November 19, 2018
Tony C. Maranto
President and Chief Executive Officer
Roan Resources, Inc.
14701 Hertz Quail Springs Pkwy
Oklahoma City, OK 73134
Re: Roan Resources, Inc.
Registration Statement on Form S-1
Filed October 23, 2018
File No. 333-227953
Dear Mr. Maranto:
We have reviewed your registration statement and have the following
comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by amending your registration statement
and providing the
requested information. If you do not believe our comments apply to your facts
and
circumstances or do not believe an amendment is appropriate, please tell us why
in your
response.
After reviewing any amendment to your registration statement and the
information you
provide in response to these comments, we may have additional comments.
Form S-1 filed October 23, 2018
Prospectus Summary
Our Company, page 1
1. You state here and on pages 52 and 78 that you are "one of the most
active operators in
Oklahoma, with eight rigs actively operating as of September 30, 2018."
Please describe
how you measure activity and provide support for your claim that you are
one of the most
active operators in Oklahoma.
2. Please revise your introductory disclosures here to clarify that Roan
Resources Inc. is a
newly formed entity and that the descriptions of the historical
operations consists of Roan
LLC and Citizen.
Tony C. Maranto
FirstName LastNameTony C. Maranto
Roan Resources, Inc.
Comapany 19, 2018 Resources, Inc.
November NameRoan
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Our Business Strategies, page 3
3. We note that you attribute your assertion on pages 4 and 81 regarding
child well
production to RS Energy. Please supplementally provide us with a copy
of the specific
report or other source of the cited information. If you commissioned
any research or
reports from RS Energy or any other third parties for use in the
registration statement,
please disclose this fact and file each commissioned party's consent
as an exhibit. Refer
to Securities Act Rule 436.
Our Competitive Strengths, page 5
4. You state here and on page 82 that, "Additionally, a significant
amount of our Merge
acreage is concentrated in the play's oil and liquids-rich fairways,
which has historically
been among the highest rate of return areas in the Anadarko Basin."
Please support this
claim by disclosing average historical results from those of your
wells which are located
in your Merge acreage.
5. On page 5, you disclose your realized oil price differential to NYMEX
WTI average
prices and compare this differential to the WTI-Midland oil price
differential to NYMEX
WTI average prices. Please balance this disclosure by providing
comparable price
differential information for natural gas and NGLs, and by clarifying
that natural gas and
NGLs comprise the majority of your reserves and production.
The Offering, page 9
6. Please disclose the number of Class A common stock outstanding as of a
recent
practicable date.
Risk Factors
Risks Related to Our Business
"We are subject to acreage dedications . . .", page 28
7. Please disclose all material terms of your midstream contracts in your
Business section.
We note the related disclosure on pages 127, F-31 to F-32, and F-55 to
F-56.
"Legislation or regulatory initiatives intended to address seismic activity . .
..", page 36
8. Please update this risk factor to address the recent earthquake in
Grady County, the
Oklahoma Corporation Commission's subsequent order to temporarily shut
down your
ongoing well completion in that area, and your eventual decision to
permanently shut
down the well.
Risks Related to Our Class A Common Stock
"Certain of our directors have significant duties . . .", page 41
9. Please revise to identify the individual directors you describe here,
as well as the
Tony C. Maranto
FirstName LastNameTony C. Maranto
Roan Resources, Inc.
Comapany 19, 2018 Resources, Inc.
November NameRoan
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potentially competing entities they serve and their positions or roles
with such entities.
Please also provide this information, where applicable, in the
related party transaction
disclosure that begins on page 126. As an example, please identify
those of your directors
who serve on the board of Riviera Resources.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Contractual Obligations, page 71
10. According to your June 30, 2018 contractual obligations table and
footnote 3 thereto,
$15,351,000 of the $30,838,000 total obligations coming due in 2019
reflects "future
minimum drilling fees including early termination fees as specified by
the contract." You
also reference your rig contracts on pages 6, 83, and F-32. Please
revise to describe the
material terms of your rig contracts, including any minimum drilling
provisions or early
termination provisions thereunder. Please also expand your risk factor
disclosure to
address, if material, the risk of failing to meet minimum drilling
commitments and of
incurring early termination fees under your rig contracts.
Business
Oil and Natural Gas Production Prices and Costs, page 90
11. Tell us how you considered the requirements with regard to disclosure
of production, by
final product sold, for individual fields and/or geological formations
that contain 15% or
more of your total proved reserves. Refer to Item 1204(a) of
Regulation and Rule 4-
10(a)(15) of Regulation S-X.
Management, page 106
12. Please expand John V. Lovoi's biography on page 108 to disclose that
Mr. Lovoi is the
sole member of, and exercises investment management control over, JVL,
and that JVL
may be deemed to beneficially own all securities held by Roan Holdings
through its
majority ownership interest in Roan Holdings and its contractual right
to nominate a
majority of Roan Holdings' board of managers, which exercises voting
and dispositive
power over all securities held by Roan Holdings. We note in that
regard footnote 2 to the
Principal and Selling Stockholders table on pages 121 to 122. Refer to
Regulation S-K
Item 401(a)(1), which requires in part "the name . . . of any
corporation or other
organization in which such occupations and employment were carried on;
and whether
such corporation or organization is a parent, subsidiary or other
affiliate of the registrant."
13. Please revise the biographies of Messrs. Loyd and Raleigh on pages 108
and 109 to
disclose their roles with JVL and Roan Holdings as described in
footnote 2 to the
Principal and Selling Stockholders table on pages 121 to 122. Refer to
Regulation S-K
Item 401(a)(1).
14. We note Section 2.1(a) of the Stockholders' Agreement filed as Exhibit
4.2 identifies
Anthony Tripodo as a director designated by Roan Holdings. Please
revise Mr. Tripodo's
Tony C. Maranto
FirstName LastNameTony C. Maranto
Roan Resources, Inc.
Comapany 19, 2018 Resources, Inc.
November NameRoan
November 19, 2018 Page 4
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FirstName LastName
biography on page 109 and the Principal and Selling Stockholders table
on pages 121 to
122 to indicate as much.
Executive Compensation, page 113
15. It appears that you have been subject to Section 15(d) of the Exchange
Act. Please expand
the disclosure in this section to provide all information that
Regulation S-K Item 402
requires, including any compensation awarded to, earned by, or paid to
your named
executive officers for services rendered to Roan LLC for the last
three completed fiscal
years. Please refer to Regulation S-K Item 402(a)(2) and Item
402(c)(1). Please also refer
to Instruction 2 to Regulation S-K Item 402(a)(3) and Exchange Act
Rule 3b-7, which
provide that named executive officers may include executive officers
or other employees
of subsidiaries. Alternatively, if you believe you are not required to
include this disclosure
in your registration statement, please explain to us why you believe
that to be the case.
Potential Payments Upon Termination or Change in Control, page 117
16. We note your discussion here regarding certain change in control
payment provisions in
your employment agreements and performance share unit awards. We also
note your
definition of change of control "following the Reorganization." Please
revise to clarify
whether your completed reorganization qualifies as a "change in
control" within the
meaning of these provisions.
Certain Relationships And Related Party Transactions
Stockholders' Agreement, page 127
17. You state here that you entered into a stockholders' agreement "with
Roan Holdings and
certain of the Legacy Linn Stockholders . . . ." Please revise to
identify those Legacy Linn
Stockholders who are party to the stockholders' agreement.
Description of Capital Stock
Forum Selection, page 134
18. We note that your forum selection provision identifies the Court of
Chancery in the State
of Delaware as the exclusive forum for certain litigation, including
"derivative actions."
Please disclose whether this provision applies to actions arising
under the Securities Act
or Exchange Act. In this regard, we note that Section 27 of the
Exchange Act creates
exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created
by the Exchange Act or the rules and regulations thereunder.
Roan Resources, Inc.
Notes to Pro Forma Condensed Combined Financial Statements (Unaudited)
Supplemental Pro Forma Combined Oil and Gas Reserve and Standardized Measure
Information
(Unaudited)
Tony C. Maranto
FirstName LastNameTony C. Maranto
Roan Resources, Inc.
Comapany 19, 2018 Resources, Inc.
November NameRoan
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Estimated Pro Forma Combined Quantities of Proved Reserves, page F-7
19. Expand the disclosure of your pro forma proved reserves to provide the
net quantities, by
individual product type, of proved developed and proved undeveloped
reserves as of the
beginning and the end of each period presented. Refer to FASB ASC
932-235-50-4. This
comment also applies to the disclosure on page F-35 regarding the
proved reserves as of
the beginning of the year ended December 31, 2015 for Roan Resources
LLC.
20. Expand the disclosure of your pro forma proved reserves information to
provide an
appropriate narrative explanation of the significant changes related
to each line item other
than production. To the extent that two or more unrelated factors are
combined to arrive
at the line item figure, your disclosure should separately identify
and quantify each
individual factor that contributed to a significant change so that the
change in net reserves
between periods is fully explained. Expand the disclosure relating to
revisions in the
previous estimates of your reserves to identify such factors as
changes caused by
commodity prices and/or well performance. Refer to FASB ASC
932-235-50-5. This
comment also applies to the disclosure on page F-34 regarding the
changes in reserves for
each of the periods presented for Roan Resources LLC.
General
21. You will need to update the historical and pro forma financial
information prior to the
effective date of your registration statement to comply with Rule 3-12
and Article 11 of
Regulation S-X.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact John Hodgin, Petroleum Engineer, at (202) 551-3699 with
questions
about engineering comments. If you have questions regarding comments on the
financial
statements and related matters, you may contact Jenifer Gallagher, Staff
Accountant, at (202)
551-3706 or John Cannarella, Staff Accountant, at (202) 551-3337. Please
contact Parhaum J.
Hamidi, Attorney-Adviser at (202) 551-3421 or Loan Lauren Nguyen, Legal Branch
Chief, at
(202) 551-3642 with any other questions.
Tony C. Maranto
Roan Resources, Inc.
November 19, 2018
Page 6
FirstName LastNameTony C. Maranto Sincerely,
Comapany NameRoan Resources, Inc.
Division of Corporation Finance
November 19, 2018 Page 6 Office of Natural Resources
FirstName LastName