3Q24 Quarterly Portfolio Valuations & NAV
Updated : 07:01
- THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION
Riverstone Energy Limited Announces 3Q24 Quarterly Portfolio Valuations & NAV
London, UK (21 October 2024) - Riverstone Energy Limited ("REL" or the "Company") announces its quarterly portfolio summary as of 30 September 2024, inclusive of updated quarterly unaudited fair market valuations, as well as the quarterly changes in NAV and NAV per share. The Company's NAV as of 30 September 2024 was $401 million, representing a decrease of approximately 13 per cent. from 30 June 2024. As of 30 September 2024, REL had a NAV per share of $15.57 (£11.63), representing a decrease in USD and GBP of 8 and 13 per cent., respectively, compared to the 30 June 2024 NAV per share.
Current Portfolio - Conventional
Investment (Public/Private) | Gross Committed Capital ($mm) | Invested Capital ($mm) | Gross Realised Capital ($mm)[1] | Gross Unrealised Value ($mm)[2] | Gross Realised Capital & Unrealised Value ($mm) | 30 Jun 2024 Gross MOIC2 | 30 Sep 2024 Gross MOIC2 |
Permian Resources[3] (Public) | 268 | 268 | 231 | 137 | 368 | 1.46x | 1.37x |
Onyx (Private) | 66 | 60 | 121 | 64 | 185 | 3.10x | 3.10x |
Veren3,[4] (Public) | 296 | 296 | 199 | 51 | 250 | 0.89x | 0.85x |
Total Current Portfolio - Conventional - Public[5] | $564 | $564 | $430 | $188 | $618 | 1.16x | 1.10x |
Total Current Portfolio - Conventional - Private5 | $66 | $60 | $121 | $64 | $185 | 3.10x | 3.10x |
Total Current Portfolio - Conventional - Public & Private5 | $630 | $624 | $551 | $252 | $803 | 1.35x | 1.29x |
Current Portfolio - Decarbonisation
Investment (Public/Private) | Gross Committed Capital ($mm) | Invested Capital ($mm) | Gross Realised Capital ($mm)1 | Gross Unrealised Value ($mm)2 | Gross Realised Capital & Unrealised Value ($mm) | 30 Jun 2024 Gross MOIC2 | 30 Sep 2024 Gross MOIC2 |
Infinitum (Private) | 27 | 27 | - | 30 | 30 | 1.10x | 1.10x |
GoodLeap (formerly Loanpal) (Private) | 25 | 25 | 2 | 23 | 25 | 1.00x | 1.00x |
Solid Power3 (Public) | 48 | 48 | - | 10 | 10 | 0.25x | 0.21x |
Group14 (Private) | 4 | 4 | - | 4 | 4 | 1.00x | 1.00x |
Enviva3 (Public) | 22 | 22 | 0 | - | 0 | 0.03x | 0.02x |
Hyzon Motors3 (Public) | 10 | 10 | - | - | - | 0.03x | 0.00x |
Tritium DCFC3,[6] (Public) | 25 | 25 | 1 | - | 1 | 0.10x | 0.03x |
Ionic I & II (Samsung Ventures) (Private) | 3 | 3 | - | - | - | 0.00x | 0.00x |
Our Next Energy (Private) | 13 | 13 | - | - | - | 0.00x | 0.00x |
Total Current Portfolio - Decarbonisation - Public5 | $105 | $105 | $1 | $10 | $11 | 0.15x | 0.11x |
Total Current Portfolio - Decarbonisation - Private5 | $71 | $71 | $2 | $57 | $59 | 0.83x | 0.83x |
Total Current Portfolio - Decarbonisation - Public & Private5 | $176 | $176 | $3 | $67 | $70 | 0.42x | 0.40x |
Total Current Portfolio - Conventional & Decarbonisation - Public & Private5 | $806 | $800 | $554 | $319 | $873 | 1.11x | 1.09x |
Cash and Cash Equivalents |
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| $83 |
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Total Liquidity (Cash and Cash Equivalents & Public Portfolio) | $281 |
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Total Market Capitalisation |
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| $270 |
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Realisations
Investment (Initial Investment Date) | Gross Committed Capital ($mm) | Invested Capital ($mm) | Gross Realised Capital ($mm)1 | Gross Unrealised Value ($mm)2 | Gross Realised Capital & Unrealised Value ($mm) | 30 Jun 2024 Gross MOIC2 | 30 Sep 2024 Gross MOIC2 | |||
Rock Oil[7] (12 Mar 2014) | 114 | 114 | 238 | 1 | 239 | 2.09x | 2.09x | |||
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[8] (17 Apr 2015) | 40 | 40 | 88 | - | 88 | 2.20x | 2.20x | |||
RCO[9] (2 Feb 2015) | 80 | 80 | 80 | - | 80 | 0.99x | 0.99x | |||
Carrier II (22 May 2015) | 110 | 110 | 67 | - | 67 | 0.61x | 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 Realisations5 | $819 | $819 | $1,005 | $1 | $1,006 | 1.23x | 1.23x | |||
Withdrawn Commitments and Investment Write-Offs[10] | 405 | 405 | 9 | - | 9 | 0.02x | 0.02x | |||
Total Investments5 | $2,030 | $2,024 | $1,568 | $320 | $1,888 | 0.96x | 0.93x | |||
Total Investments & Cash and Cash Equivalents | $403 |
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Draft Unaudited Net Asset Value | $401 |
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Total Shares Repurchased to-date | 58,701,911 | at average price per share of £6.59 ($8.36) | ||||||||
Current Shares Outstanding | 25,778,153 |
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Further information on REL's five largest positions, which account for ~95 per cent. of the portfolio's gross unrealised value is set forth below:
Permian Resources
The valuation for Permian Resources (NYSE: PR) decreased from 1.46x to 1.37x Gross MOIC in the third quarter of 2024. In Q3 2024, PR announced the closing of its acquisition of c. 29,500 net leasehold and c. 9,900 royalty interest acres and related midstream infrastructure from Occidental (NYSE: OXY). The company announced an increase to its quarterly base dividend from $0.06 per share to $0.15 per share. PR also announced the pricing of $1bn 6.25 per cent. senior notes due 2033 to redeem its 7.75 per cent. senior notes due 2026, fund a portion of its recent acquisition of assets from OXY and repay amounts outstanding under its credit facility. The pro-forma company has hedged approximately 29 per cent. of forecasted 2024 crude oil production at a weighted average price of $74.57 per barrel and 20 per cent. of forecasted 2024 natural gas production at a weighted average price of $3.79 per mcf.
Onyx
The valuation multiple for Onyx was unchanged during the third quarter, holding at 3.10x Gross MOIC. CDS margins have reduced materially since 2023 due to high gas storage levels and high wind / solar generation; however, since last quarter, CDS margins have moved in a positive direction. Decommissioning at Farge has commenced and is advancing smoothly. Additionally, Onyx received a withholding tax exemption certificate for OSIM II from BZSt (German federal tax office). The management team continues to work on organic growth initiatives, including the implementation of operational performance improvements and the development of projects related to the energy transition.
Veren (formerly Crescent Point Energy / Hammerhead Energy)
Veren's valuation decreased from 0.89x to 0.85x Gross MOIC during the third quarter of 2024. Since closing the acquisition, Veren's shares have traded down 23.9 per cent. compared to a 11.9 per cent. decrease in its peer group, and a 16.4 per cent. decrease in WTI over the same period. In July 2024, Veren announced its Q2 2024 results, which were in line with guidance, but below market expectations. Veren's unchanged five-year plan is targeting 6 per cent. production CAGR through 2028, driven by the Montney (8 per cent. CAGR) and Duvernay (11 per cent. CAGR), and targeting corporate production of 260 mboe/d. In Q3 2024, Veren delivered its quarterly dividend of C$0.115 per share, implying an annualised dividend yield of 5.3 per cent.
Infinitum
The valuation multiple for Infinitum held at 1.10x Gross MOIC for the third quarter of 2024. In July, the company closed an extension to its Series E, with $35mm of additional funding from Marunouchi Innovation Partners and Rice Investment Group to bring the total round to $220mm. The round will be used to scale the company to meet customer demand and drive decarbonization. Additionally, the company's new facility in Saltillo, Mexico came online this summer. The company's Aircore EC motor won 2024 Sustainability Product of the Year Award at the 2024 Sustainability Awards hosted by Business Intelligence Group, the third year in a row they have been honored at the Sustainability Awards.
GoodLeap (formerly Loanpal)
The valuation multiple for GoodLeap held at 1.00x Gross MOIC for the third quarter of 2024. While short-term macroeconomic environment is still creating business headwinds, the interest rate environment has begun to improve given the Federal Reserve's 50-basis point interest rate cut announced in September. The company also launched its Third-Party Ownership product via its partnership with Palmetto in the quarter.
Other Investments
Solid Power
On 20 September 2024, Solid Power announced it was selected by the U.S. Department of Energy (DOE) Office of Manufacturing and Energy Supply Chains to begin award negotiations for up to $50 million in federal funding under the Bipartisan Infrastructure Law. With this project, Solid Power intends to install the first globally known continuous manufacturing process of sulfide-based solid electrolyte materials for advanced all-solid-state batteries (ASSBs) and expand its electrolyte production capabilities at its Thornton, CO facility.
Group14
On 23 September 2024, Group14 announced it had been selected for an award negotiation of up to $200 million by the U.S. DOE's Office of Manufacturing and Energy Supply Chains as part of the second set of projects funded by the Bipartisan Infrastructure Law to expand domestic battery manufacturing for electric vehicles and the electrical grid. The DOE award would allow Group14 to build a silane factory using its proprietary intellectual property which produces silane at a significantly reduced capital and energy requirement from the conventional process.
Enviva
On 4 October 2024, following the filing of Enviva's Form 8-K related to the Amended Joint Chapter 11 Plan of Reorganization of Enviva Inc. ("Amended Plan"), the New York Stock Exchange (NYSE) Regulation reached its decision that Enviva is no longer suitable for listing pursuant to NYSE Listed Company Manual and delisted the company. In reaching its delisting determination, NYSE Regulation notes that pursuant to the Amended Plan, existing equity interests of the company, including REL's equity interests, will be cancelled and holders thereof will receive no recovery.
Tritium DCFC
At 30 September 2024, REL's debt investment was written down from 0.62x Gross MOIC to 0.03x Gross MOIC. On 8 August 2024, Exicom Tele-systems Limited (NSE: EXICOM), (along with its subsidiaries together referred to as, "Exicom"), India's largest EV charger manufacturer, announced that it had entered into a definitive agreement under which it will acquire business and assets of Tritium. Based on the terms of the definitive agreement, the Company does not expect to receive any further proceeds regarding its loan investment as a result of the ongoing liquidation of Tritium.
LEI: 213800HAZOW1AWRSZR47
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 10 active investments spanning decarbonisation, oil and gas, renewable energy and power in the Continental U.S., Western Canada, Europe and Australia.
REL shareholders should note that the Company's investment Crescent Point Energy Corp. was rebranded as Veren Inc. on 10 May 2024 and now trades on the TSX and NYSE under its new ticker symbol "VRN".
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:
LPRELATIONS@RIVERSTONELLC.COM
+44 (0) 20 3206 6300
Deutsche Numis - Corporate Broker:
Hugh Jonathan
Matt Goss
+44 (0) 20 7260 1000
Ocorian Administration (Guernsey) Limited -
Company Secretary:
Birgitte Horn
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 September 2024 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 $1,567 million of capital realised to date, $1,198 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 $135.8 million of realised and unrealised losses to date at 30 September 2024 are made whole with future gains. Since REL has not yet met the appropriate Cost Benchmark at 30 September 2024, $25.6 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.
[3] Represents closing price per share in USD for publicly traded shares Permian Resources Corporation (formerly Centennial Resource Development, Inc.) (NASDAQ:PR - 30-09-2024: $13.61 per share / 30-06-2024: $16.15 price per share); Enviva, Inc. (NYSE:EVA - 30-09-2024: n/a / 30-06-2024: $0.43 price per share); Solid Power, Inc. (NASDAQ:SLDP - 30-09-2024: $1.35 per share / 30-06-2024: $1.65 per share); Hyzon Motors, Inc. (NASDAQ:HYZN - 30-09-2024: $2.43 per share / $0.321 as of 30-06-2024 pre 1:50 stock split); and Veren (NASDAQ:VRN - 30-09-2024: CAD 8.33 per share / 30-06-2024: CAD 10.79 per share).
[4] Veren shares were acquired via realisation of Hammerhead Energy
[5] Amounts vary due to rounding
[6] The Tritium investment consists of publicly traded shares related to the original SPAC Sponsor investment and a further backstop funding (unrealised valued at $0.0 million at 30 September 2024) as well as an additional private loan investment (unrealised value at nil with $0.9 million of realised value at 30 September 2024)
[7] The unrealised value of Rock Oil investment is made up of funds held in escrow from the sale of rights to mineral acres
[8] Midstream investment
[9] Credit investment
[10] Withdrawn commitments consist of Origo ($9 million) and CanEra III ($1 million), and investment write-offs consist of Liberty II ($142 million), Fieldwood ($80 million), Eagle II ($62 million), Castex 2005 ($48 million), T-Rex ($21 million), Anuvia ($20 million) and FreeWire ($14 million)
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