Riverstone Energy Limited ("REL"), has sold its one-third ownership interest in ILX Holdings III LLC ("ILX III" or the "Company") to an institutional investment fund managed by Ridgewood Energy Corporation ("Ridgewood"). Following this transaction, REL no longer owns any interest in ILX III.
The transaction with Ridgewood is all cash and closed upon signing but is subject to certain post-closing purchase price adjustments. Estimated total net proceeds from the sale are $172 million, including prior realised distributions. This represents approximately 1.0x Gross MOIC, which is a 23% premium to REL's 0.8x Gross MOIC valuation at 31 December 2020.
ILX III is a Houston-based joint-venture with Ridgewood, focused on the strategy of acquiring non-operated working interests in oil-focused exploration projects in the Gulf of Mexico. ILX III represented the third partnership that Riverstone's Global Energy & Power Funds established with Ridgewood since 2010.
Richard Hayden, Chairman and Non-Executive Independent Director of REL, commented: "The proceeds from REL's exit of ILX III provide additional funds to accelerate our investments in decarbonisation and low-carbon power generation. It also provides improved liquidity to support Board approved share repurchases. As of 30 June 2021, pro forma for this sale, REL holds total cash of $221 million. In addition, as of 30 June 2021, REL owns $86 million of freely marketable securities and $6 million of securities subject to a lock-up.
We believe that our focus on originating and executing investments that support the portfolio's focus on decarbonisation and low-carbon power generation themes will provide REL shareholders with access to a unique set of opportunities that generate strong financial returns while having a positive impact on climate change.
The Board and Investment Manager are committed to maximising value from REL's oil and gas assets to support returns to shareholders and continued investment in low carbon energy assets. With a stronger balance sheet , subject to market conditions, capital needs for the current portfolio and the new investment opportunities, the Board will continue the Board authorised buyback program on the open market when shares are trading below intrinsic value and may also consider tender offers and dividends in the future."