Harrison,
I hope you're doing well. Following up on yesterday's organizational call and the outline term sheet circulated in connection with that call, I am attaching an initial draft (v1) of the Indenture for the proposed offering by Dunmore Energy Holdings Ltd. (as Issuer) and Dunmore upstream Finance Corp. (as Co-Issuer) of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032. The other parties to the Indenture are the Guarantor subsidiaries identified below and Northgate Trust Company, N.A., acting as Trustee and Collateral Agent. As discussed, the offering is being conducted under Rule 144A and Regulation S under the Securities Act of 1933, as amended.
**Key Structural Terms**
The draft reflects the terms discussed on the organizational call and the outline term sheet, including the following:
- **Maturity:** May 1, 2032 - **Interest Rate:** 9.375% per annum, payable semi-annually on May 1 and November 1 of each year, commencing November 1, 2025 - **Issue Price:** 98.50% of par (OID of 1.50%) - **Denomination:** $2,000 minimum; integral multiples of $1,000 in excess thereof - **Optional Redemption:** First call date May 1, 2028 at 104.688%, stepping down to 102.344% (May 1, 2029), 101.172% (May 1, 2030), and par (May 1, 2031 and thereafter) - **Make-Whole:** Prior to May 1, 2028, at Treasury Rate + 50 bps - **Equity Clawback:** Up to 40% of the original aggregate principal amount at 109.375% from equity offering proceeds prior to May 1, 2028, subject to at least 60% of the original aggregate principal amount remaining outstanding after giving effect to such redemption - **Change of Control:** Put at 101% of par plus accrued and unpaid interest - **Governing Law:** State of New York
**Collateral and Intercreditor Matters**
The draft includes the collateral and security provisions as outlined on the call. The Notes will be secured by first-priority liens on (i) the equity interests of each Guarantor subsidiary, (ii) substantially all tangible and intangible assets of the Issuers and the Guarantors (subject to Permitted Liens), (iii) intercompany receivables, (iv) material hydrocarbon offtake contracts, and (v) assignment of insurance proceeds.
As you know, the collateral package is subject to the Intercreditor Agreement with Velthorn National Bank, N.A. (as ABL Agent under the existing $750,000,000 ABL revolving credit facility). The Intercreditor Agreement delineates ABL Priority Collateral (accounts receivable, inventory, and deposit accounts) and Notes Priority Collateral (PP&E, equity interests, intellectual property, and material contracts). We are separately preparing the Intercreditor Agreement and the various Collateral Agreements (covering U.S., Nigerian, English, and Senegalese law security) and will circulate those drafts shortly.
**Guarantors**
The draft includes guarantees from the following six subsidiaries:
1. Dunmore Nigeria E&P Ltd. (Nigeria) 2. Dunmore Gulf Operations LLC (Delaware) 3. Dunmore Renewables LLC (Delaware) 4. Dunmore Senegal S.A. (Senegal) 5. Dunmore Midstream Holdings Inc. (Delaware) 6. Dunmore Trading Ltd. (England & Wales)
A form of First Supplemental Indenture providing for the joinder of future guarantors is included as an exhibit to the draft.
**Sanctions / OFAC Provisions**
I wanted to flag that the draft contains sanctions-related representations and covenants, including a prohibition on the use of proceeds in violation of OFAC sanctions, reflecting Dunmore's operations in Nigeria and Senegal. These provisions are still under review internally, and we will be circulating a separate OFAC and Sanctions Compliance Memorandum in the coming days. Additionally, Sandoval Compliance Solutions LLC is completing its sanctions screening of the Dunmore group entities and their counterparties, which we expect to be finalized by April 25.
**Tax Provisions**
The draft includes tax gross-up, additional amounts, and tax redemption provisions, reflecting the Cayman Islands domicile of the Issuer. Leonard Cross, our tax partner, is reviewing these provisions and may have further comments.
**Areas Flagged for Your Review**
We would appreciate your and Priya's attention to the following areas in particular:
- Restricted payments covenant baskets and builder basket mechanics - Permitted Liens definitions, particularly as they interact with the ABL intercreditor structure - Limitation on asset sales covenant and reinvestment provisions (given the multi-jurisdictional asset base) - Reporting covenant provisions (noting the Issuer is a Cayman exempted company and not an SEC reporting company) - Sanctions representations and covenant language - Tax gross-up provisions
**Timing and Next Steps**
As discussed on the organizational call, the timeline here is tight. The Preliminary Offering Memorandum ("Red") is targeted for distribution on April 28, and the roadshow is expected to commence May 5. With that in mind, it would be very helpful if we could receive WBC's initial comments by end of day Friday, April 25, so that we can turn a revised draft (v2) early the following week.
Happy to set up a call later this week to walk through any questions or discuss any of the provisions in greater detail. Jennifer Kwon (copied) is the responsible partner on the matter and is available for any higher-level discussions as well.
Please let me know if you have any trouble accessing the attachment or if anything else would be useful in the meantime.
Best regards,
Eric Johannsen Calderwood & Harkness LLP 425 Lexington Avenue New York, NY 10017 Direct: (212) 506-3847 Email: ejohannsen@calderwoodharkness.com Matter No. 1016-00003
Attachment: Dunmore — Indenture — Draft v1 (04.22.2025).docx
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