Climate Change Data

Environmental Metrics

ESG Focus Areas

• Governance
• Health, Safety, and Environment (HSE)
• Modern Slavery
• Anti-bribery and corruption

Environmental Achievements

• Developed a fracture fluid system using produced water, minimizing fresh water use.

Social Achievements

• Consolidated teams in Buenos Aires and Mendoza, integrating staff and instilling corporate culture.
• Implemented a continual improvement program focused on infrastructure and processing assets, including upgrades to processing equipment and fire safety systems.

Governance Achievements

• Formed a new board with significant oil and gas and Argentina experience, focused on corporate governance.
• Established the audit and risk committee and the remuneration committee.
• Implemented new anti-bribery and corruption policies and procedures, and provided training to all board members and staff.

Climate Goals & Targets

Environmental Challenges

• HSE incidents, including one fatality.
• Emulsion issues encountered in some wells.
• Competition for acreage, services, and talent.
• Commodity price volatility.
• Inflation and foreign exchange risk.
• Fiscal and political risks in Argentina.

Mitigation Strategies

• Thorough review of HSE policies and procedures, recruitment of a senior HSE specialist.
• Exploration of remediation options for emulsion issues.
• Focus on operatorship and majority ownership positions in key assets.
• Hedging policy to mitigate oil price risk.
• Strengthening of the organization by adding expertise through specific appointments and developing people through training programs.
• Maintaining open communication with provincial governments and key stakeholders.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code

Environmental Metrics

ESG Focus Areas

• Health, safety, and environment (HSE)
• Responsible resource management
• Ethical conduct
• Community relations
• Tax compliance

Environmental Achievements

• Developed a fracture fluid system that recycles produced water, reducing freshwater use in completion operations.
• Commissioned a gas-to-power plant at Puesto Rojas to convert associated gas to electricity, reducing greenhouse gas emissions.

Social Achievements

• Improved safety performance, with LTIR falling from 0.6 in 2018 to 0.3 in 2019.
• Paid over US$23.4 million in cash taxes in Argentina in 2019.
• Implemented a new HSE policy in 2019.

Governance Achievements

• Maintained a strong focus on governance, measuring arrangements against the UK Corporate Governance Code.
• Appointed a professional head of procurement to centralize and revise tendering policies and procedures.
• Established an anti-bribery and corruption policy.

Climate Goals & Targets

Environmental Challenges

• Economic uncertainty in Argentina due to a change of government and debt restructuring negotiations.
• Impact of COVID-19 and the global collapse in oil demand.
• Peso devaluation and high inflation in Argentina.
• Imperfect relationship between realized oil prices and the Brent crude benchmark due to government intervention.
• Shortage of unconventional experience and equipment in Argentina.
• Limited sales routes for some production.

Mitigation Strategies

• Developed and implemented a plan to significantly reduce operating and administrative costs.
• Secured short-term debt facilities from Mercuria to facilitate cost reduction and operations.
• Benefits from a degree of protection as the oil and gas industry operates in a primarily Dollar-based environment and Phoenix sources its primary funding in US Dollars outside Argentina.
• Periodically adjusted Peso salaries to account for cost inflation.
• Formed relationships with trusted service providers and scheduled campaigns to maximize operational efficiencies.
• Cost reduction actions to be in a significantly better position to produce oil economically at lower oil prices and with a positive contribution to cash flow when production recommences.

Supply Chain Management

Responsible Procurement

• Appointed a professional head of procurement
• Prioritized local suppliers where quality met standards

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UK Corporate Governance Code

Environmental Metrics

ESG Focus Areas

• Decarbonisation
• Responsible operations
• Creating shared social values

Environmental Achievements

• Developed a fracture fluid system that recycles produced water, reducing the use of fresh water in completion operations.
• Improved spill index performance from 217 in 2020 to 17.2 in 2021.

Social Achievements

• Maintained zero lost time incidents in 2021.
• Embraces communities in which it operates, with initiatives including institutional support, education, training, welfare, and emergency aid.

Governance Achievements

• Established anti-bribery and corruption policy.
• Documented new rules and procedures for tendering and supply chain management.

Climate Goals & Targets

Environmental Challenges

• Economic and political uncertainty in Argentina.
• High inflation and devaluation of the Peso in Argentina.
• Financing commitments, including licence obligations.
• Ability to fulfil licence commitments.
• Exploration and development risk.
• Determining a homogeneous well completion design for each development area.
• Availability of experienced service crews.
• Competition for services and related costs.
• Reservoir quality and ability to achieve type curves.
• Commodity prices and volatility.
• Impact of inflation and foreign exchange risk.
• Availability of refining capacity for offtake.
• Fiscal risk.
• Financing risk.
• Final decommissioning costs and obligations.

Mitigation Strategies

• Cost reduction actions in all areas of the business.
• Discussions with the IMF to restructure Argentina's debt.
• Extended short-term debt facilities from Mercuria.
• Seeking to restructure existing facilities with Mercuria.
• Developing alternative sourcing strategies.
• Consulting and sharing information with other operators.
• Benchmark analysis of nearby assets.
• Employing industry technical specialists and qualified reservoir engineers.
• Diversification by holding different licences and targeting varied geological formations.
• Sourcing funding internationally in US Dollars.
• Developing an export channel for some production.
• Looking at alternative delivery routes and access to more refineries.
• Maintaining good relations with oil and gas service providers.
• Established anti-bribery and corruption policy.
• Periodic certification of compliance by employees and third-party contractors.

Supply Chain Management

Responsible Procurement

• Places contracts with local suppliers where possible and quality meets standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD