LGX Oil + Gas Inc ROAOF

Oil giant Shell faces bigger lawsuit

[bcjt]

THEY WILL NEED OILEXCO"S OIL !!!! Oil giant Shell faces bigger US lawsuit James Rossiter, Evening Standard 19 March 2004 AMERICAN lawyers stalking Shell with massive fraud claims are ready to extend their attack on the embattled oil major following its second reserves shock in just three months. More than £1bn was wiped from Shell's stock market value yesterday after it was forced to downgrade nearly 500m barrels of 'proven' oil and gas on its books. Multi-billion dollar class action lawsuits pending may now be extended to include thousands of new investors who have bought Shell stock since its first reclassification in January. 'We are watching the share price. It may be that the class period - the time over which Shell investors have lost money - gets extended,' said one source involved in the legal proceedings. All 15 competing class-action claims filed on behalf of all Shell investors in US courts allege investment losses between 3 December 1999 and 9 January this year, when the group revealed it had overstated oil and gas reserves by 3.9bn barrels, or 20%. The shares quickly fell to a three-year low of 348 3/4p after the first cut. Yesterday they slid 11p to 361p and today were down a further 1/2p at 360 1/2p. Lengthening the class-action period would allow new investors to sue, including many hedge funds thought to have bought into Shell to profit from its share price volatility. The axe may fall again INSTITUTIONAL investors are willing to give Shell's new executive team time to resolve the reserves issue crippling the group, but warn that more changes may be necessary. Sir Philip Watts and his exploration chief Walter van de Vijver were ousted a fortnight ago and speculation has raged that a further cull may take place, centring on finance chief Judy Boynton. But analysts, shocked by yesterday's second reserves downgrade in three months, have called for calm until the group's audit committee completes its internal review next month. Finley McDonald, UK investment manager at Britannic Asset Management said: 'We are more interested in getting to the end of the review process and seeing the outcome of that before making a judgment. It's wrong to say people are happy with the management but there needs to be an element of pragmatism here. We have to give them a chance to get their feet under the desks and judge the extent of the problems.' US reports suggest that Boynton and Shell's new chairman Jeroen van der Veer knew about the reserves problem as long ago as February 2002, a claim vehemently denied by van der Veer. Insiders believe Watts' departure may be enough to satisfy the critics, who will now have to wait until the delayed annual general meeting on 28 June to vent their frustrations at the new directors. Watts has hired Washington lawyers Crowell & Moring to advise him as the prospect of criminal charges remains. The US Justice Department is investigating the crisis. • An energy consortium, including Shell, working on the huge Kashagan oilfield in Kazakhstan has been hit with a $150m (£82m) fine for delaying commercial output by three years to 2008.