PRELIMINARY OFFERING MEMORANDUM DATED APRIL 28, 2025
SUBJECT TO COMPLETION — THE INFORMATION IN THIS OFFERING MEMORANDUM IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE OFFERING MEMORANDUM IS DELIVERED IN FINAL FORM. THIS OFFERING MEMORANDUM SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.
DUNMORE ENERGY HOLDINGS LTD.
(a Cayman Islands exempted company)
and
DUNMORE UPSTREAM FINANCE CORP.
(a Delaware corporation)
$850,000,000
9.375% Senior Secured Notes due 2032
The Issuers are offering $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes"). The Notes will mature on May 1, 2032.
Issue Price: [●]% of par
Interest Rate: 9.375% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing November 1, 2025.
The Notes are being offered in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The Notes will be guaranteed on a senior secured basis by Dunmore Nigeria E&P Ltd., Dunmore Gulf Operations LLC, Dunmore Renewables LLC, Dunmore Senegal S.A., Dunmore Midstream Holdings Inc., and Dunmore Trading Ltd. (collectively, the "Guarantors").
The Notes and the guarantees will be secured by first-priority liens on Notes Priority Collateral (including property, plant and equipment, equity interests, intellectual property, and material contracts) and second-priority liens on ABL Priority Collateral, in each case subject to the Intercreditor Agreement with Velthorn National Bank, N.A. as ABL Agent.
Optional Redemption. On or after May 1, 2028, the Issuers may redeem the Notes, in whole or in part, at declining redemption prices set forth herein. Prior to May 1, 2028, the Issuers may redeem the Notes, in whole or in part, at a make-whole redemption price equal to 100% of the principal amount plus a make-whole premium based on the Treasury Rate plus 50 basis points. In addition, prior to May 1, 2028, the Issuers may redeem up to 40% of the original aggregate principal amount of the Notes from the net cash proceeds of one or more equity offerings at a redemption price of 109.375% of par, plus accrued and unpaid interest.
Change of Control. Upon a Change of Control, each holder may require the Issuers to repurchase all or a portion of such holder's Notes at 101% of par plus accrued and unpaid interest.
Preliminary Ratings: B2 / Stable by Lodestar Ratings International; B+ / Stable by Veridian Credit Assessments Inc. A rating is not a recommendation to purchase, hold, or sell the Notes and may be revised or withdrawn at any time.
CUSIP (144A): 265387 AA 5 CUSIP (Reg S): C2085R AA 2 ISIN (144A): US265387AA51 ISIN (Reg S): USC2085RAA24
The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. The Notes are being offered and sold only (i) to qualified institutional buyers ("QIBs") pursuant to Rule 144A under the Securities Act and (ii) outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. Prospective purchasers are hereby notified that the seller of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of certain restrictions on resale and transfer, see "Transfer Restrictions."
Lead Left Bookrunner Ridgeline Capital Markets LLC
Joint Bookrunner Clarion Securities Inc.
Co-Manager Pinnacle Partners LLC
The date of this Offering Memorandum is April 28, 2025.
IMPORTANT NOTICES AND LEGENDS
Notice to Investors
The Issuers have not authorized anyone to provide any information or make any representation about the Issuers, the Guarantors, the Notes, or the offering described in this Offering Memorandum other than the information and representations contained herein. If anyone provides any information or makes any representation not contained in this Offering Memorandum, prospective investors should not rely on it as having been authorized by the Issuers, the Guarantors, or the Initial Purchasers.
No representation or warranty, express or implied, is made by the Initial Purchasers, or any of their respective affiliates, as to the accuracy or completeness of any information contained in this Offering Memorandum. Nothing contained in this Offering Memorandum is, or shall be relied upon as, a promise or representation by the Initial Purchasers, whether as to the past or the future. The Initial Purchasers assume no responsibility for the accuracy or completeness of the information contained in this Offering Memorandum.
This Offering Memorandum does not constitute an offer to sell or a solicitation of an offer to buy the Notes in any jurisdiction in which such offer or solicitation would be unlawful. Neither the delivery of this Offering Memorandum nor any sale of the Notes shall, under any circumstances, create any implication that the information contained herein is correct as of any date subsequent to the date hereof or that there has been no change in the business, financial condition, results of operations, or prospects of the Issuers or the Guarantors since such date.
The Issuers and the Guarantors reserve the right to withdraw the offering of the Notes at any time. The Issuers and the Initial Purchasers also reserve the right to reject any offer to purchase the Notes, in whole or in part, for any reason, or to sell to any prospective investor less than the full amount of Notes sought by such investor. The Initial Purchasers and certain related entities may acquire a portion of the Notes for their own accounts.
Responsibility Statement
The Issuers and the Guarantors accept responsibility for the information contained in this Offering Memorandum. To the best of the knowledge of the Issuers and the Guarantors (each of which has taken all reasonable care to ensure that such is the case), the information contained in this Offering Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information. The Issuers and the Guarantors, having made all reasonable inquiries, confirm that this Offering Memorandum contains all information with respect to the Issuers, the Guarantors, and the Notes that is material in the context of the issuance and offering of the Notes, that the information contained or incorporated in this Offering Memorandum is true and accurate in all material respects, that the opinions and intentions expressed in this Offering Memorandum are honestly held, and that there are no other facts the omission of which would make this Offering Memorandum, or any statement contained herein, misleading in any material respect.
Forward-Looking Statements Cautionary Language
This Offering Memorandum contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are based on the Issuers' current expectations, estimates, projections, beliefs, and assumptions and are not guarantees of future performance. Words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "projects," "targets," "net-zero," "may," "will," "should," "could," "would," and similar expressions, and the negatives thereof, identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding:
• future commodity prices and their impact on revenue, cash flow, and reserves;
• planned capital expenditures, including the Cayar Offshore Phase II development program;
• future production volumes and operating costs;
• expected reserve additions and reserve life;
• the Issuers' net-zero by 2050 commitment and interim emissions reduction targets;
• anticipated regulatory developments in Nigeria, Senegal, the United States, and other jurisdictions;
• future financial condition, liquidity, and results of operations; and
• the Issuers' business strategy, competitive position, and growth opportunities.
These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially include, among others:
• commodity price volatility, including fluctuations in Brent crude, WTI, and Henry Hub natural gas prices;
• political instability, changes in government, and regulatory uncertainty in Nigeria and Senegal;
• climate-related regulatory developments, including carbon pricing, emissions reduction mandates, and evolving ESG disclosure requirements;
• operational hazards, including blowouts, equipment failures, oil spills, and extreme weather events;
• risks associated with exploration, development, and production activities;
• changes in reserve estimates;
• foreign exchange fluctuations;
• competition for exploration and production rights, equipment, and personnel;
• security risks in the Niger Delta region of Nigeria;
• risks related to the Issuers' indebtedness and the Notes, including compliance with restrictive covenants;
• sanctions, anti-corruption, and regulatory compliance risks; and
• other risk factors described under "Risk Factors" in this Offering Memorandum.
Neither the Issuers nor the Initial Purchasers undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required by applicable law or regulation. Prospective investors should not place undue reliance on any forward-looking statement. All forward-looking statements attributable to the Issuers or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.
Notice to Certain Investors
Notice to Prospective Investors in the United States. The Notes are being offered and sold in the United States only to QIBs (as defined in Rule 144A under the Securities Act). Each purchaser of Notes in the United States will be deemed to have made the representations and agreements described under "Transfer Restrictions."
Notice to Prospective Investors in the European Economic Area. The Notes are not being offered to the public in the European Economic Area ("EEA"). This Offering Memorandum is not a "prospectus" within the meaning of Regulation (EU) 2017/1129 of the European Parliament and of the Council of June 14, 2017 (the "EU Prospectus Regulation"). No prospectus has been approved or will be approved under the EU Prospectus Regulation with respect to the Notes. The Notes may only be offered to qualified investors as defined in the EU Prospectus Regulation or in other circumstances that do not require the publication of a prospectus. Each investor in the EEA who purchases Notes in this offering is deemed to have represented and agreed that it is a qualified investor within the meaning of the EU Prospectus Regulation.
Notice to Prospective Investors in the United Kingdom. The Notes are not being offered to the public in the United Kingdom. This Offering Memorandum is not a "prospectus" within the meaning of Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation"). No prospectus has been approved or will be approved under the UK Prospectus Regulation with respect to the Notes. This Offering Memorandum is for distribution only to, and is directed only at, persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.), or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) in connection with the issue or sale of any Notes may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons"). This Offering Memorandum must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Offering Memorandum relates is available only to relevant persons and will be engaged in only with relevant persons.
Notice to Prospective Investors in the Cayman Islands. No invitation, whether directly or indirectly, may be made to the public of the Cayman Islands to subscribe for the Notes. This Offering Memorandum does not constitute an invitation to the public of the Cayman Islands to subscribe for the Notes.
For additional information regarding restrictions on transfer, see "Transfer Restrictions."
Available Information and Incorporation by Reference
Dunmore Energy Holdings Ltd. is not a reporting company under the Exchange Act and is not required to file periodic reports or other information with the U.S. Securities and Exchange Commission (the "SEC"). However, in connection with this offering, DEH has agreed, for so long as any Notes remain outstanding, to make available, upon request, to any holder or prospective purchaser of the Notes the information required to be provided by Rule 144A(d)(4) under the Securities Act. Such information will include a brief description of the business of DEH and its subsidiaries, the Issuers' most recent financial statements, and such other information as is necessary to permit holders and prospective purchasers of the Notes to make an informed decision regarding the purchase or sale of the Notes. Requests for such information should be directed to the Chief Financial Officer, Dunmore Energy Holdings Ltd., 2900 Post Oak Boulevard, Suite 3100, Houston, TX 77056, or by email at ir@dunmoreenergy.com.
No documents are incorporated by reference into this Offering Memorandum.
Presentation of Financial and Other Information
The financial statements included elsewhere in this Offering Memorandum have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (the "IASB"). IFRS differs in certain significant respects from accounting principles generally accepted in the United States of America ("U.S. GAAP"). No reconciliation of the financial statements to U.S. GAAP has been prepared, and no such reconciliation is included in this Offering Memorandum. Prospective investors should consult their own professional advisors for an understanding of the differences between IFRS and U.S. GAAP and how those differences might affect the financial information herein.
The financial statements of Dunmore Energy Holdings Ltd. and its consolidated subsidiaries as of and for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, included in this Offering Memorandum, have been audited by Alverton & Co. LLP, independent auditors (lead engagement partner: Graham Stillwell), as stated in their report appearing elsewhere herein.
Oil and gas reserves data included in this Offering Memorandum has been prepared by Duval Howard & Partners, independent petroleum engineers (lead consultant: Dr. Evelyn Marchetti), as of December 31, 2024. The reserves data is set forth in greater detail under "Business — Reserves Summary" and in Annex B.
The fiscal year of Dunmore Energy Holdings Ltd. ends on December 31. All references to "FY 2024," "FY 2023," and "FY 2022" refer to the fiscal years ended December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
All references to "$," "dollars," or "U.S. dollars" in this Offering Memorandum are to United States dollars unless otherwise indicated. Certain of the Issuers' operations are denominated in Nigerian Naira ("NGN") and West African CFA Franc ("XOF"), and certain financial information is translated into U.S. dollars for purposes of presentation in this Offering Memorandum.
Certain non-IFRS financial measures, including EBITDA, EBITDA margin, net debt, gross leverage, and net leverage, are presented in this Offering Memorandum. These measures are not defined under IFRS and should not be considered as alternatives to measures prepared in accordance with IFRS. The Issuers believe these measures provide useful information to investors regarding the Issuers' financial performance and capital structure, but they have limitations as analytical tools and should not be considered in isolation.
Enforceability of Civil Liabilities
Dunmore Energy Holdings Ltd. is a Cayman Islands exempted company. Dunmore upstream Finance Corp. is a Delaware corporation. Certain of the directors and executive officers of the Issuers and the Guarantors, as well as certain experts named in this Offering Memorandum, are residents of countries other than the United States. Substantially all of the assets of such persons and a significant portion of the assets of the Issuers and the Guarantors are located outside the United States.
As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or the Issuers and the Guarantors in U.S. courts judgments obtained in such courts predicated upon the civil liability provisions of the U.S. federal securities laws. There is doubt as to the enforceability in the Cayman Islands, Nigeria, Senegal, and England and Wales, in original actions or in actions for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon U.S. federal securities laws. However, the Issuers have submitted to the jurisdiction of the courts of the State of New York and the United States District Court for the Southern District of New York for the purpose of any suit, action, or proceeding arising out of or relating to the Indenture or the Notes, and have appointed an authorized agent for service of process in the State of New York.
Currency and Exchange Rates
Financial information in this Offering Memorandum is presented in U.S. dollars. The following exchange rates are provided for informational purposes and may not reflect the rates at which actual transactions were conducted:
• Nigerian Naira: NGN 1,580.0 = $1.00 (as of December 31, 2024)
• West African CFA Franc: XOF 608.5 = $1.00 (as of December 31, 2024)
No representation is made that amounts in Nigerian Naira or West African CFA Franc could have been or could be converted into U.S. dollars at the rates indicated or at any other rate.
Market and Industry Data
Certain market and industry data contained in this Offering Memorandum have been derived from third-party sources, including industry publications, government reports, and independent research. Although the Issuers believe these sources to be reliable, neither the Issuers nor the Initial Purchasers have independently verified such data, and none of them makes any representation or warranty with respect to the accuracy or completeness of such information. Industry publications and reports generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. The Issuers do not make any representation as to the accuracy of such information.
TABLE OF CONTENTS
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SUMMARY
The following summary highlights selected information contained elsewhere in this Offering Memorandum and does not contain all of the information that prospective investors should consider before investing in the Notes. Prospective investors should carefully read this entire Offering Memorandum, including the sections entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the consolidated financial statements and the notes thereto appearing elsewhere herein, before making an investment decision. Unless the context otherwise requires, references in this Offering Memorandum to "Dunmore," "we," "us," "our," or the "Company" refer to Dunmore Energy Holdings Ltd. and its consolidated subsidiaries, references to "DEH" refer to Dunmore Energy Holdings Ltd., references to "DUFC" refer to Dunmore upstream Finance Corp., and references to the "Issuers" refer to DEH and DUFC, collectively. References to the "Notes" refer to the 9.375% Senior Secured Notes due 2032 offered hereby.
Overview of the Issuers
Dunmore Energy Holdings Ltd.
Dunmore Energy Holdings Ltd. is a Cayman Islands exempted company with its registered office c/o Maples Corporate Services Ltd., PO Box 309, Ugland House, George Town, Grand Cayman KY1-1104, Cayman Islands (registry number MC-384726). DEH's principal executive offices are located at 14th Floor, Harbour Place Tower, 103 South Church Street, George Town, Grand Cayman KY1-1002. The Company maintains its primary operational office at 2900 Post Oak Boulevard, Suite 3100, Houston, TX 77056, United States.
Dunmore is an upstream and midstream oil and gas company with exploration, development, and production operations across multiple basins in West Africa and the Gulf of Mexico, complemented by a nascent but growing renewable energy portfolio. The Company's principal producing assets include Oil Mining Leases 47 and 63 in the Niger Delta, Nigeria; the Cayar Offshore Block, offshore Senegal; and deepwater leases in the Green Canyon and Garden Banks areas of the Gulf of Mexico. In addition, Dunmore operates a 220 MW utility-scale solar portfolio in West Texas through its subsidiary Dunmore Renewables LLC and maintains pipeline and processing infrastructure through Dunmore Midstream Holdings Inc. The Company's offtake and trading activities are conducted through Dunmore Trading Ltd., incorporated in England and Wales.
Dunmore is led by an experienced management team with deep expertise across the upstream exploration and production value chain. Marcus Ellingham, age 54, serves as Chief Executive Officer and brings 28 years of experience in upstream E&P, including his prior role as Chief Operating Officer of Praetorian Petroleum plc, a London-listed independent exploration and production company. Deepa Rajaram, age 47, serves as Chief Financial Officer and was formerly Vice President of Finance at Kestrel Resources Corp., where she led multiple capital markets transactions. Alistair Forde, age 51, serves as General Counsel. The Board of Directors is chaired by Lady Constance Harrowby, an independent director and former UK Energy Minister, who brings extensive public policy and governance experience to her oversight role.
As of the date of this Offering Memorandum, Dunmore employs approximately 3,400 individuals worldwide across its operations in Nigeria, Senegal, the United States, the Cayman Islands, and the United Kingdom.
Dunmore upstream Finance Corp.
Dunmore upstream Finance Corp. is a Delaware corporation and wholly-owned subsidiary of DEH formed solely for the purpose of serving as co-issuer of the Notes. DUFC has no independent operations, revenues, or material assets other than those related to its status as co-issuer. DUFC's registered agent is Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005 (EIN: 93-4728106). DUFC's principal office is located at 2900 Post Oak Boulevard, Suite 3100, Houston, TX 77056, United States.
Business Highlights
Dunmore's diversified asset base spans multiple producing basins and jurisdictions, providing geographic and commodity diversification that the Company believes reduces concentration risk and supports consistent cash flow generation. The key elements of the Company's asset portfolio include:
• Nigerian Operations (OML 47 and OML 63). Dunmore Nigeria E&P Ltd. operates two prolific Oil Mining Leases in the Niger Delta, Nigeria. OML 47 and OML 63 are mature, low-cost producing assets benefiting from extensive existing infrastructure, including flow stations, gathering systems, and export pipeline connections to the Bonny and Forcados oil terminals. As of December 31, 2024, these assets contributed proved reserves of 229.9 MMboe with a combined PV-10 of $4,460,000,000, representing approximately 66% of the Company's total proved reserves.
• Senegalese Operations (Cayar Offshore Block). Dunmore Senegal S.A. operates the Cayar Offshore Block under a production sharing contract with the Government of the Republic of Senegal. Phase I of the Cayar development is currently producing, and Phase II development — which is expected to be funded in part with approximately $250,000,000 of offering proceeds — is designed to bring additional reserves online through appraisal and development drilling, subsea infrastructure installation, and FPSO (Floating Production, Storage, and Offloading) tie-back. As of December 31, 2024, the Cayar Offshore contributed proved reserves of 64.1 MMboe with a PV-10 of $1,190,000,000.
• Gulf of Mexico Operations (Green Canyon and Garden Banks). Dunmore Gulf Operations LLC holds deepwater leases in the Green Canyon and Garden Banks areas of the Gulf of Mexico, providing the Company with exposure to prolific deepwater Gulf of Mexico production and proximity to U.S. refining infrastructure along the Gulf Coast. As of December 31, 2024, these assets contributed proved reserves of 51.8 MMboe with a PV-10 of $1,050,000,000.
• Renewable Energy Portfolio (West Texas Solar). Dunmore Renewables LLC operates a 220 MW utility-scale solar portfolio in West Texas, generating revenue pursuant to long-term power purchase agreements. The solar portfolio supports the Company's energy transition strategy and its stated commitment to achieving net-zero greenhouse gas emissions by 2050.
• Midstream Infrastructure. Dunmore Midstream Holdings Inc. owns and operates pipeline and processing infrastructure that supports the Company's upstream operations and generates incremental revenue through third-party throughput and tolling arrangements.
• Trading and Marketing. Dunmore Trading Ltd. conducts crude oil offtake and trading activities, providing the Company with direct access to international commodity markets and supporting the optimization of realized prices across the Company's production base.
Key Financial Metrics (FY 2024)
For the fiscal year ended December 31, 2024, the Company reported the following key financial metrics:
• Revenue: $2,140,000,000
• EBITDA: $816,000,000
• EBITDA Margin: 38.1%
• Capital Expenditures: $387,000,000
• Net Income: $294,000,000
• Total Assets: $4,870,000,000
• Cash and Cash Equivalents: $185,000,000
Proved Reserves (as of December 31, 2024)
The following table summarizes the Company's total proved reserves as of December 31, 2024, as estimated by Duval Howard & Partners, the Company's independent petroleum engineers:
The Company's total proved reserves of 345.8 MMboe represent a significant resource base supporting long-term production and cash flow generation. PV-10 of $6,700,000,000 provides substantial asset coverage relative to the Company's pro forma total debt of $1,720,000,000.
Competitive Strengths
Dunmore believes it possesses the following competitive strengths:
Diversified Portfolio Across Multiple Basins and Jurisdictions. The Company operates assets across four distinct geographies — Nigeria, Senegal, the Gulf of Mexico, and West Texas — providing geographic, regulatory, and commodity diversification that reduces concentration risk and supports stable cash flow generation across varying market conditions and commodity price environments.
Low-Cost Producing Assets in Nigeria with Established Infrastructure. OML 47 and OML 63 are mature, infrastructure-rich producing assets with low lifting costs relative to many comparable West African and deepwater operations. The Company benefits from established flow stations, gathering systems, and pipeline connections to major export terminals, reducing the capital intensity of sustaining production from these assets.
Significant Reserves Base with Long Reserve Life. The Company's total proved reserves of 345.8 MMboe, with a PV-10 of $6,700,000,000, provide a substantial resource base that supports production and cash flow for an extended period. The Company estimates a proved reserve life of approximately 12 years at current production levels, providing visibility and predictability with respect to future production volumes.
Cayar Offshore Block Offering High-Margin Growth Potential. The Cayar Offshore Phase II development represents a significant growth opportunity, with additional reserves expected to be brought online through the deployment of offering proceeds. Senegal's emerging deepwater petroleum province offers favorable geology, competitive fiscal terms under the existing production sharing contract, and proximity to growing West African and Atlantic Basin markets.
GoM Deepwater Assets with Proximity to U.S. Refining Infrastructure. The Company's Green Canyon and Garden Banks leases provide exposure to the prolific deepwater Gulf of Mexico trend, with direct access to extensive subsea infrastructure and pipeline systems connecting to the largest concentration of refining capacity in the world along the U.S. Gulf Coast.
Emerging Renewables Platform Supporting Energy Transition Strategy. The Company's 220 MW solar portfolio in West Texas, operated through Dunmore Renewables LLC, provides diversified revenue streams, exposure to the growing U.S. renewable energy market, and tangible evidence of the Company's commitment to the energy transition. The renewables platform is designed to be scalable over time.
Experienced Management Team with Deep E&P Expertise. The Company's management team brings decades of collective experience across all phases of the upstream oil and gas lifecycle, including exploration, appraisal, development, production operations, reservoir management, and capital markets execution, as well as significant international operating experience in West Africa and the Gulf of Mexico.
Business Strategy
Dunmore's business strategy is designed to maximize value for stakeholders through disciplined capital allocation, operational excellence, and selective growth. The key elements of the Company's strategy include:
Optimize Production and Cash Flow from Existing Nigerian and GoM Operations. The Company intends to continue investing in sustaining and infill drilling, workover programs, and production optimization initiatives across its mature producing assets in Nigeria and the Gulf of Mexico to maximize recovery and extend the productive life of these assets while controlling costs.
Execute Cayar Offshore Phase II Development. The Company plans to deploy approximately $250,000,000 of offering proceeds to fund the next phase of development at the Cayar Offshore Block, including appraisal and development drilling, installation of subsea production infrastructure, and FPSO tie-back. Phase II development is expected to bring additional proved reserves online and contribute to production and revenue growth over the medium term.
Selectively Grow Renewable Energy Portfolio. Consistent with its net-zero by 2050 commitment, Dunmore intends to selectively expand its renewable energy portfolio through organic development and potential acquisitions, focusing on utility-scale solar and other proven renewable technologies that offer attractive risk-adjusted returns and complement the Company's existing operations.
Maintain Disciplined Capital Allocation and Prudent Leverage. The Company is committed to maintaining a conservative capital structure and disciplined approach to capital allocation, with pro forma gross leverage of 2.11x and pro forma net leverage of 1.88x following completion of this offering and application of the net proceeds.
Strengthen ESG Profile and Stakeholder Engagement. The Company intends to continue strengthening its environmental, social, and governance practices, including implementation of its flaring reduction program, community development initiatives in the Niger Delta, and enhanced ESG reporting and disclosure practices.
The Offering — Summary Terms
The following is a summary of certain terms of the Notes. For a more complete description, see "Description of the Notes."
Optional Redemption. On or after May 1, 2028, the Issuers may redeem the Notes, in whole or in part, at the following redemption prices (expressed as percentages of par), plus accrued and unpaid interest thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on May 1 of the years indicated below:
Make-Whole Redemption. Prior to May 1, 2028, the Issuers may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus a make-whole premium equal to the greater of (a) 1.0% of the principal amount of such Notes and (b) the excess of (i) the present value, at the redemption date, of the May 1, 2028 redemption price plus all remaining scheduled interest payments on such Notes through May 1, 2028, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (ii) the principal amount of such Notes, in each case plus accrued and unpaid interest thereon to the applicable redemption date.
Equity Clawback. Prior to May 1, 2028, the Issuers may, on one or more occasions, redeem up to 40% of the original aggregate principal amount of the Notes at a redemption price of 109.375% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to the applicable redemption date, from the net cash proceeds of one or more equity offerings by the Issuers or any direct or indirect parent company; provided that at least 60% of the original aggregate principal amount of the Notes remains outstanding immediately following any such redemption and that such redemption occurs within 180 days of the closing of any such equity offering.
Change of Control
Upon a Change of Control (as defined in "Description of the Notes"), each holder of the Notes will have the right to require the Issuers to repurchase all or a portion of such holder's Notes at a price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon to the date of repurchase.
Collateral Summary. The Notes and the guarantees will be secured by:
• First-priority liens on Notes Priority Collateral, which includes: (i) equity interests of each Guarantor subsidiary; (ii) substantially all tangible and intangible assets of the Issuers and each Guarantor (subject to Permitted Liens); (iii) intercompany receivables; (iv) material hydrocarbon offtake contracts; and (v) assignment of insurance proceeds.
• Second-priority liens on ABL Priority Collateral (accounts receivable, inventory, and deposit accounts).
The relative priority of liens on the Collateral is governed by the Intercreditor Agreement among Northgate Trust Company, N.A. (as Notes Collateral Agent), Velthorn National Bank, N.A. (as ABL Agent), the Issuers, and the Guarantors. Under the Intercreditor Agreement, the ABL Agent has first priority on ABL Priority Collateral, and the Trustee/Collateral Agent has first priority on Notes Priority Collateral.
For a more complete description, see "Description of the Notes — Collateral," "Description of Security Documents," and "Description of Intercreditor Agreement."
Use of Proceeds — Summary
The following table summarizes the expected use of offering proceeds (amounts are subject to adjustment based on final pricing):
Note: Amounts for general corporate purposes and estimated fees and expenses are placeholders pending determination of the final issue price.
Following the partial repayment of $450,000,000 of the existing 7.50% Senior Unsecured Notes due October 2028, approximately $400,000,000 of such notes will remain outstanding. For additional information, see "Use of Proceeds."
Ownership
The following table sets forth the beneficial ownership of DEH as of the date of this Offering Memorandum:
Harborview Capital Partners Fund VI, L.P., a Delaware limited partnership, is the Company's majority shareholder. For additional information, see "Principal Shareholders."
Summary Historical Consolidated Financial Data
The following tables set forth summary historical consolidated financial data for DEH for the periods indicated, together with pro forma adjustments to give effect to the offering and the anticipated application of net proceeds. The summary historical consolidated financial data for the fiscal years ended December 31, 2024, December 31, 2023, and December 31, 2022, have been derived from the audited consolidated financial statements of DEH appearing elsewhere in this Offering Memorandum. The pro forma data gives effect to (i) the issuance of $850,000,000 aggregate principal amount of the Notes, (ii) the partial repayment of $450,000,000 of the existing 7.50% Senior Unsecured Notes due 2028, and (iii) the payment of estimated fees and expenses of the offering.
This data should be read in conjunction with "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and the consolidated financial statements and the notes thereto appearing elsewhere in this Offering Memorandum.
Pro forma total debt assumes: (i) $850,000,000 of Notes issued; (ii) $450,000,000 of 7.50% Senior Unsecured Notes due 2028 repaid; (iii) $470,000,000 drawn on ABL Revolving Credit Facility; and (iv) $400,000,000 of 7.50% Senior Unsecured Notes due 2028 remaining outstanding. Pro forma cash and cash equivalents is presented net of estimated offering fees and expenses and assumes Cayar Phase II development proceeds of $250,000,000 are deployed over time. Pro forma gross leverage is calculated as pro forma total debt divided by LTM EBITDA. Pro forma net leverage is calculated as pro forma total debt less pro forma cash and cash equivalents divided by LTM EBITDA.
For additional detail, see "Selected Historical Consolidated Financial Data" and "Capitalization."
RISK FACTORS
An investment in the Notes involves significant risks. Prospective investors should carefully consider the following risk factors, together with the other information contained in this Offering Memorandum, before investing in the Notes. If any of the following risks were to occur, the Issuers' business, financial condition, results of operations, and prospects could be materially adversely affected, and investors could lose all or a substantial portion of their investment in the Notes. The risks described below are not the only risks the Issuers face. Additional risks and uncertainties not currently known to the Issuers, or that the Issuers currently believe are not material, could also materially adversely affect the Issuers' business, financial condition, and results of operations. References to "we," "us," and "our" in this section refer to DEH, DUFC, and their consolidated subsidiaries, collectively.
Risks Relating to Our Business and Industry
Commodity Price Volatility
Our revenue, cash flows, and profitability are heavily dependent on prevailing prices for crude oil and natural gas. Prices for Brent crude oil, West Texas Intermediate ("WTI") crude oil, Henry Hub natural gas, and regional price differentials are subject to wide fluctuations in response to relatively minor changes in supply and demand, market uncertainty, geopolitical events, weather, OPEC+ production decisions, global economic conditions, and range other factors beyond our control. A sustained decline in commodity prices, or a significant increase in the discount between the prices at which we sell our production and benchmark prices, could materially and adversely affect our revenue, cash flow, profitability, the value of our proved reserves, our ability to service our indebtedness (including the Notes), and our ability to fund our capital expenditure program, including the Cayar Offshore Phase II development.
We enter into commodity hedging transactions from time to time to mitigate a portion of our exposure to commodity price fluctuations. However, our hedging strategies may not fully mitigate our price risk. Hedging activities may limit our ability to participate in price increases and may expose us to counterparty credit risk, basis risk, and other risks. We may not be able to enter into hedging arrangements on terms acceptable to us, and existing hedging arrangements may not be effective in protecting us against significant commodity price declines.
Exploration, Development, and Production Risks
Our operations involve inherent risks associated with the exploration for, and development and production of, crude oil and natural gas, including the risk that exploration and appraisal activities will not result in the discovery of commercially exploitable reserves. Drilling operations, whether exploratory, appraisal, or development, are subject to numerous risks, including:
• mechanical difficulties and equipment failures;
• unexpected geological conditions, formation pressures, or fluid compositions;
• encountering lost circulation, stuck pipe, or wellbore instability;
• blowouts, cratering, fires, and explosions;
• environmental contamination and surface damage; and
• adverse weather conditions, particularly in deepwater Gulf of Mexico and offshore West African operations.
Any of these risks could result in damage to or destruction of wells or production facilities, personal injury, loss of life, damage to the environment, regulatory penalties, and interruption or loss of production. The Cayar Offshore Phase II development is subject to additional construction, commissioning, and cost-overrun risks, including risks associated with FPSO fabrication and installation, subsea production equipment, and deepwater drilling in an emerging petroleum province.
Reserves Estimates. Our proved reserves estimates as of December 31, 2024, as prepared by Duval Howard & Partners, are based on geological, geophysical, engineering, and economic data and assumptions, including assumptions about future commodity prices, production rates, operating costs, capital expenditures, and regulatory conditions. Reserve estimates are inherently uncertain, and actual production, revenues, and expenditures with respect to our reserves will differ, potentially materially, from the estimates used to determine our proved reserves. The PV-10 value of $6,700,000,000 is a measure of the estimated future net revenues from our proved reserves, discounted at a rate of 10% per annum, and should not be construed as the current market value of our estimated reserves. Among the factors that could cause actual results to differ materially from the estimated quantities of economically recoverable reserves are:
• changes in commodity prices, which may affect the economic viability of certain reserves;
• production experience that differs from estimated decline rates or recovery factors;
• changes in operating costs, capital costs, or fiscal terms;
• new geological, geophysical, or engineering information;
• regulatory changes affecting development plans; and
• the outcome of development drilling programs, including the Cayar Offshore Phase II.
Downward revisions to our reserves estimates could result in impairment charges, reduce the borrowing base under our ABL facility, and materially and adversely affect our business, financial condition, and results of operations.
Operational Hazards and Insurance
Our operations are subject to all of the hazards and risks customarily encountered in the oil and gas industry, including blowouts, fires, explosions, equipment failure, pipeline ruptures, oil spills, and environmental contamination. These events could result in substantial losses due to personal injury or death, property damage, environmental contamination, remediation costs, business interruption, regulatory penalties, litigation, and reputational harm.
We maintain insurance coverage customary for companies of our size and in our industry, including property, business interruption, third-party liability, environmental liability, and directors' and officers' liability insurance. However, our insurance coverage may not be adequate to cover all potential losses or liabilities, certain types of losses or events may be uninsurable or prohibitively expensive to insure, and our insurance coverage is subject to deductibles, retentions, coverage limits, and exclusions. Any significant uninsured or underinsured loss could have a material adverse effect on our business, financial condition, and results of operations.
Competition. We face significant competition from other oil and gas companies, including international oil companies, national oil companies, and independent exploration and production companies, for access to exploration and production rights, drilling rigs, specialized equipment, skilled personnel, and capital. Many of our competitors have substantially greater financial, technical, and human resources than we do, and may be able to better withstand periods of low commodity prices, fund larger capital programs, and compete more effectively for new acreage and development opportunities. Increased competition could adversely affect our ability to acquire new assets, attract and retain skilled personnel, and execute our business strategy.
Dependence on Key Personnel
Our success depends, in significant part, on the continued services of our senior management team, including Marcus Ellingham (Chief Executive Officer), Deepa Rajaram (Chief Financial Officer), and other key executive officers and operational personnel. The loss of any of these individuals could disrupt our operations, impair our ability to execute our business strategy, and materially and adversely affect our business, financial condition, and results of operations. We do not maintain "key person" insurance with respect to any of our executive officers or other key personnel.
Risks Relating to Our Operations in Nigeria
Political and Regulatory Risks in Nigeria
Our operations in Nigeria are subject to significant political and regulatory risks. Nigeria has experienced political instability, changes in government, and regulatory uncertainty from time to time, and there can be no assurance that the political and regulatory environment in Nigeria will remain stable or favorable to our operations. The Nigerian government, through the Calderon Group ("NNPC"), holds back-in rights in OML 47 and OML 63 that entitle it to participate in production and share in revenues from these assets. Changes in the terms of government participation, fiscal terms, or regulatory requirements could materially and adversely affect the economics of our Nigerian operations.
Our Nigerian operations are subject to the provisions of the Nigerian Petroleum Industry Act 2021 (the "PIA") and related regulations, which introduced significant changes to the governance, fiscal, and regulatory framework for the Nigerian petroleum industry. The PIA includes, among other things, provisions relating to host community development, local content requirements, environmental remediation, and fiscal terms for oil mining leases. Compliance with the PIA and its implementing regulations may increase our operating costs and capital expenditure requirements in Nigeria.
We are also subject to risks associated with host community relations in the Niger Delta region. Community grievances, demands for increased development spending or employment, blockades, protests, and legal proceedings could disrupt our operations, damage our assets, and expose us to reputational risk and additional costs.
Security Risks in Nigeria
The Niger Delta region of Nigeria, where our OML 47 and OML 63 assets are located, has historically been subject to significant security risks, including militancy, criminal activity, theft of crude oil and petroleum products, sabotage and vandalism of pipelines and production facilities, and kidnapping of industry personnel. These security risks have resulted in the interruption of production and export activities, damage to infrastructure, increased operating costs, and safety concerns for our personnel. While we have implemented security measures and protocols, including engagement with community security structures and coordination with Nigerian security agencies, we cannot guarantee that these measures will be effective in preventing or mitigating all security incidents. Any significant security incident could disrupt our operations, damage our assets, injure or endanger our personnel, and materially and adversely affect our business, financial condition, and results of operations.
Risks Relating to Our Operations in Senegal
Senegalese Regulatory and PSC Risks
Our operations at the Cayar Offshore Block are conducted under a production sharing contract ("PSC") with the Government of the Republic of Senegal. The PSC establishes the fiscal and contractual framework governing our exploration, development, and production activities at the Cayar Offshore Block, including provisions relating to cost recovery, profit oil sharing, government participation, local content requirements, and environmental obligations. The Government of Senegal may seek to renegotiate or modify the terms of the PSC, impose additional fiscal or regulatory requirements, or exercise its rights under the PSC in ways that could materially and adversely affect the economics of our Cayar Offshore operations.
Senegal is an emerging petroleum-producing country with a nascent regulatory and institutional framework for offshore oil and gas production. The regulatory environment is evolving, and there is limited precedent for the application and interpretation of petroleum legislation and regulations. Regulatory uncertainty, potential changes in law, and the potential for inconsistent or unpredictable application of regulations could adversely affect our ability to develop and operate the Cayar Offshore Block and to realize the expected economic benefits of the Phase II development program.
Risks Relating to Our Gulf of Mexico Operations
GoM Regulatory Risks
Our Gulf of Mexico operations are subject to extensive regulation by the Bureau of Ocean Energy Management ("BOEM"), the Bureau of Safety and Environmental Enforcement ("BSEE"), and other federal and state agencies. Regulatory requirements include, among other things, permit and lease requirements, safety and environmental standards, decommissioning obligations, and financial responsibility and bonding requirements. Compliance with these regulations requires significant expenditures, and changes in regulatory requirements or more stringent enforcement of existing requirements could increase our costs and limit our ability to conduct operations.
We are subject to decommissioning obligations for our Gulf of Mexico facilities and pipelines, which require us to plug and abandon wells, remove platforms and other structures, and remediate the seabed at the end of production. These obligations may be substantial and are subject to change based on regulatory requirements, cost estimates, and the timing of decommissioning activities. We may be required to post supplemental bonds or other financial assurance to satisfy our decommissioning obligations.
Our Gulf of Mexico operations are also subject to risks associated with hurricanes, tropical storms, and other severe weather events, which can damage or destroy production facilities, disrupt operations, interrupt production, and result in environmental contamination. The frequency and severity of hurricanes and tropical storms may increase due to climate change, potentially increasing the risks to our Gulf of Mexico operations.
Risks Relating to Sanctions, OFAC, and Anti-Corruption