My Watch List: ROAN

[dan_s]

Stifel: Roan Resources, Inc. (ROAN, $1.19, Buy; Target $11.00) by Derrick Whitfield

Roan announces term loan and borrowing base reaffirmation to solidify liquidity position
After the markets closed on June 19th, Roan announced that it entered into a $100mm term loan facility that is expected to bear interest at LIBOR plus 7.5%. In exchange for the commitments, Roan agreed to issue 1.0% of the current shares outstanding to the lending parties no later than June 26, 2019. Of additional importance, the company completed its June borrowing base redetermination and successfully reaffirmed it at $750mm. Management projects the company will have $150mm of liquidity available on June 30, 2019, which we estimate to be more than sufficient to fund the company's ongoing capital program. Management reiterated its yearly production growth target of 20%-25% and its expectation that the company will be free cash flow generative by year-end 2019. We view the developments positively as they collectively address investor concerns surrounding liquidity while retaining the company's strategic optionality.

[ChuckGeb]

I would recommend extreme caution with anything having anything to do with Linn Energy.

[dan_s]

Agree, but when I see a respected firm like Stifel put a price target 10X higher than the current share price it definitely deserves a spot on the Watch List.