Sources say that Northern Oil and Gas is in the process of acquiring Granite Ridge, a smaller rival.

According to sources familiar with the situation, Northern Oil and Gas made a purchase offer for Granite Ridge Resources. Granite Ridge Resources is a small U.S. oil and gas producer that operates in the Permian and Eagle Ford basins.

Sources said that Northern, based in Minneapolis, Minnesota, has made at least two bids for Granite Ridge. The latest offer, which was made within the last few weeks, came at roughly a 20% premium over the target's stock price.

Sources said that while Granite Ridge management has rejected the overtures to date, Northern is still interested in the deal and may sweeten it next year. The discussions are confidential, so they asked for anonymity.

Granite Ridge declined comment. Northern has not responded to our request for comment.

Grey Rock Investment Partners was founded in Dallas by Matt Miller and Griffin Perry. They are also the co-chairmen. Kirk Lazarine is also a board member.

The shares of the company, which are traded in New York, since the merger of 2022 with a blank check acquisition firm backed and financed by the former Speaker of the U.S. House of Representatives Paul Ryan have dropped about 12% over the last three month, falling slightly below the S&P 500 Oil & Gas Exploration & Production Index.

Granite Ridge shares traded at $5.72 per share on Friday. This gives it a value of about $750 million. According to LSEG data, it also had a debt net of cash amounting to about $136 millions at the end of September.

Northern and Granite Ridge are both specialists in non-op (non-operational) production. This means that they pay a portion of the costs of drilling and other expenses in exchange for a percentage of the revenues from the sale hydrocarbons. Another producer manages the daily operations of oil and gas wells.

Northern is one the largest non-op producer in the U.S. Shale Patch, and it has grown over the past few years through smaller acquisitions and partnerships.

Northern would be the largest acquisition in its history if it were to secure a deal with Granite Ridge.

Northern and Granite Ridge are active in multiple shale formations including the Permian Basin in Texas and New Mexico and the Williston Formation in North Dakota. Northern would gain a presence in Eagle Ford, Haynesville and Denver-Julesburg Basins if it acquired Granite Ridge. David French, New York (Reporting) and David Gregorio (Editing)

(source: Reuters)