- Formation of Granite Ridge creates a scaled, non-operated oil
and gas exploration and production company with an unlevered
balance sheet and immediate free cash flow generation
- Assets include a diversified portfolio of production and
top-tier acreage across the Permian and other prolific US basins in
partnership with proven operators
- Pro forma enterprise value of Granite Ridge estimated at
approximately $1.3 billion underpinned by an expected initial 3.5%
- 4.6% regular dividend yield, depending on redemptions, and an
attractive entry valuation multiple for investors
- Estimated 2022 net production of 20.5 thousand barrels of oil
equivalent per day
- 2022 estimated EBITDA of approximately $425 million1 and strong
free cash flow of more than $240 million2
- Fortress balance sheet with net leverage expected to be below
0.0x at the end of second quarter 2022
- Management team, sponsor economics and governance are highly
aligned with public stockholders
- Scaled platform poised to consolidate the fragmented
non-operated market
Grey Rock Investment Partners (“Grey Rock”), a Dallas-based
investment firm, and Executive Network Partnering Corporation
("ENPC") (NYSE: ENPC), a special purpose acquisition entity,
announced today that they have entered into a definitive agreement
to complete a $1.3 billion business combination resulting in the
formation of publicly traded Granite Ridge Resources, Inc.
(“Granite Ridge”). Subject to approval by the ENPC stockholders and
customary regulatory requirements, Granite Ridge intends to be
listed on the NYSE under the ticker symbol “GRNT” upon closing,
which is expected to occur later this year. Granite Ridge will be
led by chief executive officer Luke Brandenberg and chief financial
officer Tyler Farquharson.
Leadership Perspectives
“We see a tremendous market opportunity driven by the
ever-increasing global demand for traditional energy commodities,”
said Griffin Perry, Co-Founder of Grey Rock. “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.” Matt Miller, Co-Founder of Grey Rock added, “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.”
“This transaction with Grey Rock reflects our philosophy and
commitment to matching accomplished, proven executives and great
assets, with the proper capital structure to maximize results and
value creation,” said Paul Ryan, Chairman of ENPC and former
Speaker of the U.S. House of Representatives. “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.”
“I look forward to leading Granite Ridge as we enter the public
market and seize the opportunities presented by today’s energy
environment,” said Luke Brandenberg, future Granite Ridge chief
executive officer. “As demonstrated by consistent success across
multiple hydrocarbon price cycles and a fortress balance sheet,
Grey Rock is unique among its peer group. Our team at Granite Ridge
will maintain Grey Rock’s strategic, adaptable approach as we focus
on non-operated working interest and joint ventures, partner with
experienced operators in the most prolific basins, leverage
real-time data and analytics, and build a diversified asset base
that generates attractive returns and substantial value for our
partners.”
Transaction Details
In connection with this transaction, Grey Rock will contribute
oil and gas assets currently held in its Fund I, Fund II, and Fund
III portfolios to Granite Ridge in exchange for equity. Grey Rock
will not receive any cash proceeds as part of this transaction and
will roll all of its equity into the pro forma company. Assuming no
redemptions paid from ENPC cash in trust, gross proceeds of
approximately $414 million held in the trust account will be
transferred to Granite Ridge in connection with the transaction for
growth capital purposes, including future acquisitions.
Members of the Grey Rock team will continue to help manage the
assets post-transaction through a long-term services agreement,
providing technical, legal, commercial, acquisition and divestment,
and back-office support. The seasoned team brings significant oil
and gas experience across multiple basins, having generated strong
returns through various cycles.
Granite Ridge and Grey Rock have agreed that during the term of
the services agreement, Granite Ridge and any additional oil and
gas-focused funds managed by Grey Rock shall have the opportunity
to jointly participate in investment opportunities for upstream oil
and gas assets, with 75% of any future transactions allocated to
Granite Ridge and 25% of any future transactions allocated to oil
and gas funds managed by Grey Rock.
The transaction was unanimously approved by the board of ENPC
and remains subject to the approval of ENPC stockholders and the
satisfaction or waiver of other customary conditions. Upon closing,
Granite Ridge will maintain a seven-person board, which will
include three independent directors as well as a committee
dedicated to strong ESG (environment, social and governance)
practices.
Please see the investor presentation for more detail.
Advisors
Evercore is acting as exclusive financial and capital markets
advisor to Grey Rock and Stephens Inc. is acting as financial
advisor to ENPC. Holland & Knight LLP is acting as legal
counsel to Grey Rock and Kirkland & Ellis LLP is acting as
legal counsel to ENPC.
Presentation Information
https://www.enpc.co/news/presentations
About Grey Rock Investment Partners
Grey Rock Investment Partners is a Dallas-based private equity
firm with more than $525 million of committed capital under
management and interests in more than 2,500 wells in core areas of
the Midland, Delaware, Bakken, Eagle Ford, DJ, and Haynesville
plays. With a focus on lower and mid-market non-operated working
interests, Grey Rock builds positions with low breakeven costs to
provide investors with attractive risk-adjusted returns. Grey Rock
was founded and is led by three managing directors: Matt Miller,
Griffin Perry and Kirk Lazarine. For more information, visit
www.grey-rock.com
About Executive Network Partnering Corporation
Executive Network Partnering Corporation (NYSE: ENPC) was formed
as a partnership among Paul Ryan, as Chairman, who served as the
54th Speaker of the U.S. House of Representatives and currently
serves as a Partner at Solamere Capital; Alex Dunn, as CEO, who has
served in various senior operating roles at several businesses
where he helped grow shareholder value, most recently as President
of Vivint SmartHome (NYSE: VVNT); and Solamere Capital, a private
equity firm anchored by its network of leading business executives,
including former chief executive officers of S&P 500 companies.
ENPC was established for the purpose of identifying a company to
partner with in order to effectuate a merger, share exchange, asset
acquisition, share purchase, reorganization or similar partnering
transaction with one or more businesses. For more information,
visit https://www.enpc.co/
Forward-Looking Statements
This news release includes certain statements that may
constitute “forward-looking statements” for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. Forward-looking
statements may include, for example, statements about Grey Rock’s,
ENPC’s and Granite Ridge’s ability to effectuate the proposed
business combination discussed in this news release; the benefits
of the proposed business combination; the future financial
performance of Granite Ridge following the transactions; changes in
Grey Rock’s or Granite Ridge’s strategy, future operations,
financial position, estimated revenues and losses, projected costs,
prospects, plans and objectives of management. These
forward-looking statements are based on information available as of
the date of this news release, and current expectations, forecasts
and assumptions, and involve a number of judgments, risks and
uncertainties. Accordingly, forward-looking statements should not
be relied upon as representing Grey Rock’s, ENPC’s or Granite
Ridge’s views as of any subsequent date, and none of Grey Rock,
ENPC or Granite Ridge undertakes any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws. You should not place undue reliance on
these forward-looking statements. As a result of a number of known
and unknown risks and uncertainties, Grey Rock’s and Granite
Ridge’s actual results or performance may be materially different
from those expressed or implied by these forward-looking
statements. Some factors that could cause actual results to differ
include: (i) the timing to complete the proposed business
combination; (ii) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
definitive agreements relating to the proposed business
combination; (iii) the outcome of any legal proceedings that may be
instituted against ENPC, Grey Rock, Granite Ridge or others
following announcement of the proposed business combination; (iv)
the inability to complete the proposed business combination due to
the failure to obtain the approval of ENPC stockholders; (v)
Granite Ridge’s success in retaining or recruiting, or changes
required in, its officers, key employees or directors following the
proposed business combination; (vi) Granite Ridge’s ability to
obtain the listing of its common stock and warrants on NYSE
following the proposed business combination; (vii) the risk that
the proposed business combination disrupts current plans and
operations of Grey Rock as a result of the announcement and
consummation of the proposed business combination; (viii) the
ability to recognize the anticipated benefits of the proposed
business combination; (ix) unexpected costs related to the proposed
business combination; (x) the amount of any redemptions by public
stockholders of ENPC being greater than expected; (xi) the
management and board composition of Granite Ridge following the
proposed business combination; (xii) limited liquidity and trading
of Granite Ridge’s securities; (xiii) the use of proceeds not held
in ENPC’s trust account or available from interest income on the
trust account balance; (xiv) geopolitical risk and changes in
applicable laws or regulations; (xv) the possibility that Grey
Rock, ENPC or Granite Ridge may be adversely affected by other
economic, business, and/or competitive factors; (xvi) operational
risk; (xvii) the possibility that the COVID-19 pandemic, or another
major disease, disrupts Grey Rock’s business; (xviii) litigation
and regulatory enforcement risks, including the diversion of
management time and attention and the additional costs and demands
on Grey Rock’s resources; and (xix) the risks that the consummation
of the proposed business combination is substantially delayed or
does not occur.
No Offer or Solicitation
This communication relates to a proposed business combination
between Grey Rock and ENPC. This document does not constitute an
offer to sell or exchange, or the solicitation of an offer to buy
or exchange, any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction.
Important Information for Investors and Stockholders and
Where to Find It
In connection with the proposed business combination between
Grey Rock and ENPC, Granite Ridge and ENPC intend to file a
registration statement on Form S-4 (as may be amended from time to
time, the "Registration Statement") that includes a preliminary
proxy statement/prospectus of ENPC and a preliminary prospectus of
Granite Ridge, and after the Registration Statement is declared
effective, ENPC will mail a definitive proxy statement/prospectus
relating to the proposed business combination to ENPC’s
stockholders. The Registration Statement, including the proxy
statement/prospectus contained therein, when declared effective by
the Securities and Exchange Commission ("SEC"), will contain
important information about the proposed business combination and
the other matters to be voted upon at a meeting of ENPC’s
stockholders to be held to approve the proposed business
combination (and related matters). This communication does not
contain all the information that should be considered concerning
the proposed business combination and other matters and is not
intended to provide the basis for any investment decision or any
other decision in respect of such matters. ENPC and Granite Ridge
may also file other documents with the SEC regarding the proposed
business combination. ENPC stockholders and other interested
persons are advised to read, when available, the preliminary proxy
statement/prospectus and the amendments thereto and the definitive
proxy statement/prospectus and other documents filed in connection
with the proposed business combination, as these materials will
contain important information about ENPC, Granite Ridge, Grey Rock
and the proposed business combination.
When available, the definitive proxy statement/prospectus and
other relevant materials for the proposed business combination will
be mailed to ENPC stockholders as of a record date to be
established for voting on the proposed business combination.
Stockholders will also be able to obtain copies of the preliminary
proxy statement/prospectus, the definitive proxy
statement/prospectus and other documents filed or that will be
filed with the SEC, free of charge, by ENPC and Granite Ridge
through the website maintained by the SEC at www.sec.gov, or by
directing a request to ENPC, 137 Newbury Street, 17th Floor,
Boston, Massachusetts 02116.
Participants in the Solicitation
ENPC, Granite Ridge, Grey Rock and their respective directors,
officers and related persons may be deemed participants in the
solicitation of proxies of ENPC stockholders in connection with the
proposed business combination. ENPC stockholders and other
interested persons may obtain, without charge, more detailed
information regarding the directors and officers of ENPC, and a
description of their interests in ENPC is contained in ENPC’s final
prospectus related to its initial public offering, dated September
15, 2020 and in ENPC’s subsequent filings with the SEC. Information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to ENPC stockholders in
connection with the proposed business combination and other matters
to be voted upon at the ENPC shareholder meeting will be set forth
in the Registration Statement for the proposed business combination
when available. Additional information regarding the interests of
participants in the solicitation of proxies in connection with the
proposed business combination will be included in the Registration
Statement that Granite Ridge and ENPC intend to file with the SEC.
You may obtain free copies of these documents as described in the
preceding paragraph.
1. Based on NYMEX strip pricing as of 5/11/22 2. Free cash flow
(FCF) defined as operating cash flow less net capex and based on
NYMEX strip pricing as of 5/11/22
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220516005399/en/
Investor & Media Contact: Emmie Watts –
ew@enpc.co – 801.400.3077
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