Unique-Northern Oil and Gasoline is attempting to amass its smaller rival Granite Ridge, sources say

By David French

(Reuters) -Northern Oil and Gasoline has made an acquisition provide for Granite Ridge Assets, a small U.S. producer with operations in basins together with the Permian and Eagle Ford, in line with folks conversant in the matter.

Northern, primarily based in Minneapolis, Minn., has submitted no less than two gives for Granite Ridge, the sources mentioned, including that the most recent provide, made in current weeks, represented a premium of about 20 % over the asking value. goal motion.

Though Granite Ridge administration has thus far rebuffed gives, Northern stays enthusiastic about a deal and will sweeten its provide subsequent 12 months, the sources mentioned, requesting anonymity as a result of the discussions are confidential.

Shares of Granite Ridge closed up greater than 10% after Friday’s announcement, giving the corporate a market worth of about $809 million. It additionally had internet debt of about $136 million on the finish of September this 12 months, in line with LSEG information.

Northern, which has a market capitalization of round $3.6 billion, reversed its marginal features and closed down 1.2%.

“The Firm ceaselessly sends expressions of curiosity to amass property or companies,” Northern mentioned in a press release.

It mentioned many of those requests had been rejected and that it “isn’t at present engaged in formal negotiations to amass Granite Ridge.”

Granite Ridge declined to remark.

Granite Ridge is majority-owned by entities managed by personal fairness agency Grey Rock Funding Companions, based by Matt Miller and Griffin Perry, who additionally function co-chairmen of the Dallas-based firm. Grey Rock’s different co-founder, Kirk Lazarine, additionally sits on the board.

The corporate’s shares, traded in New York since its 2022 merger with a blank-check acquisition firm backed by former U.S. Home Speaker Paul Ryan, had misplaced greater than 40% of their worth between their itemizing and Thursday, it’s closed.

Northern and Granite Ridge specialise in so-called non-op manufacturing, which means they contribute a share of drilling prices and different bills to get a share of income from hydrocarbon gross sales, whereas one other producer is in cost for the day. -daily operations of oil and gasoline wells.

Northern is likely one of the largest non-operating producers within the US shale play and has grown in current instances by way of quite a lot of smaller acquisitions, partnerships and joint ventures.

If it will possibly shut a deal on Granite Ridge, will probably be Northern’s largest acquisition ever.

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

(Reporting by David French in New York; modifying by David Gregorio and Pooja Desai)