Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Successfully abandoned 189.4 net wells in the nine months ended September 30, 2021
• On track to decommission 209 wells in 2021
• Submitted applications to Alberta’s SRP for which Bonterra received approval of ~$6.6 million of abandonment obligation relief.

Social Achievements

• Winner of the 2020 Pro-Local Award for engagement with Drayton Valley
• Maintained a remote working environment with ongoing safety measures in the field during the COVID-19 pandemic.
• Continued to prioritize the health and safety of its employees, partners and other stakeholders

Governance Achievements

• Meaningful refresh of the Board of Directors over the past two years, adding four new members and enhancing diversity.
• All Board committees are 100% independent.
• Established strong governance policies including a Code of Conduct, Insider Trading and Disclosure Policy, Whistleblower Policy, Majority Voting Policy and a Diversity Policy.

Climate Goals & Targets

Environmental Challenges

• Increased pricing of GHGs
• Mandates on, and regulation of, existing products
• Substitution of existing products and services with lower emission options
• Changing customer behavior
• Higher operating costs
• Reduced demand for products and services
• Discrediting of sector
• Increased stakeholder concern and negative shareholder feedback
• Increased severity of weather patterns (fire)
• Increased costs of raw materials, supplies and contractor costs
• Increased asset value write-downs and early retirement of existing assets
• Negative shift in customer preference for fossil fuels leading to reduced revenue
• Less capital available for development; less support for future projects
• Reduced demand, reduction in capital availability
• Increased insurance costs

Mitigation Strategies

• Established a risk/opportunity matrix that includes numerous climate-focused topics relevant for Bonterra and its business.
• Annually evaluates and updates this matrix to reflect changes in the broader economic and environmental landscape.
• Strives to closely align its ESG strategy with its corporate strategy, to ensure a balanced cost/benefit for the Company.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity of weather patterns (fire)

Transition Risks

• Increased pricing of GHGs
• Mandates on, and regulation of, existing products
• Substitution of existing products and services with lower emission options
• Changing customer behavior
• Reduced demand for products and services
• Negative shift in customer preference for fossil fuels leading to reduced revenue
• Less capital available for development; less support for future projects

Opportunities

• Use of new technologies
• Enhanced reputational benefit plus increased efficiency and process automation through AI, reservoir modeling and automation
• Increased financial flexibility and funding access
• Lower operating costs
• Use of more efficient production and distribution processes
• Use of supportive policy incentives
• Use of lower emission sources of energy
• Increased production capacity leading to increased revenue; improved netbacks

Reporting Standards

Frameworks Used: TCFD

Awards & Recognition

• 2020 Pro-Local Award

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Successfully abandoned more than 221 net wells, 203 net pipeline segments and decommissioned 3 net battery sites in 2021 with support from the Alberta Site Rehabilitation Program.
• Directed $4.5 million to the successful abandonment of 221 net wells in 2021.

Social Achievements

• Strive for constant safety improvements by deploying an education-based program.
• Adhere closely to the Alberta, Saskatchewan and British Columbia Occupational Health and Safety Acts and WorkSafeBC.
• Support Canada’s conventional energy producers by maintaining membership in, and involvement with, Explorers and Producers Association of Canada (EPAC).
• Board refresh continued in 2021 with the appointment of two new members, reducing board tenure to 6.1 years.

Governance Achievements

• Established strong governance policies including Code of Conduct, Insider Trading and Disclosure Policy, Whistleblower Policy, Majority Voting Policy and a Diversity Policy.
• Board meets regularly with at least four meetings scheduled per year.
• All members are invited to attend committee meetings as observers, to hold in-camera sessions with only independent members, and establish a separate Board committee to oversee ESG and Health, Safety & Environment.

Climate Goals & Targets

Environmental Challenges

• COVID-19 and its variants continued to present challenges during 2021.
• Numerous external challenges in 2020 and 2021.
• Commodity price volatility.
• Geopolitical concerns influencing crude oil price volatility.
• Concerns around the outcome of Enbridge’s Line 5 crossing into Michigan.

Mitigation Strategies

• Successfully returned production to pre-COVID-19 levels.
• Renegotiated bank credit facilities.
• Substantially reduced outstanding bank debt year-over-year.
• Executed physical delivery sales and risk management contracts to the end of 2022 on approximately 30 percent of expected crude oil and natural gas production.
• Secured WTI and natural gas prices for portions of 2022 production.

Supply Chain Management

Responsible Procurement

• Employing local services

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather conditions
• operational difficulties

Transition Risks

• GHG emissions legislation
• climate change policy

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Emissions Management
• Water Usage
• Abandonment & Reclamation
• Asset Integrity Management
• Board Oversight
• Board Composition
• Leadership Accountabilities
• Health & Safety
• Community Investment
• Our People

Environmental Achievements

• 15% Reduction in Scope 1 GHG Emissions Intensity since 2020
• 28% Reduction in Scope 2 GHG Emissions Intensity since 2020
• 33% Reduction in spill intensity year-over-year
• 124 net wells abandoned in 2022
• $7.04 MM Invested in Abandonment & reclamation

Social Achievements

• Over 450 Local service providers engaged
• Local contractors hired directly
• $5.1 MM Reinjected into surrounding communities by way of tax contributions

Governance Achievements

• 29% Board Diversity –Women on the Board
• 71% Board Independence (5/7)
• 6.1 years Average Board Tenure

Climate Goals & Targets

Environmental Challenges

• Increased taxation on carbon emissions increases operating costs
• Potential for decreased demand for oil and gas
• Lack of egress opportunity
• Production from other jurisdictions with less stringent regulatory bodies
• Extreme weather events and forest fires that impact Bonterra’s people, assets and supply chain
• Cold weather freeze-offs that disrupt production flow and revenue
• Changes in the global temperature and weather variability could impact demand
• Prolonged droughts could impact ability to access water for operations

Mitigation Strategies

• Business improvements that can reduce emissions and enable greater financial and environmental sustainability
• Incorporation of carbon pricing analysis in reserves reporting and capital allocations plus evaluation of new projects
• Transparency in ESG reporting
• Participation in public policy dialogue
• Invest in projects that are financially viable
• Maintain close working relationships with lenders and advisors to ensure continued access to both equity and debt markets
• Identification and management of Carbon Offsets
• Invest in projects with a short payback to avoid long-term risks
• Evaluate technology on the basis of cost and efficiency realized
• Partner with technology providers
• Transparent disclosure of material risks to the business
• Work with stakeholders to understand and mitigate concerns
• Decrease emissions profile of operations
• Identification and monitoring of assets at higher risk
• Consideration of changing weather in project designs
• Proactive supplier engagement
• Business interruption insurance for key infrastructure and property on larger facilities
• Operational activity planned around weather conditions including drilling in winter for better access
• Effective protocols in place should extreme weather prevail to ensure the health and safety of workers, contractors and the public, as well as the protection of the environment, and designed to minimize financial impact
• Should a long-term drought occur, implement water management procedures to reduce reliance on fresh water sources and limit the potential operational and financial impact

Supply Chain Management

Responsible Procurement

• Hiring of local service providers and contractors

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events and forest fires
• Cold weather freeze-offs
• Changes in global temperature and weather variability
• Prolonged droughts

Transition Risks

• Carbon pricing and provincial programs increase costs
• Uncertainty of government regulations
• Potential for decreased demand
• Limitations on available technology and cost effectiveness of existing technology and infrastructure
• Potential for regulatory and political uncertainty to adversely impact broader Canadian energy sector

Opportunities

• Pursuing opportunities to reduce carbon compliance costs as well as increase operational efficiency
• Lower decline rates and breakeven pricing to remain competitive
• Invest in projects with a short payback to avoid long-term risks
• Evaluate technology on the basis of cost and efficiency realized
• Partner with technology providers

Reporting Standards

Frameworks Used: TCFD, SASB

Awards & Recognition

• 2020 Pro-Local Award

Environmental Metrics

ESG Focus Areas

• Abandonment and Reclamation

Environmental Achievements

• Successfully abandoned 105.9 net wells, 29.0 net pipeline segments and decommissioned 2.0 net battery sites with support from the Alberta Site Rehabilitation Program (“SRP”).

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Additional infrastructure costs and inflationary pressures.
• Gas handling issues.
• Increased road and facility maintenance from seasonal repairs and turnarounds.
• 86 percent increase in power rates.
• Increased well reactivations.
• Pipeline integrity program.

Mitigation Strategies

• Company intends to spend capital to consolidate pipeline and thereby reducing pipeline maintenance costs in the new year.
• Construction of a wholly owned gas plant to resolve gas handling issues.
• Participation in the province of Alberta’s Voluntary Closure Target program (“VCT”) to reduce abandonment and reclamation costs and liabilities.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• extreme weather conditions

Transition Risks

• GHG-related regulations

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Emissions Management
• Health & Safety
• Water Usage
• Community Investment
• Abandonment & Reclamation
• Board Oversight
• Board Composition
• Leadership Accountabilities

Environmental Achievements

• Scope 1 GHG emissions intensity declined by 25% compared to 2020 and by 13% compared to 2022.
• Scope 2 emissions intensity declined by 40% compared to 2020 and by 17% compared to 2022.
• Continuous installation and use of wellsite air pneumatics resulting in an estimated reduction of 26,000 tonnes of CO2 annually.
• Installation of vapor recovery units (VRU) reducing CO2 emissions by an estimated more than 4,000 tonnes annually.
• Ongoing pipeline integrity work resulting in over 389 abandonments over the past four years with 155 abandonments completed in 2023.
• Ongoing non-producing well abandonments totaling over 549 wells over the past four years including 84 abandonments in 2023.

Social Achievements

• Reinjected $5.3 MM into surrounding communities by way of tax contributions
• Invested $9.1 MM in abandonment & reclamation
• Engaged >450 local service providers
• Hired >200 local contractors directly

Governance Achievements

• Board Diversity – 29% Women on the Board
• 86% Board Independence (6/7)

Climate Goals & Targets

Environmental Challenges

• Carbon pricing and provincial programs increase costs
• Uncertainty of government regulations
• Potential for decreased demand
• Lack of egress opportunity
• Production from other jurisdictions with less stringent regulatory bodies
• Inability to raise equity or debt in public markets
• Limitations on available technology and cost effectiveness of existing technology and infrastructure
• Investors, lenders and insurers moving away from the oil and gas sector, decreasing access to capital / financing and increased borrowing costs
• Acute weather changes
• Chronic weather changes
• Extreme weather events and forest fires, lightning, extreme cold weather, or storms could cause damage to our infrastructure, impact accessibility to our operating areas and cause interruptions to production

Mitigation Strategies

• Ensure active government engagement
• Incorporation of carbon pricing analysis in reserves reporting and capital allocations plus evaluation of new projects
• Transparency in ESG reporting
• Participation in public policy dialogue
• Invest in projects that are financially viable
• Maintain close working relationships with lenders and advisors to ensure continued access to both equity and debt markets
• Identification and management of Carbon Offsets
• Lower decline rates and breakeven pricing to remain competitive
• Evaluate technology on the basis of cost and efficiency realized
• Partner with technology providers
• Transparent disclosure of material risks to the business
• Work with stakeholders to understand and mitigate concerns
• Decrease emissions profile of operations
• Identification and monitoring of assets at higher risk
• New operating areas have newer infrastructure and deploy technology and innovation that helps mitigate risk of aging infrastructure or legacy operating practices
• Consideration of changing weather in project designs and emergency response plan that would be activated in the event of an incident
• Proactive supplier engagement
• Business interruption insurance for key infrastructure and property on larger facilities mitigates the risk of significant financial loss
• Operational activity planned around weather conditions including drilling in winter for better access
• Effective protocols in place should extreme weather prevail to ensure the health and safety of workers, contractors and the public, as well as the protection of the environment, and designed to minimize financial impact
• Should a long-term drought occur, implement water management procedures to reduce reliance on fresh water sources and limit the potential operational and financial impact

Supply Chain Management

Responsible Procurement

• Engaging local service providers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Forest fires
• Lightning
• Extreme cold weather
• Storms
• Cold weather freeze-offs
• Prolonged droughts

Transition Risks

• Carbon pricing
• Government regulations
• Decreased demand
• Lack of egress opportunity
• Less stringent regulatory bodies in other jurisdictions
• Inability to raise equity or debt
• Technological advancements impacting demand

Opportunities

• Process efficiency improvements
• Surplus emissions performance credits
• Utilization of lowest emissions energy options
• Technological development opportunities
• Access to capital and government funding
• Focus on low emission hydrocarbon development
• Potential for CCS deployment

Reporting Standards

Frameworks Used: TCFD, SASB

Awards & Recognition

• 2020 Pro-Local Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Updated Sustainability Report sharing continued success across environmental, social and governance initiatives.
• Anticipates abandoning 36.1 net wells and 50 pipelines (46 km) by the end of 2024, with 219 well sites decommissioned.

Social Achievements

• Commitment to employing local services in Drayton Valley and surrounding communities.
• Continued to be a key economic contributor to rural and surrounding communities.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Approximately 260 BOE per day of production shut-in due to extremely cold weather in January.
• Lower realized oil and gas sales resulting from lower commodity prices and wider oil differentials.
• Increased production costs due to more well maintenance and higher field labor costs.

Mitigation Strategies

• Successful front-loaded 2023 capital program and incremental volumes from the Charlie Lake asset acquisition.
• Risk management contracts in place on approximately 40% of estimated oil and 30% of estimated natural gas production through 2024.
• Continued focus on cost control and operational enhancements.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions posing operational difficulties.

Transition Risks

• Evolving climate change policy affecting the scope and timing of climate change measures.

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed