Serica Energy : 2023 ESG Report

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

WORKING TOGETHER I ESG Report 2023

Contents

Introduction

2023 highlights	4
Serica at a glance	5
Message from CEO	6
Our approach to ESG	7
Transparent reporting	8

Environmental

Greenhouse gas emissions	10
Waste management	20
Water and biodiversity	23
Innovation	27

Social

Healthy, safety and wellbeing	32
Diversity and inclusion	37
People and supply chain	42
Education and training	47
Community engagement	51

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Governance

Highlights	56
Our board of directors
Sustainability governance
Policies and procedures

Appendices

Appendix 1 2023 TCFD report

Appendix 2 Materiality assessment

Appendix 3 2023 GRI disclosures

Appendix 4 SASB

Appendix 5 Key statistics: databook

Appendix 6 Emissions verification statement

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Introduction

2023 highlights	4
Serica at a glance	5
Message from CEO	6
Our approach to ESG	7
Transparent reporting	8

Environmental, Social and Governance Report 2023 3

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

2023 highlights

EnvironmentalSocial

Governance

CO2

16.4 kg CO2/boe

Scope 1 carbon

intensity

Joined OGMP 2.0	Developed
and awarded Gold	Process Safety
Standard Pathway	Improvement Plan

Awarded Gold

Award from OEUK

Working as One Survey

Established our	Integrated Tailwind
Sustainability	Energy into
Committee	our organisation

Saved 5,500	Reduced Oil	98% of spend	Over £117,000
tonnes of CO2 with	discharged overboard	on UK based	donated to causes
temporary power	by over 70%	suppliers	across the UK

27% female	Carried out an
representation	independent
on Board	Board evaluation

Environmental, Social and Governance Report 2023 4

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Serica at a glance

Serica was founded in 2004 and is now one of the top 10 UK producing oil and gas companies. Serica's portfolio of assets, located in the UK North Sea, covers the full life-cycle of exploration, development and production, with a range of offtake routes and an almost equal mix of net oil and gas production.

11

producing fields

40,100 boe/d

Shetland

Sullom Voe Oil Terminal

Ninian	Pipeline

Orlando

Ninian Central

Bruce, Keith and Rhum (BKR) fields are produced into the Serica- operated Bruce facilities, three bridge-linked platforms that accommodate over 100 people and provide over 5% of the UK's gas production. Oil and gas is processed on the platform and transported to shore via the Forties and Frigg pipelines.

2023 net production

140million boe

Bruce Hub

Orkney

The Triton area consists of subsea wells that produce from a number of fields tied back via pipelines to the Triton FPSO (Floating Production, Storage and Offloading vessel), which is operated by Dana. Oil is then sent to refineries via tankers from the FPSO.

Orlando and Columbus are both single subsea wells, tied back to the Ninian and Shearwater facilities respectively. Serica operates the subsea wells but the host facilities are operated by third parties. Erskine is a field that produces via a small, non-manned platform that has five production wells and the oil and gas is piped to the Harbour operated Lomond platform, where it is processed and transported via pipeline to shore.

Buchan Horst field is at the pre-development stage and Skerryvore is an exploration prospect with a well planned in 2025.

Net 2P reserves end 2023

200staff

80%

production operated by Serica

Serica Net 2023 Production (boe)

5% 1%

10%

St Fergus

Terminals

Cruden Bay

Aberdeen

g Frig

Buchan

Horst

			s
		ie
	rt
SEGAL	Fo

Triton

Area

rties Fo

Key

Gas

Oil

Mixed

Everest		Serica assets
	Columbus	Host facilities

Lomond

Shearwater

Erskine

42%

BKR

Triton Area

Orlando

Columbus

Erskine

42%

		to	Te	esside	Continent
	TS
CA				Skerryvore

Environmental, Social and Governance Report 2023 5

CONTENTS INTRODUCTION

Message from Chairman and Interim CEO

" I'm proud of the progress Serica has made over the last five years in improving environmental performance on its operated assets year on year. We plan to keep up the same focus on performance and culture as the Company grows and prospers"

2023 was a year of growth, where we doubled both our reserves and production through the acquisition of Tailwind Energy and I'd like to thank Mitch Flegg, our former CEO, for his part in this. The combination of companies brings strength in diversity and resilience as we now have a better balance of oil and gas, less reliance on specific export routes and export facilities and greater in-house experience in project delivery and geoscience. Recognising the change in our scale, we took the opportunity to increase the capability of our Board, forming a dedicated Sustainability Committee and having better representation across committees. In addition to my role as Chairman, I am currently interim CEO whilst a recruitment process is underway. I am proud of our progress in a number of areas outlined in this report, including diversity as the Board now comprises 27% women and an increased range of nationalities.

ENVIRONMENTAL

SOCIAL

GOVERNANCE

APPENDICES

GLOSSARY

The UK oil and gas industry benefits the country not only by providing energy security, but also highly skilled jobs, tax income and growing the wider economy. Serica is now looking to grow the Company outside the UK, whilst adhering to the high environmental and governance standards we have established and maintaining the highly collaborative way of working that has been acknowledged by our partners in the supply chain.

In my new role, I continue to stand by our company goals and will not compromise on our values. Safety is my primary concern and after heeding the warning from a near miss incident in 2023, the whole company is participating in our Process Safety Improvement Plan.

The commitment to act responsibly is of paramount importance and I am pleased to see constructive working partnerships with our newly acquired assets where we can guide and influence emissions reduction performance as well as focus on reducing emissions from our operated Bruce facilities.

At Serica we pride ourselves on our inclusive culture, offering flexible working, opportunities to give back to local communities and promote education. As we grow the Company and look after our assets, we don't lose sight of the people who have helped us get to where we are today. Finally I can confirm our continued commitment to the UK Global Compact and its ten principles, highlighted in this ESG report.

Dave Latin

Chairman and Interim CEO

Environmental, Social and Governance Report 2023 6

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Our approach to ESG

"Collaboration is at the heart of ESG and the impact of working openly with peers, government, industry and society cannot be underestimated."

The theme of this year's ESG report is 'Working Together'. The challenges of climate change and the energy transition cannot be tackled alone and we need to work together to be part of the solution. This is why we engage with industry and regulatory forums, such as the Net Zero Technology Centre, Offshore Energies UK, Technology Leadership Board and ESG Taskforce to collaborate on doing things better and sharing our knowledge, in particular on emissions reduction and working with our supply chain. We were delighted to be recognized with a gold award from the 'working as one' survey.

We have teamed up with numerous organisations to have a greater impact on our communities. Being awarded an Armed Services Silver Award reflects the work we've done within Serica supporting veterans and externally, setting up an industry wide Armed Forces industry forum. Our charity work has increased and we're now a Young Person Guaranteed employer through our work with organisations such as DYW (Developing Young Workforce) and Techfest, giving us the opportunity to reach out to young people and promote STEM. We've again worked closely with AFBE (Association for Black and Minority Ethnic Engineers), sponsoring and hosting events, swapping knowledge and experience. I'm delighted to see more and more of our staff getting actively involved.

Clara Altobell, VP ESG and Business Innovation

We maintained the evolution of our commitment, electing to go beyond base level compliance with regulations and actively looking to disclose more data and information to improve the ability of our stakeholders to assess our performance. In the interests

of transparency, we worked hard to ensure that data was made available in user-friendly formats, making it easier for people to understand our business, our performance and targets.

We achieved both our emissions and flaring targets for the year, reduced methane emissions by 33% and in other key ESG metrics, including carbon intensity and oil-in-water, we also had our best year-to-date.

Our commitment January 2023	Outcome
Total flare below 5,000 tonnes	4,708 tonnes
Scope 1 CO2 emissions below	179,447 tonnes
200,000 tonnes

We continue to include ESG-related targets for Serica-operated facilities in the company-wide staff remuneration scheme. Our 2024 ESG bonus-related target for the Bruce facilities is to further reduce its Scope 1 carbon intensity to 15.5 kg CO2/boe, which will be our lowest level ever.

Environmental, Social and Governance Report 2023 7

In 2023 we stepped up our efforts on methane reduction and joined 'OGMP 2.0', the UN's flagship oil and gas reporting and mitigation programme, and have started our journey towards Gold Standard status. As part of our membership,

we developed a Methane Action Plan, kicking off with aerial methane surveys of our Bruce facilities. Another innovation contributing to the significant reduction in our methane emissions was the isolation of a vent line in our glycol unit, allowing us to divert gas away from the vent line to be processed instead. Reinstatement of a water injection well dedicated to eliminating oil in water over-boarding was completed in April 2023, reducing our oil discharged from 0.9 to 0.2 tonnes and the temporary use of a smaller power unit during a maintenance campaign significantly reduced our diesel consumption, slashing our emissions on that front.

Many of these innovations originated as a result of core personnel thinking outside the norm and seeing their routine tasks through an ESG lens, then sharing their ideas with the wider team for a shared positive result.

Looking forward, we will continue to forge partnerships to reduce emissions, develop our people, support our communities and look to the future, in the knowledge that our teamwork is backed by a fully supportive Board.

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Our Board

Strong and effective governance is bolstered by the experience of the Board. During 2023 we welcomed five new Board members, increasing the number of independent non-executive directors to broaden both its diversity and experience. We set up a dedicated Sustainability Committee to focus on ESG-related risks and opportunities and to enhance sustainability governance. Serica is a signatory to the UN Global Compact and aligns with TCFD reporting recommendations.

Transparent reporting

As we progress on our ESG Journey, we strive to ensure that our ESG reports continue to provide all stakeholders with a clear and transparent picture of our performance and our plans going forward. This report is aligned to multiple internationally recognised sustainability reporting frameworks and standards, including TCFD and SASB. This report is also prepared in accordance with the 2021 GRI Standards.

In 2023, we officially acquired Tailwind Energy and those assets have now been incorporated into our reporting.

Environmental, Social and Governance Report 2023 8

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

Environmental

Greenhouse gas emissions	10
Waste management	20
Water and biodiversity	23
Innovation	27

Environmental, Social and Governance Report 2023 9

Greenhouse gas (GHG) emissions

Highlights

• Lowest carbon intensity since 2018
• Circa 5,500 tonnes of CO2 saved via installation of temporary power generators
• Joined OGMP 2.0 and reduced methane emissions by 33%
• Conducted an Aerial Methane Survey
• Incorporated former Tailwind assets into emissions reporting

The combustion of fossil fuels is a leading contributor to global warming and anthropogenic climate change. Our own GHG emissions, especially CO2, are strictly monitored and measured, giving us accurate data as we focus on reducing our emissions. Our Bruce Scope 1 emissions reduction targets are aligned to the North Sea Transition Deal, a deal backed by the UK Government and Industry to reach a net zero UKCS basin by 2050. The targets to reduce CO2 emissions are the driving force behind our own Emissions Reduction Action Plan. At the end of 2023, our scope 1 emissions had fallen by over 20% compared to 2018.

CONTENTS	INTRODUCTION	ENVIRONMENTAL	SOCIAL	GOVERNANCE	APPENDICES	GLOSSARY

"We support the targets set out in the North Sea Transition Deal and have developed a plan to help us reduce our emissions in line with these targets and actively engage with our partners on their plans"

Matt Neal - Energy Transition Engineering Advisor

Environmental, Social and Governance Report 2023 10