2Q19 Quarterly Portfolio Valuations

RNS Number : 2775H
Riverstone Energy Limited
31 July 2019
 

- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -

Riverstone Energy Limited Announces 2Q19 Quarterly Portfolio Valuations

London, UK (31 July 2019) - Riverstone Energy Limited ("REL") announces its quarterly portfolio summary as of 30 June 2019, inclusive of updated quarterly unaudited fair market valuations:

Current Portfolio

Investment

(Initial Investment Date)

 

Target Basin

Gross Committed Capital  ($mm)

Invested

Capital ($mm)

Gross Realised

Capital ($mm)[1]

Gross Unrealised Value

($mm)

Gross Realised Capital & Unrealised Value ($mm)

30 Jun 2019 Gross MOIC2

31 Mar 2019

Gross MOIC2

Centennial

(6 Jul 2016)

 

Permian (U.S.)

$268

$268

$172

$115

$287

1.1x

1.1x

Hammerhead Resources

(27 Mar 2014)

 

Deep Basin (Canada)

307

295

23

202

225

0.8x

1.0x

ILX III 

(8 Oct 2015)

 

Deepwater GoM (U.S.)

200

155

2

200

202

1.3x

1.3x

Liberty II   

(30 Jan 2014)

 

Bakken, PRB (U.S.)

142

142

-

128

128

0.9x

1.1x

Carrier II    

(22 May 2015)

 

Permian & Eagle Ford (U.S.)

133

110

22

66

88

0.8x

1.0x

RCO3  

(2 Feb 2015)

 

North America

80

80

79

3

82

1.0x

1.1x

Fieldwood

(17 Mar 2014)

 

GoM Shelf (U.S.)

89

88

8

54

62

0.7x

0.6x

Castex 2014 

(3 Sept 2014)

 

Gulf Coast Region (U.S.)

67

50

-

35

35

0.7x

0.7x

CNOR  

(29 Aug 2014)

 

Western Canada

90

90

-

27

27

0.3x

0.5x

Ridgebury H3

(19 Feb 2019)

 

Global

22

18

-

20

20

1.1x

1.0x

Total Current Portfolio4

$1,398

$1,296

$305

$849

$1,154

0.9x

1.0x

 

 

Realisations

Investment   (Initial Investment Date)

 

Target Basin

Gross Committed Capital  ($mm)

Invested

Capital ($mm)

Gross Realised

Capital ($mm)1

Gross Unrealised Value

($mm)

Gross Realised Capital & Unrealised Value ($mm)

30 Jun 2019 Gross MOIC2

31 Mar 2019

Gross MOIC2

Rock Oil5   

(12 Mar 2014)

 

Permian (U.S.)

114

114

231

8

239

2.1x

2.1x

Three Rivers III (7 Apr 2015)

 

Permian (U.S.)

94

94

203

-

203

2.2x

2.2x

Meritage III6  (17 Apr 2015)

 

Western Canada

62

40

83

-

83

2.1x

2.1x

Sierra  

(24 Sept 2014)

 

Mexico

18

18

39

-

39

2.1x

2.1x

Total Realisations4

$290

$267

$557

$8

$565

2.1x

2.1x

Withdrawn Commitments and Impairments7

121

121

1

-

1

0.0x

0.0x

Total Investments4

$1,809

$1,683

$862

$857

$1,719

1.0x

1.1x

Cash and Cash Equivalents

 

 

 

$219

 

 

 

Total Investments & Cash and Cash Equivalents4

 

 

 

$1,076

 

 

 

                       

 

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 11 active investments spanning oil and gas, midstream, and energy services in the Continental U.S., Western Canada, Gulf of Mexico, Latin America 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 30 June 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.

The unaudited fair market valuations as of 30 June 2019 will form part of REL's 2019 interim financial statements, which are scheduled to be released on 14 August 2019, and are subject to an interim review under ISRE2410, which will be undertaken by Ernst & Young LLP on behalf of the Directors.

 

[1] Gross realised capital is total gross proceeds realised on invested capital. Of the $862 million of capital realised to date, $573 million is the return of the cost basis, and the remainder is profit.

2 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.

3 Credit investment.

4 Amounts may vary due to rounding.

5 The unrealised value of the Rock Oil investment consists of rights to mineral acres.

6 Midstream investment.

7 Withdrawn commitments consist of Origo ($9 million) and CanEra III ($1 million), and impairments consist of Eagle II ($62 million) and Castex 2005 ($48 million).


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