OKC’s Roan Resources acquired in $1 billion deal

In a $1 billion deal, Oklahoma City’s Roan Resources has been purchased by Tulsa-based Citizen Energy Operating LLC with backing from the private equity firm Warburg Pincus.

Roan said its shareholders would receive $1.52 per share, implying a total equity value of $234.2 million and a premium of 23.6% to the stock’s closing price on Monday.

Roan was formed only two years ago with contributions from Linn Energy, Inc. and Citizen Energy, II, LLC totaling nearly 140,000 net acres in the Merge/SCOOP/STACK plays of Oklahoma.  Since then, it added acreage for a total of 177,000 net acres with 115,000 net acres in the Merge creating the largest position in the Merge play.

After officially taking over field operations in January 2018, Roan Resources was producing approximately 49,000 Boe per day by the end of the first quarter 2019.

Roan, which has seen its shares drop from over $16 last year to $1.23 as of Monday’s close, is among smaller firms that were looking to merge or sell operations against the backdrop of waning interest in Oklahoma’s SCOOP and the STACK basins, where the company mainly operates.

Interest in the plays seemed to have dimmed as the region’s geology proved to be inconsistent, making the basins a higher-cost area for producers and undercutting their results, according to Reuters.

A few weeks after Chief Executive Officer Tony Moranto resigned in April, Roan had said it was studying options after receiving inquiries about a potential sale or in-basin merger.

Oklahoma-based Roan on Tuesday also announced the appointment of Rick Gideon as its new CEO, effective immediately.

Roan said it will temporarily reduce drilling and development and suspend all completion activities to allow its new CEO time to assess its operations.