Woodford Shale drilling operation (copy)

Tulsa World file

Tulsa-based oil and natural gas company Citizen Energy Operating, LLC announced Tuesday it has agreed to buy Oklahoma City-based Roan Resources, Inc. in an all-cash transaction for about $1 billion.

The deal includes Roan’s net debt of roughly $780 million as of Monday and is expected to be completed during the fourth quarter of 2019 or the first quarter of 2020, subject to Roan stockholder approval, regulatory approvals and the satisfaction of other customary closing conditions.

Citizen Energy is an affiliate of Warburg Pincus, LLC, a private equity firm headquartered in New York City. Citizen Energy is a privately funded company.

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Under terms of the merger, unanimously approved by Roan’s Board of Directors, Roan stockholders will receive $1.52 in cash for each share of Roan common stock they own. The all-cash purchase price represents a premium of about 24% more than the closing price of company shares as of Monday.

“We are pleased to reach this agreement with Citizen Energy,” Joseph A. Mills, Roan’s Executive Chairman of the Board, said in a statement. “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.”

In addition, Roan on Tuesday announced the appointment of Rick Gideon as chief executive officer, effective immediately. With more than 20 years of executive and industry experience at several large, publicly held exploration and production companies, he recently served as senior vice president of U.S. operations at Devon Energy Corp. for four years.

Prior to his time at Devon, Gideon was general manager of the Mid-Continent region and drilling & completions for HighMount Exploration & Production, LLC for six years. Prior to that, Gideon held senior positions at Linn Energy, Inc. and Dominion Energy, Inc.

To allow Gideon to assess the company’s overall operations plan, Roan also elected to temporarily reduce its drilling and development activity and to suspend all completion activity. As a result, investors should no longer rely on the guidance provided by the company on its last quarterly investor call, and Roan does not expect to otherwise update or provide further guidance.

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Rhett Morgan 918-581-8395


Twitter: @RhettMorganTW