Item 1.01 Entry into a Material Definitive Agreement.
On June 27, 2017, Linn Energy Holdings, LLC (“LEH”) and Linn Operating, LLC (“LOL”, and together with LEH, “Linn”), each of which is a wholly owned subsidiary of Linn Energy, Inc., entered into a contribution agreement (the “Contribution Agreement”) with Citizen Energy II, LLC (“Citizen”) and Roan Resources LLC (the “Company”), a new limited liability company formed to be a joint venture between Linn and Citizen. Pursuant to the terms of the Contribution Agreement, Linn and Citizen agree to each contribute approximately 70,000 net acres located in the Anadarko Basin, Oklahoma to the Company (the “Contribution”). Linn and Citizen will each receive a 50% equity interest in the Company, subject to adjustment, in exchange for the Contribution. The transactions contemplated by the Contribution Agreement are expected to close in the third quarter of 2017, with an effective date of April 1, 2017. Upon closing, the Company will be governed by a board of directors initially composed of four representatives appointed by Linn and four representatives appointed by Citizen.
The Contribution Agreement contains various representations, warranties, covenants and indemnification obligations of Linn, Citizen and the Company that are customary in transactions of this type. The closing is subject to satisfaction or waiver of specified conditions, including the material accuracy of the representations and warranties of Linn, Citizen and the Company. There can be no assurance that these closing conditions will be satisfied.
The Contribution Agreement may be terminated, subject to certain exceptions, (i) by mutual written consent of Linn and Citizen, (ii) resulting from certain material breaches of the Contribution Agreement that remain uncured or unwaived and cause the failure of certain closing conditions, (iii) if the closing has not occurred on or before February 28, 2018, (iv) in the event the conditions related to the Citizen Title Defect Amounts (as defined in the Contribution Agreement), Remediation Amounts for Citizen Environmental Defects (as defined in the Contribution Agreement), the Linn Title Defect Amounts (as defined in the Contribution Agreement), and the Remediation Amounts for Linn Environmental Defects (as defined in the Contribution Agreement) are not satisfied and (v) upon the occurrence of certain other events specified in the Contribution Agreement.