Roan suspends drilling operations pending merger vote

 

As Oklahoma City’s Roan Resources, Inc. prepares to formally merge with Tulsa’s Citizen Energy Operating, LLC, the company has temporarily shut down drilling, development and completion activities.

The firm stated in its third quarter 2019 earnings report the move will give new CEO Rick Gideon time to assess Roan’s overall operations plan. He took over after Roan entered into a merger agreement Oct. 1, 2019. Shareholders will meet Dec. 4, 2019 to vote on the proposed acquisition. Closing is expected in the fourth quarter 2019 or first quarter of 2020 subject to stockholder approval.

Citizen Energy announced in October it was acquiring Roan Resources in an all-cash transaction for nearly $1 billion. The acquisition includes Roan’s net debt of nearly $780 million as of early October.

In its third quarter release, Roan reported net income of $19.3 million or 13 cents a diluted share while adjusted EBITDAX was $86.8 million. The company said capital expenditures for the quarter were $130.9 million and 14 gross operated wells were drilled. It also brought online another 18 wells.

Roan reported $3.5 million cash on the balance sheet at the end of the third quarter. It also had drawn $732.6 million on its revolving credit facility and $50 million funded on its term loan, resulting in net funded debt of $779.2 million.

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