KEY POINTS
- Northern Oil bids for Granite Ridge, offering a 20 percent premium.
- Acquisition would expand Northern’s footprint across key U.S. shale basins.
- Granite Ridge’s non-operator model attracts interest despite share price struggles.
Northern Oil and Gas (NOG), based in Minneapolis, has submitted multiple offers to acquire Granite Ridge Resources, a smaller U.S. oil producer operating across significant shale basins, including the Permian and Eagle Ford.
The latest bid was reportedly at a 20 percent premium to Granite Ridge’s share price, valuing the company at over $809 million, excluding its $136 million debt.
Granite Ridge, majority-owned by private equity firm Grey Rock Investment Partners, has so far rejected Northern’s advances. Despite this, sources close to the matter say Northern remains interested and may sweeten its offer in 2025.
Granite Ridge’s stock surged by over 10 percent following the news, while Northern’s shares saw a slight dip. Northern, in a statement, confirmed its practice of expressing interest in acquiring businesses but clarified that no formal negotiations are ongoing for Granite Ridge.
Potential deal to reshape U.S. non-operator oil production
Both Northern and Granite Ridge specialize in non-operator production, contributing to drilling and operational costs in exchange for revenue shares while other producers manage day-to-day operations.
According to Reuters, a successful acquisition would mark Northern’s largest deal yet and significantly expand its footprint across the U.S. shale landscape.
Granite Ridge’s operations span the Eagle Ford, Haynesville, and Denver-Julesburg basins, complementing Northern’s stronghold in the Permian Basin and the Williston formation.
If the deal proceeds, it could consolidate Northern’s position as a leader in non-operator oil production, strengthening its portfolio amid the industry’s ongoing consolidation trend.
Granite Ridge: A potential gem despite recent struggles
Granite Ridge’s shares, listed in New York since its 2022 merger with a blank-check acquisition firm, have faced challenges, losing over 40 percent of their value until the latest surge.
The company’s unique non-operator business model and presence in key basins make it an attractive target for Northern and potentially other bidders.
Industry analysts note that Northern’s interest underscores the growing importance of diversification in the U.S. oil and gas sector.
However, investors caution that Northern will need to present a compelling offer to succeed, particularly as Granite Ridge’s management evaluates its long-term strategy.
As both companies navigate these discussions, the potential acquisition highlights the evolving dynamics in the U.S. shale industry and the strategic moves by key players to consolidate and expand their influence.
