Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the allocation of estimated remediation costs totaling approximately $9.74 million between Dunmore Energy Holdings Ltd. ("DEH"), as successor-in-interest to Dunmore Terminal Services, Inc. ("DTS"), and Rowan Creek Fuel Distributors, Inc. ("RCFD") with respect to the Dunmore Wharton Terminal Site located at 14200 FM 1301, Wharton, Wharton County, Texas

II. Factual Background A. The Site The property at issue in this matter is commonly known as the Dunmore Wharton Terminal (the "Site"). The Site is located at 14200 FM 1301, Wharton, Wharton County, Texas 77488, within unincorporated Wharton County. The Site is zoned Heavy Industrial (HI) under Wharton County's applicable land use designations. The legal description of the Site is as follows: a 48.7-acre tract compri

1. Dunmore Terminal Services, Inc. (DTS) Dunmore Terminal Services, Inc. ("DTS") was a Texas corporation that operated the Dunmore Wharton Terminal from 1974 through 2015 — a period of approximately forty-one years. DTS maintained its registered office at 800 Travis Street, Suite 1440, Houston, Texas 77002 during its operational period. Its historical Employer Identification Number was 76-0384291. DTS ceased all term

2. Dunmore Energy Holdings Ltd. (DEH) Dunmore Energy Holdings Ltd. ("DEH") is an exempted company incorporated under the laws of the Cayman Islands, bearing Cayman Registration No. MC-318574. DEH maintains its principal headquarters at 4th Floor, Harbour Place, 103 South Church Street, George Town, Grand Cayman, KY1-1002, Cayman Islands. Gavin Rourke serves as Chairman and Chief Executive Officer. For the fiscal year

3. Rowan Creek Fuel Distributors, Inc. (RCFD) Rowan Creek Fuel Distributors, Inc. ("RCFD") is an active Texas corporation, bearing Employer Identification Number 74-2951683. RCFD's principal office is located at 1150 Lavaca Street, Suite 600, Austin, Texas 78701. Malcolm Griggs serves as President. RCFD's estimated annual revenue is approximately $89 million. RCFD is engaged in wholesale fuel distribution operations

4. Calera Properties Group LLC (CPG) Calera Properties Group LLC ("CPG") is a Texas limited liability company, bearing Employer Identification Number 84-3207156. CPG's managing member is Rebecca Strand, and its principal office is located at 2900 Woodlands Parkway, Suite 310, The Woodlands, Texas 77381. CPG acquired the 48.7-acre Site at a tax foreclosure sale in March 2019 for a purchase price of $612,000. Since acq

III. Legal Framework A. CERCLA § 107(a) — Federal Cost-Recovery

1. Elements of a CERCLA § 107(a) Claim The Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601–9675, provides a federal cause of action for the recovery of environmental response costs. Under CERCLA § 107(a), 42 U.S.C. § 9607(a), liability attaches to four categories of potentially responsible parties ("PRPs"): (a) current owners and operators of a facility; (b) past owners and op

2. Application to RCFD Each of the four elements of a CERCLA § 107(a) claim is satisfied with respect to RCFD: (a) Facility. The Site qualifies as a "facility" under CERCLA § 101(9), 42 U.S.C. § 9601(9), which defines "facility" to include "any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." The Site is a petroleum storage terminal at whic

3. DEH's Own PRP Status It must be acknowledged that DEH, as successor-in-interest to DTS, is itself a PRP under CERCLA § 107(a)(2). DTS owned and operated the Site from 1974 through 2015, and at least two documented releases occurred in areas under DTS's operational control (the 2003 Tank N-3 gasoline release and the 2014 Loading Rack diesel release). DEH assumed all of DTS's environmental liabilities, including tho

1. Statutory Framework In addition to the federal CERCLA claim, DEH possesses a viable cost-recovery claim against RCFD under the Texas Solid Waste Disposal Act ("TSWDA"), codified at Texas Health & Safety Code Chapter 361. Specifically, Texas Health & Safety Code § 361.344 authorizes a "responsible person" who has incurred costs in cleaning up contamination at a site to bring an action to recover a proportionate sha

2. Advantages of the State-Law Claim The Texas state-law claim offers several practical advantages over the federal CERCLA claim: No NCP-Consistency Requirement. Unlike CERCLA § 107, which requires that response costs be "consistent with the National Contingency Plan" in order to be recoverable, the TSWDA does not impose an NCP-consistency requirement. This eliminates one potential defense that RCFD might otherwise r

IV. Equitable Allocation Analysis A. Gore Factors When apportioning costs among PRPs — whether under a CERCLA § 113(f) contribution framework or as part of an equitable allocation within a § 107 cost-recovery action — courts commonly consider the factors set forth in the legislative history of CERCLA, known as the "Gore factors" (named for then-Representative Al Gore, who proposed them during the 1980 congressional d

1. The ability of the parties to demonstrate that their contribution to a release can be distinguished from that of other parties;

2. The amount and toxicity of the hazardous substances involved;

3. The degree of involvement of the parties in the generation, transportation, treatment, storage, or disposal of the hazardous substances;

4. The degree of care exercised by each party with respect to the hazardous substances, taking into account the characteristics of the substances; and

5. The degree of cooperation of the parties with federal, state, or local officials to prevent any harm to the public health or the environment. Courts may also consider additional factors as they deem appropriate under the circumstances of a particular case, including the financial resources of the parties, the equities of each party's position, and any agreements between the parties regarding the allocation of liab

V. RCFD's Anticipated Defenses A. Statute of Limitations

1. CERCLA § 113(g)(2) — Federal Limitations Period Under CERCLA § 113(g)(2), 42 U.S.C. § 9613(g)(2), the limitations period for a cost-recovery action under § 107 depends on the type of response action: (i) For a remedial action, the claim must be brought within six years after initiation of physical on-site construction of the remedial action; (ii) For a removal action, the claim must be brought within three years a

2. Texas Limitations Period The Texas Health & Safety Code does not prescribe a specific limitations period for cost-recovery actions under § 361.344. In the absence of a specific statutory limitations period, the applicable period is generally the residual four-year statute of limitations under Texas Civil Practice and Remedies Code § 16.004, or, arguably, the two-year statute for statutory liability claims. Under e

3. Assessment. RCFD's statute of limitations defense, as articulated in the July 8, 2025 Whitfield Barr letter, is weak. The defense appears to conflate the dates of the underlying releases (1996, 2001, and 2008) with the accrual of a cost-recovery claim. This is a fundamental error. Under both CERCLA and Texas law, a cost-recovery claim does not accrue upon the date of the release. Rather, the claim accrues upon the

VI. Remediation Cost-Recovery Calculation Summary A. Cost Allocation Between DEH and RCFD The following table summarizes the proposed allocation of the estimated $9.74 million in remediation costs between DEH and RCFD: *Note: Contingency and project management costs are allocated 100% to DEH for conservatism. These amounts are subject to partial recovery as administrative response costs in any final allocation determ

VII. Assessment of RCFD's Counter-Offer In its July 8, 2025 response letter, RCFD (through its counsel, Thomas Kessler of Whitfield Barr LLP) counter-proposed a global settlement of $750,000 in full resolution of all environmental liabilities associated with the Site. The counter-offer is grossly inadequate and should be rejected for the following reasons:

1. Proportionality. The proposed $750,000 settlement represents only approximately 16.1% of RCFD's allocated $4.647 million share. This figure does not reflect the strength of DEH's legal position, the severity of contamination traceable to RCFD's operations, or the well-documented evidentiary record supporting RCFD's operator status and responsibility for the S-farm releases.

2. Even Under RCFD's Best Case. Even under the most favorable divisibility analysis for RCFD — one that would limit RCFD's liability exclusively to S-farm soil remediation costs of $3.42 million, with zero responsibility for groundwater remediation — the $750,000 counter-offer would represent only approximately 21.9% of RCFD's minimum reasonable exposure. This figure remains wholly inadequate.

3. Evidentiary Strength. DEH possesses clear documentary evidence of RCFD's operator status (the JOA), TCEQ incident reports documenting releases from RCFD-operated tanks, environmental data demonstrating that the worst contamination is concentrated in the S-farm, and a potential witness (Craig Pemberton) who can testify to RCFD's operational deficiencies. The strength of this evidence does not support a settlement a