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Roan Resources is exploring a sale or merger after receiving unsolicited offers

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Flags are pictured flying in front of Roan Resources' Oklahoma City headquarters. [OKLAHOMAN ARCHIVES]
Flags are pictured flying in front of Roan Resources' Oklahoma City headquarters. [OKLAHOMAN ARCHIVES]

Is this a seller’s market?

Better oil prices caused in part by a renewed commitment from the U.S. to keep Iranian oil off the market and bids from Chevron and Occidental Petroleum to acquire Anadarko Petroleum and its Permian Basin holdings certainly are creating that buzz.

At least one analyst recently asked whether that might have independents operating in Oklahoma wondering what company might be next.

On Monday, Roan Resources officials indicated it might.

The Oklahoma City-based company announced it had received “multiple unsolicited indications of interest to purchase the company” and had formed a working committee to evaluate those offers as it looks to maximize shareholder value.

To be sure, Roan isn’t Anadarko, as it doesn’t hold any Permian Basin acreage.

However, it is actively acquiring, exploring and developing unconventional oil and natural gas reserves in the MERGE, SCOOP and STACK plays of the Anadarko Basin.

It also is a company with an active recent past.

Tony Maranto, the company’s CEO, president and chairman of its board and the man who led its transformation into a public company, resigned from those positions in mid-April for personal reasons.

His resignation followed an issuance of 2018 annual and fourth-quarter results that were listed as preliminary because an audit to verify those numbers had not yet been completed.

Subsequently, the company board appointed one of its members, Joseph A. Mills, to step in to run the company’s day-to-day operations while Roan sought a new CEO.

Plus, Mills, who is president and CEO of Tulsa-based Samson Resources II, is going through the same process there.

Samson Resources II’s board also is exploring sale and merger options as it seeks to maximize shareholder value.

Robert Dauffenbach, director of the Center for Economic and Management Research at the University of Oklahoma's Price College of Business, said Monday the proposed deals put forward by Chevron and then Occidental to acquire Anadarko are indicative of how markets may recently have been undervaluing the worth of oil and gas firms operating in shale plays.

Anadarko’s stock value steeply climbed from $46.80 a share April 11 to $62.43 a share the following day. It closed Monday at $72.96 a share, up 16 cents for the day, as it and Occidental work on fundamentals to execute a purchase agreement that can be taken to shareholders.

“I think we are going to continue to have companies consider outside offers, especially when you have the kind of gain in value Anadarko experienced” after the other companies came calling, he said.

Roan Resources’ stock, meanwhile, was the biggest gainer on the New York Stock Exchange Monday after it disclosed the unsolicited bids.

Its stock closed Friday at $4.19 a share, and it gained nearly 33 percent in value on Monday with nearly 7.9 million shares changing hands, up $1.37 to close at $5.56 a share.

Dauffenbach said part of what might be driving current merger and acquisition explorations is that companies are looking to consolidate their operations to make them more cost effective.

"The scale of operations to be efficient is changing,” he said. “It might well be that total production would be higher and cost less if you had a larger landmass you could exploit through a scale in economies.”

As for Roan’s Monday disclosure, it also announced it had been asked to consider potential in-basin consolidation opportunities.

The release stated the committee will consider all potential merger and acquisition opportunities that could help the board maximize shareholder value, and added Roan intends to hire an investment bank to help in that process.

Mills, Roan’s executive board chairman, stated in the release “consolidation in the core of the basin through a sale or merger combination could be value enhancing, on many levels.”

Meanwhile, Mills said the company remains focused on delivering positive results.

The release stated Roan Resources can’t assure ongoing offer evaluations will generate any transactions that might impact the company’s future and stated there isn’t a timetable in place to conclude any reviews.

Officials said Roan won’t comment further on the process unless it determines any additional disclosures are appropriate or required by law.

Related Photos
<strong>A rig drills a well in the MERGE play for Roan Resources near Tuttle earlier this year. [OKLAHOMAN ARCHIVES]</strong>

A rig drills a well in the MERGE play for Roan Resources near Tuttle earlier this year. [OKLAHOMAN ARCHIVES]

<figure><img src="//cdn2.newsok.biz/cache/r960-24852a348b5f8e822698cc785b699561.jpg" alt="Photo - A rig drills a well in the MERGE play for Roan Resources near Tuttle earlier this year. [OKLAHOMAN ARCHIVES] " title=" A rig drills a well in the MERGE play for Roan Resources near Tuttle earlier this year. [OKLAHOMAN ARCHIVES] "><figcaption> A rig drills a well in the MERGE play for Roan Resources near Tuttle earlier this year. [OKLAHOMAN ARCHIVES] </figcaption></figure><figure><img src="//cdn2.newsok.biz/cache/r960-efd7862877a37a437373106f9fd60743.jpg" alt="Photo - Flags are pictured flying in front of Roan Resources' Oklahoma City headquarters. [OKLAHOMAN ARCHIVES] " title=" Flags are pictured flying in front of Roan Resources' Oklahoma City headquarters. [OKLAHOMAN ARCHIVES] "><figcaption> Flags are pictured flying in front of Roan Resources' Oklahoma City headquarters. [OKLAHOMAN ARCHIVES] </figcaption></figure>
Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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