Executive Network Partnering Corporation (NYSE:ENPC), a special purpose acquisition vehicle "SPAC", announced plans to combine with Grey Rock Investment Partners Monday. Grey Rock is wealth management and an oil and gas investment business. Based in Dallas, Grey Rock holds interests in non-operated producing and non-producing oil and gas assets in the Permian and other US shale basins. The newly formed entity, named Granite Ridge Resources, will trade on the NYSE under ticker "GRNT."
Blank-check company Executive Network (ENPC) went public in late 2020, and is a partnership between former Speaker Paul Ryan, Solamere Capital, and Alex Dunn. Alex is the former President of Vivint Smart Home (VVNT), while Solamere Capital is a private equity business co-founded in 2008 by Paul Ryan and Taggart Romney, Mitt Romney's oldest son. At the time of the IPO, it was reported that the SPAC had not selected a target industry, but "plans to focus on businesses where its strong network, operational background, and aligned economic structure will provide a competitive advantage."
Pro-forma for the transaction, Granite Ridge will be valued at ~$1.7b, or $1.3b net of cash. At current oil (USO) and gas (UNG) strip pricing, the company expects to generate $432m in EBITDA during 2022, and $247m of free cash flow (14% yield). 2022 production is ~50% hedged at below strip pricing. In 2021, the company generated $213m of EBITDA. The sponsors will receive ~$9.0m worth of sponsor shares, in addition to warrants, for completing the transaction.