Oil firm ReconAfrica agrees to class action settlement
Africa-focused, Canada-based upstream firm ReconAfrica has agreed to pay $10.8mn in total to eligible shareholders to settle class action lawsuits lodged in different jurisdictions over allegations that the company made misleading statements.
The company will pay $7.05mn to investors who bought its shares on the US over-the-counter (OTC) markets and $3.7mn to shareholders who bought securities in the firm on Canada's TSX Venture Exchange and the Frankfurt Stock Exchange within specified class periods.
In Canada, parties reached the proposed settlement after a full-day mediation in October 2023, without any admission of liability by ReconAfrica. A hearing has been scheduled on 20 June for the British Columbia Supreme Court to approve the settlement.
The plaintiffs allege that between May 2020 and September 2021, ReconAfrica released misleading statements, including its plans to undertake hydraulic fracturing of "unconventional" resources and "shale" deposits within Namibia. The firm failed to disclose that Namibia has never before allowed fracking. The plaintiffs further claim that ReconAfrica did not disclose data from its test wells that revealed poor prospects for achieving commercially viable oil and gas production.
The company also stands accused of undertaking unlicensed drilling and illegal water usage, as well as other environmental and human rights violations. It denies all these allegations.
ReconAfrica has a current market capitalisation of C$204.7mn. Earlier this month, it raised C$17.25mn in a public share offering.
The firm plans to undertake a multi-well drilling campaign this year, with the first well in Namibia's Damara Fold Belt scheduled for June. The company controls the entire Kavango sedimentary basin, which spans over 300km from the northeast of Namibia to northwest Botswana. Early estimates claimed the basin could hold as much as 31bn bl of oil, of which 22.3bn bl are in Namibia and 8.7bn bl in Botswana.
ReconAfrica has a 90pc stake in the PEL 73 licence, which extends 25,000km² across northeast Namibia. The remaining 10pc is held by Namibian state-run company Namcor.
The Kavango basin includes part of the ecologically sensitive Okavango Delta, a Unesco World Heritage site. The Okavango watershed consists of the Okavango river and a network of shallow, interlinked aquifers, which is a vital water source for more than a million people. The delta also serves as a habitat and migration path for many endangered animal species.
Last year, ReconAfrica received environmental approval to drill 12 more wells in the Kavango. The firm recently completed a technical review of its entire exploration inventory in Namibia and now expects to find a mix of oil and gas.
ReconAfrica announced an updated prospective resource estimate for Damara last month, indicating an unrisked 15.4bn bl of undiscovered oil initially-in-place. This compares with a previous estimate that pointed only to prospective natural gas resources amounting to 22.4 trillion ft³. The change "is the result of in-depth analyses of all geochemical data, including cores, cuttings, mud logs, seeps and additional basin modelling studies," ReconAfrica said. The firm has made the updated estimates available to potential joint venture partners and expects to complete this month a farm-out process that it started in December 2023.
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Canada’s TMX pipeline ready to move crude: Update
Canada’s TMX pipeline ready to move crude: Update
Adds regulatory approvals received. Calgary, 30 April (Argus) — Canada's 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline can now start moving volumes to the Pacific coast after receiving final regulatory approvals today, more than a decade after the project was first conceived. The Canada Energy Regulator (CER) approved Trans Mountain's final applications on Tuesday, giving the midstream company a green light to put its C$34bn ($25bn) project into service. Trans Mountain had recently maintained its commitment to being ready by 1 May. The expansion nearly triples the existing 300,000 b/d Trans Mountain line that runs from Edmonton, Alberta, to Burnaby, British Columbia. Also expanded was the Westridge Marine Terminal from one dock to three, all capable of loading Aframax-sized vessels. The line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. Much of the new volume to flow on TMX is expected to be heavy sour crude. Federally-owned Trans Mountain had submitted applications as recent as 15 April for the final section of the pipeline about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The final applications concerned piping, valves and other components at two pipeline inspection device traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. The pipeline had been marred by legal challenges and cost over-runs since it was first proposed in 2013 by its then-owner US midstream firm Kinder Morgan. The Canadian government took ownership of it in 2018. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New US rule may let some shippers swap railroads
New US rule may let some shippers swap railroads
Washington, 30 April (Argus) — US rail regulators today issued a final rule designed to help customers switch railroads in cases of poor rail service, but it is already drawing mixed reviews. Reciprocal switching, which allows freight shippers or receivers captive to a single railroad to access to an alternate carrier, has been allowed under US Surface Transportation Board (STB) rules. But shippers had not used existing STB rules to petition for reciprocal switching in 35 years, prompting regulators to revise rules to encourage shippers to pursue switching while helping resolve service problems. "The rule adopted today has broken new ground in the effort to provide competitive options in an extraordinarily consolidated rail industry," said outgoing STB chairman Martin Oberman. The five-person board unanimously approved a rule that would allow the board to order a reciprocal switching agreement if a facility's rail service falls below specified levels. Orders would be for 3-5 years. "Given the repeated episodes of severe service deterioration in recent years, and the continuing impediments to robust and consistent rail service despite the recent improvements accomplished by Class I carriers, the board has chosen to focus on making reciprocal switching available to shippers who have suffered service problems over an extended period of time," Oberman said today. STB commissioner Robert Primus voted to approve the rule, but also said it did not go far enough. The rule adopted today is "unlikely to accomplish what the board set out to do" since it does not cover freight moving under contract, he said. "I am voting for the final rule because something is better than nothing," Primus said. But he said the rule also does nothing to address competition in the rail industry. The Association of American Railroads (AAR) is reviewing the 154-page final rule, but carriers have been historically opposed to reciprocal switching proposals. "Railroads have been clear about the risks of expanded switching and the resulting slippery slope toward unjustified market intervention," AAR said. But the trade group was pleased that STB rejected "previous proposals that amounted to open access," which is a broad term for proposals that call for railroads to allow other carriers to operate over their tracks. The American Short Line and Regional Railroad Association declined to comment but has indicated it does not expect the rule to have an appreciable impact on shortline traffic, service or operations. Today's rule has drawn mixed reactions from some shipper groups. The National Industrial Transportation League (NITL), which filed its own reciprocal switching proposal in 2011, said it was encouraged by the collection of service metrics required under the rule. But "it is disheartened by its narrow scope as it does not appear to apply to the vast majority of freight rail traffic that moves under contracts or is subject to commodity exemptions," said NITL executive director Nancy O'Liddy, noting it was a departure from the group's original petition which sought switching as a way to facilitate railroad economic competitiveness. The Chlorine Institute said, in its initial analysis, that it does not "see significant benefit for our shipper members since it excludes contract traffic which covers the vast majority of chlorine and other relevant chemical shipments." By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
First TMX cargo booked on Aframax to China
First TMX cargo booked on Aframax to China
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Canada’s TMX awaits regulator OK on eve of service
Canada’s TMX awaits regulator OK on eve of service
Calgary, 30 April (Argus) — Regulatory approvals needed for the 590,000 b/d Trans Mountain Expansion (TMX) crude pipeline in western Canada are coming down to the wire on the eve of entering commercial service. The major crude pipeline last week maintained its plan to start commercial operations on 1 May, but three filings remain under assessment by the Canada Energy Regulator (CER) with less than 24 hours to go. Federally-owned Trans Mountain requires all sections, called spreads, of the pipeline to receive regulatory blessing before the line can be put into service. Outstanding are applications pertaining to Spread 5B Part 3, which runs from kilometer post 1064 to 1067, according to CER's website. The segment is near Hope, British Columbia, about 140 kilometers (87 miles) east of the line's terminus in Burnaby. The three applications concern piping, valves and other components at two pipeline inspection gauge (pig) traps and the mainline pipe between the two traps. The traps were added for safety assurance when the operator was allowed by CER to use a smaller diameter pipe as part of the Mountain 3 deviation. Mountain 3 was the last segment of the pipeline to be constructed because of delays relating to difficult terrain while tunneling. TMX will nearly triple the existing 300,000 b/d Trans Mountain system that connects oil-rich Alberta to the docks in Burnaby, British Columbia. Importantly, the line will provide Canadian oil sands producers with a significant export outlet without having to first go through the US. The "golden weld" marking the end of construction occurred on 11 April, according to Trans Mountain. A group of shippers last week expressed concern that TMX would not be ready for commercial service by 1 May. Spreads 6, 7A and 7B stretching from kilometer post 1075 to 1180 were approved earlier in the week, bringing the total number of approvals up to 39. The expansion was first conceived more than a decade ago with the intention of being operational by late-2017, but that date slipped amid cost overruns and repeated delays. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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