Linn Energy and Citizen Energy will create a separate joint venture to develop oil resources in a 140,000-acre piece of land in Oklahoma, according to a new report by Reuters.
The new company, named Roan Resources, will get land from both companies on an equal basis from shale formations in the oil-rich state. Some parts will be from SCOOP and STACK areas.
The venture will double May 2017 output of 20,000 barrels per day from the same lands by the end of the year, the companies said in a statement on Wednesday.
Roan will go public in 2018, provided market conditions prove to be hospitable for a rare post-2014 oil industry IPO.
Linn became public again in February, after a Chapter 11 bankruptcy forced a $8.3 billion debt restructure that led to the sale of several major assets.
"Like many others in our industry, Linn has been impacted by continued low commodity price," CEO Mark Ellis said when the bankruptcy was announced last year.
But overall, U.S. independents are now more flexible in responding to the oil price movements, according to Rex Preston Stoner, an oil and gas consultant with HUB International.
"We have over a century of experience in developing these natural resources, particularly in Texas and Oklahoma, and the Independents are cannily employing the abundance of talent and infrastructure already in place," he said. "For 2017, I expect we'll see continued but measured growth by the area's independent producers who, while still hurting from the 2014-15 commodity slump, have the agility to quickly respond to movements in the global oil and gas market."
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More