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Reconnaissance Energy Africa Ltd.
Supreme Court of British Columbia (Vancouver)

This is a shareholder class action on behalf of a class consisting of all persons and entities who purchased or otherwise acquired the securities of Reconnaissance Energy Africa Ltd. (“ReconAfrica”) between May 30, 2020 and September 7, 2021 (the “Class Period”), excluding those persons and entities that have issued their own action or a member of a certified class action in the United States and who have not otherwise opted out of said certified class action in the United States. 

During the Class Period, the Company signaled its planned fracking by referencing “unconventional” resources and “shale” deposits within Namibia. In industry parlance, “unconventional” resources and/or “shale” deposits refer to oil and gas deposits requiring extraction by fracking. These false statements resulted in ReconAfrica’s share price being artificially inflated.

Commencing June 24, 2021, research firm Viceroy Research LLC (“Viceroy”) published a report exposing the Defendant’s wrongdoing. The report detailed ReconAfrica’s unrealistic fracking intentions, and the omission of material facts concerning their data from the Company’s promotional test well announcements. Viceroy continued to publish additional reports further revealing the Defendant’s misrepresentations and weak prospects for conventional oil and gas production. Those reports included a Viceroy report dated September 7, 2021, the last day of the Class Period, pointing out significant weaknesses and omissions in the Company’s then most recently announced test results. During the Class Period, the Defendant failed to disclose to investors that: (1) ReconAfrica had not determined whether Namibia would allow fracking, which had never been done in Namibia, and which was central to the Company’s business plans; and (2) ReconAfrica possessed data from its test wells that revealed poor prospects for achieving oil and gas production that would be commercially viable. These omitted material facts undermined the Defendant’s public statements made during the Class Period, rendering them misleading. When publicly corrected, the markets’ reaction was immediate and harsh. On September 7, 2021, when the Viceroy Report was published, ReconAfrica’s closing share price dropped from $6.50 to $5.90, or 12.8%, on record trading volume.