In an April 29 research note, Stifel analyst Derrick Whitfield reported that Roan Resources Inc. (ROAN:NYSE) formed a transaction committee to field inquiries by outside firms about consolidating assets or purchasing the company. "We expect the company to progress these indications of interests for the benefit of Roan Resources shareholders," he added. Roan holds acreage in the Merge, SCOOP and STACK plays.
Whitfield noted that a sale and a merger are possible outcomes. Regarding an acquisition, because Roan is currently trading for about $2,000 per acre, interest from entities in and out of the basin is expected. Given Roan's scale, a merger could happen within the Merge play, possibly with a company like Camino Natural Resources or Paloma Partners.
The conclusion of the transaction committee's efforts, for which there currently is no deadline, is an upcoming key catalyst, Whitefield pointed out. Another is the hiring of a permanent CEO for the company.
Stifel has a Buy rating and a $13 per share, 12-month target price on Roan Resources, whose stock is currently trading at around $5.42 per share.
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Disclosures from Stifel Nicolaus & Company, Roan Resources., April 29, 2019
I, Derrick Whitfield, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Derrick Whitfield, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Our European Policy for Managing Research Conflicts of Interest is available at www.stifel.com.
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