Riverstone Energy Limited 4Q18 Quarterly Portfolio Valuations (6028O)

TIDMRSE

RNS Number : 6028O

Riverstone Energy Limited

31 January 2019

- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -

Riverstone Energy Limited Announces 4Q18 Quarterly Portfolio Valuations

London, UK (31 January 2019) - Riverstone Energy Limited ("REL") announces its quarterly portfolio summary as of 31 December 2018, inclusive of updated quarterly unaudited fair market valuations:

Current Portfolio

 
                                                                                              Gross 
                                                                                             Realised 
                                                                                             Capital      31 
                                                 Gross                 Gross      Gross         &         Dec   30 Sep 
       Investment                              Committed   Invested   Realised  Unrealised  Unrealised   2018    2018 
   (Initial Investment                          Capital     Capital   Capital     Value       Value      Gross   Gross 
          Date)                Target Basin      ($mm)       ($mm)    ($mm)[1]    ($mm)       ($mm)      MOIC2  MOIC(2) 
  Hammerhead 
   Resources                     Deep Basin 
   (27 Mar 2014)                  (Canada)       $307        $295       $23        $416        $439      1.5x    1.8x 
  Centennial 
   (6 Jul 2016)                Permian (U.S.)     268        268        172        167         339       1.3x    1.9x 
 ILX III                          Deepwater 
  (8 Oct 2015)                    GoM (U.S.)      200        151         -          197         197      1.3x     1.4x 
  Liberty II                    Bakken, PRB 
   (30 Jan 2014)                   (U.S.)         142        142         -         156         156       1.1x    1.3x 
                                 Permian & 
  Carrier II                     Eagle Ford 
   (22 May 2015)                   (U.S.)         133        110         16         94         110       1.0x    1.2x 
  RCO3                         North America      87          87         83             10      93       1.1x    1.1x 
    (2 Feb 2015) 
  Meritage III4               Western Canada      67          40         -          80          80       2.0x    2.0x 
    (17 Apr 2015) 
  CNOR 
   (29 Aug 2014)               Western Canada     90          90         -          72          72       0.8x    1.0x 
  Fieldwood                      GoM Shelf 
   (17 Mar 2014)                   (U.S.)         82          81         3          55          58       0.7x    0.8x 
                                Gulf Coast 
  Castex 2014                  Region (U.S.)      67          47         -          47          47       1.0x    1.0x 
    (3 Sept 2014) 
  Sierra 
   (24 Sept 
   2014)                           Mexico         38          18         -          37          37       2.0x    2.2x 
  Eagle II                     Mid-Continent 
   (18 Dec 2013)                   (U.S.)         67          62         -          19          19       0.3x    0.5x 
  Total Current Portfolio5                      $1,547      $1,391      $297      $1,349      $1,646     1.2x    1.4x 
---------------------------------------------  ---------  ---------  ---------  ----------  ----------  ------  ------- 
 

Realisations

 
                                                                                       Gross 
                                                                                      Realised 
                                                                                      Capital 
                                        Gross                   Gross      Gross         &         31 Dec    30 Sep 
       Investment                     Committed    Invested    Realised  Unrealised  Unrealised     2018      2018 
   (Initial Investment     Target      Capital      Capital    Capital     Value       Value        Gross     Gross 
          Date)             Basin       ($mm)        ($mm)     ($mm)(1)    ($mm)       ($mm)       MOIC(2)   MOIC(2) 
  Rock Oil6 (12            Permian 
   Mar 2014)                (U.S.)       114         114         230         9          239         2.1x      2.1x 
  Three Rivers 
   III (7 Apr              Permian 
   2015)                    (U.S.)        94          94         200         3          203         2.2x      2.1x 
  Total Realisations(5)                  $209        $209       $430        $12         $442        2.1x      2.1x 
------------------------------------  ----------  ---------  ----------  ----------  ----------  ---------  -------- 
  Withdrawn Commitments 
   and Impairments7                       59          59          1          -           1          0.0x      0.0x 
------------------------------------  ----------  ---------  ----------  ----------  ----------  ---------  -------- 
  Total Investments(5)                  $1,815      $1,659      $729       $1,360      $2,089       1.3x      1.5x 
------------------------------------  ----------  ---------  ----------  ----------  ----------  ---------  -------- 
  Cash and Cash Equivalents                                                 $137 
------------------------------------  ----------  ---------  ----------  ----------  ----------  ---------  -------- 
  Total Investments & Cash 
   and Cash Equivalents(5)                                                 $1,497 
------------------------------------  ----------  ---------  ----------  ----------  ----------  ---------  -------- 
 

Results and Investor Call

REL will release its Annual Report for the 12 month period from 1 January 2018 to 31 December 2018 on 27 February 2019. The Report will include the NAV of REL as well as updates on the portfolio.

Representatives of Riverstone International Limited will host an investor conference call in order to review developments in the Company's investment portfolio.

The conference call will take place at 1200 GMT / 1300 CET / 0700 ET on 27 February 2019 and can be accessed by dialing 0800 028 8438 (UK) or [phone] (International) (Conference ID: 5834899).

A playback facility will be available from 1500 GMT on the same day. This facility can be accessed for the following two weeks by dialing 0800 917 2646 (UK) or [phone] (International) and using conference ID 5834899. A recording of the investor call will also be available on REL's website within several days after the call.

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:

 
Natasha Fowlie 
 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 31 December 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 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.

[1] Gross realised capital is total gross proceeds realised on invested capital. Of the $729 million of capital realised to date, $427 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 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 (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 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 consist of Origo ($9 million) and CanEra III ($1 million), and impairments consist of Castex 2005 ($48 million).

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 [e-mail] or visit www.rns.com.

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January 31, 2019 02:01 ET (07:01 GMT)