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Case Status:    SETTLED
On or around 09/26/2008 (Date of order of final judgment)

Filing Date: January 23, 2004

The original complaint alleges defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by the Securities and Exchange Commission, and all amendments thereto by issuing a series of material misrepresentations to the market during the Class Period.

The complaint alleges that defendants’ deliberately violated accounting rules and guidelines relating to oil and gas reserves which resulted in a shocking and unprecedented overstatement of oil and gas reserves, the eventual disclosure of which damaged purchasers of Royal Dutch and Shell Transport securities and rocked the investment community.

Specifically, the complaint alleges that Royal Dutch and Shell Transport had classified and reported, in SEC filings and other public documents, certain reserves as “proved reserves” from a project off the western coast of Australia called the Gorgon Joint Venture, and various projects in Nigeria. In fact, unbeknownst to investors, the reserves did not meet SEC and industry requirements necessary to be classified as “proved,” and were improperly reported as proved reserves in Royal Dutch’s and Shell Transport’s financial reports, thereby materially artificially inflating a key measure of the companies’ financial position and competitive standing. As a result of these material misrepresentations, Royal Dutch and Shell Transport’s true value in the marketplace was severely overstated and misunderstood.

The complaint further alleges that on January 9, 2004, Royal Dutch announced that it was going to write-down its proved oil and gas reserves by 20%, or 3.9 billion barrels, from 19.5 billion barrels to 15.6 billion barrels. The write-down: (a) cut Shell’s reserve life from 13.4 years to 10.6 years; (b) increased its worldwide 5-year average reserve replacement cost per barrel from $5.49 to $12.57 --- $7.06, or 128% greater than the industry average of $5.51; (c) increased Shell’s finding and development costs to $7.90 per barrel -- well above the costs of its competitors; and (d) reduced Shell’s Appraised Net Worth downward by up to 7.1%, or $9.6 billion. Following the announcement, Royal Dutch ADRs fell 7.87% from $52.76 to $48.61 on the NYSE and Royal Dutch ordinary shares fell by 7.10% from the U.S. equivalent of $52.91 to $49.15 on the Amsterdam exchange. Shell Transport ADRs were down 6.96% from $44.81 to $41.69 on the NYSE and Shell Transport ordinary shares were down 6.84% on the London exchange from the U.S. equivalent of $7.36 to $6.86. In addition, Moody’s placed the Aaa rating of Royal Dutch and Shell Transport under review for possible downgrade because the write-down materially and adversely affected the companies’ reserves-to-debt ratio. Following the belated disclosure, most analysts and commentators concluded that, because of the magnitude of the write-down and the clear SEC and industry guidelines relating to reserve classification, the reserve overstatements could not have been a result of error or accident, but rather, that the reserves were knowingly overstated to preserve the companies’ credit rating and to shore up their competitive position.

Proceedings where held on May 7, 2004, before Judge John W. Bissell and G. Donald Haneke. The motions to appoint lead plaintiff and lead counsel were granted. Pennsylvania Employees Retirement System was appointed lead plaintiff, Liebhard & Lifshitz, LLP was appointed as lead counsel, and Lite, DePalma, Greenberg & Rivas was appointed as liaison counsel. On September 13, 2004, the plaintiff filed a Consolidated Amended Class Action Complaint, and the defendants responded by filing various motions to dismiss in 2005.

According to a press release dated August 17, 2005, a US federal judge has ruled that a class action lawsuit for securities fraud against the Royal Dutch Shell PLC can now proceed. In his 147-page decision, US district court chief judge John Bissell said the plaintiffs 'adequately' provided reason for the court to look at the claims. Bissell also said that Shell, even if it is headquartered in the Netherlands, does not exempt it from being accountable in the US.

On September 19, 2005, plaintiffs filed their Second Consolidated Amended Class Action Complaint (the Second Amended Complaint). The substantive allegations remain unchanged from those in the earlier complaint, except that the plaintiffs: dropped their section 14(a) claims; dropped their claims against all current directors; repleaded their claims on behalf of those who purchased shares after the January 9, 2004 announcement of the reserves recategorisation.

On April 17, 2007, Royal Dutch filed a motion to dismiss, and on May 7, 2007, Royal Dutch Shell filed a motion for partial summary judgment. On July 30, 2007, the Court entered the Order dismissing without prejudice the motion to dismiss and further dismissing without prejudice the motion for partial summary judgment.

According to an article dated March 11, 2008, Royal Dutch Shell Plc. said on March 6, 2008, that it had agreed in principle to settle a class action with American investors arising from its 2004 restatement of oil reserves, Reuters reports. According to Reuters, under the terms of the deal, the group of U.S. claimants -- who bought shares in the company in a period before the 2004 reserves restatement -- would receive a base settlement of $79.9 million, plus $2.95 million and interest. The deal is subject to the approval of the U.S. District Court for the District of New Jersey. The proposed settlement complements a previously announced deal with non-U.S. investors under consideration by the Amsterdam Court of Appeals, Shell told Reuters. Approval of both settlements would put an end to all pending litigation arising out of the 2004 restatement.

On June 18, 2008, Judge Pisano signed the Order preliminarily certifying a class for settlement purposes and preliminarily approving the proposed settlement. The settlement is in the amount of settlement of $89,508,000 in cash, plus interest. On September 26, 2008, the Judge Pisano approved the settlement and awarded attorneys’ fees in the amount of $30,000,000 and expenses in the amount of $3,000,000. The action is dismissed with prejudice.

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