REG - Riverstone Energy Ld - Sale of Hammerhead to Crescent Point

Riverstone EnergyAnnouncement

07/11/2023 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:20231107:nRSG5663Sa&default-theme=true

RNS Number : 5663S  Riverstone Energy Limited  07 November 2023

LEI: 213800HAZOW1AWRSZR47

This announcement contains inside information

7 November 2023

Riverstone Energy Limited

REL Portfolio Company Hammerhead Announces Sale of Company to Crescent Point

Riverstone Energy Limited ("REL") is pleased to announce that Hammerhead
Energy Inc. ("Hammerhead") has announced today the sale of Hammerhead to
Crescent Point Energy Corp. ("Crescent Point"), a Calgary based energy
company, for an enterprise value of C$2.55 billion, or C$21.00 per share
(approximately US$15.26 per share based on a ~C$1.38 CAD/USD f/x rate). Each
Hammerhead share will be exchanged for (i) C$15.50 (approximately US$11.26)
per share in cash consideration and (ii) C$5.50 (approximately US$4.00) per
share in Crescent Point common shares.

The transaction is subject to customary closing conditions and completion is
anticipated to take place in late December 2023.

REL invested in Hammerhead, alongside Riverstone Global Energy and Power Fund
V, L.P. ("Fund V").  REL holds approximately 15.5 million shares today, which
represents an approximate 17% interest in Hammerhead, at a 0.71x Gross MOIC as
of 30 September 2023, representing a carrying value of US$209 million against
total invested capital of US$295 million. At the agreed transaction price,
REL's interest in Hammerhead is valued at US$260 million, or 0.88x Gross MOIC
inclusive of prior distributions. Total proceeds to REL will consist of US$198
million of realised cash, inclusive of US$23 million of prior distributions,
and US$62 million from 8 million shares of Crescent Point common equity. This
valuation represents a 24% uplift to the Gross MOIC as of 30 September 2023,
which was based on US$11.93 per Hammerhead share on the NASDAQ.

This transaction represents the culmination of months of discussion and
negotiation with several potential acquirors of Hammerhead, ultimately
resulting in an offer by Crescent Point that was viewed as extremely
attractive based on (i) headline valuation, (ii) amount of cash consideration,
and (iii) ownership of a highly liquid minority stock position.  Crescent
Point is a C$9 billion upstream company with 2023 production of approximately
150,000 boe/d and forecasted 2023 EBITDA of C$2.4 billion across assets in the
Montney and Duvernay Trends and Saskatchewan. REL's ownership in the pro forma
company will be approximately 1%.

As of 30 September 2023, REL's published cash balance was US$127 million.
Following the expected completion of the Hammerhead transaction in late
December 2023, approximately 43% of REL's net asset value is expected to
consist of cash. REL is currently exploring the most efficient means of
returning its excess capital to shareholders (while also taking into account
the anticipated on-going requirements of its other portfolio companies) and
will make a further announcement in due course.

 

 

About Hammerhead:

Hammerhead is a Calgary, Canada-based energy company, with assets and
operations in Alberta targeting the Montney formation. Hammerhead Resources
Inc., the predecessor entity to Hammerhead Resources ULC, a wholly owned
subsidiary of Hammerhead, was formed in 2009.

For further details, see www.hhres.com

About Riverstone Energy Limited:

REL is a closed-ended investment company which invests in the energy industry
that has since 2020 been exclusively focussed on pursuing and has committed
US$211 million to a global strategy across decarbonisation sectors presented
by Riverstone's investment platform.  REL's ordinary shares are listed on the
London Stock Exchange, trading under the symbol RSE.  REL currently has 15
active investments spanning decarbonisation, oil and gas, renewable energy and
power in the Continental U.S., Western Canada, Europe and Australia.

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:

Josh Prentice

+44 20 3206 6300

J.P. Morgan Cazenove - Joint Corporate Broker

William Simmonds

Jeremie Birnbaum

+44 (0) 203 493 8000

Deutsche Numis - Joint Corporate Broker

Hugh Jonathan

Matt Goss

+44(0) 20 7260 1000

 

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  PFUDXBDBDUGDGXL