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Forensic Accounting of Profits Earned From Construction of Drilling Rigs

Accumyn assembled a team of engineers and forensic accountants to determine the profits earned by a sub-contractor from constructing two land-based drilling rigs for a Canadian exploration and production (“E&P”) company. The E&P company hired a contractor who sub-contracted the project to a land rig specialist. After more than $8 million was paid to the original contractor, the contractor ceased operating and entered chapter 7 bankruptcy. The sub-contractor said a delay in payments by the contractor had resulted in a price escalation and demanded almost $2 million in additional payments to complete the first rig. After the first rig was delivered, the sub-contractor terminated the agreement and sold the uncompleted second rig to a third party.

Accumyn’s technical engineering experts identified each major component of the rig construction and the related purchase orders and disbursements. Accumyn’s engineering and forensic accounting experts demonstrated that funds had been used to acquire parts and pay expenses for unrelated purposes, including other rig construction projects.