A view of the Exxon Mobil refinery in Baytown, Texas.
Jessica Rinaldi | Reuters
Exxon shares fell more than 5 percent 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 rich Permian Basin.
The whistleblower complaint, filed by an employee, alleged that Exxon was pushing staff toward inaccurate forecasts, including the speed at which wells could go online, according to the newspaper, 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 for the oil and gas industry in general. In December, Exxon said it will record the value of its assets up to $ 20 billion in the fourth quarter.
With the pandemic wreaking havoc on oil prices in 2020, Exxon suffered from an aggressive cost-cutting strategy, including downsizing its workforce.
Wall Street analysts believe that some of these initiatives will eventually bear fruit and that they have recently become bullish.
Barclays upgraded that stock to an overweight rating on Thursday, saying that “a perfect storm from a more constructive macro perspective and a structural repositioning of capex / costs provides a solid springboard for materially improved financial metrics that are impossible to ignore “.
Earlier in the week, JPMorgan and Morgan Stanley upgraded the shares to a purchase-equivalent rating.
Exxon shares have risen 15% to date, but are down more than 30% from last year.
To read the full Wall Street Journal report click here.