NEW YORK, March 23, 2004 (PRIMEZONE) -- Rabin, Murray & Frank LLP announces that a class action lawsuit was filed on behalf of purchasers of the securities, including the common stock traded in overseas markets and the American Depository Receipts trading on the NYSE, of Royal Dutch Petroleum Company ("Royal Dutch") (NYSE:RD) and/or The Shell Transport and Trading Company, PLC ("Shell Transport") (NYSE:SC) between December 3, 1999 and January 9, 2004, inclusive (the "Class Period"), seeking remedies under the Securities Exchange Act of 1934 (the "Exchange Act").
The action is pending in the United States District Court for the District of New Jersey against defendants Royal Dutch, Shell Transport, Shell Petroleum N.V., the Shell Petroleum Limited, Maarten van der Bergh, Judy Boynton , Malcolm Brinded, S.L. Miller, Harry J.M. Roels, Paul D. Skinner, M. Moody-Stuart, Jeroen van der Veer, and Philip R. Watts. According to the complaint, defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission, and all amendments thereto by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges the defendants' deliberately violated accounting rules and guidelines relating to oil and gas reserves, resulting in a shocking and unprecedented overstatement of oil and gas reserves, the eventual disclosure of which damaged purchasers of Royal Dutch and Shell Transport securities and rocked the investment community. The complaint alleges Royal Dutch and Shell Transport had classified and reported, in SEC filings and other public documents, certain reserves as "proved reserves" from a project off the western coast of Australia called the Gorgon Joint Venture, and various projects in Nigeria. In fact, unbeknownst to investors, the reserves did not meet SEC and industry requirements necessary to be classified as "proved," and were improperly reported as proved reserves in Royal Dutch's and Shell Transport's financial reports, thereby materially and artificially inflating a key measure of the companies' financial position and competitive standing. As a result of these material misrepresentations, Royal Dutch and Shell Transport's true value in the marketplace was severely overstated and misunderstood.
On January 9, 2004, Royal Dutch announced that it was going to write-down its proved oil and gas reserves by 20%, or 3.9 billion barrels, from 19.5 billion barrels to 15.6 billion barrels. The write-down: (a) cut Shell's reserve life from 13.4 years to 10.6 years; (b) increased its worldwide 5-year average reserve replacement cost per barrel from $5.49 to $12.57 --- $7.06, or 128% greater than the industry average of $5.51; (c) increased Shell's finding and development costs to $7.90 per barrel -- well above the costs of its competitors; and (d) reduced Shell's Appraised Net Worth downward by up to 7.1%, or $9.6 billion. Following the announcement, Royal Dutch ADRs fell 7.87%, from $52.76 to $48.61 on the NYSE, and Royal Dutch ordinary shares fell by 7.10%, from the U.S. equivalent of $52.91 to $49.15, on the Amsterdam exchange. Shell Transport ADRs were down 6.96% from $44.81 to $41.69 on the NYSE and Shell Transport ordinary shares were down 6.84% on the London exchange from the U.S. equivalent of $7.36 to $6.86. In addition, Moody's placed the AAA rating of Royal Dutch and Shell Transport under review for possible downgrade because the write-down materially and adversely affected the companies' reserves-to-debt ratio. Following the belated disclosure, most analysts and commentators concluded that, because of the magnitude of the write-down and the clear SEC and industry guidelines relating to reserve classification, the reserve overstatements could not have been a result of error or accident, but rather, that the reserves were knowingly overstated to preserve the companies' credit rating and to shore up their competitive position.
Plaintiff is represented by the law firm of Rabin, Murray & Frank LLP. Rabin, Murray & Frank LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you bought the securities (including ordinary shares and/or ADRs) of Royal Dutch and/or Shell Transport, between December 3, 1999 and January 9, 2004 and sustained damages, you may, no later than March 26, 2004, move the Court to serve as lead plaintiff. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at www.rabinlaw.com. Contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Rabin Murray & Frank LLP to discuss this action, this announcement, or your rights or interests.