After a rise in recent days, up 21% YTD as a result of the gamma squeeze discussed yesterday, and coupled with a barrage of analyst upgrades, most recently from Barclays and JPM, Exxon stock fell as much as this morning. 4%, after the WSJ reported that the SEC launched an investigation into the energy giant after an employee “filed a whistleblower complaint last fall alleging that the energy giant overvalued one of its major oil and gas properties.”
According to the WSJ, the latest amusing “whistleblower complaint” has involved several people in the appraisal of an important asset in the Permian Basin, currently America’s most producing oil field, “the WSJ said.complained during a 2019 internal review that employees were forced to use unrealistic assumptions about how quickly the company could drill wells there to get to a higher value. “
At least one of the employees who complained was fired last year, a person familiar with the case said. The Journal previously reported that there had been internal disagreements about the valuation.
What’s great … the only problem is that absolutely every other US E&P and shale company, and in fact every era of energy companies, is using a similar “unrealistic” approach to valuing assets. In fact, it could be argued that Aramco is the worst offender of all, although there may be other “considerations”.
The news was enough to hammer the stock, which fell to $ 48.3 before rebounding as traders realized that Exxon isn’t doing anything that all of its competitors aren’t doing either.
By Zerohedge.com
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