October 9, 2019 / 9:45 PM / 9 days ago

ProPetro reshuffles top executives during probe into accounting disclosures

(Reuters) - Oilfield services firm ProPetro Holding Corp (PUMP.N) on Wednesday shuffled its top executives amid an internal investigation into equipment purchases and expense reimbursements.

FILE PHOTO: A piece of equipment stands in the ProPetro yard before being sent to a fracking site where it will be used to coax oil from underground, in Midland, Texas, U.S., on April 12, 2018. REUTERS/Ann Saphir

Director Phillip Gobe was appointed principal executive officer and Darin Holderness was named interim chief financial officer, the company said in a regulatory filing.

Co-founder Dale Redman will no longer serve as the principal executive but will retain the title of chief executive, the statement said. Jeffrey Smith, another co-founder and finance chief, was re-assigned as chief administrative officer. Both men agreed to reimburse the company for expenses that were billed to ProPetro.

ProPetro did not respond to a request for an interview.

The statement said the board’s review had not uncovered any matters that would require a restatement of past results. The probe is continuing to evaluate “one or more related party transactions” involving real estate dealings, the filing said.

Those transactions do not involve current or former customers or vendors, the company said in a filing with the U.S. Securities and Exchange Commission (SEC).

The Midland, Texas-based company has delayed filing its official second-quarter results pending the audit committee’s review of purchases of DuraStim electric hydraulic fracturing fleets from AFGlobal.

The company said it plans to make required SEC second-quarter filings “as soon as reasonably practicable.”

The audit, which the board disclosed in August, pointed to weakness in internal controls and was expanded to include expense reimbursements and transactions involving executives, the company said. Redman has reimbursed the company for roughly $346,000 and Smith repaid about $18,000.

Wednesday’s shakeup follows at least three other top management and board changes since July. Director Royce Mitchell and General Counsel Mark Howell left their positions in August, and the prior month, Chairman Spencer Armour III resigned. Armour remains a director, according to regulatory filings.

Chief Accounting Officer Ian Denholm also resigned this month and was replaced by Elo Omavuezi, the company said. Trey Wilson was named general counsel, replacing Howell.

Gobe’s role as principal executive in part will be responsible for improving internal controls, the company said.

The board’s audit committee, along with independent counsel and accounting advisers, has largely completed fact finding associated with the investigation, according to its filing.

Reporting by Liz Hampton in Denver and Arathy S Nair in Bengaluru; Editing by Shinjini Ganguli and Cynthia Osterman

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