LEI: 213800HAZOW1AWRSZR47
Riverstone Energy Limited
Results for the year ended 31 December 2023
London, UK (29 February 2024) - Riverstone Energy Limited ("REL" or the "Company") announces
its Year End Results for the period from 1 January 2023 to 31
December 2023 (the "Period").
Summary Performance
31
December 2023
NAV
|
$674 million[1] (£529 million)[2]
|
NAV per share
|
$15.96 /
£12.532
|
Profit/(loss) for Period
ended
|
($2.3 million)
|
Basic profit/(loss) per share for
Period ended
|
(4.86 cents)
|
Total liquidity (cash and cash
equivalents & public portfolio)
|
$509 million (£400
million)2
|
Market capitalisation
|
$430 million (£338
million)2
|
Share price
|
$10.20 /
£8.012
|
Highlights
§ As of 31 December 2023, REL had a
NAV per share of $15.96 (£12.53), representing an increase in USD
and GBP of 10 and 5 per cent., respectively, compared to the 31
December 2022 NAV.
§ The realisation of Hammerhead (now
Crescent Point), as well as increases in value for Onyx and Permian
Resources, were offset by downturns in Enviva, Anuvia, Our Next
Energy, FreeWire and GoodLeap.
§ Total net
realisations and distributions during the Period of $272.3 million:
Hammerhead sale to Crescent Point ($175.5 million), Onyx ($60.1
million), Permian Resources ($30.4 million), Carrier II ($4.8 million), and an
aggregate of $1.4 million from Rock Oil, Tritium DCFC and
Enviva.
§ During the Period, under the
Company's modified investment programme, the Company invested $22.3
million in five existing decarbonisation investments, bringing the
total invested in this area to $232 million, which, in aggregate,
were valued at $116 million, or 0.50x Gross MOIC, at 31 December
2023.
§ Total
invested capital during the Period of $22.3 million: Infinitum
($10.0 million), FreeWire ($4.0 million), T-REX ($3.8 million),
Enviva ($3.5 million) and Our Next Energy ($1.0
million).
§ REL finished the Period with a
cash balance of $291 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
34,518,746 ordinary shares at an average price of approximately
£4.19 per ordinary share, which has
contributed to the share price increase of over 3.5x from £2.20 to
£8.01 over that period to 31 December 2023.
Share Buyback Programme and 2023 Tender
Offer
Since the Company's announcement
on 23 May 2023 of the authorised
increase of £30 million for the share buyback programme up to 31
December 2023, 3,126,023 ordinary shares
have been bought back at a total cost of approximately £18
million ($22 million) at an average share price of approximately
£5.67 ($7.13). As of 31 December 2023, £22
million was available for share repurchases.
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 $85 million of realised
and unrealised losses to date at 31 December 2023
are made whole with future gains.
On 17 August 2023, REL announced a
tender offer to repurchase up to 13,840,830 shares at £5.78 per share. On 27 September 2023, the Company repurchased
3,182,196 shares representing 7 per cent. of outstanding shares at
that date, and 23 per cent. of the tender offer.
Post-Year End Update
§ As announced on 8 February
2024, the Company proposes to return $200
million (equivalent to approximately £158 million on the basis of
the prevailing USD:GBP exchange rate) of its excess capital to
shareholders by means of a tender offer (the "Tender Offer") at a
price of £10.50 per ordinary share. The Tender Price represents a
premium of approximately 31 per cent. to the closing market price
per ordinary share of £9.20 on 21 February 2024 and represents a 16
per cent. discount to the net asset value per ordinary share of
£12.53 as at 31 December 2023 (on the basis of the prevailing
USD:GBP exchange rate at 31 December 2023 of 1.2736). The Company
launched the Tender Offer on 23 February 2024 for up to 15,047,619
of the Company's ordinary shares, representing 36 per cent. of the
existing shares in issue (excluding any ordinary shares held in
treasury, of which there are none currently) and the Tender
Offer will close on 25 March 2024. The Tender Offer will require
shareholder approval at an extraordinary general meeting of the
Company's shareholders, which is due to be held on 26 March 2024,
and will be subject to other legal, regulatory and customary
conditions.
The authority to repurchase Shares
in the Tender Offer pursuant to the Resolution to be proposed at
the extraordinary general meeting due to be held on 26 March 2024
is in addition to the authority for the Company to make market
purchases of Shares granted at the Company's annual general meeting
on 23 May 2023. The Company will not make market purchases of
Shares while the Tender Offer is continuing. The Company may resume
its market purchase share buyback programme following the
completion of the Tender Offer, although any decision to resume the
buyback programme, the amount of any buyback programme and the
timing of any such purchases, will be entirely at the Board's
discretion and subject to, amongst other things, applicable law,
the Company's performance, market conditions and the cash reserves
available to the Company, in each case as determined by the Board
with the consent of the Investment Manager at the relevant
time.
§ On 3
February 2024, a potential acquiror of FreeWire, who had been under
exclusivity, withdrew from the sale process. Given the
accelerating cash constraints and limited runway in combination
with the sale process withdrawal, FreeWire evaluated all
alternatives which culminated in a sale of the company on 20
February 2024 to a private investor. The consideration with
respect to the sale was 100 per cent. assumption of all company
liabilities. As of 20 February 2024, REL, through the
Partnership, has a realized Gross MOIC of 0.00x in the FreeWire
investment, which is no longer an investment in the
portfolio.
Investment Manager Outlook
§ REL's portfolio of conventional
energy assets will continue to benefit from cash flow generation,
low to no leverage and supportive underlying commodity
prices. When appropriate, the Investment Manager will take
advantage of favorable market conditions to continue monetizing its
publicly listed holdings. The pursuit of liquidity will
remain tempered by a desire to maximise returns for all
shareholders.
§ While REL's energy transition and
decarbonisation investments continue to benefit from structural and
regulatory tailwinds, as we enter 2024, funding growth-stage
companies seeking scale continues to face headwinds. These
are symptomatic of a higher rates environment and subdued risk
appetite from investors who have suffered from a paucity of
distributions from their existing portfolios. While the
Investment Manager is confident that the decarbonisation portfolio
will perform well as a whole, the next twelve months will be
critical for some of those companies.
Richard Horlick, Chair of the Board
of Riverstone Energy Limited, commented:
"Higher values in conventional energy have begun to drive a
new wave of consolidation in the oil & gas sector which has
benefited our portfolio with the sale of Hammerhead Energy to
Crescent Point Energy, and with Permian Resources growing through
acquisitions. We expect this consolidation to continue as
investors assign a premium to greater scale, more drilling
inventories, strong balance sheets and high cash flow generation.
Concurrently, the Board and the Investment Manager are focused on
returning excess capital to shareholders through judicious share
repurchases and the recently announced tender
offer."
David M. Leuschen and Pierre F.
Lapeyre Jr., Co-Founders of Riverstone, added:
"Much of the market dynamics since the second half of 2022
remain in place as we enter 2024. These are namely strong
operating performances from our legacy energy investments aided by
continued consolidation in the North American upstream energy
markets, and continued challenges for some of the decarbonisation
investments in the portfolio. While we are confident that REL
owns clear winners of the energy transition, there is no doubt that
a difficult funding environment will continue to impact some
portfolio companies that will need to raise capital in 2024 to
reach critical scale. While the environment is improving
thanks to the prospect of lower rates we remain vigilant and
focussed on helping all of our companies achieve their
potential."
- Ends
-
Riverstone Energy Limited's 2023
Annual Report is available to view at: www.RiverstoneREL.com.
4Q23 Quarterly Portfolio Valuation
Previously, on 8 February 2024, REL
announced its quarterly portfolio summary as of 31 December 2023,
inclusive of updated quarterly unaudited fair market
valuations:
Current Portfolio - Conventional
Investment (Public/Private)
|
Gross Committed Capital
($mm)
|
Invested
Capital
($mm)
|
Gross
Realised
Capital ($mm)[4]
|
Gross Unrealised
Value
($mm)[5]
|
Gross Realised Capital &
Unrealised Value ($mm)
|
30 Sep 2023
Gross
MOIC5
|
31 Dec 2023
Gross
MOIC5
|
Permian Resources[6]
(Public)
|
268
|
268
|
225
|
137
|
362
|
1.36x
|
1.35x
|
Onyx
(Private)
|
66
|
60
|
121
|
70
|
191
|
3.00x
|
3.20x
|
Crescent Point Energy (Hammerhead
Energy)12
(Public)
|
296
|
296
|
198
|
58
|
256
|
0.71x
|
0.87x
|
Total Current Portfolio - Conventional - Public[7]
|
$576
|
$564
|
$423
|
$195
|
$618
|
1.02x
|
1.10x
|
Total Current Portfolio - Conventional -
Private7
|
$66
|
$60
|
$121
|
$70
|
$191
|
3.00x
|
3.20x
|
Total Current Portfolio - Conventional - Public &
Private7
|
$642
|
$624
|
$544
|
$265
|
$809
|
1.21x
|
1.30x
|
Current Portfolio - Decarbonisation
|
|
|
|
|
|
|
Investment (Public/Private)
|
Gross Committed Capital
($mm)
|
Invested
Capital
($mm)
|
Gross
Realised
Capital
($mm)4
|
Gross Unrealised
Value
($mm)5
|
Gross Realised Capital &
Unrealised Value ($mm)
|
30 Sep 2023
Gross
MOIC5
|
31 Dec 2023
Gross
MOIC5
|
Infinitum
(Private)
|
27
|
27
|
-
|
30
|
30
|
1.05x
|
1.10x
|
GoodLeap (formerly
Loanpal)
(Private)
|
25
|
25
|
2
|
29
|
31
|
1.50x
|
1.25x
|
T-REX Group
(Private)
|
21
|
21
|
-
|
17
|
17
|
1.00x
|
0.82x
|
Tritium DCFC6
13 (Public)
|
25
|
25
|
1
|
11
|
12
|
0.47x
|
0.46x
|
Solid Power6
(Public)
|
48
|
48
|
-
|
11
|
11
|
0.31x
|
0.22x
|
Group14
(Private)
|
4
|
4
|
-
|
4
|
4
|
1.00x
|
1.00x
|
FreeWire
(Private)
|
10
|
10
|
-
|
3
|
3
|
1.00x
|
0.25x
|
Our
Next
Energy
(Private)
|
13
|
13
|
-
|
3
|
3
|
1.00x
|
0.25x
|
Ionic I & II (Samsung
Ventures) (Private)
|
3
|
3
|
-
|
3
|
3
|
1.00x
|
1.00x
|
Enviva6
(Public)
|
22
|
22
|
0
|
1
|
1
|
0.29x
|
0.05x
|
Hyzon Motors6 (Public)
|
10
|
10
|
-
|
1
|
1
|
0.13x
|
0.09x
|
Anuvia Plant Nutrients
(Private)
|
20
|
20
|
-
|
-
|
-
|
0.00x
|
0.00x
|
Total Current Portfolio - Decarbonisation -
Public7
|
$105
|
$105
|
$1
|
$23
|
$24
|
0.32x
|
0.23x
|
Total Current Portfolio - Decarbonisation -
Private7
|
$127
|
$127
|
$2
|
$90
|
$92
|
0.95x
|
0.73x
|
Total Current Portfolio - Decarbonisation - Public &
Private7
|
$232
|
$232
|
$3
|
$113
|
$116
|
0.66x
|
0.50x
|
Total Current Portfolio - Conventional & Decarbonisation -
Public & Private7
|
$874
|
$855
|
$548
|
$378
|
$926
|
1.06x
|
1.08x
|
Cash and Cash Equivalents
|
|
|
$291
|
|
|
|
Total Liquidity (Cash and Cash Equivalents & Public
Portfolio)
|
$509
|
|
|
|
Total Market Capitalisation
|
|
|
$430
|
|
|
|
|
|
|
|
|
|
|
| |
Realisations
Investment (Initial Investment
Date)
|
Gross Committed Capital
($mm)
|
Invested
Capital
($mm)
|
Gross
Realised
Capital
($mm)4
|
Gross Unrealised
Value
($mm)5
|
Gross Realised Capital &
Unrealised Value ($mm)
|
30 Sep 2023
Gross
MOIC5
|
31 Dec 2023
Gross
MOIC5
|
Rock Oil [8]
(12 Mar
2014)
|
114
|
114
|
234
|
4
|
238
|
2.08x
|
2.08x
|
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
(3
Sep 2014)
|
52
|
52
|
14
|
-
|
14
|
0.27x
|
0.27x
|
Total Realisations7
|
$819
|
$819
|
$1,000
|
$4
|
$1,004
|
1.23x
|
1.23x
|
Withdrawn Commitments and Impairments[11]
|
350
|
350
|
9
|
-
|
9
|
0.02x
|
0.02x
|
Total Investments7
|
$2,042
|
$2,024
|
$1,557
|
$382
|
$1,939
|
0.95x
|
0.96x
|
Total Investments & Cash and Cash
Equivalents
|
$674
|
|
|
|
Draft Unaudited Net Asset Value
|
$674
|
|
|
|
Total Shares Repurchased to-date
|
34,518,746
|
at average price per share of
£4.19 ($5.35)
|
Current Shares Outstanding
|
42,195,789
|
|
|
|
About Riverstone Energy Limited:
REL is a closed-ended investment
company which invests in the energy industry. REL's ordinary
shares are listed on the London Stock Exchange, trading under
the symbol RSE. REL has 14 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 31
December 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.