Granite Ridge Resources (NYSE:GRNT), which combined with Executive Network Partnering in October 2022, announced this morning that it has launched an offer to exchange all outstanding warrants into 0.25 shares each.

As of Granite Ridge’s last close at $6, this would be equal to $1.50 in value per full warrant, and the company’s share price has dropped -13% in the pre-market in reaction to the offer’s pending dilutive effects. At its current price of $5.20, each full warrant is effectively worth about $1.30.

Granite Ridge warrants (NYSE:GRNT.WS) are up +79% to $1.11 in turn. The company expects to transfer up to 2,587,493 new shares to warrant holders as a part of the offer, which would represent about 2% of the company’s total shares outstanding.

It is also soliciting consent from warrant holders to amend the company’s warrant agreement such that all outstanding warrants still in circulation at the end of the day June 16 when the offer period expires will be automatically exchanged into 0.225 shares each.

This practice of giving non-exchangers 10% less value has become standard practice and Granite Ridge has already secured the consent of parties representing about 51.3% of outstanding warrants, which is enough to guarantee the amendment’s passage.

Granite Ridge was created in its de-SPAC transaction as a carve-out of oil and gas assets from the portfolio of Dallas-based Grey Rock Investment Partners. Its combination with Executive Network Partnering was announced just over a year ago.

It is one of few recent de-SPACs to offer a dividend and the new energy company has traded well since completing its deal. Only 19 of the 102 de-SPACs that closed in 2022 finishing Thursday trading with a higher share price.