Press release

LEI: 213800HAZOW1AWRSZR47

23 February 2024

Riverstone Energy Limited

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO CANADA, AUSTRALIA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

Tender Offer and Notice of Extraordinary General Meeting

Further to its announcement on 8 February 2024, Riverstone Energy Limited (the "Company") announces a Tender Offer for up to 15,047,619 of the Company's ordinary shares (the "Shares"), representing 35.66 per cent. of the existing Shares in issue (excluding any Shares held in treasury), to be acquired at a single price equal to £10.50 (the "Tender Price"). Capitalised terms used but not otherwise defined in this announcement shall have the same meaning as set out in the circular in respect of the Tender Offer (the "Circular") being published later today. 

The Tender Price represents a premium of approximately 14 per cent. to the closing market price per Share of £9.20 on 21 February 2024 (being the latest practicable date prior to publication of this document) and represents a discount of approximately 16 per cent. to the unaudited Net Asset Value per Share of £12.53 as at 31 December 2023 (on the basis of the then prevailing USD: GBP exchange rate of 1.2736:1).

The Board has arranged for the Tender Offer to return $200 million, equivalent to £158 million[1]

in Sterling of excess capital to Eligible Shareholders by providing the opportunity for all such Eligible Shareholders on the Record Date to exit part of their Shareholding in the Company by participating in the Tender Offer, whilst ensuring that continuing Shareholders who do not wish to tender their Shares are not disadvantaged, as the Tender Offer is expected to be accretive to the Company's prevailing published NAV at the point of completion of the Tender Offer.

The Tender Offer will be available to Eligible Shareholders on the Register as at the Record Date, which is 6.00 p.m. (London time) on 25 March 2024.

Reasons for the tender offer and outlook for the Company

As at 21 February 2024 (being the latest practicable date prior to publication of this document, the Company held aggregate cash balances of approximately $291 million. A significant portion of these cash balances are attributable to the disposal of the Company's investment in Hammerhead Energy Inc. to Crescent Point Energy Corp.

These cash balances exceed the amount that the Company currently requires for its investment purposes. Accordingly, the Company has determined to use $200 million, equivalent to £158 million in Sterling, of its cash to provide the opportunity for all Eligible Shareholders on the Record Date to exit part of their Shareholding in the Company by participating in the Tender Offer.

Following completion of the Tender Offer, and assuming it is accepted in full, the Company's remaining cash balances are expected to total approximately $91 million.  These remaining cash balances will be applied to the Company's on-going investment activities, expenses and, as described below, potentially to further market repurchases of Shares.

The Company intends that, through the Investment Manager, it will continue to work as an active investor with the aim of enhancing the value of both its conventional and decarbonisation investment portfolios, as demonstrated by the Investment Manager's recent work in relation to the Company's investments in each of Hammerhead, Onyx and Permian Resources.  The Company is committed to managing its existing decarbonisation investment portfolio to maturity, which may include, where appropriate, making follow-on investments and in other cases disposing of, or agreeing to the dilution of existing investments by not participating in future funding rounds.  The Company's investment management agreement requires that the Board must consent in advance to any further investments that are made by the Company. 

The Tender Offer

The maximum number of Shares to be acquired under the Tender Offer is 15,047,619 Shares, representing approximately 35.66 per cent. of the Shares in issue (excluding any Shares held in treasury) as at 21 February 2024 and equal in value to £158 million at the Tender Price (the "Available Shares").

The purchase of Shares under the Tender Offer will cause an uplift in Net Asset Value in the Shares for Shareholders who continue with their investment in the Company with the precise amount of the uplift depending on the number of Shares acquired in the Tender Offer.

The Record Date for participation in the Tender Offer is 6.00 p.m. on 25 March 2024. The Tender Offer is subject to certain conditions set out in the Circular and may be suspended or terminated in certain circumstances, as set out in the Circular.

The Company will repurchase from successfully tendering Shareholders (other than certain Overseas Shareholders) up to 35.66 per cent. of the Shares registered in their name (the "Basic Entitlement"), rounded down to the nearest whole number of Shares. Shareholders will also have the option to tender additional Shares to the extent that other Shareholders tender less than their Basic Entitlement. Any such excess tenders will be satisfied pro rata in proportion to the amount tendered in excess of the Basic Entitlement (rounded down to the nearest whole number of Shares).

An Eligible Shareholder tendering up to its Basic Entitlement will have such tender satisfied in full. Any Eligible Shareholder tendering more than its Basic Entitlement ("Excess Applications") will have its Excess Application satisfied if there are sufficient remaining Available Shares. Such Available Shares shall be apportioned to Eligible Shareholders pro rata to their Excess Applications should other Eligible Shareholders not tender the full amount of their Basic Entitlement, and as a result of certain Overseas Shareholders not being permitted to participate in the Tender Offer.

Unless withdrawn in accordance with the instructions set out in the Circular, once tendered, Shares may not be sold, transferred, charged or otherwise disposed of other than in accordance with the Tender Offer.

Further information on how to participate in the Tender Offer and how to tender Shares are set out in the Circular.

Taxation

Shareholders who sell Shares in the Tender Offer may, depending on their individual circumstances, incur a liability to taxation. The attention of Shareholders is drawn to the Circular which sets out a general guide to certain aspects of current law and tax authority practice in respect of UK and US taxation. Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the United Kingdom or the United States should consult an appropriate professional adviser.

Takeover Code

Shareholders should note the following important information relating to certain provisions of the City Code, which will be relevant to purchases of Shares after the date of the Circular.

Under Rule 9 of the City Code, any person or group of persons deemed to be acting in concert who acquires an interest in shares which carry 30 per cent. or more of the voting rights of a company to which the City Code applies is normally required by the Takeover Panel to make a general offer to shareholders of that company to acquire their shares. Rule 9 of the Takeover Code also provides that any person or group of persons deemed to be acting in concert who is interested in shares which in the aggregate carry between 30 per cent. and 50 per cent. of the voting rights of a company to which the City Code applies will be unable, without the Takeover Panel's consent, to acquire, either individually or together, any further voting rights in the company without being required to make a general offer to shareholders of that company to acquire their shares. An offer under Rule 9 must be in cash and at the highest price paid by the person required to make the offer or any person acting in concert with him for any interest in shares in the company during the 12 months prior to the announcement of the offer.

It is possible that, on completion of the Tender Offer, the proportionate size of the shareholding of one or more Shareholders could increase so that they hold 30 per cent. or more of the voting rights of the Company following implementation of the Tender Offer. In particular, as at 21 February 2024 (being the last practicable date prior to publication of this announcement) Moore Capital Management held Shares carrying approximately 19.98 per cent. of the voting rights attaching to the Company's issued Shares (excluding shares held in treasury). Therefore, if Moore Capital Management were to choose not to tender into the Tender Offer (whether in respect of their respective Basic Entitlement or a lower amount) and the Tender Offer completes, the voting rights of the Shares held by Moore Capital Management Group could exceed 30 per cent. of the Company's total voting rights following the Tender Offer.

Under Rule 37.1 of the City Code, when a company purchases its own voting shares, a resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purpose of Rule 9.

A shareholder not acting in concert with the directors will not incur an obligation to make a general offer under Rule 9 if, as a result of the purchase of its own shares by a company, he comes to exceed the percentage limits set out in Rule 9. However, this exception will not normally apply when a shareholder not acting in concert with the directors (as such term is understood for the purposes of the City Code) has acquired an interest in shares at a time when he had reason to believe that such a purchase of its own shares by the company would take place. For the avoidance of doubt, RIGL Holdings, LP, as the investment manager of the Company, is considered to be a Director for the purposes of the City Code.

A Shareholder not acting in concert with the Directors may, therefore, incur an obligation under Rule 9 to make a general offer to Shareholders to acquire their Shares if, as a result of the purchase by the Company of its own Shares from other Shareholders, he, she or it comes to hold or acquires an interest in 30 per cent. or more of the Shares following the Tender Offer or otherwise and he, she or it has purchased Shares or an interest in Shares when he, she or it had reason to believe that the Company would purchase its own Shares (under the Tender Offer or otherwise).

Extraordinary General Meeting

The implementation of the Tender Offer requires the approval of Shareholders. A notice convening an Extraordinary General Meeting of the Company, which is to be held at 11.00 a.m. (London time) on 26 March 2024 at Trafalgar Court, Les Banques St Peter Port Guernsey GY1 4LY, Channel Islands, is set out at the end of the Circular. The quorum requirement for the Extraordinary General Meeting is not less than two Shareholders present in person or by proxy (or, in the case of a corporation, by a duly appointed representative).

The Resolution is to be proposed as a special resolution under Guernsey law and must be passed in order to enable the implementation of the Tender Offer. As a special resolution, the Resolution requires not less than 75 per cent. of the Shareholders and duly appointed proxies attending the meeting and voting on a show of hands to vote in favour (excluding any votes that are withheld) or, if a poll is demanded, not less than 75 per cent. of the total voting rights cast on the relevant resolution (excluding any votes that are withheld) to be in favour.

The Resolution permits the Company to effect the Tender Offer so as to permit those Eligible Shareholders who wish to realise their investment (whether in whole or in part) to do so, subject to the terms and conditions of the Tender Offer and the extent to which Eligible Shareholders tender their Shares.

Board intentions in relation to the Tender Offer

The Board considers that the Tender Offer is in the best interests of Shareholders as a whole.

No Director will tender Shares owned or controlled by that Director in the Tender Offer.

Expected Timetable

All references are to local time in London on the day in question.

The dates set out in the expected timetable may be adjusted by the Company in which event details of the new dates will be notified to Shareholders via an announcement made by the Company through a Regulatory Information Service.

Share Buyback Programme

The authority to repurchase Shares in the Tender Offer pursuant to the Resolution to be proposed at the EGM is in addition to the authority for the Company to make market purchases of Shares granted at the Company's annual general meeting on 23 May 2023. The Company will not make market purchases of Shares while the Tender Offer is continuing. The Company may resume its market purchase share buyback programme following the completion of the Tender Offer, although any decision to resume the buyback programme, the amount of any buyback programme and the timing of any such purchases, will be entirely at the Board's discretion and subject to, amongst other things, applicable law, the Company's performance, market conditions and the cash reserves available to the Company, in each case as determined by the Board with the consent of the Investment Manager at the relevant time.

Publication of Circular

The Circular, which contains the full terms and conditions of the Tender Offer, instructions to Eligible Shareholders on how to tender their Shares should they choose to do so, is being posted to Eligible Shareholders.

A copy of the Circular will shortly be available to view on the Company's website at https://www.riverstonerel.com/

A copy of the Tender Offer circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information

For Riverstone Energy Limited:

Josh Prentice

+44 (0) 20 3206 6300

J.P. Morgan Cazenove - Joint Corporate Broker

William Simmonds

Jeremie Birnbaum

+44 (0) 203 493 8000

Deutsche Numis - Joint Corporate Broker

Hugh Jonathan

Matt Goss

+44 (0) 207 260 1000

About Riverstone Energy Limited:

REL is a closed-ended investment company which invests in the energy industry that has since 2020 been exclusively focussed on pursuing and has committed $211 million to a global strategy across decarbonisation sectors presented by Riverstone's investment platform.  REL's ordinary shares are listed on the London Stock Exchange, trading under the symbol RSE.  REL has 14 active investments spanning decarbonisation, oil and gas, renewable energy and power in the Continental U.S., Western Canada, Europe and Australia.

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) is incorporated into, or forms part of, this announcement.