TIDMRSE
RNS Number : 9360O
Riverstone Energy Limited
23 May 2018
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -
Riverstone Energy Limited - Interim Management Statement
London, UK (23 May 2018) - Riverstone Energy Limited ("REL" or
the "Company") is issuing this Interim Management Statement ("IMS")
for the period from 1 January 2018 to 31 March 2018 (the
"period").
Highlights
-- Key Financials (unaudited)
o NAV as at 31 March 2018 $1,707 million (GBP1,218 million)(1)
o NAV per share as at 31 March 2018 $20.21 / GBP14.42(1)
o Profit/(loss) during period $(35.9) million
o Basic profit/(loss) per share during period $(42.52) cents
o Market capitalisation at 31 March 2018 $1,412 million (GBP1,007 million)(1)
o Share price at 31 March 2018 $16.71 / GBP11.92[1]
-- Total invested capital during the period of $9 million
o $8 million in ILX Holdings III, LLC
o $1 million in Sierra Oil and Gas Holdings, L.P.
-- Total realisations during the period of $103 million from
Centennial Resource Development, Inc. ($85 million) and Three
Rivers Natural Resources Holdings III, LLC ($18 million)
-- Total gross committed capital at 31 March 2018 is $1,752 million
-- Total net committed capital at 31 March 2018 is $1,553
million or 108 per cent. of net capital available[2]
-- Total net capital invested at 31 March 2018 is $1,211 million
or 84 per cent. of net capital available(2)
-- Subsequent to quarter end, REL received $173 million in gross
proceeds from the closing of the sale of Three Rivers Natural
Resources Holdings III, LLC. The Company has also repaid its loan
of $100 million, secured against shares in Centennial Resource
Development, Inc.
Richard Hayden, Chairman of REL, commented:
"REL had a strong start to the year, achieving over $275 million
of realisations to date. This has strengthened REL's capital
position, resulting in a cash balance in excess of $265 million
following repayment of the Centennial margin loan, and the Board is
now considering a variety of options for deploying this
capital."
David M. Leuschen and Pierre F. Lapeyre, Jr., Co-Founders of
Riverstone, added:
"The rebalancing of the oil market has supported prices
increasing to levels not seen since 2014. Meanwhile, North America
continues to provide the engine to meet increased global appetite
for energy. REL is well placed to realise value in this environment
and capitalise upon attractive opportunities as they emerge
throughout the energy value chain. "
Portfolio Update
Below is a summary of material activity in the portfolio during
the period.
Centennial Resource Development, Inc. ("Centennial")
REL, through the Partnership, made a partial realisation of its
investment in Centennial through the sale of 4.4 million shares,
resulting in gross proceeds of $85 million, at a Gross MOIC[3] of
1.8x (Net MOIC(3) of 1.6x) and a Gross IRR(3) of 55 per cent. (Net
IRR(3) of 44 per cent.). REL retains a substantial holding in
Centennial, which has a gross unrealised value of $283 million as
of 31 March 2018.
Three Rivers Natural Resources Holdings III LLC ("Three Rivers
III")
In February 2018, REL announced the sale of its investment in
Three Rivers III, through the Partnership. The transaction closed
in April 2018, resulting in gross cash proceeds to REL of
approximately $203 million, a Gross MOIC(3) of 2.2x (Net MOIC(3) of
1.9x) and a Gross IRR(3) of 48 per cent. (Net IRR(3) of 40 per
cent.) on the Company's investment of $94 million.
ILX Holdings III LLC ("ILX III")
In the third quarter, REL, through the Partnership, invested $8
million in ILX III.
Sierra Oil and Gas Holdings, L.P. ("Sierra")
In the first quarter, REL, through the Partnership, invested $1
million in Sierra.
1Q 2018 Quarterly Portfolio Valuations
Previously, on 13 April 2018, REL announced its quarterly
portfolio summary as of 31 March 2018, inclusive of updated
quarterly unaudited fair market valuations:
Gross
Gross Net Invested Realised
Committed Invested Realised Capital & Unrealised
Capital Capital Capital ($mm)[5] Value Gross
Target Basin ($mm) ($mm) ($mm)[4] ($mm)(3) MOIC(3)
Hammerhead
Resources
(formerly Deep Basin
CIOC) (Canada) $307 $295 $23 $275 $561 1.9x
Permian
Centennial (U.S.) 268 268 172 170 455 1.7x
Three Rivers Permian
III (U.S.) 167 94 18 76 205 2.2x
Liberty Bakken, PRB
II (U.S.) 142 142 - 142 177 1.3x
Deepwater GoM
ILX III (U.S.) 200 125 - 125 150 1.2x
Carrier Permian
II (U.S.) 133 110 - 110 131 1.2x
RCO[6] North America 125 87 82 23 93 1.1x
Western
CNOR Canada 90 83 - 83 83 1.0x
Meritage Western
III[7] Canada 67 34 - 34 59 1.8x
Mid-Continent
Eagle II (U.S.) 67 62 - 62 49 0.8x
Gulf Coast
Castex Region
2014 (U.S.) 67 44 - 44 44 1.0x
Sierra Mexico 38 9 - 9 21 2.4x
GoM Shelf
Fieldwood (U.S.) 82 59 3 59 12 0.2x
Total Current Portfolio[8] $1,752 $1,411 $298 $1,211 $2,040 1.4x
-------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Percentage of REL net
capital available(2) 84%
-------------------------------- ---------- --------- ---------- ------------- ------------- ---------
Realisations
Gross
Gross Unrealised Realised
Committed Invested Realised Value & Unrealised
Capital Capital Capital ($mm) Value Gross
Target Basin ($mm) ($mm) ($mm)(4) ($mm)(3) MOIC3
Rock Oil[9] Permian (U.S.) - 114 229 11 240 2.1x
CanEra
III Western Canada - 1 1 - 1 0.4x
North Sea (Norway,
Origo U.K.) - 9 - - - 0.0x
Castex Gulf Coast Region
2005 (U.S.) - 48 - - - 0.0x
Total Investments(8) $1,584 $528 $2,281 1.4x
------------------------------------ ---------- --------- ---------- ------------ ------------- -------
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 13 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 31
March 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 valuation committee as part of the
valuation process.
[1] GBP:USD Fx rate of 1.402 as of 31 March 2018
[2] Net capital available of $1,436 million is based on total
capital raised of $1,320 million, bank loan of $100 million (fully
repaid on 6 April 2018), realised profits and other income net of
fees, expenses and performance allocation. The Board does not
expect to fully fund all commitments
[3] 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 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. 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.
[4] Realised capital is total gross proceeds realised on
invested capital. Of the $528 million of capital realised to date,
$315 million is the return of the cost basis, and the remainder is
profit.
[5] Net invested capital is total invested capital less cost
basis of the realised capital.
[6] Credit investment.
[7] Midstream investment.
[8] Amounts may vary due to rounding.
[9] The unrealised value of the Rock Oil investment consists of
rights to mineral acres.
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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