June 22, 2020 / 4:16 PM / 23 days ago

Oilfield firm ProPetro details weaknesses in regulatory filing

(Reuters) - Oilfield service provider ProPetro Holding Corp said on Monday a lengthy audit committee review revealed multiple financial and internal control weaknesses, but none severe enough to restate prior results.

The company, which is being investigated by the U.S. Securities and Exchange Commission (SEC), said in a regulatory filing that the board’s investigation also found a failure to elevate whistleblower complaints and inaccurate business expense reporting.

Former Chief Executive Officer Dale Redman pledged company shares for personal loans, violating its insider trading policy. Redman stepped down in March, shortly after Reuters sought comment on the share pledges.

“Our senior management did not establish and promote a control environment with an appropriate tone of compliance and control consciousness throughout the entire company,” the company said in a filing, adding the audit committee found “a general lack of focus on promoting a culture of compliance within the company.”

ProPetro, which has delayed financial reports during the audit, expects to become current with financial filings by July 15. The company has replaced its chief executive, finance chief and chief accountant since October.

Shares gained 2% on Monday at $5.51.

“We hope the current PUMP (ProPetro) team will learn from these mistakes,” analysts for Tudor Pickering Holt & Co wrote in a note on Monday, adding that relationships with customers like Pioneer Natural Resources could help future operations.

Reporting by Liz Hampton; Editing by David Gregorio and Muralikumar Anantharaman

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