[Context: On February 17, Riverstone announced the sale of 100% of the assets in Austin-based Three Rivers Operating Company III (TROC III). Terms were undisclosed but Riverstone Energy Ltd (LSE: REL) announced it would receive gross proceeds of $205m on an invesment of $94m. Further details and related links are below.]
When TROC III disclosed its initially funding from Riverstone in 2015, the company disclosed that REL would contribute roughly one-third of the equity commitment. Assuming that proportion remained the same then TROC III could have sold for around $615m. The company originally disclosed it was pursuing a sale back in mid 2017.
Three Rivers Operating III | Riverstone
Riverstone Energy Limited Announces Sale of Three Rivers III
London, UK (17 February 2018). Riverstone Holdings LLC (“Riverstone”), the Manager of Riverstone Energy Limited (“REL” or the “Company”), has announced that it has agreed to the sale of 100% of the assets in Three Rivers Operating Company III LLC (“Three Rivers III”), an Austin-based oil and gas company focused on the Permian Basin.
Riverstone formed Three Rivers III in April 2015 to pursue acquisition, exploitation and development opportunities in the Permian Basinof West Texas and Southeast New Mexico, following successful partnerships with the same team in Three Rivers Operating Company I and Three Rivers Operating Company II. Shortly after formation, Three Rivers III assembled a significant contiguous acreage position in the core of the Delaware Basin through several acquisitions in 2015 and 2016. The company subsequently leased offset acreage, developed midstream oil and gas infrastructure and initiated a drilling programme to delineate its approximately 57,000 net acre position. Three Rivers III was producing in excess of 10,000 boepd net as of January 2018.
Today, Riverstone announces an agreement has been reached to sell Three Rivers III’s upstream assets for an undisclosed cash consideration. This follows an acreage gas dedication agreement executed in December for additional undisclosed consideration.
Upon closing of these transactions, REL will realise gross cash proceeds of approximately $205 million, representing a gross multiple of invested capital of 2.2x on the Company’s investment of $94 million and a gross IRR of 49%. This represents a gross profit of $111 million, which will be subject to taxes and a performance fee upon closing of the sale, which is expected to occur in April 2018 and is subject to customary closing conditions.
The Company will release its 2017 annual results, including the updated NAV as at 31 December 2017, on 28 February 2018.
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 14 active investments spanning conventional and unconventional oil and gas activities in the Continental U.S., Western Canada, Gulf of Mexico, Mexico and credit.