PUMP stock has gained over 18% on Thursday after ProPetro Holding Corp (NYSE:PUMP) announced a number of changes to its executive leadership team in light of a recent internal probe into the company’s accounting practices.
No Reason to Restate Previous Earnings
The internal audit, which was disclosed in August and has forced the company to delay the release of its quarterly results, was focused on a weakness in internal controls but was expanded to incorporate expense claims and transactions involving executives. ProPetro said that the audit did not uncover any reasons that would require a restatement of past results, but it is continuing to evaluate “one or more related party transactions” involving real estate dealings. PUMP stock is currently valued at $9.36, following the announcement.
PUMP Stock Gains on Executive Shakeup
The executive-level reshuffle will see director Phillip Globe take on the role of principal executive officer of the oilfield services firm, replacing co-founder Dale Redman who will retain the title of chief executive. Jeffrey Smith, another co-founder, will become chief administrative officer while Darin Holderness will move to chief financial officer. Both Smith and Redman have also agreed to reimburse the company for expenses, of $18,000 USD and $356,000 USD respectively, that were billed to ProPetro Holding. The reshuffle has helped PUMP shares move off a 52-week low.
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 Omavuez.
ProPetro Not in the Clear Yet
PUMP stock is down over 60% since reports of expense irregularities within the company first began to circulate, and it may not be entirely out of the clear yet. Many analysts have slashed their earnings and share price outlook for ProPetro Holding following the release of today’s statement. Raymond James lowered its price target to $14 per share from a previous target of $20, while Cowen & Co said it expects pre-tax earnings of $75 million USD, well below Wall Street’s estimate of $102 million USD.
While PUMP stock’s recent woes highlight some of the issues facing oil & gas companies, we looked at some alternative energy stocks that might keep your portfolio in tip-top shape.
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