Former Apache worker settles
A former Apache Corp. employee has agreed to pay more than $400,000 to settle insider trading charges that allege he bought Apache shares and options just prior to the company’s announcement of a major oil and gas discovery in West Texas, the Securities and Exchange Commission said Wednesday.
In its complaint, the SEC said Christopher J. Lollar, a petroleum engineer, bought almost 1,000 Apache shares and options in the days before the Houston oil company announced Alpine High, a field estimated to hold some 15 billion barrels of oil and gas in the desert around the small town of
Balmorhea. A few days after the announcement, Lollar sold all the shares and options, pocketing more than $214,000 in profits, the SEC said.
The SEC said Lollar has agreed to pay $435,000, including the return of the profits, plus interest and penalties. Lollar, who could not be reached for comment, did not admit guilt in settling the case. His attorney, Toby Galloway of Fort Worth’s Kelly Hart & Hallman, did not return phone calls seeking comment.
Apache said in a statement that it cooperated with the SEC investigation and has “zero tolerance” for insider trading. It fired Lollar in May, after the SEC investigation ended.
Lollar started at Apache, based in Houston, as an intern in 2012, according to the complaint. He took a full-time job in January 2014 in Apache’s San Antonio office, where a team was secretly developing the Alpine High oil and gas field. On Sept. 7 last year, Apache announced the find: 350,000 acres along a southern strip of Reeves County near the Davis Mountains, in the prolific Permian Basin’s western lobe.
Apache geologists estimated it held more than 3 billion barrels of oil and 75 trillion cubic feet of natural gas — one of the biggest finds of the decade. It was a game-changing discovery for Apache, which had struggled during Texas’ shale revolution to keep up with competitors.
And Lollar knew that, the SEC alleged. He worked with the engineers and geologists developing the play.
He had also signed Apache conduct codes prohibiting him from disclosing confidential information, using such information for his own gain, and trading on nonpublic information learned through his work there, according to the SEC. Still, in the days prior to Apache’s announcement, Lollar liquidated at least one personal securities account and emptied a second, using almost all of the proceeds to buy 461 shares of Apache stock and 490 options, the SEC said.
Apache announced Alpine High at 7:40 a.m., before the markets opened. The company’s stock value jumped, trading as high as $58.99 per share before closing at $55.13 — an increase of $3.46, or about 7 percent.
That day, Lollar sold all 490 options, making almost $212,000, the SEC complaint alleged. The next day, OptionsHouse, the company that executed Lollar’s options sale, opened an internal fraud investigation into the trades. On Sept. 9, Lollar sold the stock, netting about $2,300 in profit, according to the SEC.
The SEC’s investigation was conducted in the Fort Worth office by Tamara F. McCreary, Ty S. Martinez and Christopher Davis. The case was supervised by Jessica B. Magee, associate director for enforcement in Fort Worth.
The settlement is subject to court approval.
Apache shares closed at $42.23 in New York on Wednesday, up 86 cents or 2 percent. david.hunn@chron.com twitter.com/@davidhunn