REG - Riverstone Energy Ld - Results for the half year ended 30 June 2024
21/08/2024 07:00
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RNS Number : 1696B Riverstone Energy Limited 21 August 2024
LEI: 213800HAZOW1AWRSZR47
Riverstone Energy Limited
Results for the half year ended 30 June 2024
London, UK (21 August 2024) - Riverstone Energy Limited ("REL" or the
"Company") announces its Half Year Results from 1 January 2024 to 30 June 2024
(the "Period").
Summary Performance
30 June 2024
NAV $459 million 1 (#_edn1) (£363 million) 2 (#_edn2)
NAV per share $16.91 / £13.37(2)
Loss for Period ended ($15.9 million)
Basic loss per share for Period ended (46.22 cents)
Total liquidity (cash and cash equivalents & public portfolio) $336 million (£266 million)(2)
Market capitalisation $276 million (£218 million)(2)
Share price $10.17 / £8.04(2)
Highlights
§ As of 30 June 2024, REL had a NAV per share of $16.91 (£13.37),
representing an increase in USD and GBP of 6 and 7 per cent., respectively,
compared to the 31 December 2023 NAV.
§ Total net realisations and distributions during the Period of $5.3 million:
Permian Resources ($3.5 million) and Rock Oil ($1.8 million)
§ REL ended the Period with a cash balance of $94 million and remaining
potential unfunded commitments of $6 million 3 (#_edn3) .
§ Since the initial announcement of the Share Buyback Programme on 1 May
2020, the Company has bought back a total of 34,518,746 ordinary shares at an
average price of approximately £4.19 per ordinary share, which has
contributed to the share price increase of ~265 per cent. from £2.20 to
£8.04 over the period to 30 June 2024.
2024 Tender Offer and Share Buyback Programme
On 28 March 2024, Riverstone Energy Limited acquired and
cancelled 15,047,619 of the Company's ordinary shares at the Tender Price
of £10.50 per Share, pursuant to the Tender Offer announced on 23 February
2024 for a total price of £158,000,000 ($198,556,380).
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 repurchases as 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.
In addition, pursuant to changes to the Investment Management Agreement
announced on 3 January 2020, the Investment Manager agreed for the Company to
be required to repurchase shares or pay dividends equal to 20 per cent. of net
gains on dispositions. No further performance fees will be payable until the
$95.4 million of realised and unrealised investment losses to date as at 30
June 2024 are made whole with future investment gains. REL continues to seek
opportunities to purchase shares in the market at prices at or below the
prevailing NAV per share.
Investment Manager Outlook
§ REL's portfolio of conventional energy assets will continue to benefit from
cash flow generation, low to no leverage and supportive underlying commodity
prices. When appropriate, the Investment Manager will take advantage of
favorable market conditions to continue monetising its publicly listed
holdings. The pursuit of liquidity will remain tempered by a desire to
maximise returns for all shareholders.
§ While REL's energy transition and decarbonisation investments continue to
benefit from structural and regulatory tailwinds, funding growth-stage
companies, which seek scale, continues to face headwinds. This is
symptomatic of a higher rates environment and subdued risk appetite from
investors who have suffered from a paucity of distributions from their
existing portfolios. While the Investment Manager is confident that the
decarbonisation portfolio will perform well as a whole, the near term will be
critical for some of those companies.
Richard Horlick, Chair of the Board of Riverstone Energy Limited, commented:
"In the first half of 2024 we have seen an improvement in the performance of
our conventional energy investments being more than offset by the continued
headwinds facing the decarbonisation portfolio. We have also now returned to
shareholders, by means of a $199 million tender offer, the vast majority of
the proceeds realised from last year's sale of Hammerhead Energy Inc. This has
resulted in a reduction of over one third in the Company's ordinary share
count and an increase in NAV per share of 6 per cent. The Board remains
committed to driving shareholder value from our portfolio and is continuing to
execute its ongoing share buyback programme."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of Riverstone, added:
"The portfolio remains appropriately split between conventional energy assets
and decarbonisation plays, and we continue to look at how best we can deliver
growth and value from our investments. In conventional energy, particularly
oil, corporate activity has continued. There is also an increasing recognition
of the enduring role conventional energy sources will play in ensuring
continuity of supply while the world transitions to new energy sources. With
around two thirds of energy spend now going towards decarbonisation and
renewable energy it is clear that there remains a sizable long-term
opportunity in helping the world meet its net zero ambitions. We believe our
portfolio is well-positioned to capture opportunities in both areas."
- Ends -
Riverstone Energy Limited's 2024 Interim Report is available to view at:
www.RiverstoneREL.com (http://www.RiverstoneREL.com) .
2Q24 Quarterly Portfolio Valuation
Previously, on 13 August 2024, REL announced its quarterly portfolio summary
as of 30 June 2024, inclusive of updated quarterly unaudited fair market
valuations:
Current Portfolio - Conventional
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2024 30 Jun 2024
Capital ($mm) Capital ($mm) 4 (#_edn4) ($mm) 5 (#_edn5) Gross MOIC(5) Gross MOIC(5)
Permian Resources 6 (#_edn6) (Public) 268 268 228 163 391 1.51x 1.46x
Onyx (Private) 66 60 121 64 185 3.20x 3.10x
Veren(6) (Public) 296 296 199 65 264 0.90x 0.89x
Total Current Portfolio - Conventional - Public 7 (#_edn7) $564 $564 $427 $228 $655 1.19x 1.16x
Total Current Portfolio - Conventional - Private(7) $66 $60 $121 $64 $185 3.20x 3.10x
Total Current Portfolio - Conventional - Public & Private(7) $630 $624 $548 $292 $840 1.38x 1.35x
Current Portfolio - Decarbonisation
Investment (Public/Private) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2024 30 Jun 2024
Capital ($mm) Capital ($mm)(4) ($mm)(5) Gross MOIC(5) Gross MOIC(5)
Infinitum 28 28 - 30 30 1.10x 1.10x
(Private)
GoodLeap (formerly Loanpal) (Private) 25 25 2 23 25 1.25x 1.00x
Solid Power(6) (Public) 48 48 - 12 12 0.31x 0.25x
Group14 (Private) 4 4 - 4 4 1.00x 1.00x
Tritium DCFC(6) 25 25 1 1 2 0.24x 0.10x
(Public)
Enviva(6) (Public) 22 22 0 1 1 0.05x 0.03x
Hyzon Motors(6) (Public) 10 10 - 1 1 0.07x 0.03x
T-REX Group (Private) 2118 21 - - - 0.00x 0.00x
Our Next Energy (Private) 13 13 - - - 0.00x 0.00x
Ionic I & II (Samsung Ventures) (Private) 3 3 - - - 0.00x 0.00x
Total Current Portfolio - Decarbonisation - Public(7) $105 $105 $1 $15 $16 0.57x 0.15x
Total Current Portfolio - Decarbonisation - Private(7) $93 $93 $2 $57 $59 0.71x 0.64x
Total Current Portfolio - Decarbonisation - Public & Private(7) $198 $198 $3 $72 $75 0.44x 0.38x
Total Current Portfolio - Conventional & Decarbonisation - Public & $827 $821 $551 $364 $915 1.16x 1.11x
Private(7)
Cash and Cash Equivalents $94
Total Liquidity (Cash and Cash Equivalents & Public Portfolio) $336
Total Market Capitalisation $276
Investment (Initial Investment Date) Gross Committed Capital ($mm) Invested Gross Realised Gross Unrealised Value Gross Realised Capital & Unrealised Value ($mm) 31 Mar 2024 30 Jun 2024
Capital ($mm) Capital ($mm)(4) ($mm)(5) Gross MOIC(5) Gross MOIC(5)
Rock Oil 8 (#_edn8) (12 Mar 2014) 114 114 236 3 239 2.08x 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 9 (#_edn9) (17 Apr 2015) 40 40 88 - 88 2.20x 2.20x
RCO 10 (#_edn10) (2 Feb 80 80 80 - 80 0.99x 0.99x
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(7) $819 $819 $1,002 $3 $1,006 1.23x 1.23x
Withdrawn Commitments and Investment Write-Offs 11 (#_edn11) 384 384 9 - 9 0.02x 0.02x
Total Investments(7) $2,030 $2,024 $1,562 $367 $1,929 0.97x 0.95x
Total Investments & Cash and Cash Equivalents $461
Unaudited Net Asset Value $459
Total Shares Repurchased to-date 34,518,746 at average price per share of £4.19 ($5.35)
Current Shares Outstanding 27,148,170
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 10 active investments spanning decarbonisation, oil
and gas, renewable energy and power in the Continental U.S., Western Canada,
Europe and Australia.
REL shareholders should note that the Company's investment in Crescent Point
Energy Corp. was rebranded as Veren Inc. on 10 May 2024 and now trades on the
TSX and NYSE under its new ticker symbol "VRN".
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
+44 (0) 20 3206 6300
Ocorian Administration (Guernsey) Limited -
Company Secretary:
Adam Spurr
+44 (0) 1481 742742
Deutsche Numis - Corporate Broker:
Hugh Jonathan
Matt Goss
+44 (0) 20 7260 1000
Note:
The Investment Manager is charged with proposing the valuation of the assets
held by REL through the Riverstone Energy Investment Partnership, LP
("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 2024 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 (#_ednref1) Since REL has not yet met the appropriate Cost Benchmark at 30
June 2024, $35.4 million in Performance Allocation that would have been due
under the prior agreement were not accrued, and thereby would have reduced the
NAV on a pro forma basis to $431 million or $15.61 per share
2 (#_ednref2) GBP:USD FX rate of 1.2647 as of 30 June 2024
3 (#_ednref3) The expected funding of the remaining unfunded commitments at
30 June 2024 are $nil and $nil for the remainder of 2024. The residual amounts
are to be funded as needed in 2025 and later years.
4 (#_ednref4) 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.
5 (#_ednref5) 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.
6 (#_ednref6) 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).
7 (#_ednref7) Amounts vary due to rounding
8 (#_ednref8) The unrealised value of the Rock Oil investment consists of
sale proceeds from the sale of the rights to mineral acres.
9 (#_ednref9) Midstream investment
10 (#_ednref10) Credit investment
11 (#_ednref11) 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)
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