Citizen Energy Operating LLC, a Warburg Pincus LLC affiliate, agreed to acquire Roan Resources Inc., Oklahoma City, in an all-cash transaction valued at $1 billion. The deal includes Roan’s funded net debt of $780 million as of Sept. 30.
According to Roan Resources’ web site, the company holds a consolidated 177,000-acre position in the Merge-SCOOP-STACK plays in Oklahoma’s Anadarko basin. It estimates a resource potential of more than 2 billion boe. In this year’s second quarter, the company produced 50,800 boe/d (26% oil, 29% natural gas liquids, and 45% gas).
Roan has appointed Rick Gideon as its chief executive officer. He was previously senior vice-president of US operations at Devon Energy Corp. Gideon will assume his new responsibilities immediately. To allow him time to assess the operations plan, the company said it will temporarily reduce its drilling and development activity and suspend all completion activity.
Under the terms of the merger agreement, Roan stockholders will receive $1.52 in cash for each share of Roan common stock. The all-cash purchase price represents a premium of 24% over the closing price of company shares as of Sept. 30.
The transaction is expected close during this year’s fourth quarter or in first-quarter 2020, subject to Roan stockholder approval, regulatory approvals, and other customary closing conditions.
Roan Resources LLC was formed in the second quarter of 2017 by Linn Energy Inc. and Citizen Energy II LLC (OGJ Online, June 17, 2017). In September 2018, Linn and Roan Holdings LLC agreed to combine their respective 50% equity interests in Roan Resources LLC into a publicly traded company, Roan Resources Inc., as part of a master reorganization agreement (OGJ Online, Sept. 18, 2018).
