|In re Apache Corp. Securities Litigation
|United States District Court for the Southern District of Texas
|Honorable George C. Hanks, Jr.
|Court-appointed Lead Plaintiffs Plymouth County Retirement Association and the Trustees of the Teamsters Union No. 142 Pension Fund
|Apache Corporation, John F. Christmann IV, Timothy J. Sullivan, & Stephen J. Riney
|September 7, 2016 to March 13, 2020, inclusive
This securities fraud class action arises from Apache’s materially false and misleading statements regarding its purportedly groundbreaking oil and gas discovery in West Texas, which it dubbed “Alpine High.” Starting in September 2016, Defendants claimed the play held copious amounts of valuable oil and gas on par with world-class plays like the Marcellus Shale in Pennsylvania and the Eagle Ford in Texas, which Apache could economically exploit, and thus drive company revenues for years to come. Investors accepted the claims, and Apache’s common stock price skyrocketed. However, Lead Plaintiffs’ extensive investigation has revealed that Defendants’ claims were baseless. Internal studies at Apache prior to September 2016 established that Alpine High was characterized by low-value gas, not valuable oil or gas resources. Confirming this, Apache’s own production data from the wells it drilled at Alpine High showed that the area held hardly any oil and gas that could be economically exploited, let alone the vast amounts Defendants repeatedly touted to investors. Scrambling to contain the failure, Defendants fired multiple dissenters from inside the company and shielded Alpine High production data from ordinary disclosure and review—but they could sustain the sham only so long. The truth concerning Alpine High was gradually revealed to the public through a series of disclosures on October 9, 2017, February 22, 2018, April 23, 2019, October 25, 2019, and March 16, 2020, which collectively showed that the play was an unprofitable bust. Apache’s stock prices fell sharply on each partial corrective disclosure, causing massive losses to defrauded shareholders.
On December 17, 2021, Plaintiffs filed a Consolidated Class Action Complaint on behalf of a putative class of investors, alleging that Apache, John Christmann IV, Timothy Sullivan, and Stephen Riney violated Section 10(b) of the Exchange Act by making materially false and misleading statements regarding the Alpine High play; and that Christmann IV, Sullivan, and Riney, as controlling persons of Apache, violated Section 20(a) of the Exchange Act. On September 15, 2022, Magistrate Judge Edison issued a Memorandum and Recommendation denying Defendants’ motion to dismiss. On November 29, 2022, the Court overruled Defendants’ objections to the Recommendation. The case is now in fact discovery, and the parties are engaged in briefing on Plaintiffs’ motion for class certification.
Read Consolidated Class Action Complaint Here