El Paso ( EP) keeps pumping out nasty surprises.

The giant energy company warned on Wednesday that it could be restating years of financial reports in order to properly account for a huge cut in reserves that stunned investors last month . In the meantime, the company has postponed its fourth-quarter earnings release -- originally slated for Thursday -- and the filing of its latest annual report until the completion of an internal audit. It is currently seeking waivers from its lenders to address the likely restatements and filing delays.

"Based on El Paso's internal technical reviews, as well as the independent review of the audit committee of the board of directors, the company believes that it is likely that a restatement of the financial statements for El Paso (and two subsidiaries) will be required," the company announced. "Consequently, investors should not rely on previously filed reports for these registrants until further notice from the company."

El Paso's stock immediately slid, falling 1.7% to $6.98 Wednesday morning.

Bad news has been gushing from the company -- and its production division in particular -- for some time. Following disappointing results last year, the company replaced its production chief and then, last month, slashed its proved reserves by an unprecedented 40%. It had originally expected to account for the change, which triggered a $1 billion "ceiling test" charge, entirely in the fourth quarter of 2003. But it now suspects the revision could hurt prior results and trigger additional charges requiring multiple restatements.

"If upon completion of these reviews, it is determined that a restatement is required, the restatement of previous periods would likely result in non-cash ceiling-test charges in certain of those periods and higher-than-reported depletion rates in some periods, and potential adjustments in gains or losses in prior sales of oil and gas properties," the company explained.

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