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Shares of ExxonMobil (XOM) closed down 4.81% today on a Wall Street Journal report that the Securities & Exchange Commission was investigating a whistleblower complaint alleging that the company overvalued assets in the Permian Basin oil shale geology.

The whistleblower complaint alleges that during a 2019 internal assessment workers were forced to use unrealistic assumptions about how quickly wells could be drilled to reach a higher valuation.

ExxonMobil called the claims “demonstrably false” and said that the company “stands by” its statements to investors.

The case would be a difficult one to prove since oil companies are allowed to set their own assumptions on asset valuation. The SEC requires oil companies to report with reasonable certainty the volume of reserves in wells that are profitable at a price set by the agency the year before. Those wells must be drilled within five years of being added to a company’s books. The calculations take into account the rate at which a well’s production is likely to decline, how closely the wells are drilled, land and capital costs, as well as the price per barrel of crude.

The SEC adopted new reporting rules in 2009, after lobbying by oil shale producers. Before the rule change, there was a series of reserve scandals that involved Royal Dutch Shell, which the agency fined $120 million in 2004, and a few years later El Paso, which settled charges for inflating reserves.

It’s not the first time that ExxonMobil has been questioned by regulators about how it values assets. In 2016, Exxon was questioned by the regulator about why the company appeared immune from the multi-billion write downs affecting the rest of the industry. The issue was resolved without any action being taken.

The news of the SEC investigation has wider implications for the entire energy sector. If ExxonMobil, inflated its assets by enough to draw regulators’ attention, what other companies might be using “aggressive” valuations during the current and severe oil industry plunge. Asset values have immediate importance because they’re used by bond investors and banks to decide how much to charge an oil company to borrow and whether to let the company borrow at all.