Grey Rock Investment Partners has signed a $1.3bn worth merger deal with Executive Network Partnering (ENPC) to create Granite Ridge Resources, a publicly traded oil and gas upstream company in the US.
ENPC is a special purpose acquisition entity (SPAC) that is listed on the New York Stock Exchange (NYSE), while Grey Rock Investment Partners is a Dallas-based investment firm.
ENPC chairman Paul Ryan said: “This transaction with Grey Rock reflects our philosophy and commitment to matching accomplished, proven executives and great assets, with the proper capital structure to maximise results and value creation.
“As hydrocarbons continue to play an important role in the global energy mix, we are confident that Granite Ridge, led by a world-class team with deep operational, technical, and financial expertise, is a compelling opportunity for investors looking to participate in the energy space.”
Grey Rock Investment Partners has non-operated interests in over 2,500 wells in core areas of the Midland, Delaware, Eagle Ford, Bakken, DJ, and Haynesville plays.
Under the terms of the deal, the private equity firm will contribute the currently held oil and gas assets in its Fund I, Fund II, and Fund III portfolios to the newly created entity in exchange for equity.
It will not get any cash proceeds as part of the deal and will transfer all its equity into the pro forma company.
Granite Ridge Resources will have an estimated net production of 20.5 thousand barrels of oil equivalent per day in 2022.
With the assumption that there are no redemptions paid from ENPC cash in trust, Granite Ridge Resources will get gross proceeds of nearly $414m held in the SPAC’s trust account. The proceeds will be used by the new oil and gas company for growth capital purposes, which include acquisitions in the future.
Granite Ridge Resources and Grey Rock Investment Partners agreed that during the term of the services agreement, the former and any additional oil and gas-focused funds managed by the latter could jointly take part in investment opportunities for upstream oil and gas assets.
As per the terms, 75% of any future transactions will be allocated to Granite Ridge Resources, while the remaining 25% will be assigned to oil and gas funds managed by Grey Rock Investment Partners.
Grey Rock Investment Partners co-founder Matt Miller said: “In creating Granite Ridge, we have the unique opportunity to build a new company anchored by a premiere, scaled, non-operated oil and gas platform diversified across five of the most prolific basins in the United States.
“We are excited to partner with ENPC to enter the public markets and deliver on our commitment to create healthy, risk-adjusted returns in underserved areas of the oil and gas market, while creating long-term value for Granite Ridge’s stockholders.”
The closing of the deal, which is subject to the approval of ENPC’s shareholders and the meeting or waiver of other customary conditions, is expected to occur later this year.
