By David French
(Reuters) -Northern Oil and Gas has made a takeover bid for Granite Ridge Resources, a smaller U.S. producer with operations including the Permian and Eagle Ford (NYSE:), according to people familiar with the matter.
Minneapolis, Minnesota-based Northern has submitted at least two bids for Granite Ridge, the sources said, with the latest offer, made in recent weeks, at a premium of about 20% to the target’s stock price.
Although Granite Ridge management has so far rejected the overtures, Northern remains interested in a deal and could tighten its offer next year, the sources said, requesting anonymity because the discussions are confidential.
Shares of Granite Ridge closed more than 10% higher after Friday’s news, giving the company a market value of about $809 million. It also had net-of-cash debt of about $136 million at the end of September this year, according to LSEG data.
Northern, which has a market cap of about $3.6 billion, reversed marginal gains and closed 1.2% lower.
“The company regularly sends expressions of interest to acquire assets or businesses,” Northern said in a statement.
It said many such requests have been denied and that it is “not currently involved in formal negotiations to acquire Granite Ridge.”
Granite Ridge declined to comment.
Granite Ridge is majority owned by entities controlled by private equity firm Gray Rock Investment Partners, founded by Matt Miller and Griffin Perry, who are also co-chairmen of the Dallas-based company. Gray Rock’s other co-founder, Kirk Lazarine, also sits on the board.
The company’s shares, which have been trading in New York since its 2022 merger with a blank-check acquisition company backed by former Speaker of the U.S. House of Representatives Paul Ryan, had lost more than 40% of their value as of from the moment of listing until the IPO. Thursday is almost here.
Both Northern and Granite Ridge specialize in so-called non-op production, meaning they contribute some of the drilling costs and other expenses to get a share of the revenue from hydrocarbon sales while another producer takes the lead about the day. -the daily activities of the oil and gas wells.
Northern is one of the largest non-operating producers in the US shale region and has grown recently through a series of smaller acquisitions, partnerships and joint ventures.
If it manages to strike a deal for Granite Ridge, it would be Northern’s largest acquisition ever.
Northern and Granite Ridge operate in multiple shale basins, including the Permian Basin in Texas and New Mexico, and the Williston Formation in North Dakota. An acquisition of Granite Ridge would also give Northern a presence in the Eagle Ford, Haynesville and Denver-Julesburg watersheds.
