Environment & Energy
Related: About this forumExxon Announces $19.3 Billion Write-Down Of Assets, Much Of It From The Flailing Fracked NG Sector
ExxonMobil announced a $19.3 billion write-down on Tuesday, a big hit to a company reeling from depressed oil and gas prices and a rapidly changing global energy market. The write-down reduces the value of the assets on Exxons books. The announcement comes as part of the companys fourth quarter earnings for 2020.
The fossil fuel giant, however, may be understating the financial damage to its assets, according to a former ExxonMobil employee turned whistleblower, Franklin Bennett. The oil major has overvalued its assets for years, according to Bennett and a team of advisors, a practice he describes as fraudulent and defiant behavior in a January 31 supplement to a whistleblower complaint he filed with the U.S. Securities and Exchange Commission (SEC).
Bennett and his team argue that instead, the company has been overvaluing its U.S. oil and gas assets by as much as $56 billion, as of year-end 2019.
At the root of the SEC complaint is ExxonMobils 2010 purchase of shale fracking company XTO Energy, which it acquired at the height of the natural gas boom for $46 billion. In the months and years following the acquisition, natural gas prices collapsed, and never returned to previous heights, rendering much of XTOs assets uneconomic to produce. Until now, ExxonMobil largely refused to take a meaningful write-down on those assets, despite several downturns in oil and gas market conditions. In particular, a deep natural gas price slide in 20152016, and another in 2019, hollowed out the valuation of many high-cost shale gas assets. Through it all, Exxon never took a significant write-down, which Bennett and his team argue is illegal.
EDIT
https://www.desmogblog.com/2021/02/02/whistleblower-sec-complaint-alleges-exxon-fraud-overvalue-fracking-assets?utm_source=DeSmog%20Weekly%20Newsletter
Fullduplexxx
(7,857 posts)Magoo48
(4,705 posts)I shiver to think about the untold tons of toxic chemicals this dying industry will leave seeping into our water.