Inside Apache's Alpine High Fiasco: Deception, Fraud, and a $3 Billion Write-Down

Court: S.D. Texas

Case: 4:21-cv-00575

The Hype Around Alpine High

In 2014, Apache acquired nearly 300,000 acres in West Texas and rebranded the area “Alpine High,” despite decades of failed drilling by competitors who dubbed it “where oilmen go to die.” Internal studies also suggested the site was uneconomic, but Apache promoted it as a breakthrough discovery.

In 2016, CEO John J. Christmann hailed Alpine High as a “world-class resource play,” projecting massive oil and gas returns worth over $8 billion. The announcement pushed Apache’s stock up 61% that year.

Cracks Beneath the Surface

Behind the scenes, many wells at Alpine High produced no oil or gas. In September 2016, Apache touted a well at 281 barrels per day, but by November, output dropped to zero for five months.

Still, executives reassured investors, misrepresenting the site’s viability. By October 2019, findings from “Project Neptune” confirmed Alpine High’s failures, but Apache delayed disclosures.

The Collapse and Investor Fallout

On February 26, 2020, Apache announced a $3 billion write-down for Alpine High, slashed its dividend by 90%, and halted drilling. The news shocked markets, as it contradicted years of CEO statements defending Alpine’s prospects.

Apache’s stock, once $69, collapsed 93% to $4.46 by March 2020, erasing $24 billion in market value.

Investors sued in 2021, accusing Apache of fraud and concealment. They pointed to withheld data on zero-output wells and rapid declines, as well as executives’ misleading public claims.

Settlement and Moving Forward

Apache agreed to a $65 million settlement to resolve investor claims. Affected shareholders are still able to file for compensation.

The scandal led to leadership changes, including the departure of senior geologist Steven Keenan. The company ultimately abandoned Alpine High and shifted focus to other projects, including Suriname and Egypt, which analysts view as critical to rebuilding investor trust.

Today, APA has partially rebounded to around $23, but the Alpine High fiasco remains a cautionary tale of corporate misrepresentation.