HOUSTON, Dec. 14 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) announced today that it will delay the filing of its
Annual Report on Form 10-K for the fiscal year ended September 30, 2004 and
has requested a fifteen-day extension of the deadline to file its Annual
Report by filing a Form 12b-25 with the SEC. This will extend the filing
deadline to December 29, 2004.
In October 2004, the Company received a report from a whistle-blower
alleging that its Asia Pacific Region Controller had misappropriated Company
funds in fiscal 2001. The Company began an internal investigation during
October, which is continuing. The Region Controller has admitted to multiple
misappropriations totaling approximately $9.0 million during a 30 month period
ended April 2002 and has repaid $9.0 million to the Company. His employment
has been terminated. The misappropriated funds were recorded as an expense in
the Consolidated Statement of Operations in prior periods and, therefore, no
restatement is required.
As a result, the Company expects to record $9.0 million as Other Income in
the Consolidated Condensed Statement of Operations for the quarter ending
December 31, 2004. The Company has expanded the scope of its review in order
to investigate whether additional funds were misappropriated or whether other
inappropriate actions occurred. As the Company continues its investigation,
further adjustments may be recorded in the Consolidated Statement of
Operations, but are not believed to be material at this time.
Based on results of the investigation to date, the misappropriations were
possible because of internal control operating deficiencies, including
approval procedures that were not being followed, as required by Company
policy, with respect to cash disbursements. The Company believes that these
operating control deficiencies constitute a significant control deficiency and
has discussed these operating deficiencies, as well as corrective actions and
plans, with the Audit Committee and the Company's independent auditor. There
is presently no indication that the deficiencies that permitted these
misappropriations existed in any of the Company's operating regions other than
the Asia Pacific Region.
During the course of the investigation, the Company received additional
whistleblower allegations that illegal payments to foreign officials were made
in the Asia Pacific Region. The Audit Committee of the Board of Directors has
engaged independent counsel to conduct a separate investigation to determine
whether any such illegal payments were made. That investigation, which is
also continuing, has found information indicating that illegal payments to
government officials in the Asia Pacific Region aggregating in excess of
$1.5 million may have been made over several years. As this investigation is
ongoing, the Company has not yet evaluated related internal control issues.
Chairman and CEO Bill Stewart commented, "In light of the status of the
Audit Committee's investigation, we concluded that we could not timely file
our 10-K. If it is determined that illegal payments were made, we will take
all appropriate remedial action."
This press release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenues, and
expenses and profits. These forward-looking statements are based on
assumptions that may prove to be inaccurate, and they are subject to risks and
uncertainties that may cause actual results to differ materially from expected
results. These risk factors include, without limitation, general global
business and economic conditions, drilling activity and rig count, pricing
volatility for oil and gas, reduction in demand for our services and products,
risks from operating hazards such as fire, explosion and oil spills,
unexpected litigation for which insurance and customer agreements do not
provide complete protection, adverse consequences that may be found in or
result from our internal investigation, including potential consequences from
deferring filing of our annual report on Form 10-K, consequences of changes in
exchange rates and declines in the U.S. dollar, and risks associated with our
international operations, including potential instability and hostilities.
This list of risk factors is not intended to be comprehensive. More extensive
information concerning risk factors may be found in our public filings with
the Securities and Exchange Commission.
BJ Services Company is a leading provider of pressure pumping and other
oilfield services to the petroleum industry.
SOURCE BJ Services Company
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Related links:
http://www.bjservices.com
CONTACT:
Trey Whichard of BJ Services Company,
+1-713-462-4239
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