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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

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I. EXECUTIVE SUMMARY

The purpose of this memorandum is to analyze the potential liability exposure arising from environmental, social, and governance ("ESG")-related statements and forward-looking commitments contained in the Offering Memorandum (both the Preliminary Offering Memorandum dated April 28, 2025 (the "Preliminary OM") and the Final Offering Memorandum expected to be dated May 14, 2025 (the "Final OM," and together with the Preliminary OM, the "OM")) for Dunmore Energy Holdings Ltd.'s ("DEH," "Dunmore," or the "Company") offering of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes").

The Notes are being offered in a Rule 144A / Regulation S private placement to qualified institutional buyers ("QIBs") within the meaning of Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. The initial purchasers for the offering are Ridgeline Capital Markets LLC, as Lead Left Bookrunner, Clarion Securities Inc., as Joint Bookrunner, and Pinnacle Partners LLC, as Co-Manager (collectively, the "Initial Purchasers"). Calderwood & Harkness LLP ("C&H" or the "Firm"), as counsel to the Issuer, will deliver a customary 10b-5 negative assurance letter to the Initial Purchasers in connection with the closing of the offering.

Dunmore's ESG-related disclosure in the OM currently includes: (i) a standalone "Environmental and Social Responsibility" section presenting narrative and quantitative data regarding the Company's environmental practices, community engagement, and sustainability initiatives; (ii) two ESG-specific risk factors addressing climate-transition risk and physical climate risk; (iii) the Company's publicly stated commitment to achieve net-zero greenhouse gas ("GHG") emissions by 2050; and (iv) quantitative data regarding GHG emissions (Scope 1 and Scope 2), methane flaring intensity, and community development expenditures in Nigeria. The underlying data for these disclosures was prepared by Barrisford Advisory Group LLC ("Barrisford"), an independent ESG consulting firm retained by Dunmore, under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant.

Conclusion. Meaningful liability exposure exists under the federal anti-fraud provisions — principally Section 10(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder — as well as under New York state common-law theories of fraud and negligent misrepresentation. However, this exposure can be substantially mitigated through the adoption of four principal strategies:

(a) the incorporation of robust, specific, and meaningful cautionary language accompanying all forward-looking ESG statements;

(b) the careful qualification of forward-looking ESG commitments — most critically, the net-zero by 2050 pledge — as aspirational long-term objectives rather than binding projections or guarantees;

(c) the thorough verification of all historical quantitative ESG data points against Barrisford source materials and management records, with appropriate disclosure regarding methodology and the absence of independent third-party assurance; and

(d) the avoidance of specific interim emissions-reduction targets absent a credible, board-approved implementation plan with quantified milestones and identified capital allocation.

This memorandum details the applicable legal framework, analyzes each material ESG statement and data point in the OM, assesses current SEC enforcement trends in the greenwashing arena, evaluates the impact of the ESG disclosures on the Firm's 10b-5 negative assurance letter, and provides specific drafting recommendations for incorporation into the Preliminary OM and Final OM. A comprehensive set of recommended cautionary language is provided in Appendix C.

II. SCOPE AND LIMITATIONS

The scope of this memorandum is limited to an analysis of potential liability under U.S. federal securities law and New York state common law arising from the ESG-related disclosures in the OM for the Notes offering. Specifically, this memorandum addresses:

• Section 10(b) of the Exchange Act and Rule 10b-5 thereunder — the primary federal anti-fraud provisions applicable to misstatements and omissions of material fact in connection with the purchase or sale of securities, including in the context of unregistered Rule 144A / Regulation S offerings;

• Section 17(a) of the Securities Act — a broader anti-fraud provision enforceable by the Securities and Exchange Commission (the "SEC") that, as to subsections (a)(2) and (a)(3), requires only a showing of negligence rather than scienter; and

• New York state common-law theories of fraud and negligent misrepresentation — applicable given that the Indenture, the Purchase Agreement, and the Notes are each governed by New York law.

Because the Notes are being offered in reliance on the exemptions from registration provided by Rule 144A and Regulation S under the Securities Act, no registration statement is being filed with the SEC, and accordingly the strict liability and negligence-based provisions of Section 11 of the Securities Act and Section 12(a)(2) of the Securities Act are not applicable to the offering. However, as discussed in greater detail in Section IV below, purchasers of the Notes retain the ability to assert claims under Rule 10b-5 in connection with their purchases, and this remains the principal source of private litigation risk.

This memorandum does not address potential liability under the following non-U.S. regulatory frameworks, each of which may be relevant to the Regulation S leg of the offering and to Dunmore's broader ESG disclosure posture:

• The European Union's Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) ("SFDR") and related EU taxonomy regulations;

• The United Kingdom Financial Conduct Authority's sustainability disclosure and labelling requirements, including the FCA's Anti-Greenwashing Rule (effective May 31, 2024);

• The International Sustainability Standards Board ("ISSB") standards (IFRS S1 and IFRS S2), to the extent adopted by jurisdictions in which Regulation S purchasers are located; and

• Any environmental or securities regulatory regime applicable in Nigeria, Senegal, or other jurisdictions in which Dunmore operates or in which the Notes may be resold.

We note that the Regulation S leg of the offering will result in the placement of Notes with non-U.S. institutional investors who may be located in jurisdictions with their own greenwashing regulatory frameworks. If the deal team determines that further analysis of non-U.S. regulatory exposure is warranted, we are prepared to coordinate with the Firm's London and Paris offices to prepare a supplemental memorandum addressing these regimes.

The ESG data presented in the OM was sourced from data packages prepared by Barrisford Advisory Group LLC under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant. Verification of the accuracy and completeness of this data is being addressed separately through the ESG Data Verification Checklist currently being compiled by Eric Johannsen. This memorandum assumes the accuracy of the ESG data subject to the completion of that verification process, and the analysis and recommendations herein should be read in conjunction with the final verified data set. To the extent that the verification process identifies discrepancies, additional disclosure or modification of the OM may be required, and this memorandum should be updated accordingly.

III. THE DUNMORE ESG DISCLOSURES AT ISSUE

This section summarizes the principal ESG-related disclosures currently included in the draft OM, organized by type. Each of these disclosures is analyzed in detail in Section VI below.

A. The "Environmental and Social Responsibility" Section

The draft OM includes a standalone section entitled "Environmental and Social Responsibility" (the "ESG Section"), which was prepared by Dunmore management and the Company's investor relations team in consultation with Barrisford Advisory Group LLC, and is being reviewed by the deal team in connection with the customary due diligence process. The ESG Section presents both narrative and quantitative information regarding Dunmore's environmental practices, community engagement programs, and sustainability strategy.

The key quantitative statements currently set forth in the ESG Section are as follows:

• Scope 1 GHG Emissions: 1.42 million metric tons of carbon dioxide equivalent ("CO₂e") for the fiscal year ended December 31, 2024 ("FY 2024"). Scope 1 emissions encompass direct emissions from owned or controlled sources, including combustion of fuels in Dunmore's production operations, flaring, and fugitive emissions from its upstream oil and gas assets.

• Scope 2 GHG Emissions: 0.18 million metric tons CO₂e for FY 2024. Scope 2 emissions represent indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the Company.

• Methane Flaring Intensity: 3.8 cubic meters per barrel of oil equivalent ("m³/boe"), described as comparing favorably to a cited "industry average" of 5.1 m³/boe. The source of the industry-average figure is not currently identified in the draft OM.

• Community Development Spend (Nigeria): $14.2 million in FY 2024, encompassing expenditures on infrastructure, education, healthcare, and community relations programs in the Niger Delta communities proximate to the Company's OML 47 and OML 63 production operations.

In addition to these quantitative disclosures, the ESG Section presents Dunmore's net-zero by 2050 commitment — a company-wide pledge to achieve net-zero GHG emissions across all operations by the year 2050. This commitment was initially announced in the Company's 2023 Sustainability Report and is being carried forward in the OM as part of the Company's ESG narrative.

The ESG Section also highlights the Company's 220 megawatt ("MW") solar portfolio operated through Dunmore Renewables LLC, a wholly owned subsidiary, with solar generation facilities located in West Texas. This solar portfolio is presented as evidence of Dunmore's energy transition strategy and its commitment to developing renewable energy capacity alongside its core hydrocarbon business.

Dunmore's operations span multiple jurisdictions, creating a complex and geographically diverse environmental footprint. The Company's upstream oil and gas assets include: (i) oil mining leases OML 47 and OML 63 in the Niger Delta region of Nigeria; (ii) the Cayar Offshore Block in Senegal, where the Company is pursuing the Phase II development program; and (iii) deepwater leases in the Green Canyon and Garden Banks areas of the Gulf of Mexico ("GoM"). This multi-jurisdictional operational profile subjects the Company to overlapping and in some cases inconsistent environmental regulatory regimes, and amplifies the complexity and inherent uncertainty of the GHG emissions data presented in the ESG Section.

B. ESG-Specific Risk Factors

The draft OM includes two risk factors that specifically address ESG-related risks:

(i) Climate-Transition Risk. This risk factor addresses the regulatory, market, technological, and reputational risks arising from the evolving global transition to a lower-carbon economy. The risk factor discusses the potential for increased carbon pricing, more stringent emissions regulations, reduced access to capital from ESG-sensitive lenders and investors, shifting consumer and counterparty preferences, and the long-term risk of stranded hydrocarbon assets. The risk factor is drafted broadly but does not currently reference specific pending legislation or regulatory developments in any of Dunmore's operating jurisdictions.

(ii) Physical Climate Risk. This risk factor addresses the potential impact of extreme weather events, sea-level rise, and other physical manifestations of climate change on Dunmore's offshore and coastal operations, including its deepwater GoM operations and its Cayar Offshore Block in Senegal. The risk factor discusses the potential for operational disruptions, increased insurance costs, and asset damage.

In addition, the OM's risk factors addressing sanctions compliance and anti-corruption risks (particularly with respect to Dunmore's Nigerian and Senegalese operations) tangentially address ESG-adjacent reputational concerns, including the risk that compliance failures in these areas could undermine the Company's broader ESG narrative and damage investor confidence.

C. Forward-Looking ESG Statements

The OM contains several categories of forward-looking ESG statements that warrant particular attention from a greenwashing liability perspective:

• Net-Zero by 2050 Pledge. As described above, the Company has included its aspirational commitment to achieve net-zero GHG emissions by 2050. The current draft of the OM presents this as a company-wide goal but does not disclose any binding interim targets, quantified milestones, or a detailed implementation roadmap with specific decarbonization initiatives and associated capital expenditure commitments.

• Cayar Offshore Phase II Environmental Mitigation Plans. The OM describes the planned Phase II development of the Cayar Offshore Block, to which $250,000,000 of the net proceeds of the Notes offering will be allocated. In connection with this development, the OM includes references to environmental mitigation plans, including environmental impact assessments, marine biodiversity protection measures, and emissions monitoring protocols. These plans are forward-looking in nature and subject to significant operational and regulatory uncertainty.

• General Statements Regarding Emissions Reduction and Energy Transition. The ESG Section and certain other portions of the OM contain general forward-looking statements regarding Dunmore's anticipated emissions-reduction trajectory, its plans for expanding its renewable energy capacity, and its community engagement goals in Nigeria and Senegal. These statements are not currently accompanied by specific quantitative targets or timelines beyond the overarching net-zero by 2050 commitment.

IV. APPLICABLE LEGAL FRAMEWORK

A. Federal Anti-Fraud Provisions

1. Section 10(b) and Rule 10b-5

Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder constitute the principal federal anti-fraud provisions applicable to the ESG disclosures in the OM. Rule 10b-5 makes it unlawful for any person, in connection with the purchase or sale of any security, to (a) employ any device, scheme, or artifice to defraud, (b) make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

To prevail on a private Rule 10b-5 claim, a plaintiff must establish each of the following elements:

(i) a material misstatement or omission of fact;

(ii) made in connection with the purchase or sale of a security;

(iii) scienter — a mental state embracing an intent to deceive, manipulate, or defraud, or in certain circuits, severe recklessness;

(iv) reliance by the plaintiff on the misstatement or omission;

(v) economic loss; and

(vi) loss causation — a causal connection between the material misrepresentation and the plaintiff's economic loss.

The applicability of Rule 10b-5 to ESG disclosures has been the subject of a growing body of judicial decisions and SEC enforcement actions. While no court has held that ESG disclosures constitute a categorically distinct species of securities disclosure, the emerging consensus in the case law and the SEC's enforcement posture is clear: ESG statements in offering documents are subject to the same anti-fraud standards as any other disclosure, and when such statements create a materially misleading impression — whether through affirmative misstatement or omission of material countervailing information — they may give rise to Rule 10b-5 liability.

Materiality is the threshold inquiry. Under the standard established in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976), and subsequently adopted for Rule 10b-5 claims in Basic Inc. v. Levinson, 485 U.S. 224 (1988), a fact is material if there is a "substantial likelihood" that a reasonable investor would consider it important in making an investment decision. The standard does not require proof that the information would have changed the investor's decision — only that it would have been viewed by the reasonable investor as having "significantly altered the 'total mix' of information" available.

ESG-related information is increasingly recognized as material, particularly for issuers in the extractive industries with significant environmental footprints. For an upstream oil and gas company such as Dunmore, with operations in environmentally sensitive regions (the Niger Delta, the offshore waters of Senegal, the deepwater Gulf of Mexico), the materiality of environmental data, emissions metrics, and climate-related commitments is difficult to dispute. Institutional investors — who constitute the entirety of the purchaser base in a Rule 144A offering — increasingly incorporate ESG factors into their investment analysis and credit assessments, further strengthening the case for materiality.

The scienter element presents a significant hurdle for private plaintiffs in Rule 10b-5 actions. The Private Securities Litigation Reform Act of 1995 ("PSLRA") requires a complaint to "state with particularity facts giving rise to a strong inference" of scienter. In the ESG context, scienter is most likely to be established where an issuer (a) made affirmative statements about its environmental performance or commitments that were contradicted by internal documents or known facts, or (b) had access to information demonstrating the falsity of its ESG representations and consciously disregarded it. For aspirational or forward-looking ESG statements, establishing the required level of intent or recklessness is substantially more difficult.

2. Section 17(a) of the Securities Act

Section 17(a) of the Securities Act is a broader anti-fraud provision that applies to offers or sales of securities. Unlike Rule 10b-5, Section 17(a) is enforceable only by the SEC and does not give rise to a private right of action. Critically, however, subsections 17(a)(2) and 17(a)(3) do not require proof of scienter — negligence is the applicable mental state standard. This means the SEC can bring enforcement actions for ESG misstatements or omissions based on a showing that the issuer acted negligently, without the need to prove intent to deceive or recklessness.

Section 17(a) is relevant to this analysis because the SEC has employed it in recent ESG-related enforcement actions, and the lower mental-state threshold makes it a more accessible enforcement tool for the Commission. From a practical standpoint, this means that even ESG disclosures that would likely survive a private Rule 10b-5 challenge (because plaintiffs cannot establish scienter) could nonetheless be the basis for an SEC enforcement action if the disclosures were negligently prepared or failed to reflect information reasonably available to the Company.

3. Rule 10b-5 in the 144A Context

A threshold question for this analysis is whether purchasers of the Notes in the Rule 144A placement retain the ability to assert Rule 10b-5 claims. The answer is clearly yes.

While the Supreme Court's decision in Gustafson v. Alloyd Co., 513 U.S. 561 (1995), limited the availability of Section 12(a)(2) of the Securities Act to claims arising from "public offerings" (i.e., registered offerings), Rule 10b-5 is not similarly limited. By its terms, Rule 10b-5 applies to "any person" who makes a material misstatement or omission "in connection with the purchase or sale of any security." Courts have consistently held that Rule 10b-5 applies to purchases and sales of securities in private placements, including Rule 144A offerings to QIBs. The rule's broad language encompasses any transaction in securities, regardless of whether the securities are registered under the Securities Act.

This has direct implications for the Firm's 10b-5 negative assurance letter. Because purchasers of the Notes will have Rule 10b-5 claims available to them in the secondary market, the Initial Purchasers will expect — and the Firm will deliver — a customary 10b-5 negative assurance letter confirming that, based on the Firm's participation in the preparation of the OM and the related due diligence process, nothing has come to the Firm's attention that causes it to believe the OM contains a material misstatement or omission. The Firm's own exposure is therefore directly tied to the adequacy of the due diligence process with respect to all material disclosures in the OM, including the ESG disclosures.

B. The PSLRA Safe Harbor for Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 ("PSLRA"), codified at 15 U.S.C. § 78u-5, created a statutory safe harbor for forward-looking statements. Under the PSLRA safe harbor, a person shall not be liable with respect to any forward-looking statement if:

(a) the statement is identified as a forward-looking statement and is accompanied by "meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement"; or

(b) the statement is immaterial; or

For purposes of the Dunmore ESG disclosures, the most significant prong of the safe harbor is prong (a) — the "meaningful cautionary language" requirement. Under this prong, the issuer need not identify every factor that could cause actual results to differ; however, the cautionary language must be "substantive and tailored to the specific future projections, estimates, or opinions" at issue. Generic or boilerplate cautionary language — such as a blanket disclaimer that "actual results may differ" — is insufficient to invoke the safe harbor. Courts have consistently required that the cautionary language identify the specific risks and uncertainties that are most relevant to the particular forward-looking statement being made.

Applicability to Dunmore's ESG Forward-Looking Statements. The net-zero by 2050 commitment, the emissions-reduction trajectory statements, and the environmental mitigation plans for Cayar Phase II are all forward-looking statements within the meaning of the PSLRA. If properly identified as forward-looking and accompanied by meaningful cautionary language enumerating the specific factors that could prevent their achievement, these statements should qualify for safe-harbor protection.

However, a critical caveat applies: the PSLRA safe harbor protects only forward-looking statements; it does not protect statements of present or historical fact. Where a statement contains both a forward-looking component and a statement of present fact, courts will disaggregate the statement and apply the safe harbor only to the forward-looking component. This is particularly relevant where the OM presents current emissions data (historical fact) alongside projections of future emissions reductions (forward-looking). Any inaccuracy in the historical data cannot be cured by cautionary language.

Applicability in Rule 144A Offerings. The statutory text of the PSLRA safe harbor is not limited to registered offerings or publicly traded securities. The safe harbor applies to any "forward-looking statement" as defined in the statute, subject to certain enumerated exceptions (e.g., statements made in connection with initial public offerings, tender offers, or going-private transactions). Because a Rule 144A offering is none of these excluded categories, the majority view among commentators and the weight of judicial authority supports the conclusion that the PSLRA safe harbor is available for forward-looking statements made in connection with Rule 144A offerings. We note that this issue has not been definitively resolved by the Supreme Court, and there is a minority view suggesting that the safe harbor was intended primarily for the public markets. However, we believe the better-reasoned position is that the safe harbor applies here.

A separate, more detailed analysis of the net-zero commitment's qualification for PSLRA safe-harbor protection is being prepared concurrently in the Net-Zero Commitment Disclosure Review memo. That analysis will address, among other things, the sufficiency of specific cautionary language, the treatment of mixed statements, and the interaction between the safe harbor and the scienter requirement.

C. The "Bespeaks Caution" Doctrine (Common Law)

The judicially developed "bespeaks caution" doctrine predates the PSLRA and provides an independent basis for dismissing claims based on forward-looking statements that are accompanied by adequate cautionary language. Under this doctrine, forward-looking statements that are accompanied by sufficiently specific cautionary language may be rendered immaterial as a matter of law — i.e., the cautionary language is so thorough that no reasonable investor would be misled by the forward-looking statement.

The "bespeaks caution" doctrine is relevant in two contexts:

First, it applies to state-law fraud and negligent misrepresentation claims, which are not governed by the PSLRA safe harbor (the PSLRA safe harbor applies only to claims under the federal securities laws). Because the Indenture, Purchase Agreement, and Notes are governed by New York law, noteholders may assert state-law claims in New York courts. The "bespeaks caution" doctrine provides a defense to such claims.

Second, it provides supplemental protection even in the federal context, as courts may invoke the doctrine alongside or in addition to the statutory safe harbor when evaluating motions to dismiss.

As with the PSLRA safe harbor, the effectiveness of the "bespeaks caution" doctrine depends on the specificity and substance of the cautionary language. Courts applying the doctrine have emphasized that the cautionary language must be "tailored to the specific risk" and must identify factors that are actually relevant to the forward-looking statement at issue. Mere boilerplate will not suffice.

D. State Common-Law Fraud and Negligent Misrepresentation (New York)

Because the Indenture, the Purchase Agreement, and the Notes are governed by New York law, noteholders may assert common-law claims for fraud and negligent misrepresentation in New York state courts (or in federal court applying New York law).

Common-Law Fraud under New York Law. The elements of a common-law fraud claim under New York law are: (i) a material misrepresentation of fact, (ii) made with knowledge of its falsity (scienter), (iii) with the intent to induce the plaintiff's reliance, (iv) justifiable reliance by the plaintiff, and (v) damages proximately caused by the reliance. New York courts apply a "reasonable reliance" standard, and the sophistication of the plaintiff is a relevant factor in assessing whether reliance was justified. Given that the purchasers in the Rule 144A placement are QIBs — sophisticated institutional investors with access to information and analytical resources — the reliance element may be difficult for plaintiffs to establish, particularly with respect to general, aspirational ESG statements.

Negligent Misrepresentation under New York Law. The elements of a negligent misrepresentation claim are: (i) the defendant had a duty, as a result of a special relationship, to give correct information, (ii) the information given was incorrect, (iii) the defendant failed to exercise reasonable care in communicating the information, (iv) the plaintiff justifiably relied on the information, and (v) the plaintiff suffered damages as a result. This cause of action has a lower mental-state threshold than common-law fraud — negligence rather than scienter — but requires the existence of a "special relationship" between the parties, which is typically found where the defendant possesses unique expertise or is in a position of trust vis-à-vis the plaintiff.

ESG statements in the OM that are demonstrably false or misleading at the time they were made — for example, inaccurate historical emissions data, inflated community development spending figures, or a net-zero commitment that the Company's management knew to be unrealistic — could give rise to claims by noteholders under either theory. The adequacy of cautionary language, the sophistication of the purchasers, and the availability of countervailing information in the OM will all be relevant to the defense of such claims.

V. SEC ENFORCEMENT TRENDS IN ESG AND GREENWASHING

A. SEC Climate and ESG Task Force

In March 2021, the SEC established the Climate and ESG Task Force (the "Task Force") within its Division of Enforcement. The Task Force was charged with developing initiatives to proactively identify ESG-related misconduct and coordinating the effective use of the Division's resources to address these issues. The Task Force's stated focus areas include:

• Material gaps or misstatements in issuers' disclosure of climate risks under existing rules;

• Disclosure and compliance issues relating to ESG strategies in the investment management space;

• Accuracy and adequacy of ESG-related disclosures in registration statements, periodic filings, and offering documents; and

• ESG metrics, targets, and commitments that may be misleading or lacking a reasonable basis.

The Task Force has been particularly active in scrutinizing disclosures by companies in the extractive industries — including upstream oil and gas producers, mining companies, and utilities — reflecting the SEC's view that these sectors present the greatest potential for material ESG-related misstatements and omissions. Companies with operations in jurisdictions associated with elevated environmental risk (including Nigeria and West Africa) have also been the subject of heightened scrutiny, both in connection with ESG disclosures and with respect to the related issues of sanctions compliance and anti-corruption.

Although the current administration has shifted enforcement priorities in certain respects and the Task Force has been reorganized, the underlying legal framework governing ESG-related misstatements and omissions remains unchanged, and the SEC retains full authority to bring enforcement actions for material misrepresentations in offering documents regardless of the institutional posture of the Task Force at any given time. We therefore continue to counsel caution in the preparation of ESG disclosures.

B. Notable SEC Enforcement Actions (Analogized to Fictional Contexts)

The SEC's enforcement record in the ESG and greenwashing space, while still developing, reveals several recurring theories of liability that are directly relevant to the Dunmore OM disclosures:

Inflated Emissions-Reduction Claims. The SEC has pursued enforcement actions against issuers in the energy sector that made affirmative claims regarding their emissions-reduction achievements that were not supported by the underlying data. In one notable matter, an upstream producer disclosed a year-over-year reduction in Scope 1 emissions that was attributable primarily to asset dispositions rather than operational improvements, without disclosing the methodology that produced the reported reduction. The SEC charged the issuer with making materially misleading statements under Section 17(a) and Rule 10b-5, focusing on the failure to disclose the basis for the claimed reduction and the misleading impression created by the presentation of the data.

Failure to Disclose Known Environmental Liabilities. In another enforcement matter, the SEC charged an issuer with omitting from its offering documents material information regarding pending environmental remediation obligations at several of its operating facilities. The issuer had included positive ESG disclosure regarding its environmental stewardship record, but failed to disclose that it was the subject of ongoing regulatory proceedings related to contamination at multiple sites. The SEC characterized the omission as creating a materially misleading impression in the context of the issuer's affirmative ESG narrative.

Misleading Sustainability-Linked Disclosures. The SEC has also focused on issuers that linked specific financial instruments to sustainability targets (e.g., sustainability-linked bonds with coupon step-ups tied to emissions-reduction milestones) where the selected targets were not ambitious relative to the issuer's baseline performance, creating a misleading impression that the issuer was undertaking meaningful sustainability commitments when, in substance, the targets were designed to be easily met.

Net-Zero and Carbon-Neutral Claims. Of particular relevance to the Dunmore analysis, the SEC has signaled skepticism toward broad "net-zero" and "carbon-neutral" claims made by issuers that lack specific implementation plans, interim milestones, or quantified capital allocation toward decarbonization. In public statements and enforcement advisories, senior SEC officials have cautioned that such claims, when made in securities offering documents, may be actionable if they create a misleading impression regarding the issuer's actual commitment to and likelihood of achieving the stated goal, particularly where the issuer's near-term capital allocation is directed overwhelmingly toward carbon-intensive activities.

C. Implications for Dunmore

The SEC enforcement trends summarized above have several direct implications for Dunmore's ESG disclosures in the OM:

Sector and Geographic Scrutiny. Dunmore is an upstream oil and gas company with operations in Nigeria and Senegal — sectors and geographies that are associated with elevated ESG scrutiny from regulators, investors, and the public. The Company's core business — the exploration and production of hydrocarbons — is inherently carbon-intensive, and its operations in the Niger Delta (OML 47 and OML 63) are located in a region with a well-documented history of environmental degradation, community conflict, and regulatory enforcement challenges. These characteristics place Dunmore squarely within the categories of issuers that the SEC and private litigants have targeted for ESG-related claims.

Net-Zero Pledge and Capital Allocation Tension. The most significant risk factor identified in this analysis is the tension between Dunmore's net-zero by 2050 commitment and its near-term capital allocation. Approximately $250 million of the net proceeds of the Notes offering is being directed to the Cayar Offshore Phase II hydrocarbon development — a project that will increase the Company's hydrocarbon production capacity and, in all likelihood, its absolute GHG emissions in the near to medium term. The inclusion of the net-zero pledge in the OM without adequate qualification and acknowledgment of this tension could be characterized by regulators or litigants as creating a materially misleading impression regarding the Company's actual commitment to decarbonization.

Methane Flaring Comparator Risk. The OM's statement that Dunmore's methane flaring intensity of 3.8 m³/boe compares favorably to an "industry average" of 5.1 m³/boe could be challenged if the comparator benchmark is not clearly sourced and defined. If the "industry average" figure is drawn from a data set that is not directly comparable to Dunmore's operations — for example, a global average that includes jurisdictions with significantly different flaring practices, or an average that includes companies with different operational profiles — the comparison could be characterized as misleading. The SEC has demonstrated a willingness to challenge comparative ESG claims where the basis for comparison is not transparent.

VI. ANALYSIS OF SPECIFIC DUNMORE ESG STATEMENTS

This section provides a detailed risk assessment and set of recommendations for each of the principal ESG statements and data points in the draft OM. The analysis is organized by disclosure category, with risk levels assessed on a Low / Moderate / High scale. A summary table is provided in Appendix A.

A. Quantitative GHG Emissions Data (Scope 1 and Scope 2)

1. Risk Assessment

The OM reports Dunmore's Scope 1 GHG emissions at 1.42 million metric tons CO₂e and Scope 2 GHG emissions at 0.18 million metric tons CO₂e, in each case for FY 2024. These are statements of historical fact — they purport to describe the Company's actual emissions during a completed fiscal year — and are therefore not eligible for protection under the PSLRA safe harbor, which applies only to forward-looking statements. The safe harbor cannot cure inaccuracy in the underlying data.

The principal risk associated with these quantitative disclosures is accuracy. If the reported emissions figures are materially inaccurate — whether because of errors in the underlying data, flawed methodology, incomplete operational boundary definitions, or other factors — liability could attach under Rule 10b-5 and Section 17(a) (as well as under New York common law), regardless of any cautionary language included in the OM.

The data was prepared by Barrisford Advisory Group LLC under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant. Several questions must be addressed through the ESG Data Verification Checklist and the due diligence process:

• Methodology. What methodology was used to calculate the emissions figures? Did Barrisford employ the GHG Protocol Corporate Accounting and Reporting Standard, the American Petroleum Institute ("API") Compendium of Greenhouse Gas Emissions Methodologies for the Natural Gas and Oil Industry, or another recognized framework? The choice of methodology can materially affect the reported figures, particularly with respect to fugitive methane emissions and flaring calculations.

• Operational Boundary. What operational boundary was applied? Did the calculations include all of Dunmore's operated and non-operated assets across all jurisdictions (Nigeria, Senegal, GoM, West Texas), or were certain assets or activities excluded? Were emissions from the Dunmore Renewables LLC solar portfolio netted against the Company's total emissions?

• Estimation and Assumptions. GHG emissions calculations in the upstream oil and gas industry necessarily involve estimates and assumptions — for example, regarding well-level emission factors, flare efficiency, equipment leak rates, and grid emission factors for Scope 2 calculations. The nature and significance of these estimates should be disclosed.

• Independent Assurance. Has Alverton & Co. LLP (independent auditor; Graham Stillwell, lead engagement partner) reviewed the emissions data, or does the firm plan to provide any level of assurance (limited or reasonable) over the ESG data? Based on our current understanding, no third-party assurance on the ESG data has been obtained or is planned for the offering. The absence of independent assurance is itself a relevant disclosure item.

Risk Level: Moderate — The risk is moderate, contingent on the accuracy of the underlying data. If the data is verified through the ESG Data Verification Checklist and management provides representations of accuracy, the risk is manageable. If the data cannot be verified, or if the verification process reveals discrepancies, the risk level increases.

2. Recommendations.

(a) Clearly state the methodology and reporting framework used to calculate the emissions figures, including the organizational and operational boundaries applied.

(b) Disclose that GHG emissions data has not been independently audited or assured by a third party, and that the data was prepared by management with the assistance of Barrisford Advisory Group LLC.

(c) Include a caveat that emissions calculations involve estimates and assumptions, that these estimates and assumptions may change as methodologies evolve, and that the reported figures are subject to inherent measurement uncertainty.

(d) Cross-reference the ESG Data Verification Checklist to confirm that each data point traces to Barrisford source material and that the underlying calculations have been reviewed for reasonableness.

(e) Ensure that Scope 3 emissions are not inadvertently implied or referenced — if Dunmore has not calculated Scope 3 emissions, the OM should avoid language that could be read as implying that the reported emissions represent the Company's total greenhouse gas footprint.

B. Methane Flaring Intensity Comparison

1. Risk Assessment

The draft OM states that Dunmore's methane flaring intensity of 3.8 m³/boe compares favorably to an "industry average" of 5.1 m³/boe. Comparative claims of this nature present heightened risk because they involve not only the accuracy of the Company's own data but also the appropriateness and accuracy of the benchmark against which the Company is comparing itself.

The principal risks are as follows:

• Source of the Comparator. The 5.1 m³/boe "industry average" is not currently sourced in the draft OM. Without a clear identification of the source — including the data set, the geographic scope, the time period, and the definition of "industry" — the comparison is essentially unverifiable by investors and could be challenged as misleading.

• Comparability. Even if the 5.1 m³/boe figure is accurately sourced, the comparison may be inappropriate if the comparator data set is not meaningfully comparable to Dunmore's operations. For example, if the "industry average" represents a global average across all upstream operators (including those in jurisdictions with minimal flaring regulation), while Dunmore's 3.8 m³/boe figure reflects only its Nigerian and GoM operations (where regulatory frameworks may impose different constraints), the comparison could be misleading.

• Cherry-Picking. If Dunmore selected the particular comparator benchmark because it was the most favorable available benchmark — i.e., the one that made Dunmore's performance appear most impressive — the selection itself could be characterized as misleading, particularly if other readily available benchmarks (e.g., peer-group averages or jurisdiction-specific averages) would produce a less favorable comparison.

Risk Level: Moderate — The risk is moderate. Comparative ESG claims are inherently more vulnerable to challenge than standalone data points, and the SEC has demonstrated a willingness to scrutinize the basis for such comparisons. However, the risk is manageable if the source is clearly identified and appropriate caveats are included.

2. Recommendations.

(a) Identify the source of the 5.1 m³/boe industry-average figure with specificity — e.g., "Based on data published by the World Bank Global Gas Flaring Reduction Partnership for sub-Saharan African upstream operators for the year ended December 31, 2023," or an equivalent specific citation.

(b) Evaluate whether the selected comparator is the most appropriate benchmark given Dunmore's geographic and operational mix. If a more narrowly tailored peer-group comparison is available, consider using that instead of or in addition to the broader industry average.

(c) Add qualifying language acknowledging that methodologies and reporting boundaries may differ among companies, and that the comparison should be considered in that context — for example: "The comparability of methane flaring intensity data across companies is limited by differences in measurement methodologies, reporting boundaries, and operational conditions."

(d) If the deal team determines that the comparative claim is not essential to the ESG narrative, consider removing it entirely to eliminate the associated risk.

C. Community Development Spend in Nigeria ($14.2 Million)

1. Risk Assessment

The OM reports that Dunmore spent $14.2 million on community development programs in Nigeria in FY 2024, encompassing infrastructure, education, healthcare, and community relations initiatives in the Niger Delta communities proximate to OML 47 and OML 63.

This is a statement of historical fact — a reported expenditure during a completed fiscal year. As such, it is not eligible for PSLRA safe-harbor protection, and the primary risk is accuracy. However, the litigation risk associated with this data point is generally lower than the risk associated with the emissions data or the net-zero pledge, because: (i) the figure is a discrete financial data point that should be verifiable against management accounts; and (ii) the figure, standing alone, is less likely to be outcome-determinative for a reasonable investor's purchase decision.

The more significant risk arises from the context in which the community development spending figure is presented. If the OM includes this positive disclosure regarding community engagement while failing to disclose material community disputes, ongoing environmental remediation liabilities, or other adverse facts relating to Dunmore's operations in the Niger Delta, the positive disclosure could be characterized as part of a materially misleading "total mix" of information. This is the classic selective disclosure or half-truth theory of liability: an issuer that chooses to speak on a topic must speak fully and not omit material countervailing facts.

The Niger Delta is a region with a well-documented history of environmental contamination, community conflict, and litigation involving international oil companies. Dunmore's operations on OML 47 and OML 63 may be subject to pending or anticipated claims, regulatory proceedings, or community grievances that, if material, must be disclosed alongside the positive community development narrative.

Risk Level: Low to Moderate — Low if the figure is accurate and the OM includes adequate disclosure of associated risks; Moderate if material adverse facts regarding the Company's Niger Delta operations are omitted.

2. Recommendations.

(a) Ensure that the risk factors in the OM adequately address community relations risks in the Niger Delta, including the risk of community disputes, protests, operational disruptions, and demands for increased community development spending or environmental remediation.

(b) Ensure that the OM includes appropriate disclosure regarding any known environmental remediation liabilities, pending or threatened litigation, or regulatory proceedings relating to the Company's Niger Delta operations.

(c) Confirm that the $14.2 million community development spending figure reconciles to audited financial statements or management accounts that have been reviewed by Alverton & Co. LLP (or, if the figure is not included in the audited financial statements, confirm that it can be traced to internal records that have been verified through the due diligence process).

(d) Define the scope of "community development spend" — what categories of expenditure are included, and are there items that might reasonably be characterized differently (e.g., payments that are more properly classified as operating costs, government-mandated contributions, or settlement payments)?

D. Net-Zero by 2050 Commitment

1. Risk Assessment — Highest Exposure Category

The net-zero by 2050 commitment represents Dunmore's most prominent forward-looking ESG statement and presents the highest exposure of any ESG disclosure in the OM. This assessment is driven by several factors:

Tension with Capital Allocation. The single most significant risk factor is the internal tension between the net-zero commitment and the Company's near-term capital allocation. Approximately $250 million of the net proceeds of the Notes offering — representing approximately 29.4% of the total offering — is being directed to the Cayar Offshore Phase II hydrocarbon development, a project that will expand the Company's oil and gas production capacity and is expected to contribute to increased absolute GHG emissions in the near to medium term. Dunmore's core business remains upstream oil and gas, with $2.14 billion in hydrocarbon revenue in FY 2024 and 345.8 million barrels of oil equivalent ("MMboe") in proved reserves with a PV-10 value of $6.7 billion. Against this backdrop, a net-zero by 2050 commitment that is not accompanied by a credible decarbonization roadmap — including specific interim targets, quantified capital allocation toward decarbonization, and identified technological pathways — risks being perceived as aspirational marketing rather than a good-faith projection of future performance.

Absence of Interim Targets and Implementation Plan. The current draft of the OM presents the net-zero commitment as a company-wide goal but does not disclose any binding interim targets (e.g., a 30% reduction in Scope 1 emissions by 2030), a detailed implementation roadmap, or a quantified capital expenditure plan directed toward decarbonization. The absence of these elements significantly weakens the credibility of the commitment and increases the risk that it will be viewed as unsubstantiated — or worse, as intentionally vague to avoid accountability.

SEC Posture on Net-Zero Claims. As discussed in Section V.B above, the SEC has signaled skepticism toward net-zero pledges that lack "concrete, measurable steps" and has pursued enforcement actions against issuers whose ESG commitments were not supported by credible implementation plans. While the current regulatory environment may be somewhat less aggressive in this area than in prior years, the legal exposure remains, and private litigation risk persists regardless of the SEC's enforcement posture at any particular time.

Elevation to Securities Disclosure. There is a meaningful distinction between a net-zero pledge made in a corporate sustainability report, a press release, or a website disclosure, on the one hand, and the same pledge included in an offering memorandum in connection with an $850 million high-yield debt offering, on the other. The inclusion of the pledge in the OM elevates it from a corporate communication to a securities disclosure that is subject to the full rigor of the anti-fraud provisions. Purchasers of the Notes are entitled to rely on the OM as a comprehensive and accurate disclosure document, and statements in the OM carry a different weight — and a different potential for liability — than statements made in other contexts.

Mixed Statement Risk. The net-zero commitment, as currently drafted, risks being characterized as a "mixed statement" — one that contains both a forward-looking aspiration (achieving net-zero by 2050) and an implicit representation of present fact (that the Company has a genuine commitment to and is taking meaningful steps toward achieving this goal). To the extent a court characterizes the statement as containing a present-fact component, the PSLRA safe harbor would not protect that component, and the plaintiffs would need to demonstrate only that the present-fact representation was materially false or misleading.

Risk Level: High — This is the highest-risk ESG disclosure in the OM.

2. Recommendations. Given the significance of this risk, we provide detailed and specific recommendations:

(a) Frame as Aspirational. Characterize the net-zero pledge explicitly as an "aspirational long-term objective" or "long-term goal," not as a binding commitment, target, projection, or guarantee of future results. Suggested formulation: "The Company has announced an aspirational long-term objective of achieving net-zero greenhouse gas emissions across its operations by 2050. This objective reflects the Company's recognition of the importance of addressing climate change and does not constitute a binding commitment or a projection of future results."

(b) Deploy PSLRA-Compliant Cautionary Language. Immediately accompany the net-zero statement with meaningful cautionary language that identifies the specific factors that could prevent achievement of the objective. These factors should include, at a minimum: (i) the commodity price environment and its effect on the Company's capital allocation decisions; (ii) the pace and direction of technological development in carbon capture, utilization, and storage ("CCUS"), hydrogen, and other decarbonization technologies; (iii) changes in the regulatory environment in Nigeria, Senegal, the United States, and other jurisdictions; (iv) the Company's need to allocate capital to its core hydrocarbon business to service its debt obligations (including the Notes) and fund ongoing operations; (v) geological and operational uncertainties; (vi) the availability and cost of renewable energy sources and offsets; and (vii) macroeconomic conditions and energy market dynamics.

(c) Avoid Interim Milestones Without a Plan. Do not state or imply any specific interim milestones, percentage-reduction targets, or time-bound commitments unless the Company has a board-approved implementation plan with quantified targets, identified decarbonization initiatives, and allocated capital. Vague references to an "emissions-reduction trajectory" should be removed or replaced with more clearly aspirational language.

(d) Acknowledge Capital Allocation Tension. Include an explicit acknowledgment that the Company's near-term capital expenditure plans — including the allocation of approximately $250 million of the net proceeds of the Notes offering to the Cayar Offshore Phase II hydrocarbon development — are focused on hydrocarbon production, and that achievement of net-zero emissions by 2050 will depend on future strategic decisions, capital allocation choices, and technologies that are not yet deployed at scale.

(e) Contextualize the Solar Portfolio. If the 220 MW West Texas solar portfolio operated by Dunmore Renewables LLC is cited as evidence of the Company's energy transition strategy in connection with the net-zero discussion, ensure that the presentation provides appropriate context regarding the relative scale of the solar portfolio in relation to the Company's overall hydrocarbon-dominated business. The solar portfolio represents a small fraction of the Company's $4.87 billion asset base and $2.14 billion revenue base.

(f) Cross-Reference Risk Factors. Include a direct cross-reference to the climate-transition risk factor and the physical climate risk factor, and ensure that those risk factors are sufficiently robust to support the cautionary language accompanying the net-zero pledge.

(g) Coordinate with Separate Memo. A separate, more detailed analysis of the net-zero commitment is being prepared in the Net-Zero Commitment Disclosure Review memo. The recommendations in this memorandum should be read in conjunction with the conclusions of that separate analysis. Final language should not be settled until both analyses are complete.

E. 220 MW Solar Portfolio (Dunmore Renewables LLC)

1. Risk Assessment

The OM describes Dunmore Renewables LLC's 220 MW solar portfolio in West Texas as part of the Company's ESG narrative. This is principally a statement of existing operational capacity — a present fact — and therefore carries lower inherent risk than forward-looking commitments. The solar assets exist, they have an identified capacity, and their operational status is verifiable.

However, the risk associated with this disclosure is not the accuracy of the underlying fact but rather the context and framing in which the fact is presented. If the solar portfolio is characterized as evidence of a broader "energy transition" strategy in a manner that overstates its significance relative to Dunmore's overwhelmingly hydrocarbon-driven business, the presentation could be misleading. Specifically:

• Dunmore's proved hydrocarbon reserves total 345.8 MMboe with a PV-10 value of $6.7 billion.

• The Company's total asset base is approximately $4.87 billion, and its FY 2024 revenue was approximately $2.14 billion, the vast majority of which is derived from hydrocarbon production and sales.

• The 220 MW solar portfolio, while a meaningful renewable energy asset in absolute terms, represents a small fraction of the Company's overall business by any financial measure — revenue, asset value, or capital allocation.

If the OM presents the solar portfolio alongside language characterizing Dunmore as an "energy transition company," a "diversified energy company," or similar formulations, the discrepancy between the implied characterization and the reality of the Company's business could be challenged as misleading.

Risk Level: Low to Moderate — Low for the factual statement of capacity; Moderate if the framing overstates the solar portfolio's significance relative to the hydrocarbon business.

2. Recommendations.

(a) Present the solar portfolio factually, with clear identification of capacity (220 MW), location (West Texas), operational status, and the subsidiary through which it is held (Dunmore Renewables LLC).

(b) Avoid characterizing Dunmore as an "energy transition company," a "clean energy company," or any similar formulation that could be misleading given the Company's predominantly hydrocarbon profile.

(c) If the solar portfolio is included in the ESG narrative as evidence of the Company's diversification or sustainability efforts, provide appropriate context regarding its relative scale. Consider including a statement such as: "The Company's solar portfolio, while an important component of its long-term strategy, represents a small portion of the Company's total asset base, which is predominantly composed of upstream oil and gas assets."

(d) Ensure that revenue, earnings, and capital expenditure data related to the solar portfolio, if disclosed, is presented in a manner that does not overstate its contribution to the Company's overall financial performance.

VII. BEST PRACTICES FOR CAUTIONARY LANGUAGE

A. General Drafting Principles

The effectiveness of the PSLRA safe harbor and the "bespeaks caution" doctrine depends critically on the quality, specificity, and placement of cautionary language in the OM. Based on the applicable case law and SEC guidance, the following general drafting principles should govern the preparation of cautionary language for the Dunmore ESG disclosures:

1. Identification. Each forward-looking ESG statement should be expressly identified as a forward-looking statement. This identification can be accomplished through introductory language in the relevant section (e.g., "The following statements regarding our environmental goals and sustainability initiatives are forward-looking statements...") and/or through the general forward-looking statements disclaimer that typically appears at the front of the OM.

2. Meaningful Cautionary Language. Each forward-looking ESG statement should be accompanied by meaningful cautionary language that is specific to the statement and to the Company. Courts have consistently held that generic or boilerplate disclaimers — such as "actual results may differ materially" standing alone — are insufficient to invoke the PSLRA safe harbor. The cautionary language must identify the "important factors" that could cause actual results to differ materially from those projected or implied by the forward-looking statement, and those factors must be substantive and relevant, not merely hypothetical.

3. Specificity. The cautionary language must be tailored to the specific forward-looking statement being made. A one-size-fits-all disclaimer at the front of the OM is helpful but insufficient; each significant forward-looking ESG s

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
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I. EXECUTIVE SUMMARY
The purpose of this memorandum is to analyze the potential liability exposure arising from environmental, social, and governance ("ESG")-related statements and forward-looking commitments contained in the Offering Memorandum (both the Preliminary Offering Memorandum dated April 28, 2025 (the "Preliminary OM") and the Final Offering Memorandum expected to be dated May 14, 2025 (the "Final OM," and together with the Preliminary OM, the "OM")) for Dunmore Energy Holdings Ltd.'s ("DEH," "Dunmore," or the "Company") offering of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes").
The Notes are being offered in a Rule 144A / Regulation S private placement to qualified institutional buyers ("QIBs") within the meaning of Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-U.S. persons in offshore transactions in reliance on Regulation S under the Securities Act. The initial purchasers for the offering are Ridgeline Capital Markets LLC, as Lead Left Bookrunner, Clarion Securities Inc., as Joint Bookrunner, and Pinnacle Partners LLC, as Co-Manager (collectively, the "Initial Purchasers"). Calderwood & Harkness LLP ("C&H" or the "Firm"), as counsel to the Issuer, will deliver a customary 10b-5 negative assurance letter to the Initial Purchasers in connection with the closing of the offering.
Dunmore's ESG-related disclosure in the OM currently includes: (i) a standalone "Environmental and Social Responsibility" section presenting narrative and quantitative data regarding the Company's environmental practices, community engagement, and sustainability initiatives; (ii) two ESG-specific risk factors addressing climate-transition risk and physical climate risk; (iii) the Company's publicly stated commitment to achieve net-zero greenhouse gas ("GHG") emissions by 2050; and (iv) quantitative data regarding GHG emissions (Scope 1 and Scope 2), methane flaring intensity, and community development expenditures in Nigeria. The underlying data for these disclosures was prepared by Barrisford Advisory Group LLC ("Barrisford"), an independent ESG consulting firm retained by Dunmore, under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant.
Conclusion. Meaningful liability exposure exists under the federal anti-fraud provisions — principally Section 10(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 10b-5 promulgated thereunder — as well as under New York state common-law theories of fraud and negligent misrepresentation. However, this exposure can be substantially mitigated through the adoption of four principal strategies:
(a) the incorporation of robust, specific, and meaningful cautionary language accompanying all forward-looking ESG statements;
(b) the careful qualification of forward-looking ESG commitments — most critically, the net-zero by 2050 pledge — as aspirational long-term objectives rather than binding projections or guarantees;
(c) the thorough verification of all historical quantitative ESG data points against Barrisford source materials and management records, with appropriate disclosure regarding methodology and the absence of independent third-party assurance; and
(d) the avoidance of specific interim emissions-reduction targets absent a credible, board-approved implementation plan with quantified milestones and identified capital allocation.
This memorandum details the applicable legal framework, analyzes each material ESG statement and data point in the OM, assesses current SEC enforcement trends in the greenwashing arena, evaluates the impact of the ESG disclosures on the Firm's 10b-5 negative assurance letter, and provides specific drafting recommendations for incorporation into the Preliminary OM and Final OM. A comprehensive set of recommended cautionary language is provided in Appendix C.
II. SCOPE AND LIMITATIONS
The scope of this memorandum is limited to an analysis of potential liability under U.S. federal securities law and New York state common law arising from the ESG-related disclosures in the OM for the Notes offering. Specifically, this memorandum addresses:
• Section 10(b) of the Exchange Act and Rule 10b-5 thereunder — the primary federal anti-fraud provisions applicable to misstatements and omissions of material fact in connection with the purchase or sale of securities, including in the context of unregistered Rule 144A / Regulation S offerings;
• Section 17(a) of the Securities Act — a broader anti-fraud provision enforceable by the Securities and Exchange Commission (the "SEC") that, as to subsections (a)(2) and (a)(3), requires only a showing of negligence rather than scienter; and
• New York state common-law theories of fraud and negligent misrepresentation — applicable given that the Indenture, the Purchase Agreement, and the Notes are each governed by New York law.
Because the Notes are being offered in reliance on the exemptions from registration provided by Rule 144A and Regulation S under the Securities Act, no registration statement is being filed with the SEC, and accordingly the strict liability and negligence-based provisions of Section 11 of the Securities Act and Section 12(a)(2) of the Securities Act are not applicable to the offering. However, as discussed in greater detail in Section IV below, purchasers of the Notes retain the ability to assert claims under Rule 10b-5 in connection with their purchases, and this remains the principal source of private litigation risk.
This memorandum does not address potential liability under the following non-U.S. regulatory frameworks, each of which may be relevant to the Regulation S leg of the offering and to Dunmore's broader ESG disclosure posture:
• The European Union's Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) ("SFDR") and related EU taxonomy regulations;
• The United Kingdom Financial Conduct Authority's sustainability disclosure and labelling requirements, including the FCA's Anti-Greenwashing Rule (effective May 31, 2024);
• The International Sustainability Standards Board ("ISSB") standards (IFRS S1 and IFRS S2), to the extent adopted by jurisdictions in which Regulation S purchasers are located; and
• Any environmental or securities regulatory regime applicable in Nigeria, Senegal, or other jurisdictions in which Dunmore operates or in which the Notes may be resold.
We note that the Regulation S leg of the offering will result in the placement of Notes with non-U.S. institutional investors who may be located in jurisdictions with their own greenwashing regulatory frameworks. If the deal team determines that further analysis of non-U.S. regulatory exposure is warranted, we are prepared to coordinate with the Firm's London and Paris offices to prepare a supplemental memorandum addressing these regimes.
The ESG data presented in the OM was sourced from data packages prepared by Barrisford Advisory Group LLC under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant. Verification of the accuracy and completeness of this data is being addressed separately through the ESG Data Verification Checklist currently being compiled by Eric Johannsen. This memorandum assumes the accuracy of the ESG data subject to the completion of that verification process, and the analysis and recommendations herein should be read in conjunction with the final verified data set. To the extent that the verification process identifies discrepancies, additional disclosure or modification of the OM may be required, and this memorandum should be updated accordingly.
III. THE DUNMORE ESG DISCLOSURES AT ISSUE
This section summarizes the principal ESG-related disclosures currently included in the draft OM, organized by type. Each of these disclosures is analyzed in detail in Section VI below.
A. The "Environmental and Social Responsibility" Section
The draft OM includes a standalone section entitled "Environmental and Social Responsibility" (the "ESG Section"), which was prepared by Dunmore management and the Company's investor relations team in consultation with Barrisford Advisory Group LLC, and is being reviewed by the deal team in connection with the customary due diligence process. The ESG Section presents both narrative and quantitative information regarding Dunmore's environmental practices, community engagement programs, and sustainability strategy.
The key quantitative statements currently set forth in the ESG Section are as follows:
• Scope 1 GHG Emissions: 1.42 million metric tons of carbon dioxide equivalent ("CO₂e") for the fiscal year ended December 31, 2024 ("FY 2024"). Scope 1 emissions encompass direct emissions from owned or controlled sources, including combustion of fuels in Dunmore's production operations, flaring, and fugitive emissions from its upstream oil and gas assets.
• Scope 2 GHG Emissions: 0.18 million metric tons CO₂e for FY 2024. Scope 2 emissions represent indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the Company.
• Methane Flaring Intensity: 3.8 cubic meters per barrel of oil equivalent ("m³/boe"), described as comparing favorably to a cited "industry average" of 5.1 m³/boe. The source of the industry-average figure is not currently identified in the draft OM.
• Community Development Spend (Nigeria): $14.2 million in FY 2024, encompassing expenditures on infrastructure, education, healthcare, and community relations programs in the Niger Delta communities proximate to the Company's OML 47 and OML 63 production operations.
In addition to these quantitative disclosures, the ESG Section presents Dunmore's net-zero by 2050 commitment — a company-wide pledge to achieve net-zero GHG emissions across all operations by the year 2050. This commitment was initially announced in the Company's 2023 Sustainability Report and is being carried forward in the OM as part of the Company's ESG narrative.
The ESG Section also highlights the Company's 220 megawatt ("MW") solar portfolio operated through Dunmore Renewables LLC, a wholly owned subsidiary, with solar generation facilities located in West Texas. This solar portfolio is presented as evidence of Dunmore's energy transition strategy and its commitment to developing renewable energy capacity alongside its core hydrocarbon business.
Dunmore's operations span multiple jurisdictions, creating a complex and geographically diverse environmental footprint. The Company's upstream oil and gas assets include: (i) oil mining leases OML 47 and OML 63 in the Niger Delta region of Nigeria; (ii) the Cayar Offshore Block in Senegal, where the Company is pursuing the Phase II development program; and (iii) deepwater leases in the Green Canyon and Garden Banks areas of the Gulf of Mexico ("GoM"). This multi-jurisdictional operational profile subjects the Company to overlapping and in some cases inconsistent environmental regulatory regimes, and amplifies the complexity and inherent uncertainty of the GHG emissions data presented in the ESG Section.
B. ESG-Specific Risk Factors
The draft OM includes two risk factors that specifically address ESG-related risks:
(i) Climate-Transition Risk. This risk factor addresses the regulatory, market, technological, and reputational risks arising from the evolving global transition to a lower-carbon economy. The risk factor discusses the potential for increased carbon pricing, more stringent emissions regulations, reduced access to capital from ESG-sensitive lenders and investors, shifting consumer and counterparty preferences, and the long-term risk of stranded hydrocarbon assets. The risk factor is drafted broadly but does not currently reference specific pending legislation or regulatory developments in any of Dunmore's operating jurisdictions.
(ii) Physical Climate Risk. This risk factor addresses the potential impact of extreme weather events, sea-level rise, and other physical manifestations of climate change on Dunmore's offshore and coastal operations, including its deepwater GoM operations and its Cayar Offshore Block in Senegal. The risk factor discusses the potential for operational disruptions, increased insurance costs, and asset damage.
In addition, the OM's risk factors addressing sanctions compliance and anti-corruption risks (particularly with respect to Dunmore's Nigerian and Senegalese operations) tangentially address ESG-adjacent reputational concerns, including the risk that compliance failures in these areas could undermine the Company's broader ESG narrative and damage investor confidence.
C. Forward-Looking ESG Statements
The OM contains several categories of forward-looking ESG statements that warrant particular attention from a greenwashing liability perspective:
• Net-Zero by 2050 Pledge. As described above, the Company has included its aspirational commitment to achieve net-zero GHG emissions by 2050. The current draft of the OM presents this as a company-wide goal but does not disclose any binding interim targets, quantified milestones, or a detailed implementation roadmap with specific decarbonization initiatives and associated capital expenditure commitments.
• Cayar Offshore Phase II Environmental Mitigation Plans. The OM describes the planned Phase II development of the Cayar Offshore Block, to which $250,000,000 of the net proceeds of the Notes offering will be allocated. In connection with this development, the OM includes references to environmental mitigation plans, including environmental impact assessments, marine biodiversity protection measures, and emissions monitoring protocols. These plans are forward-looking in nature and subject to significant operational and regulatory uncertainty.
• General Statements Regarding Emissions Reduction and Energy Transition. The ESG Section and certain other portions of the OM contain general forward-looking statements regarding Dunmore's anticipated emissions-reduction trajectory, its plans for expanding its renewable energy capacity, and its community engagement goals in Nigeria and Senegal. These statements are not currently accompanied by specific quantitative targets or timelines beyond the overarching net-zero by 2050 commitment.
IV. APPLICABLE LEGAL FRAMEWORK
A. Federal Anti-Fraud Provisions
1. Section 10(b) and Rule 10b-5
Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder constitute the principal federal anti-fraud provisions applicable to the ESG disclosures in the OM. Rule 10b-5 makes it unlawful for any person, in connection with the purchase or sale of any security, to (a) employ any device, scheme, or artifice to defraud, (b) make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
To prevail on a private Rule 10b-5 claim, a plaintiff must establish each of the following elements:
(i) a material misstatement or omission of fact;
(ii) made in connection with the purchase or sale of a security;
(iii) scienter — a mental state embracing an intent to deceive, manipulate, or defraud, or in certain circuits, severe recklessness;
(iv) reliance by the plaintiff on the misstatement or omission;
(v) economic loss; and
(vi) loss causation — a causal connection between the material misrepresentation and the plaintiff's economic loss.
The applicability of Rule 10b-5 to ESG disclosures has been the subject of a growing body of judicial decisions and SEC enforcement actions. While no court has held that ESG disclosures constitute a categorically distinct species of securities disclosure, the emerging consensus in the case law and the SEC's enforcement posture is clear: ESG statements in offering documents are subject to the same anti-fraud standards as any other disclosure, and when such statements create a materially misleading impression — whether through affirmative misstatement or omission of material countervailing information — they may give rise to Rule 10b-5 liability.
Materiality is the threshold inquiry. Under the standard established in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976), and subsequently adopted for Rule 10b-5 claims in Basic Inc. v. Levinson, 485 U.S. 224 (1988), a fact is material if there is a "substantial likelihood" that a reasonable investor would consider it important in making an investment decision. The standard does not require proof that the information would have changed the investor's decision — only that it would have been viewed by the reasonable investor as having "significantly altered the 'total mix' of information" available.
ESG-related information is increasingly recognized as material, particularly for issuers in the extractive industries with significant environmental footprints. For an upstream oil and gas company such as Dunmore, with operations in environmentally sensitive regions (the Niger Delta, the offshore waters of Senegal, the deepwater Gulf of Mexico), the materiality of environmental data, emissions metrics, and climate-related commitments is difficult to dispute. Institutional investors — who constitute the entirety of the purchaser base in a Rule 144A offering — increasingly incorporate ESG factors into their investment analysis and credit assessments, further strengthening the case for materiality.
The scienter element presents a significant hurdle for private plaintiffs in Rule 10b-5 actions. The Private Securities Litigation Reform Act of 1995 ("PSLRA") requires a complaint to "state with particularity facts giving rise to a strong inference" of scienter. In the ESG context, scienter is most likely to be established where an issuer (a) made affirmative statements about its environmental performance or commitments that were contradicted by internal documents or known facts, or (b) had access to information demonstrating the falsity of its ESG representations and consciously disregarded it. For aspirational or forward-looking ESG statements, establishing the required level of intent or recklessness is substantially more difficult.
2. Section 17(a) of the Securities Act
Section 17(a) of the Securities Act is a broader anti-fraud provision that applies to offers or sales of securities. Unlike Rule 10b-5, Section 17(a) is enforceable only by the SEC and does not give rise to a private right of action. Critically, however, subsections 17(a)(2) and 17(a)(3) do not require proof of scienter — negligence is the applicable mental state standard. This means the SEC can bring enforcement actions for ESG misstatements or omissions based on a showing that the issuer acted negligently, without the need to prove intent to deceive or recklessness.
Section 17(a) is relevant to this analysis because the SEC has employed it in recent ESG-related enforcement actions, and the lower mental-state threshold makes it a more accessible enforcement tool for the Commission. From a practical standpoint, this means that even ESG disclosures that would likely survive a private Rule 10b-5 challenge (because plaintiffs cannot establish scienter) could nonetheless be the basis for an SEC enforcement action if the disclosures were negligently prepared or failed to reflect information reasonably available to the Company.
3. Rule 10b-5 in the 144A Context
A threshold question for this analysis is whether purchasers of the Notes in the Rule 144A placement retain the ability to assert Rule 10b-5 claims. The answer is clearly yes.
While the Supreme Court's decision in Gustafson v. Alloyd Co., 513 U.S. 561 (1995), limited the availability of Section 12(a)(2) of the Securities Act to claims arising from "public offerings" (i.e., registered offerings), Rule 10b-5 is not similarly limited. By its terms, Rule 10b-5 applies to "any person" who makes a material misstatement or omission "in connection with the purchase or sale of any security." Courts have consistently held that Rule 10b-5 applies to purchases and sales of securities in private placements, including Rule 144A offerings to QIBs. The rule's broad language encompasses any transaction in securities, regardless of whether the securities are registered under the Securities Act.
This has direct implications for the Firm's 10b-5 negative assurance letter. Because purchasers of the Notes will have Rule 10b-5 claims available to them in the secondary market, the Initial Purchasers will expect — and the Firm will deliver — a customary 10b-5 negative assurance letter confirming that, based on the Firm's participation in the preparation of the OM and the related due diligence process, nothing has come to the Firm's attention that causes it to believe the OM contains a material misstatement or omission. The Firm's own exposure is therefore directly tied to the adequacy of the due diligence process with respect to all material disclosures in the OM, including the ESG disclosures.
B. The PSLRA Safe Harbor for Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 ("PSLRA"), codified at 15 U.S.C. § 78u-5, created a statutory safe harbor for forward-looking statements. Under the PSLRA safe harbor, a person shall not be liable with respect to any forward-looking statement if:
(a) the statement is identified as a forward-looking statement and is accompanied by "meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement"; or
(b) the statement is immaterial; or
(c) the plaintiff fails to prove that the statement was made with "actual knowledge" that it was false or misleading.
For purposes of the Dunmore ESG disclosures, the most significant prong of the safe harbor is prong (a) — the "meaningful cautionary language" requirement. Under this prong, the issuer need not identify every factor that could cause actual results to differ; however, the cautionary language must be "substantive and tailored to the specific future projections, estimates, or opinions" at issue. Generic or boilerplate cautionary language — such as a blanket disclaimer that "actual results may differ" — is insufficient to invoke the safe harbor. Courts have consistently required that the cautionary language identify the specific risks and uncertainties that are most relevant to the particular forward-looking statement being made.
Applicability to Dunmore's ESG Forward-Looking Statements. The net-zero by 2050 commitment, the emissions-reduction trajectory statements, and the environmental mitigation plans for Cayar Phase II are all forward-looking statements within the meaning of the PSLRA. If properly identified as forward-looking and accompanied by meaningful cautionary language enumerating the specific factors that could prevent their achievement, these statements should qualify for safe-harbor protection.
However, a critical caveat applies: the PSLRA safe harbor protects only forward-looking statements; it does not protect statements of present or historical fact. Where a statement contains both a forward-looking component and a statement of present fact, courts will disaggregate the statement and apply the safe harbor only to the forward-looking component. This is particularly relevant where the OM presents current emissions data (historical fact) alongside projections of future emissions reductions (forward-looking). Any inaccuracy in the historical data cannot be cured by cautionary language.
Applicability in Rule 144A Offerings. The statutory text of the PSLRA safe harbor is not limited to registered offerings or publicly traded securities. The safe harbor applies to any "forward-looking statement" as defined in the statute, subject to certain enumerated exceptions (e.g., statements made in connection with initial public offerings, tender offers, or going-private transactions). Because a Rule 144A offering is none of these excluded categories, the majority view among commentators and the weight of judicial authority supports the conclusion that the PSLRA safe harbor is available for forward-looking statements made in connection with Rule 144A offerings. We note that this issue has not been definitively resolved by the Supreme Court, and there is a minority view suggesting that the safe harbor was intended primarily for the public markets. However, we believe the better-reasoned position is that the safe harbor applies here.
A separate, more detailed analysis of the net-zero commitment's qualification for PSLRA safe-harbor protection is being prepared concurrently in the Net-Zero Commitment Disclosure Review memo. That analysis will address, among other things, the sufficiency of specific cautionary language, the treatment of mixed statements, and the interaction between the safe harbor and the scienter requirement.
C. The "Bespeaks Caution" Doctrine (Common Law)
The judicially developed "bespeaks caution" doctrine predates the PSLRA and provides an independent basis for dismissing claims based on forward-looking statements that are accompanied by adequate cautionary language. Under this doctrine, forward-looking statements that are accompanied by sufficiently specific cautionary language may be rendered immaterial as a matter of law — i.e., the cautionary language is so thorough that no reasonable investor would be misled by the forward-looking statement.
The "bespeaks caution" doctrine is relevant in two contexts:
First, it applies to state-law fraud and negligent misrepresentation claims, which are not governed by the PSLRA safe harbor (the PSLRA safe harbor applies only to claims under the federal securities laws). Because the Indenture, Purchase Agreement, and Notes are governed by New York law, noteholders may assert state-law claims in New York courts. The "bespeaks caution" doctrine provides a defense to such claims.
Second, it provides supplemental protection even in the federal context, as courts may invoke the doctrine alongside or in addition to the statutory safe harbor when evaluating motions to dismiss.
As with the PSLRA safe harbor, the effectiveness of the "bespeaks caution" doctrine depends on the specificity and substance of the cautionary language. Courts applying the doctrine have emphasized that the cautionary language must be "tailored to the specific risk" and must identify factors that are actually relevant to the forward-looking statement at issue. Mere boilerplate will not suffice.
D. State Common-Law Fraud and Negligent Misrepresentation (New York)
Because the Indenture, the Purchase Agreement, and the Notes are governed by New York law, noteholders may assert common-law claims for fraud and negligent misrepresentation in New York state courts (or in federal court applying New York law).
Common-Law Fraud under New York Law. The elements of a common-law fraud claim under New York law are: (i) a material misrepresentation of fact, (ii) made with knowledge of its falsity (scienter), (iii) with the intent to induce the plaintiff's reliance, (iv) justifiable reliance by the plaintiff, and (v) damages proximately caused by the reliance. New York courts apply a "reasonable reliance" standard, and the sophistication of the plaintiff is a relevant factor in assessing whether reliance was justified. Given that the purchasers in the Rule 144A placement are QIBs — sophisticated institutional investors with access to information and analytical resources — the reliance element may be difficult for plaintiffs to establish, particularly with respect to general, aspirational ESG statements.
Negligent Misrepresentation under New York Law. The elements of a negligent misrepresentation claim are: (i) the defendant had a duty, as a result of a special relationship, to give correct information, (ii) the information given was incorrect, (iii) the defendant failed to exercise reasonable care in communicating the information, (iv) the plaintiff justifiably relied on the information, and (v) the plaintiff suffered damages as a result. This cause of action has a lower mental-state threshold than common-law fraud — negligence rather than scienter — but requires the existence of a "special relationship" between the parties, which is typically found where the defendant possesses unique expertise or is in a position of trust vis-à-vis the plaintiff.
ESG statements in the OM that are demonstrably false or misleading at the time they were made — for example, inaccurate historical emissions data, inflated community development spending figures, or a net-zero commitment that the Company's management knew to be unrealistic — could give rise to claims by noteholders under either theory. The adequacy of cautionary language, the sophistication of the purchasers, and the availability of countervailing information in the OM will all be relevant to the defense of such claims.
V. SEC ENFORCEMENT TRENDS IN ESG AND GREENWASHING
A. SEC Climate and ESG Task Force
In March 2021, the SEC established the Climate and ESG Task Force (the "Task Force") within its Division of Enforcement. The Task Force was charged with developing initiatives to proactively identify ESG-related misconduct and coordinating the effective use of the Division's resources to address these issues. The Task Force's stated focus areas include:
• Material gaps or misstatements in issuers' disclosure of climate risks under existing rules;
• Disclosure and compliance issues relating to ESG strategies in the investment management space;
• Accuracy and adequacy of ESG-related disclosures in registration statements, periodic filings, and offering documents; and
• ESG metrics, targets, and commitments that may be misleading or lacking a reasonable basis.
The Task Force has been particularly active in scrutinizing disclosures by companies in the extractive industries — including upstream oil and gas producers, mining companies, and utilities — reflecting the SEC's view that these sectors present the greatest potential for material ESG-related misstatements and omissions. Companies with operations in jurisdictions associated with elevated environmental risk (including Nigeria and West Africa) have also been the subject of heightened scrutiny, both in connection with ESG disclosures and with respect to the related issues of sanctions compliance and anti-corruption.
Although the current administration has shifted enforcement priorities in certain respects and the Task Force has been reorganized, the underlying legal framework governing ESG-related misstatements and omissions remains unchanged, and the SEC retains full authority to bring enforcement actions for material misrepresentations in offering documents regardless of the institutional posture of the Task Force at any given time. We therefore continue to counsel caution in the preparation of ESG disclosures.
B. Notable SEC Enforcement Actions (Analogized to Fictional Contexts)
The SEC's enforcement record in the ESG and greenwashing space, while still developing, reveals several recurring theories of liability that are directly relevant to the Dunmore OM disclosures:
Inflated Emissions-Reduction Claims. The SEC has pursued enforcement actions against issuers in the energy sector that made affirmative claims regarding their emissions-reduction achievements that were not supported by the underlying data. In one notable matter, an upstream producer disclosed a year-over-year reduction in Scope 1 emissions that was attributable primarily to asset dispositions rather than operational improvements, without disclosing the methodology that produced the reported reduction. The SEC charged the issuer with making materially misleading statements under Section 17(a) and Rule 10b-5, focusing on the failure to disclose the basis for the claimed reduction and the misleading impression created by the presentation of the data.
Failure to Disclose Known Environmental Liabilities. In another enforcement matter, the SEC charged an issuer with omitting from its offering documents material information regarding pending environmental remediation obligations at several of its operating facilities. The issuer had included positive ESG disclosure regarding its environmental stewardship record, but failed to disclose that it was the subject of ongoing regulatory proceedings related to contamination at multiple sites. The SEC characterized the omission as creating a materially misleading impression in the context of the issuer's affirmative ESG narrative.
Misleading Sustainability-Linked Disclosures. The SEC has also focused on issuers that linked specific financial instruments to sustainability targets (e.g., sustainability-linked bonds with coupon step-ups tied to emissions-reduction milestones) where the selected targets were not ambitious relative to the issuer's baseline performance, creating a misleading impression that the issuer was undertaking meaningful sustainability commitments when, in substance, the targets were designed to be easily met.
Net-Zero and Carbon-Neutral Claims. Of particular relevance to the Dunmore analysis, the SEC has signaled skepticism toward broad "net-zero" and "carbon-neutral" claims made by issuers that lack specific implementation plans, interim milestones, or quantified capital allocation toward decarbonization. In public statements and enforcement advisories, senior SEC officials have cautioned that such claims, when made in securities offering documents, may be actionable if they create a misleading impression regarding the issuer's actual commitment to and likelihood of achieving the stated goal, particularly where the issuer's near-term capital allocation is directed overwhelmingly toward carbon-intensive activities.
C. Implications for Dunmore
The SEC enforcement trends summarized above have several direct implications for Dunmore's ESG disclosures in the OM:
Sector and Geographic Scrutiny. Dunmore is an upstream oil and gas company with operations in Nigeria and Senegal — sectors and geographies that are associated with elevated ESG scrutiny from regulators, investors, and the public. The Company's core business — the exploration and production of hydrocarbons — is inherently carbon-intensive, and its operations in the Niger Delta (OML 47 and OML 63) are located in a region with a well-documented history of environmental degradation, community conflict, and regulatory enforcement challenges. These characteristics place Dunmore squarely within the categories of issuers that the SEC and private litigants have targeted for ESG-related claims.
Net-Zero Pledge and Capital Allocation Tension. The most significant risk factor identified in this analysis is the tension between Dunmore's net-zero by 2050 commitment and its near-term capital allocation. Approximately $250 million of the net proceeds of the Notes offering is being directed to the Cayar Offshore Phase II hydrocarbon development — a project that will increase the Company's hydrocarbon production capacity and, in all likelihood, its absolute GHG emissions in the near to medium term. The inclusion of the net-zero pledge in the OM without adequate qualification and acknowledgment of this tension could be characterized by regulators or litigants as creating a materially misleading impression regarding the Company's actual commitment to decarbonization.
Methane Flaring Comparator Risk. The OM's statement that Dunmore's methane flaring intensity of 3.8 m³/boe compares favorably to an "industry average" of 5.1 m³/boe could be challenged if the comparator benchmark is not clearly sourced and defined. If the "industry average" figure is drawn from a data set that is not directly comparable to Dunmore's operations — for example, a global average that includes jurisdictions with significantly different flaring practices, or an average that includes companies with different operational profiles — the comparison could be characterized as misleading. The SEC has demonstrated a willingness to challenge comparative ESG claims where the basis for comparison is not transparent.
VI. ANALYSIS OF SPECIFIC DUNMORE ESG STATEMENTS
This section provides a detailed risk assessment and set of recommendations for each of the principal ESG statements and data points in the draft OM. The analysis is organized by disclosure category, with risk levels assessed on a Low / Moderate / High scale. A summary table is provided in Appendix A.
A. Quantitative GHG Emissions Data (Scope 1 and Scope 2)
1. Risk Assessment
The OM reports Dunmore's Scope 1 GHG emissions at 1.42 million metric tons CO₂e and Scope 2 GHG emissions at 0.18 million metric tons CO₂e, in each case for FY 2024. These are statements of historical fact — they purport to describe the Company's actual emissions during a completed fiscal year — and are therefore not eligible for protection under the PSLRA safe harbor, which applies only to forward-looking statements. The safe harbor cannot cure inaccuracy in the underlying data.
The principal risk associated with these quantitative disclosures is accuracy. If the reported emissions figures are materially inaccurate — whether because of errors in the underlying data, flawed methodology, incomplete operational boundary definitions, or other factors — liability could attach under Rule 10b-5 and Section 17(a) (as well as under New York common law), regardless of any cautionary language included in the OM.
The data was prepared by Barrisford Advisory Group LLC under the direction of Nathan Reyes Linley CPAs LLP, Lead Consultant. Several questions must be addressed through the ESG Data Verification Checklist and the due diligence process:
• Methodology. What methodology was used to calculate the emissions figures? Did Barrisford employ the GHG Protocol Corporate Accounting and Reporting Standard, the American Petroleum Institute ("API") Compendium of Greenhouse Gas Emissions Methodologies for the Natural Gas and Oil Industry, or another recognized framework? The choice of methodology can materially affect the reported figures, particularly with respect to fugitive methane emissions and flaring calculations.
• Operational Boundary. What operational boundary was applied? Did the calculations include all of Dunmore's operated and non-operated assets across all jurisdictions (Nigeria, Senegal, GoM, West Texas), or were certain assets or activities excluded? Were emissions from the Dunmore Renewables LLC solar portfolio netted against the Company's total emissions?
• Estimation and Assumptions. GHG emissions calculations in the upstream oil and gas industry necessarily involve estimates and assumptions — for example, regarding well-level emission factors, flare efficiency, equipment leak rates, and grid emission factors for Scope 2 calculations. The nature and significance of these estimates should be disclosed.
• Independent Assurance. Has Alverton & Co. LLP (independent auditor; Graham Stillwell, lead engagement partner) reviewed the emissions data, or does the firm plan to provide any level of assurance (limited or reasonable) over the ESG data? Based on our current understanding, no third-party assurance on the ESG data has been obtained or is planned for the offering. The absence of independent assurance is itself a relevant disclosure item.
Risk Level: Moderate — The risk is moderate, contingent on the accuracy of the underlying data. If the data is verified through the ESG Data Verification Checklist and management provides representations of accuracy, the risk is manageable. If the data cannot be verified, or if the verification process reveals discrepancies, the risk level increases.
2. Recommendations.
(a) Clearly state the methodology and reporting framework used to calculate the emissions figures, including the organizational and operational boundaries applied.
(b) Disclose that GHG emissions data has not been independently audited or assured by a third party, and that the data was prepared by management with the assistance of Barrisford Advisory Group LLC.
(c) Include a caveat that emissions calculations involve estimates and assumptions, that these estimates and assumptions may change as methodologies evolve, and that the reported figures are subject to inherent measurement uncertainty.
(d) Cross-reference the ESG Data Verification Checklist to confirm that each data point traces to Barrisford source material and that the underlying calculations have been reviewed for reasonableness.
(e) Ensure that Scope 3 emissions are not inadvertently implied or referenced — if Dunmore has not calculated Scope 3 emissions, the OM should avoid language that could be read as implying that the reported emissions represent the Company's total greenhouse gas footprint.
B. Methane Flaring Intensity Comparison
1. Risk Assessment
The draft OM states that Dunmore's methane flaring intensity of 3.8 m³/boe compares favorably to an "industry average" of 5.1 m³/boe. Comparative claims of this nature present heightened risk because they involve not only the accuracy of the Company's own data but also the appropriateness and accuracy of the benchmark against which the Company is comparing itself.
The principal risks are as follows:
• Source of the Comparator. The 5.1 m³/boe "industry average" is not currently sourced in the draft OM. Without a clear identification of the source — including the data set, the geographic scope, the time period, and the definition of "industry" — the comparison is essentially unverifiable by investors and could be challenged as misleading.
• Comparability. Even if the 5.1 m³/boe figure is accurately sourced, the comparison may be inappropriate if the comparator data set is not meaningfully comparable to Dunmore's operations. For example, if the "industry average" represents a global average across all upstream operators (including those in jurisdictions with minimal flaring regulation), while Dunmore's 3.8 m³/boe figure reflects only its Nigerian and GoM operations (where regulatory frameworks may impose different constraints), the comparison could be misleading.
• Cherry-Picking. If Dunmore selected the particular comparator benchmark because it was the most favorable available benchmark — i.e., the one that made Dunmore's performance appear most impressive — the selection itself could be characterized as misleading, particularly if other readily available benchmarks (e.g., peer-group averages or jurisdiction-specific averages) would produce a less favorable comparison.
Risk Level: Moderate — The risk is moderate. Comparative ESG claims are inherently more vulnerable to challenge than standalone data points, and the SEC has demonstrated a willingness to scrutinize the basis for such comparisons. However, the risk is manageable if the source is clearly identified and appropriate caveats are included.
2. Recommendations.
(a) Identify the source of the 5.1 m³/boe industry-average figure with specificity — e.g., "Based on data published by the World Bank Global Gas Flaring Reduction Partnership for sub-Saharan African upstream operators for the year ended December 31, 2023," or an equivalent specific citation.
(b) Evaluate whether the selected comparator is the most appropriate benchmark given Dunmore's geographic and operational mix. If a more narrowly tailored peer-group comparison is available, consider using that instead of or in addition to the broader industry average.
(c) Add qualifying language acknowledging that methodologies and reporting boundaries may differ among companies, and that the comparison should be considered in that context — for example: "The comparability of methane flaring intensity data across companies is limited by differences in measurement methodologies, reporting boundaries, and operational conditions."
(d) If the deal team determines that the comparative claim is not essential to the ESG narrative, consider removing it entirely to eliminate the associated risk.
C. Community Development Spend in Nigeria ($14.2 Million)
1. Risk Assessment
The OM reports that Dunmore spent $14.2 million on community development programs in Nigeria in FY 2024, encompassing infrastructure, education, healthcare, and community relations initiatives in the Niger Delta communities proximate to OML 47 and OML 63.
This is a statement of historical fact — a reported expenditure during a completed fiscal year. As such, it is not eligible for PSLRA safe-harbor protection, and the primary risk is accuracy. However, the litigation risk associated with this data point is generally lower than the risk associated with the emissions data or the net-zero pledge, because: (i) the figure is a discrete financial data point that should be verifiable against management accounts; and (ii) the figure, standing alone, is less likely to be outcome-determinative for a reasonable investor's purchase decision.
The more significant risk arises from the context in which the community development spending figure is presented. If the OM includes this positive disclosure regarding community engagement while failing to disclose material community disputes, ongoing environmental remediation liabilities, or other adverse facts relating to Dunmore's operations in the Niger Delta, the positive disclosure could be characterized as part of a materially misleading "total mix" of information. This is the classic selective disclosure or half-truth theory of liability: an issuer that chooses to speak on a topic must speak fully and not omit material countervailing facts.
The Niger Delta is a region with a well-documented history of environmental contamination, community conflict, and litigation involving international oil companies. Dunmore's operations on OML 47 and OML 63 may be subject to pending or anticipated claims, regulatory proceedings, or community grievances that, if material, must be disclosed alongside the positive community development narrative.
Risk Level: Low to Moderate — Low if the figure is accurate and the OM includes adequate disclosure of associated risks; Moderate if material adverse facts regarding the Company's Niger Delta operations are omitted.
2. Recommendations.
(a) Ensure that the risk factors in the OM adequately address community relations risks in the Niger Delta, including the risk of community disputes, protests, operational disruptions, and demands for increased community development spending or environmental remediation.
(b) Ensure that the OM includes appropriate disclosure regarding any known environmental remediation liabilities, pending or threatened litigation, or regulatory proceedings relating to the Company's Niger Delta operations.
(c) Confirm that the $14.2 million community development spending figure reconciles to audited financial statements or management accounts that have been reviewed by Alverton & Co. LLP (or, if the figure is not included in the audited financial statements, confirm that it can be traced to internal records that have been verified through the due diligence process).
(d) Define the scope of "community development spend" — what categories of expenditure are included, and are there items that might reasonably be characterized differently (e.g., payments that are more properly classified as operating costs, government-mandated contributions, or settlement payments)?
D. Net-Zero by 2050 Commitment
1. Risk Assessment — Highest Exposure Category
The net-zero by 2050 commitment represents Dunmore's most prominent forward-looking ESG statement and presents the highest exposure of any ESG disclosure in the OM. This assessment is driven by several factors:
Tension with Capital Allocation. The single most significant risk factor is the internal tension between the net-zero commitment and the Company's near-term capital allocation. Approximately $250 million of the net proceeds of the Notes offering — representing approximately 29.4% of the total offering — is being directed to the Cayar Offshore Phase II hydrocarbon development, a project that will expand the Company's oil and gas production capacity and is expected to contribute to increased absolute GHG emissions in the near to medium term. Dunmore's core business remains upstream oil and gas, with $2.14 billion in hydrocarbon revenue in FY 2024 and 345.8 million barrels of oil equivalent ("MMboe") in proved reserves with a PV-10 value of $6.7 billion. Against this backdrop, a net-zero by 2050 commitment that is not accompanied by a credible decarbonization roadmap — including specific interim targets, quantified capital allocation toward decarbonization, and identified technological pathways — risks being perceived as aspirational marketing rather than a good-faith projection of future performance.
Absence of Interim Targets and Implementation Plan. The current draft of the OM presents the net-zero commitment as a company-wide goal but does not disclose any binding interim targets (e.g., a 30% reduction in Scope 1 emissions by 2030), a detailed implementation roadmap, or a quantified capital expenditure plan directed toward decarbonization. The absence of these elements significantly weakens the credibility of the commitment and increases the risk that it will be viewed as unsubstantiated — or worse, as intentionally vague to avoid accountability.
SEC Posture on Net-Zero Claims. As discussed in Section V.B above, the SEC has signaled skepticism toward net-zero pledges that lack "concrete, measurable steps" and has pursued enforcement actions against issuers whose ESG commitments were not supported by credible implementation plans. While the current regulatory environment may be somewhat less aggressive in this area than in prior years, the legal exposure remains, and private litigation risk persists regardless of the SEC's enforcement posture at any particular time.
Elevation to Securities Disclosure. There is a meaningful distinction between a net-zero pledge made in a corporate sustainability report, a press release, or a website disclosure, on the one hand, and the same pledge included in an offering memorandum in connection with an $850 million high-yield debt offering, on the other. The inclusion of the pledge in the OM elevates it from a corporate communication to a securities disclosure that is subject to the full rigor of the anti-fraud provisions. Purchasers of the Notes are entitled to rely on the OM as a comprehensive and accurate disclosure document, and statements in the OM carry a different weight — and a different potential for liability — than statements made in other contexts.
Mixed Statement Risk. The net-zero commitment, as currently drafted, risks being characterized as a "mixed statement" — one that contains both a forward-looking aspiration (achieving net-zero by 2050) and an implicit representation of present fact (that the Company has a genuine commitment to and is taking meaningful steps toward achieving this goal). To the extent a court characterizes the statement as containing a present-fact component, the PSLRA safe harbor would not protect that component, and the plaintiffs would need to demonstrate only that the present-fact representation was materially false or misleading.
Risk Level: High — This is the highest-risk ESG disclosure in the OM.
2. Recommendations. Given the significance of this risk, we provide detailed and specific recommendations:
(a) Frame as Aspirational. Characterize the net-zero pledge explicitly as an "aspirational long-term objective" or "long-term goal," not as a binding commitment, target, projection, or guarantee of future results. Suggested formulation: "The Company has announced an aspirational long-term objective of achieving net-zero greenhouse gas emissions across its operations by 2050. This objective reflects the Company's recognition of the importance of addressing climate change and does not constitute a binding commitment or a projection of future results."
(b) Deploy PSLRA-Compliant Cautionary Language. Immediately accompany the net-zero statement with meaningful cautionary language that identifies the specific factors that could prevent achievement of the objective. These factors should include, at a minimum: (i) the commodity price environment and its effect on the Company's capital allocation decisions; (ii) the pace and direction of technological development in carbon capture, utilization, and storage ("CCUS"), hydrogen, and other decarbonization technologies; (iii) changes in the regulatory environment in Nigeria, Senegal, the United States, and other jurisdictions; (iv) the Company's need to allocate capital to its core hydrocarbon business to service its debt obligations (including the Notes) and fund ongoing operations; (v) geological and operational uncertainties; (vi) the availability and cost of renewable energy sources and offsets; and (vii) macroeconomic conditions and energy market dynamics.
(c) Avoid Interim Milestones Without a Plan. Do not state or imply any specific interim milestones, percentage-reduction targets, or time-bound commitments unless the Company has a board-approved implementation plan with quantified targets, identified decarbonization initiatives, and allocated capital. Vague references to an "emissions-reduction trajectory" should be removed or replaced with more clearly aspirational language.
(d) Acknowledge Capital Allocation Tension. Include an explicit acknowledgment that the Company's near-term capital expenditure plans — including the allocation of approximately $250 million of the net proceeds of the Notes offering to the Cayar Offshore Phase II hydrocarbon development — are focused on hydrocarbon production, and that achievement of net-zero emissions by 2050 will depend on future strategic decisions, capital allocation choices, and technologies that are not yet deployed at scale.
(e) Contextualize the Solar Portfolio. If the 220 MW West Texas solar portfolio operated by Dunmore Renewables LLC is cited as evidence of the Company's energy transition strategy in connection with the net-zero discussion, ensure that the presentation provides appropriate context regarding the relative scale of the solar portfolio in relation to the Company's overall hydrocarbon-dominated business. The solar portfolio represents a small fraction of the Company's $4.87 billion asset base and $2.14 billion revenue base.
(f) Cross-Reference Risk Factors. Include a direct cross-reference to the climate-transition risk factor and the physical climate risk factor, and ensure that those risk factors are sufficiently robust to support the cautionary language accompanying the net-zero pledge.
(g) Coordinate with Separate Memo. A separate, more detailed analysis of the net-zero commitment is being prepared in the Net-Zero Commitment Disclosure Review memo. The recommendations in this memorandum should be read in conjunction with the conclusions of that separate analysis. Final language should not be settled until both analyses are complete.
E. 220 MW Solar Portfolio (Dunmore Renewables LLC)
1. Risk Assessment
The OM describes Dunmore Renewables LLC's 220 MW solar portfolio in West Texas as part of the Company's ESG narrative. This is principally a statement of existing operational capacity — a present fact — and therefore carries lower inherent risk than forward-looking commitments. The solar assets exist, they have an identified capacity, and their operational status is verifiable.
However, the risk associated with this disclosure is not the accuracy of the underlying fact but rather the context and framing in which the fact is presented. If the solar portfolio is characterized as evidence of a broader "energy transition" strategy in a manner that overstates its significance relative to Dunmore's overwhelmingly hydrocarbon-driven business, the presentation could be misleading. Specifically:
• Dunmore's proved hydrocarbon reserves total 345.8 MMboe with a PV-10 value of $6.7 billion.
• The Company's total asset base is approximately $4.87 billion, and its FY 2024 revenue was approximately $2.14 billion, the vast majority of which is derived from hydrocarbon production and sales.
• The 220 MW solar portfolio, while a meaningful renewable energy asset in absolute terms, represents a small fraction of the Company's overall business by any financial measure — revenue, asset value, or capital allocation.
If the OM presents the solar portfolio alongside language characterizing Dunmore as an "energy transition company," a "diversified energy company," or similar formulations, the discrepancy between the implied characterization and the reality of the Company's business could be challenged as misleading.
Risk Level: Low to Moderate — Low for the factual statement of capacity; Moderate if the framing overstates the solar portfolio's significance relative to the hydrocarbon business.
2. Recommendations.
(a) Present the solar portfolio factually, with clear identification of capacity (220 MW), location (West Texas), operational status, and the subsidiary through which it is held (Dunmore Renewables LLC).
(b) Avoid characterizing Dunmore as an "energy transition company," a "clean energy company," or any similar formulation that could be misleading given the Company's predominantly hydrocarbon profile.
(c) If the solar portfolio is included in the ESG narrative as evidence of the Company's diversification or sustainability efforts, provide appropriate context regarding its relative scale. Consider including a statement such as: "The Company's solar portfolio, while an important component of its long-term strategy, represents a small portion of the Company's total asset base, which is predominantly composed of upstream oil and gas assets."
(d) Ensure that revenue, earnings, and capital expenditure data related to the solar portfolio, if disclosed, is presented in a manner that does not overstate its contribution to the Company's overall financial performance.
VII. BEST PRACTICES FOR CAUTIONARY LANGUAGE
A. General Drafting Principles
The effectiveness of the PSLRA safe harbor and the "bespeaks caution" doctrine depends critically on the quality, specificity, and placement of cautionary language in the OM. Based on the applicable case law and SEC guidance, the following general drafting principles should govern the preparation of cautionary language for the Dunmore ESG disclosures:
1. Identification. Each forward-looking ESG statement should be expressly identified as a forward-looking statement. This identification can be accomplished through introductory language in the relevant section (e.g., "The following statements regarding our environmental goals and sustainability initiatives are forward-looking statements...") and/or through the general forward-looking statements disclaimer that typically appears at the front of the OM.
2. Meaningful Cautionary Language. Each forward-looking ESG statement should be accompanied by meaningful cautionary language that is specific to the statement and to the Company. Courts have consistently held that generic or boilerplate disclaimers — such as "actual results may differ materially" standing alone — are insufficient to invoke the PSLRA safe harbor. The cautionary language must identify the "important factors" that could cause actual results to differ materially from those projected or implied by the forward-looking statement, and those factors must be substantive and relevant, not merely hypothetical.
3. Specificity. The cautionary language must be tailored to the specific forward-looking statement being made. A one-size-fits-all disclaimer at the front of the OM is helpful but insufficient; each significant forward-looking ESG s

MEMORANDUM

I. EXECUTIVE SUMMARY

II. SCOPE AND LIMITATIONS

III. THE DUNMORE ESG DISCLOSURES AT ISSUE

IV. APPLICABLE LEGAL FRAMEWORK

V. SEC ENFORCEMENT TRENDS IN ESG AND GREENWASHING

VI. ANALYSIS OF SPECIFIC DUNMORE ESG STATEMENTS

VII. BEST PRACTICES FOR CAUTIONARY LANGUAGE

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