Riverstone Energy net asset value falls in first half

Riverstone Energy reported a net asset value of $12.90 or £10.23 per share at the end of its first half on Wednesday, making for an 11% dollar-denominated decline and a 15% reduction on a sterling basis when compared to 31 December.

The London-listed company said the main contributors to the decline were investments in Enviva, Anuvia, and GoodLeap.

Within the six-month period, REL said it made a significant move towards decarbonisation by investing $4.5m in two of its existing investments in the sector, bringing its total decarbonisation investments to $214m.

By the end of the period, they were collectively valued at $156m, reflecting a 0.73x gross multiple on invested capital.

During the half-year, REL said it channelled $3.5m into Enviva and $1m into Our Next Energy.

Meanwhile, net realisations and distributions amounted to $54.3m, with contributions from several entities including Permian Resources, Onyx, Carrier II, Hammerhead, Tritium DCFC, and Enviva.

REL closed the period with a cash balance of $133m, while its pending unfunded commitments stood at $6m.

The company added that its share buyback programme, initiated on 1 May 2020, had seen the repurchase of more than 33 million ordinary shares at an average cost of about £4.12 each.

That had resulted in a substantial 157% hike in the share price, moving from £2.20 to £5.66 by 30 June.

Following its announcement on 24 May to authorise an additional £30m towards the buyback, the company acquired 1,703,495 shares, costing around £9.7m at an average share price of £5.70.

By the end of June, £29.5m remained available for future repurchases.

REL's investment management agreement, amended on 3 January 2020, stipulated that the company should either repurchase shares or allocate dividends equaling 20% of net gains from dispositions.

That would remain effective until the $193m in realised and unrealized losses noted by 30 June were balanced out by subsequent gains.

Looking ahead, REL's investment manager said the firm’s net cash reserve of $130m positioned it advantageously to address the capital needs of its portfolio, make fresh investments, and tackle challenges in capital formation.

The legacy energy investments within its portfolio remained pivotal for an equitable energy transition, it explained, with the company expecting positive traction from technology-driven ventures under its altered investment scheme.

It added that there was a continued focus on energy transition and decarbonisation due to favourable macroeconomic and regulatory winds.

While actively scouting for assets in the sector, the primary objective remained to boost operational efficiency, manage liquidity, and support capital formation, especially for tech-intensive growth-phase businesses in a challenging fundraising landscape.

“As the demand for energy and sustainable business models and practices continues to grow, REL sits well-positioned to benefit,” said board chair Richard Horlick.

“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 macroeconomic and regulatory tailwinds bolstering sector growth.”

At 0828 BST, shares in Riverstone Energy were down 2.48% at 563.67p.

Reporting by Josh White for Sharecast.com.