Saxena White Wins Motion to Dismiss Against Apache Corp.

On November 29, 2022, Saxena White secured a major victory with a significant decision issued by the Honorable George C. Hanks, Jr., of the Southern District of Texas in Plymouth County Retirement Association v. Apache Corp., No. 4:21-cv-00575 (S.D. Tex.). In the Court’s order denying Defendants’ motion to dismiss, Judge Hanks accepted and adopted the Memorandum and Recommendations of Magistrate Judge Andrew M. Edison.

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.

The Consolidated Class Action 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: (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.

In his Memorandum and Recommendation to the Court, Magistrate Judge Edison praised the quality of the Consolidated Class Action Complaint and the efficacy of the allegations therein: “Over my career, both as a lawyer and as a judge, I have had the opportunity to review a vast number of securities class action lawsuits. Despite their usual length, many of those filings are cut-and-paste jobs that unquestionably fail to properly allege a false or misleading statement. This is not one of those complaints.”

Judge Edison further concluded that the allegations made in the Consolidated Class Action Complaint, buttressed by the statements from 24 confidential witnesses, provided a sufficient presumption that “Defendants made materially false or misleading statements,” and “the totality of allegations indicate that representations made by Defendants concerning the commercial viability of Alpine High were materially false or misleading when made.”

The case will now proceed to the discovery phase.