Final results for the half year ended
Summary performance
30 June 2014 | |
NAV | $1,137 million |
NAV per share | $16.00 |
Profit/(loss) during period | $(2.4) million1 |
Basic profit/(loss) per share during period | (3.33) cents1 |
Market Capitalisation | $1,124 million / £657 million2 |
Share price | $15.82 / £9.252 |
Highlights
§ REL continues to execute on its strategy and now has a strong portfolio of five investments in the U.S. and
§ Over the first six months of 2014, REL has made three new commitments, totalling
§ The Company has invested a total of
§ The Company has incurred a loss of
Commitments and Investments
§ Committed
· Initial investment of
§ Committed
· Initial investments totalling
§ Committed
· Initial investment of
§ Invested
§ Invested
Manager Outlook
§ The investment pipeline for REL remains robust with several exploration & production and midstream investments in various stages of review and negotiation.
§ Several current industry themes continue to drive the investment opportunity set for REL, including the strong growth in North American oil and gas production, continued advancement in exploration & production technologies, larger energy companies being under pressure to rationalise their assets and development budgets, and a favourable supply / demand outlook in the global oil and gas market.
§ The Investment Manager continues to believe that this is a market where patience and a disciplined approach to investment are likely to be well rewarded.
Sir
"REL has continued to make good progress thus far in 2014. REL had a net asset value at the end of June of
"We are very pleased with the continued progress of REL during the first half of 2014. As we approach the first anniversary of the IPO, our first five investments are developing well and offer investors exposure to a broad range of North American E&P opportunities. Our pipeline of opportunities remains robust and we look forward to exciting future developments for REL in the coming months."
(1) Including KFI's second tranche of 5 million shares and excluding the related KFI commitment fee income for the six months ended
(2) GBP:USD Fx rate of 1.710 as of
(3) Based on total capital raised of
- Ends -
The Investment Manager will host a conference call with investors at
Dial-in (
Dial-in (Intl.): +44 (0)1452550000
About
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. The Company is uniquely positioned to benefit from the large number of investment opportunities being driven by the North American energy revolution and the continued growth in global energy demand. 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
For further details, see www.RiverstoneREL.com
Neither the contents of
Media Contacts
For
Alfredo Marti +44-20-3206-6300
John Cosgrove +1 212-993-0076
|
Brunswick:
+44-207-404-5959
Interim Report and Unaudited Interim Condensed Financial Statementsfor the six months ended 30 June 2014
A focus on long-term capital growth |
Riverstone Energy Limited (LSE: RSE) |
Financial and Operational Highlights
Committed to Date | $376 million/31 per cent. of total capital raised(1) |
Commitments during the six months ended 30 June 2014 | Committed a total of $225 million: (i) $83 million to Rock Oil (ii) $82 million to Fieldwood and (iii) $60 million to CIOC |
Invested to Date | $166 million/14 per cent. of capital raised(1) |
Investments during the six months ended 30 June 2014 | Invested a total of $165 million: (i) $66 million in Liberty II (ii) $54 million in Fieldwood (iii) $39 million in CIOC (iv) $5 million in Eagle II and (v) $2 million in Rock Oil |
Key Financials
NAV as at 30 June 2014 | $1,137 million |
NAV per share as at 30 June 2014 | $16.00 |
Profit/(loss) for the six months ended 30 June 2014 | $(2.4) million(2) |
Basic profit/(loss) per share for the six months ended 30 June 2014 | (3.33) cents(2) |
Market capitalisation at 30 June 2014 | $1,124 million/£657 million(3) |
Share price at 30 June 2014 | $15.82/£9.25(3) |
(1) Based on total capital raised of
(2) Including KFI's second tranche of 5 million shares and excluding the related KFI commitment fee income for the six months ended
(3) Assumed exchange rate of 1.710 $/£.
Chairman's Statement
A very good start…
"REL has made good progress over the first half of 2014. We have made a number of new investments during the first half of the year. In addition, the first two investments we made in 2013 continue to show promising results. REL has also been able to deliver strongly on its stated objectives to invest alongside proven management teams across a broad footprint of exploration and production in
Although still in our first year of operations as a company, as of
Events in both
This growth in
Performance
REL incurred a loss of
During the period, the Company made three new commitments and invested capital in each of the five companies in the portfolio.
The new capital commitments made during the period were of
As for the companies that were in the portfolio at the start of the period, REL invested
The five REL companies cover a broad range of the North American exploration and production opportunity set, geographically stretching from the Gulf of
During the period, Riverstone also announced it commenced fundraising for a new private equity fund, Fund VI, which has a target of
On behalf of the Board, I would like to thank all of our shareholders for their commitment to REL. The investment pipeline for the Company remains robust, with a number of actionable exploration & production and midstream investments in various stages of review and negotiation. We are pleased with our progress and confident the Company will perform strongly for shareholders.
Sir
Chairman
(1) Based on total capital raised of
(2) Source:
Investment Manager's Report
Macro-trends continue to provide positive backdrop…
During the first six months of this year, we have seen significant asset divestments announced by major oil companies; we have seen U.S. oil production on track to reach levels not seen since the 1970s; and we have seen renewed geopolitical unrest once again impacting global energy markets.
This has created a positive backdrop for our business. Our focus on
About the Investment Manager
Appointed in
Investment Strategy
The Investment Manager's objective is to achieve superior risk adjusted returns by making privately negotiated control investments primarily in the exploration and production and midstream energy sectors. The energy sector is global and a significant component of virtually all major economies. Prevalent market drivers of economic expansion, population growth, development of markets, deregulation and privatisation are expected to continue to create opportunities globally for investors in energy.
Key Drivers:
• The industry is being transformed as the unconventional production growth in
• Growing success rates of deepwater exploration and other technology-driven sources of reserves.
• Larger companies are under pressure to rationalise assets.
• Historical under-investment in energy infrastructure.
Macro-drivers make energy investment a very attractive proposition, particularly in shale gas, tight oil, energy infrastructure, orphaned assets and certain offshore basins such as the Gulf of
The Investment Manager, through its affiliates, has an outstanding track record of building businesses with exceptional management teams and of delivering consistently strong returns and significant outperformance against both crude oil and natural gas benchmarks. The Company aims to capitalise on the opportunities presented by Riverstone's pipeline of investments.
The Investment Manager utilises its extensive industry expertise and relationships to thoroughly evaluate and investigate investment prospects and uses its significant experience in conducting due diligence, valuing assets and all other aspects of deal execution, including financial and legal structuring, accounting and compensation design. The Investment Manager also draws upon its extensive network of relationships with industry-focused professional advisory firms to assist with due diligence in other areas such as legal, accounting, tax, employee benefits, environmental, engineering or insurance.
Investment Portfolio Summary
The Investment Manager has assessed numerous potential exploration & production and midstream investments since REL's admission. As of
Liberty II
As of
As of
Eagle II
As of
As of
Rock Oil
On
As of
Fieldwood
On
As of
CIOC
On
As of
Valuation
The Investment Manager is charged with the responsibility of valuing the assets held by REL through the Partnership. The Partnership has directed that securities and instruments be valued at their fair value. REL's valuation policy follows the IFRS accounting standards and IPEV Valuation Guidelines. Riverstone values each underlying investment in accordance with the Riverstone valuation policy, the IFRS accounting standards and IPEV Valuation Guidelines. The value of REL's portion of that investment is derived by multiplying its ownership percentage by the value of the underlying investment. If there is any divergence between the Riverstone valuation policy and REL's valuation policy, the Partnership's proportion of the total holding will follow REL's valuation policy and the Fund V proportion will follow the Riverstone valuation policy. Valuations determined by Riverstone are disclosed quarterly to investors.
Riverstone values its investments using common industry valuation techniques, including comparable public market valuation, comparable merger and acquisition transaction valuation, and discounted cash flow valuation.
For development-type investments, Riverstone also considers the recognition of appreciation of subsequent financing rounds, if any, or if subsequent financing rounds are below original cost, the investment is valued at the "down round". For those early stage privately held companies where there are other indicators of a decline in the value of the investment, Riverstone will value the investment accordingly even in the absence of a subsequent financing round.
Riverstone reviews the valuations on a quarterly basis with the Riverstone investment committee as part of the valuation process.
Formation and Initial Expenses
The formation and initial expenses of the Company, in the amount of approximately
Investment Management Fee
The Investment Manager has agreed to deduct from its annual Investment Management Fee all fees, travel costs and related expenses of the Directors exceeding certain specified annual limits (see Note 9).
The annual limits are subject to adjustment by agreement between the Investment Manager and the Company acting by its independent Directors. Based on the NAV as of
The maximum amount pro-rated for the period was
Uninvested Cash
Of the
In connection with the listing of REL on the
Going Concern
Of the
Principal Risks and Uncertainties
The Company's assets consist of investments, through the Partnership, within the global energy sector, with a particular focus on opportunities in the global exploration and production and midstream energy sub-sectors. Its principal risks are therefore related to market conditions in the energy sector in general, but also the particular circumstance of the businesses in which it is invested through the Partnership. The Investment Manager to the Partnership seeks to mitigate these risks through active asset management initiatives and carrying out due diligence work on potential targets before entering into any investments.
The key areas of risk faced by the Company are the following: 1) concentration risk from investing only in the global energy sector, 2) Ordinary Shares trading at a discount to NAV per Share and 3) inherent risks associated with the exploration and production and midstream sectors of the global energy sector.
The principal risks and uncertainties of REL were identified in further detail in the 2013 Annual Report and Financial Statements. There have been no changes to REL's principal risks and uncertainties in the six-month period ended
Outlook
The investment pipeline for REL remains robust with several actionable exploration and production and midstream investments in various stages of review and negotiation. Several current industry themes continue to drive the investment opportunity set for REL, as outlined above. The Investment Manager continues to believe that this is a market where patience and a disciplined approach to investment are likely to be well rewarded.
(1) Gross MOIC is Multiple of
(2) Does not include KFI's second tranche of
(3) The Company retained
Directors' Responsibilities Statement
The Directors are responsible for preparing this Interim Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:
• The unaudited interim condensed financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU; and
• The Chairman's Statement and Investment Manager's Report meet the requirements of an interim management report, and include a fair review of the information required by:
(i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the unaudited interim condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the year and that have materially affected the financial position and performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
On behalf of the Board
Sir
Chairman
Independent Review Report to the Members of Riverstone Energy Limited
We have been engaged by the Company to review the condensed set of financial statements in the Interim Financial Report for the six months ended
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (
Directors' Responsibilities
The Interim Financial Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Financial Report in accordance with the Disclosure and Transparency Rules of the United Kingdom's
As disclosed in Note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim Financial Report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Interim financial report for the six months ended
(1) The maintenance and integrity of the Company's website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.
(2) Legislation in
Condensed Statement of Financial Position
As at
| Notes | 30 June 2014 $'000 (Unaudited) | 31 December 2013 $'000 (Audited) |
ASSETS: |
|
|
|
Non-current assets |
|
|
|
Investment at fair value through profit or loss | 7 | 1,129,002 | 1,130,051 |
Total non-current assets |
| 1,129,002 | 1,130,051 |
|
|
|
|
Current assets |
|
|
|
Trade and other receivables |
| 285 | 553 |
Cash and cash equivalents |
| 9,503 | 11,805 |
Total current assets |
| 9,788 | 12,358 |
|
|
|
|
TOTAL ASSETS |
| 1,138,790 | 1,142,409 |
|
|
|
|
LIABILITIES: |
|
|
|
Non-current liabilities |
|
|
|
Due to affiliates | 9 | 419 | 1,028 |
|
|
|
|
Current liabilities |
|
|
|
Trade and other payables |
| 380 | 1,132 |
Due to affiliates | 9 | 1,351 | 1,243 |
Total current liabilities |
| 1,731 | 2,375 |
|
|
|
|
TOTAL LIABILITIES |
| 2,150 | 3,403 |
|
|
|
|
NET ASSETS |
| 1,136,640 | 1,139,006 |
|
|
|
|
EQUITY |
|
|
|
Share capital |
| 1,138,431 | 1,138,431 |
(Accumulated losses)/Retained earnings |
| (1,791) | 575 |
TOTAL EQUITY |
| 1,136,640 | 1,139,006 |
|
|
|
|
Number of shares in issue at period end | 10 | 71,032,058 | 71,032,058 |
Net asset value per share ($) | 10 | 16.00 | 16.04 |
The condensed financial statements on pages 10 to 22 were approved and authorised for issue by the Board of Directors on
Sir Robert Wilson Chairman | Richard Hayden Director |
The accompanying notes form an integral part of these interim condensed financial statements.
Condensed Statement of Comprehensive Income
For the six months ended
| Notes | 1 January 2014 to 30 June 2014 $'000 (Unaudited) |
Income |
|
|
Change in fair value of investment at fair value through profit or loss | 7 | (1,049) |
|
|
|
Expenses |
|
|
Directors' fees and expenses |
| (540) |
Legal and professional fees |
| (222) |
Audit fees |
| (133) |
Other operating expenses |
| (1,212) |
Total expenses |
| (2,107) |
|
|
|
Operating loss for the period |
| (3,156) |
|
|
|
Finance income |
|
|
Foreign exchange gain |
| 161 |
Other finance income | 9 | 626 |
Interest income |
| 3 |
Total finance income |
| 790 |
|
|
|
Loss for the period |
| (2,366) |
Other comprehensive income |
| - |
Total comprehensive loss for the period |
| (2,366) |
|
|
|
Basic loss per share (cents) | 10 | (3.33) |
Diluted loss per share (cents) | 10 | (3.94) |
All activities derive from continuing operations.
The accompanying notes form an integral part of these interim condensed financial statements.
Condensed Statement of Changes in Equity
For the six months ended
| Share capital $'000 | Retained earnings/ (Accumulated losses) $'000 | Total Equity $'000 |
As at 1 January 2014 | 1,138,431 | 575 | 1,139,006 |
|
|
|
|
Loss for the period | - | (2,366) | (2,366) |
Other comprehensive income | - | - | - |
Total comprehensive loss for the period | - | (2,366) | (2,366) |
|
|
|
|
As at 30 June 2014 | 1,138,431 | (1,791) | 1,136,640 |
The accompanying notes form an integral part of these interim condensed financial statements.
Condensed Statement of Cash Flows
For the six months ended
| 1 January 2014 to 30 June 2014 $'000 (Unaudited) |
Cash flows from operating activities |
|
Operating loss for the period | (3,156) |
|
|
Adjustments for: |
|
Net finance income | 629 |
Change in fair value on investment at fair value | 1,049 |
through profit or loss |
|
Decrease in amounts due to affiliates | (501) |
Decrease in trade receivables | 268 |
Decrease in trade payables | (752) |
Foreign exchange loss on trade receivables/payables | (40) |
Net cash used in operating activities | (2,503) |
Net movement in cash and cash equivalents during the period | (2,503) |
|
|
Cash and cash equivalents at the beginning of the period | 11,805 |
Effect of foreign exchange rate changes | 201 |
Cash and cash equivalents at the end of the period | 9,503 |
The accompanying notes form an integral part of these interim condensed financial statements.
Notes to the Interim Condensed Financial Statements
For the six months ended
1. General information
The Company makes its investments through the Partnership, a
The Partnership invests alongside Private Riverstone Funds in all Qualifying Investments in which the Private Riverstone Funds participate. These funds are managed and advised by affiliates of the Investment Manager, and therefore all of these parallel investments are considered to be related party transactions. Further detail of these investments is provided in the Investment Manager's Report.
2. Accounting policies
Basis of preparation
The annual financial statements for the period ended
These interim condensed financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". They do not contain all the information and disclosures presented in the annual financial statements and should be read in conjunction with the Annual Financial Statements as of
The same accounting policies and methods of computation have been followed in the preparation of these interim condensed financial statements as were followed in the annual financial statements for the period ended
These interim condensed financial statements are presented in U.S. dollars and are rounded to the nearest $'000, unless otherwise indicated.
3. Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors, as a whole. The key measure of performance used by the Board to assess the Company's performance and to allocate resources is the total return on the Company's Net Asset Value, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the Financial Statements.
For management purposes, the Company is organised into one main operating segment, which invests in one limited partnership.
All of the Company's income is derived from within
All of the Company's non-current assets are located in the
Due to the Company's nature, it has no customers.
4. Critical accounting judgement and estimation uncertainty
The estimates and judgements made by management are consistent with those made in the annual financial statements for the period ended
5. Taxation
The Company is exempt from taxation in
The Company has made an election to, and currently expects to conduct its activities so as to be treated as a partnership for U.S. federal income tax purposes. Therefore, the Company expects that it generally will not be liable for U.S. federal income taxes. Instead, each of the Company's shareholders will take into account its respective share of the Company's items of income, gain, loss and deduction in computing its U.S. federal income tax liability as if such shareholder had earned such income directly, even if no cash distributions are made to the shareholder.
The
Local taxes may apply at the jurisdictional level on profits arising in operating entity investments. Further withholding taxes may apply on distributions from such operating entity investments. Based upon the current commitments and investments in Liberty II, Eagle II, Rock Oil and Fieldwood, the future U.S. tax liability on profits is expected to be in the range of 35 to 41.5 per cent.
6. Fair Value
The level in the fair value hierarchy within which the financial assets or financial liabilities are categorised is determined on the basis of the lowest level input that is significant to the fair value measurement.
Financial assets and financial liabilities are classified in their entirety into only one of the three levels.
The fair value hierarchy has the following levels:
• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The Company's only financial instrument carried at fair value is its investment in the Partnership which has been classified within Level 3 as it has unobservable inputs and is not traded. Amounts classified under Level 3 for the periods ended
The fair value of all other financial instruments approximates their carrying value.
Transfers during the period
There have been no transfers between levels. Due to the nature of the investments, they are always expected to be classified under Level 3.
Valuation techniques
The value of the Company's investment in the Partnership is based on the value of the Company's limited partner capital account within the Partnership. This is based on the components within the Partnership, principally the value of the Partnership's investments in addition to cash and U.S. treasury bills held. Any fluctuation in the value of the Partnership's investments in addition to cash and U.S. treasury bills held will directly impact on the value of the Company's investment in the Partnership.
In measuring this fair value, the net asset value of the Partnership is adjusted, as necessary, to reflect liquidity, future commitments, and other specific factors of the Partnership and Investment Manager.
When valuing the underlying investee companies, the Investment Manager reviews information provided by the underlying investee companies and other business partners and applies IPEV methodologies, to estimate a fair value as at the date of the statement of financial position.
Initially, acquisitions are valued at price of recent investment. Subsequently, and as appropriate, the Investment Manager values the investments using common industry valuation techniques, including comparable public market valuation, comparable merger and acquisition transaction valuation, and discounted cash flow valuation. For early stage private investments, Riverstone's investment due diligence process includes assumptions about short-term financial results in determining the appropriate purchase price for the investment. The techniques used in determining the fair value of the Company's investments through the Partnership are selected on an investment by investment basis so as to maximise the use of market based observable inputs.
The Partnership's investments in Eagle II, Liberty II, Rock Oil, CIOC and Fieldwood are valued using the techniques described in the Company's valuation policy. For the period ended
The Board reviews and considers the fair value arrived at by the Investment Manager before incorporating into the fair value of the Partnership. The variety of valuation bases adopted, quality of management information provided by the underlying investee companies and the lack of liquid markets for the investments mean that there are inherent difficulties in determining the fair value of these investments that cannot be eliminated. Therefore the amounts realised on the sale of investments may differ from the fair values reflected in these interim condensed financial statements and the differences may be significant.
The Company approves the valuations performed by the Investment Manager and monitors the range of reasonably possible changes in significant observable inputs on a regular basis.
7. Investment at fair value through profit or loss
| 30 June 2014 $'000 (Unaudited) | 31 December 2013 $'000 (Audited) |
Cost |
|
|
Brought forward | 1,130,438 | - |
Investment in the Partnership | - | 1,130,438 |
Carried forward | 1,130,438 | 1,130,438 |
|
|
|
Fair value adjustment through profit or loss |
|
|
Brought forward | (387) | - |
Fair value movement during period | (1,049) | (387) |
Carried forward | (1,436) | (387) |
Fair value at end of the period | 1,129,002 | 1,130,051 |
The movement in fair value is derived from the fair value movements in the underlying investments held by the Partnership, net of income and expenses of the Partnership and its related Investment Undertakings, including any Performance Allocation or applicable taxes.
Summary financial information for the Partnership
| 30 June 2014 $'000 (Unaudited) | 31 December 2013 $'000 (Audited) |
Net asset value |
|
|
Investments at fair value | 171,706 | 989 |
Cash and cash equivalents | 111,775 | 529,518 |
U.S. treasury bills | 849,991 | 599,974 |
Management fee payable - see Note 9 | (1,396) | (387) |
Deferred tax on investment - see Note 5 | (1,507) | - |
Other net liabilities | (491) | (43) |
Partnership's net asset value | 1,130,078 | 1,130,051 |
General Partner performance allocation - see Note 9 | (1,076) | - |
Fair Value of REL's investment in the Partnership | 1,129,002 | 1,130,051 |
| 1 January 2014 to 30 June 2014 $'000 (Unaudited) |
Summary Income Statement |
|
Total income | 5,608 |
Management fee expense - see Note 9 | (2,790) |
Deferred tax on investment - see Note 5 | (1,507) |
Other operating expenses | (1,284) |
Partnership's operating profit for the period | 27 |
General Partner performance allocation - see Note 9 | (1,076) |
Portion of the operating loss for the period for REL's investment in the Partnership | (1,049) |
8. Contingent liabilities
Contingent liabilities are potential future cash outflows where the likelihood of payment is considered more than remote but is not considered probable or cannot be measured reliably.
Formation and initial expenses
The formation and initial expenses of the Company, in the amount of approximately
9. Related party transactions
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party in making financial or operational decisions.
Directors
The Company has nine non-executive Directors. Annual remuneration terms for each Director are as follows: the Chairman receives
Directors' fees for the period to
None of the non-independent Directors are paid any remuneration in connection with their directorship.
Messrs Lapeyre and Leuschen are senior executives of Riverstone and have direct or indirect economic interests in affiliates and/or related parties of the Investment Manager, which holds the founder Ordinary Share of the Company, the General Partner, the general partner of Fund V,
Lord Browne is a senior executive of Riverstone and has direct or indirect economic interests in Other Riverstone Funds as an investor.
Mr Hackett is a senior executive of Riverstone and has direct or indirect economic interests in Other Riverstone Funds as an investor.
Messrs Barker and Hayden have direct or indirect economic interests in Other Riverstone Funds as investors.
Investment Manager
For the provision of services under the Investment Management Agreement, the Investment Manager is paid in cash out of the assets of the Partnership an annual Management Fee equal to 1.5 per cent. per annum of the Company's Net Asset Value. The fee is payable quarterly in arrear and each payment is calculated using the quarterly Net Asset Value as at the relevant quarter end. Notwithstanding the foregoing, no Management Fee is paid on the cash proceeds of the Issue to the extent that they have not yet been invested or committed to an investment. Amounts not forming part of a commitment to an investment that are invested in cash deposits, interest-bearing accounts or sovereign securities directly or indirectly, are not considered to have been invested or committed for these purposes.
The Investment Manager has agreed to deduct from its annual Management Fee all fees, travel costs and related expenses of the Directors exceeding the following annual limits:
Portion of NAV | Limit (as a percentage of the then last published NAV) |
Up to and including £500 million | 0.084 per cent. |
From £500 million to and including £600 million | 0.084 per cent. at £500 million and thereafter adjusted downwards proportionately to NAV to 0.07 per cent. at £600 million. |
From £600 million to and including £700 million | 0.07 per cent. at £600 million and thereafter adjusted downwards proportionately to NAV to 0.06 per cent. at £700 million. |
Above £700 million | 0.06 per cent. |
The above limits are subject to adjustment by agreement between the Investment Manager and the Company acting by its independent Directors. Based on the NAV as of
During the period, the Partnership incurred Management Fees of
General Partner
The General Partner makes all management decisions, other than investment management decisions, in relation to the Partnership and controls all other actions by the Partnership and is entitled to receive a Performance Allocation, calculated and payable at the underlying investment holding subsidiary level, equal to 20 per cent. of the realised gross profits (if any) on the sale of any underlying asset of the Company.
The General Partner is entitled to receive its Performance Allocation in cash, a substantial portion of which Riverstone, through its affiliate RELCP, intends to reinvest in Ordinary Shares of the Company on the terms summarised in Part I and Part VIII of the Prospectus. No amounts are liable to be paid as yet. An amount of
Qualifying Investments
For so long as the Investment Manager (or any of its affiliates) remains the investment manager of the Company, the Company, through the Partnership, invests alongside Private Riverstone Funds in all Qualifying Investments in which the Private Riverstone Funds participate. Three additional such qualifying investments were committed to by the Company, through the Partnership, in the period, taking the total to five.
Cornerstone Investors
Each of the
Each Cornerstone Investor has agreed with the Company and the Joint Bookrunners not to dispose of its Ordinary Shares for a specified period from Admission, subject to certain exclusions as described in paragraph 7.8 of Part VIII "Additional information" of this Prospectus. The subscriptions by each of the
KFI, one of the
An upfront two year financing charge equal to 1.5 per cent. of the unpaid subscription monies of
The Company and KFI are party to an Off-Market Acquisition Agreement, dated
KFI has the right to pay the second tranche of subscription monies to the Company at any time after Admission, and prior to the due date for payment. The share capital will be issued in Pounds Sterling and therefore the Company bears the foreign exchange risk of the transaction.
The terms of the Off-Market Acquisition Agreement, which is governed by
| 30 June 2014 $'000 (Unaudited) | 31 December 2013 $'000 (Audited) |
Other finance income recognised through Profit and Loss in the period | 626 | 214 |
Due to affiliates current portion | 1,351 | 1,243 |
Due to affiliates non-current portion | 419 | 1,028 |
10. Earnings (loss) per share and net asset value per share
| 1 January 2014 to 30 June 2014 (Unaudited) | |
Loss per share | Basic | Diluted |
Loss for the period ($'000) | (2,366) | (2,992) |
Weighted average numbers of shares in issue | 71,032,058 | 76,032,058 |
Loss per share (cents) | (3.33) | (3.94) |
| 1 January 2014 to 30 June 2014 $'000 (Unaudited) |
Loss for the period | (2,366) |
Less: Commitment fee relating to KFI arrangement - see Note 9 | (626) |
Loss for the period including assumed share issues | (2,992) |
|
|
Weighted average numbers of shares in issue | 71,032,058 |
Plus: Dilutive potential ordinary shares relating to KFI arrangement - see Note 9 | 5,000,000 |
Weighted average numbers of shares in issue | 76,032,058 |
The earnings or loss per share is based on the profit or loss of the Company for the period and on the weighted average number of shares the Company had in issue for the period.
The deferred issue of shares to KFI as outlined in Note 9 may have a dilutive effect on earnings or loss per share. There are no other dilutive shares in issue.
Net asset value per share
| 30 June 2014 (Unaudited) | 31 December 2013 (Audited) |
NAV ($'000) | 1,136,640 | 1,139,006 |
Number of shares in issue | 71,032,058 | 71,032,058 |
Net asset value per share ($) | 16.00 | 16.04 |
The net asset value per share is arrived at by dividing the net assets as at the date of the statement of financial position by the number of Ordinary Shares in issue at that date.
Glossary of Capitalised Defined Terms
"Administrator" or "Heritage" or "HIFM" means
"Admission" means admission, on
"AIC" means the
"AIC Code" means the AIC Code of Corporate Governance;
"AIC Guide" means the AIC Corporate Governance Guide for Investment Companies;
"Annual General Meeting" or "AGM" means the general meeting of the Company;
"Annual Report and Financial Statements" means the annual publication of the Company provided to the Shareholders to describe their operations and financial conditions, together with their Financial Statements;
"Articles of Incorporation" or "Articles" means the articles of incorporation of the Company;
"Audit Committee" means a formal committee of the Board with defined terms of reference;
"Board" or "Directors" means the directors of the Company;
"Boepd" means barrels of equivalent oil per day;
"CIOC" means
"Companies Law" means the Companies (
"Company" or "REL" means
"
"Corporate Governance Code" means The UK Corporate Governance Code as published by the
"Eagle II" means
"EBITDA" means earnings before interest, taxes, depreciation and amortisation;
"EU" means the
"FCA" means the
"Fieldwood" means
"Financial Statements" means the audited financial records of the Company, including the statement of financial position, the statement of comprehensive income, the statement of cash flows, the statement of changes in equity and associated notes;
"Fund V" means
"Fund VI" means
"General Partner" means
"GFSC" or "Commission" means the
"GFSC Code" means the GFSC Finance Sector Code of Corporate Governance;
"Gross IRR" means an aggregate, annual, compound, gross internal rate of return on investments. Gross IRR does not reflect expenses to be borne by the relevant investment vehicle or its investors including, without limitation, carried interest, management fees, taxes and organisational, partnership or transaction expenses;
"Gross MOIC" means gross multiple of invested capital;
"Hunt" means
"IFRS" means the International Financial Reporting Standards, being the principles-based accounting standards, interpretations and the framework by that name adopted by the
"Interim Financial Report" means the Company's half yearly report and unaudited interim condensed financial statements for the period ended 30 June;
"Investment Manager" or "RIL" means
"Investment Management Agreement" means the investment management agreement dated
"Investment Undertaking" means the Partnership, any intermediate holding or investing entities that the Company or the Partnership may establish from time to time for the purposes of efficient portfolio management and to assist with tax planning generally and any subsidiary undertaking of the Company or the Partnership from time to time;
"IPEV Valuation Guideline" means the International Private Equity and Venture Capital Valuation Guidelines;
"IPO" means the initial public offering of shares by a private company to the public;
"ISA" means international accounting standards as issued by the Board of the International Accounting Standards Committee;
"ISIN" means an International Securities Identification Number;
"KFI" means
"Liberty II" means
"Listing Rules" means the listing rules made by the
"
"LSE Admission Standards" means the rules issued by the
"Management Engagement Committee" means a formal committee of the Board with defined terms of reference;
"Management Fee" means the management fee to which RIL is entitled;
"McNair" means
"Mmboe" means million barrels of oil equivalent;
"NAV per Share" means the Net Asset Value per Ordinary Share;
"Net Asset Value" or "NAV" means the value of the assets of the Company less its liabilities as calculated in accordance with the Company's valuation policy and expressed in U.S. dollars;
"Nominations Committee" means a formal committee of the Board with defined terms of reference;
"Official List" is the list maintained by the
"Ordinary Shares" means redeemable ordinary shares of no par value in the capital of the Company issued and designated as "Ordinary Shares" and having the rights, restrictions and entitlements set out in the Articles;
"Other Riverstone Funds" means other Riverstone-sponsored, controlled or managed entities, including Fund V, which are or may in the future be managed or advised by the Investment Manager or one or more of its affiliates, excluding the Partnership;
"Partnership" or "RELIP" means
"Partnership Agreement" means the partnership agreement in respect of the Partnership between inter alios the Company as the sole limited partner and the General Partner as the sole general partner dated
"Performance Allocation" means the Performance Allocation to which the General Partner is entitled;
"POI Law" means the Protection of Investors (Bailiwick of
"Private Riverstone Funds" means Fund V and all other private multi-investor, multi-investment funds that are launched after Admission and are managed or advised by the Investment Manager (or one or more of its affiliates) and excludes Riverstone employee co-investment vehicles and any Riverstone managed or advised private co-investment vehicles that invest alongside either Fund V or any multi-investor multi-investment funds that the Investment Manager (or one or more of its affiliates) launches after Admission;
"Prospectus" means the prospectus published on
"Qualifying Investments" means all investments in which Private Riverstone Funds participate which are consistent with the Company's investment objective where the aggregate equity investment in each such investment (including equity committed for future investment) available to the relevant
"RELCP" means
"RIL" or "Investment Manager" means
"Riverstone" means
"Rock Oil" means
"Shareholder" means the holder of one or more Ordinary Shares;
"Stewardship Code" means the UK Stewardship Code;
"
"
"U.S." or "
"£" or "Pounds Sterling" means British pound sterling; and
"$" means
General Information
Investment Manager
P.O. Box 1350
KY1-1108
Heritage Hall
PO Box 225
St Peter Port
Registered office
Heritage Hall
PO Box 225
St Peter Port
Registrar
Longue Hougue House
St Sampson
Principal bankers
1 Glategny Esplanade
St Peter Port
English solicitors to the Company
PO Box 98
Les Banques
St Peter Port
U.S. legal advisors to the Company
Suite 2500
TX 77002
Independent auditor
PO Box 9,
St Julian's Avenue
St Peter Port
Website: www.RiverstoneREL.com
ISIN: GG00BBHXCL35
Ticker: RSE
Public relations adviser
16 Lincoln's
Corporate Brokers
JP Morgan Cazenove
Cautionary Statement
The Chairman's Statement and Investment Manager's Report have been prepared solely to provide additional information for shareholders to assess the Company's strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose.
The Chairman's Statement and Investment Manager's Report may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.
These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding the intentions, beliefs or current expectations of the Directors and the Investment Manager, concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual investment performance, results of operations, financial condition, liquidity, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Directors and the Investment Manager, expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Heritage Hall, PO Box 225,
T: +44 (0) 1481 716000
F: +44 (0) 1481 730617
Further information available online:
This information is provided by RNS