27th Feb 2019 09:04
LONDON (Alliance News) - Energy and power investor Riverstone Energy Ltd said on Wednesday its net asset value decreased in 2018 due to falls in assets within its portfolio.
Net asset value per share as at December 31 was USD17.91, down 13% from USD20.63 on the same date the year before, and was down 9% on sterling terms at GBP14.06 from GBP15.27.
Riverstone sunk to a loss of USD241.0 million for 2018 from a profit of USD44.6 million, due to a loss of USD236.4 million on the fair value of investments, compared to a gain of USD48.2 million the prior year.
Riverstone said its net asset value fall over the period was because of declining valuations in several of its exploration & production investments due to falling commodity prices.
Specifically, the main drivers of the decrease was Hammerhead Resources Inc and Centennial Resource Development Inc.
Both companies saw a fall in their gross multiple of investment capital for the year with Hammerhead decreasing to 1.5x from 1.9x the year before, and Centennial to 1.3x from 1.9x.
Hammerhead experienced challenging conditions in the Canadian oil market, while Nasdaq-listed Centennial suffered from a decline in its share price to USD11.02 from USD19.80 in 2017.
Riverstone's share price in sterling terms was 1,076.00 pence on December 31, reflecting a discount to net asset value of 23%.
Shares in Riverstone Energy were down 1.9% on the day Wednesday at 1,028.00 pence, having declined further since the year-end.
"As the current portfolio matures and the pace of realisations increases, REL will continue to seek to reinvest in opportunities that span the entire energy value chain. In order to effect this change to its portfolio construction, we expect that REL will make more investments independently of Riverstone's private funds going forward. This approach should result in a reduction in exposure to the exploration and production sector," said Chair Richard Hayden.
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