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Boost for Riverstone Energy’s NAV thanks to ‘stabilised macro environment’

Boost for Riverstone Energy’s NAV thanks to ‘stabilised macro environment’ – Riverstone Energy (RSE) has posted its half-year results for the 6 months to 30 June 2021. During the period under review, the company saw an increase in its NAV per share of 50% (in GBP terms) while ending the period with a cash balance of $53m and remaining potential unfunded commitments of $43m.

The company said Centennial, Hammerhead and ILX III were the largest drivers of its NAV improvement over the 6 months, while it also boosted its exposure to energy transition investments, with $36m of new investment. Total invested capital during the period was $47m, in names such as GoodLeap, FreeWire Technologies and Onyx Power.

RSE also made a $20m commitment to Decarbonization Plus Acquisition Corporation III through a PIPE investment which is expected to complete in conjunction with the business combination with Solid Power Inc in Q4 2021.

Meanwhile the board has confirmed it will will recommence its £20m open market share buyback programme with Numis Securities and J.P. Morgan. Since RSE’s announcement on 11 May 2021, 1,185,808 ordinary shares have been bought back at a total cost of approximately £4m at an average share price of approximately £3.36 ($4.72).

Manager’s outlook:

RSE’s $178 million aggregate cash balance and $86 million of unrestricted marketable securities at 16 August 2021 makes the Company well positioned to fund the capital needs of the portfolio. With the funding of the $10.0 million DCRB PIPE commitment in July 2021, the Company has remaining potential unfunded commitments of up to $33 million2; however, the Board, in consultation with the Investment Manager, does not expect to fully fund all commitments in the normal course of business.

Following a difficult year for energy in 2020, the macro environment has started to stabilise but is expected to have significant uncertainty due to the prolonged nature of the COVID-19 pandemic and delays in vaccine administration.

§ REL remains focussed on managing liquidity and operational efficiency at the portfolio company level, while continuing to execute on its modified investment programme, which includes a pivot from E&P investments towards energy transition and decarbonisation assets. The Investment Manager believes the current market environment is generating attractive risk-reward investment opportunities within these subsectors.

Statement from the chairman:

“While the macro outlook remains uncertain the continued commodity price recovery into the second quarter provided RSE with improved financial resilience and has allowed us to extend our buyback programme by a further £20 million. As of 16 August, RSE has an aggregate cash balance of $178 million, freely tradeable securities of $86 million, and $15 million of securities with sale restrictions that are estimated to expire no later than December 2022. It has been exciting to see a pick-up in momentum for action on climate change around the world over the last six months – with RSE stepping up its own activity and making five new energy transition investments in businesses that further diversify our portfolio away from fossil fuels. Looking ahead, we will draw further on our experience and expertise to access opportunities that will help drive the energy transition while delivering value for our Shareholders.”

RSE : Boost for Riverstone Energy’s NAV thanks to ‘stabilised macro environment’

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