As of 31 March 2020, Riverstone Energy (RSE) had a NAV per share of $5.31 – this compares with $9.66 as at 31 December 2019 (click here to read more on this). RSE released an interim update this morning, covering the quarter-ending 31 March.
Key unaudited financial highlights from the period include:
||$5.31 / £4.301|
||$1.80 / £1.461|
Over the first quarter, the West Texas Intermediate (WTI) spot prices and S&P Oil & Gas Exploration & Production Index decreased by approximately 67%. and 65%, respectively, largely due to the macro backdrop becoming tumultuous as the confluence of the coronavirus pandemic and geopolitical instability with regards to OPEC+ have created unprecedented challenges within energy markets.
Richard Hayden, RSE’s chairman, commented:
“Energy markets saw historic declines at the end of the first quarter, with commodity prices and equities dropping dramatically as a result of the covid-19 pandemic. Recognising the difficulties that REL is facing, the board and manager are actively working together to support the portfolio’s ability to navigate these challenging times as well as evaluate other ways to maximise value for shareholders.”
David M. Leuschen and Pierre F. Lapeyre Jr., co-founders of Riverstone, added:
“The first quarter of 2020 created unprecedented market conditions that were extremely difficult. As covid-19 led to significant commodity demand contraction, the potential for a Saudi-Russian price war also weighed on oil markets globally. These dynamics severely impacted valuations in both the public and private markets. As we anticipate a period of continued volatility and uncertainty in the near-term, we are working real-time with each of our portfolio companies to reduce costs and capital expenditures as well as focus on liquidity until the macro environment stabilises.”
Update on the return of uninvested capital
RSE noted the following: “As advised on 23 April, the Board and the Investment Manager were in discussions around the desirability and method of returning some of the company’s existing uninvested cash to shareholders. The board announced on 1 May 2020 that they are initiating a buyback programme with the intention of returning £50m to shareholders via on market buybacks using the current authority obtained at the 2019 AGM and, on the basis that the authority is renewed at the company’s forthcoming AGM in June, any further authority required.”
RSE: Quarterly update from Riverstone Energy with plans afoot to return portion of uninvested capital