REG - Riverstone Energy Ld - Portfolio Update
14/08/2025 07:00
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RNS Number : 2485V Riverstone Energy Limited 14 August 2025
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -
Riverstone Energy Limited Announces 2Q25 Quarterly Portfolio Valuations &
NAV
London, UK (14 August 2025) - Riverstone Energy Limited ("REL" or the
"Company") announces its quarterly portfolio summary as of 30 June 2025,
inclusive of updated quarterly unaudited fair market valuations.
Current Portfolio - Conventional
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2025 30 Jun 2025
Capital ($mm) Capital ($mm) 1 ($mm) 2 Gross MOIC(2) Gross MOIC(2)
Permian Resources 3 (Public) 268 268 235 137 372 1.39x 1.39x
Whitecap Resources(3) (Public) 296 296 200 59 259 0.86x 0.87x
Onyx (Private) 66 60 121 46 167 2.80x 2.80x
Total Current Portfolio - Conventional - Public 4 $564 $564 $435 $196 $631 1.11x 1.12x
Total Current Portfolio - Conventional - Private(4) $66 $60 $121 $46 $167 2.80x 2.80x
Total Current Portfolio - Conventional - Public & Private(4) $630 $624 $556 $242 $798 1.27x 1.28x
Current Portfolio - Decarbonisation
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2025 30 Jun 2025
Capital ($mm) Capital ($mm)(1) ($mm)(2) Gross MOIC(2) Gross MOIC(2)
GoodLeap 25 25 2 23 25 1.00x 1.00x
(Private)
Infinitum (Private) 27 27 - 18 18 0.65x 0.65x
Solid Power(3) (Public) 48 48 - 16 16 0.16x 0.33x
Group14 (Private) 4 4 - 1 1 0.75x 0.25x
Total Current Portfolio - Decarbonisation - Public(4) $48 $48 $- $16 $16 0.16x 0.33x
Total Current Portfolio - Decarbonisation - Private(4) $56 $56 $2 $42 $44 0.81x 0.78x
Total Current Portfolio - Decarbonisation - Public & Private(4) $104 $104 $2 $58 $60 0.51x 0.57x
Total Current Portfolio - Conventional & Decarbonisation - Public & $734 $728 $558 $300 $858 1.17x 1.18x
Private(4)
Cash and Cash Equivalents $73
Total Liquidity (Cash and Cash Equivalents & Public Portfolio) $285
Total Market Capitalisation $270
Realisations
Investment (Initial Investment Date) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2025 30 Jun 2025
Capital ($mm) Capital ($mm)(1) ($mm)(2) Gross MOIC(2) Gross MOIC(2)
Rock Oil 5 (12 Mar 2014) 114 114 239 0 239 2.09x 2.09x
Three Rivers III (7 Apr 2015) 94 94 204 - 204 2.17x 2.17x
ILX III (8 Oct 2015) 179 179 172 - 172 0.96x 0.96x
Meritage III 6 (17 Apr 2015) 40 40 88 - 88 2.20x 2.20x
RCO 7 80 80 80 - 80 0.99x 0.99x
(2 Feb 2015)
Carrier II (22 May 2015) 110 110 67 - 67 0.61x 0.61x
Pipestone Energy (formerly CNOR) (29 Aug 2014) 90 90 58 - 58 0.64x 0.64x
Sierra (24 Sept 2014) 18 18 38 - 38 2.06x 2.06x
Aleph (9 Jul 2019) 23 23 23 - 23 1.00x 1.00x
Ridgebury 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(4) $818 $818 $1,005 $0 $1,005 1.23x 1.23x
Withdrawn Commitments and Investment Write-Offs 8 477 477 10 - 10 0.02x 0.02x
Total Investments(4) $2,030 $2,024 $1,573 $300 $1,873 0.92x 0.93x
Total Investments & Cash and Cash Equivalents $373
Draft Unaudited Net Asset Value $372
Total Shares Repurchased to-date 37,075,536 at average price per share of £4.44 ($5.67)
Current Shares Outstanding 24,591,380
Equity markets remain volatile in the wake of "Liberation Day"
President Trump's "Liberation Day" announcement in April introduced sweeping
tariffs on the United States' global trading partners, lifting U.S. tariffs to
their highest levels since the post-war era. Coming amid already fragile
economic sentiment in the U.S. and globally, the announcement triggered a
sharp sell-off in equities, reigniting fears of a broader trade conflict, a
renewed inflationary cycle, and an additional drag on global growth.
In the immediate aftermath, the S&P 500 fell to a low of 4,982 and the
FTSE 100 to 7,679. However, as the administration stepped back from a
full-scale trade war with China and secured new trade agreements with several
partners, including the United Kingdom, markets recovered. Both the S&P
500 and FTSE 100 ended the period above their January opening levels.
While sentiment has stabilised somewhat, the overall environment remains
delicate, with global markets finely attuned to both monetary and political
signals. Inflation concerns have resurfaced, with investors focused on the
risk that higher tariffs could raise U.S. consumer prices and exacerbate
global supply chain frictions. Post-period developments, including the passage
of President Trump's tax-cutting "One Big Beautiful Bill" and the UK
government's failure to deliver meaningful welfare reform, have added to
concerns about the long-term sustainability of public finances in the U.S.,
UK, and other advanced economies.
The return of inflationary pressures has also influenced central banks'
willingness to reduce interest rates further. While the European Central Bank
implemented cuts in both March and April 2025, the Federal Reserve has kept
rates steady since the start of the year. In the UK, the Bank of England
enacted two cuts, most recently in May, in the wake of U.S. tariff
announcements. This slower-than-expected pace of monetary easing is likely to
persist through the remainder of the year, as policymakers weigh inflation
risks against economic and labour market pressures.
Oil markets mirrored the wider macro volatility. WTI crude fell from US$71.72
at the start of the year to a low of US$55.30 in May before recovering to
US$65.11 by quarter-end, driven by both economic sentiment and geopolitical
tensions, including renewed conflict in the Middle East. The faster than
anticipated unwinding of OPEC+ production cuts have had a further softening
effect on oil prices. Natural gas prices were relatively more stable but ended
the quarter modestly lower, with Henry Hub prices closing at US$3.46 per
MMBtu.
Half Year Performance Commentary
Reflecting the uncertain macro backdrop and fluctuating commodity prices,
share prices across REL's conventional energy portfolio remained volatile
during the first half of 2025.
Permian Resources, one of REL's two publicly traded upstream oil and gas
companies, ended the period down 1.7 per cent., which still represented a
recovery of nearly 40 per cent. from April lows. The company remained
operationally active, executing two bolt-on acquisitions in the North Delaware
Basin, including a $608 million transaction with APA Corporation announced
after the period end in July.
Elsewhere, the combination of Veren Inc. with TSX-listed Whitecap Resources
was completed in May, just two months after its announcement. The transaction
has created a leading Canadian light oil and condensate producer with core
assets in the Alberta Montney and Duvernay basins. Amid ongoing volatility and
softer commodity prices, Whitecap's share price ended the period 1.2 per cent.
lower during the quarter, though notably higher than its April trough.
Performance in the decarbonisation portfolio was weaker, with further declines
in value due to persistent regulatory uncertainty and shifting subsidy
frameworks. Notably, Solid Power made technical progress with joint
solid-state battery testing alongside BMW Group. Meanwhile, Hyzon proceeded
with its formal dissolution during the period, highlighting the more difficult
environment for early-stage clean energy businesses, particularly in North
America.
There is no question that the current economic and policy backdrop is creating
considerable headwinds for the decarbonisation sector. While our focus has now
shifted to realising value from the portfolio through the proposed managed
wind-down, our belief in the long-term need for energy diversification remains
unchanged. The world's growing energy appetite, driven by industrial,
population and technology demand, will require increased volumes of both
conventional and renewable energy to meet future needs.
Further information on REL's five largest positions, which account for 94 per
cent. of the portfolio's gross unrealised value, is set forth below:
Permian Resources
The valuation for Permian Resources (NYSE: PR) remained at 1.39x Gross MOIC in
the second quarter of 2025. During the quarter, the company closed a bolt-on
acquisition of core Delaware Basin assets and announced an accretive
transaction adding 13,320 net leasehold acres, 8,700 NRAs, and 12,000 Boe/d in
its core New Mexico operating areas. Permian also reduced drilling and
completion costs to approximately $750 per lateral foot and redeemed $175
million of Earthstone's 9.875 per cent. Senior Notes due in 2031. The
pro-forma company has hedged approximately 25 per cent. of forecasted 2025
crude oil production at a weighted average price of $72.70 per barrel and 18
per cent. of forecasted 2025 natural gas production at a weighted average
price of $3.47 per mcf.
Whitecap Resources (formerly Veren)
Whitecap's valuation increased from 0.86x to 0.87x Gross MOIC during the
second quarter of 2025. Over the last twelve months, Whitecap's shares have
traded down 8.6 per cent. compared to a 11.7 per cent. increase in its peer
group, and a 20.0 per cent. decrease in WTI over the same period. Whitecap
closed its merger with Veren in May 2025 and the combined company is traded on
the TSX under the WCP ticker. In Q2 2025, Whitecap delivered monthly dividends
of C$0.0608 per share, implying an annualised dividend yield of 8.0 per cent.
Onyx
The valuation multiple for Onyx remained at 2.80x Gross MOIC during the second
quarter. Operational reliability continues to be a key focus across the
Rotterdam and Wilhelmshaven plants. At Zolling, the asset has entered grid
reserve, and discussions with the grid operator regarding cost coverage
arrangements are progressing constructively. Decommissioning efforts at Farge
are advancing smoothly. The management team is also pursuing organic growth
through operational performance enhancements and the development of energy
transition initiatives.
GoodLeap
The valuation multiple for GoodLeap was held at 1.00x Gross MOIC for the
second quarter of 2025. In June, GoodLeap publicly introduced GoodLeap
Payments, a comprehensive payments platform designed specifically for modern
contractors. Unfortunately, short-term macroeconomic environment continues to
present headwinds and excess litigation costs are weighing on the business. In
turn, GoodLeap reduced its 2025E adjusted EBITDA forecast to incorporate a $35
million projected litigation overspend relative to the prior quarter.
Additionally, tariffs are creating uncertainty and could increase costs across
solar, battery, and home efficiency offerings.
Infinitum
The valuation multiple for Infinitum remained at 0.65x Gross MOIC during the
second quarter of 2025. The company performed in line with expectations for
the first half of the year and is on track to achieve its full-year 2025
targets. As planned, Infinitum is actively exploring funding alternatives to
support its ongoing growth trajectory.
Other Investments
Solid Power
During the second quarter of 2025, Solid Power's valuation increased from
0.16x to 0.33x based on the 30 June 2025 share price of $2.19 per share. The
company received significant coverage as analysts highlighted Solid Power's
increasing relevance in the EV industry and investor demand for next-gen
solid-state battery plays, driving share price growth sharply in June.
Additionally, on 10 June 2025, the US Department of Energy awarded Solid Power
$3 million to help research advanced manufacturing technologies.
Group14
The valuation multiple for Group14 was lowered from 0.75x to 0.25x Gross MOIC
for the second quarter of 2025. The mark-down is primarily driven by new
delays in production of the BAM-2 facility from 2025 to 2026, thereby pushing
back the ramp up in revenue.
Managed Wind-Down
Further to the Company's announcements on 20 May 2025 and 1 August 2025, as a
result of extensive discussions as to the strategic direction of the Company,
the Board and the Investment Manager have concluded, following careful
consideration of the options available to the Company, that it is in the best
interests of the Company and its Shareholders as a whole to put forward
proposals to implement a managed wind-down of the Company's Portfolio (the
"Managed Wind-Down").
In addition, in connection with the Managed Wind-Down, the Company has agreed
to certain amendments to the existing terms of its investment management
agreement with the Investment Manager (the "Investment Management Agreement")
(the "Proposed Amendments"). The Proposed Amendments would, amongst other
things, reduce the Management Fee paid by the Company to the Investment
Manager, eliminate the Investment Manager's current performance allocation and
termination payment provisions, whilst introducing certain Adjustment Payments
to be made by the Company to the Investment Manager in connection with the
Managed Wind-Down. These amendments, and the payment by the Company of the
Adjustment Payments, do not require Shareholder approval, but are conditional
upon the Proposals being approved by Shareholders.
The Extraordinary General Meeting at which certain resolutions required to
implement the Managed Wind-Down will be voted on will be held at 9:30 a.m.
(BST) on Friday, 22 August 2025.
Share Buyback Programme
In further support of the Board's capital management objectives, at the 2024
AGM, the shareholders renewed the
authorisation for the Board to continue with share buybacks. The Board fully
utilised the £20.0 million approved for the 2024 Share Buyback Programme,
having bought back 2,556,790 shares at an average price of £7.82 ($9.92).
However, in conjunction with the Managed Wind-Down, the Company has agreed
that it will not return cash other than by way of pro rata compulsory
redemption of Ordinary Shares without the prior consent of the Investment
Manager (such consent to be exercised by the Investment Manager in its sole
discretion).
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
disposals. No further carried interest will be payable until the $147.9
million of realised and unrealised losses to date as at 30 June 2025 are made
whole with future gains. As mentioned in the RNS dated 1 August 2025, the
Investment Manager's performance allocation arrangements under the Existing
IMA (which are also implemented via certain other agreements, including the
Partnership Agreement of Riverstone Energy Investment Partnership, LP, the
undertaking through which the Company makes its investments (the
"Partnership") would cease to apply from commencement of the Managed
Wind-Down. Because of the current valuation of the Portfolio and its
performance against applicable benchmarks, no further performance allocations
would be paid by the Company were it to enter into Managed Wind-Down.
LEI: 213800HAZOW1AWRSZR47
About Riverstone Energy Limited:
REL is a closed-ended investment company which invests in the energy industry.
REL's ordinary shares are listed on the London Stock Exchange, trading under
the symbol RSE. REL has 7 active investments spanning decarbonisation, oil
and gas, renewable energy and power in the Continental U.S., Western Canada
and Europe.
For further details, see www.RiverstoneREL.com (http://www.RiverstoneREL.com)
Neither the contents of Riverstone Energy Limited's website nor the contents
of any website accessible from hyperlinks on the websites (or any other
website) is incorporated into, or forms part of, this announcement.
Media Contacts
For Riverstone Energy Limited:
LPRelations@RiverstoneLLC.com
Deutsche Numis - Corporate Broker:
Hugh Jonathan
Matt Goss
+44 (0) 20 7260 1000
Ocorian Administration (Guernsey) Limited -
Company Secretary:
Birgitte Horn
OAGLCoSec@ocorian.com (mailto:OAGLCoSec@ocorian.com)
Note:
The Investment Manager is charged with proposing the valuation of the assets
held by REL through the Partnership. The Partnership has directed that
securities and instruments be valued at their fair value. REL's valuation
policy follows IFRS and IPEV Valuation Guidelines. The Investment Manager
values each underlying investment in accordance with the Riverstone valuation
policy, the IFRS accounting standards and IPEV Valuation Guidelines. The
Investment Manager has applied Riverstone's valuation policy consistently
quarter to quarter since inception. The value of REL's portion of that
investment is derived by multiplying its ownership percentage by the value of
the underlying investment. If there is any divergence between the Riverstone
valuation policy and REL's valuation policy, the Partnership's proportion of
the total holding will follow REL's valuation policy. There were no valuation
adjustments recorded by REL as a result of differences in IFRS and U.S.
Generally Accepted Accounting Policies for the period ended 30 June 2025 or in
any period to date. Valuations of REL's investments through the Partnership
are determined by the Investment Manager and disclosed quarterly to investors,
subject to Board approval.
Riverstone values its investments using common industry valuation techniques,
including comparable public market valuation, comparable merger and
acquisition transaction valuation, and discounted cash flow valuation.
For development-type investments, Riverstone also considers the recognition of
appreciation or depreciation of subsequent financing rounds, if any. For those
early stage privately held companies where there are other indicators of a
decline in the value of the investment, Riverstone will value the investment
accordingly even in the absence of a subsequent financing round.
Riverstone reviews the valuations on a quarterly basis with the assistance of
the Riverstone Performance Review Team ("PRT") as part of the valuation
process. The PRT was formed to serve as a single structure overseeing the
existing Riverstone portfolio with the goal of improving operational and
financial performance.
The Board reviews and considers the valuations of the Company's investments
held through the Partnership.
1 Gross realised capital is total gross proceeds realised on invested
capital. Of the $1,574 million of capital realised to date, $1,206 million is
the return of the cost basis, and the remainder is profit.
2 Gross Unrealised Value and Gross MOIC (Gross Multiple of Invested Capital)
are before transaction costs, taxes (approximately 21 to 27.5 per cent. of
U.S. sourced taxable income) and 20 per cent. carried interest on 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 carried interest
rate on the portfolio as a whole will be greater than 20 per cent. No further
carried interest will be payable until the $149.9 million of realised and
unrealised losses to date at 30 June 2025, are made whole with future gains.
Since REL has not yet met the appropriate Cost Benchmark at 30 June 2025,
$22.1 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 Represents closing price per share in USD for publicly traded shares
Permian Resources Corporation (NASDAQ:PR - 30-06-2025: $13.62 per share /
31-03-2025: $13.85 price per share); Solid Power, Inc. (NASDAQ:SLDP -
30-06-2025: $2.19 per share / 31-03-2025: $1.05 price per share); and Whitecap
Resources, Inc. (TSX: WCP - 30-06-2025: CAD 9.15 per share) / Veren Inc.
(NASDAQ/TSX: VRN - 31-03-2025: CAD 9.52 per share).
4 Amounts vary due to rounding
5 The unrealised value of Rock Oil investment is made up of funds held in
escrow from the sale of rights to mineral acres
6 Midstream investment
7 Credit investment
8 Withdrawn commitments and investment write-offs consist of Origo ($9
million) and CanEra III ($1 million), and impairments consist of Liberty II
($142 million), Fieldwood ($80 million), Eagle II ($62 million), Castex 2005
($48 million), Tritium ($25 million), T-Rex ($21 million), Enviva ($21
million) Anuvia Plant Nutrients ($20 million), FreeWire ($14 million), Our
Next Energy ($12 million), Hyzon ($10 million) and Ionic I & II ($3
million)
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