Harvest Natural Resources $HNR Fires PricewatershouseCoopers. Are They in Play? or Just Screwed Up?

Harvest Natural Resources (NYSE:HNR) announced that they have fired their auditors PricewaterhouseCoopers after announcing that the valuation on some of their properties has broken and they are facing a very large restatement of income. stock has tumbled. A potential sale of Venezuelan assets to Indonesia concerns has fallen through.

They have hired UHL LLP. Under the circumstances they probably did not have an adequate time to review a list of suitable candidates.

OK assume the accounting firm was totally incompetent. It still comes back to the management. who knew what and when. Only 5 Independent directors. No one with less than five years on this particular board. Some of the board members have pretty good resumes.

On the board since 2000 Mr. Hardee is a Senior Vice President-Financial Advisor with RBC Wealth Management, since 1994. From 1991 through 1994, Mr. Hardee was a Senior Vice President with Kidder Peabody. From 1977 through 1991, Mr. Hardee was a Senior Vice President at Rotan Mosle/Paine Webber Inc. Mr. Hardee was named as one of Americas best financial advisors for 2009, 2010, 2011 and 2012 by Barrons financial newspaper and by Reuters AdvicePoint.
 On the board since 2000 in 2007, Mr. Murray retired from Dresser, Inc. He had been the Chairman of the Board and CEO of Dresser since 2004.
On the board since 2005 from September 2006 to December 2011, Mr. Stinson was Chairman of TORP Terminal LP, the U.S. unit of a Norwegian LNG technology company. From 2004 until November of 2009, he served as a director of Enventure Global Technology.
On the board since 2008 Mr. Irelan has over 37 years of experience in the oil and gas industry. He retired from Occidental Petroleum as Executive Vice President of Worldwide Operations in April 2004, having started there in 1998.
On the board since 2008 Dr. Igor Effimoff is founder and principal of a firm which provides upstream and midstream consulting services since 2005. From 2002 until 2005 he was Chief Operating Officer for Teton Petroleum Company. Between 1996 and 2001, he was President of Pennzoil Caspian Corporation, managing their interests in the Caspian Region.
These guys should have been able to smell it. With this level of smarts the auditor should not have been allowed to miss the valuation problems.
Watch out for the class action lawsuits.
When you have problems of this magnitude senior officers also lose their jobs. Within the past year shares traded around $15. Now $3.30. Once you look through the blood and gore a take over perhaps. Short ratio is almost 18%. Insiders control about 5% and institutions control 70%. Yeah baby you’re in play.
George Gutowski writes from a caveat emptor perspective.
George Gutowski writes from a caveat emptor perspective.