TIDMRSE
RNS Number : 8163X
Riverstone Energy Limited
15 August 2018
Riverstone Energy Limited
Final results for the half year ended 30 June 2018
London, 15 August 2018: Riverstone Energy Limited ("REL" or the
"Company") announces its Half Year Results for the 6-month period
(the "Period") from 1 January 2018 to 30 June 2018.
Summary performance
30 June 2018
NAV $1,754 million
NAV per share $20.76 / GBP15.721
Profit/(loss) during period $10.7 million
Basic profit/(loss) per share during 12.72 cents
period
Market Capitalisation GBP1,078 million / $1,423
million1
Share price $16.85 / GBP12.76(1)
Highlights
-- As of 30 June 2018, REL had a NAV per share of $20.76,
representing an increase of 13 cents or 0.6 per cent. versus NAV
per share at 31 December 2017. On a Sterling basis, the NAV per
share increased by GBP0.45 or 2.9 per cent. compared with the end
of 2017.
-- REL took advantage of favourable market conditions to exit
Three Rivers Natural Resources Holdings III LLC and sell 4.4
million shares in Centennial Resource Development, Inc., of which
$280 million of gross proceeds were received during the Period,
resulting in a Gross IRR of 47 per cent. for shareholders.
-- The Company invested a total of $50 million during the
period, bringing net capital invested as of 30 June 2018 to $1,156
million, or 83 per cent of net capital available(2) .
-- During the first half of 2018, REL reduced commitments to two
companies, totaling $74 million, bringing net committed capital as
of 30 June 2018 to $1,385 million, or 99 per cent of net capital
available(2) .
-- REL finished the Period with a cash balance of $236 million
and no debt, following repayment of its loan secured against shares
in Centennial Resource Development, Inc., in April 2018.
Commitments and Investments
During the Period, the company made the following
investments:
-- Invested $22 million in Fieldwood Energy, LLC
-- Invested $15 million in ILX Holdings III LLC
-- Invested $6 million in Sierra Oil and Gas Holdings, L.P.
-- Invested $5 million in Meritage Midstream Services III,
L.P.
-- Invested $2 million in Canadian Non-Operated Resources LP
During the Period, the Company made the following
realisations:
-- Realised $196 million of gross proceeds for Three Rivers
Natural Resources Holdings III, LLC
-- Realised $85 million of gross proceeds for Centennial
Resource Development, Inc.
During the Period, the Company reduced the following
commitments:
-- Commitment reduction of $72 million to Three Rivers Natural
Resources Holdings III LLC
-- Commitment reduction of $2 million to Castex Energy 2005,
LLC
Manager Outlook
-- REL's $236 million cash balance makes the Company well placed
to make new investments and grow its existing Portfolio.
-- The Investment Manager believes the current cycle is
generating attractive opportunities in midstream, oilfield services
and power, while energy producers in low-cost basins, with strong
operational capabilities and an oil-weighting will continue to
outperform.
-- North American energy investments retain an advantage in a
global marketplace due to low breakeven costs, short cycle times
and high asset liquidity.
-- The portfolio's 12 active investments as a whole are well
placed to offer investors resilience and growth in a variety of
commodity price environments.
Richard Hayden, Chairman of Riverstone Energy Limited,
commented:
"The $280 million of realisations during the Period have
strengthened REL's ability to take advantage of new opportunities.
The Board continues to evaluate various options to deploy this
capital which would be most beneficial for shareholders, including
new investments as well as a return of capital."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of
Riverstone, added:
"Oil prices experienced their first sustained period above $60
per barrel since the market downturn in 2014. The improvement in
market fundamentals is supportive for REL realising value from its
mature investments, while capitalising upon a broader universe of
opportunities across the energy value chain."
- Ends -
Riverstone Energy Limited's 2018 Interim Report is available to
view at: www.RiverstoneREL.com.
2Q18 Quarterly Portfolio Valuation
Previously, on 31 July 2018, REL announced its quarterly
portfolio summary as of 30 June 2018, inclusive of updated
quarterly unaudited fair market valuations:
Current Portfolio
Gross
Gross Gross Gross Realised 30 Jun 31 Mar
Committed Invested Realised Unrealised Capital 2018 2018
Capital Capital Capital Value & Unrealised Gross Gross
Target Basin ($mm) ($mm) ($mm)(3) ($mm) Value ($mm) MOIC(4) MOIC(4)
Hammerhead Deep Basin
Resources (Canada) $307 $295 $23 $508 $531 1.8x 1.9x
Permian
Centennial (U.S.) 268 268 172 278 450 1.7x 1.7x
Deepwater
ILX III GoM (U.S.) 200 131 - 183 183 1.4x 1.2x
Bakken, PRB
Liberty II (U.S.) 142 142 - 177 177 1.3x 1.3x
Permian &
Eagle
Permian
Carrier II (U.S.) 133 110 - 131 131 1.2x 1.2x
RCO(5) North America 125 87 82 4 86 1.0x 1.1x
Western
CNOR Canada 90 85 - 85 85 1.0x 1.0x
Meritage Western
III(6) Canada 67 39 - 77 77 2.0x 1.8x
GoM Shelf
Fieldwood (U.S.) 82 81 3 65 68 0.8x 0.2x
Gulf Coast
Region
Castex 2014 (U.S.) 67 44 - 44 44 1.0x 1.0x
Mid-Continent
Eagle II (U.S.) 67 62 - 37 37 0.6x 0.8x
Sierra Mexico 38 14 - 33 33 2.4x 2.4x
Total Current Portfolio(7) $1,585 $1,356 $280 $1,623 $1,903 1.4x 1.4x
------------------------------ ------------ --------- ---------- ------------ ------------ --------- --------
Realisations
Gross
Gross Gross Gross Realised 30 Jun 31 Mar
Committed Invested Realised Unrealised Capital 2018 2018
Capital Capital Capital Value & Unrealised Gross Gross
Target Basin ($mm) ($mm) ($mm)(1) ($mm) Value ($mm) MOIC(4) MOIC(4)
Permian
Rock Oil(8) (U.S.) 114 114 229 11 240 2.1x 2.1x
Three Rivers Permian
III (U.S.) 94 94 196 9 205 2.2x 2.2x
Total Realisations(7) $209 $209 $425 $19 $444 2.1x 2.1x
----------------------------- ------------ --------- ---------- ------------ ------------- --------- --------
Withdrawn Commitments
and Impairments(9) 59 59 1 - 1 0.0x 0.0x
----------------------------- ------------ --------- ---------- ------------ ------------- --------- --------
Total Investments(7) $1,853 $1,624 $706 $1,642 $2,348 1.4x 1.4x
----------------------------- ------------ --------- ---------- ------------ ------------- --------- --------
Cash and Cash Equivalents $236
----------------------------- ------------ --------- ---------- ------------ ------------- --------- --------
Total Investments & Cash
and Cash Equivalents(7) $1,878
----------------------------- ------------ --------- ---------- ------------ ------------- --------- --------
About Riverstone Energy Limited:
REL is a closed-ended investment company that invests
exclusively in the global energy industry, with a particular focus
on the exploration & production and midstream sectors. REL aims
to capitalise on the opportunities presented by Riverstone's energy
investment platform. REL is a member of the FTSE 250 and its
ordinary shares are listed on the London Stock Exchange, trading
under the symbol RSE. REL has 12 active investments spanning
conventional and unconventional oil and gas activities in the
Continental U.S., Western Canada, Gulf of Mexico, Mexico and
credit.
For further details, see www.RiverstoneREL.com
Neither the contents of Riverstone Energy Limited's website nor
the contents of any website accessible from hyperlinks on the
websites (or any other website) is incorporated into, or forms part
of, this announcement.
Media Contacts
For Riverstone Energy Limited:
Brian Potskowski
Fraser Johnston-Donne
+44 20 3206 6300
Note:
The Investment Manager is charged with proposing the valuation
of the assets held by REL through the Partnership. The Partnership
has directed that securities and instruments be valued at their
fair value. REL's valuation policy follows IFRS and IPEV Valuation
Guidelines. The Investment Manager values each underlying
investment in accordance with the Riverstone valuation policy, the
IFRS accounting standards and IPEV Valuation Guidelines. The
Investment Manager has applied Riverstone's valuation policy
consistently quarter to quarter since inception. The value of REL's
portion of that investment is derived by multiplying its ownership
percentage by the value of the underlying investment. If there is
any divergence between the Riverstone valuation policy and REL's
valuation policy, the Partnership's proportion of the total holding
will follow REL's valuation policy. There were no valuation
adjustments recorded by REL as a result of differences in IFRS and
U.S. Generally Accepted Accounting Policies for the period ended 30
June 2018 or in any period to date. Valuations of REL's investments
through the Partnership are determined by the Investment Manager
and disclosed quarterly to investors, subject to Board
approval.
Riverstone values its investments using common industry
valuation techniques, including comparable public market valuation,
comparable merger and acquisition transaction valuation, and
discounted cash flow valuation.
For development-type investments, Riverstone also considers the
recognition of appreciation or depreciation of subsequent financing
rounds, if any. For those early stage privately held companies
where there are other indicators of a decline in the value of the
investment, Riverstone will value the investment accordingly even
in the absence of a subsequent financing round.
Riverstone reviews the valuations on a quarterly basis with the
assistance of the Riverstone Performance Review Team ("PRT") as
part of the valuation process. The PRT was formed to serve as a
single structure overseeing the existing Riverstone portfolio with
the goal of improving operational and financial performance.
The Audit Committee reviews the valuations of the Company's
investments held through the Partnership, and makes a
recommendation to the Board for formal consideration and
acceptance.
(1) GBP:USD Fx rate of 1.321 as of 30 June 2018.
(2) Based on total capital raised of $1,320 million, realised
profits and other income net of fees, expenses and performance
allocation. The Board does not expect to fully fund all commitments
in the normal course of business.
(3) Gross realised capital is total gross proceeds realised on
invested capital. Of the $706 million of capital realised to date,
$410 million is the return of the cost basis, and the remainder is
profit.
(4) Gross MOIC is Multiple of Invested Capital. Gross Unrealised
Value and Gross MOIC are before transaction costs, taxes
(approximately 21 to 27.5 per cent. of U.S. sourced taxable income)
and 20 per cent. carried interest on gross profits (without a
hurdle rate). Since there is no netting of losses against gains,
the effective carried interest rate on the portfolio as a whole
will be greater than 20 per cent. In addition, there is a
management fee of 1.5 per cent. of net assets (including cash) per
annum and other expenses. Given these costs, fees and expenses are
in aggregate expected to be considerable, Total Net Value and Net
MOIC will be materially less than Gross Unrealised Value and Gross
MOIC. Local taxes, primarily on U.S. assets, may apply at the
jurisdictional level on profits arising in operating entity
investments. Further withholding taxes may apply on distributions
from such operating entity investments. In the normal course of
business, REL may form wholly-owned subsidiaries, to be treated as
C Corporations for US tax purposes. The C Corporations serve to
protect REL's public investors from incurring U.S. effectively
connected income. The C Corporations file U.S. corporate tax
returns with the U.S. Internal Revenue Service and pay U.S.
corporate taxes on its taxable income.
(5) Credit investment. Following completion of the interim
financial statements review process, the valuation of RCO has
increased by $8 million to $12 million with a valuation multiple of
1.1x, since the valuations announcement released on 31 July
2018.
(6) Midstream investment.
(7) Amounts may vary due to rounding.
(8) The unrealised value of the Rock Oil investment consists of
rights to mineral acres.
(9) Withdrawn commitments and impairments consist of Castex 2005
($48 million), Origo ($9 million), and CanEra III ($1 million).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR PIMMTMBTBTLP
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