Warburg Pincus-backed Citizen Energy to acquire Roan Resources

Citizen Energy acquisition of Roan Resources : Tulsa-based Citizen Energy Operating, a portfolio company of Warburg Pincus, has signed a $1bn deal to acquire Oklahoma City-based onshore oil and gas company Roan Resources.

The total consideration for the deal also includes the assumption of Roan Resources’ net debt of around $780m by Citizen Energy.

As per the terms of Citizen Energy acquisition of Roan Resources, the former will pay $1.52 per each share of the latter in an all-cash transaction.

Roan Resources is an active player across the unconventional oil and natural gas reserves in the Merge, STACK, and SCOOP plays in the Oklahoma portion of the Anadarko Basin.

Established a couple of years by combining about 140,000 net acres from Linn Energy and Citizen Energy, II in the Merge, SCOOP, and STACK plays, Roan Resources has added additional acreage for a total of nearly 177,000 net acres. Of these, 115,000 acres are located in the Merge play.

Citizen Energy acquisition of Roan Resources. Photo courtesy of suwatpo at FreeDigitalPhotos.net.

Roan Resources has produced nearly 49,000 barrels of oil equivalent (BOE) per day by the end of Q1 2019. The US onshore company in May 2019, appointed Citigroup Global Markets and Jefferies to guide it in exploring strategic alternatives for its business.

Citi and Jefferies are the financial advisors, while Vinson & Elkins is the legal counsel for Roan Resources for the transaction. On the other hand, for Citizen Energy, the financial advisor is BofA Merrill Lynch with Latham & Watkins as the legal counsel.

Commenting on Citizen Energy acquisition of Roan Resources, Joseph A. Mills, Roan Resources Executive Chairman of the Board, said: “We are pleased to reach this agreement with Citizen Energy. 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.

“Ultimately, the Board unanimously determined that an all-cash transaction with Citizen Energy is in the best interests of our stockholders and the Company and will deliver value to our stockholders at a premium to our recent share price.”

The closing of Citizen Energy acquisition of Roan Resources is expected to occur during Q4 2019 based on the latter’s shareholders’ approval, regulatory approvals and the satisfaction of other customary closing conditions.

Roan Resources also appointed Rick Gideon as its CEO and in connection with that has temporarily reduced its drilling and development operations and to suspend all completion activity. The reduction in operations is said to give Rick Gideon time to understand the overall operations plan of the company.