04 June 2018
Sundance Energy Australia’s chairman was decidedly upbeat at the fracking firm’s annual general meeting (AGM) held last week in Adelaide on 31 May 2018.
‘This is exciting time for our shareholders,’ proclaimed Mike Hannell. “Strong economic growth and geopolitical risk in Middle East have, at least for now, swung the oil cycle in our favour.”
Hannell has reason to be cheerful. A year ago, things were looking grim for Sundance, which operates only in the US. Its share price was at an all-time low and it was facing a lawsuit against its unconventional gas operations in Oklahoma related to earthquake damage to residents’ properties. Sundance’s shares have since risen slightly and it has sold off its troublesome Oklahoma assets. The proceeds from the sale along with cash generated from its operations have been used to bring online new wells in its south Texas acreages.
Yet for those shareholders worried about Sundance’s refusal at last year’s AGM to accept or address climate change impact in its business model, there was disappointingly little news to get excited about.
Asked whether Sundance would join the ever-growing ranks of companies worldwide signing up to the Taskforce on Climate-Related Financial Disclosures, and committing to producing a 2C scenario analysis on how it could meet the Paris Agreement goals, the answer was a resounding no. They were, said Hannell, ‘keeping a watch’ on the issue but that’s all – despite acknowledging the recent warning by Baker McKenzie climate lawyer Martjin Wilder of a trend in potential litigation risks faced by company directors who ignore climate change.
No plans for emissions disclosure
Nor, it seems, is Sundance prepared to sign up to the global UN Climate and Clean Air Coalition principles on reducing methane emissions. At 84 times worse than CO2, methane emissions pose one of the greatest dangers for global warming.
Pressed by a shareholder on this critical issue, Mike Hannell replied that Sundance already has to abide by Texas’ strict laws on emissions. Besides that, he explained, economics is a “powerful” motivator in this respect – any gas flared or emitted by Sundance’s operations means lost profits for them.
Nevertheless, Hannell added that Sundance has no intention of disclosing its emissions in its mainstream reporting either.
The focus in the year ahead, he explained, will be on developing their newly acquired assets. In 2018 this will see Sundance spud around 30-35 wells, and another 37 wells in 2019.
With Sundance’s business model so obviously focused on expanding dirty fossil fuels, we would argue that it’s high time they come clean on their climate impact, and take action to improve transparency around the possibility of ‘stranded assets’ in the context of a 2C scenario. As a listed company on the Australian stock exchange they have a duty not to risk their shareholders’ money – or our climate any further.
Do you own shares in Sundance Energy? Would you like to see Sundance get serious about climate action? Get in touch to discuss what you can do.