Case 4:21-cv-00575 Document 1 Filed on 02/23/21 in TXSD Page 1 of 26
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`Case No.
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`PLYMOUTH COUNTY RETIREMENT
`SYSTEM, Individually and on Behalf of All
`Others Similarly Situated,
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` Plaintiff,
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`JURY TRIAL DEMANDED
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` v.
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`APACHE CORPORATION, JOHN J.
`CHRISTMANN IV, TIMOTHY J.
`SULLIVAN, STEPHEN J. RINEY, and
`STEVEN KEENAN,
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` Defendants.
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`CLASS ACTION COMPLAINT
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`Plaintiff Plymouth County Retirement System (“Plaintiff”) alleges the following based
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`upon personal knowledge as to allegations specifically pertaining to Plaintiff and, as to all other
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`matters, upon the investigation of counsel, which included, without limitation: (i) reviewing and
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`analyzing public filings made by Apache Corporation (“Apache” or the “Company”) with the
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`United States Securities and Exchange Commission (“SEC”); (ii) reviewing and analyzing press
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`releases and other publications disseminated by Defendants (defined below) and other parties;
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`(iii) reviewing and analyzing news articles, shareholder communications, conference calls, and
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`postings on Apache’s website about the Company’s public statements; and (iv) reviewing and
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`analyzing other publicly available information about the Company.
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`NATURE OF THE ACTION
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`This is a federal securities class action against Apache and certain of its officers for
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`violations of the federal securities laws. Plaintiff brings this action on behalf of all persons or
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`entities that purchased or otherwise acquired Apache common stock from September 7, 2016,
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`through March 13, 2020, inclusive (the “Class Period”), seeking remedies under the Securities
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`Exchange Act of 1934 (the “Exchange Act”). The action alleges that Defendants engaged in a
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`fraudulent scheme to artificially inflate the Company’s stock price in violation of Sections 10(b)
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`and 20(a) of the Exchange Act.
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`Apache is an independent energy company that explores for, develops, and produces
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`natural gas, crude oil, and natural gas liquids. Apache currently has exploration and production
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`operations in three geographic areas: the U.S., Egypt, and offshore U.K. in the North Sea, and is
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`developing a purported new find in offshore Suriname. Historically, the U.S. has represented
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`nearly 60% of the Company’s production and 70% of its estimated year-end proved reserves. At
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`all relevant times, one of the Company’s purported key “core growth areas” was the Permian
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`region in West Texas and New Mexico.
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`Throughout the Class Period, Defendants made materially false and misleading
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`statements about the Company’s operations and financial health, including the viability and
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`profitability of a purported large oil-and-gas resource play in the Permian Basin called Alpine High.
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`Specifically, Defendants made false and misleading statements and/or failed to disclose that:
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`(i) Apache intentionally used unrealistic assumptions regarding the amount and composition of
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`available oil and gas in Alpine High; (ii) Apache did not have the proper infrastructure in place to
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`safely and/or economically drill and/or transport those resources even if they existed in the
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`amounts purported; (iii) these misleading statements and omissions artificially inflated the value
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`of the Company’s operations in the Permian Basin; and (iv) as a result, the Company’s public
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`statements were materially false and misleading at all relevant times.
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`On April 23, 2019, before financial markets opened, Apache announced that it had
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`begun a “[t]emporary” deferral of natural gas production at Alpine High. In response to this news,
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`Apache’s stock price fell $4.03 per share, or nearly 11% over the next four trading days, from a
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`close of $37.09 per share on April 22, 2019, to close at $33.06 per share on April 26, 2019.
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`Then, on October 25, 2019, Apache’s Senior Vice President of Worldwide
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`Exploration, Steven Keenan, abruptly resigned from the Company. In response to this
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`announcement, Apache’s stock price dropped $1.16, or approximately 5%, from a close of $23.23
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`per share on October 24, 2019, to close at $22.07 per share on October 25, 2019. Apache’s stock
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`traded as low as $20.57 per share on October 25, 2019, an intra-day drop of approximately 11.5%,
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`prompting Bloomberg to issue a story titled “Apache Executive’s Departure Sparks Worst Rout
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`Since 2016.”
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`A few months later, on February 26, 2020, after the close of the markets, Apache
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`announced that it was completely de-valuing Alpine High after taking a $3 billion write down on
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`the project. Two weeks later, on March 12, 2020, Apache announced that it had slashed its
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`quarterly dividend by 90% (from $0.25 per share to just $0.025 per share) and was significantly
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`reducing planned capital expenditures for the rest of 2020. On this news, the price of Apache
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`common stock fell $0.49 per share, or approximately 6%, from a close of $8.25 per share on March
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`11, 2020, to close at $7.76 per share on March 12, 2020.
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`A few days later, on March 16, 2020, Seeking Alpha published an article pre-market
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`noting that Apache was particularly challenged amongst its peers, carrying “the highest debt-to-
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`equity ratio among large-cap independent [exploration and production companies],” and that “[t]he
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`company doesn’t have a strong balance sheet” and its “financial health isn’t great.” The article
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`observed that low gas prices had “forced Apache to shift capital away from the wet-gas rich Alpine
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`High play which has been driving the company’s production growth.” The article noted that
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`“Apache also reduced Alpine High’s value by $1.4 billion.” In response to this news and other
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`investment research downgrades, Apache’s stock price fell $3.61 per share, or approximately 45%,
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`over two trading days, from a close of $8.07 per share on Friday, March 13, 2020, to close at $4.46
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`per share on March 17, 2020.
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`As a result of Defendants’ wrongful acts and omissions and the decline in the
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`Company’s share price, Plaintiff and other class members have suffered significant damages.
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`JURISDICTION AND VENUE
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`The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange Act
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`(15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 C.F.R.
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`§ 240.10b-5).
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` This Court has jurisdiction over the subject matter of this action under 28 U.S.C.
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`§ 1331, Section 27 of the Exchange Act (15 U.S.C. § 78aa).
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` Venue is proper in this Judicial District under 28 U.S.C. § 1391(b), and Section 27
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`of the Exchange Act (15 U.S.C. § 78aa). Substantial acts in furtherance of the alleged fraud or the
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`effects of the fraud have occurred in this Judicial District. Many of the acts charged herein,
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`including the dissemination of materially false and misleading information, occurred in substantial
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`part in this Judicial District, as Apache is headquartered in this District.
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`In connection with the acts, conduct, and other wrongs alleged herein, Defendants
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`directly or indirectly used the means and instrumentalities of interstate commerce, including the
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`United States mails, interstate telephone communications, and the facilities of a national securities
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`market.
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`CLASS ACTION ALLEGATIONS
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` Plaintiff brings this action as a class action under Federal Rule of Civil Procedure
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`23(a) and (b)(3) on behalf of a class, consisting of all persons or entities that purchased or otherwise
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`acquired Apache common stock from September 7, 2016, through March 13, 2020, inclusive, and
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`who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers
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`and directors of the Company, at all relevant times, members of their immediate families and their
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`legal representatives, heirs, successors, or assigns, and any entity in which Defendants have or had
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`a controlling interest.
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` The members of the Class are so numerous that joinder of all members is
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`impracticable. Throughout the Class Period, Apache’s common stock actively traded on the
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`NASDAQ. While the exact number of Class members is unknown at this time and can only be
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`ascertained through appropriate discovery, Plaintiff believes that there are at least hundreds or
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`thousands of members in the proposed Class. Millions of shares of Apache common stock were
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`publicly traded during the Class Period on the NASDAQ. Record owners and other members of
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`the Class may be identified from records maintained by Apache or its transfer agent and may be
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`notified of the pendency of this action by mail, using the form of notice similar to that customarily
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`used in securities class actions.
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` Plaintiff’s claims are typical of the claims of the members of the Class as all
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`members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
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`federal law that is complained of herein.
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` Plaintiff will fairly and adequately protect the interests of the members of the Class
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`and has retained counsel competent and experienced in class and securities litigation.
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` Common questions of law and fact exist as to all members of the Class and
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`predominate over any questions solely affecting individual members of the Class. Questions of
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`law and fact common to the Class include:
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`a)
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`whether the federal securities laws were violated by Defendants’ acts and
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`omissions as alleged herein;
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`b)
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`whether Defendants participated in and pursued the common course of
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`conduct complained of herein;
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`c)
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`whether documents, press releases, and other statements disseminated to the
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`investing public and the Company’s shareholders during the Class Period
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`misrepresented material facts about the business, finances, and prospects of
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`Apache;
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`d)
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`whether statements made by Defendants to the investing public during the
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`Class Period misrepresented and/or omitted to disclose material facts about
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`the business, finances, value, performance, and prospects of Apache;
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`e)
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`whether the market price of Apache common stock during the Class Period
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`was artificially inflated due to the material misrepresentations and the
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`failures to correct the material misrepresentations complained of herein; and
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`f)
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`the extent to which the members of the Class have sustained damages and
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`the proper measure of damages.
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` A class action is superior to all other available methods for the fair and efficient
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`adjudication of this controversy since joinder of all members is impracticable. Further, as the
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`damages suffered by individual Class members may be relatively small, the expense and burden
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`of individual litigation makes it impossible for members of the Class to individually redress the
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`wrongs done to them. There will be no difficulty in the management of this action as a class action.
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`PARTIES
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` Plaintiff Plymouth County Retirement System, as set forth in the accompanying
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`certification, which is incorporated by reference herein, purchased Apache common stock during
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`the Class Period, and suffered damages as a result of the federal securities law violations and false
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`and misleading statements and/or material omissions alleged herein.
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` Defendant Apache Corporation is incorporated under the laws of Delaware with its
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`principal executive offices located in Houston, Texas. Apache’s common stock trades on the
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`NASDAQ exchange under the symbol “APA.”
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` Defendant John J. Christmann IV (“Christmann”) served at all relevant times as the
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`Company’s Chief Executive Officer (“CEO”) and President, and as a member of Apache’s Board
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`of Directors.
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` Defendant Timothy J. Sullivan (“Sullivan”) served as the Company’s Executive
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`Vice President, Operations Support from January 2016 to December 2019.
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` Defendant Stephen J. Riney (“Riney”) served at all relevant times as the Company’s
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`Executive Vice President and Chief Financial Officer.
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` Defendant Steven Keenan (“Keenan”) served as the Company’s Senior Vice
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`President of Worldwide Exploration during the Class Period until October 2019.
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` Defendants Christmann, Sullivan, Riney, and Keenan (collectively the “Individual
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`Defendants”), because of their positions with the Company, possessed the power and authority to
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`control the contents of the Company’s reports to the SEC, press releases and presentations to
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`securities analysts, money and portfolio managers, and institutional investors, i.e., the market. The
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`Individual Defendants were provided with copies of the Company’s reports and press releases
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`alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and
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`opportunity to prevent their issuance or cause them to be corrected. Because of their positions and
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`access to material non-public information available to them, the Individual Defendants knew that
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`the adverse facts specified herein had not been disclosed to, and were being concealed from, the
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`public, and that the positive representations which were being made were then materially false and
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`misleading. The Individual Defendants are liable for the false statements pleaded herein.
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` The Company and the Individual Defendants are collectively referred to as the
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background
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` Apache is an independent energy company that explores for, develops, and produces
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`natural gas, crude oil, and natural gas liquids. The U.S. has historically represented nearly 60% of
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`the Company’s production and 70% of its estimated year-end proved reserves. At all relevant
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`times, one of the Company’s purported key “core growth areas” in the U.S. was the Permian region,
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`a large oil-and-gas producing area in West Texas and New Mexico.
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`In the years leading up to the start of the Class Period, Apache’s prior strategy of
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`focusing on developing oil in established fields through acquisitions of properties and smaller oil
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`companies was no longer working, and its productions began to stall. The Company responded
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`by implementing a new strategy of acquiring land and finding new oil discoveries, led by
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`Defendant Christmann, as its new Chief Executive Officer, promoted from Chief Operating
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`Officer in January 2015, and Defendant Keenan, as its Senior Vice President of Worldwide
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`Exploration, hired by the Company in April 2014 due to his successful discoveries in the shale
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`basin of Texas at his prior company. Notably, by January 2016, Apache had purchased over
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`300,000 acres in the Permian Basin.
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`Materially False and Misleading Statements
`Issued During the Class Period
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` The Class Period begins on September 7, 2016, when Apache, while under immense
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`pressure to show results from its new strategy and reverse its lagging share price, announced the
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`discovery of a new resource play called Alpine High.
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` Christmann touted the Alpine High discovery and its potential for large amounts of
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`economic drilling opportunities stating at the time that “[w]e are incredibly excited about the
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`Alpine High play and its large inventory of repeatable, high-value drilling opportunities,” and that
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`they are “looking forward to further delineat[e] what we believe will be a significant number of
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`oil-prone locations.” Christmann called Alpine High “a giant onion that is going to take us years
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`to unveil and peel back.” Investors reacted positively to the Alpine High announcement as
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`Apache’s stock price increased more than 6%, to close at $55.13 per share on September 7, 2016.
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`In addition to the gas reserves, the Company also claimed that Alpine High had
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`valuable oil reserves. For example, on February 14, 2017, Christmann, speaking at the Credit
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`Suisse Annual Energy Summit, expressed confidence that Apache had made a significant
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`discovery that would pay off for years to come, representing that the small number of wells drilled
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`so far had confirmed oil and gas in five geologic formations, each with multiple reservoirs.
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`Christmann added that the reservoirs were “overpressured,” as they would more easily produce oil
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`and gas as the Company continued to exploit them. Christmann also stated that the Company was
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`“focused on long-term results, not short-term press release material.”
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` On May 4, 2017, the Company released new well results that showed improved oil
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`production, as well as the early completion of a section of Apache’s natural gas pipeline, allowing
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`the Company to begin shipping its products from the area, two months ahead of schedule. That
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`day, in the Company’s press release announcing Apache’s first-quarter 2017 financial results,
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`Christmann stated that “[a]t Alpine High, testing and delineation have continued with strong
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`results that reinforce our confidence in this world-class resource play.” In July 2017, Christmann
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`addressed the effect on Apache of the then-current oil price of $44 a barrel, telling Barron’s,
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`“[w]e’ve spent two years repositioning Apache . . . . We have a very strong portfolio and are
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`positioned to thrive in a sub-$50 [oil price] world.”
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` During an October 8, 2017 Special Conference Call, Sullivan stated that “[t]he
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`weighted average typical Alpine High wet gas well is estimated to produce 13.3 [billion of cubic
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`feet equivalent] of hydrocarbons, of which 6% is oil.” Sullivan noted that “[w]e have just scratched
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`the surface in exploring this resource” and “[w]e are excited about what we have learned and the
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`tremendous upside potential this play holds.”
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` On February 22, 2018, Christmann told analysts the property would “really hum”
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`even with lower gas prices and stated that “Alpine High has all the makings of a great resource
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`play, and Apache is fortunate to have such a commanding acreage position.” That same day,
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`Apache issued a press release announcing its fourth-quarter and full-year 2017 financial results
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`(“4Q 2017 Press Release”). The 4Q 2017 Press Release noted that, in the fourth-quarter, Permian
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`oil volumes grew 10% from the previous quarter and total Permian production achieved a new
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`record, exceeding the previous high set two years earlier.
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` Despite these rosy sentiments, however, industry observers expressed skepticism
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`about the viability of the Alpine High play. For example, on April 19, 2018, the environmental
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`research website DeSmog published an article titled, “Despite Disappointing Returns, Oil Driller
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`Pushes Ahead with Fracking Near Rare Texas Wildlands.” The article reported that, “[a]lready,
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`there are signs the wells may not live up to Apache’s early hopes and pressure has been growing
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`from Wall Street to stop pouring money into huge infrastructure projects based on risky
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`assumptions.” These concerns, however, did nothing to temper the Company’s promotion of
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`Alpine High as the centerpiece of its development business.
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` Shortly after the article was published, in the Company’s May 2, 2018 press release
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`announcing its first-quarter 2018 results, Christmann stated that “2018 will be a year in which
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`Apache differentiates itself operationally, particularly in the Permian Basin.” On the
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`accompanying conference call with investors the next day, Sullivan called the Permian Basin “the
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`primary driver of our growth,” which reflected ongoing oil development as well as “the startup of
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`Alpine High.” Christmann asserted that Alpine High was “going very well and there’s a
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`tremendous amount of interest” and monetization opportunities when “the value of this
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`infrastructure is going to grow significantly over the next 5, 6, 7, 8 years.”
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` Later that month, during the May 24, 2018 Apache Annual Shareholders Meeting,
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`Christmann told investors that Alpine High had a “significant production ramp that’s going to
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`continue for many years” while the Company “made great progress on reducing our well costs.”
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` On August 1, 2018, Alpine issued a press release announcing its second-quarter
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`2018 financial results, which again displayed positive results from the Alpine High play. During
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`the accompanying earnings conference call the next day, Christmann highlighted “another great
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`quarter” as it exceeded guidance and raised the 2018 outlook. Christmann also pointed to the
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`significant upside still coming, due to added capital, which would increase Apache’s capital
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`efficiency improvements and strong well performances in the Permian Basin for 2019 and 2020.
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`Christmann reiterated the Company’s earlier guidance, stating that “we anticipate that the 2019
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`production from Alpine High will trend towards the high end of the 85,000 to 100,000 barrels of
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`oil equivalent per day guidance range that was established back in February [2018].”
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` On October 31, 2018, Apache issued a press release announcing its third-quarter
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`2018 financial results and the positive results from Alpine High. Christmann stated that “Apache
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`continued our strong performance in the third quarter of 2018, delivering 31 percent growth in U.S.
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`production year over year. The Permian Basin continues to be the key driver, with oil production
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`up 16 percent and total production up 38 percent year over year.” Notably, Apache raised its full-
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`year 2018 U.S. production guidance to 262,000 barrels of oil equivalent per day.
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` The statements identified in ¶¶ 29 – 39 above were materially false and misleading
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`and failed to disclose material adverse facts about the Company’s business, operations, and
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`prospects. Specifically, Defendants failed to disclose to investors that: (i) Apache intentionally
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`used unrealistic assumptions regarding the amount and composition of available oil and gas in
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`Alpine High; (ii) Apache did not have the proper infrastructure in place to safely and/or
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`economically drill and/or transport those resources even if they existed in the amounts purported;
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`(iii) these misleading statements and omissions artificially inflated the value of the Company’s
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`operations in the Permian Basin; and (iv) as a result, the Company’s public statements were
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`materially false and misleading at all relevant times.
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`The Truth Emerges Through a Series of Disclosures
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` The truth about Alpine High and its lack of viability emerged in a series of
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`disclosures between April 2019 and March 2020 that caused Apache’s stock price to decline over
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`83% from its Class Period high.
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` On April 23, 2019, Apache issued a pre-market press release announcing that
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`starting in late March it began deferring natural gas production at its gas-heavy Alpine High play
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`in order to positively impact the Company’s cash flow, blaming extremely low gas pricing in the
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`Permian gas market. At the time of the press release, the deferrals represented 250 million cubic
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`feet per day of gross gas production. In an article published before markets opened, Bloomberg
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`called the Alpine High production deferral “another blow to the Apache project.”
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` In response to this news, Apache’s stock price fell $0.66 per share, from a close of
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`$37.09 per share on April 22, 2019, to close at $36.43 per share on April 23, 2019. This decline
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`continued over the next three trading days, closing at $33.06 per share on April 26, 2019—for a
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`four-day stock price decline of $4.03 per share, or nearly 11%.
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`In the same press release announcing the production deferrals, the Company stood
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`behind its prior plans for Alpine High. Specifically, Apache stated that its expected exit rate from
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`Alpine High would remain unchanged in 2019 and reiterated its planned rig count and well
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`completions.
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` The following month, the Company again maintained its fourth quarter and full-year
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`2019 guidance and downplayed long-term concerns over Alpine High’s viability. For example,
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`on the Company’s May 2, 2019 earnings call for the first quarter of 2019, held a week after the
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`announced deferrals, Riney reassured investors that “[o]ur 2019 rig schedule and completions
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`activity is not impacted by the deferrals. As a result, we still expect that fourth quarter and year-
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`end exit rates from Alpine High will exceed 100,000 [barrels of oil equivalent] per day.” Later
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`that month, Company representatives even told Bloomberg that “[i]nvestors do not yet have an
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`appreciation for the potential cash flow generation from the liquids play at Alpine High” and “[w]e
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`are here for the long haul.”
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` On October 25, 2019, news stories revealed that Keenan had resigned from Apache.
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`Analysts at Credit Suisse noted that Keenan “oversaw the discovery of the Alpine High play, which
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`has been an economic disappointment for investors” and that since announcing the Alpine High
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`discovery at the start of the Class Period, “[Apache’s] shares have underperformed global
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`[exploration and production companies] by >30%, likely a cause for Mr. Keenan’s resignation.”
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`In response to this news, Apache’s stock price fell by $1.16 per share, or
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`approximately 5%, from a close of $23.23 per share on October 24, 2019, to close at $22.07 per
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`share on October 25, 2019, prompting Bloomberg to issue a story titled “Apache Executive’s
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`Departure Sparks Worst Rout Since 2016.”
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` As The Wall Street Journal later reported, by December 2019, “the value of the
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`Apache’s shares . . . had fallen roughly 35% in the last 12 months . . . as Apache slowed production
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`in the Permian Basin of West Texas and New Mexico due to low natural-gas and natural-gas-
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`liquids prices.”
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` Then on February 26, 2020, Apache announced that it was immediately
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`discontinuing its Alpine High project and posting a $3 billion write down, confirming previous
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`disclosures and persistent investor concern about its viability during the Class Period. On the
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`Company’s fourth quarter earnings call held the next day, Christmann admitted, “[i]n the end, a
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`number of factors were problematic at Alpine High,” including steeply lower prices for gas and
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`gas byproducts, the lack of infrastructure to handle output, and productivity improvements that
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`“did not materialize.”
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` As operational challenges continued to mount, Apache announced on March 12,
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`2020, that, “to further strengthen its financial position,” the Company’s “board of directors has
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`approved a reduction in the company’s quarterly dividend per share from $0.25 to $0.025.” The
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`Company further revealed that, “[o]ver the coming weeks, the company will reduce its Permian
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`rig count to zero, limiting exposure to short-cycle oil projects” in the Alpine High resource play.
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`In response to these disclosures, the price of Apache common stock fell $0.49 per share, or
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`approximately 6%, from a close of $8.25 per share on March 11, 2020, to close at $7.76 per share
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`on March 12, 2020.
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` Finally, on March 16, 2020, a Seeking Alpha article published pre-market explained
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`that Apache was particularly challenged amongst its peers, carrying “the highest debt-to-equity
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`ratio among large-cap independent [exploration and production companies],” and noted that “[t]he
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`company doesn’t have a strong balance sheet” and its “financial health isn’t great.” The article
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`emphasized the Company’s “weak balance sheet marked by high levels of debt” of over $8 billion
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`in 2019, “which translates into a lofty debt-to-equity ratio of almost 250% - the highest among all
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`large-cap independent oil producers.” Regarding Alpine High, the article observed that low gas
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`prices “forced Apache to shift capital away from the wet-gas rich Alpine High play which has been
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`driving the company’s production growth.” The article noted that “Apache also reduced Alpine
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`High’s value by $1.4 billion.”
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` That same day, Susquehanna Financial Group, LLLP downgraded Apache from
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`positive to neutral, highlighting a lack of “balance sheet flexibility” and noting Apache’s “net
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`leverage exceeding 3.0x by the end of 2021,” as well as the Company’s “activity reduction” and
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`the possibility of further cutbacks.
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`
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`In response to this news, Apache’s stock price fell $3.61 per share over two trading
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`days, or approximately 45%, from a close of $8.07 per share on March 13, 2020, to close at $4.46
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`per share on March 17, 2020.
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`UNDISCLOSED ADVERSE FACTS
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` The market for Apache’s common stock was open, well-developed, and efficient at
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`all relevant times. As a result of these materially false and misleading statements, and/or failures
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`to disclose, Apache’s common stock traded at artificially inflated prices during the Class Period.
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`Case 4:21-cv-00575 Document 1 Filed on 02/23/21 in TXSD Page 16 of 26
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`Plaintiff and other members of the Class purchased or otherwise acquired Apache’s common stock
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`relying upon the integrity of the market price of the Company’s common stock and market
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`information about Apache and have been damaged thereby.
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` During the Class Period, Defendants materially misled the investing public, thereby
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`inflating the price of Apache’s common stock, by publicly issuing false and misleading statements
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`and/or omitting to disclose material facts necessary to make Defendants’ statements, as set forth
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`herein, not false and misleading. The statements and omissions were materially false and
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`misleading because they failed to disclose material adverse information and/or misrepresented the
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`truth about Apache’s business, operations, and prospects as alleged herein.
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` At all relevant times, the material misrepresentations and omissions described in this
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`Complaint directly or proximately caused or were a substantial contributing cause of the damages
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`suffered by Plaintiff and other members of the Class. As described herein, during the Class Period,
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`Defendants made or caused to be made a series of materially false and misleading statements about
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`Apache’s financial well-being and prospects.
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` These material misstatements and omissions had the cause and effect of creating in
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`the market an unrealistically positive assessment of the Company and its financial well-being and
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`prospects, thus causing the Company’s common stock to be overvalued and artificially inflated at
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`all relevant times. Defendants’ materially false and misleading statements made during the Class
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`Period resulted in Plaintiff and the other members of the Class purchasing the Company’s common
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`stock at artificially inflated prices, thus causing the damages complained of herein.
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`LOSS CAUSATION
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` During the Class Period, the Defendants engaged in a scheme to deceive the market
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`and a course of conduct that artificially inflated the prices of Apache common stock and operated
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`Case 4:21-cv-00575 Document 1 Filed on 02/23/21 in TXSD Page 17 of 26
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`as a fraud or deceit on Class Period purchasers of Apache common stock. Defendants failed to
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`disclose to investors that the Company’s public statements about Alpine High were materially
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`misleading and misrepresented material information. When the Defendants’ misrepresentations
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`and fraudulent conduct were disclosed and became apparent to the market, the prices of Apache
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`common stock fell precipitously as the artificial inflation came out of the Company’s stock price.
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`As a result of their purchases of Apache common stock during the Class Period, Plaintiff and the
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`other Class members suffered economic loss.
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` By failing to disclose the true state of the Company’s business operations and
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`financial prospects, including related to Alpine High, investors were unawa