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Embezzlement Suspected by Oil Company

November 12, 2005|From Associated Press

SNYDER, Texas — Oil and gas drilling operator Patterson-UTI Energy Inc. said it suspected that a former officer may have embezzled $70 million over five years, news that punished the company's shares Friday.

Patterson-UTI said late Thursday that it planned to hire legal counsel and forensic accountants to investigate "unauthorized payments" the company made for assets that were never delivered. The company said it was too early to tell how the inquiry would affect previous financial results.

Investors drove the company's shares down $2.83, or 8.6%, to $30 on Nasdaq. Volume surged to 18 million shares from a daily average of about 2.6 million.

The announcement of the possible embezzlement came less than a week after the company said that its chief financial officer, Jonathan D. Nelson, had resigned for personal reasons.

Patterson-UTI did not return a call Friday for further comment.

In a statement late Thursday, the company said the audit committee of its board began an investigation "as a result of information received by senior management" on Wednesday.

The company reported profit of $108.7 million on sales of $1 billion last year. For the first nine months of this year, it said, it earned $247.5 million on revenue of $1.21 billion.

The company provides contract drilling services to oil and natural gas operators in Texas, New Mexico, Oklahoma and other states and in western Canada. It also has exploration and production operations in Texas and New Mexico.

The company operates about 400 drilling rigs, the second-largest land-based fleet in North America, and has about 6,800 employees.

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