Water Management Services Agreement
. In January 2019, the Company entered into a
water management services agreement with Blue Mountain. Under this agreement, Blue Mountain will provide water management services including pipeline gathering, disposal, treatment and redelivery of recycled water. The agreement provides for an
acreage dedication for water management services through January 2029. Blue Mountain began providing services under this agreement in April 2019.
Transition Services Agreement
. On August 7, 2018, New Linn entered into a Transition Services Agreement (the Riviera
TSA) with Riviera to facilitate an orderly transition following the Riviera Separation. During the term of the Riviera TSA, Riviera provided New Linn with certain finance, financial reporting, information technology, investor relations, legal,
payroll, tax and other services. Riviera reimbursed New Linn for, or paid on New Linns behalf, all direct and indirect costs and expenses incurred by New Linn during the term of the Riviera TSA in connection with the fees for any such
services. The Riviera TSA terminated according to its terms on the Effective Date.
Riviera Separation and Distribution Agreement.
On August 7, 2018, the Companys predecessor, New Linn, entered into that certain Separation and Distribution Agreement by and between New Linn and Riviera, following which Riviera holds, directly or through its subsidiaries,
substantially all of the assets of Old Linn, other than Old Linns 50% equity interest in Roan LLC. Following the internal reorganization, New Linn distributed all of the outstanding shares of common stock of Riviera to the Legacy Linn
Stockholders on a pro rata basis, including the Elliott Funds, the Fir Tree Funds and the York Capital Funds, each a principal stockholder of the Company. On September 21, 2018, the Elliott Funds, the Fir Tree Funds and the York Capital Funds
owned approximately 20.8%, 19.4% and 12.1%, respectively, of Riviera. Immediately following the Riviera Separation, Rivieras common stock closed at $23.25 per share, valuing the stock received by each of the Elliott Funds, the Fir Tree Funds
and the York Capital Funds at approximately $367.2 million, $342.1 million and $197.1 million, respectively.
Tax
Matters Agreement
.
In conjunction with the Reorganization, the Companys predecessor, New Linn, entered into a tax matters agreement with Riviera (the Riviera TMA). The Riviera TMA, in part, provides for indemnification
of the Company and entitlement of refunds by Riviera of certain taxes related to New Linn prior to the spinoff of assets from New Linn to Riviera. As a result of the Riviera TMA and an estimated overpayment of federal taxes by New Linn, the Company
paid $7.6 million to Riviera during the three months ended March 31, 2019.
Corporate Office Lease.
During 2018, we entered
into a lease for office space in Oklahoma City, Oklahoma that is owned by a subsidiary of Riviera. The lease has an initial term of five years. Under this lease, we paid $0.5 million during the year ended December 31, 2018 and $0.3 million for
the three months ended March 31, 2019. As of March 31, 2019, total remaining payments are $7.8 million.
Legal expenses
.
During the year ended December 31, 2018, we also reimbursed Riviera $1.8 million for legal services incurred on the behalf of Roan in connection with the Reorganization.
Stockholders Agreement
In
connection with the Reorganization, on the Effective Date, we entered into a stockholders agreement (the Stockholders Agreement) with Roan Holdings and the Elliot funds, the Fir Tree funds and the York Capital funds (each
such group of affiliated funds, a Principal Linn Stockholder, and together with Roan Holdings, the principal stockholders), which will govern certain rights and obligations of the principal stockholders following the
Reorganization.
Pursuant to the Stockholders Agreement, until the earlier of (i) our 2020 annual general meeting of
stockholders (the 2020 annual meeting) and (ii) with respect to the applicable Principal Linn Stockholder, the date on which the applicable Principal Linn Stockholder ceases to beneficially own at least 5% of our outstanding
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