Riverstone Energy Limited 2Q18 Quarterly Portfolio Valuations (2336W)

TIDMRSE

RNS Number : 2336W

Riverstone Energy Limited

31 July 2018

- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -

Riverstone Energy Limited Announces 2Q18 Quarterly Portfolio Valuations

London, UK (31 July 2018) - Riverstone Energy Limited ("REL") announces its quarterly portfolio summary as of 30 June 2018, inclusive of updated quarterly unaudited fair market valuations:

Current Portfolio

 
                                                                                      Gross 
                                   Gross                    Gross       Gross        Realised      30 Jun    31 Mar 
                                 Committed     Invested    Realised   Unrealised     Capital        2018      2018 
                                  Capital       Capital    Capital      Value      & Unrealised     Gross     Gross 
                 Target Basin      ($mm)         ($mm)     ($mm)[1]     ($mm)      Value ($mm)     MOIC[2]   MOIC(2) 
  Hammerhead      Deep Basin 
   Resources        (Canada)        $307         $295        $23         $508          $531         1.8x      1.9x 
                    Permian 
  Centennial         (U.S.)         268          268         172         278           450          1.7x      1.7x 
                   Deepwater 
 ILX III           GoM (U.S.)        200         131          -           183           183         1.4x      1.2x 
                  Bakken, PRB 
  Liberty II         (U.S.)         142          142          -          177           177          1.3x      1.3x 
                  Eagle Ford 
                   & Permian 
  Carrier II         (U.S.)         133          110          -          131           131          1.2x      1.2x 
  RCO[3]         North America      125           87         82           4             86          1.0x      1.1x 
                    Western 
  CNOR               Canada          90           85          -           85            85          1.0x      1.0x 
  Meritage          Western 
   III[4]            Canada          67           39          -           77            77          2.0x      1.8x 
                   GoM Shelf 
  Fieldwood          (U.S.)          82           81          3           65            68          0.8x      0.2x 
                  Gulf Coast 
                     Region 
  Castex 2014        (U.S.)          67           44          -           44            44          1.0x      1.0x 
                 Mid-Continent 
  Eagle II           (U.S.)          67           62          -           37            37          0.6x      0.8x 
  Sierra            Mexico           38           14          -           33            33          2.4x      2.4x 
  Total Current Portfolio[5]       $1,585       $1,356      $280        $1,623        $1,903        1.4x      1.4x 
------------------------------  ------------  ---------  ----------  ------------  ------------  ---------  -------- 
 

Realisations

 
                                                                                      Gross 
                                  Gross                    Gross       Gross        Realised       30 Jun    31 Mar 
                                Committed     Invested    Realised   Unrealised      Capital        2018      2018 
                                 Capital       Capital    Capital      Value      & Unrealised      Gross     Gross 
                Target Basin      ($mm)         ($mm)     ($mm)(1)     ($mm)       Value ($mm)     MOIC(2)   MOIC(2) 
                   Permian 
  Rock Oil[6]       (U.S.)         114          114         229          11            240          2.1x      2.1x 
  Three Rivers     Permian 
   III              (U.S.)          94           94         196          9             205          2.2x      2.2x 
  Total Realisations(5)            $209         $209       $425         $19           $444          2.1x      2.1x 
-----------------------------  ------------  ---------  ----------  ------------  -------------  ---------  -------- 
  Withdrawn Commitments 
   and Impairments[7]               59           59          1           -              1           0.0x      0.0x 
-----------------------------  ------------  ---------  ----------  ------------  -------------  ---------  -------- 
  Total Investments(5)            $1,853       $1,624      $706        $1,642        $2,348         1.4x      1.4x 
-----------------------------  ------------  ---------  ----------  ------------  -------------  ---------  -------- 
  Cash and Cash Equivalents                                             $236 
-----------------------------  ------------  ---------  ----------  ------------  -------------  ---------  -------- 
  Total Investments & Cash 
   and Cash Equivalents(5)                                             $1,878 
-----------------------------  ------------  ---------  ----------  ------------  -------------  ---------  -------- 
 

About Riverstone Energy Limited

REL is a closed-ended investment company that invests exclusively in the global energy industry, with a particular focus on the exploration & production and midstream sectors. REL aims to capitalise on the opportunities presented by Riverstone's energy investment platform. REL is a member of the FTSE 250 and its ordinary shares are listed on the London Stock Exchange, trading under the symbol RSE. REL has 12 active investments spanning conventional and unconventional oil and gas activities in the Continental U.S., Western Canada, Gulf of Mexico, Mexico and credit.

For further details, see www.RiverstoneREL.com

Neither the contents of Riverstone Energy Limited's website nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.

Media Contacts

For Riverstone Energy Limited:

 
Brian Potskowski 
 Fraser Johnston-Donne 
 [phone] 
 

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 2018 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 valuation committee as part of the valuation process.

[1] Realised capital is total gross proceeds realised on invested capital. Of the $706 million of capital realised to date, $410 million is the return of the cost basis, and the remainder is profit.

[2] Gross MOIC is Multiple of Invested Capital. Gross Unrealised Value and Gross MOIC are before transaction costs, taxes (approximately 21 to 27.5 per cent. of U.S. sourced taxable income) and 20 per cent. carried interest on gross profits (without a hurdle rate). Since there is no netting of losses against gains, the effective carried interest rate on the portfolio as a whole will be greater than 20 per cent. In addition, there is a management fee of 1.5 per cent. of net assets per annum and other expenses. Given these costs, fees and expenses are in aggregate expected to be considerable, Total Net Value and Net MOIC will be materially less than Gross Unrealised Value and Gross MOIC. Local taxes, primarily on U.S. assets, may apply at the jurisdictional level on profits arising in operating entity investments. Further withholding taxes may apply on distributions from such operating entity investments. In the normal course of business, REL may form wholly-owned subsidiaries, to be treated as C Corporations for US tax purposes. The C Corporations serve to protect REL's public investors from incurring U.S. effectively connected income. The C Corporations file U.S. corporate tax returns with the U.S. Internal Revenue Service and pay U.S. corporate taxes on its taxable income.

[3] Credit investment.

[4] Midstream investment.

[5] Amounts may vary due to rounding.

[6] The unrealised value of the Rock Oil investment consists of rights to mineral acres.

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

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July 31, 2018 02:02 ET (06:02 GMT)