Exxon reportedly investigates valuation of key asset by SEC

Exxon shares slipped more than 5% on Friday after the Wall Street Journal reported that the Securities and Exchange Commission opened an investigation into the oil giant into how it was valuing a key asset in the rich Permian Basin. oil.

According to the Journal, which reviewed a copy of the complaint, the whistleblower complaint, filed by an employee, alleged that Exxon had pushed staff towards inaccurate forecasts, including the rate at which wells could be brought online.

In a statement, Exxon called the allegations “patently false.”

The report follows a difficult year for Exxon and for the oil and gas industry more broadly. In December, Exxon announced that it would reduce the value of its assets by up to $ 20 billion in the fourth quarter.

With the pandemic wreaking havoc on oil prices in 2020, Exxon has been the subject of an aggressive cost reduction strategy, including downsizing its workforce.

Wall Street analysts believe some of these moves will eventually pay off and have recently become bullish on the stock.

Barclays raised the stock to an overweight rating on Thursday, saying “a perfect storm of more constructive macroeconomic outlook and structural repositioning of investments / costs provide a solid springboard for significantly improved financial measures that cannot be ignored” .

Earlier in the week, JPMorgan and Morgan Stanley each improved the stock to a buy equivalent rating.

Exxon shares are up 15% year-to-date, but down more than 30% from last year.

To read the full Wall Street Journal report, click here.