Riverstone NAV falls amid weaker oil sentiment

The FTSE 250 firm said that, on a sterling basis, the net asset value per share slid further, declining 6.9% or £1.13.

It said the decline in net asset value was primarily driven by Riverstone’s second-largest investment, the publicly-traded Centennial, which saw its shares decline to $15.82 on 30 June from $19.72 at the end of December.

The Riverstone board blamed that on market sentiment for oil producers weakening, although strong performance at Three Rivers III, Meritage III and Liberty II helped to offset the decline.

Riverstone invested a total of $142m during the period, which brought net capital invested as of 30 June to $1.31bn, or 91% of net capital available.

During the half, the firm reduced commitments to two companies totalling $116m, which brought net committed capital as of 30 June to $1.72bn or 119% of net capital available.

“Today's results demonstrate REL's resilience as oil price volatility resumed in the first half of 2017,” said chairman Richard Hayden.

“Despite a 14% decline in the price of West Texas Intermediate, the net asset value declined by 1.8%, reflecting continued operational successes and the portfolio's emphasis on low-cost basins.”

Looking ahead, Riverstone’s board said global oil market volatility was likely to remain “elevated” as the market was seeking equilibrium.

It said its investment manager had believed that energy producers in low-cost basins with an oil weighting would continue to outperform, adding that North American energy investments retained an “advantage” in a global marketplace due to low breakeven costs, short cycle times and high asset liquidity.

The portfolio’s 14 active investments as a whole were said to be “well-placed” to offer investors resilience and growth in a variety of commodity price environments.

“Riverstone continues to leverage its expertise across the energy value chain and capital structure to identify profitable opportunities for REL and its investors,” said co-founders David M. Leuschen and Pierre F. Lapeyre Jr in a joint statement.

“The successes highlighted in today's results, such as Meritage III's confirmed expansion in Western Canadian midstream infrastructure and Sierra's recent historic oil discovery offshore Mexico, illustrate the strength of Riverstone's investment strategy despite the increase in oil price volatility.”