According to a report from the Wall Street Journal, Exxon is being investigated by the Securities and Exchange Commission after an employee filed a whistleblower complaint regarding how the company valued some of its oil and gas properties. According to the report, Exxon pressured its employees to use unrealistic assumptions regarding the values of assets in the Permian Basin, which is located in West Texas and Eastern New Mexico. The report claims that “several” people filed internal complaints regarding the pressure they felt they were subject to when valuing Exxon’s permian holdings. At least one of the employees who complained was fired, and at least one filed an external complaint with the SEC.
Assert valuations have been a major topic of concern for major oil producers. Because of a short-lived price war between Saudi Arabia and Russia, oil and gas prices cratered early in 2020, and the ongoing COVID pandemic has reduced demand for oil, leaving prices low for an extended period of time and causing producers to re-evaluate how they have valued some of their most important assets. In June, Shell announced it would write down as much as $22 billion in assets. BP likewise said it would write down as much as $17 billion worth of assets. Another possible factor in the decline in value of oil producers’ assets is the fact that shale wells have not produced as much oil and gas as they were projected to originally.
Under the SEC’s whistleblower program, individuals who file a complaint and give information which leads to a penalty against a company can receive as much as 30% of the penalty. Complaints under the SEC’s whistleblower program can be filed anonymously and confidentially. If you are aware of a company’s dubious accounting practices when valuing assets, you should speak to an experienced whistleblower attorney as soon as possible.
Josh Borsellino is a Texas attorney that represents workers on whistleblower and retaliation claims. Mr. Borsellino can be reached at 817.908.9861 or via this email link. He provides free evaluations of any whistleblower or retaliation claims.