CALDERWOOD & HARKNESS LLP Counselors at Law
425 Lexington Avenue New York, NY 10017 Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
May 15, 2025
MEMORANDUM
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I. Introduction and Purpose
This memorandum establishes a recommended post-closing sanctions monitoring protocol for Dunmore Energy Holdings Ltd. ("DEH" or "Dunmore") and its subsidiaries following the closing, on the date hereof, of the $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes"). The protocol set forth herein is designed to provide Dunmore's legal department and senior management with a comprehensive, actionable framework for quarterly sanctions screening and ongoing sanctions compliance, consistent with the representations and covenants contained in the transaction documents executed in connection with the Notes offering and with industry best practices for companies operating in jurisdictions that present heightened sanctions compliance risk.
The Notes were issued on May 15, 2025 pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"), by DEH (as Issuer) and Dunmore upstream Finance Corp. ("DUFC," as Co-Issuer). The Notes are guaranteed on a senior secured basis by six subsidiary guarantors: 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 were placed with qualified institutional buyers and non-U.S. persons through the Initial Purchasers.
The Indenture dated as of May 15, 2025 (the "Indenture"), among DEH, DUFC, the Guarantors, and Northgate Trust Company, N.A. (as Trustee and Collateral Agent) (the "Trustee"), contains detailed representations and affirmative and negative covenants that expressly prohibit the use of the proceeds of the Notes in violation of sanctions administered or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), the U.S. Department of State, the United Nations Security Council, the European Union, and the United Kingdom's Office of Financial Sanctions Implementation ("UK OFSI"). These covenants impose ongoing obligations that extend through the maturity of the Notes on May 1, 2032, and in certain cases beyond.
In addition to the Indenture, the Purchase Agreement dated May 12, 2025 (the "Purchase Agreement"), among DEH, DUFC, the Guarantors, and the Initial Purchasers — Ridgeline Capital Markets LLC, Clarion Securities Inc., and Pinnacle Partners LLC — contains representations and warranties regarding sanctions compliance that were made as of both the pricing date and the closing date. The Side Letter — Sanctions Representations (the "Side Letter"), delivered simultaneously with the Purchase Agreement, contains supplemental sanctions-related representations provided to the Initial Purchasers that extend beyond the standard Indenture language. Certain of these representations survive closing and remain relevant for purposes of the indemnification obligations contained in Article VIII of the Purchase Agreement.
Dunmore's operational profile presents a heightened sanctions compliance risk profile that warrants the establishment of a formal, systematic monitoring protocol. Specifically, Dunmore Nigeria E&P Ltd. operates two oil mining leases in the Niger Delta region of Nigeria — OML 47 and OML 63 — involving partnerships with Nigerian state entities and a complex network of local contractors and service providers. Dunmore Senegal S.A. operates the Cayar Offshore Block in Senegal, with approximately $250,000,000 of Notes proceeds earmarked for Phase II development capital expenditures in that concession. Additionally, Dunmore Trading Ltd. (incorporated in England & Wales) engages in international hydrocarbon trading with counterparties across multiple jurisdictions. Each of these operational theaters involves counterparty relationships and geographic exposures that require careful and ongoing sanctions monitoring.
Pre-closing sanctions screening was completed by Sandoval Compliance Solutions LLC ("Sandoval"), under the direction of Rosa Medina, Lead Consultant, on April 25, 2025. The pre-closing screening covered all entities and individuals within the scope described in Section III of this memorandum, and screened them against the OFAC Specially Designated Nationals and blocked Persons List (the "SDN List"), the OFAC Sectoral Sanctions Identifications List (the "SSI List"), the EU Consolidated Sanctions List, and the UK OFSI Consolidated List. No positive matches were identified during the pre-closing screening. The results of the pre-closing screening were delivered to the Initial Purchasers and their counsel and were relied upon, in part, in connection with the closing of the Notes offering.
The purpose of this memorandum is to set forth a recommended protocol that will enable Dunmore to maintain ongoing compliance with its sanctions-related contractual obligations under the transaction documents, applicable U.S. federal sanctions laws and regulations (including, without limitation, those administered by OFAC pursuant to the International Emergency Economic Powers Act, the Trading with the Enemy Act, and various Executive Orders), applicable EU sanctions regulations, applicable UK sanctions legislation (including the Sanctions and Anti-Money Laundering Act 2018 and related statutory instruments), and applicable United Nations Security Council resolutions. The protocol addresses the scope of entities and persons subject to screening, the sanctions lists and databases to be consulted, recommended screening frequency and methodology, procedures for handling potential matches, jurisdiction-specific considerations for Nigeria, Senegal, and the United Kingdom, internal governance and reporting structures, external advisor engagement, regulatory monitoring, and integration with Dunmore's broader compliance programs.
This memorandum is provided as legal advice from Calderwood & Harkness LLP to Dunmore Energy Holdings Ltd. and is protected by the attorney-client privilege and the work product doctrine. It should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP, except as may be required by applicable law or regulation.
II. Summary of Sanctions-Related Contractual Obligations
The sanctions-related obligations arising from the Notes offering are contained in several interrelated transaction documents. This Section provides a summary of the key provisions for ease of reference by the compliance team. Full excerpted text of the relevant provisions is set forth in Appendix E to this memorandum. The compliance team should review the excerpted provisions carefully and consult with Calderwood & Harkness LLP or Dunmore's General Counsel with any questions regarding interpretation or application.
A. Indenture Covenants
The Indenture contains the following sanctions-related representations and covenants, which are binding on DEH, DUFC, and each of the Guarantors:
Representation (Section 4.18(a)). Each of the Issuers and the Guarantors represents and warrants that, as of the date of the Indenture, neither the Issuers, the Guarantors, nor any of their respective directors, officers, or, to the knowledge of the Issuers, agents or employees, are currently the subject or the target of any sanctions administered or enforced by OFAC, the U.S. Department of State, the United Nations Security Council, the European Union, or Her Majesty's Treasury (UK OFSI) (collectively, "Sanctions"), nor are any of the foregoing persons located, organized, or resident in a country or territory that is the subject or the target of comprehensive, country-wide or territory-wide Sanctions (each, a "Sanctioned Country"). This representation was given as of the date of the Indenture and, while it does not by its terms repeat on each interest payment date, it establishes the baseline compliance status of the Dunmore group as of closing.
Affirmative Covenant — Ongoing Compliance (Section 4.18(b)). The Issuers and the Guarantors covenant that they will maintain in effect and enforce policies and procedures designed to promote and achieve compliance with all applicable Sanctions. This covenant is ongoing throughout the term of the Notes and requires affirmative action by the Dunmore group to implement and maintain a compliance program — such as the protocol described in this memorandum.
Negative Covenant — Use of Proceeds (Section 4.18(c)). Neither the Issuers nor any Guarantor shall, directly or indirectly, use the proceeds of the Notes, or lend, contribute, or otherwise make available such proceeds to any subsidiary, joint venture partner, or other person or entity, (i) for the purpose of financing the activities of or business with any person that, at the time of such financing, is the subject or the target of Sanctions, or (ii) in any manner that would result in a violation of Sanctions by any person (including any person participating in the transaction, whether as underwriter, advisor, investor, or otherwise). This covenant extends to indirect uses of proceeds, which is particularly relevant given the allocation of approximately $250,000,000 of Notes proceeds to Cayar Offshore Phase II development capital expenditures in Senegal.
Negative Covenant — Restricted Payments and Investments (Sections 4.07 and 4.08, as cross-referenced in Section 4.18(d)). The Issuers and the Guarantors covenant that no Restricted Payment (as defined in Section 4.07 of the Indenture) or Investment (as defined in Section 1.01 of the Indenture) shall be made in or to any Sanctioned Person or in or to any Sanctioned Country. This covenant operates as an additional safeguard, ensuring that the restrictions on dealings with sanctioned persons and sanctioned countries apply not only to the initial deployment of Notes proceeds but also to subsequent investment and distribution decisions.
The breach of any of the covenants set forth in Section 4.18 of the Indenture could, if not cured within any applicable cure period, constitute an Event of Default under Section 6.01 of the Indenture, potentially resulting in the acceleration of the entire $850,000,000 principal amount of the Notes, together with accrued and unpaid interest and any applicable premiums.
B. Purchase Agreement Representations (Article V)
Article V of the Purchase Agreement contains representations and warranties made by DEH, DUFC, and the Guarantors to the Initial Purchasers — Ridgeline Capital Markets LLC, Clarion Securities Inc., and Pinnacle Partners LLC — regarding, among other things, sanctions compliance. These representations and warranties were made as of both the pricing date (May 12, 2025) and the closing date (May 15, 2025).
The sanctions representations in the Purchase Agreement are substantially similar to those in the Indenture but include certain additional representations regarding the accuracy and completeness of the sanctions-related disclosures in the Final Offering Memorandum dated May 14, 2025 (the "Offering Memorandum"). Specifically, the Issuers represent that the information set forth in the Offering Memorandum under the captions "Risk Factors — Risks Related to Sanctions Compliance" and "Business — Regulatory Matters — Sanctions and Export Controls" does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
Importantly, certain of the sanctions representations in the Purchase Agreement survive the closing of the Notes offering and remain relevant for purposes of the indemnification provisions contained in Article VIII of the Purchase Agreement. Under Section 8.01(a), the Issuers and the Guarantors have agreed to indemnify and hold harmless the Initial Purchasers and their respective affiliates, directors, officers, employees, and agents against any losses, claims, damages, or liabilities arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Memorandum (including the sanctions-related disclosures) or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Accordingly, a post-closing change in the sanctions status of any Dunmore entity, director, officer, agent, or material counterparty that was the subject of a representation in the Purchase Agreement could give rise to indemnification exposure if the representation was inaccurate as of the date it was made.
C. Side Letter — Sanctions Representations
The Side Letter, dated May 12, 2025, was delivered by DEH, DUFC, and the Guarantors to the Initial Purchasers simultaneously with the Purchase Agreement. The Side Letter contains supplemental sanctions-related representations that extend beyond the standard language contained in the Indenture and the Purchase Agreement. These supplemental representations were negotiated at the request of the Initial Purchasers and their counsel in light of Dunmore's operational footprint in Nigeria and Senegal.
The supplemental representations in the Side Letter address, among other things:
(a) the sanctions status of the Nigerian National Petroleum Company ("NNPC"), which holds back-in rights in OML 47 and OML 63, and each of NNPC's subsidiaries and affiliates known to the Issuers;
(b) the sanctions status of all joint venture partners in OML 47, OML 63, and the Cayar Offshore Block, and, to the knowledge of the Issuers, the beneficial owners thereof;
(c) the sanctions status of all material counterparties (defined for purposes of the Side Letter as counterparties with aggregate contractual commitments in excess of $5,000,000) of each of the Issuers and the Guarantors;
(d) representations regarding the absence of any pending or threatened regulatory action, investigation, or inquiry by OFAC, the U.S. Department of State, the European Commission, or UK OFSI with respect to any Issuer, Guarantor, or their respective directors, officers, agents, or employees; and
(e) representations regarding the procedures employed by the Issuers and the Guarantors to screen counterparties and monitor compliance with applicable Sanctions, including the engagement of Sandoval Compliance Solutions LLC for pre-closing screening.
The ongoing obligation to maintain compliance with the substance of the Side Letter representations, while not technically a covenant to "reaffirm" those representations on a continuing basis, creates a practical expectation that Dunmore will maintain the sanctions compliance infrastructure described in the Side Letter. Any material degradation of that infrastructure or any change in the facts underlying the Side Letter representations could expose Dunmore to claims by the Initial Purchasers.
D. Offering Memorandum Disclosure
The Offering Memorandum contains two OFAC-specific risk factors and a dedicated sanctions risk-factor section under the heading "Risk Factors — Risks Related to Sanctions Compliance." These risk factors describe, among other things, the risks associated with Dunmore's operations in Nigeria and Senegal, the potential impact of future sanctions designations on Dunmore's counterparties or operations, and the consequences of a sanctions violation under the Indenture and applicable law.
Any material change in Dunmore's sanctions status or compliance posture following the closing of the Notes offering could trigger supplemental disclosure obligations. In particular:
(a) If Dunmore files a Registration Statement on Form S-4 pursuant to the Registration Rights Agreement dated May 15, 2025 (the "Registration Rights Agreement") in connection with an exchange offer for the Notes, the Registration Statement and the related prospectus will need to contain current, accurate disclosure regarding sanctions compliance. Any material developments since the date of the Offering Memorandum would need to be reflected in the updated disclosure.
(b) If Dunmore files a shelf Registration Statement pursuant to the Registration Rights Agreement, similar disclosure updating requirements would apply.
(c) Under Section 4.03 of the Indenture, Dunmore is required to provide certain periodic reports to the Trustee and, upon request, to holders of the Notes. While these reporting obligations are primarily financial in nature, material sanctions compliance developments could warrant inclusion in such reports to the extent they constitute material information regarding the condition of the Issuers and the Guarantors.
(d) To the extent that any sanctions compliance development constitutes a material event that could affect the trading price of the Notes, Dunmore should consult with Calderwood & Harkness LLP regarding whether any contractual notification requirements are triggered.
III. Scope of Monitoring Obligations
This Section defines the universe of entities, individuals, counterparties, sanctions lists, and sanctioned countries and territories that are subject to the monitoring protocol. The scope is designed to be comprehensive, covering all persons and entities whose sanctions status is relevant to Dunmore's compliance obligations under the transaction documents and applicable law.
A. Entities Subject to Screening
The following categories of entities and individuals should be subject to screening under this protocol. The compliance team should treat this list as a minimum baseline; additional persons or entities should be added to the screening scope as warranted by changes in Dunmore's operations, counterparty relationships, or the applicable sanctions landscape.
1. Dunmore Group Entities
All Issuer and Guarantor entities under the Indenture, as well as any other subsidiaries or affiliates of DEH that are involved in operations, financing, or trading activities, should be screened quarterly. As of the closing date, the Dunmore group entities subject to screening are:
(a) Dunmore Energy Holdings Ltd. — the Issuer; incorporated in the Cayman Islands; the parent holding company of the Dunmore group.
(b) Dunmore upstream Finance Corp. ("DUFC") — the Co-Issuer; incorporated in Delaware (EIN 93-4728106); a special-purpose financing subsidiary with no material operations.
(c) Dunmore Nigeria E&P Ltd. — a Guarantor; incorporated in Nigeria; the operator of OML 47 and OML 63 in the Niger Delta.
(d) Dunmore Gulf Operations LLC — a Guarantor; organized in Delaware; the operator of deepwater leases in the Green Canyon and Garden Banks areas of the Gulf of Mexico.
(e) Dunmore Renewables LLC — a Guarantor; organized in Delaware; the owner and operator of a 220 MW solar portfolio in West Texas.
(f) Dunmore Senegal S.A. — a Guarantor; incorporated in Senegal; the operator of the Cayar Offshore Block.
(g) Dunmore Midstream Holdings Inc. — a Guarantor; incorporated in Delaware; the owner of pipeline and processing infrastructure supporting Dunmore's U.S. operations.
(h) Dunmore Trading Ltd. — a Guarantor; incorporated in England & Wales; the offtake and trading arm of the Dunmore group, engaged in international hydrocarbon trading.
If any new subsidiaries or affiliates are formed or acquired after the closing date, they should be added to the screening scope promptly upon formation or acquisition.
2. Directors, Officers, and Key Personnel
All directors, officers, and senior management of each Dunmore group entity listed above should be screened quarterly. As of the closing date, the individuals subject to screening include, but are not limited to:
(a) Marcus Ellingham — Chief Executive Officer, DEH
(b) Deepa Rajaram — Chief Financial Officer, DEH
(c) Alistair Forde — General Counsel, DEH
(d) Lady Constance Harrowby — Chair of the Board of Directors, DEH
(e) All other members of the Board of Directors of DEH
(f) All officers and directors of each subsidiary Guarantor
(g) All members of senior management with responsibility for operations in Nigeria, Senegal, or the UK trading operations
The compliance team should maintain a current list of all such individuals and update the list promptly upon any changes in personnel. Departing directors and officers should be retained in the screening records for archival purposes but may be removed from active quarterly screening upon termination of their relationship with the Dunmore group.
3. Equity Holders
The beneficial owners of equity interests in DEH should be screened quarterly. As of the closing date, the principal equity holders are:
(a) Harborview Capital Partners Fund VI, L.P. — holding approximately 62.4% of the equity of DEH. Key individuals associated with Harborview who should be screened include Elaine Prescott, Managing Director, and David Stein, Partner.
(b) Solstice Infrastructure Fund LP — holding approximately 11.1% of the equity of DEH.
(c) Alderman Family Office LLC — holding approximately 8.2% of the equity of DEH.
(d) Management and director holders — holding in the aggregate approximately 18.3% of the equity of DEH. Individual management and director holders are covered under the directors, officers, and key personnel screening described in Section III.A.2 above.
For institutional equity holders (Harborview, Solstice, and Alderman), the screening should cover the entity itself, its general partner or managing member, and its principal investment professionals who are involved in the management or oversight of the Dunmore investment.
4. Material Counterparties — Nigeria
Given the heightened sanctions risk associated with Dunmore's Nigerian operations, all material counterparties in Nigeria should be subject to rigorous screening. The following categories of Nigerian counterparties should be included:
(a) Nigerian National Petroleum Company (NNPC) — NNPC holds back-in rights in both OML 47 and OML 63. As a Nigerian state-owned enterprise, NNPC is a critical counterparty whose sanctions status must be monitored on an ongoing basis. The screening should cover NNPC itself, its principal subsidiaries and affiliates (including but not limited to NNPC Exploration & Production Ltd., Nigerian Petroleum Development Company, and any other entities known to the Issuers), and its senior officers and directors.
(b) Joint venture partners in OML 47 and OML 63 — All entities holding participating interests in OML 47 or OML 63, and, to the extent reasonably available, their beneficial owners and senior officers.
(c) Local contractors and service providers of material value — All contractors and service providers engaged by Dunmore Nigeria E&P Ltd. in connection with OML 47 and OML 63 operations whose aggregate contractual commitments exceed $1,000,000 (or such lower threshold as the compliance team deems appropriate given the risk profile of the particular contractor).
(d) Offtake purchasers — All counterparties to hydrocarbon offtake agreements executed by Dunmore Trading Ltd. in connection with Nigerian production.
5. Material Counterparties — Senegal
The following categories of Senegalese counterparties should be included in the screening scope:
(a) Cayar Offshore Block joint venture partners — All entities holding participating interests in the Cayar Offshore Block, and, to the extent reasonably available, their beneficial owners and senior officers.
(b) Senegalese government counterparties — The Ministère de l'Énergie and any other Senegalese governmental bodies that are parties to the production sharing contract or other agreements governing the Cayar Offshore Block.
(c) Local contractors and service providers of material value — All contractors and service providers engaged by Dunmore Senegal S.A. in connection with Cayar Offshore Block operations whose aggregate contractual commitments exceed $1,000,000.
(d) Phase II development capital expenditure contractors — All contractors engaged or to be engaged for the Cayar Offshore Phase II development program. This category is of particular importance given that approximately $250,000,000 of Notes proceeds are earmarked for Cayar Phase II development capital expenditures, creating a direct nexus between Notes proceeds and the contractors engaged in the Phase II program. The compliance team should ensure that all Phase II contractors are screened prior to the execution of any contract and quarterly thereafter.
6. Other Material Counterparties
(a) Gulf of Mexico counterparties — Counterparties to Dunmore Gulf Operations LLC in connection with the Green Canyon and Garden Banks deepwater leases. While these counterparties present lower sanctions risk given the U.S.-based nature of the operations, they should be included in the quarterly screening scope for completeness and to ensure comprehensive compliance with the Indenture covenants.
(b) Material trading counterparties of Dunmore Trading Ltd. — All active trading counterparties of Dunmore Trading Ltd., including offtake purchasers, commodity traders, shipping companies, and other parties to hydrocarbon sale and purchase agreements. Given the international nature of Dunmore Trading's activities, this category may include counterparties in a wide range of jurisdictions.
(c) New counterparties onboarded after closing — Any new counterparty, regardless of jurisdiction or business line, that is onboarded by any Dunmore group entity after the closing date should be screened prior to the commencement of any business relationship and added to the quarterly screening scope thereafter. The procedures for onboarding new counterparties are addressed in Section IV.A below.
B. Sanctions Lists to be Screened
All entities and individuals within the screening scope defined in Section III.A above should be screened against the following sanctions lists and databases. This list is current as of the closing date and should be updated if additional lists are promulgated by applicable authorities or if Dunmore expands its operations into new jurisdictions that maintain independent sanctions regimes.
1. U.S. Lists
(a) OFAC Specially Designated Nationals and blocked Persons List (SDN List) — The primary U.S. sanctions list, maintained by OFAC, identifying individuals and entities whose property and interests in property are blocked and with whom U.S. persons are generally prohibited from dealing.
(b) OFAC Sectoral Sanctions Identifications List (SSI List) — A list of persons operating in identified sectors of the Russian economy, with whom U.S. persons are prohibited from engaging in certain categories of transactions. While the SSI List is currently focused on Russia, it should be screened as a matter of best practice and in case of future expansion.
(c) OFAC Non-SDN Menu-Based Sanctions List (NS-MBS List) — A list consolidating entries from multiple non-SDN sanctions programs, including the Venezuela-related, Nicaragua-related, and other targeted programs.
(d) OFAC Foreign Sanctions Evaders List (FSE List) — A list of 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 on Syria or Iran, or to have facilitated deceptive transactions for or on behalf of persons subject to U.S. sanctions.
(e) OFAC Correspondent Account or Payable-Through Account Sanctions List (CAPTA List) — A list of foreign financial institutions subject to correspondent account or payable-through account sanctions.
(f) Bureau of Industry and Security (BIS) Entity List — Maintained by the U.S. Department of Commerce, this list identifies foreign parties that are prohibited from receiving some or all items subject to the Export Administration Regulations without a license.
(g) Bureau of Industry and Security (BIS) Denied Persons List — A list of individuals and entities that have been denied export privileges.
2. EU Lists
(a) EU Consolidated Sanctions List — The consolidated list of persons, entities, and groups subject to EU financial sanctions, maintained by the European Commission and updated pursuant to Council Regulations implementing Common Foreign and Security Policy decisions.
3. UK Lists
(a) UK Office of Financial Sanctions Implementation (OFSI) Consolidated List — The consolidated list of asset freeze targets designated under UK sanctions legislation, maintained by OFSI within HM Treasury.
4. UN Lists
(a) United Nations Security Council Consolidated Sanctions List — The consolidated list of individuals and entities subject to measures imposed by United Nations Security Council Sanctions Committees, including travel bans, asset freezes, and arms embargoes.
5. Other Lists as Applicable
(a) Any additional sanctions lists or restricted party lists required by Nigerian regulatory authorities, including any lists maintained by the Central Bank of Nigeria, the Nigerian Financial intelligence Unit, or other relevant agencies.
(b) Any additional sanctions lists or restricted party lists required by Senegalese regulatory authorities, including any lists maintained by the Banque Centrale des États de l'Afrique de l'Ouest (BCEAO) or other relevant agencies.
(c) Any additional lists that may become relevant as a result of changes in Dunmore's operational footprint or the applicable regulatory environment. The compliance team should consult with Calderwood & Harkness LLP, Abayomi Chambers, and Theron Moss & Associates SARL regarding any additional local listing requirements.
C. Sanctioned Countries and Territories
As of the closing date, the following countries and territories are subject to comprehensive, country-wide or territory-wide sanctions programs administered by OFAC, and are defined as "Sanctioned Countries" under the Indenture:
• Cuba
• Iran
• North Korea (Democratic People's Republic of Korea)
• Syria
• The Crimea region of Ukraine
• The so-called Donetsk People's Republic region of Ukraine
• The so-called Luhansk People's Republic region of Ukraine
The compliance team should ensure that no Notes proceeds, directly or indirectly, are used for any transaction or activity involving any Sanctioned Country, and that no Dunmore group entity engages in any business or financial transaction with any person located in, organized under the laws of, or ordinarily resident in any Sanctioned Country, except as may be authorized by a specific license issued by OFAC.
In addition to monitoring the comprehensive embargo programs listed above, the compliance team should monitor for any changes in country-level sanctions that could affect Nigeria or Senegal. As of the closing date, neither Nigeria nor Senegal is subject to comprehensive, country-wide sanctions by any of the authorities identified in Section III.B above. However, targeted sanctions may apply to specific individuals, entities, or sectors within those countries, and the possibility of new country-level designations — particularly in light of evolving geopolitical dynamics in West Africa and the Sahel region — should be monitored on an ongoing basis.
IV. Recommended Quarterly Screening Procedures
A. Screening Frequency and Timing
Quarterly Screening. A full screening of all persons and entities listed in Section III.A above against all sanctions lists and databases identified in Section III.B above should be conducted within the first fifteen (15) business days of each calendar quarter. Based on a standard business calendar, this means that each quarterly screening cycle should be completed no later than approximately:
• Q1: January 20 of each year
• Q2: April 20 of each year
• Q3: July 20 of each year
• Q4: October 20 of each year
These dates are approximate and should be adjusted as necessary to account for federal holidays and other non-business days. The key requirement is that each quarterly screening be completed within fifteen business days of the first day of the calendar quarter to which it relates.
First Post-Closing Screening. The first post-closing screening cycle should be completed no later than July 20, 2025, covering the period from the closing of the Notes on May 15, 2025 through June 30, 2025. This initial screening will serve as the baseline for the ongoing quarterly screening program and will validate the continued accuracy of the pre-closing screening completed by Sandoval on April 25, 2025.
Ad Hoc Screening. In addition to the quarterly screening described above, immediate ad hoc screening should be conducted upon the occurrence of any of the following triggering events:
(a) New counterparty onboarding. Prior to the execution of any contract, agreement, or other arrangement with any new material counterparty, joint venture partner, contractor, or service provider by any Dunmore group entity, the new counterparty should be screened against all applicable sanctions lists. No contract should be executed, and no business relationship should be commenced, until the screening has been completed and any potential matches have been resolved. For purposes of this protocol, a "material counterparty" is any counterparty with aggregate contractual commitments in excess of $1,000,000; however, the compliance team should exercise judgment and screen lower-value counterparties where the nature of the relationship or the jurisdiction of the counterparty presents elevated risk.
(b) Changes in beneficial ownership. If the compliance team becomes aware of any material change in the beneficial ownership structure of any existing counterparty — including changes in controlling shareholders, general partners, managing members, or other persons exercising control — the counterparty should be rescreened promptly.
(c) Changes to sanctions programs. If OFAC, the EU, the UK, or the United Nations Security Council announces material changes to sanctions programs affecting West Africa, the energy or extractives sector, or any jurisdiction in which Dunmore operates, the compliance team should conduct a targeted screening of all counterparties potentially affected by the changes. The procedures for monitoring regulatory developments are described in Section XI below.
(d) Receipt of information suggesting a potential sanctions concern. If any Dunmore employee, officer, director, agent, or advisor receives information — from any source, whether internal or external — suggesting that a Dunmore counterparty, agent, or affiliate may be the subject or target of sanctions, or may be owned or controlled by a sanctioned person, the compliance team should be notified immediately and an ad hoc screening should be conducted.
B. Screening Methodology
Automated Screening Platform. Calderwood & Harkness LLP recommends the use of an automated sanctions screening platform for all quarterly and ad hoc screening. Sandoval Compliance Solutions LLC, which conducted the pre-closing screening, maintains a proprietary screening platform that integrates data from all of the sanctions lists identified in Section III.B above and provides both exact-match and fuzzy-match capabilities. We recommend that Dunmore engage Sandoval for ongoing quarterly screening services pursuant to a separate engagement letter, as discussed in Section X.A below. If Dunmore elects to use an alternative screening provider or to develop in-house screening capabilities, the alternative platform should be validated to ensure equivalent coverage and matching capabilities.
Matching Algorithms. The screening platform should employ both exact-match and fuzzy-match algorithms to capture name variations, transliterations, and aliases. This capability is particularly important for Dunmore's operations in Nigeria and Senegal, where counterparty names may appear in multiple transliterations or spellings (e.g., Arabic, Hausa, Yoruba, Igbo, and Wolof name conventions may result in multiple valid romanizations of a single name). The screening platform should be configured to flag potential matches with a similarity score at or above a threshold calibrated to minimize false negatives while maintaining a manageable volume of false positives. Calderwood & Harkness LLP recommends an initial similarity threshold of 85%, which can be adjusted based on experience during the first several screening cycles.
Data Elements. Each screening cycle should include screening of the following data elements for each person or entity within the screening scope:
(i) Entity names and all known aliases, trade names, and "doing business as" names;
(ii) Individual names, including first name, middle name(s), last name, and any known aliases, nicknames, or alternative spellings;
(iii) Addresses, including registered office addresses, principal business addresses, and any other known addresses;
(iv) Identification numbers, including national identification numbers, passport numbers, tax identification numbers (e.g., EIN for U.S. entities), and company registration numbers, where available.
Quality Assurance. Each quarterly screening cycle should include a quality assurance review to verify that (a) all persons and entities in the current Counterparty Register were included in the screening, (b) all applicable sanctions lists were consulted, (c) the screening platform was using the most current version of each sanctions list, and (d) all potential matches were properly flagged for review.
C. Scope of Counterparty Data Collection
Effective sanctions screening requires comprehensive and current data regarding the entities and individuals subject to screening. To support the screening program, Dunmore's legal and compliance team should establish and maintain a centralized database of all material counterparties (the "Counterparty Register"). The Counterparty Register should contain, at a minimum, the following data fields for each counterparty:
• Full legal name of the counterparty
• All trade names, aliases, and "doing business as" names
• Jurisdiction of incorporation or registration
• Company registration number and/or tax identification number
• Principal office address and any other known addresses
• Names of directors, officers, and beneficial owners (for non-publicly traded entities)
• Nature and description of the contractual relationship with the Dunmore group entity
• Aggregate value of the contractual relationship (measured by contract value, annual payment volume, or other appropriate metric)
• Dunmore group entity that is the contracting party
• Date of initial sanctions screening
• Dates of all subsequent sanctions screening cycles
• Results of each screening (no match / potential match / true positive)
• Resolution status (for potential matches)
• Any notes or supplemental information relevant to sanctions compliance
A template for the Counterparty Register is set forth in Appendix C to this memorandum. The Counterparty Register should be updated on a continuous basis as new counterparties are onboarded, existing relationships are modified or terminated, and counterparty information changes. The Counterparty Register should be maintained in a secure, access-controlled format, with access limited to the General Counsel, the Compliance Officer, and other authorized personnel.
The compliance team should work with operational personnel in Lagos, Dakar, Houston, and London to collect and verify counterparty data. Regional compliance liaisons (discussed in Section IX.A below) should be responsible for ensuring that counterparty data for their respective regions is current and complete.
D. Handling of Potential Matches / Hits
The procedures set forth below should be followed whenever a potential match (also referred to as a "hit") is identified during any quarterly or ad hoc screening cycle. The goal of these procedures is to determine, as quickly and accurately as possible, whether a potential match is a "true positive" (i.e., the screened party is in fact the designated person or entity on the sanctions list) or a "false positive" (i.e., the match is attributable to a coincidental name similarity or other non-substantive overlap), and to take appropriate remedial action in the event of a true positive.
Step 1 — Initial Review and Escalation. Any potential match identified by the screening platform should be immediately escalated to Alistair Forde (General Counsel) and the designated Compliance Officer (once appointed). No transactions or dealings with the potentially matched party should be initiated, continued, or completed until the potential match has been resolved. If a potential match involves a counterparty with whom a transaction is in progress or imminent, all activity with respect to that counterparty should be suspended pending resolution, to the extent practicable and consistent with applicable legal obligations.
Step 2 — Enhanced Due Diligence. Upon escalation, the compliance team should conduct enhanced due diligence to determine whether the potential match is a true positive or a false positive. Enhanced due diligence measures may include:
(a) Comparing all available identifying information for the screened party (name, address, identification numbers, date of birth, nationality) against the identifying information for the designated person or entity on the sanctions list;
(b) Requesting additional identifying information from the counterparty, to the extent feasible and appropriate (e.g., requesting a copy of a government-issued identification document, certificate of incorporation, or beneficial ownership declaration);
(c) Reviewing publicly available information, including corporate registries, media reports, and government publications, for additional information about the screened party;
(d) Consulting the relevant sanctions list's identifying information, including any photographs, aliases, or additional identifiers published by the administering authority; and
(e) Consulting with regional compliance liaisons or local counsel for assistance in verifying identity information.
Step 3 — Legal Consultation. If the enhanced due diligence conducted in Step 2 does not conclusively resolve the potential match — that is, if the compliance team is unable to determine with reasonable confidence whether the match is a true positive or a false positive — the matter should be immediately referred to Calderwood & Harkness LLP (Jennifer Kwon, Responsible Partner) and/or Sandoval Compliance Solutions LLC (Rosa Medina, Lead Consultant) for further analysis and legal advice. Calderwood & Harkness LLP can assist with contacting OFAC's Compliance Hotline or submitting a formal inquiry to OFAC if necessary.
Step 4 — Remediation. If the enhanced due diligence and legal consultation process confirms that a potential match is a true positive — that is, the screened party is in fact a person or entity designated on an applicable sanctions list — the following remediation steps should be taken immediately:
(a) Cessation of dealings. All transactions, dealings, and business relationships with the designated person or entity should be immediately ceased. No payments should be made to or for the benefit of the designated person or entity, and no property or interests in property of the designated person or entity should be transferred, paid, exported, withdrawn, or otherwise dealt in.
(b) blocking or rejection measures. To the extent required by applicable sanctions regulations, implement blocking or rejection measures with respect to any property or interests in property of the designated person or entity that are in the possession or control of any Dunmore group entity. Under OFAC regulations, blocked property must be maintained in a blocked (frozen) account and reported to OFAC.
(c) Regulatory reporting. File any required reports with OFAC, including blocking reports (which must be filed with OFAC within ten (10) business days of the blocking action) and any annual reports of blocked property required by OFAC. If the designated person or entity is listed on EU or UK sanctions lists, file analogous reports with the European Commission and/or UK OFSI, as applicable. Consult with local counsel (Abayomi Chambers or Theron Moss & Associates SARL, as applicable) regarding any reporting requirements under Nigerian or Senegalese law.
(d) Assessment of impact on transaction documents. Assess the potential impact of the true positive match on the representations, warranties, and covenants contained in the Indenture, the Purchase Agreement, and the Side Letter — Sanctions Representations. In particular, determine whether the true positive match constitutes a breach of any representation or warranty or a violation of any covenant, and whether such breach or violation could constitute an Event of Default under Section 6.01 of the Indenture.
(e) Notification to Trustee. If the compliance team and Calderwood & Harkness LLP determine that the true positive match could constitute an Event of Default under the Indenture, or could otherwise materially affect the rights of the holders of the Notes, notify Northgate Trust Company, N.A. (as Trustee) of the situation. The notification should be coordinated with Calderwood & Harkness LLP to ensure that it is made in a manner that is consistent with Dunmore's legal obligations and preserves applicable privileges.
(f) Evaluation of indemnification obligations. Evaluate whether the true positive match requires notification to the Initial Purchasers (Ridgeline Capital Markets LLC, Clarion Securities Inc., and Pinnacle Partners LLC) under the indemnification provisions of Article VIII of the Purchase Agreement, and whether the matter could give rise to indemnification claims by the Initial Purchasers.
(g) Voluntary self-disclosure. In consultation with Calderwood & Harkness LLP, evaluate whether a voluntary self-disclosure to OFAC (or other applicable authority) is advisable. OFAC's enforcement guidelines provide that voluntary self-disclosure is a significant mitigating factor in the determination of civil penalties. No voluntary self-disclosure should be made without prior consultation with Calderwood & Harkness LLP.
Step 5 — Documentation. All screening results — whether negative (no matches) or positive (potential or confirmed matches) — and all steps taken in the resolution process should be thoroughly documented and maintained in a secure compliance file. Documentation should include, at a minimum:
(a) The date of the screening;
(b) The names of the persons and entities screened;
(c) The sanctions lists consulted;
(d) The screening platform and methodology used;
(e) The results of the screening, including any potential matches;
(f) For potential matches: the enhanced due diligence steps taken, the conclusions reached (true positive or false positive), and the basis for those conclusions;
(g) For true positives: all remediation steps taken, including communications with regulators, the Trustee, and the Initial Purchasers; and
(h) The name of the person or persons who conducted the screening and the person who reviewed and approved the results.
All compliance documentation should be retained for a minimum of five (5) years following the later of (a) the maturity of the Notes (May 1, 2032) or (b) the date of termination of the relevant counterparty relationship, as further described in Section IX.C below.
V. Nigeria-Specific Monitoring Considerations
A. OML 47 and OML 63 — Niger Delta Operations
Dunmore Nigeria E&P Ltd. is the operator of two significant oil mining leases in the Niger Delta region of Nigeria:
• OML 47: Proved reserves of 142.6 million barrels of oil equivalent (MMboe) with a PV-10 value of $2,840,000,000 as of December 31, 2024, as estimated by Duval Howard & Partners, Dunmore's independent reserve engineers.
• OML 63: Proved reserves of 87.3 MMboe with a PV-10 value of $1,620,000,000 as of December 31, 2024, also as estimated by Duval Howard & Partners.
Together, OML 47 and OML 63 represent the largest component of Dunmore's proved reserves and a substantial portion of the asset base securing the Notes. The value and strategic importance of these assets underscore the critical need for rigorous sanctions compliance in connection with Nigerian operations.
NNPC Back-In Rights. The Nigerian National Petroleum Company (NNPC) holds back-in rights in both OML 47 and OML 63 under the terms of the applicable production sharing contracts and Nigerian petroleum legislation. NNPC is a Nigerian state entity, and its sanctions status was confirmed as clear during the pre-closing screening completed by Sandoval on April 25, 2025. However, given the potential for changes in Nigerian political dynamics, including government reshuffles, changes in NNPC leadership, or geopolitical developments affecting Nigeria's relationships with sanctioned countries, NNPC and its subsidiaries and affiliates should be rescreened quarterly as part of the regular screening cycle. The compliance team should monitor for any designations of NNPC personnel, subsidiaries, or affiliates on OFAC, EU, UK, or UN sanctions lists.
Niger Delta Security Environment. The Niger Delta region has historically experienced security challenges, including militant activity, pipeline sabotage, and conflicts related to resource extraction. The compliance team should monitor for sanctions designations of militant groups, political figures, traditional rulers, or local government officials operating in the Niger Delta region that could affect Dunmore's operations or community development programs. Dunmore reported expenditures of $14.2 million on community development programs in Nigeria during fiscal year 2024, including payments to community development trusts, local contractors, and community liaison organizations. The sanctions status of the beneficiaries and intermediaries involved in these programs should be monitored to ensure that no payments are made, directly or indirectly, to or for the benefit of sanctioned persons.