Northern Oil and Gas has made an acquisition offer for Granite Ridge Resources, a smaller US producer with operations in several major basins, including the Permian and Eagle Ford, according to a report by Reuters citing sources familiar with the matter.
Granite Ridge is primarily owned by entities controlled by Grey Rock Investment Partners, a private equity firm founded by Matt Miller and Griffin Perry, who serve as co-chairmen. The firm’s other co-founder, Kirk Lazarine, also sits on Granite Ridge’s board.
Based in Minneapolis, Northern has made at least two offers to Granite Ridge, with the most recent bid, submitted in the past few weeks, offering a roughly 20% premium over Granite Ridge’s current share price.
Despite Granite Ridge’s management rejecting the proposals so far, Northern is still keen on completing a deal and may increase its offer in the coming months, according to unnamed sources.
Following news of the potential deal, Granite Ridge’s stock surged more than 12% on Friday, bringing the company’s market value to nearly $800m. As of September, Granite Ridge’s net debt stood at about $136m, according to LSEG data.
In contrast, Northern’s shares, valued at roughly $3.6bn, dropped 1.1% after the announcement.
Since its 2022 merger with a blank-check company backed by former US House Speaker Paul Ryan, Granite Ridge’s shares have lost more than 40% of their value.
Both Northern and Granite Ridge focus on non-operating production, where they contribute a share of drilling and operational costs in exchange for a portion of the revenue from oil and gas sales. Northern is one of the largest non-op producers in the US shale patch, having expanded through smaller acquisitions, partnerships, and joint ventures.
If Northern successfully acquires Granite Ridge, the deal would mark its largest acquisition to date.
Both companies operate in key shale basins, such as the Permian in Texas and New Mexico and the Williston formation in North Dakota. A potential deal would also give Northern a foothold in the Eagle Ford, Haynesville, and Denver-Julesburg basins.
