LINN Energy has signed an agreement with Citizen Energy II to form a new joint venture (JV) oil and gas company based in Oklahoma, US.
The JV company will be known as Roan Resources and will focus on the development of the prolific Merge / South Central Oklahoma Oil Province (SCOOP) / Sooner Trend Anadarko Basin Canadian and Kingfisher Counties (STACK) play in the Anadarko Basin.
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The agreement will see LINN Energy and Citizen Energy possess 50% stake each, and both firms will contribute upstream assets covering 70,000 net acres to the newly formed entity.
Roan is set to have around 140,000 total net acres of land, forming a core, largely contiguous position with LINN and Citizen assets following the closure of the deal.
The properties contributed by the companies comprise acreage in eight Oklahoma counties, including Canadian, Carter, Cleveland, Garvin, Grady, Kingfisher, McClain and Stephens.
It is claimed that Roan will potentially have no outstanding debt at closing, and the JV company is expected to establish a new revolving credit facility secured by its own assets.
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By GlobalDataThe boards of LINN and Citizen noted in a joint statement that 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.
LINN board of directors chairman Evan Lederman said: "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.”
LINN further added that Roan will go public in the near future, with the initial public offering scheduled early next year.
LINN and Citizen are currently operating a combined total of five rigs in the Merge play, with a planned drilling programme of 58 gross wells this year.
