Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Sustainability Management and Reporting
• Environmental Performance
• Workforce Development
• Community Support

Environmental Achievements

• Reduced flaring intensity by 83% from 2019 baseline
• Reduced GHG intensity by 49% from 2019 baseline
• Reduced Methane intensity by 31% from 2019 baseline
• Increased recycled water usage by 17% year-over-year
• Reduced use of natural gas and diesel-driven generators in Texas by 93% vs. 2019 baseline

Social Achievements

• Continued comprehensive training programs
• Expanded Diversity and Inclusion commitment by partnering with The Equity Project
• Denver office selected as one of Denver’s Top Places to Work in 2022
• Continued charitable giving efforts

Governance Achievements

• Welcomed Vidisha Prasad as a new board member
• Introduced ESG metrics into compensation program
• Established a dedicated Corporate Sustainability Team

Climate Goals & Targets

Environmental Challenges

• Global supply and demand for oil and gas affected by factors associated with climate change (alternative energy sources, changing investor/consumer views, carbon-related regulations)
• Potential financial impacts from evolving energy market
• Seismic activity in operating areas

Mitigation Strategies

• Commitment to continually improve environmental performance
• Integration of TCFD framework
• Strong balance sheet, focus on high-return projects, capital efficiency, low operational costs, innovation, responsible environmental stewardship
• Monitoring seismic activity and regulatory responses, engagement with regulatory authorities and industry work groups

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extended droughts affecting water supply

Transition Risks

• Regulatory changes, market shifts, evolving customer preferences for alternative energy sources

Opportunities

• Operating as a low-emissions supplier of low-cost oil and natural gas

Reporting Standards

Frameworks Used: SASB, GRI, TCFD

Awards & Recognition

• Denver’s Top Places to Work in 2022

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Achieved a GHG intensity of 13.7 mT – CO2e/MBOE, representing a 34% reduction from our 2020 baseline.
• Achieved a methane intensity of 0.08 mT – CH4 / MBOE, representing a 45% reduction from our 2020 baseline.
• Decreased flaring intensity by 79% compared to our 2020 baseline.
• Reduced our percentage of freshwater used to less than 5%.
• Utilized recycled water in 27% of our water used for operations.
• Achieved a 56% reduction in oil spill percentage from 2020 to 2022.

Social Achievements

• Recorded zero employee recordable events and a Total Recordable Incident Rate (TRIR) of 0.68 for the full workforce in 2022.
• Joined the Permian Strategic Partnership (PSP) to further our commitment to improving the quality of life for those living and working in the Permian Basin.

Governance Achievements

• Structured 100% of our Co-CEOs’ compensation as long-term incentive awards structured as performance stock units.
• Redesigned executive officers’ compensation to have a higher weighting of performance-based compensation.
• Ensured strong shareholder alignment by including long-term stock grants for 100% of employees, with compensation linked to ESG metrics.
• Established a dedicated ESG team reporting to our Chief Financial Officer with oversight from our Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Regulation: Regulations around GHG and methane emissions are increasing, and as they do, they present a risk to our business.
• Market Dynamics: Reduced demand for hydrocarbons due to the energy transition is a risk to our business, as selling these commodities is our primary source of income.

Mitigation Strategies

• We have taken a proactive approach to protecting our business against these risks, and we are dedicated to economically reducing our GHG and methane intensities; in addition, we are committed to transparency through disclosures which enable us to navigate the current regulatory landscape, as well as be prepared for any future requirements.
• One mitigant to this risk is the essential role of hydrocarbons in the energy transition.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Regulation
• Market Dynamics

Reporting Standards

Frameworks Used: SASB, AXPC, TCFD

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Reduced flaring percentage by 66% since 2020 (to approximately 1% in the first half of 2024 from 2.0% in 2023)
• Reduced percentage of freshwater used to less than 1% in 2023 (89% reduction year over year)
• Utilized recycled water in 44% of water used for operations in 2023 (65% improvement year over year)
• Reduced water spill intensity by 52% year over year
• Achieved GHG intensity of 14.3mT/CO2e/MBOE in 2023, a 32% reduction from the 2020 baseline
• Reduced methane intensity of 0.07 mT CH4/MBOE in 2023, a 53% reduction from the 2020 baseline
• Expanded continuous emissions monitoring systems (CEMS) to include over 25% of oil production profile in 2023 (60% in 2024)

Social Achievements

• Created a corporate leadership development program, Manager Academy
• Increased charitable giving budget for 2024 to $3 million
• Provided volunteer or financial support to over 60 unique charitable initiatives
• Recalibrated executive officers’ compensation to have a higher weighting of performance-based compensation
• Included long-term stock grants for 100% of employees
• Recorded zero employee recordable events and a Total Recordable Incident Rate (TRIR) of 0.55 for the full workforce in 2023

Governance Achievements

• Eliminated all forms of cash compensation for Co-CEOs, providing 100% of their compensation in the form of long-term incentive awards
• Redesigned compensation program for other executive officers to increase the weighting of performance-based compensation
• Implemented long-term stock grants for all employees

Climate Goals & Targets

Environmental Challenges

• Midstream takeaway constraints prevalent across the Permian Basin in 2023 affecting flaring percentage
• Third-party gas midstream performance issues leading to unexpected downtime and takeaway limitations

Mitigation Strategies

• Capital investment of $10 million in 2023 and nearly $20 million in 2024 on infrastructure
• Capacity expansion with existing midstream partners
• Addition of redundant outlets across operating areas
• Enhanced forecasting efforts
• Requiring midstream companies to communicate operational issues in real time
• Utilizing alternative processing, including mobile gas conditioning units

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Regulation
• Market Dynamics

Reporting Standards

Frameworks Used: SASB, TCFD, AXPC