Riverstone-backed Hammerhead to go public via merger with SPAC

The deal to take the Canadian energy company public is valued at around C$1.39 billion ($1.02 billion).

  • Founded in 2009, Hammerhead has assets and operations in Alberta targeting the Montney formation
  • The combined business will aim to achieve net zero emissions on a Scope 1 and Scope 2 basis by 2030
  • Riverstone invested in Hammerhead in 2014 and provided it with about C$300 million of financing in 2019

Riverstone Holdings-backed Hammerhead Resources, a Calgary-based upstream oil and gas company, is set to go public in the US by merging with Decarbonization Plus Acquisition Corporation IV, a special purpose acquisition company. The deal is valued at about C$1.39 billion ($1.02 billion).

Upon completion of the transaction in Q1 2023, the combined business is expected to list on Nasdaq under the ticket “HHRS”. It will continue to be led by Hammerhead’s executive team, led by CEO Scott Sobie.

Founded in 2009, Hammerhead has assets and operations in Alberta targeting the Montney formation.

The combined business will aim to achieve net zero emissions on a Scope 1 and Scope 2 basis by 2030. It will also advance its differentiated carbon capture and sequestration program (CCS).

Hammerhead’s CCS program is estimated to require approximately C$240 million of capital between 2023 and 2029. The program expected to reduce its Scope 1 and Scope 2 emissions by approximately 79% of 2021 levels by 2029, including an anticipated doubling of production volumes. The combined business is expected to have gross proceeds from the deal of $320 million which will be put toward accelerating its CCS program.

“We are extraordinarily proud of the company we have built since inception over a decade ago,” said Sobie in a statement. “Not only does Hammerhead stand poised to harvest what we consider to be among the most attractive rates of return well locations in Western Canada, but Hammerhead’s current emissions profile is already advantaged through its investment of over C$400 million in modern, technically optimized facilities that are being utilized across its properties. We believe an energy transformation is underway where conventional energy and power sources will continue to play an important role in the world energy mix for some time to come. The current global profile of both energy security and resource intermittency are demonstrating the need for continued reliance on conventional sources. We believe the energy industry has an emissions challenge, and we aim to be a leader in redefining public expectations around how companies like ours can contribute to the advancement of global net zero goals.”

Riverstone invested in Hammerhead in 2014 and provided it with about C$300 million of financing in 2019, as reported by PE Hub.

New York-headquartered Riverstone Holdings was founded in 2000 and is an asset management firm that investments primarily within energy, power and infrastructure. Since it was founded the firm has raised more than $40 billion of committed capital.