Boston, MA 04/21/2014 (wallstreetpr) – Magnum Hunter Resources Corp (NYSE:MHR)is a famous entity in the industry of oil and natural gas production with its operations in three areas i.e. West Virginia, North Dakota and Saskatchewan. The company’s shares took a hit when it dismissed its existing auditing firm. The shares witnessed a fall of more than 16% after the news. It is the steepest decline of Magnum Hunter on an intraday basis in the last two years. Prior to it, the shares had a fall of 27% on May 6, 2010.
Dismissal Reason
PricewaterhouseCoopers LLP was the auditing firm of Magnum Hunter Resources Corp (NYSE:MHR). It dismissed the firm as soon as the accountants came across the information that can have a substantial impact on the fairness or reliability of the company’s financial statements. The company filed the dismissal case with the Securities and Exchange Commission.
The clarifications required
PwC asked the company to submit the information on its oil and gas properties as well on its reserves. The company has to review the tax liabilities as per the PwC. The company needs to make a detailed analysis to make sure that it meets its debt covenants. However, Magnum Hunter has made it clear that it has ample funds to fulfill its debt covenants. It clarified that all the reserves figures and the other estimates are accurately disclosed. The company did not file an annual report for 2012.
Magnum Hunter Resources Corp (NYSE:MHR) has appointed BDO USA LLP as the new auditing firm at the place of PricewaterhouseCoopers LLP. The company disclosed the accounting problems at the start of the year. It will sell its asset of Eagle Ford Shale field as per the announcement made on April 3. The selling amount is estimated around $401 million. It is a huge asset spread in an area of 19,000 net acres. The company expects the accounting problems to be solved by hiring the new audit firm.
