HOUSTON—At the crossroads of the Merge, Stack and Scoop plays, Roan Resources LLC is being built with plans to go public, likely later this year.

Initially, the idea was for Roan to be launched as the first publicly-traded Stack company, said Greg Augsburger, CEO and founder of Citizen Energy II, which added half of Roan’s acreage to the enterprise. However, on Feb. 9, Alta Mesa Resources beat them to the punch.

Alta Mesa finalized its megadeal to combine Silver Run Acquisition Corp. II (NASDAQ: SRUNU), Kingfisher Midstream LLC and Alta Mesa Holdings LP into an enterprise valued at $3.8 billion.

Roan’s plans haven’t changed but there are other wrinkles to be ironed out, Augsburger said during a presentation at an SPE Business Development Group meeting in late January. The pure-play concept, to some observers, may end up sacrificing exploration elsewhere.

For Roan itself, the surrounding companies will have to make a strong case for their assets as one of the largest gas reservoirs in the world. Taken as a barometer, Midcontinent A&D reflects an area that has acquired a no-man’s-land vibe.

At least five deals have fallen apart in the past six months as prominent brokers and private-equity firms haven’t moved assets bordering Blaine and Dewey counties, Okla. Natural Gas Partners-backed Highmark Energy is among other portfolio companies that didn’t find a price to their liking.

“Virtually every A&D attempt that’s been out here for the last year has been a failed process,” Augsburger said. “Naturally those are some very powerful [private-equity] firms behind them. I’m sure they’re going to be doing some things, consolidating.”

For now, the forces behind Roan—a union between Citizen and Linn Energy’s Merge holdings—are as determined as they are formidable.

Linn Energy and Citizen teamed up in June 2017 to create the pure-play out of 140,000 net acres. Since then, the position has grown by another 10,000 net acres.

The impetus for the deal was a perfect overlap of acreage, Augsburger said. After emerging from bankruptcy, Linn’s backers were itching to make a deal, he said.

“We spun off our assets into [Roan] at our Citizen II level and the idea is to take that entity public,” he said.

“So we own half of the Merge, they own the other half,” he said.

Within three months of closing the deal, the company’s net average production has catapulted by more than 70% to 40,800 barrels of oil equivalent per day (boe/d). In June, Roan’s average volumes were about 23,500 boe/d.

Roan is building up its organization—so far with more than 50 employees and six operated rigs.

In November, Roan hired Tony Maranto to serve as president and CEO. Moranto previously served as EOG Resource Inc.’s (NYSE: EOG) Oklahoma general manager.

“I’m hoping it will be baby EOG,” Augsburger said.

For its part, Linn is working overtime to divest its own assets.

During the past year, Linn’s team has traipsed across the breadth of its positions in Texas, Utah, Oklahoma, North and South Dakota, Wyoming and Montana selling them for estimated proceeds of more than $1.8 billion. The company began first-quarter 2018 with agreements to sell assets in Utah and West Texas for a combined $250 million.

Augsburger said Roan will probably go public this year, but added, “You’ve got to add the constant disclaimer of ‘pending market conditions.’”

The concept of the pure-play, however, gives Augsburger pause. While not a voice of dissent, his inner-geologist is clearly more interested in finding quality rock than where they are found.

Pure plays bring advantages, particularly when it comes to having a core group that drills and completes the same rock and takes their experience from one well to the next, he said. But that shouldn’t “preclude you from chasing opportunities in other basins,” he said.

What Citizen’s team in Oklahoma has learned is clearly transferable to other areas, he said.

“I think perhaps something that’s more important … we can take our learnings from the upper Devonian through the middle Mississippian-age reservoirs into other basins,” he said. “We do have analogous rock in sister basins, which may be where the better opportunity lies.”

Darren Barbee can be reached at dbarbee@hartenergy.com.