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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Noble Midstream Partners LP    NBLX

NOBLE MIDSTREAM PARTNERS LP

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NOBLE MIDSTREAM PARTNERS LP : Changes in Registrant's Certifying Accountant (form 8-K)

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10/14/2020 | 04:19pm EDT
Item 4.01 Changes in Registrant's Certifying Accountant.
(a) Dismissal of Previous Independent Registered Public Accounting Firm.
On October 5, 2020, Chevron Corporation ("Chevron") completed its previously
announced acquisition of Noble Energy, Inc. ("Noble"), the indirect general
partner and majority unitholder of Noble Midstream Partners LP (the
"Partnership"), through the merger of Chelsea Merger Sub Inc., a direct, wholly
owned subsidiary of Chevron, with and into Noble (the "Merger"), with Noble
surviving and continuing as a direct, wholly owned subsidiary of Chevron. As a
result of the consummation of the Merger of Noble Energy and Chevron, Chevron,
through its ownership of Noble Energy, controls the Partnership through its
controlling ownership of the Partnership's general partner.
As a large multinational company, Chevron retains many global accounting firms,
consulting firms and others to provide a variety of non-audit services
throughout its organization and pursuant to a variety of compensation
arrangements. Given Chevron's control of the Partnership, the Audit Committee of
the Partnership (the "Audit Committee") and KPMG LLP ("KPMG") conducted a review
of KPMG's relationships with Chevron as well as relationships of other member
firms of the global network of accounting and professional service firms
associated with KPMG International Ltd. with Chevron. KPMG advised the Audit
Committee that it and other member firms of the KPMG network perform certain
non-audit services for Chevron. Some of the services that KPMG and other member
firms of the KPMG network provide to Chevron fall within the scope of
impermissible services covered by Rule 2-01(c) of Regulation S-X ("Impermissible
Services"). The Impermissible Services outlined below are ongoing services and
are anticipated to continue during the 2020 audit and professional engagement
period. These services are long-standing services for which it would be
disruptive to Chevron's ongoing operations to integrate a new service provider.
The impact of COVID-19 around the globe coupled with other transformative
organizational changes within Chevron make a service provider transition for
these services difficult particularly late in the fiscal year. These services
are:
•System implementation, post-implementation support and project management
services
•Individual tax compliance services for international assignees, including cash
handling, outsourcing, and legal advice and representation in certain
jurisdictions
•Internal control review and design services
•Expert witness forensic services for arbitration support and ethics hotline
administration for a subsidiary in a foreign jurisdiction
•Bookkeeping, secretarial, liquidation, tax audit and compliance, immigration
compliance and payroll services for subsidiaries in foreign jurisdictions
•Loaned staff services for subsidiaries in a foreign jurisdiction
•Corporate intelligence due diligence services for subsidiaries in foreign
jurisdictions
•Equity instrument tracking services
•Technology licensing for certain software tools
•Non-income tax (i.e., goods and services) consulting services with a contingent
fee arrangement for a subsidiary in a foreign jurisdiction
As a result of the above Impermissible Services, KPMG is not expected to meet
all requirements of Rule 2-01(c) during the period subsequent to the Merger
through the completion of the 2020 audit and professional engagement period with
respect to the Partnership. The Audit Committee did conclude, however, that the
services provided by KPMG and other member firms of the KPMG network to Chevron
are not associated with the Partnership, its systems or management, and have no
bearing on the financial reporting and related controls of the Partnership both
before and after the closing date of the Merger. Furthermore, the engagement
teams responsible for the aforementioned services are separate and distinct from
the Partnership's audit engagement team and the terms and conditions of such
services were agreed by KPMG and other member firms of the KPMG network with
Chevron, commenced prior to the Merger and were permissible at the time of
engagement. The fees associated with such services are not material to KPMG, the
Partnership or Chevron. KPMG and the Partnership will continue to monitor the
aforementioned services to ensure they have no impact on the Partnership during
the professional engagement period of KPMG and KPMG will not enter any new
engagements involving new impermissible services or impermissible fee
arrangements, with either the Partnership, Chevron or any affiliates of the
Partnership, until the completion of the audit and professional engagement
period. It is for these reasons that the Audit Committee, in consultation with
Partnership's legal counsel, and KPMG concluded that the services provided by
KPMG and other member firms of the KPMG network to Chevron do not and will not
impact KPMG's ability to exercise objective and impartial judgment with respect
to all issues encompassed in its review of the Partnership's consolidated
financial statements for the three and nine month periods ended September 30,
2020 and audit of the Partnership's consolidated financial statements for the
year ended December 31, 2020. Although the services provided by KPMG and other
member firms of the KPMG network to Chevron do not and will not impact KPMG's
ability to exercise objective and impartial judgment with respect to all issues
encompassed in the 2020 audit and professional engagement period, KPMG notified
the Audit Committee on October 8, 2020 that it will decline to stand for
re-appointment as the Partnership's independent accountant after the completion
of the 2020 audit and professional engagement period.
KPMG's audit reports on the Partnership's consolidated financial statements for
each of the two most recent fiscal years ended December 31, 2019 and December
31, 2018 did not contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope or accounting
principles.
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During the Partnership's two most recent fiscal years ended December 31, 2019
and December 31, 2018 and during the subsequent interim period through October
14, 2020, there were (i) no disagreements within the meaning of Item
304(a)(1)(iv) of Regulation S-K with KPMG on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedures,
which if not resolved to KPMG's satisfaction, would have caused KPMG to make
reference to the subject matter of the disagreements in its reports on the
Company's consolidated financial statements for such years, and (ii) no
"reportable events" as defined in Item 304(a)(1)(v) of Regulation S-K.
Pursuant to Item 304(a)(3) of Regulation S-K, the Partnership provided KPMG with
a copy of the disclosures in this Current Report on Form 8-K (this "Report")
prior to filing this Report with the Securities and Exchange Commission (the
"SEC"). The Partnership has requested that KPMG furnish a letter addressed to
the SEC stating whether or not KPMG agrees with the statements above. A copy of
KPMG's letter dated October 14, 2020 is filed as Exhibit 16.1 to this Report.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No.             Document Description
      16.1                Letter from KPMG LLP to the SEC, dated October 14, 2020.
       104              Cover page Interactive Data File (embedded within the Inline XBRL document).


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© Edgar Online, source Glimpses


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