Penn West Accounting Probe May Delay Earnings ReleaseRebecca Penty
Penn West Petroleum Ltd. may delay the release of second-quarter financial results because of an accounting review that stretches back more than four years, the company said today.
The Canadian oil and natural gas producer, which is seeking as much as C$2 billion ($1.8 billion) in asset sales by 2015, said its board’s audit committee and independent advisers are examining reporting in 2014 and four previous fiscal years, according to a statement from the company.
Penn West, based in Calgary, said it will restate some past financial statements, which may cause it to reduce capital spending plans and cash flow assumptions for 2014 and boost its operating cost forecast. The company is starting talks with lenders because the revision also may cause it to violate agreements covering its debt.
The company’s U.S.-listed shares fell as much as 5.1 percent from their closing price in after-market trading, according to data compiled by Bloomberg. The shares declined 1 percent to $9.15 at the close in New York.
The review doesn’t affect previously disclosed cash and debt balances, Penn West’s production target for 2014 and its operations, strategy and future growth plans, the company said. Penn West started the review after David Dyck, the company’s chief financial officer, assumed his position on May 1.
Initial findings show that past accounting entries appear to have reduced operating costs and increased capital spending and royalty expenses, without adequate supporting documents, the company said. Penn West said the employees it believes are responsible for the reporting no longer work for the company.
Penn West Chief Executive Officer Dave Roberts, who took over in June 2013, pledged in November to strive to sell as much as C$2 billion in assets by 2015 as part of his turnaround plan for the company.