TIDMRSE
RNS Number : 1404Y
Riverstone Energy Limited
01 March 2017
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -
Riverstone Energy Limited
Final results for the year ended 31 December 2016
London, 1 March 2017: Riverstone Energy Limited ("REL" or the
"Company") announces its Year End Results from 1 January 2016 to 31
December 2016.
Summary performance
31 December 2016
NAV $1,699 million
NAV per share $20.11 / GBP16.29(1)
Profit/(loss) during period $351.4 million
Basic profit/(loss) per 415.97 cents
share during period
Market Capitalisation GBP1,135 million /
$1,402 million(1)
Share price GBP13.44 / $16.59(1)
Highlights
-- As of 31 December 2016, REL had a NAV per share of $20.11,
representing an increase of $4.16 or 26 per cent. versus NAV per
share at 31 December 2015. On a Sterling basis, the NAV per share
increased by GBP5.47 or 50.5 per cent. compared with the end of
2015.
-- REL continues to execute on its strategy and now has a strong
portfolio of sixteen active investments in the United States,
Canada, Mexico, and Europe, covering both onshore and offshore as
well as conventional and unconventional exploration &
production, midstream and credit.
-- REL completed its first realisation, the sale of Rock Oil
Holdings LLC, resulting in a Gross MOIC of 2.1x and a Gross IRR of
78 per cent on the $114 million investment(2) .
-- The Company invested a total of $536 million during the year,
bringing total net capital invested as of 31 December 2016 to
$1,172 million, or 76 per cent. of net capital available(3) .
-- During 2016, REL committed $268 million to Centennial
Resource Development, Inc. and made five additional commitments to
existing companies, totaling $269 million, as well as reduced
commitments to two companies, totaling $188 million, bringing
current commitments as of 31 December 2016 to $1,928 million, or
126 per cent. of net capital available(3) .
-- REL's largest exposure is to the Permian basin and Eagle
Ford, where it has invested $448 million or 35 per cent. of its
capital, with Centennial being its largest investment, representing
21 per cent. of capital invested and 27 per cent. of the gross
unrealised value of the portfolio.
______________________
(1) GBP:USD Fx rate of 1.234 as of 31 December 2016. (2) The MOIC and IRR, net of performance allocation and estimated taxes, are approximately 1.6x and 44 per cent., respectively. (3) Based on total capital raised of $1,320 million plus 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.
Commitments and Investments
During the year, the Company made the following commitments:
-- Committed $268 million to Centennial Resource Development,
Inc.
-- Committed an additional $100 million to Carrier Energy
Partners II, LLC
-- Committed an additional $75 million to Canadian International
Oil Corporation
-- Committed an additional $42 million to Liberty Resources II,
LLC
-- Committed an additional $33 million to Meritage Midstream
Services III, L.P.
-- Committed an additional $17 million to Eagle Energy
Exploration, LLC
During the year, the Company reduced the following
commitments:
-- Commitment reduction of ($150 million) to Rock Oil Holdings
LLC
-- Commitment reduction of ($38 million) to Sierra Oil & Gas
Holdings LLC
During the year, the Company made the following investments:
-- Invested $268 million in Centennial Resource Development,
Inc.
-- Invested $73 million in Carrier Energy Partners II, LLC
-- Invested $65 million in Three Rivers Natural Resources
Holdings III, LLC
-- Invested $38 million in ILX Holdings III, LLC
-- Invested $27 million in Liberty Resources II, LLC
-- Invested $17 million in Rock Oil Holdings, LLC
-- Invested $13 million in Eagle Energy Exploration, LLC
-- Invested $12 million in Meritage Midstream Services III,
L.P.
-- Invested $24 million to other investments including
Riverstone Credit Opportunities, L.P., Castex Energy 2014, LLC,
Fieldwood Energy, LLC and Origo Exploration AS
Manager Outlook
-- The Investment Manager believes that energy producers in
low-cost basins with an oil-weighting will continue to
outperform.
-- Energy market fundamentals remain supportive following sharp
declines in capital expenditure and drilling activity.
Richard Hayden, Chairman of Riverstone Energy Limited,
commented:
"2016 was another volatile year for the energy industry.
However, REL performed strongly with the successful sale of Rock
Oil, NAV growth of 26 per cent. and share price appreciation of 70
per cent. Today's announcement demonstrates that REL's disciplined
build-up oriented investment strategy can deliver strong results
for shareholders."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of
Riverstone, added:
"REL continued to capitalise on attractive opportunities in
2016, investing over half a billion dollars, of which approximately
two-thirds was deployed in the Permian Basin. This aligns with
Riverstone's strategy of backing best-in class management teams in
premier, low-cost areas of hydrocarbon production. In addition, the
Portfolio benefitted from several operational successes, such as
the completion of Meritage III's initial midstream infrastructure
and strong well results from Eagle II and ILX III. With 16 active
investments, over $250 million of cash and a strong presence across
some of the most attractive basins globally, REL is well positioned
to continue to execute its strategy and reward investors."
- Ends -
Riverstone Energy Limited's 2016 Annual Report is available to
view at: www.RiverstoneREL.com.
The Investment Manager will host a conference call with
investors at 12:00pm GMT today. Dial-in details are as follows:
Dial-in (UK): 0800 028 8438
Dial-in (Intl.): +44 (0) 203 107 0289
Conference ID: 64249793
4Q 2016 Quarterly Portfolio Valuations
Previously, on 30 January 2017, REL announced its quarterly
portfolio summary as of 31 December 2016, inclusive of updated
quarterly audited fair market valuations:
Gross
Current Net Invested Realised
Committed Invested Realised Capital & Unrealised
Capital Capital Capital ($mm)(2) Value Gross
Target Basin ($mm) ($mm) ($mm)(1) ($mm)(3) MOIC(3)
---------------- -------------- ---------- --------- ---------- ------------- ------------- -----------
Deep Basin
CIOC (Canada) $307 $232 $23 $209 $471 2.0x
Permian
Centennial(4) (U.S.) 268 268 - 268 477 1.8x
Three Rivers Permian
III (U.S.) 167 76 - 76 190 2.5x
Carrier Permian
II (U.S.) 133 104 - 104 132 1.3x
Liberty Bakken, PRB
II (U.S.) 142 120 - 120 120 1.0x
RCO(5) North America 125 87 70 17 112 1.3x
Deepwater GoM
ILX III (U.S.) 200 67 - 67 88 1.3x
Western
CNOR Canada 90 73 - 73 73 1.0x
GoM Shelf
Fieldwood (U.S.) 82 58 2 57 58 1.0x
Mid-Continent
Eagle II (U.S.) 67 56 - 56 56 1.0x
Gulf Coast
Castex Region
2014 (U.S.) 67 36 - 36 36 1.0x
Meritage Western
III(6) Canada 67 29 - 29 32 1.1x
Gulf Coast
Castex Region
2005 (U.S.) 50 48 - 48 5 0.1x
North Sea
(Norway,
Origo U.K.) 67 8 - 8 4 0.5x
Sierra Mexico 38 1 - 1 2 1.1x
CanEra Western
III Canada 60 1 - 1 1 1.0x
Total Current Portfolio(7) $1,928 $1,266 $95 $1,172 $1,856 1.5x
---------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Percentage of REL net
capital available(8) 126% 76%
---------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Realisations
Gross
Current Unrealised Realised
Committed Invested Realised Value & Unrealised
Capital Capital Capital ($mm) Value Gross
Target Basin ($mm) ($mm) ($mm)(1) ($mm)(3) MOIC(3)
-------------- --------------- ---------- --------- ---------- ------------ ------------- ---------
Rock Oil(9) Permian (U.S.) - 114 216 24 240 2.1x
Total Investments(7) $1,381 $311 $2,096 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 year ended 31
December 2016 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) Realised capital is gross proceeds realised on
investment.
(2) Net invested capital is invested capital less gross proceeds
realised on investment.
(3) Gross MOIC is Multiple of Invested Capital. Gross Unrealised
Value and Gross MOIC are before transaction costs, taxes and 20 per
cent. carried interest on gross profits. 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.
(4) $93 million of the investment has been financed from the
proceeds of a bank loan of $100 million, which has a bullet
maturity of 18 months and an annual interest rate cost of 3 month
LIBOR + 3.25 per cent. Fees and expenses of approximately $700,000
were incurred with the financing. A security interest has been
granted over REL's entire investment in Centennial (NasdaqCM:CDEV)
in favour of the lenders, as security for any amounts which may be
due from time to time under the Loan.
(5) Credit investment.
(6) Midstream investment.
(7) Amounts may vary due to rounding.
(8) 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.
(9) 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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