Stone Energy Corp. said Friday the staff of the Securities and Exchange Commission (SEC) has launched an informal inquiry into the company’s proved reserves revision and financial restatements. Stone, which revised its oil and natural gas reserves downward by 171 Bcfe in October, said it intends to cooperate.
On Wednesday, the producer announced it will restate its financial results between 2001 and 2Q2005 because of possible lapses in reserves bookings (see Daily GPI, Nov. 10). Stone expects to file amended reports by Monday (Nov. 14).
The SEC announcement followed the release of a preliminary report by the law firm of Davis Polk & Wardwell, which was hired by the Lafayette, LA-based operator to perform a review of booking practices. The law firm said an independent review suggests “inadequate training and understanding” of regulatory requirements and “a tone of optimism and aggressiveness set by management regarding reserve booking.”
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