DEBENTURE AND CHARGE
granted by
DUNMORE NIGERIA E&P LTD.
(as Chargor)
in favor of
NORTHGATE TRUST COMPANY, N.A.
(as Collateral Agent)
In connection with the $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 issued by Dunmore Energy Holdings Ltd. and Dunmore upstream Finance Corp.
Dated as of May 15, 2025
(Closing Date)
Prepared by Calderwood & Harkness LLP, 425 Lexington Avenue, New York, NY 10017, in coordination with Abayomi Chambers, 14 Broad Street, Victoria Island, Lagos, Nigeria.
Governed by the laws of the Federal Republic of Nigeria.
TABLE OF CONTENTS
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SECTION 1: PARTIES AND RECITALS
1.1 Parties
THIS DEBENTURE AND CHARGE (this "Debenture") is made as a deed on the 15th day of May 2025 (the "Closing Date"),
BETWEEN:
(1) DUNMORE NIGERIA E&P LTD., a limited company incorporated under the laws of the Federal Republic of Nigeria and registered with the Corporate Affairs Commission (the "CAC") under registration number RC-1487239, with its registered office at 7th Floor, Providence House, 12 Ozumba Mbadiwe Avenue, Victoria Island, Lagos, Nigeria (the "Chargor"); and
(2) NORTHGATE TRUST COMPANY, N.A., a national banking association organized and existing under the laws of the United States of America, acting in its capacity as Collateral Agent under the Indenture (as defined herein), with its Corporate Trust Office located at 100 Wall Street, Suite 1600, New York, NY 10005, United States of America (the "Collateral Agent").
The Collateral Agent acts for the benefit of the holders from time to time of the Notes (as defined herein) and the Trustee under the Indenture (as defined herein), and all references herein to the "Collateral Agent" shall be construed accordingly.
1.2 Recitals
WHEREAS:
(A) Dunmore Energy Holdings Ltd. ("DEH"), an exempted company incorporated under the laws of the Cayman Islands (Cayman Registry No. MC-384726), with its registered office c/o Maples Corporate Services Ltd., PO Box 309, Ugland House, George Town, Grand Cayman KY1-1104, Cayman Islands, and its principal executive offices at 14th Floor, Harbour Place Tower, 103 South Church Street, George Town, Grand Cayman KY1-1002, Cayman Islands, and Dunmore upstream Finance Corp. ("DUFC"), a corporation organized under the laws of the State of Delaware, United States of America (EIN 93-4728106), with its registered agent at Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005, United States of America (DEH and DUFC, collectively, the "Issuers"), have issued Eight Hundred and Fifty Million United States Dollars ($850,000,000) aggregate principal amount of 9.375% Senior Secured Notes due 2032 (the "Notes").
(B) The Notes were issued pursuant to an Indenture dated as of May 15, 2025 (as the same may be amended, supplemented, restated, or otherwise modified from time to time, the "Indenture"), among the Issuers, the Guarantors named therein, and Northgate Trust Company, N.A., acting in its dual capacity as Trustee and Collateral Agent thereunder. The Indenture sets forth the terms and conditions of the Notes, the guarantees thereof, and the security arrangements in connection therewith.
(C) The Chargor is a wholly-owned subsidiary of DEH, incorporated under the laws of the Federal Republic of Nigeria for the purpose of conducting petroleum exploration and production operations in Nigeria. The Chargor is a Guarantor under the Indenture and has provided an unconditional guarantee of the Issuers' obligations under the Notes and the Indenture.
(D) The Chargor is the operator of Oil Mining Lease 47 ("OML 47") and Oil Mining Lease 63 ("OML 63"), each located in the Niger Delta region of the Federal Republic of Nigeria. OML 47 and OML 63 were originally granted under the Petroleum Act (Cap. P10, Laws of the Federation of Nigeria 2004) and are now subject to the provisions of the Petroleum Industry Act 2021 (the "PIA") and regulations promulgated thereunder. The Chargor holds valid and subsisting rights under OML 47 and OML 63, subject to the back-in rights and participating interests of the Calderon Group.
(E) The Notes were offered and sold in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to persons outside the United States in reliance on Regulation S under the Securities Act.
(F) The Notes were purchased by the initial purchasers (the "Initial Purchasers") pursuant to a Purchase Agreement dated May 12, 2025 (the "Purchase Agreement"), among the Issuers, the Guarantors, and the Initial Purchasers. The Initial Purchasers and their respective purchase commitments are as follows:
(i) Ridgeline Capital Markets LLC — Fifty-five percent (55%) of the aggregate principal amount, representing Four Hundred Sixty-Seven Million Five Hundred Thousand United States Dollars ($467,500,000);
(ii) Clarion Securities Inc. — Thirty percent (30%) of the aggregate principal amount, representing Two Hundred Fifty-Five Million United States Dollars ($255,000,000); and
(iii) Pinnacle Partners LLC — Fifteen percent (15%) of the aggregate principal amount, representing One Hundred Twenty-Seven Million Five Hundred Thousand United States Dollars ($127,500,000).
(G) The Notes are secured by first-priority liens on, inter alia, equity interests in each Guarantor subsidiary, substantially all tangible and intangible assets of the Issuers and each Guarantor, intercompany receivables, material hydrocarbon offtake contracts, and assignment of insurance proceeds, in each case subject to Permitted Liens (as defined in the Indenture) and the Intercreditor Agreement (as defined herein). The security package has been structured to provide comprehensive collateral coverage across the Dunmore group's operating jurisdictions, including the United States, the Cayman Islands, England and Wales, the Federal Republic of Nigeria, and the Republic of Senegal.
(H) The Chargor has agreed to grant the security interests and charges described herein in favor of the Collateral Agent as security for the full and punctual payment and performance of the Secured Obligations (as defined herein), and the Collateral Agent has agreed to hold such security for the benefit of the holders of the Notes and the Trustee, all in accordance with and subject to the terms and conditions of the Indenture, the Intercreditor Agreement, and this Debenture.
(I) The Intercreditor Agreement dated as of May 15, 2025 (as the same may be amended, supplemented, restated, or otherwise modified from time to time, the "Intercreditor Agreement") has been entered into among Northgate Trust Company, N.A. (acting in its capacity as Notes Collateral Agent), Velthorn National Bank, N.A. (acting in its capacity as administrative agent (the "ABL Agent") under the Seven Hundred and Fifty Million United States Dollar ($750,000,000) asset-based lending revolving credit facility (the "ABL Revolving Credit Facility"), of which Four Hundred and Seventy Million United States Dollars ($470,000,000) is drawn as of the date hereof), the Issuers, and the Guarantors. The Intercreditor Agreement governs the relative priorities, enforcement rights, and remedies of the Collateral Agent and the ABL Agent with respect to the collateral securing the Notes and the ABL Revolving Credit Facility, respectively. Under the Intercreditor Agreement, the Collateral Agent holds a first-priority lien on Notes Priority Collateral (which includes property, plant and equipment, equity interests, intellectual property, and material contracts), and the ABL Agent holds a first-priority lien on ABL Priority Collateral (which includes accounts receivable, inventory, and deposit accounts).
(J) This Debenture has been prepared in coordination with Abayomi Chambers (Chidinma Okafor, Lead Partner), 14 Broad Street, Victoria Island, Lagos, Nigeria, Nigerian counsel to the Issuers and the Chargor, and the provisions hereof have been reviewed for compliance with the laws of the Federal Republic of Nigeria, including the Companies and Allied Matters Act 2020, the Petroleum Industry Act 2021, and all other applicable Nigerian legislation and regulatory requirements.
NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 2: DEFINITIONS AND INTERPRETATION
2.1 Definitions
In this Debenture, unless the context otherwise requires, the following terms shall have the meanings set forth below:
"ABL Agent" means Velthorn National Bank, N.A., a national banking association organized and existing under the laws of the United States of America, acting in its capacity as administrative agent under the ABL Revolving Credit Facility, and any successor administrative agent appointed thereunder.
"ABL Priority Collateral" means accounts receivable, inventory, and deposit accounts, and the proceeds thereof, as more particularly defined in the Intercreditor Agreement, over which the ABL Agent holds a first-priority lien pursuant to the Intercreditor Agreement.
"ABL Revolving Credit Facility" means the $750,000,000 asset-based lending revolving credit facility established pursuant to the ABL Credit Agreement dated as of May 15, 2025, among the Issuers, the Guarantors, the lenders party thereto, and the ABL Agent, as the same may be amended, supplemented, restated, replaced, or refinanced from time to time.
"Authorized Representative" means any person authorized by resolution of the board of directors of the Chargor, or by such other corporate authorization as may be appropriate under the Chargor's memorandum and articles of association, to act on behalf of the Chargor for purposes of this Debenture and the transactions contemplated hereby.
"CAC" means the Corporate Affairs Commission of the Federal Republic of Nigeria, established under the Companies and Allied Matters Act 2020, and any successor body or agency.
"CAMA" or "CAMA 2020" means the Companies and Allied Matters Act 2020 of the Federal Republic of Nigeria, as the same may be amended, supplemented, or replaced from time to time.
"Cayar Offshore Block" means the offshore petroleum exploration and production block located in the territorial waters of the Republic of Senegal, held by Dunmore Senegal S.A. This block is defined herein for cross-reference purposes only and does not constitute a Charged Asset under this Debenture.
"Charged Assets" means all assets of the Chargor which are subject to the fixed charges and floating charge created under Section 3 of this Debenture, as more particularly described therein and in Schedule 1 hereto, and includes all present and future assets of the Chargor to the extent subject to such charges.
"Closing Date" means May 15, 2025, being the date on which the Notes are issued and the transactions contemplated by the Indenture and the Security Documents are consummated.
"Collateral Agent" means Northgate Trust Company, N.A., acting in its capacity as collateral agent under the Indenture and the Security Documents, and any successor collateral agent appointed in accordance with the terms of the Indenture.
"DPR" means the Department of Petroleum Resources of the Federal Republic of Nigeria, the regulatory functions of which have been assumed by the Nigerian upstream Petroleum Regulatory Commission (the "NUPRC") pursuant to the Petroleum Industry Act 2021. References herein to the DPR shall, where the context so requires, be construed as references to the NUPRC.
"Encumbrance" means any mortgage, charge (whether fixed or floating), pledge, lien, assignment by way of security, hypothecation, security interest, title retention arrangement, or any other agreement or arrangement having the effect of creating security over any asset, and "Encumber" shall be construed accordingly.
"Event of Default" means any event or circumstance described in Section 8.1 of this Debenture or any event of default as defined in the Indenture.
"Final Discharge Date" means the date on which all Secured Obligations have been unconditionally and irrevocably paid and discharged in full and no further Secured Obligations are capable of arising under the Notes, the Indenture, or any Security Document.
"Guaranteed Obligations" means all present and future obligations and liabilities (whether actual or contingent, whether owed jointly or severally, and whether owed as principal or surety) of the Chargor in its capacity as Guarantor under the Indenture, including the Chargor's unconditional guarantee of the Issuers' obligations under the Notes.
"Hydrocarbon Offtake Contracts" means all contracts, agreements, and arrangements (including spot, term, and long-term contracts) for the sale, export, processing, transportation, and delivery of crude oil, natural gas, condensate, natural gas liquids, and other hydrocarbons produced from or attributable to OML 47 and OML 63, as more particularly described in Schedule 2 hereto, and includes any replacement, renewal, or successor contract entered into in respect of such hydrocarbons.
"Indenture" means the Indenture dated as of May 15, 2025, among the Issuers, the Guarantors named therein, and Northgate Trust Company, N.A., as Trustee and Collateral Agent, governing the Notes, as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of May 15, 2025, among the Collateral Agent, the ABL Agent, the Issuers, and the Guarantors, as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with its terms.
"Issuers" means, collectively, Dunmore Energy Holdings Ltd. and Dunmore upstream Finance Corp., and their respective successors and permitted assigns under the Indenture.
"JOA" means any joint operating agreement entered into by the Chargor in connection with the exploration, development, production, and operation of OML 47 or OML 63, as applicable.
"NNPC" means the Calderon Group, the successor entity to the Nigerian National Petroleum Corporation, established pursuant to the Petroleum Industry Act 2021, which holds back-in rights and participating interests in OML 47 and OML 63.
"Notes" means the $850,000,000 aggregate principal amount of 9.375% Senior Secured Notes due 2032 issued by the Issuers pursuant to the Indenture.
"Notes Priority Collateral" means property, plant and equipment, equity interests, intellectual property, and material contracts, and the proceeds thereof, as more particularly defined in the Intercreditor Agreement, over which the Collateral Agent holds a first-priority lien pursuant to the Intercreditor Agreement.
"NUPRC" means the Nigerian upstream Petroleum Regulatory Commission, established pursuant to the Petroleum Industry Act 2021 as successor to the Department of Petroleum Resources.
"OML 47" means Oil Mining Lease 47, located in the Niger Delta region of the Federal Republic of Nigeria, operated by the Chargor, as more particularly described in Part A of Schedule 1 hereto.
"OML 63" means Oil Mining Lease 63, located in the Niger Delta region of the Federal Republic of Nigeria, operated by the Chargor, as more particularly described in Part B of Schedule 1 hereto.
"Permitted Liens" has the meaning ascribed to such term in the Indenture, and the provisions of the Indenture relating to Permitted Liens are hereby incorporated by reference.
"Petroleum Industry Act" or "PIA" means the Petroleum Industry Act 2021 of the Federal Republic of Nigeria (Act No. 6 of 2021), as the same may be amended, supplemented, or replaced from time to time, together with all regulations, rules, directives, and guidelines promulgated thereunder.
"Proved Reserves" means the estimated quantities of crude oil, natural gas, and related hydrocarbons that geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions, as determined by Duval Howard & Partners in their independent reserves report as of December 31, 2024. As of such date, the Proved Reserves attributable to the Chargor's interests in OML 47 and OML 63 are as follows:
(i) OML 47: 142.6 million barrels of oil equivalent ("MMboe"), with a present value discounted at 10% per annum ("PV-10") of $2,840,000,000; and
(ii) OML 63: 87.3 MMboe, with a PV-10 of $1,620,000,000,
for a combined total of 229.9 MMboe and a combined PV-10 of $4,460,000,000.
"Receiver" means any receiver, receiver and manager, or administrative receiver appointed under Section 8.3 of this Debenture or otherwise in connection with the enforcement of the charges created herein.
"Secured Obligations" means all present and future obligations and liabilities (whether actual or contingent, whether owed jointly or severally, and whether owed as principal, surety, or otherwise) of the Issuers and the Guarantors to the Collateral Agent, the Trustee, and the holders of the Notes under or in connection with the Notes, the Indenture, and the Security Documents, including (without limitation) all obligations in respect of principal, interest (including default interest), premium (if any), fees, costs, expenses, indemnities, and other amounts payable thereunder.
"Security Documents" means this Debenture and all other collateral agreements, pledges, security agreements, assignments, charges, mortgages, and other security documents entered into in connection with the Notes and the Indenture, including (without limitation) the Pledge and Security Agreement governed by the laws of the State of New York, the debenture granted by Dunmore Trading Ltd. governed by English law, and the nantissement and cession fiduciaire granted by Dunmore Senegal S.A. governed by the laws of the Republic of Senegal.
"Trustee" means Northgate Trust Company, N.A., acting in its capacity as trustee under the Indenture, and any successor trustee appointed in accordance with the terms of the Indenture.
2.2 Interpretation
In this Debenture, unless the context otherwise requires:
(a) References to any statute, enactment, order, regulation, rule, or other similar instrument shall be construed as a reference to the statute, enactment, order, regulation, rule, or instrument as amended, re-enacted, consolidated, or replaced from time to time, and shall include any subordinate legislation, regulation, rule, directive, or guideline made from time to time under that statute, enactment, order, regulation, rule, or instrument. Without limiting the generality of the foregoing, references to the Petroleum Act (Cap. P10, Laws of the Federation of Nigeria 2004) shall be construed as including the Petroleum Industry Act 2021 and all regulations, rules, and directives promulgated thereunder by the NUPRC or any other competent Nigerian governmental authority.
(b) As used herein and consistent with Nigerian legal terminology, a "charge" includes both fixed charges and floating charges, each having the meaning and effect ascribed under Nigerian law, including under the Companies and Allied Matters Act 2020 and applicable judicial precedent. A "debenture" has the meaning ascribed to such term under Nigerian law, including as used in Part F of CAMA 2020 and relevant provisions of the Federal High Court Act and other applicable legislation.
(c) Section headings, clause headings, and the table of contents are included for convenience of reference only and shall not affect the interpretation or construction of this Debenture.
(d) All references to currency or monetary amounts shall be deemed to be references to lawful money of the United States of America unless otherwise expressly specified.
(e) The word "including" and words of similar import shall mean "including, without limitation," and shall not be construed to limit any general statement to the specific or similar items or matters immediately following it.
(f) References to the Indenture, the Intercreditor Agreement, and any other document or agreement shall be deemed to be references to such document or agreement as amended, supplemented, restated, replaced, or otherwise modified from time to time in accordance with its terms (and, where applicable, subject to any restrictions on amendment contained in the Indenture or the Intercreditor Agreement).
(g) In the event of any conflict or inconsistency between the provisions of this Debenture and the provisions of the Indenture, the provisions of the Indenture shall prevail, except with respect to matters governed by or determined under the laws of the Federal Republic of Nigeria (including matters relating to the creation, perfection, priority, and enforcement of charges under Nigerian law, the requirements of CAMA 2020, the Petroleum Industry Act 2021, and the jurisdiction and procedures of Nigerian courts and regulatory authorities), in which case the provisions of this Debenture shall prevail.
(h) References to "persons" include individuals, corporations, partnerships, joint ventures, trusts, unincorporated associations, governmental authorities, and any other entities of whatever nature.
(i) Words importing the singular include the plural and vice versa, and words importing a gender include every gender.
(j) References to Sections, Schedules, and Exhibits are references to sections of, and schedules and exhibits to, this Debenture unless otherwise specified.
2.3 Nigerian Law Concepts
For the avoidance of doubt and for the benefit of parties and holders who may be unfamiliar with Nigerian legal concepts, the following principles of Nigerian law are relevant to this Debenture:
(a) Fixed Charge. Under Nigerian law, and in particular under the Companies and Allied Matters Act 2020, a fixed charge is a charge that attaches to specific, identified assets of the chargor and prevents the chargor from dealing with those assets in the ordinary course of business without the consent of the chargee. A fixed charge gives the chargee a proprietary interest in the specific assets charged, and such assets are not available to the chargor's unsecured creditors or to a liquidator (subject to registration requirements and applicable statutory priorities). For a fixed charge to be effective under Nigerian law, the chargee must exercise a sufficient degree of control over the charged assets to prevent the chargor from dealing with them freely.
(b) Floating Charge. A floating charge under Nigerian law is a charge that "floats" over a class or category of assets of the chargor (which may be present or future assets) and does not attach to any specific asset until crystallization occurs. Prior to crystallization, the chargor is free to deal with the charged assets in the ordinary course of its business. Upon the occurrence of a crystallization event (whether automatic or by notice), the floating charge "crystallizes" and attaches to all assets within the charged class then owned by the chargor, converting into a fixed charge. The floating charge is recognized under CAMA 2020 and by Nigerian judicial precedent as a valid form of security.
(c) Registration Requirements. Part F of CAMA 2020 requires that certain charges created by a company incorporated in Nigeria be registered with the Corporate Affairs Commission within ninety (90) days of the date of creation of the charge. Failure to register a registrable charge within the prescribed period renders the charge void against the liquidator and any creditor of the company, although the underlying debt remains valid and enforceable. The Chargor is obligated under this Debenture to ensure timely registration of the charges created herein with the CAC.
(d) Priority of Charges. Under Nigerian law, the priority of charges is generally determined by the order of registration at the CAC, subject to the following principles: (i) a fixed charge has priority over a floating charge created over the same assets (regardless of the order of registration), unless the fixed charge was created with notice of a negative pledge restriction in a prior floating charge; (ii) as between two floating charges over the same assets, priority is generally determined by the order of creation; and (iii) the rights of preferential creditors under CAMA 2020 (including employees' wages and government taxes) may take priority over the claims of a floating charge holder upon crystallization. The priority arrangements established by the Intercreditor Agreement are intended to be respected and enforced to the maximum extent permitted by Nigerian law.
SECTION 3: CREATION OF CHARGES
3.1 Fixed Charge
The Chargor, as beneficial owner, hereby charges in favor of the Collateral Agent, by way of first fixed charge, all of the Chargor's right, title, interest, and benefit (whether present or future, actual or contingent) in, to, and under the following assets (collectively, and together with the assets charged pursuant to Section 3.2, the "Charged Assets"):
(a) Oil Mining Leases. All of the Chargor's right, title, and interest in and to OML 47 and OML 63, as more particularly described in Schedule 1 hereto, including all petroleum exploration and production rights, all rights to explore for, develop, produce, extract, process, treat, store, transport, sell, and export crude oil, natural gas, condensate, natural gas liquids, and all other hydrocarbons and minerals, all licenses, permits, consents, and approvals granted by the DPR, the NUPRC, the Federal Ministry of Petroleum Resources, and the Federal Government of Nigeria in connection with OML 47 and OML 63, and all renewals, extensions, amendments, and replacements thereof, in each case subject to the provisions of the Petroleum Industry Act 2021 and the back-in rights and participating interests of NNPC as described in Section 3.4 hereof.
(b) Fixed Assets. All plant, machinery, equipment, pipelines, flow stations, gas processing facilities, export terminals, tank farms, platforms (whether fixed or floating), subsea infrastructure, wellheads, drilling equipment, production equipment, transportation equipment, and all other fixed assets and tangible personal property located on, used in connection with, or forming part of the operations on OML 47 and OML 63, including all additions, improvements, accessions, and replacements thereto.
(c) Intercompany Receivables. All intercompany receivables owed to the Chargor by any member of the Dunmore group (including DEH, DUFC, Dunmore Trading Ltd., Dunmore Senegal S.A., and any other subsidiary or affiliate of DEH), whether now existing or hereafter arising, as more particularly described in Schedule 3 hereto, including all rights to receive payment thereunder and all proceeds thereof.
(d) Hydrocarbon Offtake Contracts. All material Hydrocarbon Offtake Contracts, as more particularly described in Schedule 2 hereto, and all rights, benefits, entitlements, claims, and remedies of the Chargor thereunder, including all rights to receive payment for hydrocarbons sold, exported, or delivered pursuant to such contracts.
(e) Joint Operating Agreements. All rights, benefits, entitlements, and interests of the Chargor under all joint operating agreements relating to OML 47 and OML 63, including all rights to operatorship, cost recovery, production sharing, and revenue sharing, in each case subject to the back-in rights and participating interests of NNPC as described in Section 3.4 hereof.
(f) intellectual Property. All patents, patent applications, trademarks, service marks, trade names, copyrights, trade secrets, know-how, proprietary technology, geological and geophysical data, seismic data, reservoir models, drilling records, production data, and all other intellectual property rights owned by or licensed to the Chargor and used in connection with its Nigerian operations, together with all registrations, applications, renewals, and extensions relating thereto and all goodwill associated therewith.
(g) Insurance Policies and Proceeds. All insurance policies and contracts of insurance maintained by the Chargor covering the Charged Assets, including all-risk property insurance, well control insurance, third-party liability insurance, environmental liability insurance, business interruption insurance, and political risk insurance, as more particularly described in Schedule 4 hereto, together with all rights, claims, and entitlements to insurance proceeds, indemnity payments, and other amounts payable under such policies.
(h) Book Debts and Receivables. All book debts, trade receivables, and other receivables of the Chargor (to the extent such book debts and receivables constitute Notes Priority Collateral and not ABL Priority Collateral under the Intercreditor Agreement), including all rights to receive payment thereunder and all proceeds thereof.
(i) Equity Interests. All shares, equity interests, membership interests, partnership interests, and other ownership interests held by the Chargor in any subsidiary, joint venture, or other entity, whether now existing or hereafter acquired, together with all dividends, distributions, and other amounts payable in respect thereof and all rights to vote or consent.
The fixed charges created in this Section 3.1 are intended to create immediate, specific, and proprietary security interests in the assets described above, and the Chargor acknowledges that it shall not be entitled to deal with any of the assets subject to such fixed charges without the prior written consent of the Collateral Agent, except as expressly permitted by the Indenture or this Debenture.
3.2 Floating Charge
The Chargor, as beneficial owner, hereby charges in favor of the Collateral Agent, by way of first floating charge, all of the Chargor's assets, property, and undertaking, both present and future, of whatsoever nature and wheresoever situate, which are not otherwise effectively subject to the fixed charges created in Section 3.1 above, including (without limitation):
(a) Moveable Assets. All moveable assets, stock-in-trade, inventory, consumables, spare parts, tools, vehicles, and other tangible personal property of the Chargor, to the extent not constituting ABL Priority Collateral under the Intercreditor Agreement.
(b) Future-Acquired Assets. All assets acquired by the Chargor after the date hereof, to the extent not otherwise subject to the fixed charges created in Section 3.1 or constituting ABL Priority Collateral.
(c) Goodwill and Uncalled Capital. All goodwill of the Chargor, all uncalled capital and calls made but not paid, and all rights in respect thereof.
(d) Residual Assets. All other assets of the Chargor of whatsoever nature, whether tangible or intangible, real or personal, present or future, that are not otherwise effectively subject to the fixed charges created in Section 3.1 above.
The floating charge created in this Section 3.2 shall float over the assets described above, and the Chargor shall be free to deal with such assets in the ordinary course of its business until crystallization of the floating charge in accordance with Section 7 of this Debenture.
3.3 Relationship with Intercreditor Agreement
The charges created under Sections 3.1 and 3.2 of this Debenture are created subject to, and shall be held and enforced in accordance with, the terms and conditions of the Intercreditor Agreement. In particular, and without limiting the generality of the foregoing:
(a) With respect to ABL Priority Collateral (being accounts receivable, inventory, and deposit accounts, as defined in the Intercreditor Agreement), the lien and security interest of the ABL Agent shall have first priority. The charges created herein over any ABL Priority Collateral are and shall be subordinate and junior in priority to the security interest of the ABL Agent in such ABL Priority Collateral, and the Collateral Agent acknowledges and agrees that its charges over ABL Priority Collateral are subject to the rights and remedies of the ABL Agent as set forth in the Intercreditor Agreement.
(b) With respect to Notes Priority Collateral (being property, plant and equipment, equity interests, intellectual property, and material contracts, as defined in the Intercreditor Agreement), the charges created herein shall have first priority, and the ABL Agent's lien on such Notes Priority Collateral (if any) shall be subordinate and junior to the charges created herein.
(c) The parties hereto acknowledge and agree that the enforcement waterfall, standstill periods, turnover provisions, and all other intercreditor arrangements set forth in the Intercreditor Agreement shall apply to the exercise of any right, remedy, or power under this Debenture, and the Collateral Agent shall not take any action under this Debenture that is inconsistent with the Intercreditor Agreement.
3.4 Restrictions on NNPC Back-In Rights
The parties hereto acknowledge and agree that the Calderon Group holds back-in rights, participating interests, and other statutory and contractual rights in OML 47 and OML 63 under applicable Nigerian petroleum legislation, including the Petroleum Industry Act 2021 and the terms of the production sharing contracts, joint operating agreements, and other arrangements relating to such oil mining leases. The charges created under this Debenture are expressly subject to, and do not purport to create, extend, or impose any Encumbrance over, the NNPC's participating interest, back-in rights, or any other rights of NNPC in or relating to OML 47 or OML 63.
The Chargor represents and warrants that the creation of the charges herein does not violate, conflict with, or constitute a default under any agreement, arrangement, or understanding between the Chargor and NNPC, and that the Chargor has obtained all consents and approvals required from NNPC (if any) for the creation of the charges herein, or that no such consents or approvals are required under applicable Nigerian law or contractual arrangements.
3.5 Negative Pledge
The Chargor hereby covenants and undertakes that it shall not create, grant, permit, or suffer to subsist any Encumbrance over any of the Charged Assets, other than Permitted Liens as defined in the Indenture. The Chargor acknowledges that this negative pledge is a material term of this Debenture and that any breach thereof may, if not cured within the applicable cure period, constitute an Event of Default hereunder and under the Indenture.
SECTION 4: SECURED OBLIGATIONS
4.1 Obligations Secured
This Debenture secures the full and punctual payment, performance, and discharge of all Secured Obligations, including (without limitation):
(a) All amounts of principal payable under the Notes, being Eight Hundred and Fifty Million United States Dollars ($850,000,000) in aggregate principal amount, payable at maturity or upon earlier acceleration or redemption in accordance with the terms of the Indenture.
(b) All interest payable on the Notes at the rate of 9.375% per annum, payable semi-annually in arrear on May 1 and November 1 of each year, commencing November 1, 2025, with each semi-annual interest payment being Thirty-Nine Million Eight Hundred Forty-Three Thousand Seven Hundred and Fifty United States Dollars ($39,843,750), together with any default interest payable in accordance with the Indenture.
(c) All amounts payable by the Chargor under its Guarantee contained in the Indenture, including all amounts that the Chargor may be required to pay as guarantor of the Issuers' obligations under the Notes and the Indenture, whether as primary obligor, surety, or otherwise.
(d) All costs, charges, expenses, fees, and indemnities payable to the Collateral Agent and the Trustee under the Indenture, this Debenture, and the other Security Documents, including legal fees, enforcement costs, and the costs of appointing and remunerating any Receiver.
(e) All other obligations and liabilities (whether actual or contingent, whether owed jointly or severally, and whether owed as principal, surety, or otherwise) of the Issuers and the Guarantors to the Collateral Agent, the Trustee, and the holders of the Notes under or in connection with the Notes, the Indenture, and the Security Documents.
4.2 Continuing Security
The charges created under this Debenture are continuing security for the Secured Obligations and shall not be satisfied, discharged, or affected by any intermediate payment or settlement of the whole or any part of the Secured Obligations, or by any settlement of account, or by any other matter or thing whatsoever, and shall remain in full force and effect until the Final Discharge Date. The Chargor acknowledges that the charges created herein shall not be discharged by reason of any partial payment, any compounding, compromise, or other arrangement made with any person liable for the Secured Obligations, any extension of time or indulgence granted by the Collateral Agent, the Trustee, or the holders of the Notes, or any release or discharge of any other security for the Secured Obligations.
4.3 Additional Security
The charges created under this Debenture are in addition to, and not in substitution for, any other Encumbrance, guarantee, indemnity, or other security now or hereafter held by the Collateral Agent, the Trustee, or any holder of the Notes in respect of the Secured Obligations. Without limiting the generality of the foregoing, the charges created herein are in addition to the following Security Documents:
(a) The Pledge and Security Agreement (U.S. Collateral Agreement) governed by the laws of the State of New York, granting security interests in certain assets of the Issuers and certain U.S. Guarantors.
(b) The Debenture (Collateral Agreement — England) governed by the laws of England and Wales, granted by Dunmore Trading Ltd. in favor of the Collateral Agent, creating charges over the assets of Dunmore Trading Ltd.
(c) The Nantissement and Cession Fiduciaire (Collateral Agreement — Senegal) governed by the laws of the Republic of Senegal, granted by Dunmore Senegal S.A. in favor of the Collateral Agent, creating security over certain assets of Dunmore Senegal S.A., including the Cayar Offshore Block.
The Collateral Agent shall be entitled to enforce this Debenture and all other Security Documents in any order and in any manner as it sees fit, subject always to the terms of the Intercreditor Agreement.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF THE CHARGOR
The Chargor hereby makes the following representations and warranties to the Collateral Agent, in each case as of the date hereof and (where so specified in the Indenture) on each date on which such representations and warranties are deemed to be repeated:
5.1 Corporate Status and Capacity
The Chargor is a limited company duly incorporated, validly existing, and in good standing under the laws of the Federal Republic of Nigeria, registered with the Corporate Affairs Commission under registration number RC-1487239. The Chargor has full corporate power and authority to own, hold, and operate its assets (including OML 47 and OML 63), to carry on its business as presently conducted and as contemplated by the Indenture and the Security Documents, and to execute, deliver, and perform its obligations under this Debenture. The execution, delivery, and performance of this Debenture by the Chargor have been duly authorized by all necessary corporate action of the Chargor, including resolutions of the board of directors of the Chargor, as set forth in the consolidated Guarantor Resolutions (cross-referenced in Exhibit A hereto), and no further corporate authorization or action on the part of the Chargor is required.
5.2 Legal Validity
This Debenture constitutes the legal, valid, and binding obligation of the Chargor, enforceable against the Chargor in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally under Nigerian law, (ii) general principles of equity (whether considered in a proceeding in equity or at law), (iii) the requirement for registration of the charges created herein at the CAC in accordance with Part F of CAMA 2020, and (iv) such other enforceability exceptions as may be customary under Nigerian law. The charges created under Sections 3.1 and 3.2 of this Debenture constitute valid first-priority fixed and floating charges over the Charged Assets, subject to (x) timely registration at the CAC, (y) the terms of the Intercreditor Agreement with respect to ABL Priority Collateral, and (z) the rights of preferential creditors under CAMA 2020.
5.3 No Conflict
The execution, delivery, and performance by the Chargor of this Debenture, and the creation of the charges herein, do not and will not:
(a) conflict with, result in a breach of, or constitute a default under the memorandum and articles of association or other constitutional documents of the Chargor;
(b) conflict with, result in a breach of, or constitute a default under any law, rule, regulation, directive, order, judgment, decree, or award of any governmental authority of the Federal Republic of Nigeria or any political subdivision thereof, including the Petroleum Industry Act 2021, the Companies and Allied Matters Act 2020, and any regulations promulgated thereunder;
(c) conflict with, result in a breach of, or constitute a default under any order, injunction, or decree of any court, tribunal, or arbitral body having jurisdiction over the Chargor or any of its assets;
(d) conflict with, result in a breach of, or constitute a default under any material contract, agreement, instrument, or arrangement to which the Chargor is a party or by which the Chargor or any of its assets is bound; or
(e) conflict with, infringe, or violate the back-in rights, participating interests, or other contractual or statutory rights of NNPC in or relating to OML 47 or OML 63, or any participation agreement or other arrangement between the Chargor and NNPC.
5.4 Title to Assets
The Chargor is the sole beneficial owner of the Charged Assets, free and clear of all Encumbrances other than Permitted Liens, subject to the back-in rights and participating interests of NNPC in OML 47 and OML 63 as described in Section 3.4 hereof. The Chargor has good and valid title to OML 47 and OML 63, and such oil mining leases are valid and subsisting under the laws of the Federal Republic of Nigeria and have not been revoked, terminated, surrendered, or forfeited. The Chargor has the right to grant the charges created herein over the Charged Assets, and no consent, approval, or authorization of any third party (other than NNPC, to the extent required and obtained) is required for the creation of such charges.
5.5 Regulatory Compliance
The Chargor holds all necessary licenses, permits, consents, approvals, authorizations, and certificates from the DPR (now the NUPRC), the Federal Ministry of Petroleum Resources, the National Environmental Standards and Regulations Enforcement Agency ("NESREA"), and all other relevant Nigerian regulatory authorities required for the conduct of its petroleum exploration and production operations on OML 47 and OML 63. All such licenses, permits, and approvals are valid, subsisting, and in full force and effect, and the Chargor is not in breach of or default under any such license, permit, or approval. The Chargor is in compliance in all material respects with the Petroleum Industry Act 2021, all applicable environmental laws and regulations, and all other applicable laws and regulations of the Federal Republic of Nigeria.
5.6 OFAC and Sanctions Compliance
Neither the Chargor nor any of its directors, officers, employees, or, to the Chargor's knowledge after reasonable inquiry, agents or representatives:
(a) is a Specially Designated National or blocked Person as designated by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), or is listed on the OFAC Specially Designated Nationals and blocked Persons List (the "SDN List"), the OFAC Sectoral Sanctions Identifications List (the "SSI List"), the European Union Consolidated Sanctions List, or the United Kingdom Office of Financial Sanctions Implementation ("OFSI") Consolidated List of Financial Sanctions Targets;
(b) is located, organized, or resident in a country or territory that is the subject or target of comprehensive territorial sanctions (including, as of the date hereof, Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine);
(c) is owned or controlled by, or acting on behalf of, any person described in clause (a) or (b) above; or
(d) has been the subject of any sanctions-related enforcement action, investigation, or inquiry by OFAC, the U.S. Department of State, the European Commission, OFSI, or any other governmental authority.
The Chargor will not use the proceeds of the Notes, directly or indirectly, or lend, contribute, or otherwise make available such proceeds to any subsidiary, affiliate, joint venture partner, or other person, for the purpose of funding or facilitating any activities of or business with any person, or in any country or territory, that at the time of such funding or facilitation is the subject of sanctions administered by OFAC, the European Union, the United Kingdom, or any other applicable governmental authority. The Chargor notes that a comprehensive sanctions screening was conducted by Sandoval Compliance Solutions LLC (Rosa Medina, Senior Compliance Analyst) with respect to the Chargor and its directors, officers, and material counterparties, completed April 25, 2025, with no adverse findings or matches identified.
5.7 Environmental
The Chargor has disclosed to the Collateral Agent, the Trustee, and the Initial Purchasers all material environmental liabilities, claims, proceedings, and remediation obligations relating to OML 47 and OML 63, including all matters identified in the environmental and social due diligence review conducted in connection with the offering of the Notes. The Chargor has not received any notice from any Nigerian governmental authority (including NESREA and the NUPRC) of any material environmental violation, contamination, or remediation obligation relating to its operations on OML 47 or OML 63 that has not been previously disclosed. The environmental, social, and governance ("ESG") data and disclosures relating to the Chargor's operations, as prepared and compiled by Barrisford Advisory Group LLC for inclusion in the Offering Memorandum, are, to the Chargor's knowledge, materially accurate and complete as of the date of the Offering Memorandum.
5.8 Taxation
The Chargor has filed all tax returns required to be filed, and has paid all taxes, duties, levies, assessments, and governmental charges that are due and payable under the laws of the Federal Republic of Nigeria, including petroleum profits tax, companies income tax, education tax, value-added tax, and withholding tax. There are no outstanding tax assessments, claims, or disputes against the Chargor that could reasonably be expected to have a material adverse effect on the Chargor's financial condition or its ability to perform its obligations under this Debenture.
No withholding or deduction for or on account of Nigerian taxes is required to be made from any payment by the Chargor under this Debenture or the Indenture. If any such withholding or deduction is required by law, the Chargor shall pay such additional amounts as may be necessary to ensure that the net amount received by the Collateral Agent, the Trustee, or the holders of the Notes (as applicable) after such withholding or deduction equals the amount that would have been received absent such withholding or deduction, all in accordance with the gross-up provisions contained in the Indenture.
5.9 Litigation
There is no litigation, arbitration, administrative proceeding, regulatory investigation, or other legal proceeding pending or, to the Chargor's knowledge after reasonable inquiry, threatened against the Chargor or any of its assets before any court, tribunal, arbitral body, or governmental authority in the Federal Republic of Nigeria or any other jurisdiction, that would, if adversely determined, have a material adverse effect on (i) the Chargor's business, financial condition, or results of operations, (ii) the Chargor's ability to perform its obligations under this Debenture, the Indenture, or any other Security Document, (iii) the validity or enforceability of this Debenture or the charges created herein, or (iv) the Chargor's rights under OML 47 or OML 63.
5.10 Reserves
The Chargor confirms the accuracy and completeness of the proved reserves information provided to Duval Howard & Partners (Dr. Evelyn Marchetti, Lead Petroleum Engineer) in connection with the preparation of the independent reserves report as of December 31, 2024. The Chargor represents and warrants that:
(a) The proved reserves attributable to the Chargor's interest in OML 47 are 142.6 million barrels of oil equivalent (142.6 MMboe), with a PV-10 of Two Billion Eight Hundred Forty Million United States Dollars ($2,840,000,000);
(b) The proved reserves attributable to the Chargor's interest in OML 63 are 87.3 million barrels of oil equivalent (87.3 MMboe), with a PV-10 of One Billion Six Hundred Twenty Million United States Dollars ($1,620,000,000); and
(c) The combined proved reserves attributable to the Chargor's interests in OML 47 and OML 63 are 229.9 million barrels of oil equivalent (229.9 MMboe), with a combined PV-10 of Four Billion Four Hundred Sixty Million United States Dollars ($4,460,000,000).
The geological, geophysical, engineering, and production data provided by the Chargor to Duval Howard & Partners in connection with the preparation of such reserves report was materially accurate and complete as of the date of such report, and the Chargor is not aware of any material change in circumstances since December 31, 2024 that would cause the estimates contained in such report to be materially inaccurate or misleading.
SECTION 6: COVENANTS OF THE CHARGOR
The Chargor hereby covenants and undertakes with the Collateral Agent as follows, and agrees that such covenants and undertakings shall continue in force from the date hereof until the Final Discharge Date:
6.1 Positive Covenants
(a) Corporate Existence. The Chargor shall maintain its corporate existence, registration, and good standing under the laws of the Federal Republic of Nigeria and shall keep its registration with the CAC current and in good order.
(b) Licenses and Permits. The Chargor shall maintain in full force and effect all licenses, permits, consents, approvals, authorizations, and certificates from the NUPRC, the Federal Ministry of Petroleum Resources, NESREA, and all other relevant Nigerian regulatory authorities necessary for the conduct of its petroleum exploration and production operations on OML 47 and OML 63, and shall promptly apply for and obtain any renewal or extension thereof.
(c) Compliance with Laws. The Chargor shall comply in all material respects with the Petroleum Industry Act 2021 and all applicable laws, regulations, rules, directives, and guidelines of the Federal Republic of Nigeria, including environmental laws, anti-corruption laws, and tax laws.
(d) Taxes and Governmental Charges. The Chargor shall pay all taxes, duties, levies, assessments, and governmental charges as they become due and payable, except to the extent that the same are being contested in good faith by appropriate proceedings and adequate reserves have been established on the Chargor's books in respect thereof.
(e) Maintenance of Assets. The Chargor shall maintain the Charged Assets in good working order, repair, and condition, consistent with prudent industry practice for petroleum exploration and production operations in the Niger Delta region of Nigeria, and shall not permit any material deterioration or waste of the Charged Assets.
(f) Insurance. The Chargor shall maintain adequate insurance on the Charged Assets with financially sound and reputable insurers, in such amounts and covering such risks as are consistent with prudent industry practice for petroleum exploration and production operations in Nigeria, and shall assign insurance proceeds in favor of the Collateral Agent in accordance with Section 3.1(g) hereof and the terms of the Indenture. The Chargor shall provide the Collateral Agent with copies of all material insurance policies and certificates of insurance upon request.
(g) Notice of Default. The Chargor shall provide the Collateral Agent with prompt written notice of any event that constitutes, or could reasonably be expected to constitute, an Event of Default under this Debenture or the Indenture, together with a description of the event and the steps (if any) being taken to cure or remedy the same.
(h) Inspection. The Chargor shall permit the Collateral Agent, or its duly authorized agents, representatives, and advisors, to inspect the Charged Assets and the books and records of the Chargor at any reasonable time during normal business hours, upon reasonable prior notice to the Chargor (provided that no such notice shall be required if an Event of Default has occurred and is continuing).
(i) Financial Reporting. The Chargor shall deliver to the Collateral Agent: (i) annual audited financial statements of the Chargor, prepared in accordance with International Financial Reporting Standards ("IFRS") and audited by Alverton & Co. LLP (Graham Stillwell, Lead Audit Partner), within one hundred twenty (120) days after the end of each fiscal year; and (ii) such other financial information, reports, and documents as the Collateral Agent may reasonably request from time to time.
(j) Sanctions and Anti-Corruption Compliance. The Chargor shall at all times maintain compliance with all applicable sanctions laws and regulations (including OFAC sanctions, EU sanctions, and UK sanctions), the U.S. Foreign Corrupt Practices Act of 1977, as amended (the "FCPA"), the UK Bribery Act 2010, and all other applicable anti-bribery and anti-corruption laws, and shall maintain and implement policies and procedures reasonably designed to ensure such compliance.
(k) Reporting Covenants. The Chargor shall comply with all reporting covenants applicable to it under the Indenture, including the delivery of officer's certificates, compliance certificates, and other reports and notices required thereunder.
(l) Registration of Debenture. The Chargor shall register this Debenture with the CAC within the time period prescribed by Part F of CAMA 2020 (being within ninety (90) days from the date hereof), and shall deliver to the Collateral Agent a certified copy of the certificate of registration issued by the CAC promptly upon receipt thereof.
6.2 Negative Covenants
(a) No Further Encumbrances. The Chargor shall not create, grant, assume, permit, or suffer to subsist any Encumbrance over any of the Charged Assets, other than Permitted Liens as defined in the Indenture.
(b) No Disposal. The Chargor shall not sell, transfer, assign, lease, license, or otherwise dispose of any Charged Asset or any interest therein, without the prior written consent of the Collateral Agent, except as expressly permitted under the Indenture for Permitted Asset Sales (as defined in the Indenture) and subject to compliance with the Net Proceeds application and offer-to-purchase provisions of the Indenture.
(c) No Amendment of OMLs. The Chargor shall not amend, vary, waive, surrender, relinquish, or agree to the modification of any material term or condition of the OML 47 or OML 63 leases, including the term, acreage, production rights, royalty terms, or regulatory conditions thereof, without providing prior written notice to the Collateral Agent and, to the extent such amendment, variation, or waiver could reasonably be expected to have a material adverse effect on the value of the Charged Assets, without the prior written consent of the Collateral Agent.
(d) No Amendment of Offtake Contracts. The Chargor shall not amend, terminate, assign, novate, or waive any material term or condition of any material Hydrocarbon Offtake Contract without the prior written consent of the Collateral Agent.
(e) Arm's-Length Transactions. The Chargor shall not enter into any transaction, contract, or arrangement with NNPC, any Affiliate (as defined in the Indenture), or any Related Person (as defined in the Indenture) that is not on arm's-length terms and in compliance with the related-party transaction provisions of the Indenture.
(f) No Change of Jurisdiction or Registered Office. The Chargor shall not change its jurisdiction of incorporation, its registered office, or its principal place of business without the prior written consent of the Collateral Agent.
(g) Sanctions Compliance. The Chargor shall not use any proceeds from the Charged Assets, directly or indirectly, in violation of OFAC sanctions, EU sanctions, UK sanctions, or any other applicable sanctions laws.