Calgary-based oil and gas company Hammerhead Resources, which is backed by Riverstone Holdings, will go public following a merger with Decarbonization Plus Acquisition Corporation IV, a special purpose acquisition company (SPAC). The deal is valued at C$1.39 billion ($1.02 billion).
After the transaction is completed at the beginning of next year, the combined business will be listed on Nasdaq under the ticket HHRS. The company will continue to be led by CEO Scott Sobie and Hammerhead’s executive team.
The combined business will strive for net zero emissions on a Scope 1 and Scope 2 basis by the end of the decade. It will also work to progress its differentiated carbon capture and sequestration (CCS) program.
Hammerhead’s CCS program will need approximately C$240 million (U.S.$175.76 million) of capital between 2023 and 2029. The program is estimated to double its production volumes and bring down its Scope 1 and Scope 2 emissions by about 79% of 2021 levels by 2029.
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The deal’s gross proceeds are expected to reach C$320 million (U.S. $234.34 million) which will go toward the CCS program.
“We are extraordinarily proud of the company we have built since inception over a decade ago,” said Sobie in a statement. “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.”
Riverston invested in Hammerhead in 2014 and again in 2019, when it provided it with approximately C$300 million (U.S. $219.7 million) in financing.
Riverstone Holdings was established in 2000 with headquarters in New York. The asset management firm mostly invests in the energy, power, and infrastructure sectors. To date, it has raised more than $40 billion of committed capital.