REG - Riverstone Energy Ld - Interim Report for the six months to 30 June 2024
21/08/2024 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240821:nRSU1697Ba&default-theme=true
RNS Number : 1697B Riverstone Energy Limited 21 August 2024
riverstone Energy Limited
Financial and Operational Highlights((1)(2))
Remaining potential unfunded commitments at 30 June 2024 i) $6.0 million in Onyx Power((3))
Realisations during the period ended 30 June 2024 Realised a total of $5.3 million((2)) all of which was pursuant to the legacy
conventional strategy
(i) $3.5 million from Permian Resources
(ii) $1.8 million from Rock Oil
FreeWire's fully funded commitment of $14.0 million was written off by $3.5
million to nil during the period.
Key Financials
30 June 2024 31 December 2023 30 June 2023
NAV as at $459 million / $674 million / $604 million /
£363 million((4)) £529 million((4)) £479 million((4))
NAV per Share as at $16.91 / £13.37((4)) $15.96 / £12.53((4)) $12.90 / £10.23((4))
Per cent. change in NAV per Share (USD) for the 6 month period ended 6.0 per cent. 23.7 per cent. (11.2 per cent.)
Market capitalisation at $276 million / $430 million / $334 million /
£218 million((4)) £338 million((4)) £265 million((4))
Share price at $10.17 / £8.04((4)) $10.20 / £8.01((4)) $7.14 / £5.66((4))
Per cent. change in US Dollar and Sterling Share price for the period ended $(0.3) per cent. $ 42.9 per cent. $ (13.0 per cent.)
£0.4 per cent. £ 41.5 per cent. £ (16.5 per cent.)
Share price discount to NAV 39.9 per cent. 36.1 per cent. 44.7 per cent.
Cash and cash equivalents at $94 million((5)) / $291 million((5)) / $133 million((5)) /
£74 million((4)) £228 million((4)) £105 million((4))
Marketable securities (unrestricted) at $240.5 million((6)) / $150 million((6)) / $142 million((6)) /
£190.1 million((4)) £117 million((4)) £113 million((4))
Marketable securities (restricted) at $nil((7)) / $58 million((7))/ $111 million((7)) /
£nil ((4)) £45 million((4)) £88 million((4))
30 June 2024 30 June 2023
Total comprehensive (loss) for the six months ended $(15.89) million $(105.3) million
Basic and diluted (loss) per share for the six months ended (46.22) cents (213.18) cents
Number of Shares repurchased through buyback and tender offer and average 15,047,619 4,091,145
price per repurchased Share for the period ended((8))
$13.21 / £10.50
$7.30 / £5.78
Number of Shares outstanding at period ended 27,148,170 46,800,513
((1)) Amounts shown reflect investment-related activity at the Partnership,
not the Company.
((2)) Amounts may vary due to rounding.
((3)) The expected funding of the remaining unfunded commitment to Onyx at 30
June 2024 is $nil in 2024 and $nil in 2025. The residual amounts are to be
funded as needed in 2026 and later years.
((4)) Based on exchange rate of 1.26468 $/£ at 30 June 2024 (1.2736 $/£ at
31 December 2023 and 1.2614 $/£ at 30 June 2023).
((5)) At 30 June 2024, 31 December 2023 and 30 June 2023, respectively,
amounts are comprised of $5.4 million, $5.8 million and $12.3 million held at
the Company, $81 million, $283 million and $54.7 million held at the
Partnership and $7.4 million, $2 million and $65.8 million held at REL US
Corp.
((6)) At 30 June 2024, unrestricted marketable securities held by the
Partnership consist of publicly-traded shares of Veren Inc (formerly Crescent
Point/Hammerhead Energy), Permian Resources (formerly Centennial), Enviva,
Solid Power, Tritium and Hyzon for which the aggregate fair value was $240.5
million (31 December 2023: Permian Resources (formerly Centennial), Enviva,
Solid Power, Tritium and Hyzon and 30 June 2023: Permian Resources (formerly
Centennial), Enviva, Solid Power, Tritium and Hyzon).
((7)) At 30 June 2024, there were no restricted marketable securities held by
the Partnership (31 December 2023: Veren (formerly Crescent Point/Hammerhead
Energy) and 30 June 2023: Veren (formerly Crescent Point/Hammerhead Energy).
((8)) Inception to date total number of shares repurchased was 57,331,894 at
an average price per share of £6.56 ($8.33).
Chair's Statement
Dear Shareholder,
Resilient global economy in face of continued geo-political dislocation
The first half of 2024 has seen a continuation of the geo-political and global
uncertainty which has rapidly and regrettably become the norm over the last
couple of years. The conflicts in Ukraine and the Middle East continue
unabated. Elections in India, the EU, France and the UK have all thrown up
results that change the slant of the political landscape in significant ways
across the various regions. The fractious US election campaign has been
affected by remarkable events for both Republican and Democratic candidates
alike. Global shipping remains subject to very real threats and supply chains
are fragile as a result. Tensions between the US and China remain high as
China's ultimate intentions in the South China Sea and in relation to its
neighbour Taiwan continue to be unclear.
It would be easy to assume that against this backdrop the world's economy
would falter. Encouragingly, the world's major economies are largely holding
up. Global growth is forecast to be 3.1 per cent. in 2024, higher than was
forecast late in 2023. Helping this is the retreat of the inflationary
pressures which emerged in the wake of the pandemic and Russia's invasion of
Ukraine, which forced Central Banks to raise interest rates significantly last
year in Europe and the US. The rate-cutting cycle has just begun, albeit more
slowly than was expected earlier in 2024, but the prospect of rate reductions
remains supportive for economies and markets alike as inflation retreats to
target levels even in the face of continued tight labour markets and supply
constraints.
The conventional energy market reflects this global economic resilience and
the first half of 2024 saw WTI crude oil prices open the year at $70.38,
rising 15.8 per cent. to $81.54 by the end of the first half of the year,
despite a dip in June. Henry Hub gas prices stayed stable over the first half
of the year, recovering after a slide in January and February following the
mild winter that reduced demand for gas heating.
Energy demand and investment continue to grow
As C02 emissions begin to decouple from economic growth, advanced economies
saw a record decrease in their emissions, which are now back to the level of
fifty years, but as a whole, the world has seen a rise in carbon emissions
that have continued to grow by 0.8 per cent. per year between 2019-23. For
example, due to unprecedented drought conditions, there was a shortfall in
hydropower generation over this period; without these effects, emissions from
the sector would have fallen in 2023. There is an increased recognition of the
challenges of the scale of the transition and acknowledgement that
conventional energy sources will remain a part of the global energy mix while
the transition takes place. Indeed, we are in a phase where the consumption of
both low carbon energy and fossil fuels is increasing. This requires continued
growth in energy investment and in 2024 this is forecast to be around $3
trillion. Around $2 trillion of that is expected to go into renewable energy
and associated infrastructure, with only around $1 trillion going into
conventional energy. With double the spend on renewable energy vs.
conventional, it is clear the transition is now proceeding at a rapid pace.
Despite this, the amounts being spent are still far short of the investments
required to meet national commitments and keep temperature increases to below
1.5°C globally.
The long-term drivers of energy demand growth, fuelled by the developing
economies of the world, remain tailwinds for our investments in both
conventional and renewable energy. A key mechanism to tackle the climate
problem is to electrify as much as possible and produce electricity without
the carbon impact, whether it be electrifying industrial processes or shipping
and aviation, which are a bigger challenge than electrifying road transport.
New ways of decarbonising industrial processes are being developed all the
time, starting with carbon capture and storage. With such a sizable shift in
the energy landscape the path forward will be challenging.
Decarbonisation investments have been under some pressure for a while as
rising rates impacted the valuations of small-cap growth stocks, and have also
impacted renewable energy and infrastructure investments. This difficult phase
is continuing to play out and while we believe in the long-term value of our
remaining decarbonisation portfolio, we accept that continued patience is
required before we see a recovery in the valuations of these assets and the
value they will ultimately generate.
Conventional energy assets have fared better and the performance of our
investments in this space has proved supportive to the portfolio. Large
M&A transactions in the oil and gas space have continued from 2023 into
2024, for example Chesapeake Energy and Southwestern Energy Company have
agreed to merge, while ConocoPhillips has agreed to buy Marathon Oil. More
deals are expected in the second half of the year, creating a supportive
backdrop for our portfolio.
Investment portfolio summary and performance
On a per share basis, the portfolio saw an increase in value over the first
half of the year with NAV per share rising 6 per cent. from $15.96 / £12.53
at 31 December 2023 to $16.91 / £13.37 due to a combination of portfolio
performance and the change in share concentration following the tender offer.
The total portfolio saw a decrease in value over the first half of the year
with headwinds in the decarbonisation portfolio offsetting gains in the
conventional portfolio. The decarbonisation portfolio declined in value by
$41.6 million or 35.8 per cent., while the conventional assets increased in
value by $30.8 million or 3.8 per cent.
The decrease in the value of the portfolio was primarily due to the write-off
of the investment in FreeWire ($3.5 million write-off from December 2023) and
the write-down to 0.0x Gross MOIC in T-REX ($17.4 million markdown from
December 2023). This was mostly offset by unrealised gains in the period from
the shares of Permian Resources (increase $25.6 million) and Veren (increase
$7.5 million) in the conventional energy portfolio. The total portfolio
consists of three conventional energy investments and eight decarbonisation
investments but is weighted approximately 79 per cent. in favour of
conventional assets given recent relative performance.
Update on the Board
During the first half of 2024 there were some changes to the Board. In January
it was announced that John Roche would succeed Patrick Firth as Chair of the
Audit Committee and, with effect from 31 March 2024, that Jeremy Thompson
would take over from Patrick as the Senior Independent Director. Patrick
retired as a Non-Executive Director of the Company and the Board at the
Company's AGM in May and I would like to thank him for his service to the
Company and the Board during his long tenure as a Non-Executive Director.
Addressing the share price discount to NAV
The Board is committed to taking action to deliver shareholder value, improve
balance sheet efficiency and to reduce the valuation discount of the ordinary
share price to NAV over time. Following the transaction between REL's
investment in Hammerhead Energy Inc. with Veren Inc. (formerly Crescent Point
Energy Corp.), which completed on 22 December 2023, REL received cash proceeds
of $175 million. On 8 February 2024, REL announced that it proposed to return
$200 million of its excess capital to shareholders by means of a tender offer.
This tender offer was launched on 23 February 2024 at a price of £10.50 per
ordinary share, a premium of approximately 14 per cent. to the closing REL
share price of £9.20 on 21 February 2024 and a discount of approximately 16
per cent. to the unaudited NAV per share of £12.53 as at 31 December 2023.
On 2 April 2024, REL announced that it had acquired, as of 28 March 2024,
15,047,619 of the Company's ordinary shares at a price of £10.50 per share,
for a total of £158.0 million (or $198.6 million), approximately 36 per cent.
of all outstanding ordinary shares, and that all shares repurchased by the
Company had been cancelled. This means that as at 30 June 2024, the Company
had 27,148,170 shares outstanding.
In further support of the Board's capital management objectives, the Company
had a share buyback programme of £30 million which was launched on 23 May
2023 following shareholder authorisation received at the 2023 AGM. During the
period to the 2024 AGM held on 21 May 2024, 1,506,867 ordinary shares had been
bought back, at a total cost of approximately £8.5 million ($10.7 million)
and an average share price of approximately £5.63 ($7.09). At the 2024 AGM,
the shareholders renewed the authorisation for the Board to continue with
share buybacks and the Board duly commenced the current programme, allocating
an amount of approximately £22 million ($28 million), all of which was
available for repurchase at 30 June 2024. On 4 July 2024, the Company
announced that it has entered into an irrevocable agreement with Deutsche
Numis to continue this share buyback programme.
Furthermore, following the changes to the Investment Management Agreement
announced on 3 January 2020, the Investment Manager agreed that the Company
would repurchase shares or pay dividends equal to 20 per cent. of net gains on
investment disposals. No further performance fees will be payable until the
$94.5 million of realised and unrealised losses to date as at 30 June 2024 are
made whole with future gains.
Outlook
The energy demand and supply picture continues to change. The Russian invasion
of Ukraine has already forced a major re-balancing as European countries
successfully reduced their reliance on Russian energy, seeking new sources of
supply to meet their needs. Russia, in turn, has shifted its focus to find new
outlets and markets for its energy. Additionally, the impact of the transition
to renewable energy is significant and has created a very dynamic market
environment. It is one that requires focus, expertise and careful management.
At REL, we continue to believe in running a portfolio with both conventional
and decarbonisation assets at its core. The world needs to transition but it
also needs a consistent supply of energy which today can only be met by
harnessing both conventional and renewable energy. The focus on a reliable and
secure energy supply favours both conventional energy that is produced closer
to end markets where the energy is being consumed and locally produced
renewable energy. In addition, the longer tail for conventional energy use
will continue to support these assets. This is beneficial for our portfolio
and we feel confident about the long-term outlook for our investments.
In the oil market, low inventories and risks to supply, driven by the tensions
in the Middle East and restrictions in OPEC+ oil production growth, are likely
to be somewhat offset by production growth outside of OPEC+. With continued
growth in global consumption, the environment for oil remains relatively
supportive. In natural gas, reductions in production may help to decrease the
inventory overhang but a lot will depend on the outlook for the winter and the
resulting forecast for demand.
In decarbonisation there undoubtedly remains a huge opportunity ahead. There
are also, inevitably, a number of challenges in such a vast and fast-moving
market. Improving energy efficiency across the system is a key area but
progress on storage solutions, despite a rapid decrease in battery costs, has
not been as rapid as required. Public and private solutions need to be found
and governments have a critical role to play in helping develop a supportive
environment for investment, reduce friction in the system and help speed up
progress in the delivery and efficacy of renewable energy. The benefits of the
Inflation Reduction Act and the Bipartisan Infrastructure Act are feeding
through, reflecting and accelerating similar policies and regulations in the
EU. In addition, 37 per cent. of the EU's post-Covid recovery plan are being
spent on climate initiatives as will 30 per cent. of the total expenditure for
the long-term EU budget (2021-27), notwithstanding recent EU elections.
REL has positioned its portfolio to benefit from the development of the
world's energy needs over the coming years. The Board seeks to realise value
when opportunities arise and will continue to do so in the future, maintaining
the financial discipline to deliver effective shareholder value creation
through capital returns where possible.
I would like to take this opportunity to thank our shareholders for their
continued support..
Richard Horlick
Chair of Riverstone Energy Limited
20 August 2024
Investment Manager's Report
The first six months of 2024 have arguably seen a shift from economic
uncertainty to political uncertainty: while interest rates and inflation have
stabilised or declined since the same period last year, and oil and gas prices
have avoided dramatic swings, the political landscape in Europe and beyond has
witnessed substantial volatility. The full impact of that volatility is still
unclear but so far the economic environment has remained relatively resilient,
albeit risks remain. The US is experiencing solid growth but major economies
like the UK and Germany are finding growth harder to come by. Financing costs
appear to be on a downward path but labour markets remain tight, while stock
markets have set record highs and exceeded one day losses. While the high
marks have been driven once more by incredible performance from some of the
large US tech names, notably Nvidia, and there is concern about how much
further they have to run. These factors are combining to subdue investor risk
appetite.
In this challenging context, the performance of the portfolio continues to be
mixed. Our conventional energy investments have performed well. These
investments are benefiting from the broad recognition that the transition to
renewable energy will require an integrated approach, using conventional fuels
as well as renewables to avoid overexposure to any one source of energy and
ensure consistency of supply. This means conventional energy still holds, and
will continue to hold, substantial value for some time yet. In addition,
increasing demand for oil has been met by a relatively benign supply picture,
providing a supportive backdrop to pricing.
In Q1 2024, Permian Resources announced a series of portfolio optimisation
transactions to strengthen the business, which include bolt-on acquisitions
and divestment of non-core assets. At Onyx, the focus has been on organic
growth initiatives, including driving operational efficiency and new projects,
while Veren continues to deliver financial results above expectations, which
in turn is driving strong share price performance. As a result, the unrealised
value of the conventional portfolio has increased by $31.0 million over the
period, or 3.8 per cent. with an unrealised value of $292.0 million at 30 June
2024.
The decarbonisation and transition portfolio has been more exposed to
valuation pressures and macroeconomic impacts. With the exception of
Infinitum, Solid Power and GoodLeap (formerly Loanpal), the remainder of the
decarbonisation portfolio continues to suffer from fundraising headwinds
caused by the impact of increased interest rates and lower risk appetite from
investors. This has affected our investments in T-REX and Our Next Energy,
which were written down to 0.0x Gross MOIC, and FreeWire which was written
off, due to a takeover of its assets arising from company-specific events,
including missed sales process targets and falling short of fundraising goals.
REL does not expect to recover any of its original investments in these
companies.
Enviva, facing difficulties from persistently high input prices and below
target production volumes, declared bankruptcy in March this year. To improve
profitability and secure the long-term future of the business, the company
announced a restructuring plan aimed at reducing debt by around $1 billion.
Tritium, which has struggled to achieve profitability this year as originally
planned, reported in April 2024 that it was at risk of insolvency. Following a
reverse stock split, Tritium also received notice in March 2024 that it would
have to delist from the NASDAQ.
Despite these setbacks, we are pleased to see a range of successes across the
portfolio in the first half, including bolt on acquisitions, production
ramp-ups and distribution agreements:
· Hyzon Motors, following a comprehensive review of its operations,
has realigned its strategy to focus on core North American markets and the
refuse industry. The company will also prioritise cost reductions and
liquidity management to maintain its competitiveness and maximise its growth
potential.
· Group14 Technologies has signed five multi-year offtake
agreements with leading electric vehicle and consumer electronic cell
manufacturers across Europe, Asia and North America, with a total value of at
least $300 million. This demonstrates strong demand for silicon battery
technology and Group14 continues to drive adoption and awareness of silicon
battery products.
· Solid Power earlier this year reaffirmed its 2024 outlook on the back
of strong operational performance in the first quarter, achieving key
milestones and securing partner agreements. Solid Power announced positive FY
2023 results of $17.4 million in revenue, up $5.6 million compared to FY 2022.
The company attributes this success to the continued execution of Solid
Power's joint development agreement with SK On. The company also appointed a
new Chief Financial Officer, Linda Heller, who brings deep renewables
expertise that will no doubt prove invaluable for the execution of the
strategy.
· Infinitum has made progress by announcing an agreement with Matrix, a
leading safety and productivity technology provider for the mining industry,
to jointly develop and distribute advanced motor technology. Infinitum also
received a series of awards from credible bodies, which include Silver at the
2024 Product of the Year awards from Consulting-Specifying Engineer, finalist
in the 2024 Edison Awards, and being listed in the 2024 Global Cleantech 100.
Founder Ben Schuler was also named among Bloomberg BusinessWeek's Green Ones
to Watch.
· GoodLeap is increasingly recognised as a disruptor and innovator
in its industry. It was named on Forbes Fintech 50 for 2024 and won Seal's
2024 Sustainable Innovation Award.
Despite the varied performance in the decarbonisation portfolio in H1, we
remain confident in the long-term outlook for our remaining investments.
Governmental and societal focus on decarbonisation and renewables is not going
away, even if the pace and intensity may fluctuate. The need to diversify
energy supply away from imported fossil fuels in the face of flaring
geopolitical tensions, combined with governments' statutory obligations to
reduce emissions, have embedded the trend towards decarbonisation. Higher
manufacturing costs and interest rates may have temporarily impacted the
viability of certain projects, but the Inflation Reduction Act in the US, the
Green New Deal in the EU and aggressive state subsidies in China make the
direction of travel clear. Falling interest rates might provide further
impetus.
The total value of the gross realised and unrealised decarbonisation portfolio
now stands at $77.8 million, a fall of 34.8 per cent. from the previous
period. In aggregate, this is a decline in fair value of $41.5 million over
the period. The decarbonisation portfolio had an unrealised value of $72.4
million at period-end.
The Board has taken steps to deliver value and return excess capital to
shareholders in order to improve balance sheet efficiency and help reduce the
valuation discount of the ordinary share price to NAV over time. On 8
February 2024, REL announced that it proposed to return $200 million of its
excess capital to shareholders by means of a tender offer. On 2 April 2024 REL
announced that it had acquired, as of 28 March 2024, 15,047,619 of the
Company's ordinary shares at a price of £10.50 per share, approximately 36
per cent. of all outstanding ordinary shares, and that all shares repurchased
by the Company had been cancelled. In addition and subsequent to the 2023 AGM
shareholder authorisation, in support of the Board's capital management
objectives, the Company had an ongoing share buyback programme with £30
million allocated. During the remainder of 2023, 1,506,867 ordinary shares had
been bought back at a total cost of approximately £8.5 million ($10.7
million) and an average share price of approximately £5.63 ($7.17). At the
2024 AGM, the shareholders renewed the authorisation for the Board to continue
with share buybacks and the Board duly commenced the current programme,
allocating an amount of approximately £22 million ($28million), all of which
was available for repurchases at 30 June 2024. On 4 July 2024, the Company
announced that it has entered into an irrevocable agreement with Deutsche
Numis to continue this share buyback programme.
Following the tender offer, and reflecting portfolio activity in the first
half of 2024, cash on the balance sheet held by REL and the Partnership
structure totalled $93.7 million (£74.1 million) as at 30 June 2024, a
decrease of $197.7 million or 67.8 per cent. from 31 December 2023.
During the period the NAV per share for REL as a whole increased by 6.0 per
cent. to $16.91 per share (or ~6.7 per cent. to £13.37 per share as at 30
June 2024) due to unrealised gains from the shares of Permian Resources ($25.6
million) and Veren ($7.5 million), as well as the reduction in share count
following the tender offer.
The Investment Manager remains committed to maintaining a balanced portfolio,
combining value-generative investments in conventional energy with growth
investments in decarbonisation and transition assets, where long-term trends
offer significant opportunities as the world directs investment resources into
renewable energy and clean technology.
Current Portfolio - Conventional((13))
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 30 Jun 2024 Gross MOIC((2)) 31 Dec 2023 Gross MOIC((2))
Capital ($mm) Capital ($mm)((1)) ($mm)((2))
Permian Resources ((4)) (Public) 268 268 228 163 391 1.46x 1.35x
Onyx (Private) 66 60 121 64 185 3.10x 3.20x
Veren (Crescent Point Energy)((4)) ((10)) (Public) 296 296 199 65 264 0.89x 0.87x
Total Current Portfolio - Conventional - Public((3)) $564 $564 $427 $228 $655 1.16x 1.10x
Total Current Portfolio - Conventional - Private((3)) $66 $60 $121 $64 $185 3.10x 3.20x
Total Current Portfolio - Conventional - Public & Private((3)) $630 $624 $548 $292 $840 1.35x 1.30x
Current Portfolio - Decarbonisation((13))
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 30 Jun 2024 Gross MOIC((2)) 31 Dec 2023
Capital ($mm) Capital ($mm)((1)) ($mm)((2)) Gross MOIC((2))
Infinitum 28 28 - 30 30 1.10x 1.10x
(Private)
GoodLeap (formerly Loanpal) (Private) 25 25 2 23 25 1.00x 1.25x
Solid Power((4)) (Public) 48 48 - 12 12 0.25x 0.22x
Group14 4 4 - 4 4 1.00x 1.00x
(Private)
Tritium DCFC((4)(11)) (Public) 25 25 1 1 2 0.10x 0.46x
Enviva((4)) 22 22 0 1 1 0.03x 0.05x
(Public)
Hyzon Motors((4)) 10 10 - 1 1 0.03x 0.09x
(Public)
T-REX Group (Private) 21 21 - - - 0.00x 0.82x
Our Next Energy 13 13 - - - 0.00x 0.25x
(Private)
Ionic I & II (Samsung Ventures) (Private) 3 3 - - - 0.00x 1.00x
Total Current Portfolio - Decarbonisation - Public((3)) $105 $105 $1 $15 $16 0.15x 0.23x
Total Current Portfolio - Decarbonisation - Private((3)) $93 $93 $2 $57 $59 0.64x 0.73x
Total Current Portfolio - Decarbonisation - Public & Private((3)) $198 $198 $3 $72 $75 0.38x 0.50x
Total Current Portfolio - Conventional & Decarbonisation - Public & $827 $821 $551 $364 $915 1.11x 1.08x
Private((3))
Cash and Cash Equivalents((9)) $94
Total Liquidity((12)) $336
Total Market Capitalisation $276
Investment Gross Committed Capital Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 30 Jun 2024 31 Dec 2023
(Initial Investment Date) ($mm) Capital ($mm) Capital ($mm)((1)) ($mm)((2)) Gross Gross
MOIC((2)) MOIC((2))
Rock Oil((5)) 114 114 236 3 239 2.09x 2.08x
(12 Mar 2014)
Three Rivers III 94 94 204 - 204 2.17x 2.17x
(7 Apr 2015)
ILX III 179 179 172 - 172 0.96x 0.96x
(8 Oct 2015)
Meritage III((6)) 40 40 88 - 88 2.20x 2.20x
(17 Apr 2015)
RCO((7)) 80 80 80 - 80 0.99x 0.99x
(2 Feb 2015)
Carrier II 110 110 67 - 67 0.61x 0.61x
(22 May 2015)
Pipestone Energy (formerly CNOR) 90 90 58 - 58 0.64x 0.64x
Sierra 18 18 38 - 38 2.06x 2.06x
(24 Sept 2014)
Aleph Midstream 23 23 23 - 23 1.00x 1.00x
(9 Jul 2019)
Ridgebury H3 18 18 22 - 22 1.22x 1.22x
(19 Feb 2019)
Castex 2014 52 52 14 - 14 0.27x 0.27x
(3 Sep 2014)
Total Realisations((3)) $819 $819 $1,002 $3 $1,006 1.23x 1.23x
Withdrawn Commitments and Investment Write-Offs((8)) 384 384 9 - 9 0.02x 0.02x
Total Investments((3)) $2,030 $2,024 $1,562 $367 $1,929 0.95x 0.96x
Total Investments & Cash and Cash Equivalents((3), (9)) $461
((1)) Gross realised capital is total gross proceeds realised on invested
capital. Of the $1,562 million of capital realised to date, $1,197 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. performance fees on
applicable gross profits in accordance with the revised terms announced on 3
January 2020, but effective 30 June 2019. Since there was no netting of losses
against gains before the aforementioned revised terms, the effective
performance fees rate on the portfolio as a whole will be greater than 20 per
cent. No further performance fees will be payable until the $94.5 million of
realised and unrealised losses to date at 30 June 2024 are made whole with
future gains. Since REL has not yet met the appropriate Cost Benchmark at 30
June 2024, $35.4 million in Performance Allocation Fees that would have been
due under the prior agreement were not accrued. 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)) Amounts may vary due to rounding.
((4)) Represents closing price per share in USD for publicly traded shares
Permian Resources Corporation (formerly Centennial Resource Development, Inc.)
(NASDAQ:PR - 30-06-2024: $16.15 per share / 31-03-2024: $17.66 price per
share); Enviva, Inc. (NYSE:EVA - 30-06-2024: $0.43 per share / 31-03-2024:
$0.44 price per share); Solid Power, Inc. (NASDAQ:SLDP - 30-06-2024: $1.65 per
share / 31-03-2024: $2.03 price per share); Hyzon Motors, Inc. (NASDAQ:HYZN -
30-06-2024: $0.32 per share / 31-03-2024: $0.74 price per share); and Veren
(NASDAQ: VRN - 30-06-2024: CAD 10.79 per share / 31-03-2024: CAD 11.08 per
share).
((5)) The unrealised value of the Rock Oil investment consists of sale
proceeds from the sale of the rights to mineral acres.
((6)) Midstream investment.
((7)) Credit investment.
((8)) Withdrawn commitments consist of Origo ($9 million) and CanEra III ($1
million), and investment write-offs consist of Liberty II ($142 million),
Fieldwood ($80 million), Eagle II ($62 million), Castex 2005 ($48 million),
Anuvia Plant Nutrients ($20 million) and FreeWire ($14 million).
((9)) This figure is comprised of $5.4 million held at the Company, $81.0
million held at the Partnership and $7.4 million held at REL US Corp.
((10) ) Veren shares were acquired via realisation of Hammerhead Energy.
((11)) Tritium consists of publicly traded shares related to original SPAC
Sponsor investment and a further backstop funding ($0 million at 30 June 2024)
as well as an additional private loan investment ($1.6 million at 30 June
2024).
((12)) Total liquidity comprises remaining fair value of all public
investments and all cash held at REL and within RELIP structure.
((13)) The investments in the tables are held within the Partnership.
Investment Portfolio
Summary
As of 30 June 2024, REL's portfolio comprised thirteen active investments, of
which three are in the process of being realised in the near term for nil
value. The ten remaining investments include two E&P investments, seven
decarbonisation investments and one power investment.
Permian Resources (formerly Centennial)
As of 30 June 2024, REL, through the Partnership, has invested in full its
$268 million commitment to Permian Resources. Headquartered in Midland, Texas,
Permian Resources is a large pure-play E&P company in the Delaware Basin.
Permian Resources completed the previously announced ~$4.5 billion acquisition
of Earthstone Energy, Inc. (NYSE: ESTE) in November 2023. The transaction
bolsters Permian Resource's leading position in the Delaware Basin and
increases operating size and scale. The transaction further enhances free cash
flow generation and is expected to generate ~$175 million of annual synergies.
The pro-forma company remains committed to achieving an investment grade
rating.
In Q2 2024, Permian Resources added ~11,200 net acres and ~110 locations in
the Delaware Basin through recent transactions for ~$270mm. The company
completed the ESTE integration ahead of schedule, identifying an additional
$50mm of annual run-rate synergies. Permian Resources also repaid $356mm of
senior notes due 2027. The company also announced a quarterly cash dividend of
$0.06 per share and a variable quarterly cash dividend of $0.14 per share in
May. The pro-forma company has hedged approximately 29 per cent. of
forecasted 2024 crude oil production at a weighted average price of $74.96 per
barrel and 21 per cent. of forecasted 2024 natural gas production at a
weighted average price of $3.71 per mcf.
REL, through the Partnership, owns approximately 10.1 million shares which are
publicly traded (NYSE: PR).
As of 30 June 2024, REL's interest in Permian Resources, through the
Partnership, was valued at 1.46x Gross MOIC((1)) or $391 million (Realised:
$228 million, Unrealised: $163 million). The Gross MOIC((1)), which reflects
the mark-to-market value of REL's shareholding, increased over the period.
Onyx
As of 30 June 2024, REL, through the Partnership, has invested $60 million of
its $66 million commitment to Onyx. Onyx is a European-based independent power
producer that was created through the successful acquisition of 2,350MW of
gross installed capacity (1,941MW of net installed capacity, which reduced to
1,641MW following the decommissioning of Farge) of coal-, gas-, and
biomass-fired power plants in Germany and the Netherlands from Engie SA. Two
of the facilities in the current portfolio are among Europe's most recently
constructed thermal plants, which benefit from high efficiencies, substantial
environmental controls, low emissions profiles and the potential use of
sustainable biomass.
As of 30 June 2024, REL's interest in Onyx, through the Partnership, was
valued at 3.10x Gross MOIC((1)) or $185 million (Realised: $121 million,
Unrealised: $64 million). The Gross MOIC((1)) decreased from 3.20x to 3.10x
QoQ.
Veren (formerly Crescent Point, acquired through the sale of Hammerhead
Energy)
As of 30 June 2024, REL, through the Partnership, had invested its $296
million original commitment to Hammerhead Energy which was subsequently
acquired by Veren, a company focused on liquids-rich unconventional resources
in the Montney and Duvernay resource play in Western Canada. REL provided an
initial equity commitment to Hammerhead Energy in 1Q14; since the initial
commitment, REL had made several additional investments into Hammerhead
Energy. Prior to the acquisition, Hammerhead Energy had aggregated a position
of ~190,000 net acres in the Montney and ~100,000 net acres in the Duvernay
formations and operated 100 per cent. of its asset base.
Since closing the acquisition of Hammerhead Energy, Veren's shares have traded
up 16.3 per cent. compared to a 13.5 per cent. increase in its peer group, and
a 16.6 per cent. rally in WTI over the same period. In May 2024, Veren
announced its Q1 2024 results, which were above expectations. Veren's
unchanged five-year plan is targeting 6 per cent. production CAGR through
2028, driven by the Montney (8 per cent. CAGR) and Duvernay (11 per cent.
CAGR), and targeting corporate production of 260 mmboe/d. In Q2, 2024, Veren
delivered its quarterly dividend of C$0.115 per share, implying an annualised
dividend yield of 4.3 per cent.
As of 30 June 2024, REL's interest in Veren, was valued at 0.89x Gross
MOIC((1)) or $264 million (Realised: $199 million, Unrealised: $65 million).
The Gross MOIC((1)) increased over the period.
Infinitum
Infinitum continues to execute on its strong pipeline, with a continued focus
on both ramping production and converting purchase orders into revenue. The
company's new facility in Saltillo, Mexico is expected to come online this
summer, which will double the company's production capacity by year-end. In Q2
2024, the company was recognised with a prestigious Silver 2024 Product of the
Year Award from Consulting-Specifying Engineer for its Aircore EC motor
designed for data centers. Founder and CEO Ben Schuler was likewise named
among Bloomberg BusinessWeek's Green Ones to Watch, an inaugural list of
people poised to be the climate leaders of tomorrow.
As of 30 June 2024, REL's interest in Infinitum, through the Partnership, was
valued at 1.10x Gross MOIC((1)) or $30.2 million (Realised: nil, Unrealised:
$30.2 million).The Gross MOIC((1)) was unchanged over the period.
GoodLeap (formerly Loanpal)
As of 30 June 2024, REL, through the Partnership, has invested in full its $25
million commitment to GoodLeap. The company is a technology-enabled
sustainable home improvement loan originator, providing a point-of-sale
lending platform used by key residential contractors. GoodLeap does not take
funding risk. The company pre-sells its originated loans via forward purchase
agreements to large asset managers. The company's attractive unit economics
and asset-light business model allow for rapid growth and the ability to scale
faster than its competitors, while generating free cash flow by capitalising
on upfront net cash payments on the flow of loan originations and avoiding
costly SG&A and capital expenditures incurred by other portions of the
value chain.
The valuation multiple for GoodLeap was lowered to 1.00x Gross MOIC((1)) for
the second quarter of 2024. The macroeconomic environment headwinds did not
decrease as much as originally expected, but the industry outlook is positive.
The company will enforce strategic changes to better navigate market dynamics
such as expanding product partnerships, introducing new products such as home
efficiency and tightening contractor payment guidelines.
As of 30 June 2024, REL's interest in GoodLeap, through the Partnership, was
valued at 1.00x Gross MOIC((1)) or $25 million (Realised: $2 million,
Unrealised: $23 million). The Gross MOIC((1)) decreased over the period.
DCRN/Tritium DCFC
In February 2021, REL, through the Partnership, invested $0.6 million in the
Founder Shares and Warrants of Decarbonisation Plus Acquisition Corp. II
(NASDAQ: DCRN) at the time of its IPO. In May 2021, DCRN announced it would
combine with Tritium, a Brisbane based pioneer in e-mobility and EV charging
infrastructure. The merger vote to approve the combination of Tritium and DCRN
occurred and closed on 12 January 2022. In February 2022, REL funded an
additional $15 million commitment to Tritium.
In March 2024, Tritium executed a reverse stock split to avoid de-listing by
converting every existing common stock share into the right to receive 0.005
new common stock shares (200 to 1 split). In April 2024, Tritium notified
regulators that its businesses were insolvent or likely to become insolvent
and proposed placing control of the company under administrators working for
KPMG in compliance with Australian law.
As of 30 June 2024, REL's interest in Tritium, through the Partnership,
consisted of the $0.6 million sponsor investment, which was valued at nil or
0.00x Gross MOIC((1)); similarly, the $15 million equity investment, which was
valued at nil or 0.00x Gross MOIC((1)); and the $9.7 million loan investment,
which was valued at 0.25x Gross MOIC((1)) or $2.5 million (Realised: $0.9
million, Unrealised: $1.6 million).
Solid Power
As of 30 June 2024, REL, through the Partnership, has fully invested its $47.8
million commitment to Solid Power. Riverstone sponsored DCRC's $350 million
IPO on 23 March 2021. REL made a $0.6 million investment in DCRC at the time
of the IPO, as the blank check company began to pursue merger candidates. On
15 June 2021, DCRC announced its business combination agreement with Solid
Power, a Louisville, Colorado based producer of all solid-state batteries for
electric vehicles, to which REL, through the Partnership, committed an
additional $20 million to the $165 million PIPE that was raised. On 17 August
2021, REL announced the purchase of an interest in one of Samsung Ventures'
battery technology focused venture capital portfolios (the "Samsung
Portfolio") for $30.0 million, of which $27.2 million related to the purchase
of 1.66 million shares of Solid Power.
The business combination between DCRC and Solid Power closed on 8 December
2021, with Solid Power beginning to trade on NASDAQ under the ticker "SLDP".
In January 2024, Solid Power announced it had deepened its partnership with SK
On with three new agreements, including an R&D license, a line
installation arrangement and an electrolyte supply agreement. The deepened
relationship between the two companies will increase collaboration and
development efforts on Solid Power's solid-state cell technology.
As of 30 June 2024, REL's interest in Solid Power, through the Partnership,
consisted of the $0.6 million sponsor investment, which was valued at 1.36x
Gross MOIC((1)) or $0.7 million (Realised: nil, Unrealised: $0.7 million), the
$20 million PIPE investment, which was valued at 0.17x Gross MOIC((1)) or $3.3
million (Realised: nil, Unrealised: $3.3 million), and the $27.2 million
secondary purchase from Samsung Ventures, which was valued at 0.19x Gross
MOIC((1)) or $7.9 million (Realised: nil, Unrealised: $5.2 million).
Group14
In April 2022, REL, through the Partnership, invested $4 million into Group14
Technologies, Inc.'s $400 million Series C funding round. The Series C round
was led by Porsche AG, with participation from OMERS Capital Markets,
Decarbonisation Partners, Vsquared Ventures, and others. Group14 is a battery
materials technology company founded in 2015. The company has developed a
proprietary silicon-based anode battery material to replace graphite in
conventional lithium-ion batteries.
On 6 June 2024, the company announced it had signed agreements with five
leading EV and consumer electronic cell manufacturers, across Europe, Asia and
North America. The agreements will allow Group 14's customers to deliver the
highest performance batteries in production today to a diverse array of
industries including automotive, consumer electronic, electric vertical
take-off and landing (eVTOL) and other markets.
As of 30 June 2024, REL's interest in Group14, through the Partnership,
remained at 1.00x Gross MOIC((1)) or $4.0 million (Realised: nil, Unrealised:
$4.0 million).
Enviva
As of 30 June 2024, REL, through the Partnership, has invested $22 million of
its $22 million commitment to Enviva, with the final $3.5 million invested in
Q1 2023.
On 12 March 2024, Enviva filed for voluntary Chapter 11 bankruptcy protection
and announced a restructuring plan to reduce debt by approximately $1.0
billion, improve profitability, and better position the business for long term
success. The stock will stay listed, and equity shareholders are expected to
retain approximately 5% of the reorganised company, subject to dilution from
the RSA, DIP, and MIP.
As of 30 June 2024, REL's interest in Enviva, through the Partnership, was
valued at 0.03x Gross MOIC((1)) or $0.7 million (Realised: $0.4 million,
Unrealised: $0.3 million). The Gross MOIC((1)) decreased over the period.
Hyzon
In connection with the closing of the previously announced merger between DCRB
and Hyzon Motors Inc. (NASDAQ: HYZN), REL purchased $10 million of DCRB common
stock in a private placement transaction at $10 per share in July 2021. Hyzon
is the industry-leading global supplier of zero-emissions hydrogen fuel cell
powered commercial vehicles.
As of 30 June 2024, REL's interest in Hyzon, through the Partnership, was
valued at 0.03x Gross MOIC((1)) or $0.3 million (Realised: nil, Unrealised:
$0.3 million). The Gross MOIC((1)) decreased over the period.
T-REX Group
The valuation multiple for T-REX was written down to 0.00x Gross MOIC((1))
during the first quarter of 2024. In September 2023, an investment bank was
hired to run a sales process for the company. After over 6-months no LOIs were
submitted. In April 2024, the company initiated an orderly wind-down due to
limited cash runway (mid May 2024). The company currently has an asset sale
pending completion that would monetise substantially all of T-REX's assets
that would result in a ~60% recovery for Silicon Valley Bank (T-REX's
Creditor). Simultaneously, the board of the company is evaluating several ABC
providers to manage the liquidation.
As of 30 June 2024, REL's interest in T-REX Group, through the Partnership,
was valued at nil or 0.00x Gross MOIC((1)).
Our Next Energy (ONE)
The valuation multiple for ONE was written down to 0.00x Gross MOIC((1))
during the first quarter of 2024. In Q1 2024, the company raised capital by
way of its insider-led convertible note, a financing in which Riverstone
elected not to participate. As a result of not participating, REL's ownership
stake was significantly diluted and subordinated.
As of 30 June 2024, REL's interest in Our Next Energy, through the
Partnership, was valued at nil or 0.00x Gross MOIC((1)).
Ionic I & II
On 17 August 2021, REL announced the purchase of an interest in one of Samsung
Ventures' battery technology focused venture capital portfolios (the "Samsung
Portfolio") for $29.9 million, of which $2.7 million related to shares of
Ionic Materials (Ionic I & II), a material science company that
manufactures transformative polymers for use in solid-state batteries,
healthcare and 5G applications. Ionic Materials' solid polymer is believed to
be the first of its kind to conduct ions at room temperature, a critical
enabler of solid-state batteries.
Ionic was in the midst of demonstrating within-spec, roll-to-roll LCP
manufacturing capabilities with the hopes that it would be acquired by a
Korean corporation/manufacturing partner looking to vertically integrate.
Together with Goldman Sachs, Ionic Materials' worked hard to monetize the LCP,
and had the parameters of deal worked out pending proof of manufacturing
capabilities. However, Ionic Materials' lacked the cash runway to achieve that
goal.
As of 30 June 2024, REL's investment in Ionic Materials through the Samsung
Ventures portfolio, was valued at nil or 0.00x Gross MOIC((1)).
Investment Write-Off
FreeWire
On 3 February 2024, a potential acquiror of FreeWire, who had been under
exclusivity, withdrew itself from the sale process. Given the accelerating
cash constraints and limited runway in combination with the sale process
withdrawal, FreeWire evaluated all alternatives, culminating in a sale on 20
February 2024 to a private investor. The consideration with respect to the
sale was 100% assumption of all company assets and liabilities. As of 30 June
2024, FreeWire has a realised mark of 0.00x Gross MOIC((1)) and is no longer
an investment in the portfolio.
Valuation
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 is compliant with IFRS and IPEV Valuation Guidelines and has been
applied consistently from period to period since inception. As the Company's
investments through the Partnership have tended to not be publicly quoted,
valuations require meaningful judgement to establish a range of values, and
the ultimate value at which an investment is realised may differ from its most
recent valuation and the difference may be significant.
The Investment Manager values each underlying investment in accordance with
the Riverstone valuation policy, the IFRS accounting standards and IPEV
Valuation Guidelines. 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. 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 early
stage private investments, Riverstone's investment due diligence process
includes assumptions about short-term financial results in determining the
appropriate purchase price for the investment.
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.
Uninvested Cash
As of 30 June 2024, REL had a cash balance of $5.4 million and the
Partnership, including its wholly-owned subsidiaries, REL Cayman Holdings, LP,
REL US Corp and REL US Centennial Holdings, LLC, had uninvested funds of over
$88.3 million held as cash, United States Treasury Bills and short-term money
market fixed deposits, gross of the accrued management fee of $1.7 million.
After the accrued management fee, REL's aggregate cash balance is $92.0
million. As in prior years, in accordance with the Partnership Agreement, if
the Company requires additional funds for working capital, it is entitled to
receive further distributions from the Partnership. The Partnership maintains
deposit accounts with several leading international banks. In addition, the
Partnership invests a portion of its cash deposits in US Treasury Bills. REL's
treasury policy seeks to protect the principal value of cash deposits
utilising low risk investments with top-tier counterparts. Uninvested cash
earned approximately 244 basis points during the period ended 30 June 2024.
All cash deposits referred to in this paragraph are denominated in U.S.
dollars.
Post-Year End Update
On 4 July 2024, the Company announced that it has entered into an irrevocable
agreement with Deutsche Numis to continue its share buyback programme.
There have been no other material updates for the Company, subsequent to
period end.
Outlook
The themes of global macro-economic uncertainty, geopolitical instability and
tension are likely to remain. On top of this, elections in 64 countries for
around half of the world's total population this year will add to the sense of
uncertainty and the potential for drama. A change in the political party
controlling either the executive or legislative branches in the US could see
a shift in the rhetoric around the environmental and energy debate but it is
unlikely to impact the trend toward new manufacturing investment in the US,
dominated by climate change technology, and the need to upgrade, modernise and
improve the world's energy infrastructure.
A stable macro-economic outlook, increasing geopolitical tensions and further
disruption to global supply routes could provide a favourable environment for
higher conventional energy prices. A reduction in interest rates is likely to
be reflected positively in the valuations of small-cap, high growth companies
which could be supportive for our decarbonisation portfolio. KThe timing,
scale and speed of any reduction in interest rates is still unknown but
inflationary pressures across the world have been reduced, providing optimism
that Central Banks will be able to cut rates when conditions allow, which has
already taken place in both Canada and the United Kingdom.
RIGL Holdings, LP
20 August 2024
REPORT OF THE BOARD OF DIRECTORS
For the period ended 30 June 2024
General Information
The Board submits its report, together with the Interim Condensed Financial
Statements, of Riverstone Energy Limited ("REL" or the "Company") for the
six-month period ended 30 June 2024.
REL is a company limited by shares, which was incorporated on 23 May 2013 in
Guernsey with an unlimited life and registered with the Commission as a
Registered Closed-ended Collective Investment Scheme pursuant to the POI Law.
It has been listed on the London Stock Exchange since 29 October 2013. The
registered office of the Company is PO Box 286, Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey, GY1 4LY.
Principal Activities
The principal activity of the Company is to act as an investment entity
through the Partnership and make investments in the energy sector. The
Company's investment objective is to generate long-term capital growth by
making investments in the global energy sector.
Business Review
A review of the Company's business and its likely future development is
provided in the Board Chair's Statement and in the Investment Manager's
Report.
Results and Dividend
The results of the Company for the period ended 30 June 2024 are shown in the
Condensed Statement of Comprehensive Income. The Net Asset Value of the
Company as at 30 June 2024 was $459 million (31 December 2023: $674 million).
The Directors do not recommend the payment of a dividend in respect of the
period ended 30 June 2024 (30 June 2023: $nil).
Principal Risk and Uncertainties
The Company's assets consist of listed and private equity investments, held
through the Partnership, in the conventional and decarbonisation portfolios.
Initially, there was a particular focus on opportunities in the global E&P
and midstream energy sub-sectors, but since 2020 REL has been exclusively
focussed on pursuing a global strategy across decarbonisation sectors
presented by Riverstone's investment platform. Its principal risks are
therefore related to market conditions in the energy and energy transition
sectors in general, but also to the particular circumstances of the businesses
in which it is invested through the Partnership. The Investment Manager,
through the Partnership, seeks to mitigate these risks through active asset
management initiatives and carrying out due diligence work on potential
targets before entering into any investments.
Each Director is fully aware of the risks inherent in the Company's business
and understands the importance of identifying, evaluating and monitoring these
risks. The Board has adopted procedures and controls that enable it to carry
out a robust assessment of the risks facing the Company, manage these risks
within acceptable limits and meet all of its legal and regulatory obligations.
The Board thoroughly considers the process for identifying, evaluating and
managing any significant risks faced by the Company on an ongoing basis and
these risks are reported and discussed at Audit Committee and Board meetings.
The Board ensures that effective controls are in place to properly mitigate
these risks to the greatest extent possible and that a satisfactory compliance
regime exists to ensure all applicable local and international laws and
regulations are upheld.
The process which the Company follows in order to identify and mitigate its
principal risks and uncertainties is set out in the Corporate Governance
Section of the Annual Report and Financial Statements for the year ended 31
December 2023 (the "2023 Annual Report"), a copy of which is available on the
Company's website
https://www.riverstoneREL.com//investors/reports-and-presentations/
(https://www.riverstoneREL.com/investors/reports-and-presentations/) . The
Directors have reviewed the principal risks and uncertainties for the
remaining six months of the Company's financial year and the risks identified
are the same as those set out in the 2023 Annual Report and are summarised as
follows:
Investment Concentration Risk
The Company initially intended to only invest in the global energy sector,
with a particular focus on oil and gas exploration and production, and
midstream investments, which exposed it to industry and sector concentration
risk. Under the modified investment strategy, since 2020, the Company has
pivoted to focus on energy transition and decarbonisation and this provides an
element of diversification for the portfolio, albeit with additional
investment risks. Overall, the valuation risk of the investment portfolio has
also been reduced with an increased portion now being held in listed
investments.
Ordinary Shares Trading at a Discount to NAV per Share
The Company's shares have, for a considerable period of time, been trading at
a discount to NAV per share. Reasons for this include, but are not limited to,
general market conditions in the energy sector as the Company transitions to
maximising value in its conventional and decarbonisation portfolios. This
persistent discount to NAV has the potential to lead to material shareholder
dissatisfaction where any shareholder or shareholder group which in aggregate
totals 10 per cent or more of the shares outstanding can call an EGM for a
shareholder vote.
Shareholder Disquiet and Influence
Existing or future shareholders could use or obtain a material ownership in
the Company and exert influence through voting rights. During 2022, 2023 and
2024 there has been notified shareholder disquiet with the substantial
discount to NAV of the ordinary shares in the market and concern over the
pivot of the investment strategy to decarbonisation investments and
performance to date of that strategy/use of available cash versus the level of
the share buyback programmes. Following the cash proceeds from the transaction
with Veren Inc, on 2 April 2024, REL returned $200 million of its excess
capital to shareholders by means of a tender offer. This tender offer was well
received by the shareholders and the overall market.
Inherent Risks Associated with the Conventional and Decarbonisation
Investments
The investment portfolio held by the Company in both the conventional and
decarbonisation strategies exposes the Company to a number of specific
investment and valuation risks, the most notable ones being: risks and
judgements associated with fair valuing private equity investments, potential
changes to the domestic policy, banking, regulatory or tax environment of
existing investments, early/development stage investment risk in the
decarbonisation portfolio, global conflict/imposition of sanctions/operating
in hazardous environments etc.
The Company is Heavily Reliant on the Services Provided by the Investment
Manager
The Investment Management Agreement requires the Investment Manager to provide
competent, attentive, and efficient services and personnel to the Company. If
the Investment Manager was not able to do this or if there was an unacceptable
reduction in the service received or investment competence levels of the
personnel employed by the Investment Manager, then the Company would not be
able to terminate the Investment Management Agreement as it does not expressly
provide for termination on notice without specific cause, and poor investment
performance, the departure of key Riverstone executives or a change of control
of Riverstone do not constitute cause for these purposes. Furthermore, it
would be costly for the Company to terminate the Investment Management
Agreement as the Company would be required to make significant payments.
Vote on any Discontinuance Resolution that may be Proposed
Affiliates of the Investment Manager and the Company's Cornerstone Investors
would be entitled to vote on any Discontinuation Resolution that may be
proposed. As the Investment Manager and its affiliates (and, indirectly, the
Cornerstone Investors) receive fees from the Company, they will most probably
be incentivised to vote against such resolution.
Climate Change
The effects of climate change and the transition to a low carbon economy could
possibly reduce demand for some of the Company's existing investments, as well
as impact their valuations, and may limit future growth opportunities. General
sentiment may affect investor appetite and hence may lead to a depression of
the Company's share price.
Related Parties
Details of related party transactions that have taken place during the period
and any material changes, if any, are set out in Note 7 of the Interim
Condensed Financial Statements. There are no material changes in the related
party transactions that are disclosed when compared to those noted in the 2023
Annual Report.
Shareholdings of the Directors
The current Directors with beneficial interests in the shares of the Company
as at 30 June 2024 (31 December 2023) are detailed below:
Director Ordinary Per cent. Ordinary Per cent.
Shares held Holding at Shares held Holding at
30 June 30 June 31 December 31 December
2024 2024 2023 2023
Richard Horlick((1)) 10,000 0.037 10,000 0.024
Jeremy Thompson((2)) 3,751 0.014 3,751 0.009
Claire Whittet((1)(3)) 2,250 0.008 2,250 0.005
John Roche((1)) 2,201 0.008 2,201 0.005
Karen McClellan((1)) - - - -
((1) ) Non-executive Independent Director.
((2) ) Senior Independent Director (from 31 March 2024).
((3)) Ordinary Shares held indirectly with spouse.
There have been no changes to the current Directors' shareholdings post period
end.
Going Concern
The Audit Committee has reviewed the appropriateness of the Company's
unaudited interim condensed financial statements being prepared in accordance
with "IAS 34 Interim Financial Reporting as adopted by the EU" and presented
on a going concern basis, which it has recommended to the Board. The
unaudited interim condensed financial statements have been prepared on a going
concern basis for the reasons set out below and as the Directors, with
recommendation from the Audit Committee, have a reasonable expectation that
the Company has adequate resources to continue in operational existence for
the foreseeable future, which is defined as the period from the date of
approval of these unaudited interim condensed financial statements up until 30
September 2025.
In reaching this conclusion, that the unaudited interim condensed financial
statements are prepared on a going concern basis, the Directors have
considered the principal risks faced by the Company, the substantial level of
cash/cash equivalent balances held as at 30 June 2024, the liquidity of
certain listed investments held, the cash flow forecasts for the Company
outlining the requirements to settle current and expected liabilities
(including the funding of the Company's share buyback programme) and the
potential unfunded commitments of the Partnership.
Post Period End Updates
On 4 July 2024, the Company announced that it has entered into an irrevocable
agreement with Deutsche Numis to continue its share buyback programme.
Subsequent to the period end, there have been no other material updates noted
for the Company.
By order of the Board
Richard Horlick
Chair of the Board
20 August 2024
Directors' Responsibilities Statement
The Directors are responsible for preparing this Interim Report in accordance
with applicable law and regulations. The Directors confirm that to the best of
their knowledge:
· The unaudited interim condensed financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting as adopted by
the EU; and
· The Chair's Statement, the Investment Manager's Report and the
Report of the Board of Directors include a fair review of the information
required by:
(i) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the unaudited interim condensed
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the financial year and that have materially affected the financial position
and performance of the entity during that period; and any changes in the
related party transactions described in the last annual report that could do
so.
On behalf of the Board
Richard Horlick
Chair
20 August 2024
Condensed Statement of Financial Position
As at 30 June 2024 (Unaudited)
30 June 31 December
2024 2023
Notes $'000 $'000
(Unaudited)
(Audited)
Assets
Non-current assets
Investment at fair value through profit or loss 6 454,680 666,024
Total non-current assets 454,680 666,024
Current assets
Trade and other receivables 54 2,276
Cash and cash equivalents 5,355 5,781
Total current assets 5,409 8,057
Total assets 460,089 674,081
Current liabilities
Trade and other payables 976 512
Total current liabilities 976 512
Total liabilities 976 512
Net assets 459,113 673,569
Equity
Share capital 840,155 1,038,721
Retained deficit (381,042) (365,152)
Total equity 459,113 673,569
Number of Shares in issue at period/year end 9 27,148,170 42,195,789
Net Asset Value per Share ($) 9 16.91 15.96
The unaudited interim condensed financial statements were approved and
authorised for issue by the Board of Directors on 20 August 2024 and signed on
their behalf by:
Richard Horlick John Roche
Chair Director
Condensed Statement of Comprehensive Income
For the six months ended 30 June 2024 (Unaudited)
1 January 2024 1 January 2023
to 30 June 2024 to 30 June 2023
Notes $'000 $'000
Unaudited Unaudited
Investment loss
Change in fair value of investment at fair value through profit or loss 6 (12,778) (102,711)
Expenses
Directors' fees and expenses 7 (352) (476)
Legal and professional fees (410) (354)
Other operating expenses (2,314) (1,747)
Total expenses (3,076) (2,577)
Operating loss for the financial period (15,854) (105,288)
Finance income and expenses
Foreign exchange (loss)/gain (36) 37
Total finance income and expenses (36) 37
Loss for the period((1)) (15,890) (105,251)
Basic and Diluted Loss per Share (cents) 9 (46.22) (213.18)
((1)) A separate statement of other comprehensive income is not required as
the Company has no such income.
All activities derive from continuing operations.
Condensed Statement of Changes in Equity
For the six months ended 30 June 2024 (Unaudited)
Share Retained Total
capital deficit Equity
$'000 $'000 $'000
As at 1 January 2024 1,038,721 (365,152) 673,569
Loss for the financial period - (15,890) (15,890)
Tender offer and cancellation of shares (198,566) - (198,566)
As at 30 June 2024 840,155 (381,042) 459,113
For the six months ended 30 June 2023 (Unaudited)
Share Retained Total
capital deficit Equity
$'000 $'000 $'000
As at 1 January 2023 1,101,674 (362,884) 738,790
Loss for the financial period - (105,251) (105,251)
Buyback and cancellation of shares (29,618) - (29,618)
As at 30 June 2023 1,072,056 (468,135) 603,921
Condensed Statement of Cash Flows
For the six months ended 30 June 2024 (Unaudited)
1 January 2024 1 January 2023
to 30 June 2024 to 30 June 2023
$'000 $'000
Unaudited Unaudited
Cash flows used in operating activities((1))
Loss for the financial period (15,890) (105,251)
Adjustments for:
Change in fair value of investment at fair value through profit or loss 12,778 102,711
Foreign exchange gain/(loss) 36 (37)
Movement in trade receivables 2,222 537
Movement in trade payables 464 207
Net cash used in operating activities (390) (1,833)
Cash flows generated from investing activities
Distributions from the Partnership 198,566 27,382
Net cash generated from investing activities 198,566 27,382
Cash flow used in financing activities
Tender offer/buyback of shares (198,566) (29,074)
Net cash used in financing activities (198,566) (29,074)
Net movement in cash and cash equivalents during the period (390) (3,525)
Cash and cash equivalents at the beginning of the period 5,781 15,755
Effect of foreign exchange rate changes (36) 37
Cash and cash equivalents at the end of the period 5,355 12,267
((1)) Cash flows from operating activities for the period ended 30 June 2024
are presented by adjusting Loss for the period before tax as opposed to
Operating loss for the period. Cash flows from operating activities for the
period ended 30 June 2023 have been re-presented in the format adopted for the
year ended 31 December 2023.
The accompanying notes form an integral part of these unaudited interim
condensed financial statements.
Notes to the UNAUDITED Interim Condensed Financial Statements
For the six months ended 30 June 2024 (Unaudited)
1. General information
Riverstone Energy Limited is a company limited by shares, which was
incorporated on 23 May 2013 in Guernsey with an unlimited life and registered
with the GFSC as a Registered Closed-ended Collective Investment Scheme
pursuant to the POI Law. The Company's Ordinary Shares were admitted to the UK
Listing Authority's Official List and to trading on the London Stock Exchange
as part of its IPO which completed on 29 October 2013. The registered office
of the Company is PO Box 286, Floor 2, Trafalgar Court, Les Banques, St Peter
Port, Guernsey, GY1 4LY.
The Company makes its investments through the Partnership, a Cayman Islands
registered exempted limited partnership, in which the Company is the sole
limited partner. The principal place of business of the Partnership is the
Cayman Islands. Both the Company and the Partnership are subject to the
Investment Management Agreement with the Investment Manager, a partnership
registered in the Cayman Islands.
The Partnership has the right to invest alongside the Private Riverstone Funds
in all Qualifying Investments in which the Private Riverstone Funds
participate. These funds are managed and advised by affiliates of the
Investment Manager. Further detail of these investments is provided in the
Investment Manager's Report.
The unaudited interim condensed financial statements of the Company for the
six months ended 30 June 2024 have been prepared on a going concern basis in
accordance with the Disclosure and Transparency Rules of the United Kingdom
Financial Conduct Authority and in accordance with International Accounting
Standard 34 ("IAS 34") Interim Financial Reporting as adopted by the European
Union. These unaudited interim condensed financial statements do not
comprise statutory financial statements within the meaning of The Companies
(Guernsey) Law, 2008, and should be read in conjunction with the financial
statements of the Company as at and for the year ended 31 December 2023, which
were prepared in accordance with International Financial Reporting Standards
as adopted by the EU. The statutory financial statements for the year ended 31
December 2023 were approved by the Board of Directors on 28 February 2024. The
opinion of the auditors on those financial statements was not qualified and
did not include a reference to any matters to which the auditor drew attention
by way of emphasis without qualifying the report. The accounting policies
adopted in these interim condensed financial statements are consistent with
those of the previous financial year and the corresponding interim reporting
period. New and amended standards have been considered in Note 2. These
interim condensed financial statements for the period ended 30 June 2024 have
been reviewed by the Company's Auditors, Ernst & Young LLP, but not
audited and their review report appears earlier in this document. The
financial information for the year ended 31 December 2023 has been derived
from the audited annual financial statements of the Company for that year,
which were reported on by Ernst & Young LLP in the Company's 2023 Annual
Report.
The accounting policies adopted in the preparation of the unaudited interim
condensed financial statements for the period ended 30 June 2024 are
consistent with those followed in the preparation of the Company's annual
financial statements for the year ended 31 December 2023, which were prepared
in accordance with IFRS as adopted by the European Union.
Certain prior period amounts have been adjusted for consistency and to reflect
the current period presentation.
These unaudited interim condensed financial statements are presented in U.S.
dollars, which is also the Company's functional currency. The amounts are
rounded to the nearest $'000, unless otherwise stated.
Going Concern
The unaudited interim condensed financial statements have been prepared on a
going concern basis for the reasons set out in the Report of the Board of
Directors and the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the foreseeable
future, which is defined as the period from the date of approval of the
unaudited interim condensed financial statements up until 30 September 2025.
2. New standards, interpretations and amendments adopted by the Company
The Company has not early adopted any standard, interpretation or amendment
that has been issued but is not yet effective. Several amendments apply for
the first time in 2024, but do not have a material impact on the Company's
interim condensed financial position or on the presentation of the Company's
statements.
3. Critical accounting judgements, estimates and assumptions
The estimates and judgements made by management are consistent with those made
in the Financial Statements for the year ended 31 December 2023.
The preparation of Financial Statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expenses.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Judgements
In the process of applying the Company's accounting policies, management has
made the following critical judgements, which have the most significant effect
on the amounts recognised in the interim condensed financial statements:
Assessment of control over the Partnership
The Company makes its investments through the Partnership in which it is the
sole limited partner.
The Board has assessed whether the Company has all the elements of control as
prescribed by IFRS 10 in relation to the Company's investment in the
Partnership and has concluded that although the Company is the sole limited
partner, it has some influence but does not control the Partnership and
therefore accounts for the Partnership at fair value.
Assessment of Partnership as a structured entity
The Company considers the Partnership to be a structured entity under IFRS 12.
Transfer of funds by the Partnership to the Company is determined by the
General Partner (see Note 7). The risks associated with the Company's
investment in the Partnership are disclosed in Note 10 of the annual financial
statements. The summarised financial information for the Company's investment
in the Partnership is disclosed in Note 6.
Contingent Liabilities - Performance Fee Allocation
In the ordinary course of business, the Performance Fee allocation is
monitored and there is a provision for anticipated costs where an outflow of
resources is considered probable and a reasonable estimate can be made of the
likely outcome.
Where an outflow is not probable, but is possible, a contingent liability may
still exist and its relevant details will be disclosed.
In January 2020, the Management Engagement Committee of REL, consisting of
REL's independent directors, agreed with RIGL Holdings, LP (formerly
Riverstone International Limited), REL's Investment Manager (the "Investment
Manager"), to amend the terms on which REL is required to pay a performance
allocation (the "Performance Allocation") in respect of REL's investments.
These terms are disclosed in Note 7; Related Party Transactions.
At the reporting date there is no evidence to indicate that a present
obligation exists, nor is it probable that an outflow of resources will be
required such that any amount should be provided for, even though there were
realisations of certain investments during the period. This is due to the
portfolio level Cost Benchmark not being met.
Estimates and Assumptions
Fair valuation of investment in the Partnership
The area involving a high degree of judgement or complexity and where
assumptions and estimates are significant to the interim condensed financial
statements has been identified as the risk of misstatement of the valuation of
the investment in the Partnership (see Note 5). Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in
any future periods affected. The Board's determination that no discount or
premium should be applied to the net asset value of the Partnership involves a
degree of judgement due to the nature of the Partnership's investments and
other assets and liabilities and the valuation techniques and procedures
adopted by the Partnership.
A summary of the more relevant aspects of IPEV to the valuation of the
Partnership's underlying valuations are set out below:
Marketable (Listed) Securities - where an active market exists for the
security, the value is stated at the bid price on the last trading day in the
period. Marketability discounts are not generally applied unless there is some
contractual, governmental or other legally enforceable restriction preventing
realisation at the reporting date.
Unlisted Investments - are carried at such fair value as the Investment
Manager considers appropriate, and as approved or adjusted by the Board,
taking into account the performance of each investee company and the exercise
of ratchets, options or other incentive schemes. Methodologies used in
arriving at the fair value include prices of recent investment, earnings
multiples, net assets, discounted cash flows analysis and industry valuation
benchmarks. Valuations may be derived by reference to observable valuation
measures for comparable companies or transactions (examples include discount
rates, forward oil prices, production multiples, volatility of comparable
public traded prices, and multiplying a key performance metric of the investee
company such as estimated, unobservable EBITDA by a relevant valuation
multiple observed in the range of comparable companies or transactions),
adjusted for differences between the investment and the referenced comparable.
The resulting accounting estimates will, by definition, seldom equal the
related actual results.
Climate change
In preparing the interim condensed financial statements, the Directors have
considered the medium- and longer-term cash flow impacts of climate change on
a number of key estimates included within the interim condensed financial
statements.
In line with IFRS the Partnership's investments are valued at fair value.
The Level 1 investments are valued using quoted prices in active markets and
therefore these reflect a market participants' view of climate change risk. In
determining the value of Partnership's Level 3 investments consideration is
made as to whether there are any specific climate risks which could directly
impact the value of such investments, including the estimates of future cash
flows and future profitability. In the current and previous period there is
no material impact to the value of the Partnership's Level 3 investments.
Having assessed the impact of climate change on the Company, the Directors
concluded this is not expected to have a significant impact on the going
concern and viability assessments.
4. Taxation
The taxation basis of the Company remains consistent with that disclosed in
the Financial Statements for the year ended 31 December 2023.
The Company has made an election to, and currently expects to conduct its
activities so as to be treated as a partnership for U.S. federal income tax
purposes. Therefore, the Company expects that it generally will not be liable
for U.S. federal income taxes. In the normal course of business, REL may form
wholly owned subsidiaries, to be treated as C Corporations for U.S. tax
purposes. The C Corporations serve to protect REL's public investors from
incurring U.S. ECI. The C Corporations file U.S. corporate tax returns with
the U.S. IRS and pay U.S. corporate taxes on its income. Each of the Company's
Shareholders who are liable for U.S. taxes will take into account their
respective share of the Company's items of income, gain, loss and deduction in
computing its U.S. federal income tax liability as if such Shareholder had
earned such income directly, even if no cash distributions are made to the
Shareholder.
The Company is exempt from taxation in Guernsey under the provisions of the
Income Tax (Exempt Bodies) (Guernsey) Ordinance, 2008 and is charged an annual
exemption fee of £1,200.
The Cayman Islands at present impose no taxes on profit, income, capital gains
or appreciations in value of the Partnership. There are also currently no
taxes imposed in the Cayman Islands by withholding or otherwise on the Company
as a limited partner of the Partnership on profit, income, capital gains or
appreciations in respect of its partnership interest nor any taxes on the
Company as a limited partner of the Partnership in the nature of estate duty,
inheritance or capital transfer tax.
Local taxes may apply at the jurisdictional level on profits arising in
operating entity investments. Further taxes may apply on distributions from
such operating entity investments. The company is structured, and has
structured its investments, to eliminate the incurrence of ECI by REL's
investors. Based upon the current commitments and investments held through REL
US Corp., the future U.S. tax liability on profits is expected to be in the
range of 21 to 27.5 per cent. (31 December 2023: 21 to 27.5 per cent.).
Additionally, depending on REL US Corp's current and accumulated earnings and
profit, the future U.S. tax liability on distributions from REL US Corp is
expected to be 0 per cent. and 30 per cent., respectively, for those
distributions determined to be return of capital and dividend income. Any
applicable taxes are captured in the Company's NAV through the fair value
movements in the underlying investments held by the Partnership and its
related Investment Undertakings.
5. Fair value
IFRS 13 'Fair Value Measurement' requires disclosure of fair value measurement
by level. The level in the fair value hierarchy within which the financial
assets or financial liabilities are categorised is determined on the basis of
the lowest level input that is significant to the fair value measurement,
adjusted if necessary.
Financial assets and financial liabilities are classified in their entirety
into only one of the three levels:
• Level 1 - quoted prices (unadjusted) in active markets for identical
assets or liabilities.
• Level 2 - inputs other than quoted prices included within Level 1
that are observable for the assets or liabilities, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• Level 3 - inputs for the assets or liabilities that are not based on
observable market data (unobservable inputs).
The Company's only financial instrument carried at fair value is its
investment in the Partnership which has been classified within Level 3 as it
is derived using unobservable inputs. Amounts classified under Level 3 for the
period ended 30 June 2024, consisting of only the Company's investment in the
Partnership, were $455 million (31 December 2023: $666 million).
The fair value of all other financial instruments approximates to their
carrying value.
Transfers during the period
There have been no transfers between levels during the period ended 30 June
2024 and the year ended 31 December 2023. Any transfers between the levels
will be accounted for on the last day of each financial period. Due to the
nature of the investment in the Partnership, it is always expected to be
classified under Level 3.
Valuation methodology and process
The same valuation methodology and process was deployed at 30 June 2024 and 31
December 2023.
The Directors base the fair value of the investment in the Partnership on the
value of its limited partnership capital account received from the General
Partner, which is determined on the basis of the fair value of its assets and
liabilities, adjusted if necessary, to reflect liquidity, future commitments,
and other specific factors of the Partnership and Investment Manager. This is
based on the components within the Partnership, principally the value of the
Partnership's investments in addition to cash and both short-term money market
fixed deposits and fixed income investments. Any fluctuation in the value of
the Partnership's investments in addition to cash and both short-term money
market fixed deposits and fixed income investments held will directly impact
on the value of the Company's investment in the Partnership.
The Directors have considered whether a discount or premium should be applied
to the net asset value of the Partnership. In view of the investment in the
Partnership and the nature of the Partnership's assets, no adjustment to the
net asset value of the Partnership has been deemed to be necessary.
The Partnership's investments are valued using the techniques described in the
Company's valuation policy. The Investment Manager's assessment of fair value
of investments held by the Partnership, through Investment Undertakings, is
determined in accordance with IPEV Valuation Guidelines.
When valuing the Partnership's investments, the Investment Manager reviews
information provided by the underlying investee companies and other business
partners and applies IPEV methodologies, to estimate a fair value as at the
date of the Statement of Financial Position, subject to Board approval. It is
the opinion of the Directors, that the IPEV valuation methodology used in
deriving a fair value is generally not different from the fair value
requirements of IFRS 13. In the event that there is a difference, the
requirements of IFRS 13 override the IPEV requirements.
The Investment Manager values the investments on a quarterly basis using
common industry valuation techniques, including comparable public market
valuation, comparable merger and acquisition transaction valuation and
discounted cash flow valuation. For early stage private investments,
Riverstone's investment due diligence process includes assumptions about
short-term financial results in determining the appropriate purchase price for
the investment. For the SPAC Sponsor investments, the Investment Manager
applies discounts to the closing price of the publicly traded shares for lack
of identified target, risk of unsuccessful closing of the business combination
and applicable lock-up periods post-closing. The techniques used in
determining the fair value of the Company's investments through the
Partnership are selected on an investment by investment basis so as to
maximise the use of market based observable inputs.
REL's valuation policy is compliant with both IFRS and IPEV Valuation
Guidelines and is applied consistently from period to period. As some of the
Partnership's investments are generally not publicly quoted, valuations
require meaningful judgement to establish a range of values and the ultimate
value at which an investment is realised may differ from its most recent
valuation and the difference may be significant.
For the period ended 30 June 2024, the valuations of the Company's
investments, through the Partnership, are detailed in the Investment Manager's
Report.
6. Investment at fair value through profit or loss
The movement in fair value is derived from the fair value movements in the
underlying investments held by the Partnership, net of income, expenses and
distributions of the Partnership and its related Investment Undertakings,
including any Performance Allocation and applicable taxes.
30 June 31 December
2024
2023
$'000 $'000
Cost
Brought forward 987,014 1,046,814
Distributions from the Partnership (198,566) (59,800)
Carried forward 788,448 987,014
Fair value adjustment through profit or loss
Brought forward (320,990) (323,712)
Fair value movement during period/year - see Summary Income Statement below
(12,778) 2,722
Carried forward (333,768) (320,990)
Fair value at period/year end 454,680 666,024
Summary financial information for the Partnership's investments and its
related Investment Undertakings
30 June 31 December
2024
2023
Summary Balance Sheet $'000 $'000
Investments at fair value (net) 374,457 384,255
Cash and cash equivalents ((1)) 81,024 283,593
Management fee payable - see Note 7 (1,722) (2,193)
Other net assets 921 369
Fair value of REL's investment in the Partnership 454,680 666,024
((1)) These figures, together with the $7 million held at REL US Corp (31
December 2023: $2 million), comprise the $88 million cash held in the
Partnership (31 December 2023: $286 million).
30 June 31 December 2023
2024
Reconciliation of Partnership's investments at fair value $'000 $'000
Investments at fair value - Level 1 240,477 207,495
Investments at fair value - Level 3 - see Note 5 126,620 174,741
Investments at fair value ((2)) 367,097 382,236
Cash and cash equivalents 7,360 2,019
Partnership's investments at fair value 374,457 384,255
((2)) Partnership holds investments indirectly through Investment Undertaking.
1 January 2024 1 January 2023
to 30 June 2024 to 30 June 2023
Summary Income Statement $'000 $'000
Unrealised and realised loss on Partnership's investments (net) (13,500) (100,104)
Interest and other income 4,741 3,851
Management fee expense - see Note 7 (3,581) (4,768)
Other operating expenses (437) (1,690)
Portion of the operating loss for the period attributable to REL's investment (102,711)
in the Partnership
(12,778)
1 January 2024 1 January 2023
to 30 June 2024 to 30 June 2023
Reconciliation of unrealised and realised gain/(loss) on Partnership's $'000 $'000
investments
Unrealised loss on investments (gross) (13,374) (56,352)
Realised loss on Partnership's investments (gross) - (43,745)
General Partner's Performance Allocation - see Note 7 - -
Provision for taxation (126) (7)
Unrealised and realised loss on Partnership's investments (net) (13,500) (100,104)
The Board reviews the valuations performed by the Investment Manager and
monitors the range of reasonably possible changes in significant unobservable
inputs on a regular basis with consultation from the Investment Manager. Using
its extensive industry experience, the Investment Manager provides the Board
with its determination of the reasonably possible changes in significant
unobservable inputs in the market conditions as of the period end.
Quantitative information about Level 3 fair value measurements in the
Partnership as at 30 June 2024
Industry: Energy
Range
Fair value of Level 3 Investments (in thousands) Valuation technique(s) Unobservable input(s) Low ((1)) High((1)) Weighted Average ((1)) Sensitivity of the Fair value of Level 3
input to fair value of Investments affected by unobservable input ((3)) (in thousands)
Level 3 investments((2))
$121,615 Public Comparables 2024E EV / EBITDA Multiple 18.0x 34.0x 31.7x 25 per cent. weighted average change in the input would result in 2 per cent. 23,156
change in the total fair value of Level 3 investments
2024E EV / Revenue Multiple((4)) 4.4x 8.1x 5.9x 20 per cent. weighted average change in the input would result in 2 per cent. 53,406
change in the total fair value of Level 3 investments
2026E EV / EBITDA Multiple 8.0x 12.0x 8.9x 25 per cent. weighted average change in the input would result in 1 per cent. 4,000
change in the total fair value of Level 3 investments
Discounted cash flow Discount Rate 20% 20% 20% +/-25 per cent. Weighted average change in the input would result in -/+2 per 64,209
cent. change in the total fair value of Level 3 investments
$5,005 Other((5))
$126,620 Total
((1)) Calculated based on fair values of the Partnership's Level 3
investments.
((2)) Based on its professional experience and recent market conditions, the
Investment Manager has provided the Board with these weighted average changes
in the inputs with a forecasted time period of 6 to 12 months.
((3)) The Partnership's Level 3 investments are valued using one or more of
the techniques which utilise one or more of the unobservable inputs, so the
amounts in the "Fair value of Level 3 investments" column will not aggregate
to the total fair value of the Partnership's Level 3 investments.
((4)) As at 30 June 2024, the sensitivity of this unobservable input to the
total fair value of Level 3 investments was determined to be significant by
applying the same methodology that determined it to be significant as at 31
December 2023.
((5)) 'Other' include certain investments that are not subject to a
sensitivity analysis because they are insensitive to the changes in inputs set
out above as at 30 June 2024.
Quantitative information about Level 3 fair value measurements in the Partnership as at 31 December 2023
Industry: Energy
Range
Fair value of Level 3 Investments (in thousands) Valuation technique(s) Unobservable input(s) Low ((1)) High ((1)) Weighted Average ((1)) Sensitivity of the Fair value of Level 3
input to fair value of Investments affected by unobservable input ((3)) (in thousands)
Level 3 investments((2))
$157,807 Public comparables 2024E EV / EBITDA Multiple 12.5x 27.5x 22.3x 30 per cent. weighted average change in the input would result in 2 per cent. 29,406
change in the total fair value of Level 3 investments
2024E EV / Revenue Multiple((5)) 1.3x 10.6x 7.4x 40 per cent. weighted average change in the input would result in 5 per cent. 80,493
change in the total fair value of Level 3 investments
2025 EV/ Revenue Multiple 1.5x 2.0x 1.9x 20 per cent. weighted average change in the input would result in 1 per cent. 34,250
change in the total fair value of Level 3 investments
2026E EV/Revenue Multiple 1.3x 1.3x 1.3x 30 per cent. weighted average change in the input would result in 1 per cent. 7,125
change in the total fair value of Level 3 investments
2027E EV/ Revenue Multiple 1.0x 2.0x 1.0x 30 per cent. weighted average change in the input would result in 1 per cent. 3,125
change in the total fair value of Level 3 investments
2027E EV /EBITDA Multiple((5)) 2.0x 6.0x 2.6x 30 per cent. weighted average change in the input would result in 1 per cent. 3,125
change in the total fair value of Level 3 investments
Transaction comparables Precedent M&A Transaction 6.6x 17.8x 12.8x 50 per cent. weighted average change in the input would result in 3 per cent. 17,385
change in the total fair value of Level 3 investments
Discounted cash flow Discount Rate((4)) 30% 10% 18% +/-50 per cent. weighted average change in the input would result in -/+1 per 70,189
cent. change in the total fair value of Level 3 investments
$16,934 Other((5))
$174,741 Total
( )
( )
((1)) Calculated based on fair values of the Partnership's Level 3
investments.
((2)) Based on its professional experience and recent market conditions, the
Investment Manager has provided the Board with these weighted average change
in the inputs with a forecasted time period of 6 to 12 months.
((3)) The Partnership's Level 3 investments are valued using one or more of
the techniques which utilise one or more of the unobservable inputs, so the
amounts in the "Fair value of Level 3 investments" column will not aggregate
to the total fair value of the Partnership's Level 3 investments as they have
not been adjusted to reflect the specific weighting applied to each method at
the year end.
((4)) As at 31 December 2023, the sensitivity of this unobservable input to
the total fair value of Level 3 investments was determined to be significant
by applying the same methodology that determined it not to be significant as
at 31 December 2022.
((5)) 'Other' include certain investments that are not subject to a
sensitivity analysis because they are insensitive to the changes in inputs set
out above as at 31 December 2023 and 31 December 2022, respectively.
7. Related party transactions
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the party in making
financial or operational decisions.
Directors
The Company has five non-executive Directors (31 December 2023: six).
Directors' fees and expenses for the period ended 30 June 2024 amounted to
$351,741, (30 June 2023: $476,141), none of which was outstanding at period
end (31 December 2023: $nil).
Partnership
In accordance with section 4.1(a) of the Partnership Agreement, the Company
received distributions in aggregate of $198,566,379 (30 June 2023: $27,382,638
) from the Partnership through the 6 month period to 30 June 2024. In
accordance with section 4.1(a) of the Partnership Agreement, in the event of
the Company requiring additional funds for working capital, it is entitled to
receive such distributions from the Partnership.
Investment Manager
For the provision of services under the Investment Management Agreement, the
Investment Manager is paid in cash out of the assets of the Partnership an
annual Management Fee equal to 1.5 per cent. per annum of the Company's Net
Asset Value (including cash). The fee is payable quarterly in arrears and each
payment is calculated using the quarterly Net Asset Value as at the relevant
quarter end as further outlined on page 79 in the Financial Statements to 31
December 2023. During the period to 30 June 2024, the Partnership incurred
Management Fees of $3,580,882 (30 June 2023: $4,767,640) of which $1,721,675
remained outstanding as at the period end (31 December 2023: $2,192,927). In
addition, the Company and Partnership, in aggregate, reimbursed the Investment
Manager $603,306 in respect of amounts paid on their behalf for the period (30
June 2023: $2,067,503), of which $487,847 related to legal and professional
fees of the Company and Partnership ($319,696 specific to the Company), $9,473
related to travel and other operating expenses of the Investment Manager (all
specific to the Company), and $105,986 related to reimbursable expenses of the
portfolio companies (all specific to the Partnership).
The circumstances in which the Company and the Investment Manager may
terminate the Investment Management Agreement are as follows (Please refer to
Note 9 of the 2023 Annual Report for full disclosure. There have been no
changes since the period end):
Event Notice period Consequences of termination
By the Company if the Investment Manager is in material breach which has not 12 months The General Partner is entitled to receive a payment equal to four times the
been rectified quarterly Management Fee payable to the Investment Manager on the basis of the
Company's most recent Net Asset Value being $6,886,700 and an amount equal to
the Performance Allocation due on the Company's investments on the basis, at
the Company's option, of the latest quarterly valuation being $nil or the
actual realisation value for each investment.
By the Investment Manager if the Company is in material breach which has not 12 months The General Partner is entitled to receive a payment equal to twenty times the
been rectified quarterly Management Fee payable to the Investment Manager on the basis of the
Company's most recent Net Asset Value being $34,433,500 and an amount equal to
the Performance Allocation due on the Company's investments on the basis, at
the General Partner's option, of the latest quarterly valuation being $nil or
the actual realisation value for each investment.
By the Company if the Investment Manager becomes insolvent or resolves to wind Immediate No payment to be made to the Investment Manager or the General Partner.
up or if the Investment Manager or General Partner commits an act of fraud or
wilful default in relation to the Company which results in material harm to
the Company
The Investment Management Agreement cannot be terminated by either the Company
or the Investment Manager without cause.
Following the seventh anniversary of the Company's London listing on 29
October 2020, a discontinuation resolution was proposed and not passed,
therefore the Investment Management Agreement will continue in perpetuity
subject to the termination for cause provisions described above. However,
either the Board or Shareholders holding in aggregate at least 10 per cent. of
the Company's voting securities can call an EGM at any time to vote on the
liquidation of the Company (75 per cent. of the votes cast in favour required)
or run-off of its portfolio (50 per cent. of the votes cast in favour
required). Under both these scenarios, the Investment Manager would be
entitled to twenty times the most recent quarterly Management Fee.
General Partner
The General Partner makes all management decisions, other than investment
management decisions, in relation to the Partnership and controls all other
actions by the Partnership and is entitled to receive a Performance
Allocation, calculated and payable at the underlying investment holding
subsidiary level, equal to 20 per cent. of the gross realised profits (if any)
in respect of a disposal, in whole or in part, of any underlying asset of the
Company, subject to the portfolio level Cost Benchmark and 8% investment level
hurdle rate being met.
The General Partner is entitled to receive its Performance Allocation in cash,
all of which, after tax, Riverstone, through its affiliate RELCP, reinvests in
Ordinary Shares of the Company on the terms summarised in Part I and Part VIII
of the IPO Prospectus.
In accordance with the revised terms announced on 3 January 2020, but
effective 30 June 2019, no further performance fees will be payable until the
$94.5 million of realised and unrealised losses to date at 30 June 2024 are
made whole with future gains. Since REL has not yet met the appropriate Cost
Benchmark at 30 June 2024, $35.4 million in Performance Allocation was not
accrued in accordance with the terms of the current agreement, which would
have been accrued under the prior agreement.
Distribution of Investment Proceeds
In addition, the Company and the Investment Manager have agreed that, going
forward, 20 per cent. of the Net Profits attributable to each fully realised
investment, net of taxes, withholdings or reserves for taxes will, at the
discretion of the Company, be available for distribution to the Company's
Shareholders, whether by dividend or share repurchases.
Cornerstone Investors
Each of the Cornerstone Investors has acquired an indirect economic interest
in each of the General Partner and the Investment Manager depending on the
size of their commitment and the total issue size, up to an aggregate maximum
indirect economic interest of 20 per cent. in each, for nominal consideration.
These interests entitle the Cornerstone Investors to participate in the
economic returns generated by the General Partner, including from the
Performance Allocation, and the Investment Manager, which receives the
Management Fee.
8. Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors, as a whole. The key measure of performance used by the Board to
assess the Company's performance and to allocate resources is the Total Return
on the Company's Net Asset Value, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss used by the
Board and that contained in the Financial Statements and Interim Report.
For management purposes, the Company is organised into one main operating
segment, which invests in one limited partnership.
All of the Company's income is derived from within Guernsey and the Cayman
Islands.
All of the Company's non-current assets are located in the Cayman Islands.
Due to the Company's nature, it has no customers.
9. Earnings per Share and Net Asset Value per Share
Earnings per Share
1 January 2024 1 January 2023
to 30 June 2024 to 30 June 2023
Loss for the period ($'000) (15,890)
(105,251)
Weighted average numbers of Shares in issue 34,381,003
49,371,746
EPS cents (loss) (46.22)
(213.18)
The Earnings per Share is based on the profit or loss of the Company for the
period and on the weighted average number of Shares the Company had in issue
for the period.
There are no dilutive Shares in issue as at 30 June 2024 (30 June 2023: none).
Net Asset Value per Share
30 June 2023 31 December 2023 30 June 2023
NAV ($'000) 459,113 673,569 603,921
Number of Shares in issue 27,148,170 42,195,789 46,800,513
Net Asset Value per Share ($)((1)) 16.91 15.96 12.90
Net Asset Value per Share (£) 13.37 12.53 10.23
Discount to NAV (per cent.)((2)) 39.86 36.09 44.65
( )
((1)) The GBP:USD FX rate is 1.26468 as at 30 June 2024.
((2)) The share price used to calculate the Discount to NAV (per cent.) is
$10.17 (£8.04).
The Net Asset Value per Share is arrived at by dividing the net assets as at
the date of the Condensed Statement of Financial Position by the number of
Ordinary Shares in issue at that date. The Discount to NAV is arrived at by
calculating the percentage discount of the Company's Net Asset Value per Share
to the Company's closing Share price as at the date of the Condensed Statement
of Financial Position.
10. Post-Period End Updates
On 4 July 2024, the Company announced that it has entered into an irrevocable
agreement with Deutsche Numis to continue its share buyback programme.
There have been no other material updates for the Company, subsequent to
period end.
Glossary of Capitalised Defined Terms
"ABC" means Assignment for the Benefit of Creditors;
"Administrator" means Ocorian Administration (Guernsey) Limited;
"Aleph Midstream" means Aleph Midstream S.A;
"Annual General Meeting" or "AGM" means the general meeting of the Company;
"Annual Report and Financial Statements" means the annual publication of the
Company provided to the Shareholders to describe their operations and
financial conditions, together with their Financial Statements;
"Anuvia" means Anuvia Plant Nutrients Inc.;
"Audit Committee" means a formal committee of the Board with defined terms of
reference;
"Board" or "Directors" means the directors of the Company;
"CanEra III" means CanEra Inc.;
"Carrier II" means Carrier Energy Partners II LLC;
"Castex 2005" means Castex Energy 2005 LLC;
"Castex 2014" means Castex Energy 2014 LLC;
"CNOR" means the Canadian Non-Operated Resources LP;
"Company" or "REL" means Riverstone Energy Limited;
"Company Secretary" means Ocorian Administration (Guernsey) Limited;
"Cornerstone Investors" means those investors who have acquired Ordinary
Shares and acquired a minority economic interest in the General Partner and in
the Investment Manager, being AKRC Investments LLC, Casita, L.P., KFI and
McNair;
"Corporate Brokers" means Deutsche Numis Securities Limited;
"C Corporations" means a C Corporation, under U.S. federal income tax law,
being a corporation that is taxed separately from its owners;
"DCRB" means Decarbonization Plus Acquisition Corporation;
"DCRC" means Decarbonization Plus Acquisition Corporation III;
"DCRN" means Decarbonization Plus Acquisition Corporation II;
"DCRD" means Decarbonization Plus Acquisition Corporation IV;
"DIP" means Debtor-in-Possession;
"Disclosure Guidance and Transparency Rules" or "DTRs" mean the disclosure
guidance published by the FCA and the transparency rules made by the FCA under
section 73A of FSMA;
"Discontinuation Resolution" means a special resolution that was proposed and
not passed by the Company's Shareholders to discontinue the Company within six
weeks of the seventh anniversary of the Company's first Admission if the
trading price has not met the Target Price, and the Invested Capital Target
Return has not been met;
"Discount to NAV" means the situation where the Ordinary shares of the Company
are trading at a price lower than the Company's Net Asset Value;
"E&P" means exploration and production;
"Eagle II" means Eagle Energy Exploration, LLC;
"Earnings per Share" or "EPS" means the Earnings per Ordinary Share and is
expressed in U.S. dollars;
"EBITDA" means earnings before interest, taxes, depreciation and amortisation;
"ECI" means effectively connected income, which refers to all income from
sources within the United States connected with the conduct of a trade or
business;
"EGM" means an Extraordinary General Meeting of the Company;
"Enviva" means Enviva Holdings, L.P.;
"EU" means the European Union;
"EV" means enterprise value;
"FCA" means the UK Financial Conduct Authority (or its successor bodies);
"Fieldwood" means Fieldwood Energy LLC;
"Financial Statements" means the audited financial statements of the Company,
including the Statement of Financial Position, the Statement of Comprehensive
Income, the Statement of Cash Flows, the Statement of Changes in Equity and
associated notes;
"FreeWire" means FreeWire Technologies, Inc.;
"General Partner" means REL IP General Partner LP (acting through its general
partner, REL IP General Partner Limited), the general partner of the
Partnership and a member of the Riverstone group;
"GFSC" or "Commission" means the Guernsey Financial Services Commission;
"GoodLeap" means GoodLeap, LLC formerly known as LoanPal LLC;
"Gross MOIC" means gross multiple of invested capital;
"Group14" means Group14 Technologies Inc.;
"Henry Hub" means a pipeline interchange of natural gas in North America used
as a benchmark in gas pricing;
"Hyzon" means Hyzon Motors, Inc.;
"IAS" means international accounting standards as issued by the Board of the
International Accounting Standards Committee;
"IFRS" means the International Financial Reporting Standards, being the
principles-based accounting standards, interpretations and the framework by
that name issued by the International Accounting Standards Board, as adopted
by the EU;
"ILX III" means ILX Holdings III LLC;
"Infinitum" means Infinitum Electric Inc.;
"Interim Report" means the Company's half yearly report and unaudited interim
condensed financial statements for the period ended 30 June;
"Investment Manager" means RIL (effective through 17 August 2020) and RIGL
(effective after 17 August 2020) which are both majority-owned and controlled
by Riverstone;
"Investment Management Agreement" means the investment management agreement
dated 24 September 2013 between RIL, the Company and the Partnership (acting
through its General Partner) under which RIL is appointed as the Investment
Manager of both the Company and the Partnership (effective through 17 August
2020), the 2(nd) Amended & Restated investment management agreement
effective after 17 August 2020 between RIGL, the Company and the Partnership
(acting through its General Partner) under which RIGL is appointed as the
Investment Manager of both the Company and the Partnership and the 3(rd)
Amended & Restatement investment management agreement effective 9 December
2020 between RIGL, the Company and the Partnership (acting through its General
Partner);
"Investment Undertaking" means the Partnership, any intermediate holding or
investing entities that the Company or the Partnership may establish from time
to time for the purposes of efficient portfolio management and to assist with
tax planning generally and any subsidiary undertaking of the Company or the
Partnership from time to time;
"IPEV Valuation Guidelines" means the International Private Equity and Venture
Capital Valuation Guidelines;
"IPO" means the initial public offering of shares by a private company to the
public;
"IRS" means the Internal Revenue Service, the revenue service of the U.S.
federal government;
"ISIN" means an International Securities Identification Number;
"LCP" means Liquid Crystal Polymer;
"Liberty II" means Liberty Resources II LLC;
"LOIs" means Letters of Intent;
"London Stock Exchange" or "LSE" means London Stock Exchange Plc;
"mcf" means one thousand cubic feet;
"Management Engagement Committee" means a formal committee of the Board with
defined terms of reference;
"Management Fee" means the management fee to which RIL is entitled;
"Meritage III" means Meritage Midstream Services III, L.P.;
"MIP" means Mortgage-in-Possession;
"mmboe" means million barrels of oil equivalent;
"NASDAQ" means National Association of Securities Dealers Automated Quotations
Stock Market;
"NAV per Share" means the Net Asset Value per Ordinary Share;
"Net Asset Value" or "NAV" means the value of the assets of the Company less
its liabilities as calculated in accordance with the Company's valuation
policy and expressed in U.S. dollar
"Net MOIC" means gross multiple of invested capital net of taxes and
performance fees on gross profit;
"NYSE" means The New York Stock Exchange;
"Official List" is the list maintained by the Financial Conduct Authority
(acting in its capacity as the UK Listing Authority) in accordance with
Section 74(1) of the Financial Services and Markets Act 2000;
"ONE" or "Our Next Energy" means Our Next Energy, Inc;
"Onyx Power" means Onyx Strategic Investment Management I BV;
"OPEC" means Organisation of the Petroleum Exporting Countries;
"Ordinary Shares" means redeemable ordinary shares of no par value in the
capital of the Company issued and designated as "Ordinary Shares" and having
the rights, restrictions and entitlements set out in the Articles;
"Origo" means Origo Exploration Holding AS;
"Partnership" or "RELIP" means Riverstone Energy Investment Partnership, LP,
the Investment Undertaking in which the Company is the sole limited partner;
"Partnership Agreement" means the partnership agreement in respect of the
Partnership between inter alios the Company as the sole limited partner and
the General Partner as the sole general partner dated 23 September 2013;
"Performance Allocation" means the Performance Allocation to which the General
Partner is entitled;
"Permian Resources" means Permian Resources Corporation formerly known as
Centennial Resource Development, Inc.;
"PIPE" means private investment in public entity;
"POI Law" means the Protection of Investors (Bailiwick of Guernsey) Law, 2020,
as amended;
"Private Riverstone Funds" means Fund V and all other private multi-investor,
multi-investment funds that are launched after Admission and are managed or
advised by the Investment Manager (or one or more of its affiliates) and
excludes Riverstone employee co-investment vehicles and any Riverstone managed
or advised private co-investment vehicles that invest alongside either Fund V
or any multi-investor multi-investment funds that the Investment Manager (or
one or more of its affiliates) launches after Admission;
"PRT" means Riverstone Performance Review Team;
"Qualifying Investments" means all investments in which Private Riverstone
Funds participate which are consistent with the Company's investment objective
where the aggregate equity investment in each such investment (including
equity committed for future investment) available to the relevant Private
Riverstone Fund and the Company (and other co-investees, if any, procured by
the Investment Manager or its affiliates) is $100 million or greater, but
excluding any investments made by Private Riverstone Funds where both (a) a
majority of the Company's independent directors and (b) the Investment Manager
have agreed that the Company should not participate;
"RCO" means Riverstone Credit Opportunities, L.P.;
"RELCP" means Riverstone Energy Limited Capital Partners, LP (acting by its
general partner Riverstone Holdings II (Cayman) Ltd.) a Cayman exempted
limited partnership controlled by affiliates of Riverstone;
"Ridgebury H3" means Ridgebury H3, LLC;
"RIGL" means RIGL Holdings, LP;
"RIL" means Riverstone International Limited;
"Riverstone" means Riverstone Holdings LLC and its affiliated entities (other
than the Investment Manager and the General Partner), as the context may
require;
"Rock Oil" means Rock Oil Holdings, LLC;
"RSA" means Restructuring Support Agreements;
"Sierra" means Sierra Oil and Gas Holdings, L.P.;
"Shareholder" means the holder of one or more Ordinary Shares;
"Solid Power" means Solid Power, Inc.;
"SPAC" means special purpose acquisition company;
"Three Rivers III" means Three Rivers Natural Resources Holdings III LLC;
"Total Return on the Company's Net Asset Value" means the capital appreciation
of the Company's Net Asset Value plus the income received from the Company in
the form of dividends;
"T-REX Group" means T-REX Group, Inc.;
"Tritium" means Tritium DCFC Limited;
''UK" or "United Kingdom" means the United Kingdom of Great Britain and
Northern Ireland;
"UK Listing Authority" or "UKLA" means the Financial Conduct Authority;
"U.S." or "United States" means the United States of America, its territories
and possessions, any state of the United States and the District of Columbia;
"Veren" means Veren Inc. formerly known as Crescent Point/Hammerhead Energy;
"WTI" means West Texas Intermediate which is a grade of crude oil used as a
benchmark in oil pricing;
"£" or "Pounds Sterling" or "Sterling" means British pound sterling and
"pence" means British pence; and
"$" means United States dollars and "cents" means United States cents.
DIRECTORS AND GENERAL INFORMATION
Directors Administrator and Company Secretary English solicitors to the Company
Richard Horlick (Chair) Ocorian Administration (Guernsey) Limited Hogan Lovells International LLP
Atlantic House
Karen McClellan PO Box 286
Holborn Viaduct
London
John Roche Floor 2
EC1A 2FG
Jeremy Thompson Trafalgar Court
United Kingdom
Claire Whittet Les Banques
Patrick Firth (retired 21 May 2024) St Peter Port
Guernsey advocates to the Company
Guernsey
Carey Olsen (Guernsey) LLP
Audit Committee GY1 4LY
Carey House
John Roche (Chair) Channel Islands
PO Box 98
Richard Horlick
Les Banques
Karen McClellan Registered office
St Peter Port
Jeremy Thompson PO Box 286
Guernsey
Claire Whittet Floor 2
GY1 4BZ
Patrick Firth (retired 21 May 2024) Trafalgar Court
Channel Islands
Les Banques
Management Engagement Committee St Peter Port
U.S. legal advisors to the Company
Claire Whittet (Chair) Guernsey
Vinson & Elkins LLP
Richard Horlick GY1 4LY
1001 Fannin Street
Karen McClellan Channel Islands
Suite 2500
John Roche
Houston, Texas
Jeremy Thompson Registrar
TX 77002
Patrick Firth (retired 21 May 2024) Link Asset Services
United States of America
65 Gresham Street
Nomination Committee London
Independent auditor
Jeremy Thompson (Chair) EC2V 7NQ
Ernst & Young LLP
Richard Horlick United Kingdom
PO Box 9, Royal Chambers
Karen McClellan
St Julian's Avenue
John Roche Principal banker and custodian
St Peter Port
Claire Whittet Barclays Bank PLC
Guernsey
Patrick Firth (retired 21 May 2024) PO Box 41
Le Marchant House GY1 4AF
Le Truchot Channel Islands
Investment Manager
St Peter Port
Guernsey
RIGL Holdings, LP
GY1 3BE
Corporate Brokers
190 Elgin Avenue Channel Islands
Deutsche Numis Securities Limited
George Town
45 Gresham St
Grand Cayman
London
KY1-9005
EC2V 7BF
Cayman Islands
United Kingdom
Investment Manager's Performance Review Team
Pierre Lapeyre
David Leuschen
Baran Tekkora
Website: www.RiverstoneREL.com
ISIN: GG00BBHXCL35
Ticker: RSE
SWISS SUPPLEMENT
ADDITIONAL INFORMATION FOR INVESTORS IN SWITZERLAND
This Swiss Supplement is supplemental to, forms part of and should be read in
conjunction with the Interim Report and Unaudited Interim Condensed Financial
Statements ended 30 June 2024 for RIVERSTONE ENERGY LIMITED (the "Company").
Effective from 20th July 2015, the Company had appointed Société Générale
as Swiss Representative and Paying Agent. The current Prospectus, the
Memorandum and Articles of Association and the annual report of the Company
can be obtained free of charge from the representative in Switzerland,
Société Générale, Paris, Zurich Branch, Talacker 50, P.O. Box 5070,
CH-8021 Zurich. The paying agent of the Company in Switzerland is Société
Générale, Paris, Zurich Branch, Talacker 50, P.O. Box 5070, CH-8021 Zurich.
The Company may offer Shares only to qualified investors in Switzerland. In
respect of the Shares distributed in and from Switzerland, the place of
performance and jurisdiction is the registered office of the Swiss
Representative.
Cautionary Statement
The Chair's Statement, the Investment Manager's Report and the Report of the
Board of Directors have been prepared solely to provide additional information
for shareholders to assess the Company's strategies and the potential for
those strategies to succeed. These should not be relied on by any other party
or for any other purpose.
The Chair's Statement, Investment Manager's Report and the Report of the Board
of Directors may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will" or
"should" or, in each case, their negative or other variations or comparable
terminology.
These forward-looking statements include all matters that are not historical
facts. They appear in a number of places throughout this document and include
statements regarding the intentions, beliefs or current expectations of the
Directors and the Investment Adviser, concerning, amongst other things, the
investment objectives and investment policy, financing strategies, investment
performance, results of operations, financial condition, liquidity, prospects,
and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that may or may not
occur in the future. Forward-looking statements are not guarantees of future
performance.
The Company's actual investment performance, results of operations, financial
condition, liquidity, distribution policy and the development of its financing
strategies may differ materially from the impression created by the
forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Directors and the
Investment Manager expressly disclaim any obligations to update or revise any
forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
Riverstone Energy Limited
PO Box 286, Floor 2,
Trafalgar Court, Les Banques, St Peter Port, Guernsey, GY1 4LY, Channel
Islands.
T 44 (0) 1481 742742
F 44 (0) 1481 742698
Further information available online:
www.RiverstoneREL.com (http://www.RiverstoneREL.com)
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR EANPEALNLEFARecent news on Riverstone Energy
See all newsREG - Riverstone Energy Ld - Total Voting Rights
AnnouncementREG - Riverstone Energy Ld - Transaction in Own Shares
AnnouncementREG - Riverstone Energy Ld - Transaction in Own Shares
AnnouncementREG - Riverstone Energy Ld - Transaction in Own Shares
AnnouncementREG - Riverstone Energy Ld - Notice of AGM
Announcement