TIDMRSE
RNS Number : 1704U
Riverstone Energy Limited
29 July 2022
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION -
Riverstone Energy Limited Announces 2Q22 Quarterly Portfolio
Valuations & NAV
London, UK (29 July 2022) - Riverstone Energy Limited ("REL" or
the "Company") announces its quarterly portfolio summary as of 30
June 2022, inclusive of updated quarterly unaudited fair market
valuations.
Current Portfolio - Conventional
Gross
Gross Gross Realised 31 Mar
Gross Invested Realised Unrealised Capital & 2022 30 June
Investment Committed Capital Capital Value Unrealised Gross 2022
(Public/Private) Capital ($mm) ($mm) ($mm) ([1]) ($mm) ([2]) Value ($mm) MOIC(2) Gross MOIC(2)
------------------- ------------- --------- ------------- ------------ ------------ ------------- -------------
Centennial
([3]) (Public) 268 268 194 75 269 1.10x 1.00x
Hammerhead
Resources
(Private) 307 295 23 133 156 0.50x 0.53x
Onyx (Private) 66 60 - 149 149 2.50x 2.50x
Carrier
II (Private) 133 110 29 48 77 0.70x 0.70x
Total Current
Portfolio
- Conventional
- Public
([4]) $268 $268 $ 194 $75 $269 1.10x 1.00x
------------------- ------------- --------- ------------- ------------ ------------ ------------- -------------
Total Current
Portfolio
- Conventional
- Private(4) $507 $465 $ 52 $330 $382 0.80x 0.82x
------------------- ------------- --------- ------------- ------------ ------------ ------------- -------------
Current Portfolio - Decarbonisation
Gross Gross Gross Realised
Committed Invested Realised Gross Unrealised Capital & 31 Mar 30 Jun
Investment Capital Capital Capital Value Unrealised 2022 Gross 2022 Gross
(Public/Private) ($mm) ($mm) ($mm)(1) ($mm)(2) Value ($mm) MOIC(2) MOIC(2)
GoodLeap (formerly
Loanpal) (Private) 25 25 2 67 69 2.75x 2.75x
Solid Power(3)
(Public) 48 48 - 39 39 1.29x 0.82x
Enviva(3) (Public) 22 18 - 37 37 2.79x 2.03x
FreeWire (Private) 10 10 - 20 20 2.17x 2.00x
Anuvia Plant
Nutrients
(Private) 20 20 - 20 20 1.00x 1.00x
T-REX Group
(Private) 18 18 - 18 18 1.00x 1.00x
Infinitum
(Private) 18 18 - 18 18 1.00x 1.00x
Tritium DCFC(3) 16 16 - 17 17 1.78x 1.07x
(Public)
Group14 (Private) 4 4 - 4 4 n/a 1.00x
Hyzon Motors(3)
(Public) 10 10 - 3 3 0.64x 0.29x
Ionic I & II
(Samsung Ventures)
(Private) 3 3 - 3 3 1.00x 1.00x
DCRD(3,) ([5])
(Public) 1 1 - 1 1 1.00x 1.00x
Total Current
Portfolio -
Decarbonisation
- Public(4) $96 $92 - $96 $96 1.59x 1.04x
--------------------- ---------- --------- ---------- ---------------- ---------------- ----------- -----------
Total Current
Portfolio -
Decarbonisation
- Private(4) $97 $97 $2 $149 $151 1.60x 1.56x
--------------------- ---------- --------- ---------- ---------------- ---------------- ----------- -----------
Cash and Cash Equivalents $72
--------------------------------- --------- ---------- ---------------- ---------------- ----------- -----------
Total Liquidity (Cash and Cash Equivalents
& Public Portfolio) $243
-------------------------------------------------------- ---------------- ---------------- ----------- -----------
Total Market Capitalisation $425
--------------------------------- --------- ---------- ---------------- ---------------- ----------- -----------
Realisations
Gross
Gross Gross Gross Realised
Investment Committed Invested Realised Unrealised Capital & 31 Mar 30 Jun
(Initial Investment Capital Capital Capital Value Unrealised 2022 Gross 2022
Date) ($mm) ($mm) ($mm)(1) ($mm)(2) Value ($mm) MOIC(2) Gross MOIC(2)
Rock Oil
([6]) (12
Mar 2014) 114 114 233 4 237 2.06x 2.07x
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 ([7])
(17 Apr 2015) 40 40 87 - 87 2.20x 2.20x
RCO ([8])
(2 Feb 2015) 80 80 80 - 80 0.99x 0.99x
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
(19 Feb 2019
) 18 18 22 - 22 1.22x 1.22x
Castex 2014 52 52 14 - 14 0.27x 0.27x
(3 Sep 2014)
---------------------- ------------ --------- ------------ ----------- ------------ ------------ -------------
Total
Realisations(4) $709 $709 $932 $4 $936 1.32x 1.32x
---------------------- ------------ --------- ------------ ----------- ------------ ------------ -------------
Withdrawn
Commitments
and Impairments
([9]) 350 350 9 - 9 0.02x 0.02x
---------------------- ------------ --------- ------------ ----------- ------------ ------------ -------------
Total Investments(4) $2,026 $1,980 $1,188 $654 $1,842 0.97x 0.93x
---------------------- ------------ --------- ------------ ----------- ------------ ------------ -------------
Total Investments & Cash and Cash Equivalents $726
------------------------------------------------------------- ----------- ------------ ------------ -------------
Draft Unaudited Net Asset Value ([10]) $719
------------------------------------------------------------- ----------- ------------ ------------ -------------
Total Shares Repurchased to-date 27,182,444 at average price per share of
GBP3.70 ($4.82)
------------------------------------------------------------- ----------- -----------------------------------------
Current Shares Outstanding 52,714,287
------------------------------------------------------------- ----------- ------------ ------------ -------------
Geopolitical Dynamics and Commodity Market Volatility
Global commodity price volatility and pervasive tightness has
created distinct winners and losers in the market. We would be
remiss not to acknowledge that the benefit dispersed over the last
six months arrives alongside incredible human toll, whether
Ukrainian lives and socioeconomic progress lost to war and the
effects thereof. One small, but not insignificant silver lining is
an increase in momentum toward long-term decarbonisation. For
example, the influx of capital available to the beneficiaries of
market volatility-namely oil and gas producers-may for the first
time facilitate major consolidation among traditional and renewable
power producers. The major oil producers, including Shell, Equinor,
and TotalEnergies have recently completed cost-benefit analyses of
prospective renewable utility buy-out acquisitions to facilitate
decarbonisation. This would be a divergence and acceleration from
thus-far incremental build-out of renewable generation to satisfy
net-zero pledges, and opportunistic capital expenditure for
hydrocarbon E&P.
In the meantime, Europe will be reliant on legacy coal-fired
generation to balance intermittency on the grid in the context of
repudiation of Russian gas. We continue to feel the effects of the
bullwhip, as energy commodity price volatility persists into the
second half of the year. Whilst WTI and Brent prices are up 42 per
cent. and 45 per cent. since the beginning of the year, they
increased by only 7.2 per cent. and 6.4 per cent. over the quarter.
While some deceleration in price increases in oil may signify an
absorption of war-driven energy supply adjustments, oil prices have
reached heights not seen since 2008. Gasoline prices have risen
commensurately, but market conditions for natural gas are worse
than when systematic market failure threw the globe into
recession.
While current geopolitical tensions persist and the global
economy continues to recover from pandemic conditions, we expect
our energy trilemma: security, affordability, and the need to
decarbonise to mitigate the worst effects of climate change and
drive global market dynamics.
Quarterly Performance Commentary
REL's legacy portfolio investments have maintained their
valuations quarter over quarter due to volatility in global energy
prices. The market dynamics of particular benefit to the portfolio
include the increase in liquefied natural gas exports powering the
UK's net-exporter role in the European power landscape. They also
include European mandates to maintain or increase generation from
coal-fired assets in efforts to arrest runaway power prices on the
continent. Macroeconomic tailwinds driving the constructive
commodity environment have dovetailed with strong operational
results from several of REL's legacy investments. Centennial
Resource Development generated record free cash flows in the second
quarter of the year and now represents half of the largest
pure-play E&P company in the Delaware Basin post its business
combination with Colgate. Legacy production and generation assets
still predominate REL's gross unrealised investment value (62 per
cent. at 30 June 2022). Continued debt paydown and prudent hedging
programs by our upstream oil and gas companies have created a
resilient and substantially de-risked portfolio of high-quality
assets.
In the second quarter of the year, each of REL's privately held,
conventional investments maintained or improved their marks.
Investments with exposure to public markets were predominately
marked down. This included REL's investments in Hyzon, Tritium,
Enviva, and Solid Power, and is consistent with the market's
overall performance-the S&P 500 is down 21 per cent.
year-to-date, and 16 per cent. over the quarter. REL's investments
in private decarbonisation companies largely maintained their
value.
Over the quarter, REL invested $4 million in Group14, which is
described below. Continued liquidity management at the legacy
portfolio coupled with persistent, incremental efforts to
decarbonise has continued to position REL's portfolio to benefit
from the energy transition and decarbonisation movements.
Further information on REL's five largest positions, which
account for 72 per cent. of the portfolio's gross unrealised value
is set forth below:
Onyx
The Gross MOIC for Onyx remained flat from the first quarter at
2.50x. Power markets in Europe, while highly volatile, remain
elevated due to the Russian invasion of Ukraine and associated
concerns over gas supply. In addition to prioritising plant
availability, the management team continues to work on several
organic growth initiatives, including the implementation of
operational performance improvements and the development of
potential capital projects related to the energy transition .
Hammerhead
The Gross MOIC for Hammerhead increased from 0.50x to 0.53x
during the second quarter. Given the strong macro environment,
Hammerhead plans to continue ramping development in the second half
of 2022. Hammerhead has hedged approximately 52 per cent. of
forecasted 2022 crude oil production at a weighted average price of
$76.55 per barrel, 12 per cent. of forecasted 2023 crude oil
production at a weighted average price of $71.84 per barrel, 59 per
cent. of forecasted 2022 natural gas production at a weighted
average price of $3.41 per MMBtu, and 10 per cent. of forecasted
2023 natural gas production at a weighted average price of $3.04
per MMBtu. As of 2Q 2022, Hammerhead was producing approximately
34,400 Boepd.
Centennial Resource Development
The Gross MOIC for Centennial was 1.00x at the end of the second
quarter. In Q2, Centennial announced that they had entered into an
agreement to combine with Colgate Energy for a total consideration
of 269.3 million shares of Centennial stock, $525 million of cash
and the assumption of $1.4 billion of Colgate's outstanding net
debt. The company expects leverage at closing to be 1.0x. The
combined company will be the largest pure-play E&P company in
the Delaware Basin with approximately 180,000 net leasehold acres,
40,000 net royalty acres and total current production of 135,000
Boe/d.
From an operational standpoint, Centennial continues to see
strong results on the back of a highly constructive commodity
environment and strong capital efficiency. In Q1 2022, Centennial
generated record free cash flow of $89 million and reduced Net
Debt/LTM EBITDAX to 1.1x compared to 1.4x at YE 2021. The Company
expects leverage to fall to <1.0x by Q2 2022.
GoodLeap (formerly Loanpal)
The Gross MOIC for GoodLeap remained flat at 2.75x during the
second quarter. During the quarter, the company closed on its 13th
securitisation which was oversubscribed despite volatile markets.
Management continues to execute on its growth plans.
On 13 October 2021, GoodLeap announced a new investment round of
over $800 million, which will support the company's operational
improvements, technology innovation efforts, and expansion. This
funding round gives the company an implied post-money valuation of
$12 billion and informs our implied 2.75x valuation.
Carrier II
The Gross MOIC for Carrier II remained flat at 0.70x during the
second quarter. The company continues to operate prudently and
remains focused on using free cash flow for high commodity prices
to fund development and reduce outstanding indebtedness on the
company's term loan. Carrier II has hedged approximately 50 per
cent. of forecasted oil production during the remainder of 2022 at
a weighted average price of $57.40 per barrel WTI. As of 30 June
2022, the company was producing approximately 2,713 Boepd.
Other Investments
Anuvia
On 8 March 2022, REL invested $20 million into Anuvia Plant
Nutrients' $65.5 million Series D funding round. Anuvia, a
bio-based crop nutrition technology company, produces a
sustainable, organic fertiliser product that provides
delayed-release nutrient delivery better aligned with crop needs,
allowing for more efficient nutrient absorption in agriculture.
Anuvia's products improve soil health, reduce nutrient runoff, and
reduce reliance on carbon-intensive synthetic fertilisers. During
Q2 2022, the Company engaged McKinsey plant operations specialists
for on-site consulting to help the Company establish best practices
and identify root causes of production bottlenecks and potential
solutions to further enhance Anuvia's ability to ramp production
volumes.
Group14
In April 2022, REL invested $4 million into Group14
Technologies, Inc.'s $400 million Series C funding round. The
Series C round was led by Porsche AG, with participation from OMERS
Capital Markets, Decarbonization Partners, Vsquared Ventures, and
others. Group14 is a battery materials technology company founded
in 2015. The Company has developed a proprietary silicon-based
anode battery material to replace graphite in conventional
lithium-ion batteries.
LEI: 213800HAZOW1AWRSZR47
About Riverstone Energy Limited:
REL is a closed-ended investment company that has since 2020
been exclusively focussed on pursuing and has committed $171
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 has 19 active investments spanning decarbonisation,
oil and gas, renewable energy and power in the Continental U.S.,
Western Canada, Gulf of Mexico and Europe.
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:
Josh Prentice
+44 20 3206 6300
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 2022 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] Gross realised capital is total gross proceeds realised on
invested capital. Of the $1,188 million of capital realised to
date, $888 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 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 carried interest rate on the portfolio as a whole will be
greater than 20 per cent. No further carried interest will be
payable until the $138.4 million of realised and unrealised losses
to date at 30 June 2022 are made whole with future gains, so the
earned carried interest of $0.8 million at 30 June 2022 has been
deferred and will expire in October 2023 if the aforementioned
losses are not made whole. Since REL has not yet met the
appropriate Cost Benchmark at 30 June 2022, $34.1 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.
[3] Represents closing price per share in USD for publicly
traded shares of Centennial Resource Development, Inc. (NASDAQ:CDEV
- 30-06-2022: $5.98 per share / 31-03-2022: $8.07 price per share);
Enviva, Inc. (NYSE:EVA - 30-06-2022: $57.22 per share / 31-03-2022:
$79.15 price per share); Solid Power, Inc. (NASDAQ:SLDP -
30-06-2022: $5.38 per share / 31-03-2022: $8.67 price per share);
Hyzon Motors, Inc. (NASDAQ:HYZN - 30-06-2022: $2.94 per share /
31-03-2022: $6.39 price per share); and Tritium DCFC Limited
(NASDAQ:DCFC - 30-06-2022: $6.09 price per share / 31-03-2022
$10.04 price per share.)
[4] Amounts vary due to rounding
[5] SPAC Sponsor investment for Decarbonization Plus Acquisition
Corporation IV (NASDAQ:DCRD)
[6] The unrealised value of Rock Oil investment consists of
rights to mineral acres.
[7] Midstream investment
[8] Credit investment
[9] Withdrawn commitments consist of Origo ($9 million) and
CanEra III ($1 million), and impairments consist of Liberty II
($142 million), Fieldwood ($80 million), Eagle II ($62 million) and
Castex 2005 ($48 million)
[10] Since REL has not yet met the appropriate Cost Benchmark at
30 June 2022, $34.1 million in Performance Allocation fees that
would have been due under the prior agreement were not accrued and
thereby reduced the NAV on a pro forma basis to $685 million or
$12.99 per share
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 or visit 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.
END
PFUBVLLLLDLBBBQ
(END) Dow Jones Newswires
July 29, 2022 02:00 ET (06:00 GMT)
Riverstone Energy (LSE:RSE)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Riverstone Energy (LSE:RSE)
Gráfica de Acción Histórica
De May 2023 a May 2024
