TIDMRSE
RNS Number : 7592Z
Riverstone Energy Limited
22 May 2019
Riverstone Energy Limited - Interim Management Statement
London, UK (22 May 2019) - Riverstone Energy Limited ("REL" or
the "Company") is issuing this Interim Management Statement ("IMS")
for the period from 1 January 2019 to 31 March 2019 (the
"period").
Highlights
-- Key Financials (unaudited)
o NAV as at 31 March 2019 $1,221 million (GBP937 million)[1]
o NAV per share as at 31 March $15.28 / GBP11.72(1)
2019
o Profit/(loss) during period $(210.2) million
o Basic profit/(loss) per share $(263.10) cents
during period
o Market capitalisation at 31 March $977 million (GBP750 million)(1)
2019
o Share price at 31 March 2019 $12.24 / GBP9.39(1)
-- Total invested capital during the period of $13 million
o $7 million in Ridgebury H3 LLC
o $3 million in ILX Holdings III, LLC
o $3 million in Castex Energy 2014, LLC
-- Total realisations during the period of $123 million from
Meritage Midstream Services III, L.P. ($83 million), Sierra Oil and
Gas ($37 million), and Carrier Energy Partners II, LLC ($3
million)
-- Total gross committed capital at 31 March 2019 is $1,465 million
-- Total net committed capital at 31 March 2019 is $1,268
million or 94 per cent. of net capital available[2]
-- Total net capital invested at 31 March 2019 is $1,126 million
or 83 per cent. of net capital available(2)
-- Since inception, investment weighted average WTI oil price at
31 March 2019 is approximately $51.61 per barrel
Richard Hayden, Chairman of Riverstone Energy Limited,
commented:
"REL remains focussed on its portfolio construction and
utilising a modified investment approach to increase
diversification, as demonstrated by its investment in Handy Tankers
(Ridgebury) of up to $22 million and recent commitment of up to $66
million to Onyx, a newly formed European independent power
producer. These new commitments, as well as the next potential
investment in the near-term pipeline, are consistent with this new
modified investment approach and are non-ECI investments as such
are not subject to U.S. taxes. Following the successful
monetisations of Meritage III and Sierra, REL is continuing to
evaluate new investments that span the entire energy value chain
with an emphasis on the midstream, energy services and power
sectors."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of
Riverstone, added:
"The macro backdrop for the upstream sector has continued to be
challenging, as public indices and trading multiples have remained
at muted levels. A constructive geopolitical environment and
increase in capital markets and M&A activity will be important
to a recovery in valuations over the long-term."
Portfolio Update
Below is a summary of material activity in the portfolio during
the period.
Ridgebury H3 LLC ("Ridgebury")
In the first quarter, REL, through the Partnership, invested $7
million in Ridgebury.
ILX Holdings III, LLC ("ILX III")
In the first quarter, REL, through the Partnership, invested $3
million in ILX III.
Castex Energy 2014, LLC ("Castex 2014")
In the first quarter, REL, through the Partnership, invested $3
million in Castex 2014.
Meritage Midstream Services III, L.P. ("Meritage III")
REL, through the Partnership, received sale proceeds of $83
million from Meritage III.
Sierra Oil and Gas Holdings, L.P. ("Sierra")
REL, through the Partnership, received sale proceeds of $37
million from Sierra.
Carrier Energy Partners II, L.P. ("Carrier II")
REL, through the Partnership, received income distributions of
$3 million from Carrier II.
Current Portfolio
Gross
Realised
Capital
Gross Gross Gross & 31 Mar 31 Dec
Investment Committed Invested Realised Unrealised Unrealised 2019 2018
(Initial Investment Capital Capital Capital Value Value Gross Gross
Date) Target Basin ($mm) ($mm) ($mm)[3] ($mm) ($mm) MOIC[4] MOIC(4)
Centennial Permian
(6 Jul 2016) (U.S.) $268 $268 $172 $133 $305 1.1x 1.3x
Hammerhead
Resources Deep Basin
(27 Mar 2014) (Canada) 307 295 23 273 296 1.0x 1.5x
ILX III (8 Deepwater
Oct 2015) GoM (U.S.) 200 155 - 201 201 1.3x 1.3x
Liberty II Bakken, PRB
(30 Jan 2014) (U.S.) 142 142 - 156 156 1.1x 1.1x
Permian &
Carrier II Eagle Ford
(22 May 2015) (U.S.) 133 110 18 92 110 1.0x 1.0x
RCO[5] (2
Feb 2015) North America 87 87 83 9 92 1.1x 1.1x
Fieldwood GoM Shelf
(17 Mar 2014) (U.S.) 82 81 3 49 52 0.6x 0.7x
CNOR (29 Aug Western
2014) Canada 90 90 - 45 45 0.5x 0.8x
Gulf Coast
Castex 2014 Region
(3 Sept 2014) (U.S.) 67 50 - 35 35 0.7x 1.0x
Ridgebury
H3 Global 22 7 - 7 7 1.0x N/A
(19 Feb 2019)
Eagle II (18 Mid-Continent
Dec 2013) (U.S.) 67 62 - 6 6 0.1x 0.3x
Total Current Portfolio[6] $1,465 $1,346 $299 $1,006 $1,305 1.0x 1.1x
-------------------------------------------- --------- --------- --------- ---------- ---------- -------- -------
Realisations
Gross
Realised
Capital
Gross Gross Gross & 31 Mar 31 Dec
Investment Committed Invested Realised Unrealised Unrealised 2019 2018
(Initial Investment Capital Capital Capital Value Value Gross Gross
Date) Target Basin ($mm) ($mm) ($mm)(3) ($mm) ($mm) MOIC(4) MOIC(4)
Rock Oil[7]
(12 Mar 2014) Permian (U.S.) 114 114 231 7 238 2.1x 2.1x
Three Rivers
III (7 Apr
2015) Permian (U.S.) 94 94 200 3 203 2.2x 2.2x
Meritage III[8] Western
(17 Apr 2015) Canada 62 40 83 - 83 2.1x 2.0x
Sierra (24
Sept 2014) Mexico 18 18 37 2 39 2.1x 2.0x
Total Realisations(6) $290 $267 $552 $13 $565 2.1x 2.1x
------------------------------------------ ---------- --------- ---------- ---------- ---------- --------- --------
Withdrawn Commitments
and Impairments[9] 59 59 1 - 1 0.0x 0.0x
------------------------------------------ ---------- --------- ---------- ---------- ---------- --------- --------
Total Investments(6) $1,813 $1,672 $852 $1,019 $1,871 1.1x 1.3x
------------------------------------------ ---------- --------- ---------- ---------- ---------- --------- --------
Cash and Cash Equivalents $225
------------------------------------------ ---------- --------- ---------- ---------- ---------- --------- --------
Total Investments & Cash
and Cash Equivalents(6) $1,244
------------------------------------------ ---------- --------- ---------- ---------- ---------- --------- --------
About Riverstone Energy Limited:
REL is a closed-ended investment company that invests
exclusively in the global energy industry across all 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 oil
and gas, energy services, and power in the Continental U.S.,
Western Canada, Gulf of Mexico, Europe 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:
Natasha Fowlie
Brian Potskowski
+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 31
March 2019 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 1.304 as of 31 March 2019.
[2] Net capital available of $1,351 million is based on total
capital raised of $1,320 million, capital utilised for Tender Offer
of $72 million, realised profits and other income net of fees,
expenses and performance allocation. The Board, with consultation
by the Investment Manager, 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 $852 million of capital realised to date,
$488 million is the return of the cost basis, and the remainder is
profit.
[4] Gross Unrealised Value and Gross MOIC (Gross Multiple of
Invested Capital) 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.
[6] Amounts may vary due to rounding.
[7] The unrealised value of the Rock Oil investment consists of
rights to mineral acres.
[8] Midstream investment.
[9] Withdrawn commitments consist of Origo ($9 million) and
CanEra III ($1 million), and impairments consist of Castex 2005
($48 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
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