• 1 day Shell Oil Trading Head Steps Down After 29 Years
  • 1 day Higher Oil Prices Reduce North American Oil Bankruptcies
  • 1 day Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 1 day $1.6 Billion Canadian-US Hydropower Project Approved
  • 2 days Venezuela Officially In Default
  • 2 days Iran Prepares To Export LNG To Boost Trade Relations
  • 2 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 2 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 2 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 2 days Rosneft Announces Completion Of World’s Longest Well
  • 2 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 3 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 3 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 3 days Santos Admits It Rejected $7.2B Takeover Bid
  • 3 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 3 days Africa’s Richest Woman Fired From Sonangol
  • 3 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 3 days Russian Hackers Target British Energy Industry
  • 4 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 4 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 4 days Lower Oil Prices Benefit European Refiners
  • 4 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 4 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 4 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 5 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 5 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 5 days OPEC To Recruit New Members To Fight Market Imbalance
  • 5 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 5 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 5 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 5 days GE Considers Selling Baker Hughes Assets
  • 5 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 6 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 6 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 6 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 6 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 8 days The Oil Rig Drilling 10 Miles Under The Sea
  • 8 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 8 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 9 days Italy Looks To Phase Out Coal-Fired Electricity By 2025
Are Autonomous Cars Ready To Ditch The Backup Driver?

Are Autonomous Cars Ready To Ditch The Backup Driver?

Self-driving cars are being tested…

Tesla’ E-Truck Is A Big Thing For Energy Markets

Tesla’ E-Truck Is A Big Thing For Energy Markets

While skeptics have raised eyebrows…

Accounting Firm To Pay $6.2M In SEC Oil Audit Charges

Pipeline

Accounting firm KPMG has agreed to pay more than US$6.2 million to settle SEC charges that it had overlooked grossly overstated values of the assets of an oil and gas company, the U.S. Securities and Exchange Commission (SEC) said on Tuesday.

Tennessee-based Miller Energy Resources hired KPMG as an outside auditor in 2011. The accounting giant and the engagement partner John Riordan “failed to properly assess the risks associated with accepting Miller Energy as a client and did not properly staff the audit, which overlooked the overvaluation of certain oil and gas interests that the company had purchased in Alaska the previous year,” the SEC said.  

KPMG and Riordan failed to adequately assess and address facts about Miller Energy Resources’ valuation, and failed to see that some fixed assets had been double-counted in the valuation.

“Without admitting or denying the findings, KPMG agreed to be censured and pay $4,675,680 in disgorgement of all the audit fees received from Miller Energy plus $558,319 in interest and a $1 million penalty,” the SEC said.

Miller Energy Resources was charged with accounting fraud in 2015, for having grossly overstated the value of oil and gas assets it had purchased in Alaska. The company offered to settle the charges in 2016, and the SEC accepted.    

In 2009, during a competitive bid in a bankruptcy proceeding, Miller Energy Resources bought assets in Alaska for US$2.25 million in cash and assumed certain liabilities it valued at approximately US$2 million. But later the company reported those assets to be worth US$480 million, and recognized a one-time “bargain purchase” gain of US$277 million. The overstated value of the assets resulted in an almost 5,000-percent rise in Miller Energy’s total assets, which pushed its stock price from US$0.61 in December 2009 to an all-time high of US$8.83 in December 2013.

“Miller Energy materially overstated the value of its Alaska assets by more than four hundred million dollars,” the SEC said in 2016.  

Miller Energy’s shares were delisted in September 2015, and the following month the company filed a voluntary petition for reorganization under Chapter 11 of title 11 of the U.S. Code in the United States Bankruptcy Court for the District of Alaska.

Related: Barclays: Oil Prices To Drop This Quarter

Upon the SEC’s announcement of the KPMG audit failure settlement yesterday, Walter E. Jospin, Director of the SEC’s Atlanta Regional Office, said:

“KPMG retained a new client and failed to grasp how it valued oil and gas properties, resulting in investors being misinformed that properties purchased for less than $5 million were worth a half-billion dollars.”  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News