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 opened an investigation into the oil giant over how it valued a key asset in the oil-rich Permian Basin.
The whistleblower complaint, filed by an employee, alleged that Exxon pushed staff toward inaccurate forecasts 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 that it will write down 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 underwent an aggressive cost-cutting strategy, including reducing its workforce.
Wall Street analysts believe that some of these initiatives will ultimately pay off, and have recently become bullish on the stock.
Barclays upgraded the stock to an overweight rating on Thursday, saying “a perfect storm of a more constructive macro outlook and structural repositioning of capex/costs is providing a solid springboard for materially improved financial metrics that are impossible to ignore.”
Shares of Exxon are up 15% year to date, but are down more than 30% over the last year.