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Exxon Whistleblower Reportedly Prompts SEC Investigation

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Exxon Whistleblower Reportedly Prompts SEC Investigation

The U.S. Securities and Exchange Commission is investigating Exxon Mobil Corporation (NYSE: XOM) after an insider whistleblower alleged the energy giant overvalued its Permian Basin assets, sources told The Wall Street Journal.

What Happened: Exxon employees tasked with valuing the company's highest-producing U.S. oil field were told to use unrealistic inputs in their valuation, according to the complaint, the WSJ reported Friday.

Specifically, the complaint said workers were ordered to overstate the rate at which Exxon can drill wells to derive a higher financial valuation.

At least one employee that complained in 2019 was fired a year later, the Journal said.

Exxon spokesman Casy Norton told WSJ he can't comment on why or if a worker was fired and declined to confirm or deny the existence of an SEC investigation.

Related Link: Why BofA Projects 'Continued Recovery In Oil Prices'

Why It's Important: Exxon managers estimated the value of its Basin assets at $60 billion in 2018. But when Exxon workers reevaluated the assets a year later, it was pegged at closer to $40 billion.

The workers were told to "claw back" some of the lost value and re-do the work by using different assumptions, the report said. 

One employee reportedly submitted the revised financial model in a file titled "This is a Lie."

What's Next: U.S. whistleblowers are entitled to financial rewards if their complaint leads to a penalty.

XOM Price Action: Exxon shares were down 5.33% at $47.62 at last check Friday. 

 

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Posted-In: Oil Permian Basin The Wall Street JournalNews SEC Movers Media Trading Ideas Best of Benzinga

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