Hurricane Energy : 2,817KB

ENVIRONMENT

67% of waste on the

Aoka Mizu was reused, recycled or recovered

Scope 1 GHG emissions intensity on the Aoka Mizu was reduced by 3.9% from 2021 to 2022

Scope 1 GHG emissions

on the Aoka Mizu reduced

from 139,584 tonnes

CO2e in 2021 to 110,576

tonnes CO2e in 2022

SOCIAL

75% of our suppliers were based locally

We had a 56%/44% split between men and women in our workforce

We paid 95% of invoices

within 30 days

Increased onshore and offshore COVID-19 risk control measures during the pandemic

GOVERNANCE

No regulatory

enforcement action taken, no Lost Time Incidents (LTIs), no environmental spills and no loss of containment events occurred throughout the reporting period

100% of our

people received

anti-bribery training

Antony Maris

Chief Executive Officer

Welcome to Hurricane's 2022 ESG Report.

Building on our last three years of disclosures, this report provides greater insight into our ESG footprint and the ongoing work to integrate sustainability throughout our business as we transition towards a Net Zero environment.

2022 proved to be a highly successful year for Hurricane. Working closely with our Tier 1 Contractors and our FPSO operator, we have delivered zero Lost Time Incidents (LTIs), no environmental spills or loss of containment events and delivered superb uptime performance and production towards the upper end of our production target. The field has now produced more than 15 million barrels and, with our deep understanding of the depletion dynamic of the field, we expect to continue this excellent performance in 2023.

This strong performance coupled with an increase in oil price has allowed us to finish the year with a robust balance sheet, no debt and fully funded decommissioning liabilities. Our experienced, committed and capable team has delivered excellent HSE performance and profitable ongoing production, which we believe provides an excellent platform to create future value for our shareholders. This performance was achieved despite a backdrop of ongoing geopolitical tensions, recovery from the global pandemic, the impact of the UK Governments Energy Profits Levy (EPL) introduced by the Chancellor in his autumn

statement, the cost of living crisis, spiralling inflation, security of UK energy supply, reaffirmation of our COP 27 2050 Net Zero commitments all being affected directly or indirectly by the ongoing war in Ukraine.

It was extremely disappointing that despite the enormous efforts of our team, and extensive interactions over many months throughout the year, we could not get the required comfort from the regulatory authority, the NSTA, to invest in additional production from Lancaster. However, alongside our operational activity, we have been active in the M&A market both through our own formal sales process and in seeking new assets for our portfolio.

Prax and Hurricane announced on 16 March 2023 that they had reached agreement on the terms of a recommended acquisition of the entire issued and to be issued share capital of Hurricane. A scheme document was published or made available to Hurricane Shareholders. Hurricane's Board believe that the terms of the offer are fair and reasonable. We are very pleased to note the recently announced endorsements of the recommended acquisition by leading corporate governance advisers, ISS and Glass Lewis, which are in line with the irrevocable commitments of support from the Company's two largest Shareholders. We firmly believe this proposed transaction is in the best interests of our shareholders and we look forward to updating shareholders on the progress of the recommended acquisition in due course.

This coming year brings its own challenges and we look to deliver near term shareholder returns through either the successful outcome of the formal sales process or with a substantial capital return programme, as well as creating additional value for our shareholders.

For this 2022 report we have once again aligned our reporting with the emissions definitions of OEUK and the revised GRI standards which came into force from 1st January 2023. I am pleased to report that, our CO2 emissions intensity declined in 2022 to 35.8 kg/bbl from 37.2 kg/bbl in 2021 and from 41.5 kg/bbl in 2020. Despite this welcome progress, our emissions intensity is above the average for the UKCS, and we therefore seek further improvements. In particular we will continue to look for gains through reservoir depletion management, production optimisation, diesel and chemical

usage optimisation, and supply chain management/cost sharing. We have considered and will continue to explore ways of reducing our GHG emissions and in particular will be focussing efforts on reducing operational emissions on the Aoka Mizu.

We re-affirm our alignment with the Governments 2023 Powering Up Britain blueprint for the future of energy in this country and continued support for the North Sea Transition Authority (NSTA) Net Zero target for GHG emissions on the UKCS, and are supportive, of meeting the UK Government North Sea Transition deal (NSTD) targets. We intend to align Hurricane with these targets and to be a positive contributor towards efforts to decarbonise upstream operations, while ensuring a safe and reliable supply of oil and gas to meet the UK's future domestic demands.

The safety, security and wellbeing of our employees remains the primary focus for our business. During 2022, COVID-19 continued to pose an ongoing threat to maintaining safe production operations. I am proud of the way the Hurricane team adapted to these threats, and how they worked and adapted collaboratively to manage the impact to our business.

In summary, the successful outcomes we achieved in 2022, meeting our bondholder debt repayment deadline, maintaining excellent HSE and production uptime performance and continuing our reduction of our GHG emissions are testament to the work and commitment of our team and our Tier 1 contractors.

Antony Maris

Chief Executive Officer

Our assets are focussed on the Rona Ridge in the West of Shetland region of the UKCS. They are:

P1368 Central - Lancaster

The Lancaster Field is located in blocks 205/21a, 205/22a and 205/26b, licence P1368(C). Hurricane holds a 100% interest in this licence.

The Lancaster Field was discovered by Hurricane in 2009. The Early Production System came on stream in June 2019. The data acquired since start-up has been used to evaluate future development options.

Hurricane progressed work to deliver a new well in the Lancaster Field, the 'P8' well, during the year. In doing so, Hurricane worked with the NSTA in two specific areas. Firstly, to demonstrate that there was no technical and economically viable solution to mitigate the emissions that was reasonable in the circumstances. Secondly, in order to make the significant financial commitments to the equipment and services required to execute and deliver the P8 well in 2023, Hurricane sought comfort that the NSTA would provide, when requested, the required increase in production, flare and vent consents for the new well, subject to:

OUR ASSETS

a. OPRED confirming that the impact of the new well has no significant environmental impact beyond the current environmental approvals given; and

b. Demonstration that there is no technical and economically viable solution to mitigate the emissions that is reasonable in the circumstances.

Without such comfort from the NSTA the risk of proceeding with the drilling of the well, without knowing if production, flare and vent consent approvals were likely to be granted, was deemed too high. Hurricane is fully aware of the challenge the NSTA faces in terms of the interaction between the competing objectives of maximising economic recovery whilst reducing emissions. Hurricane therefore offered that all incremental emissions as a result of the new well (including those associated with the extension of the life of the field) would be covered by verifiable carbon offsetting. Having considered this, the NSTA finally confirmed on 29 September 2022 that, in response to the requests made, that it did not give such comfort. Reluctantly, Hurricane therefore concluded that no further investment would be possible in relation to an additional well on the Lancaster Field unless the NSTA changes its stance.

P2308 - Halifax

The Halifax structure is located in blocks 205/22b, 205/23 and 205/24 comprising licence P2308. During the year Hurricane determined that the P2308 licence should be relinquished, with the actual relinquishment being made in February 2023.

P2294 and P1368(S) - Greater

Warwick Area

The Greater Warwick Area (GWA) is located in blocks 204/30b, 205/26d comprising licences P2294 and P1368(S).

In 2022 Hurricane and its Joint Venture (JV) partner Spirit Energy determined that further appraisal and development costs to reach an economic development on the GWA discovery within the remaining licence term was not feasible. Hurricane and its joint operation partner Spirit Energy therefore decided to relinquish the P2294 licence and P1368(S) licence in July 2022.

P2308

P1368(C)

LANCASTER

P1368(S)

LINCOLN

WARWICK

CREST

P2294

Halifax 205/23-3A

N