A view of the Exxon Mobil refinery in Baytown, Texas.
Jessica Rinaldi | Reuters
Exxon’s shares fell more than 5% on Friday after The Wall Street Journal reported that the Securities and Exchange Commission opened an investigation into the oil giant on how it valued a major asset in the rich Permian basin.
The whistleblower’s complaint, filed by an employee, alleged that Exxon pressured the team to make inaccurate forecasts, including the rate at which wells could go online, according to the Journal, which analyzed a copy of the complaint.
In a statement, Exxon called the allegations “proven to be false”.
The report follows a difficult year for Exxon and the oil and gas industry in general. In December, Exxon said it would lower its assets by as much as $ 20 billion in the fourth quarter.
With the pandemic ravaging oil prices in 2020, Exxon underwent an aggressive cost-cutting strategy, including reducing its workforce.
Wall Street analysts believe that some of these initiatives will eventually bear fruit and have recently become optimistic for stocks.
Barclays lifted the action to an overweight rating on Thursday, saying that “a perfect storm from a more constructive macro perspective and structural capex / cost repositioning is providing a solid stepping stone for substantially improved financial metrics that are impossible to ignore. “
Earlier this week, JPMorgan and Morgan Stanley each raised their shares to a rating equivalent to the purchase.
Exxon’s shares have risen 15% in the year to date, but have fallen more than 30% last year.
To read the full report from The Wall Street Journal, click here.