PracticeAccounting FirmsOil company falls out with Grant Thornton

Oil company falls out with Grant Thornton

Firm raises concerns over Meridian Petroleum's US oil field

Meridian Petroleum, the AIM-listed oil company, has fallen out with auditors
Grant Thornton after the mid-tier firm raised concerns over the company’s Emery
Hudson oil field in the USA.

The oil group had capitalised the exploration and development costs of the
field, the most important in its portfolio, in 2004 when it began production.
But in 2005 work on Emery Hudson had to be suspended when an attempt to extend
the field with a step out well failed.

Since then the Meridian board has decided to maintain the carrying value of
Emery Hudson as a tangible fixed asset after it identified a re-entry point and
laid out plans to recommence production in third quarter of this year.

Grant Thornton, however, said that despite confidence of the board in the
future success of the field was far from guaranteed. The firm did not qualify
its audit of Meridian on this basis, but did raise the issue in its report on
Merdian’s 2005 accounts.

‘Further analysis has been performed by the company to identify a re-entry
point, and exploration activities are expected to resume in the third quarter of
2006. The outcome of these activities is uncertain,’ Grant Thornton warned.

For the latest on another AIM-listed oil company, Regal Petroleum, go to
www.accountancyage.com/2160081

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