25 May 2017
Sundance Energy, the company that had its annual general meeting in Adelaide today, has had a tough run lately. US Secretary of State and former CEO of Exxon Mobil Mr. Tillerson sued them because he alleged that his $5 million property was in danger due to Sundance’s unconventional gas wells. Residents in Edmond, Oklahoma also filed a lawsuit against Sundance, claiming the unconventional gas operations in the town contributed to a series of earthquakes, causing serious damage.
Sundance Energy shares are at an all time low, and the company is one of the many oil and gas corporations that may be heading towards bankruptcy. Last year, according to Forbes, 69 oil and gas producers with $34.3 billion in cumulative secured and unsecured debt went bankrupt. Deloitte has predicted that one third of all oil and gas companies, or about 175, are likely to go bankrupt in the next few years.
Low share prices was only one of many shareholders concerns at this annual general meeting. Concerns about climate featured prominently during question time. Legal opinion from Noel Hutley SC last year stated company directors should be considering the impact on their business of climate change risks, and that directors who fail to do so could now be found liable for breaching their duties. When shareholders asked Sundance whether they address climate risk, the board of Sundance exclaimed that they are not aware of any impacts from climate change, and there is no forward planning for impacts of climate change.
Shareholders were also interested to know whether executives of the company got paid more if they hit exploration targets, which is common with oil and gas companies. They asked ‘would it not be better to incentivise executives to reduce emissions in line with the aims of the Paris Agreement, like Royal Dutch Shell has introduced?’ Directors responded that the model of their business is based on exploration, and remuneration for this is important. This really implies that the model of their business is not compatible with keeping within two degrees of warming.
In light of Sundance being sued over earthquakes in Oklahoma, shareholders asked whether Sundance is drilling into or through faults. The board responded that they have never drilled through any faults… but that they have hit one. Is it possible to hit a fault line if you have never drilled through any?
Sundance Energy is clearly out of touch and the scary thing is your superannuation company may be investing in them to continue these dangerous practices. Is your super invested in companies like Sundance? Find out here and let your super know that fossil fuels have got to go.