24th Oct 2019 09:11
(Alliance News) - Energy investment company Riverstone Energy Ltd said Thursday the environment for energy companies remained "challenging" in the third quarter.
At September 30, Riverstone's total investment portfolio totalled USD1.50 billion, 7.1% higher than the USD1.40 billion seen at June 30, with total investments coming in at USD1.89 billion.
"The environment for energy companies, particularly within the onshore exploration and production sector, continued to prove challenging as the front-month WTI oil price and S&P Oil & Gas Exploration & Production Index fell by 7% and 18% over the quarter, respectively," Riverstone said.
The company continued: "This has resulted in a further compression in trading multiples for the E&P sector, with many companies trading at historically low valuations."
As a result, Riverstone's gross multiple of invested capital, which divides the fund's realised and unrealised value, slipped in the third quarter to 0.7 times compared to 0.9 at June 30.
The gross unrealised value of Riverstone's portfolio fell by 32% to USD575 million.
"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 methodologies. The unrealized valuations of Riverstone's onshore E&P investments have therefore been impacted by the deterioration in public company valuations, as well as the lack of M&A and financing activity in the market," the company added.
Shares in Riverstone Energy were 0.8% higher in London on Thursday morning at 519.00 pence each.
By Paul McGowan; [email protected]
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