How are you approaching risk management in E&P operations, particularly in regions with geopolitical or regulatory uncertainties?

As an Operator of mature producing assets, our priority within E&P Operations is:

1. Mitigating all inherent risks associated with production operations and the integrity of our assets
2. Proactively preparing for the abandonment of our assets – both technically and financially
3. In general, upholding an unquestionable licence to operate, particularly regarding the sustainability of our Operations

We operate in two distinctly different jurisdictions in the Philippines and New Zealand, where various regulatory frameworks are at different stages of maturity or certainty. Matahio’s approach for the above three items is to adopt a Group-wide consistent strategy, which ultimately results in implementing a more robust solution, compliant with one country’s more mature regulatory framework, in the other country. For example, our approach to the pre-funding of our Abandonment liability in the Philippines, mandated by the Philippines Government, has been adopted in New Zealand, well in advance of any new abandonment securities legislation being implemented (and there remains uncertainties regarding this today) – we believe this approach has enabled – and de-risked – obtaining certain approvals required from the NZ Government.

To facilitate this, Matahio have an influencing presence in the Industry Bodies in both jurisdictions, namely the PAP in the Philippines (where our Country Manager is the President) and ERA in NZ. This affords Matahio a seat at the table in discussing Regulatory risks and uncertainties directly with Governing bodies and an opportunity to share our learnings via our international exposure. Our participating in these arenas is one aspect of a broader engagement with the respective Ministries.

What measures do you take to foster positive relationships with local communities and stakeholders affected by E&P activities?

Matahio is committed to making a positive impact on the communities in which we operate. Three broad actions underpin that goal:

1. CSR programs within Matahio’s Corporate ESG plan – Matahio undertakes a broad range of CSR and sponsorship activities within the communities within which we operate, under common themes such as education, improving climate resilience and enhancing livelihoods.
2. Local content – in both our Operating offices, Matahio employs 100% local staff, including Senior and Country-level Management. Visibly promoting and developing local workforce, with the support of Matahio’s Corporate / centralized teams, ensures an inherent connection to the culture and allows proactive integration across the Company.
3. Our approach in NZ Onshore – as we have onshore operations in NZ, Matahio has dedicated, in-house resource to continually engage with lease holders, Regional Councils and the Iwi to ensure that they are continually updated and that they have a voice in supporting the sustainability of our business.

How do you adapt to fluctuations in oil and gas prices and market dynamics, and what strategies are in place to maintain profitability and competitiveness in such environments?

Matahio has three mechanisms for remaining resilient to low commodity prices:

1. Generally low cost base with sophisticated cash flow forecasting process – Matahio accepts that it has no control over commodity prices, so it is imperative that we maintain a low cost base, implemented via continual cost restructuring and optimisation. Further, Matahio’s cash flow forecasting process accounts for both upside and downside scenarios and provides this visibility to management on a frequent basis.
2. Contractual mechanisms – Given the lessons learned through multiple downturns, Matahio’s operating contracts have built-in flexibility to reduce scope and cost when required. This flexibility is possible due to establishing long life / full life of field partnerships with vendors and service providers that ensure that both Matahio and its contractors are incentivised in the same way.
3. Commercial instruments – Matahio also has commercial levers that allow us to hedge or lock in higher oil prices before they drop.