Riverstone improves NAV per share despite difficult market

Riverstone Energy issued its interim management statement ("IMS") for the three months to 30 September on Wednesday, with net asset value at period end of $1.56bn, or $18.41 per share.

The FTSE 250 firm’s profit during the three months was $183.1m, or 216.75 cents on a per-share basis.

Market capitalisation at 30 September stood at $1.26bn, with the company’s share price at $14.93 or £11.501.

“Today's results highlight REL's ability to navigate challenging commodity price environments and deliver value to shareholders,” said Riverstone chairman Richard Hayden.

“The company's NAV per share [increased] 13% since June's results and 16% since December 2015.

“Furthermore, this does not reflect the uplift of REL's recent $175m investment in Centennial, which closed after the end of the quarter and is currently trading at a 45% premium to REL's cost base.”

Hayden said the board remained sensitive to the discount to NAV at which the REL shares were currently trading, and will continue to evaluate open market purchases as authorised by the shareholders at the AGM.

Riverstone co-founders David Leuschen and Pierre Lapeyre, Jr pointed out that the company completed its first realisation in October 2016 - the sale of Rock Oil, which resulted in a gross multiple of 2.0x invested capital.

“We believe this illustrates the strength of Riverstone's investment strategy of partnering with best-in-class management teams, gradually deploying capital throughout the cycle and prudently managing risks.

“With REL's investment in Centennial in the Permian Delaware Basin, almost 60% of REL's capital is invested in the Permian, Eagle Ford and Western Canada,” the pair commented.

“Our continued NAV growth is consistent with the attractiveness of these low-cost hydrocarbon basins in particular.”