TIDMRSE
RNS Number : 1788V
Riverstone Energy Limited
01 November 2017
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -
Riverstone Energy Limited - Interim Management Statement
London, UK (1 November 2017) - Riverstone Energy Limited ("REL")
is issuing this Interim Management Statement ("IMS") for the period
from 1 July 2017 to 30 September 2017 (the "period").
Highlights
-- Key Financials (unaudited)
o NAV as at 30 September 2017 $1,728 million (GBP1,290 million)(1)
o NAV per share as at 30 September 2017 $20.45 / GBP15.27(1)
o Profit/(loss) during period $59.8 million
o Basic profit/(loss) per share during period $70.78 cents
o Market capitalisation at 30 September 2017 $1,390 million (GBP1,037 million)(1)
o Share price at 30 September 2017 $16.45 / GBP12.28(1)
-- Total invested capital during the period of $39 million
o $22 million in ILX Holdings III, LLC
o $8 million in Three Rivers Natural Resources Holdings III,
LLC
o $4 million in Sierra Oil and Gas Holdings, L.P.
o $3 million in Liberty Resources II LLC
o $1 million in Meritage Midstream Services III, L.P.
-- Total realisations during the period of $14 million from Rock
Oil Holdings, LLC and Riverstone Credit Opportunities, L.P.
-- Total gross committed capital at 30 September 2017 is $1,802 million
-- Total net committed capital at 30 September 2017 is $1,718
million or 119 per cent. of net capital available(2)
-- Total net capital invested at 30 September 2017 is $1,353
million or 94 per cent. of net capital available(2)
Richard Hayden, Chairman of REL, commented:
"Net asset value has grown to $20.45 per share, an increase of
4% since last quarter and 11% since the third quarter of 2016. This
reflects continued operational successes at the portfolio level, in
particular of Centennial, as well as the Company's overall emphasis
on low-cost basins."
David M. Leuschen and Pierre F. Lapeyre, Jr., Co-Founders of
Riverstone, added:
"REL's investments continued to execute upon their development
strategies and grow value for shareholders, examples of which
include Meritage III's ongoing expansion of its midstream
infrastructure in Western Canada, Centennial's focus on delivering
strong well results in the Delaware Basin and additional appraisal
drilling by ILX III. We believe that investors with a long-term
outlook will be rewarded as Riverstone utilises the breadth of its
platform and best-in-class management teams to capitalise on
value-creating opportunities."
______________________
(1) Assumed exchange rate of 1.339 USD/GBP. (2) Based on total capital raised of $1,320 million, bank loan (maturing 27 June 2018), 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.
Portfolio Update
Below is a summary of material activity in the portfolio during
the period.
ILX Holdings III LLC ("ILX III")
In the third quarter, REL, through the Partnership, invested $22
million in ILX III.
Three Rivers Natural Resources Holdings III LLC ("Three Rivers
III")
In the third quarter, REL, through the Partnership, invested $8
million in Three Rivers III.
Sierra Oil and Gas Holdings, L.P. ("Sierra")
In the third quarter, REL, through the Partnership, invested $4
million in Sierra.
Liberty Resources II LLC ("Liberty II")
In the third quarter, REL, through the Partnership, invested $3
million in Liberty II.
Meritage Midstream Services III, L.P. ("Meritage III")
In the third quarter, REL, through the Partnership, invested $1
million in Meritage III.
3Q 2017 Quarterly Portfolio Valuations
Previously, on 23 October 2017, REL announced its quarterly
portfolio summary as of 30 September 2017, inclusive of updated
quarterly unaudited fair market valuations:
Gross
Gross Net Invested Realised
Committed Invested Realised Capital & Unrealised
Capital Capital Capital ($mm)(2) Value Gross
Target Basin ($mm) ($mm) ($mm)(1) ($mm)(3) MOIC(3)
Hammerhead
Resources
(formerly Deep Basin
CIOC) (Canada) $307 $295 $23 $275 $563 1.9x
Permian
Centennial (U.S.) 268 268 - 268 433 1.6x
Three Rivers Permian
III (U.S.) 167 94 - 94 264 2.8x
Liberty Bakken, PRB
II (U.S.) 142 140 - 140 175 1.3x
Deepwater GoM
ILX III (U.S.) 200 116 - 116 139 1.2x
Carrier Permian
II (U.S.) 133 110 - 110 131 1.2x
RCO(4) North America 125 87 82 24 104 1.2x
Western
CNOR Canada 90 80 - 80 80 1.0x
Meritage Western
III(5) Canada 67 34 - 34 76 2.3x
Mid-Continent
Eagle II (U.S.) 67 62 - 62 62 1.0x
Gulf Coast
Castex Region
2014 (U.S.) 67 40 - 40 40 1.0x
GoM Shelf
Fieldwood (U.S.) 82 59 3 59 29 0.5x
Sierra Mexico 38 5 - 5 16 2.8x
Gulf Coast
Castex Region
2005 (U.S.) 50 48 - 48 5 0.1x
Total Current Portfolio(6) $1,802 $1,437 $108 $1,353 $2,117 1.5x
-------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Percentage of REL net
capital available(7) 94%
-------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Realisations
Gross
Gross Unrealised Realised
Committed Invested Realised Value & Unrealised
Capital Capital Capital ($mm) Value Gross
Target Basin ($mm) ($mm) ($mm)(1) ($mm)(3) MOIC3
Permian
Rock Oil(8) (U.S.) - 114 229 11 240 2.1x
CanEra Western
III Canada - 1 1 - 1 0.4x
North Sea
(Norway,
Origo U.K.) - 9 - - - 0.0x
Total Investments(6) $1,562 $338 $2,357 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
September
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) Realised capital is total gross proceeds realised on
invested capital. Of the $338 million of capital realised to date,
$199 million is the return of the cost basis, and the remainder is
profit.
2 Net invested capital is total invested capital less cost basis
of the realised capital.
3 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. The Company is structured, and has structured
its investments, to eliminate the incurrence of U.S. sourced
taxable income by REL's investors.
4 Credit investment.
5 Midstream investment.
6 Amounts may vary due to rounding.
7 Based on total capital raised of $1,320 million, bank loan
(maturing 27 June 2018), 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.
8 The unrealised value of the Rock Oil investment consists of
rights to mineral acres.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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