Transition Risks Description Risk Mitigation Resilience Policy and Legal Potential exposure to risk of climate litigation as Rex continues to grow its oil & gas business • The Group recognises that the oil & gas industry is a key target of climate litigation. • Litigations may be triggered by adverse operational impacts such as oil spills or health and safety accidents. Financial impact: Higher cost incurred to comply with operational safety requirement Value Chain and Impact Region(s): Oil & Gas segment, Non-Oil & Gas segment Likelihood and Time period: • Possible • Short, Medium, Long The Group engages in projects that adhere to stringent environmental standards, ensuring that their operations cause minimal harm to the environment in the different regions where they operate. The Group’s operating subsidiaries have in-house Health, Safety, and Environment (“HSE”) managers to oversee the impacts of drilling and production activities. External consultancy firms are sometimes engaged to conduct Environmental Impact Assessments (“EIA”). The Group continues to strengthen its resilience by integrating climate considerations into governance, monitoring regulatory developments, and maintaining compliance with environmental standards. The Group has improved on its operational management through active monitoring, regular audits, and adherence to HSE frameworks to support safe and responsible energy production. In addition to its investments in carbon capture projects, the Group continues to explore low carbon initiatives and business diversification efforts as part of its evolving strategy to navigate industry transitions. While these efforts are ongoing, the Group carefully considers climate-related risks in its operations and decision-making. Technology Technological advancements in renewable energy alternatives such as small-modular nuclear energy, cheaper solar panels and improved batteries • The Group recognises that the advancement in technology of solar panels and batteries reduces consumers reliance on traditional fossil fuels. Financial impact: Reduced demand for oil leading to lower revenue Value Chain and Impact Region(s): Oil & Gas segment Likelihood and Time period: • Likely • Medium, Long In the short term, we will continue to monitor short-term oil prices and consider hedging strategies to mitigate the impact of market volatility. In the long term, the Group has received shareholders' approval to expand into sustainable energy solutions and materials utilised across various sectors. As part of this diversification strategy, the Group has made investments in businesses outside the oil & gas industry since 2021, which do not significantly alter the overall risk profile of the organisation. Under both IEA APS and STEPS scenarios, the share of renewable energy, such as solar photovoltaic and wind, will increase, with APS seeing a greater increase. Instead of becoming a late entrant in the capitalintensive renewable energy sector, the Group has strategically invested in selected technology-driven businesses that could generate future revenue streams beyond its core oil & gas operations. 76 Annual Report 2025
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