Unique-Northern Oil and Gasoline in bid to accumulate smaller rival Granite Ridge, sources say

By David French

(Reuters) -Northern Oil and Gasoline has made an acquisition provide for Granite Ridge Assets, a smaller U.S. producer with operations in basins together with the Permian and Eagle Ford (NYSE:F), in response to individuals conversant in the matter.

Minneapolis, Minnesota-based Northern has submitted at the least two gives for Granite Ridge, the sources stated, including the most recent bid, made in latest weeks, was at a roughly 20% premium to the goal’s share worth.

Whereas Granite Ridge’s administration has rebuffed the overtures to this point, Northern stays all for a deal and will sweeten its provide subsequent yr, the sources stated, requesting anonymity because the discussions are confidential.

Granite Ridge’s shares closed greater than 10% greater after the information on Friday, giving the corporate a market worth of about $809 million. It additionally had debt web of money of about $136 million as of the tip of September this yr, in response to information from LSEG.

Northern, which has a market capitalization of about $3.6 billion, reversed marginal beneficial properties and closed 1.2% decrease.

“The corporate ceaselessly sends expressions of curiosity to accumulate property or companies,” Northern stated in a press release.

It stated that many such requests are rejected, and it “just isn’t presently engaged in formal negotiations to accumulate Granite Ridge”.

Granite Ridge declined to remark.

Granite Ridge is majority-owned by entities managed by non-public fairness agency Gray Rock Funding Companions, which was based by Matt Miller and Griffin Perry, who additionally function co-chairmen of the Dallas-based firm. The opposite co-founder of Gray Rock, Kirk Lazarine, additionally sits on the board.

The corporate’s shares, which have been buying and selling in New York since its 2022 merger with a blank-check acquisition agency backed by former speaker of the U.S. Home of Representatives Paul Ryan, had misplaced greater than 40% of their worth from the time of itemizing till Thursday’s shut.

Each Northern and Granite Ridge specialise in so-called non-op manufacturing, which implies they contribute a share of the drilling prices and different bills to get a share of the income from the sale of hydrocarbons, whereas one other producer is in control of the day-to-day operations of the oil and gasoline wells.

Northern is likely one of the largest non-op producers within the U.S. shale patch, and has grown in latest occasions by means of a wide range of smaller acquisitions, partnerships and joint ventures.

If it succeeds in clinching a deal for Granite Ridge, it could rank as Northern’s largest ever acquisition.

Northern and Granite Ridge function throughout a number of shale basins, together with the Permian Basin situated in Texas and New Mexico, and the Williston formation in North Dakota. A takeover of Granite Ridge would additionally give Northern a presence within the Eagle Ford, Haynesville, and Denver-Julesburg basins.