Having skyrocketed in the past few days, rising 21% year-to-date on the back of the range compression discussed yesterday, and along with a flurry of analyst updates, most recently from Barclays and JPM, Exxon’s stock has dropped by up to 4% this morning after the WSJ reported that the SEC launched an investigation of the energy giant after an employee “filed a complaint last fall, alleging that the energy giant overestimated one of its most important oil and gas properties”.
According to the WSJ, in the latest entertaining “whistleblower complaint”, several people involved in the valuation of a key asset in the Permian Basin, currently the most productive oil field in the United States, “complained during an internal assessment in 2019 that employees were being forced to use unrealistic assumptions about how quickly the company could drill wells to reach a higher value. “
At least one of the complaining employees was fired last year, according to a person familiar with the matter. The Journal previously reported that there were internal differences over the assessment.
What’s great … the only problem is that absolutely all other E&P and shale companies in the United States, and indeed all periods of energy companies, use a similar “unreal” approach to valuing assets. In fact, it can be argued that Aramco is the biggest offender of all, although there may be other “considerations” there.
The news was enough to hit the stock, which fell to $ 48.3 before it recovered, as traders realized that Exxon is not doing anything that all of its peers are also not doing.
By Zerohedge.com
More top readings from Oilprice.com:
Return to home page