01 Introduction
02 Environment
03 Social
04 Governance
05 Our ESG Roadmap
06 Performance Summary – metrics
07 Notes to The Mancal ESG Performance Table



1.1 President’s Message
Mancal Energy is proud to release our second Environmental, Social and Governance (“ESG”) report. We believe that it is important to act out of conviction and not for marketing reasons, and while we have only recently started to publish ESG reports, Mancal Energy has been proudly practicing and implementing ESG measures for over 20 years. Over the decades, our shareholders, have built this and other companies using ESG fundamental principles.

Despite the challenges of the pandemic in 2020, we did not lose sight of our focus on sustainability or ESG. This report builds on our 2019 sustainability report and reflects on the challenges of 2020.

Summarized in this report is the work we carried out to further advance our sustainability focus. We continue to evolve our strategy to focus on resiliency - working toward responsible resource development, which balances growth with ESG objectives, such as keeping our employees safe and enhancing people’s lives. We believe this report has an improved ESG reporting structure. We have aligned with the voluntary, but leading Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) frameworks to enable us to identify medium and long-term ESG and climate-related risks and opportunities and to promote further engagement with our stakeholders.

Through this work, we have developed internal procedures and tools to identify our priorities with respect to ESG. Our process of identifying priorities was also guided by a materiality assessment, which was informed by the SASB, TCFD, banking sector ESG focus areas, ESG rating agencies, IPIECA (formerly the International Petroleum Industry Environmental Conservation Association), the UN Sustainable Development Goals and through discussion and surveying of key stakeholders.

In 2019, Mancal Energy commenced actively working on an initiative hailed as MEI 2.0. The focus of the initiative was to streamline both back office and field processes through digital transformation to be a low-cost energy producer. This initiative continued and through 2020 we have reduced our costs and improved our sustainability as a corporation. This increases the Company’s flexibility to focus on increasing our liability reduction initiatives to go beyond the minimum requirements.

Through MEI 2.0 we also determined key performance indicators and set goals and targets to allow for measurement and evaluation of our ESG performance; with an aim to improve ESG performance in the short, medium, and long term. In 2020 we established our first set of ESG goals and targets.

As you’ll see from our targets, we have committed to climate change leadership and reducing our greenhouse gas (“GHG”) emissions. We are targeting a 50 per cent reduction in GHG emissions intensity by 2025 over 2019 levels. We are also targeting a 50 per cent reduction in our flared and vented emissions by 2025 over 2019 levels. Both targets reduce our impact and support Canadian Federal targets to reduce GHG and methane emissions.

In 2020, the world was hit by the COVID-19 pandemic. The pandemic was especially challenging for the oil and gas industry. At Mancal, the health and safety of our employees is our main priority. When the need arose, we quickly put measures in place to help protect our employees against the challenges posed by the pandemic including further advancement of our mental health support system. The pandemic was a wake-up call and a stark reminder of our fragility. The pandemic taught us resiliency and renewed our faith in humanity and the value of human life. Therefore, as we move forward from the pandemic and the tremendous economic pain and inequality that we saw in 2020, we will respond more strongly to social challenges alongside climate change. As such we have increased our education with respect to issues such as diversity and inclusion and truth and reconciliation.

Our progress towards more sustainable and responsible operations is addressed in more detail in this report. There is still much work to be done, but we are committed to protecting our people, the communities we work in, and the environment. We hope you enjoy this report.


Byron Lutes


1.2 Message from Board

Welcome to our second annual Environmental, Social and Governance (“ESG”) report. As the Board of a multi-generational family enterprise, it is our mandate to ensure that, above all else, the values of the family are integrated throughout the operations of the business. Mancal’s Board of Directors (the “Board”) is committed to strong corporate governance and provides oversight on the strategic direction of the business while ensuring that key risks are identified and mitigated. Our corporate purpose of advancing society comprises the foundation of our strategy, capital allocation and investment decisions.

The Board works closely with Management to ensure that the Company’s purpose is communicated and understood at all levels of the organization and is integrated with our strategy. Mancal has a rich history in upholding its values, including the identification and adoption of measures to operate more sustainably. In 2020 and 2021 the Board approved Mancal Energy’s materiality assessment exercise to identify and address the most important ESG issues facing the Company. In addition, we approved new sustainability goals and targets which align with our ESG ambitions. The Board is committed to support Mancal Energy as it works towards increasingly sustainable operations and progress towards our goals and targets.

The past few years have challenged us in ways that could not have been anticipated. At the onset of COVID-19, the Company acted immediately by putting several measures in place to protect our employees while keeping our focus on ESG excellence and safe operations. Nevertheless, the challenges and heartbreaking events of the COVID-19 era also provided an opportunity to revisit and re-focus social initiatives that promote diversity and inclusion, such as supporting truth and reconciliation education in the organization. Canada possesses vast resources as well as the diverse expertise required to lead the world in the transition to a low-carbon intensity economy. Talented individuals, irrespective of their race and gender, are the future of Mancal, and the energy sector.

We are proud of the commitment and progress of Mancal Energy towards our sustainability goals, and we hope that you enjoy reading our ESG report.


M.E. Cannon


1.3 About this report
We used the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD) to provide a framework for this report. We are reporting on SASB disclosure that our leadership team has determined are relevant, but also in areas acknowledged through our materiality assessment. Our intention is to publish an ESG report annually to update our stakeholders on new ESG initiatives and the progress we have made towards our sustainability goals. Any reference to “Mancal”, “Mancal Energy”, “MEI”, “the Company”, “we”, “our”, etc. refers to Mancal Energy Inc. and not any of the other Mancal Group of Companies. Any limitations with regards to the data have been identified within the report.

This report provides our key stakeholders with a comprehensive view of our Company and values, how we are managing risk and setting our goals for the sustainable development of our assets. This report has been completed with data collection procedures to ensure accuracy and assurance readiness. All our GHG emissions data is assured to a level of reasonable confidence through the Alberta Technology, Innovation and Emissions Reduction (“TIER”) regulation. Although we are yet to undertake third-party ESG verification for ESG reporting, pieces of our ESG data are assured and we will continue to evaluate the benefit of broader assurance in the future. Data and data procedures have also been reviewed and approved by Mancal Corporation’s Board of Directors (“Board”).

Data provided in this reported is accounted for using full-year 2020 as a boundary. We also report on 2019 historical data to highlight trends. Given the timing of release, January 2022, we also discuss initiatives and actions taken in 2021, which support our sustainability or ESG ambitions.

As Mancal Energy Inc. is a private company, we do not provide financial statements or operational updates to the public.  Nonetheless, we do actively participate with our public peer companies in all the environmental and socially responsible initiatives our sector has undertaken, making Canada one of the preeminent jurisdictions in the world when it comes to ESG compliance. This report is our second voluntary ESG report. We have elected to publicly report on ESG to demonstrate our commitment to ESG practice and improving our performance. ESG is very important to our sector, local communities, the Canadian economy, and the globe, hence reporting is an opportunity to highlight our focus, highlight the strength of ESG compliance in Canada, identify our gaps and focus on continuous improvement.


1.4 About Mancal
The Mancal Group is owned by the Mannix family and is founded on over 120 years of entrepreneurial spirit, hard work and determination. The Mancal Group believes it shares a responsibility to Canadians and as a result is driven by a commitment to communities and the Canadian people in advancing society.

The Mannix family began their journey with industry in 1898. Through the generations that followed, the family’s resilience, entrepreneurialism and community focus allowed them to continue to successfully construct projects and deliver essential products to support economic growth and social change. With these same guiding principles, the family started Mancal Energy Inc. in 1999.

Mancal Energy’s corporate headquarters are in Calgary, Alberta and our field operations are based in Drayton Valley, Alberta. We are focused on the development and production of liquids rich natural gas and oil. In 2020, liquids production accounted for 45 per cent of our total production. Our annual average production for 2020 was 5,852 barrels of oil equivalent per day. Barrels of oil equivalent is calculated using a conversion ratio of six thousand cubic feet of natural gas for each barrel of oil. This balanced portfolio allows the Company to maintain a strong balance sheet that provides added stability through varying commodity price cycles.


1.5 ESG Adoption at Mancal

1.5.1 ESG at Mancal
At Mancal, we believe that entrepreneurial spirit and collaboration will drive sustainable energy development in this country, and beyond our borders. This commitment is reflected in our community engagement, in our corporate sustainability strategy and through our risk management processes.

The Mancal Group has been operating under the principles of ESG since the late 1800’s. Even in the early years, the ‘outfit’ was a pioneer in sustainability and health and safety practices ensuring that environmental protection and well-being were part of doing business.

Sustainability or ESG is governed through our full Board and is a consideration when reviewing investment opportunities.

At Mancal Energy, we demonstrate our drive for a sustainable environment and economy by:

  • Minimizing our greenhouse gas (GHG) emissions and methane emissions - we have established reduction targets in
    both areas to reduce our impact.
  • Exceeding all regulations to ensure we minimize the impact to the communities in which we operate.
  • Sharing in the benefits of resource development by ensuring our supply chain is supporting local communities.
  • Focusing our attention on the health and safety of our employees.
  • Managing our assets responsibly from the onset of development until end of life.

1.5.2 Our Purpose and Role in Society
Mancal Energy exists to meet the societal demand for energy. Energy fuels our lives, our homes, our schools, our businesses, and our economies. It is essential to our security and to our quality of life. We also appreciate that oil and gas is facing unique challenges today as the world accelerates action on climate change. We appreciate that 75 per cent of global GHG emissions come from fossil fuels (as per information in the International Energy Agency 2021 World Energy Outlook). However, we appreciate energy systems, their complexity, their dynamic nature and how they connect and improve the quality of life for people. Achieving GHG emission reductions and improved ESG performance in other key areas, while meeting the demand for energy, will be a challenge in all corners of the world. Currently, only 11.6 per cent of global total energy supply is from renewables, or ‘clean’ energy (as per information in the International Energy Agency 2021 World Energy Outlook). We firmly believe in the value of energy, and we firmly believe in ESG, hence we will continue to find ways to marry the two for the benefit of Mancal and the world.

1.5.3 Our ESG Strategy
In 2020 our focus on ESG has been informed by our materiality assessment. We expect to sharpen our focus in these areas, which is also reflected in our new sustainability targets.

1.5.4 ESG Integration and Reporting
Mancal’s management team performs an annual risk assessment for the Audit and Risk Committee. The exercise highlights operational and market risks and provides an assessment of the overall risk severity for the Company based on severalrisk factors: complexity of business and environment, organizational and system changes, number and nature of operating locations, degree of information sensitivity and dollar exposure. Risk exposures are identified, mitigated, and monitored. ESG risk is increasingly a focus of this risk assessment.


1.6 Sustainability Materiality Assessment

We believe that sustainable business practice, over the long term, will translate into better financial performance. Our goal is to expand our focus on material issues over time and provide clear disclosure regarding our focus areas. This will ensure that our company remains purposeful in the topics that are most critical and of utmost importance to our business. The following provides an overview of our first sustainability materiality assessment, informed by the Sustainability Accounting Standards Board, TCFD, the Banking sector’s ESG focus areas, ESG Rating Agencies, IPIECA (formerly the International Petroleum Industry Environmental Conservation Association), the UN Sustainable Development Goals and through discussion and surveying of key stakeholders. While the performance data that we are reporting for 2020 does not cover all the material issues identified in our assessment, we will continue to update our assessment as necessary and will
use it to guide the evolution of our ESG reporting in the coming years.

1.6.1 Sustainability Issues Identification
Through our sustainability materiality assessment, we identified 25 key issues for consideration. We deem all of these issues
to be of interest to our stakeholders, albeit in varying degrees.

Economic Environment Social Governance
Clean Technology Adoption GHG Emissions, Strategy & Risk  Community Relations Governance
Business Model Resilience Water Management Health & Safety Diversity & Inclusion
Reserves Valuation & CAPEX Air Quality Indigenous Relations Managing the Legal & Regulatory Environment
Economic Growth Ecological Impacts / Biodiversity Human Rights Business Ethics
Local Hiring & Procurement Waste Management Human Capital & Labour Practices Anti-corruption
  Resource Use    
  Environmental Spills    
  Waste Management    

Table 1: Mancal Sustainability Materiality Assessment - Issues Identified

The top ten sustainability issues we identified are as follows. These issues have been deemed to either present risk to our business today, or have potential to be a threat in the future. A strong focus on these key issues complements our strategy and discussion and metrics on each area follows in this report.

1.6.2 What have we learned?
Investment in Clean Technology
  • We are an oil and gas company focused on exploration and production activities, but we appreciate that to decarbonize, increase efficiency and attract talent, analysis and adoption of clean technology may support our business in the future.
Diversity and Inclusion
  • We learned a great deal about diversity and inclusion in 2020, as did our peers, and as such we have elevated its importance to support its adoption in our workplace. Further commentary on diversity and inclusion can be found here.


TOP 10 Issues Identified
GHG Emissions, Strategy & Risk
Community Relations
Clean Technology Adoption
Health and Safety
Water Management
Air Quality
Diversity and Inclusion
Indigenous Relations
Ecological Impacts / Biodiversity

Table 2: Mancal Key Sustainability Issues

Our operations in natural gas and oil and infrastructure assets exposes us to environmental impacts. We assess environmental impacts primarily through the use of the “control approach”. Throughout this section we have noted where we see strengths and gaps in our understanding, reporting and management of environmental risks. In 2019, Mancal Energy commenced actively working on an initiative hailed as MEI 2.0. The focus of the initiative was to streamline both back office and field processes through digital transformation to be a low-cost energy producer. The economic prosperity that was realized from the initiative continues to be a significant contributor to the Company’s overall strategy of lowering our carbon footprint. Through this process we have proven that we can deliver our business with a focus on environmental initiatives while remaining competitive and sustainable.

2.1 Climate Change
Our climate change reporting is structured as per guidance from the Financial Stability Board’s TCFD recommendations.

2.1.1 Governance
Climate change-related impacts are governed by Mancal’s Board, specifically through our Health, Safety and Environment Committee.

2.1.2 Strategy
Our strategy is to reduce the absolute and GHG emissions intensity of our operations over time. Focus areas are as follows:

1. Zero Methane Emissions Wellsite
We installed a chemical injection pump system, called “Crossfire - Clean Air and Chemical Management Solution”, which is manufactured by LCO Technologies. This ultra-low power chemical injection pump system is designed to reduce maintenance costs, chemical costs, and methane emissions all with the same reliability as standard pneumatic pumps.

The “Crossfire” solution centers on a solar powered instrument air compressor to produce clean, dry compressed air for use in the pneumatic system as opposed to production gas. It is powered by solar energy and is capable of running for days without recharge. The system provides exact chemical volume injection The platform tracks and stores data to achieve profitable emission reductions utilizing Alberta’s carbon credit offset system. Mancal continues to research and implement solutions with the goal of lowering our methane emissions.

2. Zero-flaring well test and clean-up solutions
In 2021, we reduced flared volumes and corresponding emissions from new wells by capturing and selling natural gas volumes through “in-line” temporary pipelines. These volumes would otherwise be flared during post-fractured clean-up periods and testing operations.

3. Tank Vapour Recovery
In 2019, the Company installed a new vapour collection system at our Karr property to capture 100 per cent of the natural gas that previously escaped from the tanks that are used to store oil prior to shipping. During oil storage, light hydrocarbons dissolve in crude oil, resulting in methane vapourization. These vapours are often vented to the atmosphere or flared. To prevent emissions of these light hydrocarbon vapours, Mancal Energy uses this vapour collection technology on its oil storage tanks where practical.

Mancal’s tank vapour capture system eliminates 100 per cent of methane emissions from entering the atmosphere each year.

4. Pneumatic Device Conversions
In 2019, Mancal Energy partnered with an award-winning climate solution company to replace 100 per cent of the Company’s high bleed pneumatic controllers resulting in 3,200 tCO2e annual emissions reduction.

Mancal is committed to reducing methane emissions on all existing sites. On sites where high venting natural gas driven pneumatic pumps are used, Mancal plans to replace with solar powered chemical pumps. The first phase executed in 2021, reduce venting emissions by 20 per cent over 2020 levels. The second phase of this replacement could further reduce venting levels up to 50 per cent of 2020 venting emissions or a reduction of 4,100 tCO2e.

In two of our operating areas, we have also installed Sirius solar chemical injection pumps which have eliminated methane venting from onsite chemical injection activities.

5. Fuel Switching
We utilize bi-fuel drilling rigs, where and when available, which substitute the use of carbon intensive fuels such as diesel with natural gas to reduce the carbon intensity of operations. MEI also trialed the use of natural gas-powered electric generators for wellsites in a core area as a substitution for diesel generators. The electric generators reduce diesel consumption and significantly reduce emissions of CO2, NOx, and SOx from these sites.

We are evaluating climate-related transition and physical risks over the short, medium, and long-term, but are in the early stages.

We are acutely aware that certain weather events could impact our facility investments, such as wildfires, extreme cold weather and/or snowfall.

Mancal Energy maintains a Fire Control Plan to proactively identify risks and manage through prevention strategies to reduce the negative impacts of wildfire. The information in the plan is used to enhance local knowledge and communications between the Forest Protection Division and the Company and has been effective in reducing these negative impacts.

We have not conducted a climate scenario analysis to inform our resilience under different scenarios. As we mature our understanding of scenario analysis, we may adopt this as a planning tool to further support our strategy.

2.1.3 Risk and Opportunity
Climate-related risks and opportunities are identified through interactions with our Board, employees, stakeholders, peers, Government and through key analysis from credible energy authorities, such as the IEA, etc. Mancal’s management team performs an annual risk assessment for the Audit and Risk Committee. The exercise highlights operational and market risks, including climate related risks, and provides an assessment of the overall risk severity for the company based on several risk factors; complexity of business and environment, organizational and system changes, number and nature of operating locations, degree of information sensitivity and dollar exposure.

In 2016, the federal government set a target of reducing methane emissions (from the oil and gas sector) by 40-45 per cent below 2012 levels by 2025. They also put regulations in place to achieve this target. In addition, Alberta set a target to reduce methane emissions from upstream oil and gas by 45 per cent over 2014 levels.

On June 21, 2018, the Greenhouse Gas Pollution Pricing Act (“GGPPA”) came into force. Under the GGPPA, the federal government implemented a national price on GHG emissions. On January 1, 2019, the GGPPA’s backstop mechanisms came into force in provinces and territories that did not have an independent carbon pricing program or where the existing program was not deemed equivalent to the federal system. The federal government has proposed escalating the national price on carbon by $15 per tonne each year from 2023 until it reaches $170 per tonne in 2030.

On January 1, 2020, the Government of Canada applied the federal fuel charge in Alberta under the “GGPPA”. The GGPPA includes provisions to exempt facilities subject to provincial policies that meet federal benchmark criteria. The Technology Innovation Emissions Reduction (“TIER”) regulation in Alberta complies with the federal criteria and is an improved system that assists companies in finding innovative ways to reduce emissions and invest in clean technology. In 2019, Mancal Energy’s TIER application to designate its facilities as an aggregate was accepted and in 2020 Mancal submitted its Aggregate Benchmark Application and Compliance Report.

In 2021, the federal government announced its ambition to establish a new methane reduction target of 75 per cent reductions over 2012 levels by 2030.

Our team is committed to reducing emission intensity and absolute emissions from the Company’s operations and is focused on reducing methane leaks, reducing flaring as well as limiting power consumption through energy efficiency measures. Historically, Mancal has dedicated a significant amount of effort on methane emissions reduction activities as methane is 25 times more impactful on the environment than carbon dioxide over a 100-year period. Past actions include a methane reduction initiative that focused capital investment into leading emission reduction technologies.

2.1.4 Metrics and targets
GHG emissions occur within our oil and gas production facilities. They are produced from flaring, combustion, and venting. Emissions from operations can be classified as direct (scope 1) or indirect (scope 2). Direct emissions result from stationary combustion, flare, vent and fugitive sources while indirect emissions are associated with electricity consumption.

Our direct emissions are primarily generated by the combustion of natural gas used in compressors, heaters, flares, and power generators. In 2020, our direct emissions were 38,723 tonnes CO2e, a 27 per cent decrease over 2019 emissions (53,395 tonnes CO2e) and inline with a 25 per cent decrease in gross operated sales year over year. We made substantial steps to reduce a significant source of GHG emissions by reducing our total methane emissions by 46 per cent over 2019 levels to 14,986 CO2e. The largest contributor to this reduction was the capturing of vented volumes at our Karr facility which resulted in a 58 per cent reduction in vented emissions. Our indirect emissions were 2,976 tonnes CO2e; similar to 2019 with electricity consumption unchanged.

Our corporate emissions intensity (direct and indirect emissions) was 0.0205 tCO2e in 2020.

We report GHG emissions using the “control approach” as guided by the GHG Protocol Corporate Accounting and Reporting Standard. The majority of GHG emissions are from combustion at our production facilities. Methane emissions account for 14,986 tonnes CO2e or 39 per cent of total GHG emissions.

We have not reported scope 3 or value chain GHG emissions but will continue to evaluate this moving forward.

GHG Emissions (tonnes CO2e) 2020 2019
Direct (Scope 1) 38,723 53,395
% Methane or CH4 emissions 39% 52%
Indirect (Scope 2) 2,978 2,976

 In 2021 we established GHG reduction goals, which include:
  • By end-2025, reduce GHG emissions intensity by 50 per cent over 2019 levels.
  • By end-2025, reduce total flared and vented emissions by 50 per cent over 2019 levels.

2.2 Air Emissions
Air emissions in oil and gas facilities in Canada are highly regulated. Pollutants deemed more significant are required to be reported to the National Pollutant Reporting Inventory include carbon monoxide, nitrogen dioxide and volatile organic compounds.

Air emission releases can be harmful at higher volumes and if located within areas of human occupancy. Our air emissions performance in 2020 is outlined below. Data is reported using a “control approach”, which guides our GHG reporting.

Air Emissions (tonnes)   2020 2019
Nitrogen oxides (NOx) 190 148
Sulphur dioxide (SO2) 1.2 1.0
Volatile Organic Compounds (VOCs) 344 558
Particulate Matter (PM10) 7.6 8.2


2.3 Water Management
Water is used for drilling and completion operations which includes hydraulic fracturing. We do not use any hydrocarbonbased fluid to fracture. The Company participates in an online chemical disclosure registry which provides information on hydraulic fracturing and chemical usage, government regulations and groundwater protection. The protection of groundwater is paramount in the Company’s operations. Water that returns to surface following completion of a fracture operation is managed in accordance with AER standards. The protection of groundwater is also managed through wellbore design and construction which ensures that groundwater is isolated and protected from drilling fluids and all oil and gas activities. Produced water is sent to a third-party disposal or reused in our operations.

Fresh water withdrawal in 2020 was 10.6 thousand m3 (2019 - 1.5 thousand m3). The associated increase year over year was a result of increased drilling activity. Water use for fracturing activities in 2020 was 9.1 thousand m3. We expect water use to remain at 2020 levels in future years as we continue to carry out drilling operations using fracturing technology. Although water use has increased, this technology allows us to extract further resource from existing reservoirs. We are actively working on a water management strategy, which will guide our future water use and reduction ambitions.

Mancal Energy operates in areas with low to medium overall water risk as identified through use of the World Resource Institute’s Aqueduct Water Risk Atlas tool, which maps water risks such as floods, droughts, and stress, using open-source, peer reviewed data. Beyond the tools, the Aqueduct team works one-on-one with companies, governments, and research partners to help advance best practices in water resources management and enable sustainable growth in a water-constrained world made possible by the support of the Aqueduct Alliance, a coalition of companies, governments and foundations at the cutting edge of water stewardship.
An image of overall water risk in Alberta, taken from the Aqueduct tool, is shown in the corresponding map. Our areas of operations are identified on the image above. 

Our water data is reported based on the “control approach”, which guides our GHG reporting. 

2.4 Land Disturbance and Biodiversity
Our approach to pad design and horizontal directional drilling maximizes our connection to available oil and gas reserves while limiting the surface area disturbed by our operations. For all new developments, the Company recognizes and respects the existing biodiversity within an area and actively works to minimize operational impact. In areas of interest, studies to identify current activity, flora and fauna are conducted by industry experts during the initial phase of consideration.

Mancal Energy operates and maintains more than 260 kilometers of pipeline, 13 multi-well oil batteries and more than 280 wellsites. The Company’s spill management efforts include monitoring and reviewing the integrity of our assets.

Emergency response training is conducted annually to ensure timely response should a spill occur. We enhance our asset integrity through pipeline inspections such as smart pigging, pipeline surveillance, application of corrosion inhibitors and the abandonment of high-risk wells.


2.5 Abandonment and Reclamation of Assets
The Company’s land use is temporary in nature. As such, we are committed to returning the land to its owners in a responsible manner at the completion of the development and production of a resource. Although the Company currently estimates the associated cost of its asset retirement obligations to occur over a 40-year span, we continue to proactively manage any liabilities as they arise and are compliant with the AER’s requirements.

Mancal Energy remains proactive in ensuring wells are abandoned in a timely fashion and lands are reclaimed to original condition. Currently, Mancal Energy has zero wells that have been inactive for more than 20 years and only three net wells that have been inactive for more than 10 years.

Mancal Energy contributes to the Orphan Well Association, which is managed by the Province of Alberta, to address the abandonment of orphan wells. The Company prioritizes the reclamation of sites with higher environmental risks. In the past year, Mancal has obtained three reclamation certificates.


2.6 Operational Impact
The Company assesses the potential impacts of operations and is sensitive to the cumulative effects that an operation can
have on an area. We continue to work with industry experts, where applicable, to minimize disturbance.
Examples of our actions to mitigate impact include:
  •  Increasing our connectivity to wellsites to effectively monitor day to day operations through digital surveillance. This
    initiative reduces noise, dust, and vehicle intrusion in the communities in which we operate.
  •  In 2021, we introduced cameras at our wellsites to complement our digital surveillance. Increased surveillance reduces
    the amount of site visits required, which reduces travel time, reduces safety exposure hours and frees our operators to
    work on other tasks.
  •  Working with farmers to ensure our operations do not bring in any unwanted plant species. In Central Alberta, we
    implemented a full protection plan to ensure farmland would not be contaminated with clubroot disease that affects
    canola crops. The protection plans included equipment cleaning and decontamination procedures.


  Mancal Energy recognizes that entry into an area is a privilege and therefore works with communities to develop oil and gas resources in a respectful and responsible manner. As a good neighbor, we ensure there is social funding to add to the economic well-being of the communities in which we operate.

Over the last 20 years, Mancal Energy has invested over $900 million in Canada largely in acquiring land, drilling wells, and building facilities. In doing so we have engaged over 6,000 contractors and suppliers in various communities, employed local full-time staff and have paid $260 million to governments, municipalities, and regulators in the form of fees, royalties, and taxes. These funds contribute to Alberta’s investment in building schools and much of the infrastructure that our communities continue to enjoy today. The Company contributes to social programs in communities that we are involved in by funding schools and athletic programs. We are committed to increasing the prosperity of communities and sharing in the economic benefits of resource development.

3.1 COVID-19 Impact and Management
Mancal’s response to the pandemic was swift, proactive, and was focused on keeping our staff and their families safe. We were early adopters of rapid testing programs in collaboration with Creative Destruction Labs and the Government of Alberta. Mancal has since been approved to participate in pilot programs for at-home rapid testing. Our rapid test program has expanded to include testing at active field locations (with oversight by an emergency medical technician) and also includes guests that are welcomed to Mancal offices. Aligned with the government vaccination protocols, Mancal has implemented a mandatory vaccination requirement for all staff.


3.2 Indigenous Relations
The Company has assets that are adjacent to Indigenous lands or are situated on crown lands where traditional use has been established. We are committed to respectful collaboration and ensuring that the rights and title holders’ heritage is considered in the development of these lands.

Mancal Energy consults with Indigenous leaders to coordinate and facilitate discussions around planned projects. The Company aims to improve the economic situation in communities in and around our operations through engagement and economic activity. Throughout our engagement process we invite local and adjacent stakeholders and rights holders to collaborate and understand issues regarding the development plans. The Company gives back to the community in providing support for education and infrastructure.

The Aboriginal Consultation Office of the Government of Alberta has established procedures for consulting with Indigenous communities about their traditional lands. Mancal Energy believes in the consultation process and trusts that consultation will bring the company and community together to ensure the project’s success.

Mancal has made a commitment to educate our staff on the history of Residential Schools. We have implemented a speaker series whereby we welcome subject matter experts to share insights and information that will help staff appreciate the intergenerational trauma caused by the residential school experience. We have also created a Truth and Reconciliation library of Indigenous authors; much of the information provided is through the National Center for Truth and Reconciliation.


3.3 Health and Safety

3.3.1 Management Approach
Mancal Energy has an extensive health, safety, and environment (HSE) program which involves quarterly reporting to the Board on HSE performance. Health and safety is managed at the full Board level. Everyone employed by Mancal Energy is responsible for maintaining our HSE program.

The prevention of incidents and accidents is achieved through front of mind awareness gained from tailgate to boardroom safety conversations, hazard awareness training, and near miss, incident and accident reporting followed by thorough investigations. The HSE program is paramount to the Company. We track key data and safety statistics which allows us to identify trends and opportunities to strengthen our program.

All contractors providing service to Mancal Energy go through a pre-qualification process which requires them to submit appropriate worker compensation, insurance, and safety program documentation for review.

We experienced zero fatalities, zero recordable injuries and zero lost-time injuries in 2020. In our history of operating, we have not experienced a fatality. It is a testament to our safety culture and the diligence of our field staff.

3.3.2 Education & Training
At Mancal Energy, we provide an e-learning experience to our staff and operators through an online library that is used  as a resource to continue development of our competency management and training system. Our e-learning education and training platform allows for both voluntary and mandatory modules based on risk and time sensitivities. For critical competencies, mandatory tests are required to see that those in positions of responsibility are equipped with the knowledge and can perform competently and safely. The e-library also provides a resource to enhance or refresh one’s knowledge as needed.

3.3.3 Emergency Response Plan
Our Emergency Response Plan (“ERP”) provides the steps and procedures required to immediately respond in the event of an accident. The plan is focused on reducing the risk of injury and effects on the environment. To ensure our people and those of our contractors are prepared in the event of an accident, we conduct mock drills of real-life scenarios as well as tabletop exercises to train people to provide a well-coordinated, systematic, and measured approach in the event an actual accident.

The goal is a healthy, injury free environment for our workforce.


3.4 Our People
Mancal Energy is committed to providing a culture of inclusivity and empowerment by encouraging a progressive environment where employees are engaged, motivated, and challenged. We provide meaningful employment where all employees are treated fairly.

Additionally, innovation and creativity are encouraged, and entrepreneurial excellence is rewarded. Our relationships with staff, contractors and partners are important to us, and we act and treat everyone with integrity and respect. The Company believes in compensating fairly and providing a safe and healthy work environment. Through our recruitment process and beyond, we focus on attracting, retaining, and developing talent.

In 2020, we had a total workforce of 23 employees, including 57 per cent female employment. Our turnover rate was 9.5 per cent, which we consider to be within an acceptable range. Currently we have a small number of employees under 30, which we have identified as an area of potential improvement to ensure we have a pipeline of talent coming through our ranks.

3.4.1 Mental Health
Mancal provides ongoing education and information on mental health through our membership with the Canadian Mental Health Association’s “Not Myself Today” program. We also engage with wellness consultants to provide virtual mental health wellness sessions for all staff. We continue to offer the Employee and Family Assistance Program to all staff and their family members.

3.4.2 Flexible Work from Home
Mancal is piloting a new Flexible Work from Home program that allows eligible staff to work from home one day per week.


3.5 Diversity and Inclusion

Hiring and retaining talented professionals from underrepresented groups to build a workforce that better represents our society is of great importance at Mancal. For example, Mancal is proud to have a strong presence of female personnel in various positions such as Mancal Board Chair, Mancal Board Members (over 40 per cent of the board including the Chair). In addition, 25 per cent of the MEI senior leadership team is comprised of female personnel. Mancal is committed to creating a work environment that welcomes and gives a sense of belonging to talented professionals regardless of their race, sex, or religion.

In addition, 57 per cent of our workforce is made up of female personnel. Moving forward we continue to evaluate how we can further engage and promote diversity and inclusion, including potentially reporting on visible minorities in our organization. We believe this is a sensitive area and are approaching this with a level of care.


4.1 Board Committees
Our Board provides oversight on the strategic planning of the business, provides oversight on the business process to identify potential risks and is the primary group influencing corporate governance. The Board has a Human Resources, Compensation and Nominations Committee, an Audit and Risk Committee, a Reserves and Valuation Committee, a Transaction Committee and an Investment Advisory Committee. Health and Safety is managed at the full Board level. The Board has developed and approved management systems that ensure Mancal Energy’s operations comply with all laws and exceed the applicable regulations with respect to the health and safety of all persons associated with the operations of the Company and the protection of the environment. The Audit and Risk Committee meets semi-annually and is responsible for
overseeing financial reporting, internal controls, risk, and compliance. The Board meets on a quarterly basis.


4.2 How Sustainability or ESG is Governed at Mancal
Sustainability or ESG is governed through our full Board. The current ESG focus is centered on recent policy decisions, energy transition, and diversity and inclusion. ESG is a consideration in all investment decisions.


4.3 Key ESG Policies

4.3.1 Business Practice & Ethics Policy
It is the policy of Mancal Energy to maintain the highest standard of ethics in its relationships with customers, governments, suppliers, competitors, joint venture partners, its employees, and the community at large. We must not only conduct, but must be seen to conduct, our business dealings in accordance with high ethical standards.

4.3.2 Equal Opportunity Employer
It is the policy of Mancal Energy that all persons are entitled to equal employment opportunity without discrimination based on the federally and provincially legislated prohibited grounds. Specifically, employment opportunities are open to all qualified candidates based on core competencies.

4.3.3 Whistleblower Policy Mancal
Mancal Energy believes in the protection of individuals against retaliation where an employer’s activities are deemed to be illegal, unethical, or dishonest. The Company subscribes to the C.A.R.E. program which is an acronym for Confidential Anonymous Reporting for Employees. This is an independent service operated by Grant Thornton LLP which allows employees to anonymously raise a concern of misconduct if a violation has not been adequately addressed. While this aspect of governance has been mandated for public companies, it is not a requirement for a private company. Mancal Energy is serious about the values and ethics of the organization and has therefore created a culture of support.

4.3.4 Health & Safety Policy
Mancal Energy embraces and promotes a culture where health and safety, including psychological health, are an integrated component of our overall approach. The Company is committed to providing a safe and healthy work environment for employees, contractors, neighboring communities, and other stakeholders who may be affected by our operations. In fulfilling this commitment, we have developed a health and safety program that details specific health and safety requirements and guidelines in compliance with all legislative requirements. The goal is a healthy, injury free workplace for all workers.

4.3.5 Respect in the Workplace Policy
Mancal Energy is committed to ensuring that employees are provided with a work environment that is respectful and safe. Any type of harassment or behavior that affects the safety and security of employees in the workplace is prohibited by the Company and is not tolerated. All employees are required to attend a “Respect in the Workplace” training seminar.

4.3.6 Environmental Policy
Mancal Energy is focused on minimizing the adverse impacts on the environment resulting from its business activities. To achieve that objective, the Company considers environmental impacts in project decisions and has built management plans that include these factors. We focus on prevention, scheduled environmental reviews and employee training and education as proactive measures to prudently operate the Company’s asset base.

We are compliant with all applicable laws, regulations and have developed appropriate emergency response procedures and remedial action plans that minimize adverse effects on the environment and ensure any impacts are handled timely and efficiently. The Company is responsive and sensitive to the public’s concerns in the conduct of its business activities and is accountable for its actions.


Our organization was built through hard work, honest leadership with strong ethics and on a foundation of environmental and social responsibility. We are proud of where we came from, and we are excited for what is yet to come. Forward looking sustainability goals and targets follow:

Goal Target UN SDG Alignment
Climate Change Leadership By end-2025, reduce GHG emissions intensity by 50 per cent over 2019 levels Goal 13: Climate Action /
Target 13.2
Climate Change Leadership By end-2025, reduce total flared and vented methane emissions by 50 per cent over 2019 levels. Goal 13: Climate Action /
Target 13.2
Gender Diversity Maintain women Board participation at a level of 30 per cent or higher Goal 5: Gender Equality /
Target 5.5
Gender Diversity By 2025, ensure women represent 30 per cent of our executive Goal 5: Gender Equality /
Target 5.5
Gender Diversity Ensure company-wide women employees remain within a range of 40-60 per cent Goal 5: Gender Equality /
Target 5.5

Greenhouse Gas Emissions Unit 2020 2019 SASB Guidance
Scope 1 GHG Emissions        
     Carbon dioxide (CO2) tonnes CO2e 22,916 25,224 EM-EP-110a.1
     Methane (CH4) tonnes CO2e 14,986 27,502 EM-EP-110a.1
     Nitrous Oxide (N2O) tonnes CO2e 821 669 EM-EP-110a.1
Total Gross Scope 1 GHG Emissions tonnes CO2e 38,723 53,395(1) EM-EP-110a.1
Scope 1 GHG Emissions Intensity tonnes CO2e/boe 0.019 0.020(2) Industry and TCFD
Methane GHG Emissions as a percentage of Scope 1 GHG percentage (%) 39% 52%(3) EM-EP-110a.1
Scope 1 GHG Emissions by Activity        
     Flaring tonnes CO2e 6,844 8,107 EM-EP-110a.2
     Stationary Combustion tonnes CO2e 18,553 20,588 EM-EP-110a.2
     Process Emissions tonnes CO2e 0 0 EM-EP-110a.2
     Vented Emissions tonnes CO2e 8,339 19,660 EM-EP-110a.2
     Fugitive Emissions tonnes CO2e 4,987 5,040 EM-EP-110a.2
Total Gross Scope 1 GHG Emissions tonnes CO2e 38,723 53,395 EM-EP-110a.1
Total Scope 2 GHG Emissions tonnes CO2e 2,976 2,978 TCFD
Total Scope 3 GHG Emissions tonnes CO2e N/R N/R TCFD

Air Quality Unit 2020 2019 SASB Guidance
NOx Emissions tonnes 190 148(4) EM-EP-120a.1
SOx Emissions tonnes 1 1 EM-EP-120a.1
Volatile Organic Compounds (VOCs) tonnes 344 558 EM-EP-120a.1
Particulate Matter (PM10) tonnes 8 0 EM-EP-120a.1

Water Management Unit 2020 2019 SASB Guidance
Total fresh water withdrawn m3 b 1,474 EM-EP-140a.1
Percentage water withdrawn from regions with High or Extremely High Baseline Water Stress Percentage (%) 0% 0% EM-EP-140a.1
Total fresh water consumed m3 10,632 1,474 EM-EP-140a.1
Percentage water consumed from regions with High or Extremely High Baseline Water Stress Percentage (%) 0% 0% EM-EP-140a.1
Volume of flowback generated        
Discharged Percentage (%) 0% 0% EM-EP-140a.2
Injected Percentage (%) 100% 100% EM-EP-140a.2
Recycled Percentage (%) 0% 0% EM-EP-140a.2
Total m3 8,482 10,688 EM-EP-140a.2
Fresh water intensity m3/Boe 0.00520649 0.00054041 Industry
Percentage of hydraulically fractured wells for which there is public disclosure of all fracturing fluid chemicals used Percentage (%) 100% 100% EM-EP-140a.3

Biodiversity Unit 2020 2019 SASB Guidance
Description of environmental management policies and practices for active sites Number Disclosure Disclosure EM-EP-160a.1
Number of hydrocarbon spills, volume in Arctic, volume impacting shorelines with ESI rankings 8-10 Number 0 0 EM-EP-160a.2
Aggregate volume of hydrocarbon spills, volume in Arctic, volume impacting shorelines with ESI rankings 8-10, and volume recovered Barrels (bbls) 0 0 EM-EP-160a.2

Community Relations Unit 2020 2019 SASB Guidance
Percentage of (1) proved and (2) probable reserves in or near areas of conflict Percentage (%) 0 0 EM-EP-210a.1
Number and duration of non-technical delays Number and days 0 0 EM-EP-210a.2

Workforce Health & Safety Unit 2020 2019 SASB Guidance
Total recordable incident rate (TRIR) Rate 0 0 EM-EP-320a.1
Fatality rate Rate 0 0 EM-EP-320a.1

Employees Unit 2020 2019 SASB Guidance
Total employees Number or count 23 28  
     Full-time employees Number or count 23 28  
     Total workforce Number or count 13 12  
     Total workforce Percent (%) 57% 43%  
     Managers Percent (%) 4% 4%  
     Executive Percent (%) 4% 4%  
     Board Percent (%) 13% 7%  
     Turnover rate, total Percent (%) 10% 0%  
     Turnover rate, voluntary Percent (%) 10% 0%  

Business Ethics & Transparency  Unit/strong> 2020 2019 SSASB Guidance
Percentage of (1) proved and (2) probable reserves in countries that have the 20 lowest rankings in Transparency International's Corruption Perception Index Percentage 0 0 EM-EP-510a.1

Activity  Unit 2020 2019 SASB Guidance
Oil Production Mbbl/day 1.245 1.712 EM-EP-000.A
Natural Gas Production MMscf/day 0.019 0.016 EM-EP-000.A
NGLs Production MMscf/day 0.008 0.006 EM-EP-000.A
Number of offshore sites Number 0 0 EM-EP-000.B
Number of terrestrial sites Number 433(5) 420(5) EM-EP-000.C

  1. Mancal 2019 GHG information was restated to align with GHG calculation methodologies from TCFD.
  2.  Mancal 2019 carbon intensity was restated as a result of changes to 2019 GHG emissions – see note 1.
  3.  Mancal 2019 percentage methane of total GHG emissions was restated as a result of changes to 2019 GHG emissions – see
    note 1
  4.  Mancal 2019 NOx was restated to due to calculation methodology changes.
  5.  The number of terrestrial sites is reported on a gross basis and is the summation of producing operated wells, inactive operated
    wells, decommissioned wells and wells in active reclamation.

The ESG report has been prepared for informational purposes only. Mancal makes no express or implied representation or warranty as to the accuracy or completeness of the information contained herein. The estimates or projections of future financial and operating performance were prepared by or derived from information supplied by the management of the Company and involve significant assumptions, which may not be realized in fact. Such estimates, projections or other forward-looking statements have been provided to assist in an evaluation of the Company with respect to its ESG activities and performance but are not to be viewed as factual and should not be relied upon as an accurate representation of future results. Actual results may differ materially from those in such estimates, projections or other forward-looking statements. Mancal expressly disclaims any and all liability that may be based on information set forth in the ESG report, errors therein or omissions therefrom.


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