Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze whether the stated commitment of Dunmore Energy Holdings Ltd. ("DEH" or "Dunmore") to achieve net-zero greenhouse gas ("GHG") emissions by 2050, as disclosed in the "Environmental and Social Responsibility" section of the Offering Memorandum (the "OM") for the $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes")

II. Background A. The Offering Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted company registered with the Cayman Islands Registrar of Companies under Registry No. MC-384726, and Dunmore upstream Finance Corp. ("DUFC"), a Delaware corporation (EIN 93-4728106), are co-issuers of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due May 1, 2032 (the "Notes"). The Notes will be issue

III. Applicability of the PSLRA Statutory Safe Harbor A. Statutory Framework The PSLRA, enacted in 1995, created a statutory safe harbor for forward-looking statements in two parallel provisions: Section 27A of the Securities Act (15 U.S.C. § 77z-2) and Section 21E of the Exchange Act (15 U.S.C. § 78u-5). These provisions were designed to encourage companies to share projections and forward-looking information with i

IV. The "Bespeaks Caution" Doctrine A. Overview and Elements The "bespeaks caution" doctrine is a judge-made rule providing that forward-looking statements accompanied by sufficiently specific and meaningful cautionary language are immaterial as a matter of law, thereby defeating a claim of securities fraud at the pleading stage or on summary judgment. The doctrine operates on the principle that when a document's cau

1. Commodity-Price and Demand Uncertainty. Dunmore's revenues and capital allocation are fundamentally dependent on oil and gas prices, which are inherently volatile and subject to factors beyond the Company's control, including global supply and demand dynamics, OPEC+ production decisions, geopolitical events, and the pace of the energy transition. A sustained downturn in commodity prices could significantly reduce

2. Technological Uncertainty. The achievement of net-zero GHG emissions for an upstream oil and gas company requires the deployment, at commercial scale, of technologies that are not yet commercially viable or that are in early stages of development. These include, without limitation, large-scale carbon capture and storage, direct air capture, green hydrogen production, and the electrification of drilling and product

3. Regulatory Uncertainty. Dunmore operates in multiple jurisdictions — Nigeria, Senegal, the United States, and the Cayman Islands — each with distinct and evolving regulatory frameworks governing GHG emissions, environmental protection, and climate policy. Future climate regulations, including the potential imposition of carbon taxes, emissions trading systems, mandatory reduction requirements, and changes to permi

4. Portfolio Composition. Dunmore continues to invest in hydrocarbon assets, including the allocation of approximately $250 million of the Notes proceeds to the Cayar Offshore Phase II development capital expenditure program. The Company's proved reserves of 345.8 MMboe, with an estimated PV-10 of $6.7 billion, represent a substantial asset base that is expected to generate revenues and emissions for decades. Future

5. Absence of Interim Targets. As of the date of the OM, the Company has not established binding interim milestones or reduction targets (e.g., 2030 or 2035 targets) on the path to net-zero by 2050. The Company has stated that it intends to develop a detailed decarbonization roadmap, but no such roadmap has been finalized or publicly disclosed. The path to net-zero by 2050 is undefined and subject to future decisions

6. Capital Constraints and Competing Priorities. Dunmore's ability to allocate capital to emissions-reduction initiatives is constrained by its existing and anticipated debt service obligations, including approximately $79.7 million in annual interest expense on the Notes (calculated at 9.375% on $850 million), together with debt service on the Company's existing revolving credit facility and other indebtedness. In a

7. Measurement and Methodology Limitations. GHG emissions accounting methodologies, reporting standards, and verification practices are evolving and may change in ways that affect the comparability of reported emissions data across periods and among peer companies. The Company's reported Scope 1 and Scope 2 emissions data has been prepared by Barrisford Advisory Group LLC using methodologies that the Company believes

8. Political and Operational Risk. A significant portion of Dunmore's operations is located in Nigeria and Senegal, where the Company's assets and operations are subject to political instability, regulatory unpredictability, community relations challenges, security risks, and legal frameworks that may not be aligned with or supportive of a net-zero emissions pathway. Political developments, changes in government poli

V. SEC Enforcement and Regulatory Considerations A. SEC ESG Enforcement Trends The SEC has significantly increased its scrutiny of ESG-related disclosures in recent years. This trend is relevant to the Dunmore OM even though the OM is not filed with the SEC, because the anti-fraud provisions of Rule 10b-5 apply to any purchase or sale of securities, including securities offered in private placements under Rule 144A a

VI. Analysis of Dunmore's Specific Net-Zero Disclosure A. Current Draft Language (as of April 27, 2025) The current draft of the OM's "Environmental and Social Responsibility" section includes the following disclosure regarding Dunmore's net-zero commitment (summarized for purposes of this memorandum): • A statement that Dunmore is "committed to achieving net-zero Scope 1 and Scope 2 greenhouse gas emissions by 2050.

1. Tension with Continued Hydrocarbon Investment. Perhaps the most significant vulnerability in the current disclosure is the tension between the net-zero commitment and the simultaneous allocation of approximately $250 million of the Notes proceeds to the Cayar Offshore Phase II development capital expenditure program. This allocation — representing nearly 30% of the total offering proceeds — reflects a substantial

2. Absence of Interim Targets. The current draft does not include any interim milestones or reduction targets for 2030, 2035, or any other date between now and 2050. While the absence of interim targets is not uncommon among smaller upstream issuers (as discussed in Section VII below), it is a vulnerability because it may undermine the credibility of the 2050 pledge. A plaintiff or regulator could argue that a net-ze

3. Scope 3 Omission. The current draft does not disclose or address Scope 3 emissions. For an upstream oil and gas company, Scope 3 emissions — which include the emissions generated by end-use consumers who combust the oil and gas products sold by the Company — typically represent the vast majority of the total GHG emissions attributable to the company's value chain. By industry estimates, Scope 3 emissions for upstr

4. No Detailed Pathway. The current draft states that Dunmore "intends to develop a detailed decarbonization roadmap" but provides no information regarding the substance, timeline, or methodology of any such roadmap. While this language is appropriately aspirational, it may be viewed as aspirational to the point of meaninglessness without any supporting specificity. A plaintiff could argue that a company that "intend

5. Quantitative Gap. The current draft discloses Scope 1 emissions of 1.42 million metric tons CO₂e and Scope 2 emissions of 0.18 million metric tons CO₂e, for a combined total of 1.60 million metric tons CO₂e. These are substantial absolute figures. The OM does not describe how emissions of this magnitude would be eliminated or offset over the next 25 years, nor does it identify the specific technologies, investment

1. Aspirational Framing. Revise the net-zero commitment language to explicitly frame the commitment as a "long-term aspiration" that is "subject to numerous uncertainties, assumptions, and contingencies," and to state clearly that it "does not constitute a guarantee, prediction, or binding obligation" of the Company. The framing should convey that the commitment reflects management's current intention and the directi

2. Forward-Looking Statement Legend. Add a forward-looking statement identifier and legend immediately preceding the net-zero language in the ESG section. Although the PSLRA safe harbor does not apply, the inclusion of such a legend serves multiple functions: it invokes the bespeaks caution doctrine by expressly identifying the net-zero statement as forward-looking; it sets investor expectations; and it signals the C

3. Specific Cautionary Factors. Include specific cautionary factors (drawn from the categories identified in Section IV.C above) immediately following the net-zero statement within the ESG section, not solely in the risk-factors section of the OM. The placement of cautionary language in close proximity to the forward-looking statement is important under the bespeaks caution doctrine, as courts have considered whether

4. Cross-References. Include cross-references immediately following the net-zero statement to the relevant risk-factor sections of the OM, including the "ESG and Climate" risk factor section and the "Sanctions, OFAC, and Anti-Corruption" risk factor section (to the extent it addresses operational risks in Nigeria and Senegal). These cross-references alert the reader to additional detailed disclosure and reinforce the

5. Scope 3 Caveat. Add language expressly acknowledging Scope 3 emissions and stating that the Company does not currently measure or include Scope 3 emissions in its net-zero target. The language should explain that Scope 3 emissions, which for an upstream oil and gas company include emissions from the end-use combustion of sold products, are outside the current scope of the Company's net-zero commitment. This expres

6. Acknowledgment of Hydrocarbon Investment. Add language acknowledging the Company's simultaneous investment in hydrocarbon production, including the allocation of Notes proceeds to the Cayar Offshore Phase II development, and explaining the rationale — i.e., that near-term cash generation from hydrocarbon operations is expected to fund the Company's long-term transition to lower-carbon operations. This language con

7. Avoidance of Quantitative Interim Targets. Unless and until Dunmore's board is prepared to commit to and track against specific quantitative reduction targets for specific years, the OM should avoid including such targets. The inclusion of quantitative targets would create additional forward-looking statements with additional liability risk and would require ongoing monitoring and potential updating. The cautionar

8. Flexibility Language. Add language stating that the Company may adjust its net-zero strategy, timeline, and targets in response to evolving conditions, including changes in regulatory requirements, available technologies, commodity markets, capital availability, and other factors. This "evolution clause" preserves the Company's ability to modify or recalibrate its approach without being accused of abandoning a pri

VII. Comparison to Market Practice A. High-Yield Oil & Gas Precedents We have surveyed recent Rule 144A high-yield energy offerings to assess market practice regarding net-zero and other climate-related commitments in offering memoranda. Our survey covered approximately fifteen Rule 144A offerings by upstream and midstream oil and gas issuers completed between January 2023 and March 2025, including offerings by compa