Mangahewa, Kowhai, Turangi, Pohokura connected

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Haylock trial reveals that Mangahewa, Kowhai, Turangi and Pohokura wells are all connected into same structure.

NEW ZEALAND’S FIRST EVER INSIDER TRADING TRIAL Civ 1999-404-899
COMMENCED IN THE AUCKLAND HIGH COURT ON MONDAY 5 MAY 2008 BEFORE JUSTICE WILLIAMS

HAYLOCK & ORS VS J W PATEK & SHELL EXPLORATION NZ LIMITED

Sunday, 11 May 2008, 1.35pm

Press release: On behalf of the Former shareholders of Southern Petroleum NL (SPNL)

Some 700 former shareholders of Southern Petroleum NL are being represented by Parnell business women Rosemary Haylock, & others, in NZ’s first ever insider trading case to be brought to High Court trial.

The defendants are former SPNL and Fletcher Challenge Petroleum Director , James Warren Patek, and Shell Exploration NZ Limited (which succeeded to the assets and liabilities of Fletcher Challenge Energy in March 2001).

On the first day of the trial, Monday 5 May, Gary Judd QC explained how Fletcher Challenge Petroleum set it itself three Challenges in 1992. First, an aggressive land strategy to enhance Petrocorp’s acreage position, secondly execution of a play based exploration programme, and thirdly being top explorer on shore by retaining the best people available. Judd set out the background to the case and the preliminary matters of law in the matter that had been previously addressed by Justice Fisher in 2002 and the Court of Appeal in 2003.

Day two of the trial was focussed on addressing 9 bundles of key documents including a crucial letter dated 6 November 1995 from Patek to the Fletcher Challenge Petroleum executive (for more details refer http://www.ftxit.com/) urging them to increase the takeover offer for SPNL minorities who said they were not being fairly treated. On day three the matter of including into evidence, as documents, certain affidavits filed prior to Justice Fisher’s 2002 decision was addressed. The following morning Justice Williams delivered an important decision under s 130 of the new Evidence Act 2006 granting the plaintiffs’ application.

Rosemary Haylock gave evidence on day four of how disappointed she was at the amount of price sensitive information that seemed to have been withheld from the independent directors of SPNL in 1995.

The first week of the trial ended with Dr Tom Haskell’s expert evidence on the geology of the Taranaki basin and the level of technical disclosure made to him in November 1995 on behalf of his SPNL shareholder client John Oakley. His evidence included production of a three dimension model (photo attached) of the MA73 level* of Mangahewa structure. This model demonstrates that the Todd owned lower Mangahewa field including Mangahewa wells 1, 2 and 3, the Greymouth Petroleum owned Turangi and Kowhai production wells further to the north and west, and the offshore Shell owned Pohokura field is all connected and part of one Humungous on shore and near shore structure that is bigger than Maui.

* in total there are at least 5 producing levels including MA73

ENDS

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