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RSE.L - Riverstone Energy


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This is an oil and gas private equity fund listed on the London stock exchange, which I think is undervalued.

 

Current share price is GBP 2.50, giving it a market cap of GBP 199 million = $245 million.

https://uk.finance.yahoo.com/quote/RSE.L

 

Last week it released its valuation statement:

https://www.lse.co.uk/rns/RSE/1q20-valuations-and-50m-share-buyback-programme-315fz7182qr5wbx.html

 

stating on 31st March 2020 the value of its investments was $218 million, plus $211 million cash. Total: $429 million

And that it is spending $50 million of that cash on share buy-backs, with "No maximum consideration", but not higher than NAV.

 

The value of WTI oil on 31st March 2020 was $20.48, and today it is around $22.

 

The share price rose from GBP £1.60 on the release of this statement.

 

My thinking is that even if the company does not follow though on the buybacks, such that the discount to NAV remains, it might be a good recovery play on the recovery in the value of these oil assets. Back on Dec 2019 when WTI was at $60, the latest annual report:

 

https://www.fundslibrary.co.uk/FundsLibrary.DataRetrieval/Documents.aspx/?type=sl.ra.full&id=4b0b9659-acad-4b26-80a3-ee80bf8e98ee&user=jsUQjk2tyFaT%2fBzMkU0DrkM7o7MAwdfD6d28qdo%2fMWDpeef1tSpvVBxDbySrXfIT&r=1

 

has the NAV as $593 million + cash $183 million = $776 million , and the share price was £GBP 4.14

 

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