Oklahoma-based Roan Resources is set to go private after being sold to Citizen Energy Operating in an all-cash deal valued at about $1 billion, the company announced Tuesday.
Citizen Energy, a company backed by private investment firm Warburg Pincus, as part of the deal will also buy up $780 million of Roan’s funded net debt as of 30 September.
Roan stockholders are set to receive $1.52 in cash per share of common stock. The purchase price, Roan said, represents a 24% premium over the closing price on 30 September.
The company only a year ago in September had agreed to go public in a reverse merger with Linn Energy as part of a master reorganisation agreement. At the end of April 2019, Roan said it had begun evaluating offers to sell the company.
The deal is anticipated to close in the fourth quarter 2019 or the first quarter of 2020, and is still subject to Roan shareholder approval, regulatory approvals, and other closing conditions. The transaction has already been approved by Roan’s board of directors.
Roan has also appointed Rick Gideon as chief executive officer effective immediately. Gideon served as senior vice president of US operations at Devon Energy for four years, and previously held positions at HighMount Exploration and Production, Linn Energy and Dominion Energy.
The company also said it would temporarily reduce its drilling and development and suspend all completion activity “to allow Mr. Gideon time to assess the company’s overall operations plan.” Roan said that investors should not rely on guidance from the third quarter or expect any further guidance updates.
Roan holds around 150,000 acres in the Merge/Scoop/Stack plays in Oklahoma.