Emissions Due Diligence

Motivation

Goal7's client, a Private Equity firm was evaluating an investment opportunity in a package of E&P assets marketed for sale in the UK. Goal7 performed an emissions and carbon reduction-based Red Flag Diligence review of the portfolio, including assessing re-purposing for new energy and low carbon solutions.

Our Approach

Goal7 performed a due diligence review of the assets, using access to the vendor's data room information, publicly available information on the assets and their emissions, our in-house knowledge of the assets and relevant industry experience. We were involved in Q&A with the target management team and worked closely with the client's other advisors.

Goal7's review included the following elements:

• Assessment of emissions (absolute and intensity), including baseline, forecast for business as usual case and under specific investment scenarios
• Benchmarking of asset emissions and asset performance versus relevant Independent operators and best-in-class performing assets in similar regions
• Assessment of compliance with existing regulations and evaluation of future legislative changes that may harm the portfolio
• Physical and transition climate analysis, including risk rating, mitigations and high-level cost estimates
• Analysis of emission reduction commitments, Energy Transition Projects and Carbon Capture projects, their potential effectiveness, and assess any gaps in asset plans versus regulatory requirements, including NSTD targets
• Identification of new carbon emission reduction initiatives, including high-level costs and timing for implementation

Benefit and Impact

Goal7's rapid and efficient assessment allowed the client to understand the potential risks, including the costs of implementing carbon reduction plans and opportunities in a short time frame with limited seller-provided data. The client factored in our findings into its assessment and pricing of the opportunity.

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