Texas-based oil explorer Kosmos Energy has been sued in the US for giving false projections to shareholders that Ghana’s Jubilee oil fields will be able to produce 120,000 barrels of oil per day beginning 2012.
Lead Jubilee operator, Tullow Oil in its trading statement January 18, 2012 said daily output from Jubilee will range from 70,000 barrels to 90,000 barrels in 2012 instead of the plateau output it forecasted.
A US law firm, Kendall Law Group led by former federal judge Joe Kendall announced February 6, 2012 that a lawsuit has been filed against Kosmos Energy for securities violations concerning their initial public offering (IPO).
The law firm said the complaint, filed in Dallas, Texas, charges Kosmos Energy and certain of “its officers and directors with violations of the federal securities laws concerning Defendants’ positive statements regarding the financial condition, business and prospects of the Company.”
“The Company’s Registration Statement created the materially misleading impression of the business by stating that the Jubilee Oil fields in Ghana would produce 120,000 barrels of oil per day,” Kendall said in a statement.
But on July 6, 2011, the statement said a Kosmos Energy business partner announced that the Jubilee Oil field was “experiencing difficulties in meeting the previously stated projections due to design defects in the oil wells and that the fields were underperforming, producing at or around 80,000 barrels of oil per day.”
Kendall indicated that the complaint alleges that Kosmos Energy failed to disclose the design defects in the oil wells, despite the fact that the Company was aware of this prior to the IPO.
Another US law firm Gilman Law LLP has also filed a similar lawsuit against Kosmos Energy on the matter on behalf of some shareholders.
Immediately oil production from Jubilee was downgraded January 18, 2012, shares of Tullow and Kosmos fell in value.
Tullow fell 4.2% to close at 1,394 pence in London. In Accra, it fell 3.2% to close at GH¢30, the lowest since August 3, 2011 when the shares started trading on the Ghana Stock Exchange, reports Bloomberg January 18, 2012.
According to the report, the value of Kosmos Energy’s shares fell 3.5% to close at $13.42 in New York while Anadarko’s rose 1.3% to $80.24.