CALGARY – Poseidon Concepts Corp. lost more than half of its value in heavy trading Thursday after the oilfield services company suspended its dividend, replaced its CEO and initiated a board review of its management and business processes.
Poseidon (TSX:PSN) was the most heavily traded issue on the Toronto Stock Exchange, falling $1.83 or 55.29 per cent to $1.48 on volume of more than 12.1 million shares.
Prior to the announcement, the company had been paying a monthly dividend of nine cents per share.
Investors sold off the stock after the Calgary-based company’s announcement, which included creation of a special committee to review the recent writeoff of certain accounts owing to it and an assessment of business controls.
“In addition, the special committee will make recommendations to the board of directors of Poseidon regarding further changes, including managerial changes, that will strengthen the operations and finance functions of the company,” it said.
Poseidon said executive chairman Scott Dawson has assumed the role of interim president and chief executive.
Dawson, former president and CEO of Open Range Energy before it was sold to Peyto Exploration and Development, was named executive chairman in November with a mandate to become actively involved with the company’s management.
Lyle Michaluk, who was chief executive, was named interim chief financial officer to replace Matt MacKenzie, while Cliff Wiebe moved from president and chief operating officer to the role of chief technology officer.
Michaluk, Wiebe and James McKee, chief financial officer at Saxon Energy Services, also resigned from the Poseidon board.
The move followed a $9.5-million charge in Poseidon’s third quarter related to a writeoff of accounts receivable after the company had difficulty in collecting payments from certain unnamed customers.
Poseidon said it has been addressing its accounts receivable in recent weeks and was actively pursuing collections.
“While a final number cannot yet be determined, the company may need to make additional writedowns of accounts receivable in future periods and such writedowns may be significant,” the company said.
Poseidon said exploration and development activity has slowed considerably in recent months and, as a result, it has seen lower realized prices and thinner margins.
The company rents large tanks used by the oil and gas industry to hold fracturing fluids and other liquids.