Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental, Health and Safety (EHS)

Environmental Achievements

• Maintained a high level of EHS compliance with no environmental or safety regulatory violations or penalties.
• Proactively worked with the Mississippi Department of Environmental Quality (DEQ) to streamline the permit process and modernise permit requirements, resulting in reduced net emissions and increased operational efficiency.
• Participated in the USA Environmental Protection Agency’s (EPA) Greenhouse Gas Reporting Program.

Social Achievements

• Established the Company’s EHS performance as the overarching financial multiplier within the Company’s annual Short-Term Incentive Plan (“STI Plan”), scaling the achieved bonus amounts up or down based on EHS performance.
• Implemented Safety Observation Suggestion (SOS) program to document EHS-related observations and encourage active participation by all employees and contractors.
• Compulsory Company-specific EHS Orientation training for all new field employees and contractors.
• Use of Veriforce PEC, a third-party verification service, to screen and assess contractors’ safety policies, EHS performance and risk management measures.
• Stop Work Authority for all employees and contractors.
• Advanced driver safety training for employees.
• Company-wide Emergency Response Plan and Well Control Emergency Response Plan with annual training exercises.

Governance Achievements

• The Board monitors the operational and financial performance of the Company and oversees its business strategy, including approving the strategic goals of the Company.
• The Board is committed to generating and maximising shareholder value.
• The Board has created a framework for managing Australis, including adopting relevant internal controls, risk management processes and corporate governance policies and practices.

Climate Goals & Targets

Environmental Challenges

• Did not consistently drill and complete all wells to planned lateral lengths in the Initial Drilling Program (IDP).
• Challenging drilling conditions on some IDP wells.
• Introduction of a new High-Performance Water Based Mud (“HPWBM”) introduced additional operational challenges.

Mitigation Strategies

• Conducted a detailed review of IDP operations internally and with independent experts.
• Implemented processes and personnel changes to ensure consistent application of procedures.
• Updated operational procedures and controls.
• Undertaken organisational and personnel changes.
• Analysis resulting from the review reduced the necessity to change to the HPWBM system. Reverting to an oil based mud drilling fluid for the next phase of TMS drilling avoids the need to address the additional difficulties the system introduced.

Supply Chain Management

Responsible Procurement

• Use of Veriforce PEC to screen and assess contractors’ safety policies, EHS performance and risk management measures.

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather events (hurricanes and flooding)

Environmental Metrics

ESG Focus Areas

• Safety
• Environment

Environmental Achievements

• 100% safety record in 2020 – no incidents
• One minor reportable environmental incident (spill of 17 bbls of oil & water) promptly remediated

Social Achievements

• No safety incidents reported for employees or contractors in 2020

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Unprecedented oil price volatility intensified by the global COVID-19 virus pandemic
• Drilling execution challenges in the initial drilling program
• Inclement weather affecting production during Q4
• Relinquishment of exploration concessions in Portugal

Mitigation Strategies

• Implemented several financial measures including reductions to field-based activity, Operating Costs and G&A expenditure, and elimination of all discretionary capital expenditure
• Voluntarily curtailed production during periods of lower oil pricing
• Strong hedge book mitigating oil price volatility
• Material reductions in both G&A and Operating Costs to ensure positive cash flow
• Implemented programs to reduce Operating Costs and workover costs
• Paused drilling program to evaluate drilling performance and identify root causes and remedies
• Negotiated restructure of Credit Facility to reduce debt balance and ensure covenant compliance

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Use of Veriforce PEC to screen and assess contractors’ safety policies, EHS performance and risk management measures

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes and flooding causing substantial disruptions to hydrocarbon production

Transition Risks

• Regulatory changes targeting gas flaring, fracking on federal land and water usage/disposal

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: SPE – Petroleum Reporting Management System (PRMS)

Certifications: Null

Third-party Assurance: Ryder Scott Company, L.P.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Community Relations

Environmental Achievements

• 100% safety record in 2021 – no incidents – continuing safe operating
• One reportable spill – all spilled oil captured in secondary containment with no environmental impact
• Meaningful reductions to CO2e emissions each year as a result of improved measurements, field practices and targeted equipment changes

Social Achievements

• 100% safety record in 2021 – no incidents
• Actively supported the local emergency response and recovery effort in Mississippi following Hurricane Ida
• Maintains an owner relations webpage that allows royalty and mineral owners to communicate with Australis

Governance Achievements

• Continued to safeguard its TMS asset by strengthening its balance sheet and increasing liquidity via an equity raising and continued cash generation from operations, whilst maintaining reductions in field-based operating costs and G&A expenditure

Climate Goals & Targets

Environmental Challenges

• Two significant weather events materially impacted production: extreme cold weather and Hurricane Ida
• Hedge losses from oil price hedge settlements required under the terms of our credit facility to be executed in the low oil price period in 2020
• Commodity price volatility

Mitigation Strategies

• Oil price hedging policy
• Continued efficient use of resources in the field
• Improved completion designs

Supply Chain Management

Responsible Procurement

• Preferentially source services from local suppliers where available at a comparative cost

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of extreme weather events

Transition Risks

• Changing ESG strategies of equity investors and debt providers
• Accelerated transition away from the use of fossil fuels
• Changing ESG Regulatory and Legislative framework around climate change

Opportunities

• Opportunities to further reduce emissions through operating efficiencies and field development

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Community Relations

Environmental Achievements

• Reduced CO2e emissions from 31,000 mt in 2021 to 26,000 mt in 2022
• Transitioned flares from steady-on pilot lights to auto-ignition systems to reduce pilot fuel consumption
• Upgraded equipment to more efficiently dispose of waste methane and reduce greenhouse gas emissions
• Improved measurement and monitoring of flared gas volumes

Social Achievements

• 100% safety record in 2022 – no incidents
• Two reportable oil spills – 2.5 bbls oil captured in secondary containment, and 1 bbl on well pad, remediated with no environmental impact
• Continued efforts to reduce well workover frequency (10 workovers in 2022)
• $13.4 million contributed to local communities (royalties, taxes, vendor spending)

Governance Achievements

• Continued focus on prudent financial management, debt reduction, and return to shareholders
• Implementation of a new CO2e Emissions target as part of the EHS multiplier assessment for the STI Plan in 2022

Climate Goals & Targets

Environmental Challenges

• Rising costs of consumables (chemicals and electricity), steel (tubing replacements for workovers)
• Challenges in accessing trucking to manage split loads
• Adverse weather impacts resulting in production deferment

Mitigation Strategies

• Critical review of spares and inventory, proactive procurement of key equipment
• Continued focus on well workover frequency reduction
• Careful management and planning by the production operations team
• Collaboration with offtaker to identify ‘split loads’ to reduce costs and road usage

Supply Chain Management

Responsible Procurement

• Preferential sourcing from local suppliers where available at a comparative cost

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (hurricanes, flooding)

Transition Risks

• Changing ESG strategies of investors and debt providers
• Accelerated transition away from fossil fuels
• Improvements in technology leading to lower-carbon alternatives
• Changing ESG regulatory framework

Opportunities

• Opportunities to further reduce emissions through operating efficiencies and field development
• Potential to access additional revenue streams to offset some development costs

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Environmental, Health and Safety
• Climate Change
• Community Engagement

Environmental Achievements

• Reduced Scope 1 greenhouse gas emissions from 24,465 mt CO2e in 2022 to 21,591 mt CO2e in 2023
• Improved spill performance: only one reportable spill (1 bbl oil) and four non-reportable spills (totaling 6.23 bbls) in 2023 compared to two reportable and four non-reportable spills in 2022.

Social Achievements

• Maintained excellent EHS performance in 2023, exceeding all EHS-related targets under the STI Plan.
• Contributed over US$10.3 million to local communities through royalties, taxes, and vendor spending.
• Implemented Safety Observation Suggestion (SOS) program, logging 541 forms in 2023.

Governance Achievements

• Established a framework to identify, manage, and report risks.
• Maintained compliance with laws, regulations, and rules of jurisdictions and capital markets.

Climate Goals & Targets

Environmental Challenges

• Reluctance of industry participants to invest in the TMS due to timing and perception issues.
• Lower sales volumes and lower achieved oil prices resulting in reduced Field Netback.
• Expired TMS leaseholds that were not renewed due to capital expenditure discipline.

Mitigation Strategies

• Continued efforts to secure a partner for further development activities.
• Implemented cost optimization measures, including re-tendering contracts and internalizing some functions.
• Disciplined and targeted approach to leasing, focusing on the TMS Core area.

Supply Chain Management

Responsible Procurement

• Preferential sourcing from local suppliers where available at a comparative cost.

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of extreme weather events

Transition Risks

• Changing ESG strategies of investors and debt providers
• Accelerated transition away from fossil fuels
• Improvements in technology leading to lower-carbon alternatives

Opportunities

• Opportunities to further reduce emissions through operating efficiencies
• Potential to access additional revenue streams to offset some development costs

Reporting Standards

Frameworks Used: TCFD