PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 425 Lexington Avenue New York, NY 10017
MEMORANDUM
TO: Jennifer Kwon, Responsible Partner, Capital Markets Theodore Langston, Billing Partner, Capital Markets
FROM: Eric Johannsen, Lead Associate, Capital Markets Claire Dempsey, Working Associate, Capital Markets
DATE: April 27, 2025
RE: OFAC and Sanctions Compliance Analysis — Dunmore Energy Holdings Ltd. $850,000,000 9.375% Senior Secured Notes due 2032
MATTER NO.: 1016-00003
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I. EXECUTIVE SUMMARY
The purpose of this memorandum is to analyze the sanctions exposure of Dunmore Energy Holdings Ltd. ("Dunmore," "DEH," or the "Company"), a Cayman Islands-exempted company, and its subsidiaries (collectively, the "Dunmore Group"), in connection with the proposed issuance of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes"). The Notes are to be issued by DEH and Dunmore Universal Finance Corp. ("DUFC" and, together with DEH, the "Issuers"), and will be offered to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. This memorandum has been prepared at the request of the Capital Markets group in connection with the closing of the offering, currently expected on or about May 15, 2025.
Key Conclusion. Based on the comprehensive sanctions screening performed by Sandoval Compliance Solutions LLC ("Sandoval"), completed on April 25, 2025, no confirmed hits were identified against any applicable sanctions lists for any Dunmore Group entity, officer, director, beneficial owner, joint venture partner, material counterparty, or transaction participant. This result supports the conclusion that the proposed issuance of the Notes does not present a sanctions compliance impediment at this time.
Heightened Monitoring Warranted. Notwithstanding this clean screening result, heightened monitoring is warranted in light of the geographic profile of Dunmore's operations. In particular, Dunmore's upstream oil and gas operations are concentrated in Nigeria (Oil Mining Leases 47 and 63, Niger Delta) and Senegal (Cayar Offshore Block), which together constitute the substantial majority of Dunmore's proved reserves — specifically, 229.9 million barrels of oil equivalent ("MMboe") out of a total of 345.8 MMboe, representing approximately 66.5% of total Company proved reserves, as reflected in the independent reserve report prepared by Duval Howard & Partners as of December 31, 2024. While neither Nigeria nor Senegal is subject to a comprehensive U.S. sanctions program, the political and regulatory environment in these jurisdictions, coupled with the involvement of state-owned enterprises such as the Nigerian National Petroleum Company ("NNPC") and government counterparties under the Cayar Offshore production sharing contract, gives rise to a risk profile that warrants ongoing vigilance.
Scope of Analysis. This memorandum covers the following areas:
(a) the applicable sanctions regimes, including the U.S. sanctions program administered by the Office of Foreign Assets Control ("OFAC") within the U.S. Department of the Treasury, the sanctions regime maintained by the European Union ("EU"), and the United Kingdom's sanctions framework administered by the Office of Financial Sanctions Implementation ("UK OFSI");
(b) the screening methodology employed by Sandoval, including the databases screened, the persons and entities within the scope of the screening exercise, and the algorithmic and manual review procedures applied;
(c) analysis of specific counterparties, with particular attention to NNPC and its statutory back-in rights in OML 47 and OML 63, as well as joint venture partners across all material assets;
(d) analysis of country-specific sanctions risk for Nigeria, Senegal, the Gulf of Mexico, and the Cayman Islands;
(e) implications for the transaction documents, including the Indenture covenants, Purchase Agreement representations, and Offering Memorandum risk-factor disclosure; and
(f) recommendations for post-closing monitoring protocols designed to ensure continuing compliance with applicable sanctions laws throughout the life of the Notes.
This memorandum should be read in conjunction with the companion memoranda and work product referenced herein, including the OFAC Covenant and Representation Drafting Memorandum, the Sanctions Screening Results Summary, the Counterparty and JV Partner Sanctions Checklist, the OFAC Risk Factor Drafting Notes, the Post-Closing Sanctions Monitoring Protocol, and the Side Letter — Sanctions Representations.
II. BACKGROUND
A. Dunmore's Operational Footprint
Dunmore is an independent exploration and production company with a diversified portfolio of upstream oil and gas assets, midstream infrastructure, commodity trading operations, and renewable energy installations. The following is a description of each material asset and entity within the Dunmore Group, organized by geographic location, with particular emphasis on the characteristics relevant to the sanctions compliance analysis.
Nigeria. Dunmore Nigeria E&P Ltd. ("Dunmore Nigeria"), a Nigerian-incorporated limited liability company and a wholly owned subsidiary of DEH, is the operator of record for Oil Mining Lease 47 ("OML 47") and Oil Mining Lease 63 ("OML 63"), both located in the Niger Delta region of Nigeria. OML 47 encompasses approximately 1,240 square kilometers in the shallow-water and onshore areas of the eastern Niger Delta, and is one of Dunmore's most productive assets. As of December 31, 2024, OML 47 had proved reserves of 142.6 MMboe, with a PV-10 value of approximately $2,840 million. OML 63 covers approximately 860 square kilometers in the western Niger Delta, with proved reserves of 87.3 MMboe and a PV-10 value of approximately $1,620 million. Combined, Dunmore's Nigerian proved reserves of 229.9 MMboe represent approximately 66.5% of the Company's total proved reserves of 345.8 MMboe. The Nigerian operations are Dunmore's largest revenue-generating assets and are critical to the Company's creditworthiness and the collateral package securing the Notes.
NNPC, the Nigerian state-owned national oil company, holds statutory back-in rights in both OML 47 and OML 63 pursuant to the applicable provisions of the Nigerian Petroleum Act and the Petroleum Industry Act 2021. The back-in rights entitle NNPC to acquire a participation interest in the production from these licenses under specified terms and conditions, which are standard in Nigerian upstream operations. The NNPC relationship is analyzed in detail in Sections IV.C.3 and V.C below.
Senegal. Dunmore Senegal S.A. ("Dunmore Senegal"), a Senegalese société anonyme and a wholly owned subsidiary of DEH, operates the Cayar Offshore Block pursuant to a production sharing contract ("PSC") with the Republic of Senegal, acting through the Ministère de l'Énergie (the "Senegalese Ministry of Energy"). The Cayar Offshore Block is located approximately 90 kilometers off the coast of Dakar in water depths ranging from 800 to 2,200 meters. As of December 31, 2024, the Cayar Offshore Block had proved reserves of 64.1 MMboe, with a PV-10 value of approximately $1,190 million. The Cayar asset is in the early stages of development, with Phase I production having commenced in October 2023 and Phase II development — the primary use of a portion of the Notes proceeds — scheduled to commence in the third quarter of 2025.
Gulf of Mexico (United States). Dunmore Gulf Operations LLC ("Dunmore Gulf"), a Delaware limited liability company and a wholly owned subsidiary of DEH, holds interests in deepwater oil and gas leases in the Green Canyon and Garden Banks areas of the U.S. Gulf of Mexico. These leases are administered by the Bureau of Ocean Energy Management ("BOEM") and the Bureau of Safety and Environmental Enforcement ("BSEE") within the U.S. Department of the Interior. As of December 31, 2024, Dunmore's Gulf of Mexico proved reserves totaled 51.8 MMboe, with a PV-10 value of approximately $1,050 million. The Gulf of Mexico operations present a comparatively lower sanctions risk profile, given that the operations are conducted within U.S. territorial waters and are subject to extensive U.S. regulatory oversight.
West Texas (United States). Dunmore Renewables LLC ("Dunmore Renewables"), a Delaware limited liability company and a wholly owned subsidiary of DEH, operates a portfolio of solar energy generating facilities in West Texas with an aggregate nameplate capacity of approximately 220 megawatts. These facilities generate revenue primarily through long-term power purchase agreements with investment-grade offtakers. The sanctions exposure associated with these operations is minimal.
Trading. Dunmore Trading Ltd. ("Dunmore Trading"), a private limited company incorporated in England and Wales and a wholly owned subsidiary of DEH, serves as the Dunmore Group's commodity trading and offtake arm. Dunmore Trading is responsible for the marketing and sale of crude oil produced from the Nigerian and Senegalese assets, including the negotiation and execution of crude offtake agreements, forward sales contracts, and related hedging transactions. Due to the nature of the commodity trading business — which involves frequent counterparty onboarding, transactions with parties in multiple jurisdictions, and exposure to the global crude oil market — Dunmore Trading presents the most significant sanctions exposure within the Dunmore Group from a counterparty risk perspective. We address this in detail in Section V.E below.
Midstream. Dunmore Midstream Holdings Inc. ("Dunmore Midstream"), a Delaware corporation and a wholly owned subsidiary of DEH, owns and operates pipeline and processing infrastructure supporting the Company's upstream operations. The midstream assets primarily serve the Gulf of Mexico and Nigerian operations. Sanctions exposure is principally derivative of the underlying upstream operations served.
B. Transaction Overview
The Notes offering is structured as a private placement of $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032, to be issued by the Issuers on or about May 15, 2025. The Notes will bear interest at a rate of 9.375% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, commencing November 1, 2025. The Notes will mature on May 1, 2032. The Notes are being offered at an issue price of 98.50% of their principal amount, resulting in gross proceeds to the Issuers of approximately $837,250,000 before deduction of the Initial Purchasers' discounts and commissions and estimated offering expenses.
The Notes will be offered and sold by three initial purchasers (the "Initial Purchasers"): Ridgeline Capital Markets LLC ("Ridgeline"), serving as lead left bookrunner with a $467,500,000 allocation; Clarion Securities Inc. ("Clarion"), serving as joint bookrunner with a $255,000,000 allocation; and Pinnacle Partners LLC ("Pinnacle"), serving as co-manager with a $127,500,000 allocation.
The anticipated use of proceeds is as follows:
• approximately $450,000,000 to partially repay the outstanding balance under the Issuers' existing 7.50% Senior Unsecured Notes due 2028;
• approximately $250,000,000 to fund development capital expenditures associated with Phase II of the Cayar Offshore Block;
• approximately $114,750,000 for general corporate purposes, which may include working capital, additional debt repayment, and selective acquisitions; and
• approximately $22,500,000 for estimated fees and expenses associated with the offering, including Initial Purchasers' discounts and commissions, legal fees, trustee fees, rating agency fees, printing costs, and other transaction expenses.
The Notes will be secured by first-priority liens on substantially all of the assets of the Issuers and the Guarantors, subject to permitted liens. The Notes will be guaranteed on a senior secured basis by each of Dunmore's material subsidiaries, including Dunmore Nigeria, Dunmore Senegal, Dunmore Gulf, Dunmore Renewables, Dunmore Trading, and Dunmore Midstream (collectively, the "Guarantors"). The Indenture governing the Notes (the "Indenture") will be entered into among the Issuers, the Guarantors, and Northgate Trust Company, N.A., a national banking association, as trustee (the "Trustee") and collateral agent (the "Collateral Agent").
Preliminary credit ratings have been assigned as follows: Lodestar Ratings International has assigned a preliminary rating of B2 with a Stable Outlook, and Veridian Credit Assessments Inc. has assigned a preliminary rating of B+ with a Stable Outlook.
C. Ownership Structure
DEH is a Cayman Islands-exempted company with limited liability. The Company's equity ownership is concentrated among a small number of institutional and individual holders, as follows:
• Harborview Capital Partners Fund VI, L.P. ("Harborview Fund VI"), a Delaware limited partnership and a private equity fund managed by Harborview Capital Partners LLC, holds approximately 62.4% of the outstanding equity interests in DEH. Harborview Fund VI's involvement with Dunmore dates to 2018, when Harborview led the consortium that acquired a controlling interest in the predecessor company. The key Harborview personnel responsible for the Dunmore investment are Elaine Prescott, Managing Director, and David Stein, Partner. Both Ms. Prescott and Mr. Stein serve on the Board of Directors of DEH.
• Management and Directors of DEH and its subsidiaries collectively hold approximately 18.3% of the outstanding equity interests in DEH, primarily through participation in management equity incentive plans established in connection with the Harborview acquisition.
• Solstice Infrastructure Fund LP ("Solstice"), a co-investor, holds approximately 11.1% of the outstanding equity interests in DEH. Solstice is a Delaware limited partnership focused on infrastructure and energy investments.
• Alderman Family Office LLC ("Alderman"), a co-investor, holds approximately 8.2% of the outstanding equity interests in DEH. Alderman is a Delaware limited liability company serving as the family office investment vehicle for the Alderman family.
All equity holders, including the general partner of Harborview Fund VI, the key personnel named above, and the principals of Solstice and Alderman, were included within the scope of the Sandoval sanctions screening exercise described in Section IV below. The ownership structure does not present any structural sanctions concerns, as all entities and individuals within the chain of beneficial ownership have been screened and cleared.
III. APPLICABLE SANCTIONS REGIMES
This Section provides an overview of the three principal sanctions regimes applicable to the proposed offering and the Dunmore Group's ongoing operations. Given the U.S.-dollar denomination of the Notes, the U.S. governing law, and the involvement of U.S. financial institutions, OFAC jurisdiction is the primary sanctions framework. However, the multi-jurisdictional character of the Dunmore Group — with entities incorporated in the Cayman Islands, Nigeria, Senegal, England and Wales, and the United States — and the involvement of Euro-denominated commercial transactions through Dunmore Trading necessitate compliance with the EU and UK sanctions regimes as well.
A. U.S. Sanctions — OFAC
The Office of Foreign Assets Control ("OFAC") is a division within the U.S. Department of the Treasury responsible for administering and enforcing economic and trade sanctions based on U.S. foreign policy and national security objectives. OFAC operates under Presidential emergency powers, principally the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C. §§ 1701–1706, and the Trading with the Enemy Act ("TWEA"), 50 U.S.C. §§ 4301–4341, as well as specific legislation such as the Countering America's Adversaries Through Sanctions Act ("CAATSA"). OFAC sanctions are implemented through executive orders issued by the President and regulations promulgated by OFAC, codified primarily in 31 C.F.R. Parts 500–599.
OFAC jurisdiction extends broadly to "U.S. persons," defined to include all U.S. citizens and permanent residents (regardless of where they are located), all entities organized under U.S. law (including their foreign branches), and all persons physically present in the United States. In addition, certain OFAC sanctions programs extend to non-U.S. persons in specific circumstances, including transactions denominated in U.S. dollars that clear through U.S. financial institutions, transactions involving U.S.-origin goods, technology, or services, and secondary sanctions targeting non-U.S. persons who engage in specified conduct with sanctioned parties.
The following OFAC-administered lists and programs are of particular relevance to this analysis:
Specially Designated Nationals and blocked Persons List (SDN List). The SDN List is OFAC's principal sanctions list, comprising individuals, entities, vessels, and aircraft that have been designated pursuant to various OFAC sanctions programs. U.S. persons are broadly prohibited from engaging in any transactions or dealings with SDNs, and all property and interests in property of SDNs that are within the United States or within the possession or control of U.S. persons must be blocked (i.e., frozen). The prohibition on dealing with SDNs is strict liability — intent to violate is not required for civil enforcement, though willfulness is an element of criminal penalties.
Of critical importance is OFAC's "50% Rule," which provides that any entity that is owned, directly or indirectly, 50% or more in the aggregate by one or more SDNs is itself treated as a blocked person, regardless of whether that entity has been separately listed on the SDN List. This rule requires careful analysis of corporate ownership chains to determine whether any entity within the scope of a transaction is majority-owned by an SDN. OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014, as supplemented) provides the analytical framework for applying this rule.
Sectoral Sanctions Identifications List (SSI List). The SSI List identifies entities operating in specified sectors of certain economies — most prominently, the Russian energy, financial services, and defense sectors — that are subject to targeted restrictions rather than full blocking. The restrictions imposed on SSI-listed entities vary by directive but may include prohibitions on the provision of new debt or equity financing beyond specified maturities and restrictions on the provision of goods, services, or technology in support of specified activities (e.g., deepwater, Arctic offshore, or shale oil projects in Russia). While Dunmore does not operate in Russia or any other jurisdiction subject to sectoral sanctions, Dunmore Trading's commodity trading activities could potentially bring it into contact with SSI-listed entities, particularly in the global crude oil market. Accordingly, screening against the SSI List is warranted.
Country-Based Sanctions Programs. OFAC administers comprehensive sanctions programs targeting several countries and regions, currently including Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk People's Republic, and Luhansk People's Republic regions of Ukraine. Under comprehensive sanctions programs, virtually all transactions and dealings involving the targeted country or region are prohibited, subject to limited exceptions and general or specific licenses issued by OFAC. Notably, neither Nigeria nor Senegal is the subject of a comprehensive OFAC sanctions program, nor is either country the subject of a targeted or sectoral OFAC program. However, individual persons and entities associated with Nigeria and other West African countries have been designated on the SDN List under various programs, including:
• Executive Order 13818 (Global Magnitsky Human Rights Accountability Act) — targeting individuals involved in serious human rights abuse or corruption;
• Executive Order 13692 and related authorities — targeting narcotics traffickers, including certain West African drug trafficking networks;
• Executive Order 13224 — targeting terrorists, terrorist organizations, and their supporters, including certain West African groups affiliated with international terrorism; and
• Other OFAC programs targeting weapons proliferation, transnational criminal organizations, and cyber-related activities.
The fact that certain Nigerian individuals and entities have been designated under these programs underscores the importance of comprehensive name screening, even in the absence of a comprehensive country-based program.
Secondary Sanctions. Several OFAC sanctions programs include secondary sanctions provisions that apply to non-U.S. persons. Secondary sanctions do not impose direct U.S. legal prohibitions on non-U.S. persons but instead create the risk that non-U.S. persons who engage in specified conduct with sanctioned targets — particularly with respect to Iran, Russia, and North Korea — could themselves be subjected to U.S. sanctions or excluded from the U.S. financial system. For the Dunmore Group, secondary sanctions risk arises principally in the context of Dunmore Trading's commodity trading activities, where there is a theoretical possibility that counterparties in the global crude oil market could have indirect commercial relationships with Iranian, Russian, or North Korean-linked entities. While the screening results described below do not indicate any such linkages, the secondary sanctions risk is addressed in the context of the recommended post-closing monitoring protocols.
B. European Union Sanctions
The European Union maintains an autonomous sanctions framework administered by the European External Action Service ("EEAS") and implemented by EU member states. The EU Consolidated Sanctions List, maintained by EEAS and regularly updated, identifies individuals, entities, and bodies subject to asset freezes, travel bans, and other restrictive measures under EU Council Regulations. EU sanctions apply to all persons and entities within the territory of the EU, to nationals of EU member states wherever located, and to entities incorporated or constituted under the law of an EU member state, as well as to any business done in whole or in part within the EU.
The EU sanctions regime is relevant to this analysis for several reasons. First, Dunmore Trading Ltd. is incorporated in England and Wales and, while England and Wales is no longer an EU member state following Brexit, Dunmore Trading may engage in Euro-denominated transactions and may conduct business with counterparties located within EU member states. To the extent that Dunmore Trading or any other Dunmore Group entity engages in transactions that touch the EU — for example, through the use of Euro-denominated bank accounts, transactions with EU-domiciled counterparties, or the physical delivery of crude oil to EU ports — compliance with EU sanctions is required. Second, the Initial Purchasers may offer and sell the Notes to investors located within EU member states under Regulation S, which may implicate EU sanctions compliance obligations for those transactions. Third, certain EU sanctions programs impose restrictions that are broader in scope than corresponding OFAC programs, making it necessary to screen against both lists independently.
C. United Kingdom Sanctions — OFSI
Following the United Kingdom's departure from the European Union on January 31, 2020, the UK established an independent sanctions framework under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"). SAMLA provides the statutory basis for the UK government to impose, update, and lift financial sanctions for a range of purposes, including compliance with UN obligations, the prevention of terrorism, the promotion of international peace and security, and the advancement of human rights. The UK Office of Financial Sanctions Implementation ("OFSI"), situated within HM Treasury, is responsible for maintaining the UK Consolidated List of designated persons and entities subject to financial sanctions, as well as for the licensing and enforcement of UK financial sanctions.
The UK sanctions regime is directly relevant to Dunmore Trading, which is incorporated in England and Wales and is therefore a "relevant firm" for purposes of UK sanctions law. All UK persons — including UK-incorporated entities, UK nationals wherever located, and persons conducting activities within the UK — are prohibited from dealing with the funds or economic resources of persons designated on the UK OFSI Consolidated List, and from making funds or economic resources available, directly or indirectly, to or for the benefit of designated persons. OFSI has civil monetary penalty powers and has demonstrated a willingness to impose penalties for violations, including strict-liability breaches that do not require knowledge or intent.
In connection with this analysis, we have consulted with Cresswell & Greaves LLP, specifically Fiona Halsted, Partner, who serves as UK regulatory counsel to Dunmore Trading. Ms. Halsted has confirmed that Dunmore Trading maintains a UK sanctions compliance program, including counterparty screening protocols, and that Cresswell & Greaves has not identified any UK sanctions compliance issues in connection with Dunmore Trading's operations or the proposed Notes offering.
D. Interaction Among Regimes
The multi-jurisdictional character of the Dunmore Group, the U.S.-dollar denomination of the Notes, and the involvement of parties subject to different sanctions regimes require a coordinated analysis that satisfies all three applicable frameworks simultaneously. Several features of the transaction reinforce this requirement:
• The Notes are denominated in U.S. dollars and will clear and settle through The Depository Trust Company ("DTC") in the United States, ensuring that every transfer of the Notes will pass through U.S. financial infrastructure and thereby fall within OFAC's jurisdictional reach.
• The Indenture is governed by the laws of the State of New York, and the Trustee and Collateral Agent — Northgate Trust Company, N.A. — is a U.S. national banking association, fully subject to OFAC regulations and the Bank Secrecy Act.
• The multi-jurisdictional guarantor structure includes guarantors incorporated in Nigeria (Dunmore Nigeria), Senegal (Dunmore Senegal), England and Wales (Dunmore Trading), the Cayman Islands (DEH), and the United States (Dunmore Gulf, Dunmore Renewables, Dunmore Midstream, DUFC). This structure means that enforcement of the guarantees could require compliance with the sanctions regimes of each guarantor's jurisdiction of incorporation.
• Dunmore Trading's activities in the global crude oil market involve counterparties and transactions that may touch multiple jurisdictions, requiring concurrent compliance with OFAC, EU, and UK OFSI sanctions.
In light of these factors, the sanctions screening exercise and the transaction documentation have been designed to satisfy the requirements of all three sanctions regimes. Where the requirements of OFAC, the EU, and UK OFSI differ in scope or application, we have generally applied the broadest standard to ensure comprehensive compliance.
IV. SCREENING METHODOLOGY AND SCOPE
A. Engagement of Sandoval Compliance Solutions LLC
Rosa Medina, Lead Consultant, of Sandoval Compliance Solutions LLC ("Sandoval"), located at 1120 Connecticut Avenue NW, Suite 600, Washington, DC 20036, was engaged to conduct comprehensive sanctions screening in connection with the proposed Notes offering. Sandoval is a recognized provider of sanctions compliance, anti-money laundering, and export control screening services, with substantial experience in screening transactions in the energy sector, including transactions involving West African operations. Ms. Medina has over fifteen years of experience in OFAC compliance, including prior service as a compliance officer at a major U.S. financial institution. The engagement letter was executed on April 14, 2025, and the screening was completed on April 25, 2025. Sandoval's screening report (the "Sandoval Report") has been delivered to this firm and is summarized in Appendix B.
B. Databases Screened
Sandoval screened the persons and entities within the agreed scope (described in Section IV.C below) against the following sanctions and restricted-party lists:
1. OFAC Specially Designated Nationals and blocked Persons List (SDN List) — the primary OFAC sanctions list, current as of the date of screening (April 25, 2025).
2. OFAC Sectoral Sanctions Identifications List (SSI List) — the OFAC list identifying entities subject to sectoral sanctions, current as of the date of screening.
3. OFAC Consolidated Non-SDN List — a consolidated list that includes several OFAC sub-lists, specifically:
(a) the Foreign Sanctions Evaders List ("FSE List"), which identifies foreign individuals and entities that have been determined to have violated, attempted to violate, conspired to violate, or caused a violation of U.S. sanctions;
(b) the Palestinian Legislative Council List ("PLC List"), which identifies members of the Palestinian Legislative Council who were combatants, combatants' associates, or are affiliated with Hamas;
(c) the Non-SDN Menu-Based Sanctions List ("NS-MBS List"), which identifies persons sanctioned under specific authorities (e.g., CAATSA Section 231) for whom the full blocking sanctions of the SDN List are not imposed but alternative menu-based sanctions (e.g., denial of export licenses, denial of access to U.S. banking) are available;
(d) the Correspondent Account or Payable-Through Account Sanctions List ("CAPTA List"); and
(e) the Non-SDN Chinese Military-Industrial Complex Companies List ("NS-CMIC List").
4. EU Consolidated Sanctions List — maintained by the European External Action Service, current as of the date of screening.
5. UK OFSI Consolidated List — maintained by HM Treasury's Office of Financial Sanctions Implementation, current as of the date of screening.
6. United Nations Security Council Consolidated List — maintained by the Security Council's Sanctions Committees, included as a supplementary screening measure. The UN list largely overlaps with the OFAC, EU, and UK lists but may include designations not yet transposed into national lists in certain cases.
Sandoval confirmed in its report that all lists were accessed in their most recently published versions as of April 25, 2025.
C. Persons and Entities Screened
The screening scope was defined collaboratively by this firm and Sandoval, with input from Dunmore's General Counsel, Alistair Forde, and was designed to encompass all categories of persons and entities whose designation on a sanctions list could create a direct or indirect sanctions compliance risk for the proposed transaction. The following categories were included:
1. Dunmore Group Entities. All eight legal entities within the Dunmore Group were screened, specifically:
(a) Dunmore Energy Holdings Ltd. (Cayman Islands);
(b) Dunmore Universal Finance Corp. (Cayman Islands);
(c) Dunmore Nigeria E&P Ltd. (Nigeria);
(d) Dunmore Gulf Operations LLC (Delaware);
(e) Dunmore Renewables LLC (Delaware);
(f) Dunmore Senegal S.A. (Senegal);
(g) Dunmore Midstream Holdings Inc. (Delaware); and
(h) Dunmore Trading Ltd. (England & Wales).
Each entity was screened under its full legal name, any registered trade names or "doing business as" names, and any commonly used abbreviations or short-form names.
2. Officers and Directors of DEH and Subsidiaries. All directors and executive officers of DEH and each of its material subsidiaries were included within the screening scope. Key individuals include:
(a) Marcus Ellingham, Chief Executive Officer of DEH;
(b) Deepa Rajaram, Chief Financial Officer of DEH;
(c) Alistair Forde, General Counsel and Secretary of DEH;
(d) Lady Constance Harrowby, Chair of the Board of Directors of DEH;
(e) Elaine Prescott, Director of DEH (Harborview designee);
(f) David Stein, Director of DEH (Harborview designee); and
(g) All subsidiary-level directors and officers identified in the due diligence questionnaires completed by Dunmore management and provided to this firm on April 16, 2025 (27 individuals in total).
3. Ownership/Investors. The following equity holders and their principals were screened:
(a) Harborview Capital Partners Fund VI, L.P., including its general partner, Harborview Capital Partners LLC, and the key personnel noted above (Elaine Prescott and David Stein);
(b) Solstice Infrastructure Fund LP, including its general partner and principals identified in the due diligence materials; and
(c) Alderman Family Office LLC, including its managing members and principals.
4. Nigerian National Petroleum Company (NNPC). NNPC was screened as an entity, along with its key executives, board members, and material affiliated entities. As a state-owned enterprise of the Federal Republic of Nigeria, NNPC's sanctions profile requires particular attention. NNPC holds statutory back-in rights in OML 47 and OML 63, creating a structural relationship with Dunmore Nigeria that will persist throughout the life of the Notes. Sandoval's screening of NNPC included a review of NNPC's corporate affiliates and subsidiaries, including the NNPC Exploration & Production Limited, the Nigerian Petroleum Development Company, and other entities identified through publicly available corporate registries and annual reports. The application of OFAC's 50% ownership rule to the NNPC relationship is analyzed in Section V.C below.
5. Joint Venture Partners. All joint venture partners in each of Dunmore's material operating assets were screened:
(a) OML 47 joint venture partners, as identified in the Joint Operating Agreement and the due diligence materials provided by Dunmore;
(b) OML 63 joint venture partners, as identified in the Joint Operating Agreement and the due diligence materials;
(c) Cayar Offshore Severin & Co., as identified in the PSC and the Joint Operating Agreement; and
(d) Gulf of Mexico lease partners in Green Canyon and Garden Banks, as identified in the applicable Joint Operating Agreements.
6. Material Counterparties. Parties to material commercial agreements with Dunmore Group entities were screened, with particular emphasis on:
(a) Counterparties to crude oil offtake agreements entered into by Dunmore Trading, including both term and spot counterparties with transaction volumes exceeding $10 million in the twelve months ended December 31, 2024;
(b) Counterparties to material service contracts (drilling, completion, production, transportation, and marine services) in Nigeria and Senegal with contract values exceeding $5 million;
(c) Financial institution counterparties, including banks providing working capital facilities and hedging counterparties; and
(d) Insurance providers for the Nigerian and Senegalese operations.
7. Transaction Participants. All parties to the proposed Notes offering were screened, including:
(a) Ridgeline Capital Markets LLC (lead left bookrunner);
(b) Clarion Securities Inc. (joint bookrunner);
(c) Pinnacle Partners LLC (co-manager);
(d) Northgate Trust Company, N.A. (Trustee and Collateral Agent);
(e) Beacon Fiduciary Services LLC (Paying Agent and Registrar);
(f) Velthorn National Bank, N.A. (Escrow Agent);
(g) Calderwood & Harkness LLP (Issuers' counsel);
(h) All other counsel and advisors identified in the transaction participant list maintained in the closing binder.
8. Senegalese Government Counterparties. Parties to the Cayar Offshore Block PSC and related government counterparties were screened, including officials of the Ministère de l'Énergie, the Société des Pétroles du Sénégal ("Petrosen," the Senegalese national oil company), and local regulatory authorities identified in the due diligence materials.
D. Screening Approach
Sandoval's screening methodology combines automated name-matching algorithms with manual review, designed to maximize detection of true matches while efficiently resolving false positives. The automated screening engine applies multiple matching algorithms simultaneously, including:
• Exact match: Identifies character-for-character matches between the screened name and names on the sanctions lists.
• Phonetic matching: Utilizes Soundex, Double Metaphone, and related phonetic algorithms to identify names that sound similar but may be spelled differently — a critical capability when screening names transliterated from non-Latin scripts (e.g., Arabic, Yoruba).
• Fuzzy matching: Applies Levenshtein distance and related string similarity metrics, with configurable threshold settings. For this engagement, Sandoval applied a fuzzy matching threshold of 85% similarity, meaning that any name achieving an 85% or greater similarity score against a list entry was flagged for manual review. This threshold was selected to balance sensitivity against the volume of false positives expected from common Nigerian, Senegalese, and Arabic names.
• Alias and transliteration matching: Cross-references known aliases, alternative spellings, transliterations, and "also known as" entries maintained in the sanctions lists. This is particularly important for Arabic names (common in Senegal) and Yoruba names (common in Nigeria), which may have multiple accepted transliterations in Latin script.
• Corporate affiliation analysis: Where the screened party is an entity, the algorithm checks not only the entity name but also known parent companies, subsidiaries, and affiliates, and applies OFAC's 50% ownership rule to identify entities that may be constructively blocked by virtue of SDN ownership.
All potential matches flagged by the automated system were subjected to manual review by Sandoval's analysts. Manual review involved comparison of identifying details (including dates of birth, nationalities, passport numbers, addresses, and corporate registration numbers) to determine whether a flagged match was a true positive or a false positive. Sandoval's analysts also consulted publicly available databases, corporate registries, and media sources to resolve ambiguous cases.
Sandoval has represented that its screening protocols and databases are consistent with industry best practices and comply with the guidance issued by OFAC, the Financial Action Task Force ("FATF"), and the Wolfsberg Group.
V. SCREENING RESULTS
A. Summary of Results
Sandoval's comprehensive sanctions screening, completed on April 25, 2025, returned no confirmed hits against any of the screened lists — specifically, the OFAC SDN List, the OFAC SSI List, the OFAC Consolidated Non-SDN List (including the FSE, PLC, NS-MBS, CAPTA, and NS-CMIC sub-lists), the EU Consolidated Sanctions List, the UK OFSI Consolidated List, and the UN Security Council Consolidated List — for any of the persons or entities within the screening scope described in Section IV.C above.
In total, Sandoval screened 214 individuals and 47 entities across all categories. None of these persons or entities were identified as designated persons on any applicable sanctions list, and none were determined to be owned 50% or more by any SDN or otherwise constructively blocked under OFAC's 50% ownership rule. The Sandoval Report provides detailed, name-by-name confirmation of these results.
B. Potential Matches Reviewed and Cleared
The automated screening process flagged fourteen (14) potential matches that required manual investigation and resolution. This is a typical volume for a screening exercise of this scope, particularly given the prevalence of common names among Nigerian and Senegalese nationals.
The fourteen potential matches were distributed as follows:
• Seven (7) potential matches involved Nigerian nationals associated with Dunmore Nigeria E&P Ltd. or the OML 47 and OML 63 joint ventures. In each case, the flagged name corresponded to a common Nigerian name that also appeared on the OFAC SDN List in connection with narcotics trafficking or corruption designations. Manual review of identifying details — including dates of birth, nationalities, passport numbers, and known addresses — confirmed that none of the flagged individuals were the same persons as those designated on the SDN List.
• Three (3) potential matches involved Senegalese nationals associated with Dunmore Senegal S.A. or the Cayar Offshore Block. These matches arose from transliteration variants of common Arabic-origin names used in Senegal. Manual review, including comparison of identifying details and consultation with Dunmore Senegal's local counsel, confirmed that the flagged individuals were not designated persons.
• Two (2) potential matches involved counterparties of Dunmore Trading Ltd. These matches arose from similarities between the names of trading counterparties and names appearing on the EU Consolidated Sanctions List. Manual review confirmed that the flagged entities were distinct legal persons from those on the EU list, with different registration numbers, jurisdictions, and beneficial ownership.
• Two (2) potential matches involved NNPC-affiliated individuals. Manual review confirmed that the flagged individuals were not the same persons as those designated on any sanctions list.
Sandoval's resolution methodology for each potential match is documented in detail in the Sandoval Report. In each case, the resolution was supported by at least two independent identifying data points distinguishing the screened person or entity from the listed person or entity. We have reviewed Sandoval's resolution documentation and concur with its conclusions.
C. NNPC-Specific Analysis
Given the significance of the NNPC relationship to Dunmore's Nigerian operations and the collateral securing the Notes, we have conducted a detailed analysis of NNPC's sanctions profile and the implications of NNPC's back-in rights for the transaction.
NNPC's Sanctions Status. NNPC — the Nigerian National Petroleum Company (now formally the Calderon Group, following the corporatization mandated by the Petroleum Industry Act 2021) — is not designated on any OFAC sanctions list (SDN List, SSI List, or any component of the Consolidated Non-SDN List), the EU Consolidated Sanctions List, or the UK OFSI Consolidated List. NNPC has not been the subject of any publicly disclosed OFAC enforcement action, and we are not aware of any pending or threatened sanctions designation involving NNPC.
NNPC's Back-In Rights. Under the Nigerian Petroleum Act and the Petroleum Industry Act 2021, NNPC holds statutory back-in rights in oil mining leases held by private operators, including OML 47 and OML 63. These back-in rights entitle NNPC to acquire a participation interest in the production from the relevant licenses, typically through a carried interest or production-sharing mechanism. The specific terms of NNPC's back-in rights in OML 47 and OML 63 are set forth in the applicable license terms and the joint operating agreements governing each lease.
50% Ownership Rule Analysis. We have analyzed the NNPC back-in rights under OFAC's 50% ownership rule to determine whether the NNPC relationship could cause Dunmore's interests in OML 47 or OML 63 to be treated as blocked property in the event that NNPC were designated as an SDN. The critical threshold under the 50% rule is whether NNPC "owns," directly or indirectly, 50% or more of Dunmore Nigeria or of the OML 47 or OML 63 assets. Based on our review of the applicable license terms and joint operating agreements, NNPC's back-in rights constitute a participation interest in production — a contractual right to a share of output and associated economics — rather than an equity ownership interest in Dunmore Nigeria or its assets. NNPC does not hold shares, membership interests, or other equity securities of Dunmore Nigeria. Accordingly, the back-in rights do not cause NNPC to "own" 50% or more of Dunmore Nigeria or the OML assets within the meaning of OFAC's 50% rule, and Dunmore's interests in OML 47 and OML 63 would not be treated as blocked property based solely on the back-in rights, even in the hypothetical event that NNPC were designated as an SDN.
That said, we note two important caveats. First, OFAC has the authority to designate specific assets, contracts, or arrangements as blocked property on a case-by-case basis, independent of the 50% rule, if OFAC determines that the arrangement constitutes a property or interest in property of an SDN. Second, if NNPC were to be designated, the practical effect on Dunmore's Nigerian operations could be significant regardless of the technical 50% rule analysis, as continued commercial dealings with a sanctioned NNPC could constitute prohibited transactions for U.S. persons and persons dealing in U.S.-dollar-denominated instruments such as the Notes.
Individual NNPC Personnel. Sandoval screened 18 NNPC executives and board members against all applicable sanctions lists. No confirmed hits were identified. Two potential matches were flagged and cleared through manual review, as described in Section V.B above.
Ongoing Monitoring. While NNPC's current sanctions profile is clean, the political environment in Nigeria — including ongoing anti-corruption efforts, inter-party political dynamics, and the potential for changes in government — creates a meaningful risk that individual NNPC officials or affiliated entities could be designated in the future. We recommend that NNPC and its key personnel be included in the ongoing quarterly sanctions screening protocol recommended in Section IX.B below.
D. Joint Venture Partner Analysis
Sandoval screened all joint venture partners identified in the due diligence materials for each of Dunmore's material operating assets. The results are summarized as follows:
OML 47 Joint Venture Partners. Four joint venture partners participate in OML 47 alongside Dunmore Nigeria as operator and NNPC as back-in rights holder. Each partner entity, together with its key personnel and beneficial owners identified in the due diligence materials, was screened against all applicable sanctions lists. No confirmed hits were identified. All four partners are established participants in the Nigerian upstream sector with no publicly known sanctions or compliance concerns.
OML 63 Joint Venture Partners. Three joint venture partners participate in OML 63 alongside Dunmore Nigeria as operator and NNPC as back-in rights holder. Each partner entity, together with its key personnel and beneficial owners, was screened with no confirmed hits.
Cayar Offshore Severin & Co.. Two partners participate in the Cayar Offshore Block alongside Dunmore Senegal as operator and Petrosen (the Senegalese national oil company) as the government partner under the PSC. Each partner entity and its key personnel were screened with no confirmed hits. Petrosen itself was also screened as a Senegalese state-owned entity, with no confirmed hits.
Gulf of Mexico Leases. Partners in the Green Canyon and Garden Banks leases were screened with no confirmed hits. These partners are all U.S.-based entities with established compliance programs, presenting a lower sanctions risk profile.
E. Dunmore Trading Ltd. Counterparty Screening
Given the nature of Dunmore Trading's commodity trading business, particular attention was paid to the screening of its counterparties. Crude oil trading involves frequent counterparty interactions across multiple jurisdictions, and the global crude oil market includes participants from jurisdictions that are subject to sanctions or that are geographically proximate to sanctioned jurisdictions. Dunmore Trading's counterparty universe includes major international oil trading houses, independent refiners, national oil companies of non-sanctioned countries, and commodity merchants.
Sandoval screened all material offtake counterparties of Dunmore Trading, defined as counterparties with aggregate transaction volumes exceeding $10 million in the twelve months ended December 31, 2024. This scope encompassed 23 counterparty entities. No confirmed hits were identified against any applicable sanctions list.
In addition, Sandoval screened the material service contract counterparties engaged by Dunmore Trading in connection with its trading operations, including maritime transportation providers, storage terminal operators, and inspection and surveying firms. No confirmed hits were identified.
Notwithstanding the clean screening results, we note that the commodity trading business inherently involves a higher degree of counterparty turnover and new-counterparty onboarding than the upstream operations. Accordingly, we recommend that Dunmore Trading implement enhanced transaction-level screening for new counterparties on an ongoing basis, rather than relying solely on periodic (e.g., quarterly) batch screening. This recommendation is discussed further in Section IX.B below.
VI. ANALYSIS OF COUNTRY-SPECIFIC SANCTIONS RISK
A. Nigeria
Nigeria is not the subject of a comprehensive OFAC sanctions program. There is no country-wide embargo or asset-blocking regime targeting Nigeria, and U.S. persons are generally permitted to engage in commercial activities in and with Nigeria, subject to compliance with the SDN List and other applicable OFAC lists.
However, selected Nigerian persons and entities have been designated on the OFAC SDN List under various programs, including:
• Designations under the Foreign Narcotics Kingpin Designation Act and Executive Order 12978, targeting individuals and entities involved in narcotics trafficking, including certain Nigerian nationals associated with international drug trafficking organizations;
• Designations under Executive Order 13818 (Global Magnitsky Human Rights Accountability Act), targeting individuals involved in serious human rights abuse or corruption, including certain former Nigerian government officials;
• Designations under Executive Order 13224, targeting individuals and entities associated with international terrorism, including certain Nigerian nationals affiliated with Boko Haram and the Islamic State West Africa Province ("ISWAP"); and
• Designations under other OFAC programs targeting transnational criminal organizations, cybercrime, and weapons proliferation.
None of Dunmore's counterparties, joint venture partners, employees, or other associated persons have been identified as designated under any of these programs. However, the operational environment in the Niger Delta — which has historically been characterized by political instability, community tensions, militancy, and corruption — presents an elevated baseline risk that individuals within Dunmore's operational ecosystem could be designated in the future. This is particularly relevant given the involvement of government and quasi-governmental counterparties (NNPC, the Department of Petroleum Resources, and local community development committees) in the conduct of upstream operations.
Additionally, Dunmore Nigeria's community development spend — which totaled $14.2 million in fiscal year 2024 — warrants ongoing monitoring to ensure that payments are not directed to or for the benefit of sanctioned individuals or entities. Community development expenditures in the Niger Delta typically involve payments to community trust funds, local contractors, and development organizations, some of which may have connections to individuals who are, or could in the future be, designated. While there is no indication that any of Dunmore Nigeria's community development payments have been directed to sanctioned persons, we recommend that these expenditures be subject to enhanced due diligence and screening protocols.
We note that anti-corruption risk under the Foreign Corrupt Practices Act ("FCPA") and the UK Bribery Act 2010 — while conceptually distinct from sanctions risk — intersects with the sanctions compliance analysis in the Nigerian context. Corrupt payments to government officials may also constitute transactions with individuals who are or could become designated under anti-corruption sanctions authorities. The anti-corruption workstream is addressed separately, but the intersection is noted here for completeness.
B. Senegal
Senegal is not the subject of a comprehensive OFAC sanctions program, and no targeted or sectoral OFAC program is currently in effect with respect to Senegal. Senegal presents a low sanctions-risk profile compared to certain other West African jurisdictions. The country has a relatively stable political environment, a functioning democratic system, and an emerging oil and gas sector that has attracted significant international investment.
The PSC between Dunmore Senegal and the Senegalese government (Ministère de l'Énergie) does not implicate any designated parties. Petrosen, the Senegalese national oil company that holds a participation interest in the Cayar Offshore Block, is not designated on any applicable sanctions list. Officials of the Ministère de l'Énergie and Petrosen identified in the due diligence materials were screened with no confirmed hits.
Theron Moss & Associates SARL (Moustapha Sy, Managing Partner), which serves as local Senegalese counsel to Dunmore Senegal, has confirmed that it has no knowledge of any sanctions concerns relating to Dunmore Senegal's operations, partners, or counterparties. This confirmation was provided in a letter dated April 22, 2025, which is on file with this firm.
While the sanctions risk associated with Senegal is currently low, we note that the country's nascent oil and gas sector is attracting increasing international attention, and the political and regulatory landscape may evolve as production from the Cayar Offshore Block and other projects ramps up. Ongoing monitoring is appropriate.
C. Gulf of Mexico and West Texas
Dunmore's U.S.-based operations — including the deepwater leases in the Gulf of Mexico held by Dunmore Gulf and the solar energy portfolio in West Texas operated by Dunmore Renewables — present minimal standalone sanctions risk. These operations are conducted within the United States, are subject to comprehensive U.S. regulatory oversight (including BOEM/BSEE for the Gulf of Mexico operations and FERC/state public utility commissions for the renewable energy operations), and involve counterparties and partners that are predominantly U.S.-based entities with established sanctions compliance programs.
Standard OFAC compliance obligations apply to Dunmore Gulf and Dunmore Renewables as U.S. persons (i.e., entities organized under the laws of the State of Delaware). These entities must refrain from transactions with SDNs and must comply with all applicable OFAC sanctions programs. No specific risk factors beyond routine compliance have been identified for these operations.
D. Cayman Islands