Warburg Pincus LLC affiliate Citizen Energy Operating LLC has inked a deal to acquire Oklahoma City-based Roan Resources Inc. in an all-cash transaction worth roughly $1 billion that would take the company private.
Following several evolutions as a company, Roan was formed by Linn Energy LLC and a unit of Citizen Energy in late 2018. As part of the deal, Citizen agreed to acquire the Anadarko Basin pure-play’s net debt of roughly $780 million.
“This transaction is the culmination of our board’s extensive review of strategic alternatives to maximize value for our stockholders, including a comprehensive process during which we engaged with a considerable number of counterparties,” said Chairman Joseph Mills.
Roan also said Rick Gideon has taken the mantle of CEO. Gideon previously was Devon Energy Corp.’s senior vice president of U.S. operations, and served in management roles at HighMount Exploration and Production LLC, Linn Energy Inc. and Dominion Energy Inc.
In conjunction with the purchase, Roan has reduced its drilling/development activity and suspended all completions.
“This reduction in activity is to allow Mr. Gideon time to assess the company’s overall operations plan,” the company said. “As a result of this change, investors should no longer rely on the guidance provided by the company on its last quarterly investor call, and Roan does not expect to otherwise update or provide further guidance.” Roan reduced its rig count to three during the second quarter.
The deal with Citizen, set to be completed by early 2020, marks the culmination of considerations by Roan management on ways to take the company forward.
Roan stockholders are expected to receive $1.52/share for each common share; the share price closed on Monday at $1.22/share. Shares should remain range-bound until trading ends when the transaction is completed, a spokesperson told NGI’s Shale Daily.