Press release

29 November 2016

Riverstone Energy Limited (the "Company" or "REL")

Extraordinary General Meeting for the approval of change to Investment Policy

The Company has today published a circular (the "Circular") proposing a change to the Company's existing published investment policy (the "Investment Policy") to be considered at an Extraordinary General Meeting on 15 December 2016. Terms used in this announcement shall have the same meaning as set out in the Circular.

Revised Investment Policy

The Board proposes amending the Investment Policy so that the Company may make an incremental investment in Canadian International Oil Corp. ("CIOC") such that the total value of the Company's investment in CIOC may represent up to 35 per cent. of the Company's gross assets, including cash holdings, at the time of such incremental investment. The Investment Policy currently limits single investments of the Company to 25 per cent. of its gross assets. The proposed increase is being sought solely to facilitate the exercise by the Company of the Warrants in CIOC held by it and relates only to the Company's investment in CIOC. It is not proposed to increase the relevant limit more generally or in respect of other investments.

As further described in the Investment Policy set out in the Circular, the Company utilises the Partnership to make investments. Accordingly, the Company's gross assets are calculated by reference to the gross unrealised portfolio value of the Partnership, as well as cash and cash equivalents held by each of the Partnership and the Company. 

Reasons for the proposed change

The amendment to the Investment Policy is being proposed in order to allow the Company to exercise the 69.8 million warrants in CIOC acquired (indirectly) by the Company following a successful tender offer for up to 100 per cent. of the then outstanding common shares ("Common Shares"), and warrants to purchase Common Shares ("Warrants"), of CIOC (the "Tender Offer") by a Riverstone-controlled entity in November 2015. Under the terms of the Warrants held by the Company, it is able to exercise the Warrants and purchase Common Shares at a price which is at a discount to the Investment Manager's published unaudited valuation (as at 30 September 2016) at any time up until March 2017.

On completion of the Tender Offer, the Company's investment in CIOC represented 19.6 per cent. of the gross assets of the Company. As at the Investment Manager's latest published unaudited valuation at 30 September 2016, the investment in CIOC represented approximately 27.7 per cent. of the gross assets of the Company, the increase being the result of appreciation in the value of the investment, and therefore not a breach of the Investment Policy.

Under the current Investment Policy, the Company would now be prevented from making any further investment into CIOC, including by exercising the Warrants it owns, which, at the Investment Manager's current valuation, are deeply in the money. The Company estimates that, were it to exercise all of the Warrants held by it, immediately following such exercise, the Company's investment in CIOC would represent approximately 31 per cent. of the Company's gross assets (by reference to the Investment Manager's published unaudited valuation as at 30 September 2016). The amendment proposed by the Board would allow the Company to exercise the Warrants held by it without breaching the Investment Policy, leaving an additional buffer of approximately 4 per cent. to allow for any short-term currency movements and/or changes in the value of CIOC and the Company's other investments which may increase the percentage of the Company's gross assets represented by its investment in CIOC in the period between the adoption of the amended Investment Policy and the exercise of the Warrants by the Company.

The Board believes that the Company's investment in CIOC is highly attractive, as evidenced by its valuation at 30 September 2016 at 2.0 times the Company's cost base. When the Company initially invested in CIOC, CIOC was producing 3,000 barrels of oil equivalent per day ("BoE/d") from 14 wells. Since then, CIOC has been successful in developing its acreage and rapidly growing production, having significantly increased production capacity to 20,000 BoE/d by November 2016. By year-end 2016, CIOC is expected to have drilled fewer than 40 wells from an inventory of over 2,000 net undeveloped well locations. The Board and the Investment Manager believe that exercising the Warrants represents a highly attractive opportunity to increase the Company's holdings in this successful investment. The exercise of all of the outstanding Warrants (by the Company and all other Warrantholders), would raise approximately CAN$ 180 million (approximately US$ 134 million) for CIOC, which would be used to fund drilling for continued development and delineation of its asset base.

The Company currently owns 30 per cent. of the outstanding Common Shares in CIOC, and 46 per cent. of the outstanding Warrants, which equates to a fully diluted equity ownership of 35 per cent¹. The Company's investment in CIOC is valued on a fully diluted basis, with significant value attributed to the Warrants in the Investment Manager's 30 September 2016 valuation of the Company's portfolio¹. The exercise of the Company's portion of the Warrants would require an investment by the Company of CAN$ 84 million (approximately US$ 63 million), for which the Company would receive Common Shares worth materially more than the exercise cost of the Warrants. If the Company were to let the Warrants expire unexercised, this would result in a decrease in the value of the Company's investment in CIOC of approximately US$ 100 million. In addition, the Company does not believe that there is an active secondary market for the Warrants such that it can realise materially similar value via a secondary sale of the Warrants. The Company intends to fund the exercise of its portion of the Warrants using available cash².

Shareholders should note that, were the Company to implement the proposed change to the Investment Policy and exercise the Warrants held by it, the relative size of the Company's investment in CIOC would be significantly greater than its investment in any other portfolio company. Consequently, the Company's concentration risk in respect of CIOC (and the energy sub-sectors and geographies in which CIOC operates) would be increased, and the aggregate returns which the Company realises may be disproportionally adversely affected were its investment in CIOC to perform poorly or the value of that investment to be substantially written down.

The Board does not expect the Company to invest material capital in CIOC beyond the exercise of the Warrants, and expects its investment in CIOC to remain below the limit of 35 per cent. of the Company's gross assets being proposed. The remaining 65 per cent. of the Company's gross assets would still be represented by 15 separate portfolio companies, representing a diverse portfolio of exploration, production and midstream companies operating across multiple basins in the United States and Canada as well as in the North Sea and Mexico.

Extraordinary General Meeting

Set out in the Circular is a notice convening the Extraordinary General Meeting of the Company to be held at The Old Government House Hotel, St Ann's Place, St Peter Port, Guernsey GY1 2NU, Channel Islands on Thursday 15 December 2016, at 11.30 a.m.

Expected Timetable

If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.

Unless otherwise stated, all references to times in this document are to London time.

A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Circular will also be shortly available on the Company's website www.riverstonerel.com

About Riverstone Energy Limited

REL is a closed-ended investment company that invests exclusively in the global energy industry, with a particular focus on the exploration & production and midstream sectors. REL aims to capitalise on the opportunities presented by Riverstone's energy investment platform. REL is a member of the FTSE 250 and its ordinary shares are listed on the London Stock Exchange, trading under the symbol RSE. To date, REL has made 17 investments spanning conventional and unconventional oil and gas activities in the Gulf of Mexico, Continental U.S., Western Canada, the U.K. North Sea, the Norwegian Sea, Mexico and credit.

For further details, see www.RiverstoneREL.com

Neither the contents of Riverstone Energy Limited's website nor the contents of any website accessible from hyperlinks on the websites (or any other website) are incorporated into, or form part of, this announcement.

Enquiries

For Riverstone Energy Limited:

Brian Potskowski

Natasha Fowlie

+44 20 3206 6300