The Complaint brings forth claims for violations of the Securities Exchange Act of 1934 against Apache Corporation (“Apache” or the “Company”) and certain of its senior executives. The Complaint alleges that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired Apache common stock during the Class Period.
Apache is an independent energy company that explores for, develops, and produces natural gas, crude oil, and natural gas liquids. Within the United States, Apache’s purported “core growth area” was an oil and gas field known as “Alpine High” located along the western edge of the Permian Basin in West Texas. By January 2016, Apache had purchased over 300,000 acres in the Permian Basin, including and as part of the highly touted Alpine High project.
Specifically, the Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding Apache’s operations and financial health, including the viability and profitability of Alpine High which included: (i) Apache intentionally used unrealistic assumptions regarding the amount and composition of available gas and oil in Alpine High; (ii) Apache did not have the proper infrastructure in place to safely and/or economically drill and/or transport those resources even if they did in fact exist in the amounts purported; and (iii) Defendants misleading statements and omissions to investors served to artificially inflate the value of the Company’s operations and stock price.
On April 23, 2019, the truth began to be revealed when Apache announced that it had begun a “[t]emporary” deferral of natural gas production at Alpine High. In response to this news, Apache’s stock price fell $4.03 per share, or nearly 11% over the next four trading days. Then, on October 25, 2019, Apache’s Senior Vice President of Worldwide Exploration, abruptly resigned from the Company, causing another decline in stock of $1.16, or approximately 5%. By February 26, 2020, Apache announced that it was completely de-valuing Alpine High after taking a $3 billion write down on the project. Two weeks later, on March 12, 2020, Apache announced that it had slashed its quarterly dividend by 90% and was significantly reducing planned capital expenditures for the rest of 2020. On this news, the price of Apache common stock fell $0.49 per share, or approximately 6%. As the market and analysts continued to respond to this news, Apache’s stock price fell $3.61 per share, or approximately 45%, on March 17, 2020, causing significant damages to shareholders.