A week after announcing new financial guidance for the remainder of 2019, Oklahoma City-based Roan Resources, Inc. announced it received commitments for a $100 million term loan facility. The commitments are from funds affiliated with “certain significant shareholders of the company that are represented on the board of directors,” stated the announcement.
As part of the loan commitment, the independent oil and gas company agreed to issue 1.0% of the outstanding shares of Class A common stock of the company to the lending parties no longer than June 26, 2019. The term loan facility is expected to close before the end of the month.
Separately, the Company completed its June borrowing base redetermination for its revolving credit facility. The Company’s bank group unanimously reaffirmed the current borrowing base of $750 million. The announcement indicated Roan has nearly $150 million of available liquidity which it said is more than “ample” to fund the company’s ongoing capital program.
“We are very pleased to announce these two events today,” said Joseph A. Mills, Roan’s Executive Chairman of the Board. “The $100 million term loan facility, which was struck at favorable terms for the Company, and the reaffirmation of our borrowing base at $750 million enhances our current liquidity and demonstrates the confidence these two groups have in the asset quality and strategic direction of Roan. We now have ample liquidity to fund our ongoing capital program and remain focused on growing production 20-25% this year while also generating free cash flow by the fourth quarter. The Company also continues to actively evaluate strategic alternatives with Jefferies and Citigroup.”
The financial status of the company had been in question. Earlier in April, Roan announced it had received unsolicited indications of interest to purchase the company.