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RECWF.US
id: 1124

ReconAfrica (RECAF) $7.05M Kavango Area Issues U.S. Settlement

E.D. New York
Court
1:21-cv-06176
Case number
28 Feb 2019
Class period Start
07 Sept 2021
Class period End
Reconnaissance Energy Africa (RECWF) agreed to settle $7,05M with investors to end claims over hiding unconventional means for energy extraction in the fragile Kavango area.

Case Details:

Between October 2020 and September 2021, investors were informed of issues with ReconAfrica's energy operations in Namibia and Botswana.
  • These included unconventional extraction, unlicensed drilling, illegal tests, legal violations, improper hiring, and community info lack.
In a report released on September 7, 2021, Viceroy Research criticized ReconAfrica's handling of data from their 6-2 well, calling it an attempt to spin disappointing results.
  • They pointed out unreadable logs, misleading interpretations of water saturation, and the need for fracking, which is illegal in Namibia.
As a result, shares dropped by 12% the same day.

Based on these events, ReconAfrica and its leaders were accused of hiding or misleading about the following details:
  • They planned unconventional extraction methods like fracking in the fragile Kavango area.
  • ReconAfrica conducted unlicensed drilling, illegal water usage, and violated laws, risking future licenses.
  • They also failed to inform locals and focused on the Owambo Basin instead of the claimed Kavango Basin.
ReconAfrica has now decided to end all allegations related to the Kavango area business by paying a $7.05M settlement to investors. They are also paying CAD $5,07M settlement to Canadian investors for the same case.


Alleged Offence
Misleading Statements
Failure to Disclose
Omissions
Suspected Party
Directors
Management
Security Type
Depository Securities (ADS, ADR, GDR)
Trade Direction
Long
Filing date
25 October 2021
Lead Plaintiff Deadline
27 December 2021
Plaintiffs
Jeff M. Owen,
Attorneys
Glancy Prongay & Murray LLP (Los Angeles, CA)
Defendants
James Jay Park, Scot Evans, Ian D. Brown, Carlos Escribano, Shiraz Dhanani, Mark Gerlitz, James Granath, Claire Preece, Ndapewoshali Shapwanale, Chris Gilmour, Sindila Mwiya
Judge
Hon. Frederic Block
Trades matching type
FIFO
+$7,049,523
Total Settlement Amount

Frequently Asked Questions

Reconnaissance Energy Africa Ltd

Reconnaissance Energy Africa Ltd., a junior oil and gas company, engages in exploration and development of oil and gas potential in Namibia and Botswana. It holds a 90% interest in a petroleum expl...

    Ticker
    RECWF.US
    Sector
    Energy
    Industry
    Oil & Gas E&P
    Country
    USA
    Address
    PO Box 48326 Bentall, Vancouver, BC, Canada, V7X 1A1