Penn West shares fall 13.5 percent on accounting probe

Wed Jul 30, 2014 9:41am EDT
 
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TORONTO, July 30 (Reuters) - Penn West Petroleum Ltd shares fell 13.5 percent in early trading on Wednesday after the Canadian oil and gas producer said it would have to restate some of its financial results and might have to delay its second-quarter earnings report.

As a result, the company might not be in compliance with certain debt covenants and had started discussions with its lenders about the potential impact, it said in a statement late on Tuesday.

Penn West said its audit committee and independent advisors were examining entries that appear to have been made to lower operating costs and increase reported capital expenditures and royalty expense, without proper supporting documentation.

The company said it was looking into reports for 2014 and the previous four years.

The review does not affect previously disclosed cash and debt balances or the company's 2014 production guidance, Penn West said.

"We will take the steps necessary to correct our historical financial statements, and we will take appropriate steps to ensure that we avoid a similar situation in the future," Chairman Rick George said in a release.

Shortly after the start of trading, the stock was down C$1.35 at C$8.59 in Toronto. (Reporting by Cameron French; Editing by Lisa Von Ahn)