A view of the Exxon Mobil refinery in Baytown, Texas.
Jessica Rinaldi | Reuters
Shares of Exxon slipped more than 5% on Friday after The Wall Street Journal reported that the Securities and Exchange Commission had launched an investigation into the oil giant over how it valued a major asset in the oil-rich Permian Basin.
According to the complaint of the whistleblower, filed by an employee, Exxon alleges staff were making inaccurate predictions, including the rate at which wells could come online, according to the Journal, which reviewed a copy of the complaint.
In a statement, Exxon called the allegations “demonstrably false”.
The report follows a difficult year for Exxon, and the oil and gas industry more broadly. In December, Exxon said it would write down the value of its assets by up to $ 20 billion in the fourth quarter.
With the pandemic that devastated oil prices in 2020, Exxon has embarked on an aggressive cost-cutting strategy, including reducing its staff.
Wall Street analysts believe that some of these initiatives will eventually bear fruit, and that it has been strong on the stock recently.
Barclays on Thursday upgraded the stock to an overweight rating, saying “a perfect storm of a more constructive macro outlook and structural repositioning of capital / costs provides a solid springboard for substantially improved financial benchmarks that are impossible to ignore.”
Earlier in the week, JPMorgan and Morgan Stanley each upgraded the stock to a buy-equivalent rating.
Shares of Exxon have risen 15% to date, but have fallen by more than 30% in the past year.
To read the full report of The Wall Street Journal, click here.