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Penn West Petroleum Ltd. Message Board

  • ador Aug 28, 2014 7:40 AM Flag

    PWE Summary

    PWE excerpt from energy summary
    Penn West Petroleum Ltd. (PWT) added 28 cents to $8.36 on 3.84 million shares, after providing a reassuring update on its internal accounting review. Investors learned of this review at the end of July, when Penn West said it had discovered some accounting irregularities and would need to re-examine and possibly restate its financials over the last 4-1/2 years. The review as of that announcement had found $381-million of improperly classified expenses in 2012 and 2013. Shareholders sent the stock down to $8.57 from $9.95 on July 30, and ambulance-chasing law firms leaped into action, saying the company had "artificially inflated" its share price and made "materially false and misleading statements." (Those quotations are from a class action lawsuit filed by U.S. firm Wolf Popper LLP, but are representative of the general tone.) Penn West has now determined that the accounting practices under review had no effect on estimates of oil and gas reserves. Investors are at least somewhat relieved, particularly those who have been around long to enough to remember one of the greatest corporate scandals in oil patch history: Blue Range Resources. In 1999, Blue Range was sold to Big Bear Exploration in a hostile takeover. Within days of closing, Big Bear's chief executive officer, Jeff Tonken, and other executives reviewing the new subsidiary's books found several nasty accounting and reserve irregularities in 1997 and 1988. Most problematically, Blue Range appeared to have materially overstated gas reserves by disclosing raw gas volumes instead of sales gas. The misrepresentations put Big Bear in an unusual position. It placed Blue Range under creditor protection, then launched a lawsuit against it -- its own subsidiary -- to try to recover some gains for shareholders while shielding itself from the bank. The ending was unhappy. Big Bear, which traded 30 cents at the time of the takeover, was sold for 15 cents a share about a year later. (CEO

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5.00+0.13(+2.67%)Oct 21 4:03 PMEDT

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