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Riverstone Energy secures a commitment of up to C$300M

Riverstone Energy secures a commitment of up to C$300M

Riverstone Energy secures a commitment of up to C$300M – The largest holding of Riverstone Energy Limited (RSE) is Hammerhead Resources. It represents 26.9% of Riverstone’s gross assets as of 30 June 2018.

Hammerhead Resources has announced that it has secured from Riverstone Holdings LLC, a preferred share equity commitment of up to 300 million Canadian dollars that will, according to the company, provide “financial flexibility to continue its organic growth program across its high quality resource base“.

Hammerhead Resources Inc.

Hammerhead is a privately owned oil and gas producer focused on the liquids-rich Montney play in Alberta. It has a large, contiguous land base in the heart of two of the most prolific resource plays in North America, with over 200,000 net acres in each of the Montney and Duvernay formations. Hammerhead’s development has been focused on the Upper/Middle Montney, where delineation activity has proven the repeatability of the laterally continuous light oil-rich fairway.

The commitment

The preferred share equity commitment of up to C$300 million will be led by affiliates of Riverstone Holdings LLC. The financing will also feature a rights offering to certain existing common shareholders. Riverstone owns approximately 31% of Hammerhead on a fully diluted basis and an announcement will be made in in due course regarding the extent of REL’s participation in the preferred equity commitment.

Activity going forward

The money that is available to Hammerhead will be used to fund the development of the company’s activities, particularly in the Gold Creek and Karr areas. The company will improve how it uses its multi-well pads in areas of existing infrastructure, combined with implementation of leading completion technologies. 

Hammerhead is currently producing over 28,000 barrels of oil equivalent (boe) a day, with a 42% weighting towards light oil and liquids. Annual production is expected to average over 27,000 boe/day in 2018, representing a 40% increase over 2017 levels. Since Riverstone’s initial investment in 2014, the hammerhead has increased production at a compound annual growth rate of over 70%, with a substantial corresponding increase in cash flow and reserves.

RSE : Riverstone Energy secures a commitment of up to C$300M

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