According to the latest docket posted, on August 1, 2005, the Court entered the Order signed by U.S. District Judge Richard Owen preliminarily approving settlement and providing for notice. A hearing was scheduled to be held before the Court on October 5, 2005. On October 20, 2005, the Court entered the Final Judgment and Order of Dismissal with Prejudice. The Court approved the settlement, and further approved the Plan of Allocation of Settlement Proceeds and awarded Attorney's Fees and Reimbursement of Expenses.
In a press release dated June 8, 2005, Canadian Superior Energy Inc. of Calgary, Alberta, Canada announced that it and its insurers have reached an agreement with plaintiffs' legal counsel to settle all securities class action litigation and actions pending in the United States against the Company and certain of its officers and directors resulting from the drilling last year of the Canadian Superior El Paso "Mariner" I-85 exploration well drilled with El Paso Corporation (NYSE:EP) offshore Nova Scotia.
The US$3.2 million settlement, which is covered by the Company's insurance, has been reached with no admission of liability by any party and has been entered into to avoid costly and time consuming litigation by all parties. All parties have agreed to expeditiously seek the required United States court approval of the settlement.
The original complaint alleges that defendants, Canadian Superior and certain of its officers and directors, issued a number of materially false and misleading statements about its El Paso Mariner I-85 well offshore operations in Nova Scotia, Canada. These positive statements failed to disclose and indicate: (1) that defendants knew or were reckless in not knowing that the 'Mariner I-85 well' was virtually 'dry'; (2) that the actual costs of testing and drilling at the well were significantly exceeding the budgeted costs; (3) that a significant gas reservoir to support a commercial project did not exist; (4) that, as a result of the foregoing, the Company's positive announcements concerning the 'Mariner I-85 well' were lacking in a reasonable basis when made, and (5), that the defendants' positive statements only served to artificially inflate the value of its stock.
The Company shocked the market with its March 11, 2004 announcement that it had halted operations at the El Paso Mariner I-85 well in the Atlantic Ocean off Nova Scotia, following 3-1/2 months of drilling. On this news, shares of Canadian Superior skidded 44.44%, or $1.44 per share, to close at $1.80 per share on March 11, 2004 on unusual high volume.