Final results for the half year ended 30 June 2016

RNS Number : 8728G

Riverstone Energy Limited

11 August 2016

 

- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -

Riverstone Energy Limited

Final results for the half year ended 30 June 2016

London, 11 August 2016: Riverstone Energy Limited ("REL" or the "Company") announces its Half Year Results for the 6-month period from 1 January 2016 to 30 June 2016.

Summary performance

30 June 2016
NAV	$1,372 million
NAV per share	$16.24 / £12.251
Profit/(loss) during period	$25.2 million
Basic profit/(loss) per share during period	29.86 cents
Market Capitalisation	£756 million1 / $1,006 million
Share price	£8.951 / $11.91

Highlights

§ As of 30 June 2016, REL had a NAV per share of $16.24, representing an increase of 29 cents versus NAV per share at 31 December 2015. On a Sterling basis, the NAV per share increased by £1.42 or 13.1% compared with the end of 2015.

§ REL continues to execute on its strategy and now has a strong portfolio of sixteen investments in the Gulf of Mexico, Continental U.S., Canada, Mexico, and the Norwegian and U.K. continental shelves, covering both onshore and offshore as well as conventional and unconventional exploration & production, midstream and credit.

§ The Company invested a total of $203 million during the period, bringing total capital invested as of 30 June 2016 to $1,048 million, or 77 per cent of total capital available².

§ During the first half of 2016, REL made two additional commitments to existing companies, totaling $142 million, bringing total commitments as of 30 June 2016 to $1,722 million, or 127 per cent of total capital available².

Commitments and Investments

§ Committed an additional $100 million to Carrier Energy Partners II, LLC and $42 million to Liberty Resources II, LLC.

§ Invested $73 million in Carrier Energy Partners II, LLC

§ Invested $45 million in Three Rivers Natural Resources Holdings III, LLC

§ Invested $18 million in ILX Holdings III, LLC

§ Invested $17 million in Liberty Resources II, LLC

§ Invested $17 million in Rock Oil Holdings, LLC

§ Invested $11 million in Riverstone Credit Opportunities, L.P.

§ Invested $6 million in Castex Energy 2014, LLC

§ Invested $7 million in Meritage Midstream Services III, L.P.

§ Invested $4 million in Fieldwood Energy, LLC

§ Invested $3 million in Eagle Energy Exploration, LLC

§ Invested $1 million in Origo Exploration AS

Manager Outlook

§ The Investment Manager continues to believe that energy producers in low-cost basins with an oil-weighting will continue to outperform.

§ Industry fundamentals remain supportive given limited capital availability and reduced levels of North American drilling activity.

§ The REL portfolio is well positioned to reward investors as the market recovers.

§ On 8 August 2016, REL announced its first exit transaction, which is expected to generate a 2.1x Gross MOIC³ and 78 per cent. Gross IRR⁴.

Richard Hayden, Chairman of Riverstone Energy Limited, commented:

"REL continues to benefit from its disciplined build-up oriented strategy, with 16 investment platforms now actively pursuing proprietary opportunities. This is evidenced by today's results, which show ongoing NAV growth, and the Company's recent announcement of a successful exit at Rock Oil for over twice our cost base in spite of ongoing oil price volatility."

David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of Riverstone, added:

"REL is now 77% invested and has deployed the majority of its capital since the oil price collapse in 2014. This has resulted in a Portfolio which is concentrated in premier, low-cost areas of hydrocarbon production, such as the Eagle Ford, Permian and Western Canada. Furthermore, the Portfolio continued to make strong operational progress in the past three months, with Meritage III bringing its midstream infrastructure online and drilling successes by several of our teams. As always, we continue to work closely with portfolio companies to manage risk, capitalise on new opportunities and position our investments for success in a variety of commodity price environments."

- Ends -

Riverstone Energy Limited's 2016 Interim Report is available to view at: www.RiverstoneREL.com.

The Investment Manager will host a conference call with investors at 12:00pm GMT today. Dial-in details are as follows:

Dial-in (UK): 0800 028 8438

Dial-in (Intl.): [phone]

Conference ID: 51690464

2Q16 Quarterly Portfolio Valuation

Previously, on 21 July 2016, REL announced its quarterly portfolio summary as of 30 June 2016, inclusive of updated quarterly unaudited fair market valuations:

			Target Basin				Subsector		Committed Capital  ($mm)		Invested Capital ($mm)	Realised Capital ($mm)	Gross Realised & Unrealised Value ($mm)5	Gross MOIC5
CIOC			Deep Basin (Canada)				E&P		$232		$232	$1	$353	1.5x
Rock Oil			Permian (U.S.)				E&P		150		114	-	152	1.3x
Carrier II			Permian (U.S.)				E&P		133		104	-	115	1.1x
Liberty II			Bakken, PRB (U.S.)				E&P		142		110	-	100	0.9x
CNOR			Western Canada				E&P		90		73	-	73	1.0x
Three Rivers III			Permian (U.S.)				E&P		167		56	-	62	1.1x
RCO			North America				Credit		125		87	40	92	1.1x
ILX III			Deepwater GoM (U.S.)				E&P		200		47	-	47	1.0x
Fieldwood			GoM Shelf (U.S.)				E&P		82		58	1	58	1.0x
Eagle II			Mid-Continent (U.S.)				E&P		50		47	-	37	0.8x
Castex 2014			Gulf Coast Region (U.S.)				E&P		67		36	-	36	1.0x
Meritage III			Western Canada				Midstream		33		24	-	26	1.1x
Castex 2005			Gulf Coast Region (U.S.)				E&P		50		48	-	24	0.5x
Origo			North Sea (Norway, U.K.)				E&P		67		7	-	7	1.0x
Sierra			Mexico				E&P		75		3	-	3	1.0x
CanEra III			Western Canada				E&P		60		1	-	1	1.0x
	Total6							$1,722			$1,048	$41	$1,186	1.1x
	Percentage of REL capital available7									127%	77%

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.  To date, REL has made 16 investments spanning conventional and unconventional oil and gas activities in the Gulf of Mexico, Continental U.S., Western Canada, the U.K. North Sea, the Norwegian Sea, Mexico and credit.

For further details, see www.RiverstoneREL.com

Neither the contents of REL'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:

Alfredo Marti Brian Potskowski [phone]

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¹ GBP:USD Fx rate of 1.326 as of 30 June 2016.

² Based on total capital raised of $1,320 million and $41 million of realisations.

³ Gross MOIC is Multiple of Invested Capital before transaction costs, taxes, carried interest on gross profits, management fees and other expenses. Local taxes 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. Regarding this exit transaction, the Gross Multiple of 2.1x is reduced to a Net MOIC of 1.6x after taxes and carried interest on gross profit.

⁴ Gross IRR means an aggregate, annual, compound, gross internal rate of return on investments. Gross IRR does not reflect expenses to be borne by the relevant investment vehicle or its investors including, without limitation, carried interest on gross profits, management fees, taxes and organisational, partnership or transaction expenses. Regarding this exit transaction, the Gross IRR of 78 per cent. is reduced to a Net IRR of 43 per cent. after taxes and carried interest on gross profit.

⁵ Gross MOIC is Multiple of Invested Capital. Gross Unrealised Value and Gross MOIC are before transaction costs, taxes, carried interest on gross profits, management fees and other expenses. Given these costs 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 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.

⁶ Amounts may vary due to rounding.

⁷ Based on total capital raised of $1,320 million and $41 million of realisations.

 

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