Things have not been going well lately for Houston-based El Paso Corp., as noted earlier here, here and here. Accordingly, yesterday’s announcement that the U.S. Securities and Exchange Commission has launched an investigation into El Paso’s downward restatement in natural gas reserves earlier this year comes as no surprise.
El Paso’s share price has slumped 23 percent since the company last month slashed its proven natural gas reserves by 41% and announced that a financial restatement going back to 2001 was likely. El Paso has already taken a $1 billion write-down with the possibility of an additional $1.5 billion looming. The audit committee of the company’s board has launched an investigation by an outside law firm into the reserves cutback, and the outside investigation prompted El Paso two weeks ago to delay indefinitely the release of its fourth quarter results and annual report.