CALGARY – Poseidon Concepts Corp. lost more than half of its value in heavy trading Thursday after the oilfield service 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 stock Thursday morning at the Toronto Stock Exchange, with more than seven million shares traded before noon. The stock was down $1.89 or 57 per cent at $1.42.
Investors sold off the stock after the Calgary-based company’s announcement, which included creation of a special committee to review the recent write-off 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,” the company said.
The company said executive chairman Scott Dawson has assumed the role of interim president and chief executive, replacing Lyle Michaluk.
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.
The move followed a $9.5-million charge in its third quarter related to a write-off of accounts receivable after the company had difficulty in collecting payments from certain unidentified customers.
Poseidon said it has been addressing its accounts receivable in recent weeks and is actively pursuing collections.
“While a final number cannot yet be determined, the company may need to make additional write downs of accounts receivable in future periods and such write downs 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.