Market Forces makes ASIC complaint against Empire Energy over capital raising relying on ‘outdated’ market forecasts

Environmentalists are using legal avenues to inhibit gas production, which has drawn the ire of the fossil fuel industry. This time, Market Forces has accused Empire Energy of flouting continuous disclosure laws.

Environmental activist group Market Forces has lodged a formal complaint with the corporate regulator against junior gas developer Empire Energy, accusing the company of misleading investors during a $28m capital raising.

The complaint is the latest example of how environmentalists are using legal avenues to inhibit gas production, which has drawn the ire of the fossil fuel industry.

ASX-listed Empire, which is pursuing gas development in the Northern Territory’s Beetaloo Basin, has been a lightning rod for opposition from environmental organisations.

The Australian Securities and Investments Commission was told Empire relied on outdated market forecasts to justify its capital raising, overstating the urgency of gas supply shortfalls on Australia’s east coast, according to a letter seen by The Australian.

Market Forces alleges Empire told prospective investors that gas demand would soon outstrip supply, which, according to the environmental group, was based on superseded modelling from the Australian Energy Market Operator.

Empire’s chief executive Alex Underwood disputed Market Forces’s accusation.

“Any number of studies highlight growing demand for gas. The updated Shell LNG Outlook forecasts global demand for LNG will grow by over 30 per cent in the next 5 years,” Mr Underwood said.

“We completely reject Market Forces’ exaggerated claims on ecological and climate risks – as have repeated independent scientific inquiries.”

Empire Energy’s gas processing plant.

Market Forces argues that Empire failed to adequately update its representations to investors and potentially breached its continuous disclosure obligations.

The AEMO forecast had been widely published and referenced, but Morgan Pickett, policy analyst at Market Forces, said investors should have been provided with the most recent data to make an informed decision.

“Empire Energy has potentially misled investors by using outdated LNG forecasts to justify its Beetaloo fracking plans, raising serious concerns about misleading and deceptive conduct,” the letter states.

Gas industry producers have accused environmental groups of using procedural tactics to delay or derail legitimate resource projects.

The company argues its projects are essential to shoring up future energy supply and supporting the transition to cleaner fuels. Empire held its annual meeting in Sydney on Thursday.

The $28m capital raising completed earlier this year was intended to fund ongoing exploration and development work. Market Forces said its concern was not just with the accuracy of Empire’s statements, but with the broader implications for market transparency.

The gas industry is a vocal critic of what its leaders deem spurious legal complaints and challenges. Substantive projects, most notably Santos’s $5.4bn Barossa LNG project, have been the subject of environmental challenges through the courts.

While the project did not suffer delays, it was forced to incur millions in additional costs on a legal challenge that was heavily criticised by the presiding Justice Natalie Charlesworth. Gas proponents have urged the government to restrict the capacity of environmentalists to use the courts to challenge their projects.

Originally published as Market Forces makes ASIC complaint against Empire Energy over capital raising relying on ‘outdated’ market forecasts