US Securities and Exchange Commission v. Penn West Petroleum Ltd., et al.

Analysis Group was retained on behalf of the Securities and Exchange Commission (SEC) in an enforcement action against former executives of Penn West Petroleum. The SEC alleged that Penn West improperly classified certain expenses in order to understate operating expenses, a metric of great importance to oil and gas producers.  

An Analysis Group team led by Vice Presidents John Drum and Lauren Hunt, and Managers Stephen Kiebzak, Melissa Rutzen, and Andrew Ungerer, supported three experts, all of whom filed expert reports and testified at deposition. Academic affiliate Charlotte Wright explained complicated oil and gas accounting concepts, and opined that Penn West improperly classified its expenses in order to show lower operating expenses. Academic affiliate Ray Ball testified that the understatement of operating expenses was material to users of Penn West’s financial statements. Finally, Alton Heckaman, a former CFO of a public oil and gas company, testified that Penn West executives failed to enforce effective internal controls regarding adequate documentation and authorization of accounting entries.

The SEC reached a favorable settlement with the defendants.