Apache Corporation

Case Details

Class Period: September 7, 2016 - March 13, 2020
Date Filed: February 23, 2021
Case Number: 4:21-cv-0575
Jurisdiction: Southern District of Texas
icon-casetype Case Type: Securities Case

Case Summary

The complaint asserts 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.

However, unbeknownst to investors, the complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the viability and profitability of Alpine High. Specifically, Apache concealed that (1) it had intentionally used unrealistic assumptions regarding the amount and composition of available gas and oil in Alpine High, and (2) it 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 claimed.

The truth began to be revealed on April 23, 2019, 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 per share, or approximately 5%.

By February 26, 2020, Apache announced that it was completely devaluing 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 shareholders to incur significant damages.

On October 6, 2021, the Court appointed Plymouth County Retirement Association and the Trustees of the Teamsters Union No. 142 Pension Fund to serve as Lead Plaintiffs and Saxena White P.A. as Co-Lead Counsel.

On December 17, 2021, the Lead Plaintiffs filed their consolidated class action complaint, and on February 15, 2022, Defendants filed their motion to dismiss the consolidated complaint. The briefing schedule for this motion concluded on June 9, 2022.

On September 15, 2022, Magistrate Judge Andrew M. Edison issued his memorandum and recommendation, concluding that the Court should deny Defendants’ motion to dismiss in its entirety. On November 29, 2022, U.S. District Court Judge George C. Hanks, Jr., accepted the Magistrate’s conclusions, issuing an order adopting the memorandum and recommendation and denying Defendants’ motion to dismiss.

The case will now proceed to the discovery phase.