Crude awakening: Oil company faces class action after revenue forecast fail
25 October 2021
Investors could bring a class action against Beach Energy for allegedly misleading the market with optimistic projections for a declining oil reserve in South Australia.
In August 2020, the company painted a rosy picture of oil production at its onshore business on the Western Flank of the Cooper Basin.
Beach Energy predicted earnings before interest, tax, depreciation, and amortisation of at least $900 million arising from at least 26 million barrels of oil equivalent.
But in April this year, the company downgraded its forecast revenue to $850 million, wiping $900 million off its value. Class Actions Practice Leader at Shine Lawyers, Craig Allsopp, said
“Investors must have been in disbelief as the company’s market capitalisation plummeted more than 40 per cent in 2021,” he said.
“Shine Lawyers is investigating whether Beach Energy knew or ought to have known about the decline in its Western Flank business at the time it issued its bullish earnings guidance last August.”
The investigation by Shine Lawyers will explore whether Beach Energy engaged in misleading and deceptive conduct as well as potential breaches of its disclosure obligations.
The firm encourages all investors impacted by the drop in share price to register for the Beach Energy Shareholder class action.