Linus Unah – Fourth Estate Contributor
Houston, TX, United States (4E) – LINN Energy Inc has announced that it would combine forces with Tulsa, Oklahoma-based Citizen Energy II LLC to fasten the development of the prolific Merge/SCOOP/STACK play in the Anadarko Basin.
Houston-headquartered LINN said in a news release that each company will contribute certain upstream assets in Oklahoma to a newly formed company, Roan Resources LLC.
Roan is expected to have about 140,000 total net acres, forming a largely contiguous position with LINN and Citizen each contributing about 70,000 net acres.
In exchange for their respective contributions, LINN and Citizen will equally split the equity interest in Roan.
The contributed properties include acreage in the following eight Oklahoma counties: Canadian, Carter, Cleveland, Garvin, Grady, Kingfisher, McClain and Stephens.
The combined entity is expected to have no outstanding debt at closing and intends to establish a new revolving credit facility secured by its own assets.
LINN and Citizen are currently operating a combined total of five rigs in the Merge with plans to drill 58 gross wells combined in 2017
Combined production was more than 20,000 barrels of oil equivalent per day in May, with current rig pace forecasted to have an exit rate of more than 40,000 barrels of oil equivalent per day by the end of 2017.
“The combination of our assets, experience and talented teams creates a unique, premier pure play company in one of the most prolific producing regions in the country,” the boards of directors of both companies said in a joint statement.
“Roan is well positioned to grow production, reserves and value for many years to come as it develops the vast resource potential of its acreage in the Merge/SCOOP/STACK play.”
“The formation of Roan is a game changing transaction for LINN that creates a scaled Merge/SCOOP/STACK pure play that competes with the very best unconventional opportunities in the country,” said Evan Lederman, chairman of the LINN board of directors.
“In addition, our retained ownership and control of the expanding Chisholm Trail midstream business and approximately 105,000 net acres in the emerging NW STACK will continue to be evaluated and developed to create additional shareholder value.”
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