Equus Announces Fourth Quarter Net Asset Value

Rhea-AI Summary

Equus Total Return, Inc. (NYSE: EQS) reported net assets of $35.2 million as of December 31, 2022, a decline from $36.2 million at the previous quarter. The net asset value per share decreased to $2.61, down from $2.68. Despite an increase in fair value of Equus Energy from $13 million to $15.65 million, the overall net asset value fell due to higher professional fees and expenses related to due diligence on potential transformative transactions. West Texas Intermediate crude prices rose from $75.33 to $80.16 per barrel, contributing to the increased valuation of Equus Energy's holdings in the Permian Basin.

Positive

• Increase in the fair value of Equus Energy from $13 million to $15.65 million.
• Rising West Texas Intermediate crude prices from $75.33 to $80.16 per barrel positively impacting portfolio value.

Negative

• Overall net asset value declined to $35.2 million from $36.2 million.
• Net asset value per share decreased from $2.68 to $2.61.
• Increased professional fees and expenses for due diligence impacting profitability.

HOUSTON, March 28, 2023 (GLOBE NEWSWIRE) -- Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Company”) reports net assets as of December 31, 2022, of $35.2 million. Net asset value per share decreased to $2.61 as of December 31, 2022, from $2.68 as of September 30, 2022. Comparative data is summarized below (in thousands, except per share amounts):

As of the Quarter Ended	12/31/2022	9/30/2022	6/30/2022	3/31/2022	12/31/2021
Net assets	$35,237	$36,230	$37,155	$37,435	$36,365
Shares outstanding	13,518	13,518	13,518	13,518	13,518
Net assets per share	$2.61	$2.68	$2.75	$2.77	$2.69

The following was the principal contributor to the increase in fair value of the Company’s portfolio holdings in 2022:

• Increase in the Value of Equus Energy. During 2022, the fair value of Equus Energy, LLC, increased from $13.0 million to $15.65 million. Among the various leasehold rights held by Equus Energy is a 50% working interest in 2,400 acres in the Permian Basin known as the Conger Field. A number of transactions that completed in 2022 were concentrated in the Permian Basin, at imputed acreage values considerably in excess of values ascribed to such acreage in the past several years. In addition, West Texas Intermediate crude prices increased from $75.33 to $80.16 per barrel during the year while natural gas prices slightly decreased from $3.82 per MMBTU at the end of 2021 to $3.52 per MMBTU at the end of 2022.
  
  Equus also holds working interests of 7.5% and 2.5% in the Burnell and North Pettus Units, respectively, which collectively comprise approximately 13,000 acres located in the area known as the ‘Eagle Ford Shale’ play. The Company received advice and assistance from a third-party valuation firm to support its determination of the fair value of this investment.

Although the Company experienced an increase in value of its investment holding in Equus Energy, the Company’s overall net asset value declined, due in part to increased professional fees and expense relating to due diligence and the examination of potential transactions that could, if consummated, be transformative for the Company.

About Equus

The Company is a business development company that trades as a closed-end fund on the New York Stock Exchange under the symbol "EQS". Additional information on the Company may be obtained from the Company’s website at www.equuscap.com.

This press release may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the performance of the Company, including our ability to achieve our expected financial and business objectives, and the other risks and uncertainties described in the Company’s filings with the SEC. Actual results, events, and performance may differ. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. Except as required by law, the Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statements are material.

Contact:

Patricia Baronowski
Pristine Advisers, LLC
(631) 756-2486

 

FAQ

What are the net assets of Equus Total Return as of December 31, 2022?

The net assets of Equus Total Return as of December 31, 2022, were $35.2 million.

How did the net asset value per share change for EQS from September 30, 2022, to December 31, 2022?

The net asset value per share for EQS decreased from $2.68 to $2.61 from September 30, 2022, to December 31, 2022.

What contributed to the increase in the fair value of Equus Energy in 2022?

The fair value of Equus Energy increased due to rising prices for West Texas Intermediate crude oil and significant transactions in the Permian Basin.

What were the total shares outstanding for Equus Total Return as of December 31, 2022?

As of December 31, 2022, there were 13,518 shares outstanding for Equus Total Return.

What impact did increased professional fees have on Equus Total Return's financials?

Increased professional fees affected Equus Total Return's overall net asset value, contributing to the decline despite portfolio gains.