Ouch, 3Q results to be delayed:
SandRidge Energy May Need to Restate Quarterly Earnings
9:25a ET November 4, 2014 (Dow Jones) Print
SandRidge Energy May Need to Restate Quarterly Earnings
By Tess Stynes
SandRidge Energy Inc. said Tuesday the U.S. Securities and Exchange Commission has asked it to reassess how it accounts for penalties paid under an agreement with Occidental Petroleum Corp., in a move that could lead to a restatement of nearly two years of quarterly results.
SandRidge said the filing of its third-quarter financial report would be delayed until the review is completed and a resolution is reached with the SEC.
Under a 30-year pact with Occidental Petroleum, SandRidge is required to pay a penalty fee when SandRidge misses minimum required carbon-delivery volume targets.
"We want to be clear that, while certainly unfortunate, at this time we believe the resolution of this matter will only affect the timing of accruals of our [carbon-dioxide] underdelivery penalty and does not have any material impact on the core sectors of our business," SandRidge Chief Executive James Bennett said.
SandRidge said it has accounted for the penalty on an annual basis. However, the SEC recently has asked the company to look at whether the liability should be accrued quarterly.
The review could lead to the restatement of SandRidge's quarterly results from the period ended December 2012 through the three months ended June 30, 2014.
The company plans to discuss its third-quarter operational update Thursday at 9 a.m. ET.
SandRidge shares fell 3.4% to $3.68 in recent premarket trading.
Write to Tess Stynes at tess.stynes@wsj.com
