TIDMRSE
RNS Number : 4265J
Riverstone Energy Limited
16 August 2023
LEI: 213800HAZOW1AWRSZR47
Riverstone Energy Limited
Results for the half year ended 30 June 2023
London, UK (16 August 2023) - Riverstone Energy Limited ("REL"
or the "Company") announces its Half Year Results from 1 January
2023 to 30 June 2023 (the "Period").
Summary Performance
30 June 2023
NAV $604 million[1] (GBP479 million)[2]
NAV per share $12.90 / GBP10.23(2)
Profit/(loss) for Period ended ($105.3 million)
Basic profit/(loss) per share for (213.18 cents)
Period ended
Total liquidity (cash and cash $396 million (GBP315 million)(2)
equivalents & public portfolio)
Market capitalisation $334 million (GBP265 million)(2)
Share price $7.14 / GBP5.66(2)
Highlights
-- As of 30 June 2023, REL had a NAV per share of $12.90
(GBP10.23), representing a decrease in USD and GBP of 11 and 15 per
cent., respectively, compared to the 31 December 2022 NAV.
-- Enviva, Anuvia and GoodLeap were the largest drivers of REL's
NAV downturn over the Period.
-- During the Period, under the Company's modified investment
programme, the Company invested $4.5 million in two existing
decarbonisation investments, bringing the total invested in this
area to $214 million, which, in aggregate, were valued at $156
million, or 0.73x Gross MOIC, at 30 June 2023.
-- Total invested capital during the Period of $4.5 million:
Enviva ($3.5 million) and Our Next Energy ($1.0 million).
-- Total net realisations and distributions during the Period of
$54.3 million: Permian Resources ($28.1 million), Onyx ($20.2
million), Carrier II ($4.6 million), and an aggregate of $1.4
million from Hammerhead, Tritium DCFC and Enviva
-- REL finished the Period with a cash balance of $133 million
and remaining potential unfunded commitments of $6 million[3].
-- Since the initial announcement of the Share Buyback Programme
on 1 May 2020, the Company has bought back a total of 33,096,218
ordinary shares at an average price of approximately GBP4.12 per
ordinary share, which has contributed to the share price increase
of 157 per cent. from GBP2.20 to GBP5.66 over the period to 30 June
2023.
Share Buyback Programme
Since the Company's announcement on 24 May 2023 of the
authorized increase of GBP30 million for the share buyback
programme, 1,703,495 ordinary shares have been bought back at a
total cost of approximately GBP9.7 million ($12.2 million) at an
average share price of approximately GBP5.70 ($7 .18). As of 30
June 2023, GBP29.5 million was available for repurchasing.
In addition, pursuant to changes to the Investment Management
Agreement announced on 3 January 2020, the Investment Manager
agreed for the Company to be required to repurchase shares or pay
dividends equal to 20 per cent. of net gains on dispositions. No
further carried interest will be payable until the $193 million of
realised and unrealised losses to date at 30 June 2023 are made
whole with future gains. REL continues to seek opportunities to
purchase shares in the market at prices at or below the prevailing
NAV per share.
Investment Manager Outlook
-- REL's $130 million aggregate net cash balance at 30 June 2023
makes the Company well positioned to both fund the capital needs of
the portfolio, make new investments, and weather the difficult
capital formation environment.
-- REL's portfolio will continue to benefit from foundational
value in its legacy energy investments, widely recognized as
requisite for a just and equitable energy transition, and
anticipates uplift from the tech-driven business in which the
Investment Manager has invested under the modified investment
programme.
-- The energy transition and decarbonisation space continues to
benefit from macroeconomic and regulatory tailwinds which offer
advantageous risk-reward investment opportunities. While the
Investment Manager continues to pursue energy transition and
decarbonisation assets, it is primarily focussed on supporting
existing portfolio companies to optimize operational efficiency,
manage liquidity, and support capital formation in a persistently
difficult fundraising environment for tech-heavy growth-stage
companies.
Richard Horlick, Chair of the Board of Riverstone Energy
Limited, commented:
"As the demand for energy and sustainable business models and
practices continues to grow, REL sits well-positioned to benefit.
We are pleased both with the consistent performance of the legacy
commodity-linked portfolio and confident in the prospects of
investments made under the modified investment programme. Whether
supporting a just and equitable energy transition or
decarbonisation writ large, both aspects of the portfolio stand to
benefit from the already substantial and growing macroeconmic and
regulatory tailwinds bolstering sector growth."
David M. Leuschen and Pierre F. Lapeyre Jr., Co-Founders of
Riverstone, added:
"Economic volatility seeded in geopolitical uncertainty and
systematic risk to the financial sector dominated market and,
consequently, portfolio performance through the first six months of
the year. We believe strongly that the current REL portfolio is
balanced to take advantage of imminent uplift driven by undeniable
and widespread support for decarbonisation and supported by a
strong foundation in mission critical, reliable energy assets. We
will continue to focus on portfolio management and deploy our
capital in the most profitable manner for our shareholders, be it
in new decarbonisation investments or share repurchases."
- Ends -
Riverstone Energy Limited's 2023 Interim Report is available to
view at: www.RiverstoneREL.com .
2Q23 Quarterly Portfolio Valuation
Previously, on 27 July 2023, REL announced its quarterly
portfolio summary as of 30 June 2023, inclusive of updated
quarterly unaudited fair market valuations:
Current Portfolio - Conventional
Gross
Gross Gross Realised 30 Jun
Gross Invested Realised Unrealised Capital & 31 Mar 2023
Investment Committed Capital Capital Value Unrealised 2023 Gross
(Public/Private) Capital ($mm) ($mm) ($mm)[4] ($mm)[5] Value ($mm) Gross MOIC(5) MOIC(5)
------------------- ------------- --------- ---------- ------------- ------------- -------------- -------------
Permian
Resources[6]
(Public) 268 268 223 110 333 1.22x 1.24x
Onyx ( Private
) 66 60 81 98 179 3.00x 3.00x
Hammerhead(6)
(Public) 308 296 24 111 135 0.48x 0.46x
Total Current
Portfolio
- Conventional
- Public[7] $576 $564 $ 246 $222 $468 0.83x 0.83x
------------------- ------------- --------- ---------- ------------- ------------- -------------- -------------
Total Current
Portfolio
- Conventional
- Private(7) $66 $60 $ 81 $98 $179 3.00x 3.00x
------------------- ------------- --------- ---------- ------------- ------------- -------------- -------------
Total Current
Portfolio
- Conventional
- Public
& Private(7) $642 $624 $328 $320 $647 1.04x 1.04x
------------------- ------------- --------- ---------- ------------- ------------- -------------- -------------
Current Portfolio - Decarbonisation
Gross
Gross Gross Gross Realised
Committed Invested Realised Unrealised Capital & 31 Mar 30 Jun
Investment Capital Capital Capital Value Unrealised 2023 2023
(Public/Private) ($mm) ($mm) ($mm)(4) ($mm)(5) Value ($mm) Gross MOIC(5) Gross MOIC(5)
GoodLeap (formerly
Loanpal) (Private) 25 25 2 36 38 1.80x 1.50x
FreeWire (Private) 10 10 - 20 20 2.00x 2.00x
Infinitum (Private) 18 18 - 18 18 1.30 1.05x
Solid Power
6 (Public) 48 48 - 18 18 0.64x 0.39x
T-REX Group
(Private) 18 18 - 18 18 1.00x 1.00x
Tritium DCFC
6 25 25 1 13 14 0.75x 0.56x
(Public)
Our Next Energy
(Private) 13 13 - 13 13 1.00x 1.00x
Enviva 6 (Public) 22 22 0 8 9 1.04x 0.41x
Group14 (Private) 4 4 - 4 4 1.00x 1.00x
Ionic I & II
(Samsung Ventures)
(Private) 3 3 - 3 3 1.00x 1.00x
Hyzon Motors
6 (Public) 10 10 - 1 1 0.08x 0.10x
Anuvia Plant
Nutrients
(Private) 20 20 - - - 0.70x 0.00x
Total Current
Portfolio -
Decarbonisation
- Public(7) $105 $105 $1 $41 $43 0.57x 0.41x
--------------------- ------------ --------- ---------- ------------- ------------- ------------- -------------
Total Current
Portfolio -
Decarbonisation
- Private(7) $109 $109 $2 $111 $113 1.27x 1.03x
--------------------- ------------ --------- ---------- ------------- ------------- ------------- -------------
Total Current
Portfolio -
Decarbonisation
- Public &
Private(7) $214 $214 $3 $152 $156 0.92x 0.73x
--------------------- ------------ --------- ---------- ------------- ------------- ------------- -------------
Total Current
Portfolio -
Conventional
& Decarbonisation
- Public &
Private(7) $856 $837 $331 $472 $803 1.01x 0.96x
--------------------- ------------ --------- ---------- ------------- ------------- ------------- -------------
Cash and Cash Equivalents $133
----------------------------------- --------- ---------- ------------- ------------- ------------- -------------
Total Liquidity (Cash and Cash Equivalents
& Public Portfolio) $396
---------------------------------------------------------- ------------- ------------- ------------- -------------
Total Market Capitalisation $334
----------------------------------- --------- ---------- ------------- ------------- ------------- -------------
Realisations
Gross
Gross Gross Gross Realised 31 Mar
Investment Committed Invested Realised Unrealised Capital & 2023 30 Jun
(Initial Investment Capital Capital Capital Value Unrealised Gross 2023
Date) ($mm) ($mm) ($mm)(4) ($mm)(5) Value ($mm) MOIC(5) Gross MOIC(5)
Rock Oil
([8]) (12
Mar 2014) 114 114 233 3 236 2.06x 2.06x
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[9] (17
Apr 2015) 40 40 88 - 88 2.20x 2.20x
RCO [10]
(2 Feb 2015) 80 80 80 - 80 0.99x 0.99x
Carrier II
(22 May 2015) 110 110 67 - 67 0.60x 0.61x
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(7) $819 $819 $1,000 $3 $1,002 1.22x 1.22x
---------------------- ------------ --------- ------------ ----------- ------------ ------------- -------------
Withdrawn
Commitments
and Impairments[11] 350 350 9 - 9 0.02x 0.02x
---------------------- ------------ --------- ------------ ----------- ------------ ------------- -------------
Total Investments(7) $2,024 $2,006 $1,339 $475 $1,813 0.91x 0.90x
---------------------- ------------ --------- ------------ ----------- ------------ ------------- -------------
Total Investments & Cash and Cash Equivalents $607
------------------------------------------------------------- ----------- ------------ ------------- -------------
Draft Unaudited Net Asset Value $605
------------------------------------------------------------- ----------- ------------ ------------- -------------
Total Shares Repurchased to-date 33,096,218 at average price per share of
GBP4.12 ($5.28)
------------------------------------------------------------- ----------- ------------------------------------------
Current Shares Outstanding 46,800,513
------------------------------------------------------------- ----------- ------------ ------------- -------------
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 $193 million to a global strategy across
decarbonization 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 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
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 Riverstone Energy Investment
Partnership, LP ("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 2023 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] Since REL has not yet met the appropriate Cost Benchmark at
30 June 2023, $29.6 million in Performance Allocation that would
have been due under the prior agreement were not accrued, and
thereby would have reduced the NAV on a pro forma basis to $574
million or $12.27 per share
[2] GBP:USD FX rate of 1.2614 as of 30 June 2023
[3] Excludes the remaining unfunded commitment for Hammerhead of
$12.2 million, which is not expected to be funded. The expected
funding of the remaining unfunded commitments at 30 June 2023 are
$nil and $nil for the remainder of 2023 & 2024. The residual
amounts are to be funded as needed in 2025 and later years.
[4] Gross realised capital is total gross proceeds realised on
invested capital. Of the $1,339 million of capital realised to
date, $1,016 million is the return of the cost basis, and the
remainder is profit.
[5] 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 $192.6 million of realised and unrealised losses
to date at 30 June 2023 are made whole with future gains, so the
earned carried interest of $0.8 million at 30 June 2023 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 2023, $29.6 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.
([6]) Represents closing price per share in USD for publicly
traded shares Permian Resources Corporation (formerly Centennial
Resource Development, Inc.) (NASDAQ:PR - 30-06-2023: $10.96 per
share / 31-03-2023: $10.50 price per share); Enviva, Inc. (NYSE:EVA
- 30-06-2023: $10.85 per share / 31-03-2023: $28.88 price per
share); Solid Power, Inc. (NASDAQ:SLDP - 30-06-2023: $2.54 per
share / 31-03-2023: $3.01 price per share); Hyzon Motors, Inc.
(NASDAQ:HYZN - 30-06-2023: $0.96 per share / 31-03-2023: $0.82
price per share); Tritium DCFC Limited (NASDAQ:DCFC - 30-06-2023:
$1.09 price per share / 31-03-2023 $1.28 price per share); and
Hammerhead Energy, Inc. (NASDAQ: HHRS - 30-06-2023: $7.25 per share
/ 31-03-2023: $7.75 per share). )
[7] Amounts vary due to rounding
[8] The unrealized value of Rock Oil investment consists of
rights to mineral acres
[9] Midstream investment
[10] Credit investment
[11] 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)
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Riverstone Energy (LSE:RSE)
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