Press release

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, 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.

15 October 2018

This announcement includes inside information

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

Tender Offer for ordinary shares with an aggregate value of £55,000,000 at a price between £12.00 and £13.75 per ordinary share and Notice of Extraordinary General Meeting

The Company announces a Tender Offer for up to £55,000,000 in value of the Company's ordinary shares, to be acquired at a single price (the "Strike Price") in a range between £12.00 and £13.75 per Share, to be determined on the basis of tenders received. Terms used 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 this morning. 

The Board has arranged for the Tender Offer to be made to enable those Eligible Shareholders who wish to realise a portion of their investment in the Company to do so, 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 14 November 2018. The Company is convening an Extraordinary General Meeting in respect of the Tender Offer, to be held at 2.00 p.m. (London time) on 15 November 2018 at Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP, Channel Islands.

Company performance, outlook and reasons for the tender offer

Since its IPO in October 2013, the Company has performed well, with a share price of £12.52 as at close of business on 12 October 2018 (the latest practicable date prior to publication of this document), which is 25.2 per cent. higher than the IPO price of £10.00 per Share and 56.5 per cent higher than the December 2015 issue price of £8.00 per Share. Over the same respective periods, the S&P Oil & Gas E&P Index ($) is down approximately 43.3 per cent. and up approximately 23.2 per cent.  In addition, since the time of IPO, the Company has achieved, as at 30 September 2018, a gross multiple of invested capital (before the application of fees and taxes) of 2.1x on the investments in which it has fully exited, and has achieved $431 million of gross realisations. This performance has been achieved in the backdrop of a volatile period for oil prices and a prolonged downturn in natural gas prices.

The Company's latest portfolio company valuations as at 30 September 2018 were announced on 12 October 2018.

Further to the announcement on 18 September 2018 in respect of the Hammerhead Resources Inc. capital raise, the Company confirms that, for portfolio diversification reasons, it will not be participating in the capital raise. The capital raise is not expected to have a material impact on the Company's 30 September 2018 valuation of Hammerhead Resources Inc.

The Company will announce its NAV per Share as at 30 September 2018 on 31 October 2018.

Recognising the current liquidity for Shares in the market, the Board is providing an opportunity for all Eligible Shareholders on the Record Date to participate in the Tender Offer to exit part of their Shareholding in the Company. Furthermore, the recent strength in oil prices, driven by increased concerns regarding availability of supply, provides an attractive environment for the Company's investment manager to generate value from its current portfolio. The Company intends to deploy the remainder of its cash balance following completion of the Tender Offer towards attractive opportunities within the existing portfolio and one or more new energy investments which the investment manager is currently progressing. The Company's investment manager remains focused on delivering attractive risk-adjusted returns to shareholders by leveraging the investment manager's extensive platform and deep sector expertise, partnering with best-in class management teams and prudent risk management.

The Company will finance the Tender Offer from its existing cash balances. Following completion of the Tender Offer in mid-November, assuming the Tender Offer is accepted in full, the Company's residual cash balances are expected to total US$140 million.

The Tender Offer

Shareholders may tender all or any part of their holding of Shares for acquisition by the Company at the Strike Price. The Strike Price will be determined on the basis of valid tenders made by Shareholders starting at a minimum price per Share of £12.00 and rising in increments of 25 pence to a maximum price per Share of £13.75 (the "Price Range").

Shareholders who wish to participate in the Tender Offer must choose the points within the Price Range at which they are willing to offer some or all of their Shares in the Tender Offer.

The Strike Price at which Shares are purchased in the Tender Offer will be the lowest price in the Price Range that will allow the Company to acquire £55,000,000 in value of Shares (or such lower amount if insufficient Shares are validly tendered to allow the Company to acquire £55,000,000 in value of Shares).

All Shares acquired in the Tender Offer will be acquired at the same Strike Price for cash in Sterling. Only Shares validly tendered at a price at or below the Strike Price will be acquired in the Tender Offer. Shares tendered at the Strike Price will be subject to scaling back, as described below. All Shares acquired by the Company pursuant to the Tender Offer will be cancelled.

Shareholders may tender Shares at differing points in the Price Range should they wish to do so but cannot make tenders that in aggregate are in respect of more Shares than they own.

If the Strike Price is set at the minimum tender price per Share, a total of 4,583,333 Shares will be repurchased, equal to 5.43 per cent. of the Company's issued share capital as at the date of this document. If the Strike Price is set at the maximum tender price per Share, a total of 4,000,000 Shares will be repurchased, equal to 4.73 per cent, of the Company's issued share capital as at the date of this document. The Company will acquire a maximum number of 4,583,333 Shares in the Tender Offer.

If more Shares have been validly tendered at or below the Strike Price than the Company can acquire at the Strike Price for £55,000,000, valid tenders made below the Strike Price will be accepted in full, whilst valid tenders made at the Strike Price will be scaled back pro rata to the number of Shares validly tendered at the Strike Price so that the aggregate amount payable by the Company does not exceed £55,000,000.

If Eligible Shareholders intend to tender Shares in the Tender Offer and want to maximize the possibility that the Shares that they tender will be purchased, they should specify that they are willing to tender their Shares at the minimum tender price per Share, which is £12.00. However, Eligible Shareholders should note that making a tender at the minimum tender price may lower the Strike Price paid for all Shares acquired in the Tender Offer and could result in the Strike Price being equal to that minimum price per Share.

The consideration payable under the Tender Offer and the costs of its implementation will be financed from the Company's existing cash resources. The costs and expenses for implementing the Tender Offer will be approximately £335,000 (including VAT), which will be paid by the Company irrespective of the outcome of the Tender Offer. There are no variable costs.

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 Takeover Code, which will be relevant to purchases of Shares after the date of this document.

Under Rule 9 of the Takeover 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 Takeover 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 Takeover 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.

Under Rule 37.1 of the Takeover 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 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.

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). The Company is not aware of any Shareholder which, following completion of the Tender Offer, will have an interest in 30 per cent. or more of the Shares.

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 2.00 p.m. (London time) on 15 November 2018 at Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey, GY1 2JP, Channel Islands, is set out at the end of the Circular.

The Resolution is to be proposed as a special resolution under Guernsey law.  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 around the Tender Offer

The Directors make no recommendation to Shareholders as to whether they should tender Shares in the Tender Offer. Whether Shareholders decide to tender Shares will depend, among other things, on their view of the Company's prospects and their own individual circumstances, including their tax position. Shareholders who are in any doubt as to the action they should take should consult an appropriate independent professional adviser.

No Directors will tender Shares owned or controlled by that Director in the Tender Offer, and the Board understands that neither Riverstone Energy Limited Capital Partners, LP nor REL Coinvestment, LP intends to tender their respective Shares 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.

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 www.morningstar.co.uk/uk/NSM

For further information

Riverstone Energy Limited                                                    Tel: +44 (0)20 3206 6300

Ken Ryan

Brian Potskowski

Fraser Johnston-Donne

J.P. Morgan Cazenove                                                           Tel: +44 (0)20 7742 4000

Alex Watkins

Edward Gibson-Watt

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.  REL has 12 active investments spanning conventional and unconventional oil and gas activities in the Continental U.S., Western Canada, Gulf of Mexico, Mexico and credit.