Since the announcement by the Securities and Exchange Commission (SEC) this morning that it has launched a probe into oil titan ExxonMobil, the company’s shares dropped on the US stock market by 2.3 percent. The complaint which was originally reported by the Wall Street Journal and led to the subsequent investigation by the SEC states that ExxonMobil allegedly overvalued its asset in the Permian Basin.
The WSJ report said too that several people involved in valuing the asset complained that they were being forced to use unrealistic assumptions about how quickly the company could drill wells in the Permian to arrive at a higher value.
Following the damning report, ExxonMobil issued a statement vehemently denying the claims made by alleged whistleblowers.
The oil giant which is currently working aggressively to its significant oil finds offshore Guyana said, “Actual and provable performance exceeded drilling plans for the Permian, and such performance has been accurately represented to the investment community. The Wall Street Journal has been aware of these facts since September.”
Taking the foregoing into consideration, Exxon said it stands by its statements to investors while adding that if it were to be asked about this matter by authorities, it would provide information that shows the accuracy of its valuation of the company’s Permian assets and that actual drilling performance exceeded the plans.
Further to this, ExxonMobil said it is obvious that the employees who are alleged to have made the false claims lack the breadth and depth of experience to understand how and why drilling curves are routinely revised as technologies improve and understanding of the resource base expands. The Huston giant said that historically, its unconventional drilling performance has increased in short timeframes as engineers and planners gather more data in basins across its portfolio.