TIDMRSE
RNS Number : 4570N
Riverstone Energy Limited
09 August 2017
Riverstone Energy Limited
Final results for the half year ended 30 June 2017
London, 9 August 2017: Riverstone Energy Limited ("REL" or the
"Company") announces its Half Year Results for the 6-month period
from 1 January 2017 to 30 June 2017.
Summary performance
30 June 2017
NAV $1,668 million
NAV per share $19.74 / GBP15.16(1)
Profit/(loss) during period $(30.6) million
Basic profit/(loss) per (36.17) cents
share during period
Market Capitalisation GBP1,060 million /
$1,381 million(1)
Share price GBP12.55 / $16.35(1)
Highlights
-- As of 30 June 2017, REL had a NAV per share of $19.74,
representing a decrease of 36 cents or 1.8 per cent. versus NAV per
share at 31 December 2016. On a Sterling basis, the NAV per share
decreased by GBP1.13 or 6.9 per cent. compared with the end of
2016.
-- The decline in NAV was primarily driven by REL's second
largest investment, Centennial, which is publicly traded and saw
its shares share price decline from $19.72 at the end of December
to $15.82 at 30 June 2017 as market sentiment for oil producers
weakened. Strong performance at Three Rivers III, Meritage III and
Liberty II helped offset this decline.
-- The Company invested a total of $142 million during the
period, bringing net capital invested as of 30 June 2017 to $1,314
million, or 91 per cent of net capital available(2) .
-- During the first half of 2017, REL reduced commitments to two
companies, totaling $116 million, bringing net committed capital as
of 30 June 2017 to $1,718 million, or 119 per cent of net capital
available(2) .
Commitments and Investments
During the year, the company made the following investments:
-- Invested $64 million in Canadian International Oil Corp.
-- Invested $26 million in ILX Holdings III LLC
-- Invested $16 million in Liberty Resources II LLC
-- Invested $10 million in Three Rivers Natural Resources
Holdings III LLC
-- Invested $7 million in Canadian Non-Operated Resources LP
-- Invested $19 million to other investments including Eagle
Energy Exploration, LLC, Carrier Energy Partners II LLC, Castex
Energy 2014 LLC, Meritage Midstream Services III, L.P. and Origo
Exploration AS
During the year, the Company reduced the following
commitments:
-- Commitment reduction of $59 million to CanEra Resources
III
-- Commitment reduction of $57 million to Origo Exploration
AS
Manager Outlook
-- Global oil market volatility is likely to remain elevated as
the market seeks equilibrium.
-- The Investment Manager believes that energy producers in
low-cost basins with 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 14 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:
"Today's results demonstrate REL's resilience as oil price
volatility resumed in the first half of 2017. Despite a 14 per cent
decline in the price of West Texas Intermediate, the net asset
value declined by 1.8 per cent, reflecting continued operational
successes and the portfolio's emphasis on low-cost basins."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of
Riverstone, added:
"Riverstone continues to leverage its expertise across the
energy value chain and capital structure to identify profitable
opportunities for REL and its investors. The successes highlighted
in today's results, such as Meritage III's confirmed expansion in
Western Canadian midstream infrastructure and Sierra's recent
historic oil discovery offshore Mexico, illustrate the strength of
Riverstone's investment strategy despite the increase in oil price
volatility."
- Ends -
Riverstone Energy Limited's 2017 Interim Report is available to
view at: www.RiverstoneREL.com.
The Investment Manager will host a conference call with
investors at 09:00am BST today. Dial-in details are as follows:
Dial-in (UK): 0800 028 8438
Dial-in (Intl.): +44 (0) 203 107 0289
Conference ID: 59166774
2Q17 Quarterly Portfolio Valuation
Previously, on 26 July 2017, REL announced its quarterly
portfolio summary as of 30 June 2017, inclusive of updated
quarterly unaudited fair market valuations:
Current Portfolio
Gross
Gross Net Invested Realised
Committed Invested Realised Capital & Unrealised
Capital Capital Capital ($mm)(4) Value Gross
Target Basin ($mm) ($mm) ($mm)(3) ($mm)(5) MOIC(5)
--------------- -------------------- ---------- --------- ---------- -------------- ------------- ---------
CIOC Deep Basin (Canada) $307 $295 $23 $275 $533 1.8x
Centennial Permian (U.S.) 268 268 - 268 380 1.4x
Three Rivers
III Permian (U.S.) 167 86 - 86 259 3.0x
Liberty Bakken, PRB
II (U.S.) 142 137 - 137 171 1.3x
Carrier
II Permian (U.S.) 133 110 - 110 131 1.2x
Deepwater GoM
ILX III (U.S.) 200 94 - 94 122 1.3x
RCO(6) North America 125 87 81 24 109 1.3x
CNOR Western Canada 90 80 - 80 80 1.0x
Mid-Continent
Eagle II (U.S.) 67 62 - 62 68 1.1x
Meritage
III(7) Western Canada 67 32 - 32 45 1.4x
Castex Gulf Coast Region
2014 (U.S.) 67 40 - 40 40 1.0x
Fieldwood GoM Shelf (U.S.) 82 58 3 58 35 0.6x
Castex Gulf Coast Region
2005 (U.S.) 50 48 - 48 5 0.1x
Sierra Mexico 38 1 - 1 2 1.1x
Total Current Portfolio(8) $1,802 $1,398 $107 $1,314 $1,979 1.4x
-------------------------------------- ---------- --------- ---------- -------------- ------------- ---------
Percentage of REL net
capital available(9) 91%
-------------------------------------- ---------- --------- ---------- -------------- ------------- ---------
Realisations
Gross
Gross Unrealised Realised
Committed Invested Realised Value & Unrealised
Capital Capital Capital ($mm) Value Gross
Target Basin ($mm) ($mm) ($mm)(3) ($mm)(5) MOIC(5)
--------------- ------------------- ---------- --------- ---------- ------------ ------------- ---------
Rock Oil(10) Permian (U.S.) - 114 216 24 240 2.1x
CanEra
III Western Canada - 1 1 - 1 0.4x
North Sea (Norway,
Origo U.K.) - 9 - - - 0.0x
Total Investments(8) $1,523 $323 $2,220 1.5x
------------------------------------- ---------- --------- ---------- ------------ ------------- ---------
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. To date, REL has made 17 investments spanning
conventional and unconventional oil and gas activities in the Gulf
of Mexico, Continental U.S., Western Canada, the U.K. North Sea,
the Norwegian Sea, Mexico and credit.
For further details, see www.RiverstoneREL.com
Neither the contents of REL'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
Natasha Fowlie
+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 2017 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 valuation committee as part of the
valuation process.
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 1.303 as of 30 June 2017.
2 Based on total capital raised of $1,320 million, bank loan,
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) Realised capital is total gross proceeds realised on
invested capital. Of the $323 million of capital realised to date,
$199 million is the return of the cost basis, and the remainder is
profit.
(4) Net invested capital is total invested capital less cost
basis of the realised capital.
(5) Gross MOIC is Multiple of Invested Capital. Gross Unrealised
Value and Gross MOIC are before transaction costs, taxes
(approximately 35 to 41.5 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 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 US 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.
(6) Credit investment.
(7) Midstream investment.
(8) Amounts may vary due to rounding.
(9) Based on total capital raised of $1,320 million, bank loan,
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.
(10) The unrealised value of the Rock Oil investment consists of
sale proceeds in escrow of $13 million and rights to mineral acres
of $11 million.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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