Shares of Exxon Mobil Corporation XOM are trading down more than 0.9 percent on Tuesday afternoon. While, in terms of percentage, this decline does not seem large, it just shed roughly $1 billion of the company’s market cap.
According to informed sources, the U.S. Securities and Exchange Commission (SEC) is investigating the way in which the company has valued its assets in a backdrop of tumbling oil prices, Bradley Olson and Aruna Viswanatha said in a Wall Street Journal article.
Apparently, the institution is also evaluating Exxon’s accounting practices, especially those related with the estimation of future value in a world where climate change regulations continue to expand.
This, however, is not the first probe in relation to this issues that the energy company has come across. Last year, New York Attorney General Eric Schneidermanbegun a similar investigation, and how now shared his findings with the SEC.
“Exxon is the only major U.S. energy producer that hasn’t taken a write-down or impairment charge since oil prices plunged two years ago,” Viswanatha and Olson explained, as they looked into the reasons behind the SEC probe. Conversely, industry peers like Chevron Corporation CVX have trimmed their valuations by a combined figure of $50 billion.
Exxon declined to comment on both the SEC and New York Attorney General investigations, same as its auditor, PricewaterhouseCoopers LLP.
Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.
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