Item 4.01 Changes in Registrant's Certifying Accountant
(a) Dismissal of Independent Registered Public Accounting Firm
The Audit Committee of the Board of Directors of PennTex Midstream GP, LLC, the general partner of PennTex Midstream Partners, LP (“PennTex”), approved the dismissal of Ernst & Young LLP (“EY”) as its independent registered public accounting firm. PennTex notified EY of its dismissal on February
23, 2017, effective February 23, 2017, upon the appointment of Grant Thornton LLP (“Grant Thornton”) as its independent registered public accounting firm.
The audit reports of EY on the consolidated financial statements of PennTex as of December 31, 2016 and 2015 and for each of the two years in the period ended December 31, 2016 and for the period from March 17, 2014 (inception) through December 31, 2014, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During PennTex’s two fiscal years in the period ended December 31, 2016 and for the period from March 17, 2014 (inception) through December 31, 2014, and during the subsequent interim period through
February 27, 2017
, there were no (1) disagreements with EY on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of EY, would have caused EY to make reference in connection with their report to the subject matter of the disagreement, or (2) “reportable events” as defined in Item 304(a)(1)(v) of Regulation S-K.
PennTex provided EY with a copy of this Current Report on Form 8-K, and requested that EY furnish PennTex with a letter addressed to the Securities and Exchange Commission stating whether EY agrees with the statements made by PennTex in response to the disclosures required by Item 304(a) of Regulation S-K. PennTex subsequently received the requested letter, and a copy of such letter is filed as Exhibit 16.1 to this Current Report on Form 8-K.
(b) Engagement of New Independent Registered Public Accounting Firm
The Audit Committee approved the appointment of Grant Thornton as PennTex’s independent registered public accounting firm, effective February 23, 2017, to perform independent audit services for the fiscal year ending December 31, 2017. As of November 1, 2016, Energy Transfer Partners, L.P. (“ETP”) owns all of the general partner interests, incentive distribution rights and a 65% limited partner interest in PennTex. PennTex became a consolidated subsidiary of ETP following ETP’s acquisition of the general partner interests, incentive distribution rights and limited partner interests in PennTex. As Grant Thornton currently serves as ETP’s independent registered public accounting firm, the Audit Committee determined that it would be beneficial for ETP and PennTex to have the same accounting firm audit their respective financial statements.
During PennTex’s two fiscal years ended December 31, 2016 and December 31, 2015, and during the subsequent interim period through
February 27, 2017
, neither PennTex, nor anyone acting on PennTex’s behalf, consulted with Grant Thornton with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of PennTex, and no written report or oral advice was provided to PennTex by Grant Thornton that Grant Thornton concluded was an important factor considered by PennTex in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K).