The extent of the public market
for Units and the availability of such quotations would, however, depend upon
such factors as the number of Unit holders remaining at such time, the interest
in maintaining a market in such Units on the part of securities firms, the
possible termination of registration under the Exchange Act as described below
and other factors.
EXCHANGE ACT REGISTRATION. The Units are currently registered under the
Exchange Act. The purchase of the Units pursuant to the Offer may result in the
Units becoming eligible for deregistration under the Exchange Act. Registration
of the Units under the Exchange Act may be terminated upon application of the
Trust to the Commission if the Units are not listed on a national securities
exchange and there are fewer than 300 record holders of the Units. Termination
of registration of the Units under the Exchange Act would substantially reduce
the information required to be furnished by the Trust to Unit holders and to the
Commission and would make certain provisions of the Exchange Act, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act and
the requirements of furnishing a proxy statement in connection with Unit
holders' meeting pursuant to Section 14(a) of the Exchange Act, no longer
applicable to the Trust. If the Units are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with respect
to "going private" transactions would no longer be applicable to the Trust.
Furthermore, the ability of "affiliates" of the Trust and persons holding
"restricted securities" of the Trust to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended, may be
impaired or eliminated. In addition, if registration of the Units under the
Exchange Act were terminated, the Units would no longer be eligible for listing
or Nasdaq reporting.
It is the present intention of the Purchaser to seek to cause the Trust to
make such an application for termination of registration of the Units as soon as
possible following the Offer if the requirements for termination of registration
are met.
MARGIN REGULATIONS. The Units are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Units for the purpose of
buying, carrying or trading in securities ("Purpose Loans"). Depending upon
factors such as the number of record holders of the Units and the number and
market value of publicly held Units, following the purchase of Units pursuant to
the Offer, the Units may no longer constitute margin securities for purposes of
the Federal Reserve Board's margin regulations and, therefore, could no longer
be used as collateral for Purpose Loans made by brokers. In addition, if
registration of the Units under the Exchange Act were terminated, the Units
would no longer constitute margin securities.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions
of the Offer and in addition to (and not in limitation of) the Purchaser's
rights to extend and amend the Offer at any time in its sole discretion, the
Purchaser shall not be required to accept for payment or, subject to the
applicable rules and regulations of the Commission, pay for, and may delay the
acceptance for payment of or, subject to the applicable rules and regulations of
the Commission, payment for, Units tendered pursuant to the Offer, and may
terminate the Offer and not accept for payment any Units, if at any time after
February 6, 1998 and before the acceptance for payment of Units pursuant to the
Offer, any of the following events shall occur or be deemed by the Purchaser to
have occurred:
(a) there shall be threatened, instituted or pending any action or
proceeding by or before any court or governmental, administrative or
regulatory agency or authority or any other person, domestic or foreign,
challenging the making of the Offer or the acquisition by the Purchaser of
any Units, or otherwise directly or indirectly relating to the Offer or, in
the sole judgment of the Purchaser, otherwise adversely affecting the
Trust, the Purchaser, Devon or any of their respective subsidiaries or
affiliates; or
(b) any change shall have occurred or be threatened in the properties,
financial condition, operations, results of operations or prospects of the
Trust or the Royalty Interests that, in the sole judgment of the Purchaser,
is or may be materially adverse to the Trust or the Royalty Interests, or
the Purchaser shall have become aware of any facts that, in the sole
judgment of the Purchaser, have or may
16
19
have material adverse significance with respect to the value of the Trust
or the Royalty Interests or the value of the Units to the Purchaser; or
(c) there shall have been any action taken, or any statute, rule,
regulation or order proposed, promulgated, enacted, entered or deemed
applicable to the Offer, by any domestic or foreign government or
governmental authority or by any court, domestic or foreign, that, in the
sole judgment of the Purchaser, might (i) make the acceptance for payment
of or payment for some or all of the Units illegal or otherwise restrict or
prohibit consummation of the Offer, or impose material obligations upon the
Purchaser as a result of any such acceptance or payment, (ii) result in a
delay in the ability of the Purchaser, or render the Purchaser unable, to
accept for payment or pay for some or all of the Units, (iii) require the
Purchaser or the Trust or any of their respective affiliates to hold
separate or to divest itself of all or any portion of the business, assets
or property of any of them or any Units or impose any limitation on the
ability of any of them to conduct their business and own such assets,
properties and Units, (iv) impose material limitations on the ability of
the Purchaser or Devon to acquire, hold or exercise effectively all rights
of ownership of the Units, including the right to vote any Units purchased
by it on all matters properly presented to the Unit holders or (v)
otherwise adversely affect the Purchaser, Devon, the Trust or the Units; or
(d) there shall have occurred (i) any general suspension of trading,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iii) the commencement of war, armed hostilities or
other international or national calamity directly or indirectly involving
the United States, (iv) any limitation (whether or not mandatory) by any
United States governmental authority or agency on the extension of credit
by banks or other financial institutions in the United States, (v) from the
date of this Offer to Purchase through the date of expiration or
termination of the Offer, a decline of at least 20% in either the Dow ▇▇▇▇▇
Average of Industrial Stocks or the Standard & Poor's 500 Index, which
decline shall have remained in effect for at least five NYSE trading days
or (vi) in the case of any of the situations described in the clauses (i)
through (iv) inclusive, existing at the date of the commencement of the
Offer, a material acceleration or worsening thereof;
which, in the sole judgment of the Purchaser, in any such case, and regardless
of the circumstances (including any action or inaction by the Purchaser or any
of its affiliates) giving rise to any such condition, makes it inadvisable to
proceed with the Offer or with acceptance for payment or payment for Units.
The foregoing conditions are for the sole benefit of the Purchaser and its
affiliates and may be asserted by the Purchaser, in whole or in part, at any
time and from time to time in the sole judgment of the Purchaser. The failure by
the Purchaser at any time to exercise its rights under any of the foregoing
conditions shall not be deemed a waiver of any such rights and each such right
shall be deemed an ongoing right which may be asserted at any time or from time
to time. Any determination by the Purchaser concerning the events described in
this Section shall be final and binding on all parties.
15. APPRAISAL RIGHTS. Holders of Units do not have appraisal rights in
connection with the Offer.
16. CERTAIN TRANSACTIONS. Devon's single largest reserve position is its
interest in NEBU, the same property of which the Underlying Properties are a
part. In addition, Devon is the "Operator" of the NEBU Interests on behalf of
all of the working interest owners. Among other things, Devon's duties as
Operator include (i) providing personnel, supplies and equipment necessary to
conduct day-to-day production and drilling activities, well workovers,
maintenance and repairs on the ▇▇▇▇▇ and facilities of the NEBU Interests; (ii)
maintaining production and other records regarding the status and history of the
NEBU Interests; (iii) applying for necessary governmental permits and complying
with applicable regulatory requirements; (iv) paying expenses associated with
operating the NEBU Interests and billing the other working interest owners for
their proportion of such costs; and (v) various other activities necessary for
the operation of the NEBU Interests. In consideration for its duties as
Operator, Devon receives payments from the other working interest owners to
reimburse Devon for such owners' proportionate share of direct expenses
17
20
and to reimburse Devon for its overhead expense incurred in its capacity as
Operator. The amount of overhead reimbursement Devon receives is set forth in
the operating agreement covering the NEBU Interests, and reflects rates that are
standard and customary in the oil and gas industry in the San ▇▇▇▇ Basin.
The potential for gas production from coal seams varies depending upon the
thickness of the coal formation, the type of coal in place, the depth at which
it is found and other factors. The NEBU Interests are located in the central
part of the San ▇▇▇▇ Basin where, Devon believes, each of the factors is at or
near its optimum. Devon's independent petroleum engineers, ▇▇▇▇▇▇▇ Petroleum
Consultants, Inc. ("▇▇▇▇▇▇▇") estimate that as of December 31, 1997 there were
761 billion cubic feet ("Bcf") of proved reserves associated with the NEBU
Interests. This estimate includes approximately 181 Bcf of natural gas reserves
which are classified as "proved undeveloped" (defined below).
Based upon information available to Devon in the Trust's publicly available
documents and ▇▇▇▇▇▇▇'▇ reserve data, and based upon Devon's belief as to the
Trust's methodology with respect to netting of capital expenditures and other
costs, Devon has calculated that the Trust's share of the total proved reserves
of the NEBU Interests was approximately 68.0 Bcf of natural gas as of December
31, 1997. This includes approximately 3.7 Bcf of proved undeveloped reserves.
To the best of Devon's knowledge as of February 12, 1998, the Trust had not
publicly reported an estimate of the Trust's total proved reserves as of
December 31, 1997. To the best of Devon's knowledge as of February 12, 1998, the
most recent estimate of reserves reported by the Trust was 71.6 Bcf reported in
the Trust 10-K. It should be noted that proved reserves reported by the Trust
are determined by independent engineers engaged by the Trust. Such estimates may
differ from the reserves reported by ▇▇▇▇▇▇▇.
It should be noted that proved reserves are those quantities of natural gas
which geological and engineering data demonstrate with reasonable certainty to
be recoverable in the future from known reservoirs under existing economic and
operating conditions. Estimates of proved reserves are strictly technical
judgments, and are not knowingly influenced by attitudes of conservatism or
optimism. The process of estimating proved reserves is complex, requiring
significant subjective decisions in the evaluation of available geological,
engineering and economic data for each reservoir. The data for a given reservoir
may change substantially over time as a result of, among other things,
additional development activity, production history and viability of production
under varying economic conditions. Consequently, material revisions to existing
reserve estimates may occur in the future. Proved undeveloped reserves are
proved reserves to be recovered from new ▇▇▇▇▇ to be drilled in the future and
for which a relatively major expenditure is required. Because no drilling data
and/or production history is available, the estimation of proved undeveloped
reserves is inherently even more subjective and less precise than the estimation
of proved developed reserves. No assurance can be given that the ▇▇▇▇▇ required
to be drilled to recover proved undeveloped reserves will actually be drilled.
The working interest owners of the NEBU Interests have agreed to implement
a number of projects which may improve and/or accelerate production and may
increase the percentage of estimated gas in place that can be economically
recovered from the NEBU Interests. The first of these projects, called "line
looping", involves laying additional gathering lines to decrease operating
pressures. This project was begun in 1996 and was substantially completed by
October 1997. Another project involves the installation of additional
compressors at various points in the gathering system and at central delivery
points associated with the NEBU Interests. This project was begun in 1997 and
will continue in 1998. Additional projects to improve production through work on
individual ▇▇▇▇▇ are currently underway. Longer term, Devon believes that
additional ▇▇▇▇▇ may be drilled which could improve production.
Initial results from the portion of the line looping and compression
projects that has been completed through February 12, 1998 appear favorable.
Total daily production from the NEBU Interests has increased from an average of
187 million cubic feet ("MMcf") of gas per day in June 1996 to an average of 209
MMcf of gas per day in January 1998. Devon anticipates that the installation of
additional compression and facilities could increase production from the NEBU
Interests another 10 MMcf to 20 MMcf of gas per day. However, the timing,
sustainability, amounts of such increase (if any) and the effects (if any) on
distributions to Unit holders cannot be projected with certainty.
18
21
In its capacity as Operator, Devon bills BROG or its affiliates
(collectively, "Burlington") for capital expenditures, lease operating expenses
and overhead reimbursement on the NEBU Interests. In addition, Devon collects
revenue from the purchaser of Burlington's share of gas production from the NEBU
Interests and then distributes that revenue to Burlington. The following table
shows the total amount of such costs and revenues for the three years ended
December 31, 1997. The table also shows, based on information available to Devon
from the Trust's publicly available documents, Devon's calculation of the
approximate amount by which the Trust's cash distributions were reduced or will
be reduced by these various expenses billed by Devon to Burlington.
YEARS ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
----------- ----------- ----------
Amounts billed to Burlington by Devon for:
Capital expenditures................................ $ 1,923,126 $ 1,719,098 $ 254,435
Lease operating expenses............................ 789,771 386,697 365,439
Overhead reimbursement.............................. 103,039 99,028 94,938
Corresponding reduction of the Trust's cash
distributions(1) for:
Capital expenditures................................ $ 1,826,970 $ 1,633,143 $ 241,713
Lease operating expenses............................ 750,282 367,362 347,167
Overhead reimbursement.............................. 97,887 94,077 90,191
Revenues, net of royalties and production taxes, for
Burlington's share of gas production collected by
Devon, distributed to Burlington.................... $15,519,015(2) $12,395,077 $9,056,194
---------------
(1) Calculated by Devon based on Devon's belief as to the Trust's methodology
with respect to the Trust's share of Burlington's expenses.
(2) The 1997 amount includes only 11 months of distributions since the December
1997 revenues had not been disbursed as of February 12, 1998.
Devon currently estimates that Burlington's share of capital costs to be
incurred in 1998 will be approximately $1.3 million. Devon has calculated that
the Trust's cash distributions will be reduced by approximately $1.2 million of
this total. Capital costs such as these have reduced and will temporarily
continue to reduce the Trust's cash distributions until the capital projects are
completed.
Devon has a contract with Burlington to gather Devon's portion of
production from the individual ▇▇▇▇ ▇▇▇▇▇ and deliver the gas to central
delivery points. This contract is unrelated to the Trust. During the years ended
December 31, 1995, 1996 and 1997, Devon paid Burlington $5,132,000, $4,314,000
and $3,924,000, respectively, for Burlington's services in connection with this
gathering contract.
19
22
17. CERTAIN LEGAL MATTERS.
GENERAL. Except as set forth in this Offer to Purchase, including but not
limited to this Section 17, based upon an examination of publicly available
information filed by the Trust with the Commission and other publicly available
information with respect to the Trust, the Purchaser is not aware of any license
or any other regulatory permit that appears to be material to the business of
the Trust, that might be adversely affected by the Purchaser's acquisition of
the Units as contemplated herein or, except as disclosed below, of any filing,
approval or other action by or with any state, federal or foreign governmental,
administrative or regulatory agency that would be required prior to the
acquisition of Units pursuant to the Offer as contemplated herein. Should any
such approval or other action be required, the Purchaser currently contemplates
that such approval or other action will be sought. While the Purchaser does not
currently intend to delay the acceptance for payment of Units tendered pursuant
to the Offer pending the outcome of any such matter, there can be no assurance
that any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
properties and assets of the Trust or that certain of the Trust's properties and
assets might not have to be disposed of in the event that such approvals were
not obtained or such other actions were not taken in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Units tendered. See "THE TENDER OFFER -- 14. Certain
Conditions of the Offer" for certain conditions to the Offer, including
conditions with respect to litigation and governmental action.
STATE TAKEOVER STATUTES. Based upon its knowledge of the assets of the
Trust and upon publicly available information with respect to the Trust, the
Purchaser does not believe that any state takeover statutes or regulations are
applicable to the Offer. In the event that it is asserted that one or more state
takeover statutes or regulations is applicable to the Offer, and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer, the Purchaser might be required to file certain information with, or
receive approvals from, the relevant state authorities, and the Purchaser might
be unable to purchase or pay for Units tendered pursuant to the Offer or might
be delayed in continuing or consummating the Offer. In such case, the Purchaser
may not be obligated to accept Units for payment. See "THE TENDER OFFER -- 14.
Certain Conditions of the Offer."
ANTITRUST. Under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division of the Department of Justice (the "Antitrust Division") and the Federal
Trade Commission (the "FTC") and certain waiting period requirements have been
satisfied. The Purchaser believes that the acquisition of Units pursuant to the
Offer is not subject to the HSR Act or such requirements. However, if the HSR
Act is applicable to the purchase of Units pursuant to the Offer, the Purchaser
intends to take all action necessary to comply with the HSR Act, which could
result in a delay in the consummation of the Offer.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the acquisition of Units by the
Purchaser pursuant to the Offer. At any time before or after the consummation of
the transaction, the Antitrust Division or the FTC could take such action under
the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the transaction or seeking divestiture of the Units
so acquired or divestiture of substantial assets of the Purchaser or the Trust.
The Purchaser believes that the acquisition of the Units pursuant to the
Offer would not violate the antitrust laws. However, there can be no assurance
that a challenge to the Offer on antitrust grounds will not be made, or if such
a challenge is made, what the result will be. See "THE TENDER OFFER -- 14.
Certain Conditions of the Offer" for certain conditions to the Offer, including
conditions with respect to litigation and certain governmental actions.
18. FEES AND OTHER EXPENSES. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ is acting as Dealer
Manager for the Offer and as financial advisor to Devon in connection with its
acquisition of Units. Pursuant to the terms of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney's
engagement, Devon has agreed to pay ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ for its services (i) a
20
23
retainer fee of $100,000, payable upon execution of the engagement letter
between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney and Devon, (ii) a dealer manager fee of $100,000,
payable upon commencement of the Offer and (iii) a transaction fee equal to $.06
multiplied by the number of Units tendered in the Offer, payable upon
consummation of the Offer. Devon also has agreed to reimburse ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ for travel and other out-of-pocket expenses, including legal fees and
expenses, and to indemnify ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney and certain related parties
against certain liabilities, including liabilities under the federal securities
laws, arising out of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇'▇ engagement. In the ordinary course
of business, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney and its affiliates may actively trade or hold
the securities of Devon and the Trust for their own account or for the account
of customers and, accordingly, may at any time hold a long or short position in
such securities.
The Purchaser also has retained ▇.▇. ▇▇▇▇ & Co., Inc. to act as the
Information Agent and ▇▇▇▇▇▇ Trust Company of New York to act as the Depositary
in connection with the Offer. The Information Agent may contact holders of Units
by mail, telephone, telex, telecopy, telegraph and personal interview and may
request banks, brokers, dealers and other nominee Unit holders to forward
materials relating to the Offer to beneficial holders. Each of the Information
Agent and the Depositary will receive reasonable and customary compensation for
its services, will be reimbursed for certain reasonable out-of-pocket expenses
and will be indemnified against certain liabilities and expenses in connection
therewith.
Brokers, dealers, commercial banks and trust companies will, upon request
only, be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding material to their customers. Except as set forth
above, the Purchaser will not pay any fees or commissions to any broker, dealer
or other person (other than to the Dealer Manager and to the Information Agent)
for soliciting tenders of Units pursuant to the Offer.
19. MISCELLANEOUS. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Units residing in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction. The
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser becomes aware of any state law that
would limit the class of offerees in the Offer, the Purchaser may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Units in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
The Purchaser and Devon have filed with the Commission a Tender Offer
Statement on the Purchaser Schedule 14D-1, together with exhibits thereto,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto from time to time. The Schedules and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in "THE TENDER OFFER -- 6.
Certain Information Concerning the Trust" (except that such information will not
be available at the regional offices of the Commission).
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR DEVON NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, ANY SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED.
NEITHER THE DELIVERY OF THE OFFER TO PURCHASE NOR ANY PURCHASE PURSUANT TO THE
OFFER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE PURCHASER, DEVON OR THE TRUST SINCE THE DATE AS
OF WHICH INFORMATION IS FURNISHED OR THE DATE OF THIS OFFER TO PURCHASE.
February 13, 1998 DEVON ACQUISITION CORPORATION
21
24
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE PURCHASER AND DEVON
1. THE PURCHASER. Set forth below are the name, business address and
present principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each director and executive
officer of the Purchaser. Each of the persons listed below is a United States
citizen. None of such individuals owns any Units except ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ who
purchased 1,000 Units of the Trust on January 7, 1998.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇ is a director and the President and Chief
Executive Officer of the Purchaser. See description below for
additional information.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ is a Vice President of the Purchaser. See
description below for additional information.
Duke ▇. ▇▇▇▇▇ Duke ▇. ▇▇▇▇▇ is a Vice President of the Purchaser. See
description below for additional information.
H. ▇▇▇▇▇ ▇▇▇▇▇▇ H. ▇▇▇▇▇ ▇▇▇▇▇▇ is a Vice President of the Purchaser. See
description below for additional information.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇ is the Treasurer of the Purchaser. See description
below for additional information.
▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇ is the Corporate Secretary of the Purchaser. See
description below for additional information.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is a director and a Vice President of the
Purchaser. See description below for additional information.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is a director and a Vice President of the
Purchaser. See description below for additional information.
2. DEVON. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employments for the past five years of each director and executive officer of
Devon. The business address of each director and executive officer, unless
otherwise indicated below, is ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇. Each of the persons listed below is a United States citizen except
where specifically noted. None of such individuals owns any Units except ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ who purchased 1,000 Units of the Trust on January 7, 1998.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, age 61, a British citizen, has been a
director of Devon since 1982. He is Managing Director of
Englewood, N.V., a wholly-owned subsidiary of Kuwaiti-based
Al-Futtooh Investments WLL. His 20-year association with the
principals of Al-Futtooh has allowed him to represent them on the
board of directors of Devon and other companies in which they
invest. Those interests include investments in hotels,
pharmaceuticals, an investment banking company and a venture
capital fund. ▇▇. ▇▇▇▇▇▇▇▇ is a Canadian qualified Certified
General Accountant and was formerly employed by the Economist
Intelligence Unit of London as a financial consultant.
Business Address: President, United Gulf Limited, ▇ ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇.
22
25
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇, age 55, co-founded Devon with his father. He
has been a director since 1971, President since 1976 and Chief
Executive Officer since 1980. ▇▇. ▇▇▇▇▇▇▇ is active in industry
and business groups, serving as vice president of the Independent
Petroleum Association of America (IPAA), president of the
Domestic Petroleum Council and president of the Oklahoma Nature
Conservancy. In addition, ▇▇. ▇▇▇▇▇▇▇ is a director of the
Independent Petroleum Association of New Mexico, the Oklahoma
Independent Petroleum Association, the National Petroleum Council
and the National Association of Manufacturers. He also serves as
a director of Smedvig asa, a Norwegian shipping manufacturing
company, and CMI Corporation, which designs and manufactures
automated road construction equipment. Both of these companies
are traded on the New York Stock Exchange. He also serves on the
Board of Governors of the American Stock Exchange. ▇▇. ▇▇▇▇▇▇▇
holds a geology degree from Princeton University and a law degree
from the University of Michigan. He served as a law clerk to Mr.
Chief Justice ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ of the U.S.
Supreme Court. ▇▇. ▇▇▇▇▇▇▇ is a member of the Oklahoma Bar
Association.
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, age 54, was appointed to Devon's board of
directors in December, 1996. ▇▇. ▇▇▇▇▇▇ is the Vice President of
Acquisitions in the Strategic Planning/Business Development of
▇▇▇▇-▇▇▇▇▇ Corporation. He has been involved with ▇▇▇▇-▇▇▇▇▇'▇
acquisition activities since 1984. Prior to his current position,
he served ▇▇▇▇-▇▇▇▇▇ in various positions since 1975, including
Vice President of Engineering and Vice President of Natural Gas
Sales. Prior to his employment at ▇▇▇▇-▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ worked
for Shell Oil Co. for eight years serving in various engineering
capacities in various domestic locations. Subsequent to his
employment at Shell, he was manager of HK Properties for
▇▇▇▇▇▇-▇▇▇▇ Enterprises in Oklahoma City. ▇▇. ▇▇▇▇▇▇ received his
bachelor's degree in mechanical engineering from Yale University.
He is a member of the Society of Petroleum Engineers, the IPAA
and the Yale University Science and Engineering Association.
Business Address: Vice President -- Acquisition, Exploration and
Production Division, ▇▇▇▇-▇▇▇▇▇ Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, age 63, has been a director of Devon since 1979.
In addition to managing his personal investments, he serves as a
director of several other companies as well as for Devon. The
companies for which ▇▇. ▇▇▇▇▇▇ serves as a director include
Heidemij, N.V., a worldwide environmental services company; New
York Federal Savings Bank and United American Energy Corp., an
independent power producer. In addition, ▇▇. ▇▇▇▇▇▇ was
associated with ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated for 14 years
as First Vice President and was a General Partner of Windcrest
Partners, an investment partnership, for 10 years.
Business Address: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
23
26
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, age 59, was appointed to Devon's board of
directors in December, 1996. ▇▇. ▇▇▇▇▇▇▇▇ has been ▇▇▇▇-▇▇▇▇▇
Corporation's Vice-Chairman of the Board of Directors since
February 1, 1997. He joined ▇▇▇▇-▇▇▇▇▇ as associate general
counsel in 1984, became senior vice president in 1986 and served
as senior vice president and corporate secretary from 1989 to
1997. Prior to joining ▇▇▇▇-▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇ was engaged in
the private practice of law for 18 years. In 1981 he was
appointed Administrative Director of State Courts by the Oklahoma
Supreme Court. ▇▇. ▇▇▇▇▇▇▇▇ serves on the board of directors of
the National Association of Manufacturers. A member of the
Oklahoma and American Bar Associations, ▇▇. ▇▇▇▇▇▇▇▇ holds an
undergraduate degree in business from Northwestern Oklahoma State
University and a law degree from the University of Oklahoma.
Business Address: Vice Chairman of the Board, ▇▇▇▇-▇▇▇▇▇
Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, age 83, is the co-founder of Devon and has been
Chairman of the Board of Directors since 1971. He is a founding
partner of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Co., which was the original
operator of the NEBU Interests. ▇▇. ▇▇▇▇▇▇▇ is a non-practicing
Certified Public Accountant.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, age 50, was appointed to Devon's board of
directors in December, 1996. ▇▇. ▇▇▇▇▇▇▇ is ▇▇▇▇-▇▇▇▇▇
Corporation's Chairman of the Board of Directors and Chief
Executive Officer, a position he has held since February 1, 1997.
He joined ▇▇▇▇-▇▇▇▇▇ in 1985 as vice president of geophysics, was
named senior vice president of exploration for the Exploration
and Production Division in 1987, senior vice president in 1991
and President and Chief Operating Officer in 1995. Prior to
joining ▇▇▇▇-▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ was employed by Amoco Production
Company as a geophysicist. He later joined Aminoil, Inc. where he
held the position of vice president of domestic exploration. ▇▇.
▇▇▇▇▇▇▇ is also a director of OGE Energy Corp. He is a member of
the American Association of Petroleum Geologists, Society of
Exploration Geophysicists and is on the board of the American
Petroleum Institute. He is a member of the Domestic Petroleum
Council and a trustee for the American Geological Institute
Foundation and is chairman of the advisory board of the Energy
and Geoscience Institute at the University of Utah. ▇▇. ▇▇▇▇▇▇▇
obtained his bachelor's degree in mathematics from the University
of Georgia.
Business Address: Chairman & Chief Executive Officer, ▇▇▇▇-▇▇▇▇▇
Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, age 66, has been a director of Devon since
1971. In addition to managing his personal investments and
serving as a director of Devon, ▇▇. ▇▇▇▇▇▇▇ serves on the board
of several other companies. These include Humana Inc., owners of
managed health care facilities; Premier Parks, Inc., amusement
parks operator; Seacor Holdings, Inc., owners and operators of
marine equipment; and Regal Cinemas, Inc., owners and operators
of multiplex motion picture theaters. ▇▇. ▇▇▇▇▇▇▇ is also a
member of the ▇▇▇▇▇▇ Trust Company Advisory Board to The Bank of
New York. ▇▇. ▇▇▇▇▇▇▇ was associated with the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ Group and its predecessors for 31 years, including 17
years as a director, and served in various executive capacities
for its wholly-owned subsidiary, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Incorporated.
Business Address: Windcrest Partners, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇.
24
27
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
▇. ▇. ▇▇▇▇▇▇▇, ▇▇. ▇. ▇. ▇▇▇▇▇▇▇, ▇▇., age 65, joined Devon in 1981 as a Director
and Executive Vice President. He retired as Executive Vice
President in June, 1997, but continues as a member of the Devon
Board. Prior to joining Devon, ▇▇. ▇▇▇▇▇▇▇ was associated with
RepublicBank Dallas, N.A., serving from 1970 to 1981 as its
Senior Vice President with direct responsibility for independent
oil and gas producer and mining loans. ▇▇. ▇▇▇▇▇▇▇ is a member of
the IPAA, Texas Independent Producers and Royalty Owners
Association, Oklahoma Independent Petroleum Association and a
past director of Triton Energy Corporation.
Business Address: ▇▇▇▇▇ ▇, ▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, age 52, joined Devon as Vice
President -- Operations and Exploration in 1989. Prior to his
employment with Devon, ▇▇. ▇▇▇▇▇ served as General Manager in
Tenneco Oil Company's Mid-Continent and Rocky Mountain Divisions.
He holds both undergraduate and graduate degrees in Petroleum
Engineering from the Colorado School of Mines, is a Registered
Professional Engineer and a member of the Society of Petroleum
Engineers and the American Association of Petroleum Geologists.
Duke ▇. ▇▇▇▇▇ Duke ▇. ▇▇▇▇▇, age 56, joined Devon on February 17, 1997, as its
Vice President -- General Counsel. In addition to his 12 years of
energy law practice, most recently as a partner of a large New
York City law firm, he was an investment banker at Bankers Trust
Company of New York for 10 years. ▇▇. ▇▇▇▇▇ also served for three
years in various positions with the Federal Energy
Administration, U. S. Department of the Interior and Department
of Energy in Washington, D.C. ▇▇. ▇▇▇▇▇'▇ primary
responsibilities at Devon include assisting in the Company's
acquisition efforts and representing the Company in various legal
matters including litigation. ▇▇. ▇▇▇▇▇ holds an undergraduate
degree in business from Westminster College and a law degree from
the University of Texas School of Law.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, age 50, Vice President of Marketing and
Administrative Planning since 1989, joined Devon in 1986 as
Manager of Gas Marketing. ▇▇. ▇▇▇▇▇▇'▇ educational background
includes an undergraduate degree from Minot State College and a
masters degree from Wichita State University. His marketing
background includes 15 years with Energy Reserves Group, Inc./BHP
Petroleum (Americas), Inc., the last position being Director of
Marketing. He is also an oil and gas industry instructor approved
by the University of Texas' Department of Continuing Education.
▇▇. ▇▇▇▇▇▇ is a member of the Oklahoma Independent Producers
Association, Natural Gas Association of Oklahoma and the American
Gas Association.
H. ▇▇▇▇▇ ▇▇▇▇▇▇ H. ▇▇▇▇▇ ▇▇▇▇▇▇, age 45, has been responsible for Devon's
corporate finance and capital formation activities as Vice
President of Corporate Development since 1982. In 1981 he served
as Executive Vice President of Palo Pinto/Harken Drilling
Programs. For the six prior years he was associated with ▇▇▇▇▇▇▇
▇▇▇▇▇ with various responsibilities including Regional Tax
Investments Manager. He is a member of the Petroleum Investor
Relations Association, and serves on the IPAA Capital Markets
Committee. He is the immediate past chairman of the IPAA Oil and
Gas Investment Symposium. ▇▇. ▇▇▇▇▇▇ is a member of the Financial
Executives Institute. ▇▇. ▇▇▇▇▇▇ received his bachelor's degree
from Duke University.
25
28
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL OCCUPATIONS,
NAME POSITIONS, OFFICES OR EMPLOYMENTS FOR THE PAST FIVE YEARS
---- -----------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, age 51, is Devon's Vice President of Finance
in charge of commercial banking functions, accounting, tax and
information services. ▇▇. ▇▇▇▇▇▇ was elected in 1987 to his
present position. Prior to that he was Controller of Devon from
1983 to 1987. ▇▇. ▇▇▇▇▇▇'▇ prior experience includes serving as
Controller with ▇▇▇▇▇▇ Corporation for two years and employment
with ▇▇▇▇▇▇ ▇▇▇▇▇ & Co. for seven years with various duties
including audit manager. He is a Certified Public Accountant and
a member of the American Institute of Certified Public
Accountants and the Oklahoma Society of Certified Public
Accountants. He is a graduate of the University of Arkansas with
a Bachelor of Science degree.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, age 42, has been Devon's Controller since 1989.
Prior to joining Devon, ▇▇. ▇▇▇▇▇▇ was associated with Peat
Marwick Main & Co. in Oklahoma City for ten years with various
duties including senior audit manager. He is a Certified Public
Accountant and a member of the American Institute of Certified
Public Accountants and the Oklahoma Society of Certified Public
Accountants. He graduated with a Bachelor of Accountancy degree
from the University of Oklahoma.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, age 48, was elected Treasurer in 1983, having
first served as Devon's Controller. ▇▇. ▇▇▇▇▇ is a member of the
Executive Committees of both the Rocky Mountain Oil & Gas
Association and the Petroleum Association of Wyoming. He is also
a member of the Petroleum Accounting Society of Oklahoma City and
has been active in varied accounting functions with several
companies in the industry. He served as Vice President of Finance
with KSA Industries, Inc., a private holding company with various
interests including oil and gas exploration. ▇▇. ▇▇▇▇▇ also held
various accounting positions with ▇▇▇▇▇ Resources and Energy Co.
and Mesa Petroleum Company. He received his accounting degree
from the University of Oklahoma.
▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇, age 47, was elected Corporate Secretary in 1994.
▇▇. ▇▇▇▇ has served Devon in various capacities since 1984,
including her current position as Manager of Corporate Finance.
She has also served as Assistant Secretary with responsibilities
including compliance with SEC and stock exchange regulations.
Prior to joining Devon, ▇▇. ▇▇▇▇ was employed for eleven years by
Amarex, Inc., an Oklahoma City based oil and natural gas
production and exploration firm, where she served most recently
as treasurer. ▇▇. ▇▇▇▇ is a member of the Petroleum Investor
Relations Association and the American Society of Corporate
Secretaries. She is a graduate of Valparaiso University.
26
29
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal, certificates for Units and any other required documents should
be sent or delivered by each Unit holder or his broker, dealer, commercial bank,
trust company or other nominee to the Depositary at one of the addresses set
forth below:
THE DEPOSITARY FOR THE OFFER IS:
▇▇▇▇▇▇ TRUST COMPANY OF NEW YORK
By Hand Delivery Facsimile Transmission: By Mail:
or Overnight: (▇▇▇) ▇▇▇-▇▇▇▇ Wall ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (For Eligible Institutions
Only)
Confirm by Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, commercial bank, trust company or nominee for assistance concerning the
Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
▇.▇. ▇▇▇▇ & CO., INC.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
CALL TOLL-FREE (▇▇▇) ▇▇▇-▇▇▇▇
THE DEALER MANAGER FOR THE OFFER IS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
SEVEN ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇