Anadarko Investor Lawsuit

Case 4:17-cv-01372 Document 57 Filed in TXSD on 08/03/18 Page 1 of 69
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
ROBERT EDGAR, Individually and On § CIVIL ACTION NO. 4:17-cv-01372

Behalf of All Others Similarly Situated, §
§ SECOND AMENDED CLASS ACTION
Plaintiff, § COMPLAINT FOR VIOLATION OF THE
v. § SECURITIES LAWS
§
ANADARKO PETROLEUM § CLASS ACTION
CORPORATION, R.A. WALKER, and §
ROBERT G. GWIN, §
§ JURY TRIAL DEMANDED
Defendants. §
§
§
§
Lead Plaintiff Iron Workers Benefit and Pension Fund – Iron Workers District Counsel
Philadelphia & Vicinity (“Philadelphia Iron Workers” or “Plaintiff”), individually and on behalf
of all other persons similarly situated, by its undersigned attorneys, for its complaint against
Defendants Anadarko Petroleum Corp. (“Anadarko”), R. A. Walker, David J. McBride, and
John M. Christiansen (“Defendants”), alleges the following upon personal knowledge as to
itself and its own acts, and upon information and belief as to all other matters, based on an
investigation made by and through its counsel.
I. NATURE OF THE ACTION
1. This is a securities class action brought on behalf of all persons who
purchased or acquired the common stock of Anadarko between February 8, 2016 and May
2, 2017, both dates inclusive (the “Class Period”), pursuing remedies under Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) against Anadarko
and certain of its top officials.
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2. Anadarko engages in oil and gas exploration, development, and production,
as well as other oil industry-related businesses.
3. Anadarko primarily conducts its oil activities in three geographic areas: the
Delaware Basin in Texas, the Gulf of Mexico, and the Denver-Julesberg (“DJ”) Basin in
Colorado. About a quarter of Anadarko’s employees work out of its Colorado offices.
4. Between 2011 and 2014, Anadarko accrued more than $9 billion in charges
for environmental fines and settlements. These liabilities chiefly arose from the explosion
of the Macondo well, in which Anadarko owned a 25% interest, and its acquisition of Kerr-
McGee Corp., whose operations had so devastated the environment in the U.S. that
Anadarko was forced to pay out the largest environmental settlement in U.S. history to
settle the resulting liabilities.
5. But for these liabilities, Anadarko would have earned about $8 billion of
profits in 2011-2013. Giving effect to the accruals, Anadarko lost about $1 billion during
that time period.
6. With its troubled past, Anadarko’s compliance with safety and environmental
regulations was extremely material to investors. Indeed, Anadarko eagerly and repeatedly
assured investors that it had turned a new leaf and now complied with all safety and
environmental regulations. Anadarko specifically assured investors that its high-tech
Colorado control center allowed it to monitor, in real-time, all of its wells in the region,
rapidly pinpointing and addressing any potential safety issues.
7. In late 2013, Anadarko acquired more than 1,550 aging Colorado wells and
accompanying land in a land swap with a competitor, Noble Energy Inc. (the “Land Swap”
and the “Noble Wells”). These wells were located in Weld County, which had been rural
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when the wells were drilled but had become more suburban beginning in the 1990’s as
Denver expanded.
8. Within six months, Anadarko discovered that up to several hundred of the
Noble Wells were safety and environmental hazards. They had deteriorated with age and
were not mechanically nor environmentally up to the current code of operations under
Colorado regulations.
9. Anadarko initially authorized a budget of tens of millions of dollars in order
to either abandon them or bring them into current State compliance. Very little remediation
work had been done on the Noble Wells by the time oil prices crashed in the fall of 2014.
10. After oil prices collapsed, Anadarko reconsidered its commitment to safety.
It slashed the remediation budget. What was left of the budget was spent remediating Noble
Wells that were either good producers or whose poor condition interfered with Anadarko’s
drilling schedule. Anadarko did not consider safety threats in determining which few Noble
Wells to remediate, even though many of these wells were located near houses or schools.
11. Former Employee 7 (“FE 7”), who was in charge of the division responsible
for plugging Anadarko’s abandoned wells and sealing its abandoned flowlines in Colorado
from 2016-2018, observed that about 25% of the Noble Wells he plugged were dangerous.
Notably, that percentage did not decline at all over time, because Anadarko did not
prioritize plugging unsafe wells, focusing solely on economics.
12. Anadarko’s widespread violations of five rules of the Colorado Oil & Gas
Conservation Commission (the “Commission”) all but guaranteed a disaster. First,
according to FE 7, Anadarko did not know the location of flowlines and pipelines for about
20-30% of the wells it acquired in the Land Swap. These lines were not identified with
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tracer lines or location devices, in violation of Commission Rule 1101, nor were they
registered with Colorado authorities, in violation of Commission Rule 1102 (d). Therefore,
Weld County residential developers would not be able to locate the flowlines before
beginning construction, and neither Anadarko nor the public would know where to look to
see if Anadarko’s flowlines and pipelines were severed or ruptured. It was inevitable that
lines would be severed in construction in Weld County, as there was so much of it. Second,
the Anadarko contractors employed to conduct safety inspections of the Noble Wells were
unskilled and overworked. Each was responsible for weekly inspections of about 120 wells.
Time spent driving from well to well left them about 5 minutes for each inspection. This
was only enough time for a look and a quick sniff for dangerous gases, leaving them unable
to detect odorless methane and natural gas leaks. Anadarko’s contractors were so untrained
and overworked that they actually missed, and therefore never inspected approximately 3-
5% of Anadarko’s wells.
13. Third, the Commission’s Rule 1101 e. (1) mandated that Anadarko must
pressure test all of its flowlines every year. These pressure tests are designed to detect
methane leaks. Yet Anadarko instead only pressure tested the 20% of its flowlines it
believed were located in high risk areas like wetlands, and even these 20% it pressure
tested only every other year.
14. Because Anadarko wouldn’t know where to look to see if its flowlines and
pipelines were severed and didn’t check to see if they were, an explosion was inevitable.
15. Senior Colorado Anadarko executives were well aware of these safety issues.
By November 2016, they had held several meetings specifically to discuss whether it was
appropriate to ignore safety and focus on supporting drilling.
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16. Anadarko’s senior Houston executives knew as well. Defendants R.A.
Walker, David McBride, and John Christiansen regularly attended biannual meetings at
which Colorado’s five Production Superintendents,1 including FE 7, presented their most
pressing problems and salient successes. The PowerPoint slides for the presentations the
Production Superintendents made at these biannual meetings were provided to Walker and
McBride, among others. Between 2014 and 2016, during at least one of the biannual
meetings, Anadarko’s Colorado Production Superintendents raised the issue that Anadarko
did not know where all of the flowlines were located. The Production Superintendents
likewise repeatedly raised the issue that they had too few contractors to check wells and
that those they did have on the payroll were unskilled. The Production Superintendents
requested additional resources. These resources were never provided. Instead, senior
Houston executives instructed the Production Superintendents to figure out solutions for
themselves with the resources they had, which the Superintendents were unable to do,
which was why they were asking for additional resources.
17. And the policy of only pressure-testing 20% of Anadarko’s wells and only
every other year, though it clearly violated the Commission’s regulations, was nonetheless
enshrined in Anadarko’s Colorado Standard Operating Procedures. The Standard Operating
Procedures were approved by McBride’s Health, Safety & Environment division, subject to
McBride’s review, and summarized for Walker’s benefit.
18. To create the misleading impression for investors and residents that it kept
tight control over the safety of its Colorado wells, Anadarko created a purportedly high-
1
The Production Superintendents are the five senior Anadarko officials responsible for its
operations in Colorado. Each Superintendent is responsible for an Anadarko division with 200-
500 employees or contractors. Each division has complete responsibility for one aspect of
Anadarko’s operations in Colorado.
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tech operations center for the Wattenberg field. A well-publicized factsheet authorized by
John Christiansen for the operations center boasted that Anadarko could remotely monitor
and control all of its wells in the Wattenberg field – thus reassuring investors and residents
that Anadarko’s wells were modern, safe, and centrally controlled. But the claim was false.
Even by the end of 2016, half of the wells Anadarko acquired in the Land Swap, or nearly
800 wells, were not equipped for any sort of remote interaction, and were completely
excluded from the operations center’s purview, either because of age or incompatibility
with Anadarko’s systems. And these old, decrepit wells were precisely the wells most
likely to be dangerous.
19. These issues only worsened after the oil price collapse. In March 2016,
Anadarko laid off 20-30% of its workforce. Colorado was hit particularly hard, as this and
subsequent layoffs cut its workforce from 1,500 to 1,000 employees.
20. Anadarko determined that the remaining employees were not sufficient to
perform operations safely in the DJ Basin, particularly as Anadarko increased drilling in
late 2016. Anadarko determined that a 28,000 gallon oil spill in January 2017 near Denver
had been caused by lack of trained personnel. Then, at an internal meeting in February
2017 attended by a senior Colorado-based Anadarko executive, Anadarko knowingly
misled Colorado regulators about the cause of the spill. When a senior public relations
employee present at the meeting raised concerns, Christiansen told her to stop complaining
as her job was to “shovel s**t and clean up the messes that [Anadarko’s employees] make.”
21. On April 17, 2017, a home located near an Anadarko-owned well in
Firestone, Colorado exploded (the “Firestone Well”). The explosion killed Mark Martinez
and his brother-in-law, Joseph Irwin III. Mr. Martinez’s wife, Erin Martinez, suffered severe
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injuries, and she and their son were taken to the hospital. Ms. Martinez remained in the hospital
for a month and a half. The son, aged 11, escaped serious injuries by jumping out of his bedroom
window as the house exploded.
22. The Firestone Well was drilled in 1993. Anadarko acquired it in the Land
Swap, but never remediated it. Defendants did not immediately disclose the Firestone
Well’s role in the explosion.
23. On April 26, 2017, after close of trading, Anadarko announced that it owned
a nearby well that may have been involved in the explosion. Anadarko also announced that
it was shutting down 3,000 similar vertical wells in Colorado.
24. The following day, April 27, 2017, Anadarko’s stock price fell by 4.7%,
damaging investors.
25. On May 2, 2017, the Firestone-Frederick Fire Department announced that the
Firestone Explosion had been linked to a well owned by Anadarko. A flowline connected to
the Firestone Well had been abandoned but never sealed, in violation of the Commission’s
Rule 1103.
26. The Firestone Well had been turned on, but Anadarko’s measurements did
not report any methane production through the meter, a physical impossibility. Though
Anadarko had sent a work crew to inspect this anomalous result, the overworked
employees had not found the problem. The flowline had leaked methane into the home,
which exploded when the homeowner tried to install a heater.
27. On May 3, 2017, Anadarko’s stock price fell by 7.7%, damaging investors.
28. Following the explosion, Anadarko admitted that 2,400 of its flowlines had
been abandoned, but not sealed, in violation of Commission Rule 1103. Anadarko also
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added an additional 400 wells to the list of wells it needed to plug and abandon, more than
doubling the number of wells on that list.
29. Following the explosion, Anadarko publicly expressed sympathy. Internally,
however, Anadarko executives admitted that they were not concerned with the incident in
which their reckless behavior caused two deaths.
30. Anadarko’s senior executives, including Defendants, callously disregarded
known, widespread violations of the Commission’s rules that endangered the Colorado
communities in which Anadarko did business. They lied about it to the Commission. They
lied about it to investors. They violated the securities laws.
II. JURISDICTION AND VENUE
31. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
the Securities and Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b), 78b-1
and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. §240.10b-5.
32. This Court has jurisdiction over the subject matter of this action pursuant to 28
U.S.C. §§ 1331 and 1337 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.
33. Venue is proper in this District pursuant to Section 27 of the Exchange Act, and
28 U.S.C. § 1391(b). Defendants maintain their principal executive offices in this District and
many of the acts, practices and transactions complained of herein occurred in substantial part in
this District.
34. In connection with the acts alleged in this complaint, defendants, directly or
indirectly, used the means and instrumentalities of interstate commerce, including, but not
limited to, the mails, interstate telephone communications and the facilities of the national
securities markets.
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III. PARTIES
35. Court-appointed Lead Plaintiff Philadelphia Iron Workers administers benefits
for over 4,900 members in the Philadelphia area, managing assets with a market value of more
than $300 million. As set out in its PSLRA Certification, which was previously filed with the
Court and is incorporated by reference, Philadelphia Iron Workers purchased Anadarko
common stock during the Class Period and was damaged thereby.
36. Defendant Anadarko Petroleum Corp. is an oil and gas exploration and
production company. Anadarko focuses its operations on the DJ Basin in Colorado, the
Delaware Basin in Texas, and the Gulf of Mexico. Headquartered in The Woodlands, Texas.
Anadarko’s stock was actively traded on the NYSE during the Class Period under ticker
symbol APC. At all relevant times, about a quarter of Anadarko’s employees worked out of its
Colorado offices.
37. Defendant R. A. Walker has been Anadarko’s Chairman since May 14, 2013, and
has served as its Chief Executive Officer since May 15, 2012 and President since February 2010.
He previously served as Anadarko’s Chief Operating Officer from March 1, 2009 to May 15,
2012. Walker first joined Anadarko on September 6, 2005 as Senior Vice President of Finance
and Chief Financial Officer, and served in those roles until March 2009. He has been a director
of Anadarko since May 2012. Defendant Walker sat on Anadarko’s Executive Committee.
38. Defendant David J. McBride served as Anadarko’s Vice President of Health,
Safety & Environment from May 2013 through July 2018. McBride oversaw Anadarko’s global
Health, Safety & Environment programs. McBride joined Anadarko in August 2005. McBride
works in The Woodlands.
39. Defendant John M. Christiansen has served as Anadarko’s Vice President -
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Corporate Communications since October 2015. Throughout the Class Period, Christiansen was
“responsible for overseeing [Anadarko’s] media relations, public affairs, internal
communications, [and] external communications including the company’s website and digital
communications platforms [...]” Christiansen works in The Woodlands.
40. Together, Walker, McBride, and Christiansen are the “Individual Defendants.”
IV. ANADARKO EMPLOYEES AND CONTRACTORS
41. Bradley J. Holly served as Anadarko’s Senior Vice President of Operations -
Rockies from November 2014 through August 2016. The Senior Vice President of Operations -
Rockies is responsible for Anadarko’s operations in Colorado, Wyoming, and Utah, and works
out of Denver. In August 2016, he was promoted to Senior Vice President of U.S. Onshore
Exploration & Production, an officer position at Anadarko responsible for all upstream activities
in the U.S. other than offshore operations, working out of The Woodlands. In May 2017, he was
promoted to Executive Vice President of U.S. Onshore Exploration & Production. He was let go
in a corporate reshuffling on October 4, 2017.
42. Craig Walters served as Anadarko’s Vice President - DJ Basin from 2013 through
May 2017, overseeing all of Anadarko’s activities in the DJ Basin. He reported to Holly until
August 2016. In May 2017, he was promoted to the position of Vice President - Rockies. Walters
works in Denver.
43. Korby Bracken has been Anadarko’s Health Safety and Environment Director
since June 2013. Bracken works in Colorado and reports to McBride.
44. Former Employee 1 (“FE 1”)2 was initially hired as Anadarko’s Regional Director
2
This Complaint does not list the former employees’ names to protect their privacy. However,
confidentiality was neither promised nor requested. Their names, will be provided to Defendants
upon request and on the same terms as the Court’s December 18, 2017 Order (dkt. # 41).
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of Government Relations for the Rockies Region in August 2007. In March 2015, he was
promoted to Director of Engagement and Strategy for the Rockies Region. He reported to Holly.
He managed all government relations, social investment, and stakeholder relations teams, and
managed Anadarko’s public affairs group. He attended regular leadership team meetings headed
by Holly. Also attending regular leadership team meetings were Anadarko’s General Manager
for the Wattenberg Asset, General Manager for the Wyoming Asset, General Manager for the
Utah Asset, General Manager for Field Operations, General Manager for Drilling Operations,
and General Manager for Completion. Korby Bracken, Anadarko’s Director of Environment,
Health & Safety, U.S. Onshore E&P, also attended. FE 1 left Anadarko in November 2016.
45. Former Employee 2 (“FE 2”) was Anadarko’s Government and Public Affairs
Manager from July 2012 to March 2017. She reported to FE 1 and then, after his promotion,
Defendant John Christiansen, Vice President of Corporate Communications. FE 2 was
responsible for handling crisis communications, i.e. media relations, whenever Anadarko was
involved in any safety or hazard controversies, such as oil spills, injuries, and fires. She stated
that there were “a lot of them.”
46. Former Employee 3 (“FE 3”) was a Health, Safety & Environment (“HSE”)3
Representative for the Southern Region of Onshore Drilling between July 2014 and April 2016.
FE 3 worked in Anadarko’s The Woodlands headquarters, and reported to Anadarko’s Health,
Safety, and Environment Manager for the Delaware Basin.
47. Former Employee 4 (“FE 4”) was an Anadarko Senior International Health,
Safety & Environment Representative, between September 2014 and March 2016, working out
of The Woodlands. FE 4 reported to Jeff Ostmeyer, Anadarko’s Environment, Health & Safety
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“HSE” was referred to interchangeably with “EHS” (“Environment, Health & Safety”).
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Inspector, Phillis Schlagel, Anadarko’s Director of Health, Safety & Environment Services, and
Greg Hamilton, Anadarko’s Health, Safety & Environment audit manager. Ostmeyer, Schlagel,
and Hamilton all reported to Defendant David McBride, Anadarko’s Vice-President, Global
Health, Safety & Environment, an officer position. FE 4’s responsibilities included auditing
Anadarko’s contractors to make sure they were up-to-date with regulations, such as Occupational
Safety & Health Administration (“OSHA”) regulations.
48. Former Employee 5 (“FE 5”) was employed by Anadarko as a contract safety
inspector between October 2013 and February 2015. FE 5 worked out of Weld County,
Colorado. As a safety inspector, FE 5 would inspect individual wells, as well as review
remediation efforts.
49. Former Employee 6 (“FE 6”) was employed by Anadarko as a contract
Environmental Specialist from July 2015 to September 2016. FE 6 worked in Weld County,
Colorado.
50. Former Employee 7 (“FE 7”) was employed by Anadarko in various positions
between 2006 and March 2018. From 2014 through 2016, FE 7 served as Anadarko’s Colorado
Superintendent for Gas Gathering, one of the five Superintendents who are responsible for the
entirety of Anadarko’s Colorado operations. There, he was responsible for Anadarko’s
operations in getting gas to the plants and compressing that gas, managing about 120 Anadarko
employees and 120 Anadarko contractors. From 2016 through March 2018, FE 7 served as
Superintendent of well servicing. In this position, he was responsible for all vertical well prep,
including the maintenance, plugging and abandonment of wells, managing approximately 5
Anadarko employees and 300 contractors. During his tenure as a Production Superintendent, FE
7 reported successively to Beth Bosworth, Nathan Leonard, Paul Wages, and Jeff Dufresne, all
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of whom reported to Holly. FE 7 worked out of Anadarko’s Colorado offices.
51. Former Employee 8 (“FE 8”) worked as a consultant to Anadarko between the
second half of 2008 and the end of 2011, when he became an Anadarko employee. From the end
of 2011 until March 2016, FE 8 worked as a Spatial Data Analyst reporting to Mary Mondragon.
FE 8’s group was tasked with developing a system to address problems with data gathering and
inaccurate plats of its wells. Anadarko ignored FE 8’s group’s urgent request that Anadarko
conduct an as-built survey of its flowlines. FE 8 worked out of The Woodlands.
52. Former Employee 9 (“FE 9”) worked as an Administrative Assistant in
Anadarko’s Colorado Regulatory Group from August 2014 through December 2015, providing
administrative assistance to the Regulatory Group General Manager. Between December 2015
and December 2016, FE 9 was Holly’s administrative assistant.
53. Contractor Employee 1 (“CE 1”) was a Safety Inspector for Gulf Interstate
Engineering Co., a third party that had contracts for all of the Anadarko wells in the Permian
Basin. CE 1 worked exclusively on Anadarko wells from 2014 through 2015.
54. Contractor Employee 2 (“CE 2”) worked for a Colorado-based company that
provided HSE services to Anadarko until about early 2016. CE 2’s employer chose not to renew
its contract with Anadarko because Anadarko pervasively ignored advice about remedying
dangerous wells.
Respondeat Superior
55. Anadarko is liable for the acts of the Individual Defendants, as well as of Holly,
Walters, Bracken, and its other employees and agents under the doctrine of respondeat superior
and common law principles of agency as all of the wrongful acts complained of herein were
carried out within the scope of their employment with authorization.
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56. The scienter of the Individual Defendants, as well as of Holly, Walters, Bracken,
and other employees and agents of Anadarko is similarly imputed to Anadarko under respondeat
superior and agency principles.
V. BACKGROUND
A. Glossary
57. “BBL” means barrels of oil. One barrel is equivalent to 42 U.S. gallons.
58. “BOE” means barrel of oil equivalent, a unit of energy based on the approximate
energy released by burning one barrel of crude oil. BOE is used by oil and gas companies in their
financial statements as a way of combining oil and natural gas reserves and production into a
single uniform measure, although this energy equivalence does not take into account the lower
financial value of energy in the form of gas. Six thousand cubic feet (6 MCF) of natural gas is
equal to one barrel of oil.
a. MBOE - One thousand barrels of oil equivalent.
b. MMBOE - One million barrels of oil equivalent.
c. BBOE - One billion barrels of oil equivalent.
59. “Downstream” is the sector of the oil and gas industry that involves the refining
of petroleum crude oil and the processing and purifying of raw natural gas, as well as the
marketing and distribution of products derived from crude oil and natural gas.
60. A “flowline” is a surface or subsurface pipe through which oil or gas travels from
a well to processing equipment or storage.
61. A “horizontal well” is a well that is turned horizontally at depth, providing access
to oil and gas reserves at a wide range of angles. Horizontal wells became technically feasible
during the 1980s, as natural gas and oil exploration sought ways to produce more hydrocarbons
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than were available from less productive vertical wells. Horizontal wells are much more
technologically advanced and expensive to drill than vertical wells.
62. “Midstream” is the sector of the oil and gas industry that involves the
transportation, storage, and wholesale marketing of crude or refined petroleum products.
Pipelines and other transport systems can be used to move crude oil from production sites to
refineries and deliver the various refined products to downstream distributors. Natural gas
pipeline networks aggregate gas from natural gas purification plants and deliver it to downstream
customers, such as local utilities.
63. A “return line” is a flowline used to transport natural gas to power a separator
near the well that separates the raw mixture of oil, natural gas, and water.
64. “Upstream” is the segment of the oil and gas industry that refers to searching for
potential underground or underwater crude oil and natural gas fields, drilling exploratory wells,
and drilling and operating the wells that recover and bring the crude oil or raw natural gas to the
surface.
65. A “vertical well” is a well that is not turned horizontally at depth, allowing access
to oil and gas reserves located directly beneath the surface access point. Historically, natural gas
and oil exploration involved the use of vertical wells because directional drilling technology was
not understood, and was expensive and complicated.
66. A “wellhead” is the component at the surface of an oil or gas well that provides
the structural and pressure-containing interface for the drilling and production equipment.
B. Anadarko Boasts of its Operations in the Wattenberg Field in Colorado
67. Anadarko was incorporated in 1959 as a subsidiary of Panhandle Eastern
Corporation Pipe Line Company, and spun off in 1986.
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68. In 2006, Anadarko acquired a troubled oil and gas company, Kerr-McGee
Corporation.
69. Through the acquisition of Kerr-McGee and another company, Western Gas
Partners, LP, Anadarko acquired substantial oil and gas interests in the DJ Basin. As of the end
of 2006, the DJ Basin accounted for 38% of Anadarko’s proved onshore lower 48 oil and gas
onshore reserves.
70. By the end of 2015, Anadarko had focused its efforts on three areas: the DJ Basin,
the Delaware Basin, and Gulf of Mexico - Deepwater. These three areas, which Anadarko
referred to as the “three Ds,” were expected to receive more than 60% of Anadarko’s 2016
capital expenditures. Of the total budget of $2.6-2.8 billion, $700 million was budgeted for the
Gulf of Mexico Deepwater, $500 million for the Delaware Basin, and $500 million for the DJ
Basin.
71. The Wattenberg field, located in the DJ Basin in Colorado just north of Denver, is
not a new oil field. Operators have been drilling in the Wattenberg field since 1970.
72. By 2014, operators had built up an inventory of 25,000 oil and gas wells in the DJ
Basin. 24,000 of these were located in Weld County. See Chelsea R. Thompson et al, Influence
of oil and gas emissions on ambient atmospheric non-methane hydrocarbons in residential areas
of Northeastern Colorado, Elementa: Science of the Anthropocene, 2014 Volume 2, at 1.
73. Much of the drilling in the Wattenberg field took place from the 1950’s through
the 1970’s.
74. During the mid to late 2000s, the Wattenberg field languished. Operators there
were late to join the horizontal drilling revolution that accounted for the resurgence of the U.S.
domestic oil and gas industry.
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75. But in 2009, the first horizontal well was drilled in the Wattenberg field,
rejuvenating operators’ interest in the field. From then on, the Wattenberg field showed far more
drilling activity than any other part of the DJ Basin.
76. As of the end of 2015, Anadarko operated approximately 5,000 vertical wells and
1,000 horizontal wells in the Wattenberg field. In 2013, the Wattenberg field accounted for
17.6% of Anadarko’s worldwide oil production, and 10.5% of its worldwide natural gas
production. By 2015, these numbers had risen to 30.1% and 20.7%, respectively.
77. Anadarko had many advantages over its competitors in the Wattenberg field.
Unlike other producers, Anadarko owned much of the acreage outright. Indeed, Anadarko CFO
Robert G. Gwin boasted at the May 20, 2015 UBS Global Oil & Gas conference that
approximately 40% of Anadarko’s operations in the Wattenberg were on mineral acres that
Anadarko owned. For those operations, Anadarko did not have to pay any lease fees. Moreover,
Anadarko, along with Noble Energy, Inc., was one of two players who dominated the
Wattenberg field, and therefore had lower costs because of the size and scale of its operations
and of its infrastructure. Moreover, Anadarko’s subsidiary Western Gas Partners had more than
240 miles of pipeline and two massive gas processing treating plants in the Wattenberg field.
Anadarko was thus able to drill, process, and transport oil from the Wattenberg field at rock-
bottom prices. As a result, according to Anadarko’s 10-K for the year ended December 31, 2015
(the “2015 10-K”), Anadarko’s production costs in the Wattenberg field were only $7.64/BOE –
against average worldwide production costs of $8.31/BOE.
78. At the August 16, 2016 EnerCom Oil & Gas Conference, Holly noted that the
breakeven point for Anadarko in the Wattenberg field was $30/barrel. If the price of oil were
$30/barrel, Anadarko would break even in the Wattenberg field. It would make a profit if the
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price of oil was higher.
79. Anadarko actively expanded operations in the Wattenberg field following the
Land Swap. It completed 487 horizontal wells in the Rockies in 2014, and 390 in 2015, in both
years focusing mostly on the Wattenberg field. In 2016, it completed 220 horizontal wells in the
DJ Basin alone, again focusing on the Wattenberg field.
80. Anadarko officials repeatedly boasted to investors and the public of the quality of
the Wattenberg field. For example, at the May 20, 2015 UBS Global Oil & Gas Conference,
Gwin touted that the cost of drilling a horizontal well there had fallen to $3.5 million. And at the
September 17, 2015 UBS Houston Energy Tour, Gwin explained that Anadarko’s U.S. onshore
activity would be “primarily” in the Wattenberg field, chiefly because of the returns it was
earning even with low oil prices. At the June 28, 2016 JP Morgan Energy Equity Investor
Conference, Gwin said that Anadarko’s operation in the Wattenberg field was “just about the
best unconventional asset in the world” and “competes economically with anything that’s out
there.” At the November 29, 2016 Jefferies Energy Conference, Gwin stated that the DJ Basin
“is, I think, maybe arguably, but in our opinion, this is about the most attractive basin in North
America from an economic standpoint for Anadarko. Quite frankly, economically, even better
than the Delaware.” Gwin added that the DJ Basin’s “economics are phenomenal.”
81. Indeed, at the November 29, 2016 conference, Gwin noted that Anadarko had five
rigs drilling horizontal wells in the DJ Basin, and that it would add more the next year unless oil
prices fell. Gwin also noted at the same time that on average each rig took 4 days to drill a
horizontal well.
82. And Anadarko also repeatedly boasted that the Wattenberg field was massive, and
that it had identified 4,000 locations to drill horizontal wells with total reserves of 1.5 billion
18
barrels. This included Holly’s representation at the August 16, 2016 EnerCom Oil & Gas
Conference.
83. An outsize number of Anadarko employees worked in Colorado. As of the end of
2015, Anadarko had about 5,800 employees; 1,500 of them, or more than a quarter, worked in
Colorado.
C. The Price of Oil Collapses
84. The closing price of New York Mercantile Exchange (“NYMEX”) West Texas
Intermediate crude (“WTI”) fell from $95.83/barrel on September 1, 2014, to $54.56/barrel on
January 1, 2015. More than three and a half years later, the price has not recovered, trading at
approximately $70/barrel.
85. The price collapse had a devastating impact on Anadarko.
19
In million USD Revenues Operating Profit Net Income (Loss) –

(Loss) – giving effect giving effect to Kerr-
to Kerr-McGee and McGee and
Deepwater Horizon Deepwater Horizon
fines and settlements fines and settlements
2011 13,967 (1,870)4 (2,568)
2012 13,411 3,727 2,445
2013 14,581 3,333 9415
2014 18,470 5,403 (1,563)6
2015 8,698 (8,809)7 (9,689)
2016 7,869 (2,599)8 (2,808)
86. Community relations, safety, and remediation budgets were cut across the board.
According to FE 4, when the price of oil fell, Anadarko’s attitude to safety completely changed.
87. According to FE 1, the level at which a decision is made in Anadarko depended
significantly on the impact of the decision on Anadarko’s profit margins. A given dollar expense
had a much smaller impact on Anadarko’s margins when oil trades at $100/barrel than when it
trades at $30/barrel. Accordingly, as the price of oil fell in September 2014, decisions regarding
safety were pushed up the chain of command. According to FE 1, this meant senior Anadako
4
Anadarko owned a 25% interest in the Macondo well. Following the Deepwater Horizon
explosion, Anadarko paid $4,000 million to BP as Anadarko’s share of any private liabilities.
Anadarko’s 2011 operating loss reflects a $3,930 million charge for the BP settlement.
5
Over its nearly 80 years of existence, Kerr-McGee Corp., had accumulated massive
environmental liabilities through its environmental misconduct. To evade these liabilities, shortly
before the Kerr-McGee acquisition, they were placed in a company that Kerr-McGee spun off,
Tronox Inc. Faced with massive liabilities and no way to pay for them, by design, Tronox
quickly filed for bankruptcy. The Department of Justice sued Anadarko under a fraudulent
conveyance theory, and Anadarko eventually settled with the Department of Justice for $5.15
billion, the largest environmental contamination settlement in U.S. history. Anadarko’s 2013 net
income reflects an $850 million contingent loss related to the Tronox litigation.
6
Reflects a $4,360 million contingent loss related to the Tronox settlement.
7
Reflects a $5,075 million impairment in connection with the collapse of oil prices.
8
Reflects a $159.5 million penalty paid to the Justice Department in connection with the
Deepwater Horizon explosion.
20
executives were more directly involved in Anadarko’s operations.
VI. ANADARKO SYSTEMATICALLY VIOLATED COMMISSION RULES
88. The Commission is the state body with jurisdiction over oil & gas operators in
Colorado.
89. The Commission has enacted a series of regulations to govern oil & gas
operations in Colorado. The regulations the Commission enacted include the 1100 series,
regulating all pipelines and flowlines.
90. Anadarko routinely violated five of the Commission’s regulations:
a. Rule 1102 a. (2) provided during the entirety of the Class Period that
“[w]henever an operator discovers any condition that could adversely affect
the safe and proper operation of its pipeline, it shall correct it within a
reasonable time.”
b. Rule 1101 a. provided during the entirety of the Class Period that “[m]aterials
for pipe and other components of pipelines shall be [] [l]ocatable by a tracer
line or location device placed adjacent to or in the trench of all buried
nonmetallic pipelines to facilitate the location of such pipelines.”
c. Rule 1102 d. required operators during the entirety of the Class Period to
register their flowline and pipeline locations with the Utility Notification
Center, CO 811. CO 811 operates a hotline for information about the location
of flowlines that utilities companies and the general public can call before
digging to ensure they do not rupture flowlines.
d. Rule 1101 e. (1) provided during the entirety of the Class Period that every
year, Anadarko must pressure test all of its flowlines to their maximum
21
anticipated operating pressure.
e. Rule 1103 provided during the entirety of the Class Period that “[e]ach
pipeline abandoned in place shall be disconnected from all sources and
supplies of natural gas and petroleum […] and cut off […] and sealed at the
ends.” Rule 1103 continued that “[n]otice of such abandonment shall be filed
with the Commission and with the local governmental designee or local
governmental jurisdiction.” Rule 1103 applies even if a flowline is not located
near a building.
A. Anadarko Violated Rule 1102 a. Because it Ignored Known Safety Hazards
(i) Anadarko Acquires More Than 1,500 Decrepit Wells From Noble
91. On October 21, 2013, Anadarko and its chief competitor in the Wattenberg field,
Noble, announced that they had exchanged ownership of approximately 100,000 acres of land in
the Wattenberg field in Colorado – the Land Swap. The Land Swap was effective retroactively to
January 1, 2013, pursuant to an Assignment dated October 18, 2013.
92. The purpose of the Land Swap was to consolidate each company’s holdings in the
Wattenberg field and to consolidate operating areas.
93. The land Anadarko transferred to Noble was located in the North-East portion of
the Wattenberg Field, a sparsely inhabited corner of Colorado. In contrast, the land Anadarko
received from Noble was in the South-West part of the Wattenberg field, just north of Denver.
Due to Denver’s expansion, the land Anadarko acquired included housing complexes, schools,
and more densely populated areas.
94. Through the Land Swap, Anadarko acquired not only the right to drill wells, but
also, according to records filed with the Commission, more than 1,550 existing wells. The wells
22
Anadarko acquired had been drilled up to 50 years before on land that was, at the time, rural. Yet
in the 1990’s through to the present, as Denver expanded, many suburban developments were
built in Weld County’s southwestern portion. Indeed, the 2010 census reported that Weld
County’s population was 252,825, up from 131,821 in 1990.9 Accordingly, many of the acres
and wells Anadarko acquired in the Land Swap were located in residential areas or close to
schools. The wells Anadarko received in the Land Swap included the Firestone Well, which was
drilled in 1993.
9
The census bureau estimates that as of July 1, 2016, Weld County’s population was 294,243.
23
95. While the Commission imposed setback rules prohibiting drilling wells close to
houses,10 it did not prohibit developers from building houses close to wells. Many developers in
10
The Commission passed new setback rules for oil and gas facilities in February 2013 with the
purpose of decreasing the “potential adverse health and safety risks to the public and the
environment, including spills, odors, noise, dust, and lighting.” Prior rules permitted drilling
within 150 feet of occupied buildings in rural areas and within 350 feet in urban areas. The 2013
regulations increased the minimum setback distance to 500 feet, added a 350-foot setback from
outdoor recreational areas such as playgrounds or sports fields, and added a 1,000-foot setback
from high occupancy buildings such as schools or hospitals. It also included 1,000-foot buffer
distances from these outdoor areas and buildings, where facilities are permitted but only with
increased on-site mitigation to prevent air, noise, and water pollution. These rules took effect on
August 1, 2013.
24
fact did build houses close to wells.
96. Moreover, the Commission did not impose any setback rules on the flowlines that
transported oil and gas and waste from the wells. Nor did it require companies to disclose to the
public or to developers the location of oil and gas lines. As a matter of practice, Anadarko did
not disclose the location of its oil and gas lines. Accordingly, in many cases, developers were
simply not aware of the location of flowlines. This created a hazard that in building a house,
developers might sever a flowline without even knowing they had done so. Whenever a well was
turned on, that flowline would then spew dangerous gases into a residential neighborhood.
97. According to FE 1, because of the sheer number of wells exchanged in the Land
Swap (more than 1,550), Anadarko did not inspect anything more than a tiny proportion of the
wells it was acquiring from Noble. Instead, Anadarko and Noble each contributed a reserve into
an escrow account to deal with any safety or environment problem that arose.
98. According to FE 1, the problems with the wells Anadarko received in the Land
Swap were far greater than what it was expecting. The wells it received had predominantly been
drilled 30 or 40 years before. In the meantime, Colorado had tightened its safety and emissions
rules. The Noble Wells did not comply with current air quality and other standards. In particular,
the wells did not have methane emissions controls on them at all, which were not required at the
time they were drilled. And instead of pressurizing the gas emitted and placing it back into the
system, the wells simply vented the gas into the air. Moreover, the wells’ piping and oil storage
tanks had never been upgraded. Beyond that, the wells had become dangerous with age. For
example, many of the cellars and cement pits that prevent liquids from going into the ground or
groundwater had completely deteriorated.
99. According to FE 5, the problems were compounded by catastrophic flooding in
25
Colorado in 2013, which damaged “most” of the Noble Wells. “There [were] always issues [...]
Some of the batteries washed away. None of them were in tip-top shape when [Anadarko]
inherited them.”
100. According to FE 1, Anadarko’s top management, including Defendant Walker,
well understood these problems within at most six months after the Land Swap closed in October
2013.11 The problems were a frequent topic of conversation in Anadarko according to FE 1.
101. According to FE 1, Anadarko’s Colorado Health, Safety & Environment staff put
together a ranked excel spreadsheet of risky and problematic wells (the “Dangerous Wells List”).
There were up to several hundred wells listed on the Dangerous Wells List. The Health, Safety &
Environment staff regularly updated and presented the list to Anadarko’s Colorado senior
leadership team. FE 1 attended the presentations.
102. Anadarko leased 60% of the land on which it conducted its Wattenberg
operations. According to FE 1, the lease terms generally included a provision requiring
Anadarko to actually operate the wells in order to maintain its lease. If Anadarko lost a lease, it
would have to renegotiate it with the owner of the mineral rights.
103. The leases were often signed decades earlier, when there was considerably less
interest in the Wattenberg field from an economic perspective. Accordingly, the terms for
operating on these lands were far more advantageous than what Anadarko could secure by
renegotiating lease terms today.
104. According to FE 1, maintaining these old leases was a high priority for Anadarko.
To maintain these lucrative leases, Anadarko had to turn on and produce with many of the wells
it received from Noble in the Land Swap, even if these wells were in desperate need of repairs.
11
FE 7 confirms that Anadarko had discovered the problems within six months of the Land
Swap.
26
105. According to FE 1 and FE 7, Defendant McBride prepared a budget to repair, or
plug and abandon, the Noble Wells. FE 1 believes the budget was in the low tens of millions of
dollars.
106. Because Defendant McBride does not have authority to authorize a budget of tens
of millions of dollars, he had to obtain approval from Anadarko’s Executive Committee. The
Executive Committee approved the remediation budget for the Noble Wells some time before
September 2014. Defendant McBride presented the budget to repair or plug the Noble Wells to
the Executive Committee.
107. Defendant McBride was responsible for oversight of the Executive Committee-
approved remediation budget.
(ii) After the September 2014 Oil Price Collapse, Anadarko Eviscerates the
Remediation Budget
108. At first, Anadarko prepared to actually spend the budget on remediation.
However, with the collapse of oil prices in Fall 2014, Anadarko drastically reduced the
remediation budget. Thereafter, Anadarko dedicated only a trickle of resources to remediation.
When FE 1 left in November 2016, Anadarko had done very little remediation work.
109. According to FE 1, Anadarko put together its budgets based on estimates of
various oil price levels. While remediation was important in its budgets if the price of oil reached
$100/barrel, according to FE 1, who saw the budgets, “remediation and repair of old wells was
very rarely a significant percentage of the capital allocation in a lower commodity price
environment [of $40-50/barrel].”
110. According to FE 6, Anadarko was notorious for being “stingy” on environmental
issues, such as remediation. FE 6 added that because of its stinginess, “[i]n my industry, not a lot
27
of people like to work for them. It’s a money thing, mostly. They’re tough to work for, as far as
environmental consultants. They were a little stingy with that.”
111. According to FE 1, the Executive Committee, including Walker, received periodic
status reports on efforts to remediate the Noble Wells.
112. According to FE 7, Defendant McBride was responsible for originating and
overseeing the remediation budget. McBride was also responsible for drafting and presenting the
status reports to the Executive Committee as well.
113. Compounding the problem, in March 2016, according to FE 1 and FE 2,
Anadarko laid off 20-30% of its staff in every division. This included 30% of the Field
Operations Personnel who were responsible for well remediation, as well as 30% of the Health,
Safety & Environment Division.
114. As stated on Anadarko’s website, Colorado was hit particularly hard by the
layoffs, going from 1,500 employees at the beginning of 2016 to 1,100 employees by November
to 1,000 employees by the middle of 2017.
115. According to FE 2 and FE 6, in late 2016 and early 2017, Anadarko “ramped up”
its activity levels in Colorado. Indeed, Anadarko increased its count of well-drilling rigs in
Colorado from 1 in August 2016 to 5 in November 2016. Yet Anadarko did not hire employees
to do the additional work – leaving 1,100 employees to do more work than had been done by
1,500.
116. The layoffs and deprioritization of remediation left Anadarko with a skeleton staff
for well remediation, or more broadly for Health, Safety, & Environmental initiatives. According
to FE 2, Anadarko simply did not have the labor force and skill set to ramp up its oil production
in Colorado. Indeed, according to FE 2, a single employee was responsible for checking the
28
safety of all of Anadarko’s flow lines in the Wattenberg field in Weld County. There should
have been twelve to twenty employees.
117. FE 2 brought up the issue of inadequate staffing with her superior, Defendant
Christiansen, approximately 12 times between late 2016 and March 2017, when she quit in
disgust. FE 2 also raised her concerns with Walters, Shane Fross, an engineer and Anadarko’s
General Manager of Completion for the Rockies, and Paul Schneider, the Health, Safety &
Environment Manager for the DJ Basin.
118. Similarly, CE 1 reported that even before the March 2016 layoffs, for the entire
Permian Basin (of which the Delaware Basin is a part), Anadarko had only two Health, Safety &
Environment inspectors. These inspectors were responsible for inspecting between 400 and 500
wells. According to CE 1, “there was no way they could do it.”
119. According to FE 4, Anadarko only paid “lip service” to safety. FE 4 reports that a
host of Anadarko’s contractors did not comply with safety regulations, including OSHA
regulations. FE 4 reports that many contractors did not have the proper training to do the work
that they were hired to do. When he discovered that contractors did not comply with safety
regulations, he sent a formal email to the contractors, copying “everyone and their brother”
within Anadarko, including Ostmeyer, Schlagel, and Hamilton. He never received responses, and
Anadarko continued to hire the infringing contractors.
120. Internally, Anadarko attributed safety incidents to personnel issues. But
externally, Anadarko made sure to shift the blame. For example, on January 20, 2017, Anadarko
spilled 28,000 gallons of oil in Weld County, Colorado. Anadarko held an internal meeting in
early February 2017 to prepare for a hearing before the Commission to discuss the spill. The
meeting was attended by, among others, FE 2, Fross, Schneider, and Walters. During the
29
meeting, Anadarko officials noted that the cause of the accident was that Anadarko did not have
“skilled staff”. Rather than disclose the true cause, though, Fross stated “[d]on’t say that during
the [Commission] hearing.” Anadarko did in fact conceal that the cause of the spill was
inadequate staffing at the Commission hearing.
121. Moreover, Anadarko had learned that there was oil stuck in the pipe even before
the well spilled on January 20, 2017. Anadarko determined that if it attempted a quick fix of the
well, there was a 50-60% chance that the well would explode. Yet instead of filling in the well
and drilling another, Anadarko chose to proceed with the fix, endangering its employees and
others. FE 2 was present for the meetings at which this was discussed. This also was not
disclosed to the Commission.
122. In connection with the January 20, 2017 incident, FE 2 voiced concerns about
Anadarko’s safety practices and lack of skilled staff. Instead of addressing the concerns,
Defendant Christiansen told her to “keep quiet” as her job “was to shovel s**t, and to clean up
the messes that [Anadarko’s employees] make.” FE 2 warned Christiansen that there would be
future major problems in Colorado if Anadarko didn’t expend the necessary resources on Health,
Safety & Environment matters.
(iii) Anadarko Diverts the Remediation Budget to Boost Drilling
123. While the Health, Safety & Environment Division had prepared and ranked the
Dangerous Wells List, the final decision was in the hands of Anadarko’s Field Operations
division. According to FE 1, the Field Operations division spent what little remediation resources
there were on supporting production and, to a lesser extent, avoiding fines. The well priorities
were based solely on production capacity and economics. A well’s potential safety risks, and
whether it was located in a residential area or near a school, played no part in whether it was
30
chosen for remediation. According to FE 1, “Operations had the veto power, drilling wells was
the priority. Operations trumped everything else within the company.”
124. For production, Anadarko remediated wells if they either produced a great deal of
oil or if their poor condition or regulatory violations interfered with Anadarko’s drilling
schedule.
125. When it was drilling new horizontal wells, Anadarko would cross-reference the
location against the location of the lease-maintaining assets. Anadarko would then perform
mechanical integrity tests on older wells to ensure they could withstand the pressures of the
nearby horizontal frack. If the old well did not pass these tests, Anadarko would plug and
abandon the well to install a new horizontal well. In that way, Anadarko used the remediation
budget to ensure “the machine of the horizontal drilling program did not get slowed down,”
rather than to address the actual health and safety risks of the wells.
126. As to fines, federal and state law imposed penalties for methane emissions.
Anadarko was aware that Colorado State Department of Health and Environmental Protection
Agency inspectors were traveling in the field with infrared cameras to observe emissions from
older wells. Potential fines were calculated by the amount of tons of methane released into the
air, and could reach hundreds of thousands of dollars. Because it was easy to detect violations of
methane emissions laws, Anadarko took into consideration whether the well was venting a large
amount of methane. Anadarko remediated wells that vented a lot of methane.
127. But Anadarko did not take into consideration health and safety risks, including
whether the well was located near a residential area or a school. According to FE 1, the
scheduled remediation of wells had “nothing to do with the probability of the wells, or flowlines,
creating environmental or safety hazards. The company prioritized either the decommissioning
31
of a well, the upgrade or a repair of the well, based on where the drilling schedule was.” Nor did
Anadarko consider whether a well violated laws or regulations if violations were difficult to
detect. Indeed, according to FE 1, Anadarko did not consider whether wells or lines “were
known to leak or have had a prior incident” in determining which wells to remediate.
128. FE 7 confirms FE 1’s account. According to FE 1, the decision of whether to plug
or abandon wells, with very few exceptions, was based on one factor alone: the well’s
economics. And even the few exceptions, accounting for about 5-10% of total wells plugged, had
nothing to do with safety. Instead, they arose when a neighbor complained that a well was too
loud, smelled bad, or caused too much traffic, and Anadarko determined that it was less
expensive to plug the well than to fix the issue.
129. According to FE 7, about 25% of the Noble Wells that he plugged were “unsafe to
operate.” “We would go to a location and [couldn’t] believe it produced like that” because of
safety risks. The proportions of Noble Wells that FE 7’s group took offline that were unsafe to
operate did not change over time. This means that Anadarko made no efforts to prioritize unsafe
wells; otherwise, as Anadarko plugged unsafe wells, the pool of unsafe wells would diminish,
and FE 7’s group would be plugging a smaller percentage of dangerous wells. Indeed, FE 7
stated that Anadarko treated the fact that the wells were unsafe a “low priority” because the wells
were not producing a lot of oil and not worth spending money on.
130. According to FE 7, the Anadarko contractors (called pumpers) whose job it was to
check on Anadarko’s wells were low-skilled, poorly paid and on an hourly basis, and very junior.
Each pumper had about 120 wells per week to inspect. Anadarko was aware that these workers
sometimes missed wells entirely. FE 7 estimated that about 3-5% of all of Anadarko’s wells were
simply never inspected because the pumper, who was undertrained and overworked, had
32
overlooked them. FE 7 stated that this amounts to several hundred wells that were never
inspected. If these wells were never inspected, as FE 7 notes, then Anadarko could not plug and
abandon them as required by law, because it would not realize that the wells were not producing
any oil and gas. Further, if these wells were never inspected, then Anadarko could not detect any
safety problems that arose.
131. Even where Anadarko’s pumpers did inspect a well, they were so overworked that
the inspection was dangerously hasty. According to FE 7, the pumpers showed up to the well,
looked to see if anything was visibly wrong, listened to determine if there were any worrying
noises, and sniffed to see if there were any unusual smells. The whole inspection was over in five
minutes.
132. The cursory inspections Anadarko conducted were wildly inadequate to deal with
the Noble Wells’ severe safety risks. For example, methane and many other dangerous gases are
odorless. Thus, according FE 7, the visual inspections Anadarko employees conducted could
never detect it. And because Anadarko did not know the location of many of its flowlines, if one
ruptured or was cut, it was highly unlikely that the cursory inspections could ever detect the leak.
133. Anadarko could not count on residents to identify any problems, either, as they
were not equipped or trained to do so. Instead, residents only ever raised three problems –
sounds, smells, and traffic.
134. Defendants Walker, McBride and Christiansen were well aware of these safety
problems. Anadarko held biannual meetings of senior management (the “Biannual Meetings”).
The Biannual Meetings consisted of two separate two-hour meetings on the same day, with the
same people present at both meetings. FE 7 reports that Defendant Christiansen personally
attended the majority of the Biannual Meetings and that, whenever he could not attend, he sent a
33
representative. FE 7 estimates that Defendant Walker personally attended 25%, and Defendant
McBride 50%, of the Biannual Meetings. Holly, Walters, and Bracken personally attended all of
the Biannual Meetings.
135. The purpose of the Biannual Meetings was to have Anadarko’s five Colorado
Production Superintendents update Anadarko’s senior executives on developments in the field.
FE 7 attended all of the meetings, unless he was on vacation or other time off. As a result, FE 7
attended the vast majority of the Biannual Meetings.
136. At the Biannual Meetings, Production Superintendents presented PowerPoint
slides. Each of Anadarko’s five Colorado Production Superintendents were required to identify
the 3-5 most important facts about their division, whether positive or negative. They were
instructed to identify only issues requiring immediate attention. The Production Superintendents
would then make a presentation at the Biannual Meeting, using the PowerPoint slides to discuss
the problems.
137. FE 7 was told by his superiors, including Paul Wages, that the PowerPoint
presentations would be disseminated “up the chain” to the “highest levels” of the company,
including to Defendant Walker. FE 7’s superiors also were regularly unavailable following the
Biannual Meetings, telling him when he asked that it was because they would then go to The
Woodlands to present the matters discussed at the Biannual Meetings (specifically the
information in the PowerPoint presentations) to Anadarko senior executives, including
Defendant Walker.
138. During one or two of the Biannual Meetings between 2014 and the March 2016
layoffs, participants discussed the problem, appearing in a PowerPoint presentation, that 3-5% of
wells were never inspected because the pumpers were overworked and undertrained. The
34
Colorado Production Superintendents requested additional resources to hire more pumpers and
train them better. But Anadarko’s senior executives told the Colorado Superintendents that they
would have to resolve the issue on a local level. The Anadarko senior executives then slashed the
Colorado Superintendents’ resources and budgets in connection with the March 2016 layoffs.
139. Thus, Anadarko’s senior executives, including the Individual Defendants, were
aware of the safety problems but did not care enough to resolve them.
140. Anadarko’s Colorado-based senior executives were also aware that Anadarko’s
poor remediation efforts created or failed to remediate grave dangers. Anadarko convened
several meetings of its senior Colorado staff, including FE 1, Walters, Bracken, and three or four
others, specifically to discuss how diverting funds away from remediation efforts to drilling
operations could lead to environmental, safety, and health hazards. Moreover, the dangers of
prioritizing remediation funds to instead support drilling efforts was discussed at the team
leadership meetings referenced ¶44, above.
141. Anadarko ignored safety concerns raised by other employees. Bracken regularly
attended the meetings referenced in ¶44, above. According to FE 1, Bracken regularly raised
health and safety concerns at these meetings, along with suggested remediation efforts. Mr.
Bracken’s concerns were then repeatedly pushed aside in favor of other issues such as timing and
location.
142. In late April or early May 2018, The Colorado Independent spoke with a former
Colorado-based Anadarko safety manager who now works for a company that does business
with Anadarko.12 The safety manager told The Colorado Independent that he frequently thinks of
reaching out to Erin Martinez, wife and sister of Mark Martinez and Joseph Irwin III, the two
12
Susan Greene, Former Anadarko brass slam company for safety risks, callousness, The
Colorado Independent, May 8, 2018.
35
people killed in the Firestone explosion. But The Colorado Independent quotes the safety
manager as saying “But what could I say? What would I tell [her]? That those tightwads in
corporate couldn’t give a s**t about the guys who worked on those wells or the people who lived
near them?” The safety manager added that his current employer is “better” and urged The
Colorado Independent to not “make it sound like all these companies are like Anadarko.”
143. The Colorado Independent also spoke with FE 1 on-the-record and for attribution.
In the interview, FE 1 confirmed that the safety concerns were not concealed at all within
Anadarko. He was quoted as saying that:
It wasn’t just me. There were a number of people who knew what the right answer was
on safety, but were told it’s not a priority right now. It was a precarious situation for all
of us. You may be telling your boss or the person who manages your budget or the
person who [gives] you day-to-day direction that you don’t agree with him or that the
decisions being made are not the right decisions. We all expressed our opinions. We
made our concerns known. And then we sort of lived with the outcome.
B. Anadarko Violated Rules 1101 a. and 1102 d. Because It Did Not Know
Where Its Flowlines Were
144. FE 7 reports that it was a regular occurrence that when he was asked to plug and
abandon a well, Anadarko did not know the location of the well’s flowlines (the “Unknown
Flowline Wells”).
145. According to FE 7, the cause of a majority of the Unknown Flowline Wells is that
Anadarko simply did not have any plats (maps) of the wells and their flowlines. In the remainder
of instances, the plats were inaccurate. The wells did not have tracers or location devices, in
violation of Rule 1101 a., and were impossible to locate without digging up the entire area
around the well.
146. Rule 1102 d. requires operators to register their flowlines with Colorado’s 811
line locator number. Perversely, to attempt to locate Anadarko’s own flowlines, Anadarko
36
employees frequently themselves called the 811 line locator number. The 811 line is intended to
assist utilities and the general public to find flowlines before they dig underground. The 811 line
is intended to rely on the oil and gas operator’s information, not supply the operator with
information. Unsurprisingly, these calls were not successful, with 811 telling Anadarko that 811
had no record of flowlines in the area. Accordingly, Anadarko violated Rule 1102 d.
147. To find the flowlines of an Unknown Flowline Well, FE 7’s team had to dig up
the entire area around the well – a process that could take a team and a rig up to 3 weeks.
148. Based on his work plugging and abandoning Anadarko’s wells, as well as his
attendance at the Biannual Meetings, FE 7 estimates that Unknown Flowline Wells made up
about 10% of all of Anadarko’s Colorado wells (including the Noble Wells). FE 7 estimates that
a larger percentage of the Noble Wells, 20-30%, were Unknown Flowline Wells.
149. In some instances, Anadarko did not even know the location of the Noble Wells.
150. According to FE 7, Anadarko frequently operated wells even if they were
Unknown Flowline Wells. According to FE 7, the percentage of wells he was asked to plug and
abandon that were Unknown Flowline Wells did not change over time. Because wells must be
plugged or abandoned if they have not been operated for 12 months, this means that Anadarko
was not considering whether a well was an Unknown Flowline Well in determining whether to
operate it.
151. According to FE 7, the Unknown Flowline Wells problem was regularly
discussed within Anadarko.
152. For example, FE 7 recalls that the Unknown Flowline Well problem was raised in
at least one of the Biannual Meetings taking place before 2016. At the meetings, Colorado
Production Superintendents specifically stated that 10% of Anadarko’s wells were Unknown
37
Flowline Wells. FE 7 remembers that Defendant McBride was present for at least one of the
Biannual Meetings when the Unknown Flowline Wells problem was raised and discussed. At the
meetings, the Unknown Flowline Wells problem was flagged as needing immediate attention.
At the Biannual Meetings, the Colorado Production Superintendents sought additional resources
from senior Anadarko executives to address the problem.
153. According to FE 7, each time the Unknown Flowline Well problem was identified
as one of the 3-5 facts in the Biannual Meetings, it was also identified in a PowerPoint slide for
that meeting. There never was a solution presented, and Anadarko’s senior management and
executives did not offer a solution, or take or direct any action to resolve the problem, or offer
any additional resources. Instead, Anadarko senior executives instructed the Production
Superintendents to take care of the problem at the local level. But there never was a presentation
at any Biannual Meeting FE 7 attended where anyone stated that the problem had been resolved.
Indeed, the problem was “never downgraded.”
154. According to FE 5, Anadarko found lines that did not appear on internal maps “all
the time.” FE 5 blamed a variety of factors, including incomplete information from Noble, and
failure to exercise sufficient due diligence.
155. This was not an isolated phenomenon. According to CE 1, Anadarko had no idea
where many lines were located in the Permian basin, either. When CE 1 was sent out on a job, it
was common to “find a line that was not even on the map.” CE 1 thought the situation was
“scary.”
C. Anadarko Violated Rule 1101 e. Because It Only Ever Pressure-Tested 20%
of Its Wells
156. In 2013, Colorado enacted a law that, among other things, directed the
38
Commission to develop and employ a risk-based strategy to inspect oil and gas facilities. The
strategy was intended to prioritize for inspections the phases of oil and gas operations that are
most likely to experience spills, excess emissions, and other types of violations.
157. Pursuant to the newly-enacted law, in February 2014, the Commission produced a
report for the Colorado Joint Budget Committee Titled Risk-Based Inspections – Strategies to
Address Environmental Risk Associated with Oil and Gas Operations (the “Report”).
158. The Report made eight findings. One of these was that flowlines were a
significant source of spills and releases. Report, at 31. The Report reminded operators that the
Commission’s Rules required “integrity testing of flowlines is required by Commission Rule [...]
on an annual basis.” Report, at 36.
159. The Report observed that the Commission presently did not audit operators’
pressure testing program. Report, at 36. The Report noted that the failure to audit compliance
created significant risk, because annual pressure tests were extremely important. Report, at 31.
To reduce the risks, the Report recommended, and the Commission enacted, regulations
requiring the Commission to conduct annual audits of operators’ compliance with Rule 1101 e.
These annual audits were set to begin in 2016.
160. The Commission thus made very clear to operators from at least 2014 that the
annual pressure tests were a key requirement of Colorado law.
161. Yet. according to FE 7, and contrary to Rule 1101 e.’s explicit command,
Anadarko refused to pressure test all of its wells every year. Instead, until the Firestone
explosion, Anadarko pressure-tested only 10% of its wells every year.
162. During FE 7’s tenure (until the Firestone explosion), Anadarko first triaged wells
into those located in high risk locations, which it would test, and all others. High risk locations
39
were wetlands and those where, to Anadarko’s knowledge, the flowlines extended below houses
or schools. Since 20-30% of the Noble Wells were Unknown Flowline Wells, Anadarko had
flowlines running below houses or schools which it did not pressure test in violation of Colorado
law. This includes the Firestone Well.
163. Anadarko classified only about 20% of its wells as located in a high risk location.
Thus, prior to the Firestone explosion, it never tested the flowlines for 80% of its wells in direct
violation of Colorado law.
164. Anadarko did not consider whether a well was likely to leak when it decided
whether to pressure test.
165. The 20% of wells that Anadarko actually tested were only tested every other year.
Thus, prior to the Firestone explosion, Anadarko only tested 10% of its flowlines every year.
Because Rule 1101 e. required Anadarko to test every flowline every year, Anadarko violated
Rule 1101 e.
166. Anadarako’s practice of only testing flowlines in high risk locations and doing so
on a biennial cycle was documented in its Colorado Standard Operating Procedures. According
to FE 7, these Standard Operating Procedures were approved by an HSE representative, subject
to Defendant McBride’s review. Defendant Walker also received a list of Anadarko’s Standard
Operating Procedures and a description of each.
167. According to FE 7, a pressure test of the Firestone Well would have revealed that
it was leaking.
D. Anadarko Violated Rule 1103 Because It Did Not Plug Abandoned Wells
168. Rule 1103 requires that any abandoned well be plugged or flowline sealed. By
definition, any well that has not been in operation for a year is abandoned. Commission Rule
40
100, Definition of “Inactive Well.”
169. During FE 7’s tenure, Anadarko prepared and continuously maintained a list of
wells to abandon on an excel spreadsheet referred to internally as the “Plug & Abandonment
List,” or “P&A List.”
170. FE 7 provided information about the P&A List that was included in weekly
reports called the DJ Basin (or Wattenberg) Weekly Operating Reports (the “Weekly Operating
Reports”). FE 7 had to submit his information by Thursday COB so that it could be included in
weekly Monday 8 a.m. calls. The information FE 7 submitted included the number of wells that
had been plugged and abandoned as well as the number of wells remaining on the P&A List. FE
7 knows that the information was actually included in the Weekly Operating Reports because
whenever he did not timely provide the information, he would receive an email or call from
Holly’s administrative assistant asking that he immediately provide the information.
171. The Weekly Operating Reports had a header for FE 7’s group and contained
space for him to include three to five bullet points. FE 7 was told by his superior Paul Wages that
the Weekly Operating Report would be seen by Anadarko’s Executive Committee, including
Defendant Walker. He was instructed to keep in mind the fact that the Weekly Operating Report
would be reviewed by the Executive Committee in drafting his portion of it.
172. According to FE 9, Anadarko held a weekly Monday 8 a.m. call to update senior
executives about Anadarko’s activities. The calls lasted about one hour. Defendant McBride was
an invitee who “occasionally” participated, while Holly and Walters always did. FE 1 also
occasionally attended.
173. FE 9 was tasked with contacting Anadarko senior managers, including
Superintendents like FE 7, to obtain reports to be presented at the weekly calls. She then put
41
together the individual reports into a global 20-page report which she printed and labeled. The
reports formed the basis of discussions at the weekly calls. FE 9 confirms that the Weekly
Operating Reports were provided to all participants in the call, and perhaps others. FE 1 received
all Weekly Operating Reports, whether or not he attended, and was encouraged to share the
Weekly Operating Reports with his team. That the Weekly Operating Reports were distributed to
FE 1, an occasional participant, shows that they were not only distributed to actual participants –
suggesting that Defendant McBride, an occasional participant, also received the Weekly
Operating Reports.
174. According to FE 1, the reports prominently featured detailed information
concerning the Rockies Region.
175. According to FE 9, the discussion topics frequently included compliance and
safety.
176. Additionally, according to FE 9, Defendant Walker and other Anadarko senior
executives would visit Anadarko’s Colorado offices every quarter. Holly would meet them in an
18th floor conference room located right outside the executive suite.
177. During FE 7’s tenure at Anadarko, the P&A List consistently had 200-350 wells
on it.
178. According to FE 7, because the Anadarko contractors who inspected Anadarko’s
wells were unskilled and overworked, their cursory inspections frequently failed even to
determine whether a well was operating.
179. Moreover, because Anadarko could not timely seal abandoned wells it identified
as inoperative, the Company built up a substantial backlog on the P&A List.
180. Thus, according to FE 7, at any given time, approximately 3-5% of Anadarko’s
42
6,500 wells that Anadarko accounted for internally as operating were never inspected and many
were inactive wells, which were not plugged as required by law. These uninspected wells
amounted to several hundred wells.
181. According to FE 7, sometimes the Commission identified Anadarko wells that
were inoperative that Anadarko had missed. According to FE 7, “if the state knew about a well
not being in compliance, we moved it up our priority list.”
182. According to FE 7, HSE “typically didn’t monitor [wells for compliance with
state regulations] unless it was flagged by the state.”
183. Following the Firestone Explosion, Anadarko sealed 2,400 abandoned flowlines,
flowlines that Anadarko had abandoned and left unsealed in violation of Rule 1103.
VII. ANADARKO IGNORED INFORMATION PROVIDED BY ITS OWN
HSE PROFESSIONALS
184. According to several former Anadarko compliance and HSE professionals,
Anadarko used compliance and HSE professionals as a smokescreen to create the appearance of
attempting to comply with safety regulations.
185. FE 8 was part of the “Spatial Data Standards & Processing Group,” formed in
2011 under Anadarko’s then CEO James T. Hackett to develop a comprehensive “as built
survey” of Anadarko’s assets. FE 8 was told by Clay Bretches, an Anadarko VP of Marketing,
that Anadarko’s “higher-ups” saw that Anadarko had “potential problems” with data gathering
and inaccurate plats of its assets. Bretches added that the project to solve these potential
problems came “from the highest levels of the company.”
186. According to FE 8, his group’s work actually became a “bulls**t formality.”
187. Prior to a pipeline being placed in the ground, a preliminary plat is sketched out.
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According to FE 7, Anadarko did not have plats for 20-30% of the Noble Wells, which is why it
did not know where its flowlines and pipelines were.
188. But according to FE 8, even when Anadarko had plats, it still did not know
exactly where its flowlines and pipelines were. After the preliminary plat is drafted, a contract
surveyor reviews the area. Based on the contract surveyor’s review, changes are “frequently”
made to the plat. The well’s flowlines and pipelines are then installed in accordance with the
contract surveyor’s instructions, rather than the original plat. When such changes were made, the
plats were not updated, nor did Anadarko necessarily receive notice that there had been changes
in the plats. As a result, many of Anadarko’s plats inaccurately mapped Anadarko’s wells
flowlines and pipelines. Thus, even when it had plats, they were frequently inaccurate and did
not show the location of flowlines.
189. FE 8 and his group tried to convince Anadarko’s “asset managers,” senior
Anadarko employees in charge of a discipline (such as geology manager) for a particular oilfield
(such as the DJ Basin), that “as built” surveys were needed by showing them several instances
where a plat showed gas lines 500 feet away from their actual location.
190. Citing budget concerns, Anadarko’s asset managers refused to take any action.
The only reason for not conducting an as-built survey these asset managers provided was that
Anadarko had contractors or employees with personal knowledge of where the pipe was located
because they installed them. This “solution” was obviously no solution at all, because if the
contractors or employees changed jobs or retired, Anadarko would have no way of determining
where the flowlines and pipelines were actually located.
191. According to CE 2, both he and other Anadarko employees and contractors would
bring safety or code infractions to Anadarko’s attention. Many were simply never addressed.
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Indeed, when CE 2 raised issues with Anadarko’s Operations staff, they would “shrug it off [and
say] ‘it’s fine.’” According to CE 2, “that’s something I noticed about Anadarko, in particular,
that was kind of unique. Anadarko is kind of the one that really seemed heavy in operations and
light in other areas that probably could have used some help.”
192. Indeed, according to CE 2, “there’s been times that we have identified things that
are violations of hazardous-area classifications or setback requirements and not everything was
followed.”
193. CE 2 reported that Anadarko officials were concerned simply with having the
proper paperwork in the file, rather than complying with regulations or genuinely addressing
safety issues. For example, CE 2 was tasked with producing drawings of older facilities in order
to enable Anadarko to draw maps. But once presented with drawings, Anadarko would ignore
the safety issues the drawings directly identified. “The people that would directly receive the
drawings, in some cases, would not implement changes or take the data for its intended purpose,
and rather file the document.” As CE 2 added, Anadarko “just want[s] to say we have a drawing.
It was created by Operations just to check a box.”
194. Because Anadarko ignored the concerns CE 2 and other safety inspectors raised,
CE 2’s employer decided not to renew its profitable contract with Anadarko.
VIII. THE FIRESTONE WELL EXPLOSION EXPOSES ANADARKO’S
DANGEROUS OPERATIONS
195. In January 2017, Anadarko turned on the Firestone Well, in order to maintain
Anadarko’s favorable lease provisions.
196. According to FE 1, the data from the well was “not lining up.” Specifically, the
Firestone Well did not have a compressor which would dispose of methane. Thus, when it was
45
turned on, it should have begun to emit methane. Yet it did not.
197. During the two first weeks of April 2017, Anadarko sent two crews to the
Firestone well to inspect it. They could not explain how and why the well was not emitting
methane. Yet Anadarko did not shut off the well.
198. FE 1 learned these facts from discussions with former colleagues still employed
by Anadarko at the time of the conversations.
199. According to FE 2, because Anadarko was short-staffed, no one checked the
flowlines of the Firestone Well after turning it on to ensure that they were not leaking. Even if
they had decided to check the flowlines, it wouldn’t have helped. Anadarko was unaware of even
the existence of the line that was leaking.
200. On April 17, 2017, a house located approximately 200 feet away from the
Firestone Well exploded, killing Mark Martinez and his brother-in-law, Joseph Irwin III. Mr.
Martinez’s wife, Erin Martinez, suffered severe injuries, and she and their son were taken to the
hospital. Ms. Martinez remained in the hospital for a month and a half. The son, aged 11,
escaped serious injuries by jumping out of his bedroom window as the house exploded.
201. On April 26, 2017, after close of trading, Anadarko announced that it had
operated a well located 200 feet from the explosion site (i.e. the Firestone Well), and that
authorities were investigating whether the explosion was linked to the well. Anadarko also
announced that it was shutting down 3,000 vertical wells in North East Colorado, or all of the
wells of the same vintage that it operated. These wells had previously been producing 13,000
barrels of oil per day, or about 1.6% of Anadarko’s total worldwide production.
202. On April 27, 2017, Anadarko’s stock price fell by $2.84 from its previous closing
price of $59.96 to close at $57.12, or 4.7%, damaging investors.
46
203. Prior to the Firestone Explosion, the Plug & Abandonment List had 350 wells.
According to FE 7, within two weeks of the Firestone Explosion, Anadarko had expanded its
P&A List to 700 wells. The additional wells were added because, following “quick analysis,”
Anadarko determined that the costs of bringing the added 350 wells into compliance would
exceed the expected benefit.
204. On May 2, 2017, after close of trading, the Frederick-Firestone fire department
announced that a 1-inch return line connected to the Anadarko-operated Firestone Well had been
abandoned, but not disconnected from the wellhead and sealed (a violation of Colorado law).
The line later leaked methane into the Martinez’ home’s drains, which exploded when Mr.
Martinez and Mr. Irwin attempted to install a hot water heater.
205. In a notice to oil & gas operators dated May 2, 2017 (the “Notice to Operators”),
Colorado Governor John Hickenlooper ordered inspections and tests of all active and abandoned
gas pipelines within 1,000 feet of occupied buildings. The Notice to Operators also reminded
operators like Anadarko of Rule 1103’s requirements that abandoned flowlines be cut and sealed.
The Notice to Operators gave operators until June 30, 2017 to ensure that any abandoned
flowlines located within 1,000 feet of occupied buildings were taken out of service pursuant to
Rule 1103 (“Phase II”).
206. On May 3, 2017, Anadarko’s stock price fell $4.32 from its previous closing price
of $56.15 to close at $51.83, or 7.7%, damaging investors.
207. On May 2, 2017, Anadarko published a statement, attributed to its CEO,
Defendant Walker that “[o]ur thoughts and prayers remain with the Martinez and Irwin families
as they continue to mourn the loss of their loved ones”, adding that “[t]he safety of our
employees and the people who live and work in the communities in which we operate is our
47
number one priority.”
208. According to FE 2, who discussed the issue with friends who were at the time
employed by Anadarko, at the next Anadarko town hall meeting, Holly did not mention the
Firestone explosion. Discussion of the Firestone explosion only came up when Defendant
Walker mentioned that Anadarko was not too concerned with it. After hearing Walker’s
statement, several Anadarko employees walked out of the Town Hall in disgust.
209. On May 10, 2017, the Denver Post reported that the National Transportation
Safety Board (“NTSB”) had joined the local investigation into the Firestone Explosion. The
Denver Post reported that NTSB spokesman Keith Holloway said in an email that the NTSB was
probing whether there were any safety issues that could have a national policy impact.
210. On May 17, 2017, the International Business Times reported that Anadarko had
successfully lobbied Colorado lawmakers to block legislation that would have required operators
to disclose the location of lines located near homes. Anadarko-friendly legislators used a
filibuster to defeat the legislation. Since Anadarko did not know the location of a significant
portion of its lines, it would have been unable to provide the information required by the statute,
and would have incurred enormous expenses to discover the information.
211. On May 24, 2017, Anadarko and the Commission reported that a new methane
cloud had been discovered west of the Firestone explosion site, with methane levels even higher
than those at the site of the explosion.
212. On May 25, 2017, a fire occurred at an Anadarko oil storage container in Weld
County, Colorado, killing one worker and injuring three, one of them seriously.
213. On June 30, 2017, Anadarko announced that in response to the Notice to
Operators, it cut and sealed more than 2,400 abandoned flowlines located within 1,000 feet of
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buildings. Every one of those flowlines had been in violation of Rule 1103, which required that
abandoned flowlines be cut and sealed. In addition, Anadarko disconnected, plugged, and
abandoned 3,600 1-inch return lines associated with its vertical wells.
214. On December 13, 2017, the Durango Herald quoted Defendant Christiansen as
saying that:
“No one really foresaw this as a potential issue,” Christiansen said of the chain of events
that are suspected to be linked to the blast. “And I think going forward, there is no
question there is a heightened degree of awareness around it and a need to do better.”13
215. Christiansen was lying. In fact, Anadarko’s Unknown Flowline Wells and its
untrained staff were brought up at Biannual Meetings Christiansen and other executives
attended, while its decision to violate the law and not pressure-test every flowline every year was
codified in its Standard Operating Procedures. Instead, Christiansen dealt with important safety
problems by telling FE 2 to “shovel s**t”.
IX. DEFENDANTS’ FALSE AND MISLEADING STATEMENTS
216. On February 8, 2016, and continuing throughout the Class Period, a Factsheet
purporting to describe Anadarko’s Wattenberg Integrated Operations Center (the “Operations
Factsheet” and the “Operations Center”) appeared on Anadarko’s website. The Operations
Factsheet included Anadarko’s NYSE ticker at the top of the page, and stated in its introduction
that “Anadarko Petroleum Corporation’s mission is to deliver a competitive and sustainable rate
of return to shareholders.” A later version of the Operations Factsheet cautioned readers to “view
the forward-looking statement and cautionary note to investors under the terms of use page at
www.anadarko.com.” The Operations Factsheet’s intended audience thus included Anadarko’s
investors.
13
Lori Jane Gliha, The Durango Herald, December 13, 2017.
49
217. The Operations Factsheet provided that Anadarko operates “more than 6,000
wells in Weld County.” Likewise, Anadarko’s 2015, 2016, and 2017 10-Ks report, respectively,
that Anadarko operated 6,000, 6,440, and 6,000 wells in the DJ Basin in Colorado.
218. The Operations Factsheet stated that the Operating Center “[p]rovides real-time
remote-monitoring capabilities for 6,800+ wells.” That is to say, the Operations Factsheet
represents that Anadarko has real-time remote-monitoring capabilities for all of its wells in the
DJ Basin in Colorado. Likewise, the Operations Factsheet claimed that using these high-tech
tools, the Operations Center “[e]nables employees to shut-in [i.e., turn off] wells remotely”.
219. The foregoing was false and misleading because the Operations Factsheet stated,
as posted during the entire Class Period, that all of Anadarko’s Colorado wells could be remotely
monitored or deactivated when, in fact, Anadarko could not remotely monitor or deactivate about
800 of its 6,800 wells. Moreover, these wells were the decrepit Noble Wells – that is, the most
dangerous wells Anadarko operated in the DJ Basin.
220. At the time of the Land Swap, none of the more than 1,550 Noble Wells could be
monitored or turned off remotely.
221. According to FE 7, many of the wells were simply too old to have had any
remote-monitoring or deactivation capabilities installed. Those that might have some remote
capabilities had capabilities that were incompatible with Anadarko’s systems and had to be
completely retooled.
222. Anadarko immediately began to incorporate remote-monitoring and deactivation
capabilities for the Noble Wells. The process, however, was slow. According to FE 7, by the end
of 2016, only about half of the Noble Wells could be monitored or deactivated from the
Operations Center. According to FE 7, this was because equipping the Noble Wells for remote
50
monitoring or deactivation was extremely time-consuming and expensive.
223. According to FE 7, the Operations Factsheet was approved by Defendant
Christiansen. In fact, according to FE 7, Christiansen had to approve all external
communications. Likewise, Christiansen’s Anadarko biography reports that he is responsible for
overseeing Anadarko’s external communications.
224. The fact that only half of the Noble Wells had remote monitoring and control
capabilities was described in PowerPoint slides for, and discussed at, one or two of the Biannual
Meetings held before 2016. FE 7 recalled that Company executives told the Production
Superintendents “put it in your budget and we will see if we can get it approved.” It was not
approved.
225. On February 16, 2016, Anadarko filed its 10-K for the year ending December 31,
2015. Defendant Walker signed the 2015 10-K.
226. The 2015 10-K provided that:
Anadarko’s business operations are subject to numerous international, provincial, federal,

regional, state, tribal, local, and foreign environmental and occupational health and safety
laws and regulations.
* * * * * *
Many states where the Company operates also have, or are developing, similar
environmental laws and regulations governing many of these same types of activities. In
addition, many foreign countries where the Company is conducting business also have,
or may be developing, regulatory initiatives or analogous controls that regulate
Anadarko’s environmental-related activities. While the legal requirements imposed under
state or foreign law may be similar in form to U.S. laws and regulations, in some cases
the actual implementation of these requirements may impose additional, or more
stringent, conditions or controls that can significantly alter or delay the permitting,
development or expansion of a project or substantially increase the cost of doing
business. In addition, environmental laws and regulations, including new or amended
legal requirements that may arise in the future to address potential environmental
concerns such as air and water impacts, are expected to continue to have an increasing
impact on the Company’s operations.
* * * * * *
The Company believes that it is in material compliance with existing environmental
and occupational health and safety regulations. Further, the Company believes that the
51
cost of maintaining compliance with these existing laws and regulations will not have a
material adverse effect on its business, financial condition, results of operations, or cash
flows, but new or more stringently applied existing laws and regulations could increase
the cost of doing business, and such increases could be material.
(Emphasis added).
227. The foregoing emphasized statement were false and misleading because (a)
Defendants Walker, McBride, and Christiansen attended and/or received PowerPoint slides of
Biannual Meetings at which Anadarko’s Colorado Production Superintendents disclosed that
Anadarko did not know where 10% of its flowlines were, in violation of Rules 1101 a. and 1102
d.; (b) Defendant McBride presented and Walker received a presentation demonstrating that
hundreds of the Noble Wells were unsafe and had to be plugged or remediated, recognized as
much by authorizing (Walker) or requesting (McBride) a budget, and then slashed the budget,
leaving the wells unremediated or unplugged, in violation of Rule 1102 a. (2); (c) Anadarko only
pressure-tested 10% of its wells every year, and never pressure-tested 80% of its wells, in
violation of Rule 1101 e., a fact enshrined in Anadarko’s Standard Operating Procedures
approved by McBride and provided to and summarized for Walker; (d) Defendants Walker,
McBride, and Christiansen attended and/or received PowerPoint slides of Biannual Meetings at
which Anadarko’s Colorado Production Superintendents reported that Anadarko’s overworked
and undertrained pumpers failed to inspect 3-5% of its wells such that a proportion of
Anadarko’s wells would be abandoned but not sealed in violation of Rule 1103; and (e)
Anadarko’s Colorado Production Superintendents stated that they needed immediate additional
funds to remedy the problems set out in (a) and (d) above at the Biannual Meetings, but
Anadarko’s senior executives refused to provide the additional funds.
228. On or before March 12, 2016, Anadarko published its Health, Safety,
Environment and Sustainability Overview 2015 (the “2015 Safety Report”). The 2015 Safety
52
Report was signed by Defendants Walker and McBride. It was made available on Anadarko’s
website until publication of the 2016 Safety Report (defined below).
229. The 2015 Safety Report represented that:
Oil and natural gas upstream and midstream operations are subject to laws and
regulations in every country in which Anadarko operates. Anadarko operates its global
onshore and offshore operations in compliance with the applicable laws and associated
regulations.
(Emphasis added).
53
Anadarko’s senior executives refused to provide the additional funds. Moreover, Defendants
knew that Anadarko did not have enough skilled employees to prevent frequent serious accidents
threatening lives and the environment in Colorado, with Defendant Christiansen telling FE 2 that
instead of providing these funds, she should “shovel s**t and clean up the messes that
[Anadarko’s employees] make.” Further, Defendants did not attempt to hire sufficient
employees, choosing instead not to take steps to prevent calamities when the costs of doing
nothing were expected to be less than the costs of remediation (as in the case of the 28,000
gallon January 2017 spill), and to address the aftermath of calamities through public relations
strategies.
231. On August 12, 2016, Anadarko filed a Registration Statement on Form S-3 (the
“Registration Statement”), which incorporated by reference the 2015 10-K. On September 12,
2016, Anadarko sold 40,537,500 shares, raising net proceeds of $2.2 billion at an offering price
of $54.50/share. By dollar amount, this was the largest stock offering in Anadarko’s history.
232. On September 14, 2016, Anadarko publicly filed with the SEC an Underwriting
Agreement dated September 12, 2016 (the “Underwriting Agreement”). The Underwriting
Agreement’s Section 1. provided:
Representations and Warranties of [Anadarko]. [Anadarko] represents and warrants to

the Underwriter as follows:
* * * * * *
(q) Except as disclosed in the Disclosure Package and the Prospectus and except for
matters that would not, individually or in the aggregate, have a Material Adverse Effect:
(i) the Company and its subsidiaries and their respective properties and operations are
and, during the relevant time periods specified in all applicable statutes of limitations,
have been in compliance with all applicable federal, state, local and foreign laws,
rules, regulations, ordinances, codes, orders, and other legally enforceable
requirements relating to the prevention of pollution, the preservation of environmental
quality, the protection of natural resources, or the remediation of environmental
contamination [...]
54
(Second emphasis added)
Anadarko’s senior executives refused to provide the additional funds.
234. On or before March 3, 2017, Anadarko published its Health, Safety, Environment
and Sustainability Overview 2016 (the “2016 Safety Report”). The Report was signed by
Defendant Walker, as well as by Defendant McBride. It was made available on Anadarko’s
website for the remainder of the Class Period.
55
235. The 2016 Safety Report represented:
Oil and natural gas upstream and midstream operations are subject to laws and
regulations in every country in which Anadarko operates. Anadarko operates its global
onshore and offshore operations in compliance with the applicable laws and associated
regulations.
(Emphasis added).
236. foregoing emphasized statement were false and misleading because (a)
Anadarko’s senior executives refused to provide the additional funds. Moreover, Defendants
knew that Anadarko did not have enough skilled employees to prevent frequent serious accidents
56
threatening lives and the environment in Colorado, with Defendant Christiansen telling FE 2 that
instead of providing these funds, she should “shovel s**t and clean up the messes that
[Anadarko’s employees] make.” Further, Defendants did not attempt to hire sufficient
employees, choosing instead not to take steps to prevent calamities when the costs of doing
nothing were expected to be less than the costs of remediation (as in the case of the 28,000
gallon January 2017 spill), and to address the aftermath of calamities through public relations
strategies.
X. UNDER WALKER, ANADARKO DEALT WITH SAFETY HAZARDS
AS A PUBLIC RELATIONS RISK
237. According to FE 1, Anadarko spent $50 million on public relations in Colorado in
total in 2013, 2014, and 2015.
238. In 2013, Anadarko and Noble created an industry public-relations front called
Coloradans for Responsible Energy Development, known in Colorado as CRED. FE 1 was
instrumental in creating CRED. In its first four years of operations, CRED received $38 million
in funding, primarily from Anadarko and Noble.
239. CRED’s mission was to combat ballot initiatives that would negatively impact oil
industry profits.
240. In late April or early May 2018, FE 1 made statements for attribution during an
on-the-record interview with The Colorado Independent. The Colorado Independent quoted FE 1
as saying that “[Anadarko] spent a lot of time and energy and money and reputations of people
like me purchasing a social license to operate in Colorado. That social license helped us to beat
ballot measures, defeat issues in the legislature, [and] win support from people and communities
throughout Colorado.”
57
241. According to FE 1, because of the Firestone Explosion, Anadarko “don’t have the
standing to say we deserve that social license. That bank account is largely dry.”
242. FE 1 told The Colorado Independent that while Anadarko was led by former
chairman and CEO Jim Hackett, “[t]he core values they ingrained in us were remarkable.” But
after Defendant Walker replaced Hackett, “you saw a transition away from those values. That
loyalty, that commitment, those core values exist no more.” The Colorado Independent
paraphrases FE 1 as having stated that under Defendant Walker the core values “gave way to a
hard drive for profits, alarming safety risks, and a sense of disinterest in the communities where
Anadarko operates.”
243. FE 1 told The Colorado Independent that “it was a different company when I left
than when I started, and not one that I wanted to continue risking my personal reputation
representing.”
XI. CLASS ACTION ALLEGATIONS
244. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil
Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons or entities who
purchased or otherwise acquired Anadarko securities traded on the NYSE during the Class
Period (the “Class”). Excluded from the Class are Defendants herein, current and former officers
and directors of Anadarko, and members of their immediate families; any entity in which
Defendants have or had a controlling interest; and the legal representatives, heirs, successors, and
assigns of any such excluded person or entity.
245. The members of the Class are so numerous that joinder of all members is
impracticable. Throughout the Class Period, there were approximately 560 million shares of
Anadarko outstanding and actively traded on the NYSE. While the exact number of Class
58
members is unknown to Plaintiff at this time and can be ascertained only through appropriate
discovery, Plaintiff believes that there are thousands of members in the proposed Class who are
geographically dispersed. Record owners and other members of the Class may be identified from
records maintained by Anadarko or its transfer agent, and may be notified of the pendency of this
action by mail, using the form of notice similar to that customarily used in securities class
actions.
246. Plaintiff’s claims are typical of the claims of the members of the Class, as all
members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
federal law as complained of herein.
247. Plaintiff will fairly and adequately protect the interests of the members of the
Class and has retained counsel competent and experienced in class and securities litigation.
Plaintiff has no interests antagonistic to or in conflict with those of the Class.
248. Common questions of law and fact exist as to all members of the Class and
predominate over any questions solely affecting individual members of the Class. Among the
questions of law and fact common to the Class are:
a. whether the federal securities laws were violated by Defendants’ acts and omissions
as alleged herein;
b. whether statements made by Defendants to the investing public during the Class
Period misrepresented material facts or omitted to state material information about
the business, operations, and management of Anadarko;
c. whether Defendants caused Anadarko to issue false and misleading financial
statements during the Class Period;
59
d. whether Defendants acted knowingly or recklessly in issuing false and misleading
financial statements;
e. whether the prices of Anadarko securities during the Class Period were artificially
inflated because of Defendants’ conduct complained of herein;
f. whether Defendants acted with the requisite level of scienter;
g. whether the Executive Committee Defendants were controlling persons of the
Company;
h. whether reliance may be presumed; and
i. whether the members of the Class have sustained damages as a result of the conduct
complained of herein and, if so, what is the proper measure of damages.
249. A class action is superior to all other available methods for the fair and efficient
adjudication of this controversy since joinder of all members of the Class is impracticable.
Furthermore, as the damages suffered by individual Class members may be relatively small, the
expense and burden of individual litigation make it impossible for members of the Class to
redress individually the wrongs done to them. There will be no difficulty in the management of
this action as a class action.
250. Plaintiff and the members of the Class are entitled to the presumption of reliance
established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v. United States,
406 U.S. 128, 92 S. Ct. 2430 (1972), as Defendants omitted material information in their Class
Period statements in violation of a duty to disclose such information, as detailed above.
251. In addition, Plaintiff and the Class are entitled to a presumption of reliance on
Defendants’ material misrepresentations and omissions pursuant to the fraud-on-the-market
theory, because Anadarko’s securities traded in an efficient market during the Class Period, as
60
follows:
a. Throughout the Class Period, Anadarko’s securities met the requirements
for listing, and were listed and actively traded on the NYSE, a highly efficient and
automated market. Anadarko’s securities were highly liquid during the Class Period, with
an average daily volume of 5,228,786 shares;
b. As a regulated issuer, Anadarko filed periodic public reports with the SEC
and the NYSE;
c. The Company regularly communicated with public investors by means of
established market communication mechanisms, including through regular dissemination
of press releases on the major news wire services and through other wide-ranging public
disclosures, such as communications with the financial press, securities analysts, and
other similar reporting services;
d. The market reacted promptly to public information disseminated by the
Company, as new, Company-specific information was rapidly reflected in the price of
Anadarko’s securities;
e. Anadarko’s securities were covered by more than twenty securities
analysts employed by major brokerage firms who wrote reports about the Company
during the Class Period, and these reports were distributed to the sales force and certain
customers of their respective brokerage firms. Each of these reports was publicly
available and entered the public marketplace; and
f. On average, 4.6% of Anadarko’s securities were traded weekly, permitting
a very strong presumption that its shares traded on an efficient market;
g. 7 specialist firms made a market in Anadarko’s securities; and
61
h. The material misrepresentations and omissions alleged herein would tend
to induce a reasonable investor to misjudge the value of Anadarko’s securities.
252. Therefore, the market for Anadarko’s securities promptly digested current
information regarding the Company from all publicly available sources and reflected such
information in Anadarko’s share price. Under these circumstances, all purchasers of Anadarko
securities during the Class Period suffered similar injury through their purchase of the
Company’s securities at artificially inflated prices and a presumption of reliance applies.
COUNT I
Violation of § 10(b) of the Exchange Act and Rule 10b-5
(against All Defendants)
253. Plaintiff repeats and realleges the allegations set out above as if fully set forth
herein.
254. This Count is asserted against all Defendants for violations of Section 10(b) of the
Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.
255. During the Class Period, Defendants engaged in a plan, scheme, conspiracy and
course of conduct, pursuant to which it knowingly or recklessly engaged in acts, transactions,
practices and courses of business which operated as a fraud and deceit upon the Plaintiff and the
other members of the Class; made various untrue statements of material facts and omitted to state
material facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and employed devices, schemes and artifices to
defraud in connection with the purchase and sale of securities. Such scheme was intended to,
and, throughout the Class Period, did: (i) deceive the investing public, including Plaintiff and
62
other Class members, as alleged herein; (ii) artificially inflate and maintain the market price of
Anadarko securities; and (iii) cause Plaintiff and other members of the Class to purchase or
otherwise acquire Anadarko securities and options at artificially inflated prices.
256. By virtue of their positions at Anadarko, the Individual Defendants, Walters,
Holly, and Bracken had actual knowledge of the materially false and misleading statements and
material omissions alleged herein and intended thereby to deceive Plaintiff and the other
members of the Class, or, in the alternative, acted with reckless disregard for the truth in that
they failed or refused to ascertain and disclose such facts as would reveal the materially false and
misleading nature of the statements made, although such facts were readily available to
Anadarko, Individual Defendants, Walters, Holly, and Bracken. In addition to the facts alleged
herein demonstrating a strong inference of scienter, certain information showing that Anadarko,
Individual Defendants, Walters, Holly, and Bracken acted knowingly or with reckless disregard
for the truth is peculiarly within these Defendants’ and/or senior executives’ knowledge and
control. As the senior managers of Anadarko, Individual Defendants, Walters, Holly, and
Bracken had knowledge of the details of Anadarko’s internal affairs, including the deficiencies in
the Company’s regulatory compliance and safety programs.
257. As officers and/or directors of a publicly-held company, Individual Defendants,
Walters, Holly, and Bracken had a duty to disseminate timely, accurate, full and truthful
information regarding Anadarko’s business, operations, and financial controls. As a result of the
dissemination of the aforementioned false and misleading reports and filings, the market price of
Anadarko securities was artificially inflated throughout the Class Period.
258. In ignorance of the adverse facts concerning Anadarko’s operations that were
concealed by the misrepresentations and omissions alleged herein, Plaintiff and the other
63
members of the Class purchased or otherwise acquired Anadarko securities at artificially inflated
prices and relied upon the price of the securities, the integrity of the market for the securities
and/or upon statements disseminated by Anadarko and were damaged upon the disclosure of the
wrongdoing described herein.
259. During the Class Period, Anadarko securities were traded on an active and
efficient market. Plaintiff and the other members of the Class, directly relying on the materially
false and misleading statements described herein, and/or relying upon the integrity of the market,
purchased or otherwise acquired shares of Anadarko securities at prices artificially inflated by
Defendants’ wrongful conduct. Had Plaintiff and the other members of the Class known the
truth, they would not have purchased or otherwise acquired said securities, or would not have
purchased or otherwise acquired them at the inflated prices that were paid. At the time of the
purchases and/or acquisitions by Plaintiff and the Class, the true value of Anadarko securities
was substantially lower than the prices paid by Plaintiff and the other members of the Class. The
market price of Anadarko securities declined sharply upon public disclosure of the facts alleged
herein to the injury of Plaintiff and Class members.
260. By reason of the conduct alleged herein, Defendants knowingly or recklessly
violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
261. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and
the other Class members suffered damages in connection with their respective purchases,
acquisitions and sales of the Company’s securities during the Class Period upon the disclosures
alleged herein. Defendants are liable for damages in connection with these losses under Section
10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.
COUNT II
64
Violation of § 20(a) of the Exchange Act
(against Walker only)
262. Plaintiff repeats and realleges the foregoing allegations as though fully set forth
herein.
263. During the Class Period, Walker participated in the operation and management of
Anadarko, and conducted and participated, directly and indirectly, in the conduct of Anadarko’s
business affairs. Because of his senior position, he knew the adverse non-public information
about Anadarko’s operations, including adverse facts about Anadarko’s regulatory compliance
and safety programs.
264. As an officer of a publicly owned company, Walker had a duty to disseminate
accurate and truthful information with respect to Anadarko’s reports and filings and to correct
promptly any public statements issued by Anadarko which had become materially false or
misleading.
265. Because of his position of control and authority as a senior officer, Walker was
able to, and did, control the contents of the reports and public filings that Anadarko disseminated
in the marketplace during the Class Period concerning Anadarko’s regulatory compliance and
safety programs. Throughout the Class Period, Walker exercised his power and authority to
cause Anadarko to engage in the wrongful acts complained of herein.
266. As a control persons, Walker is liable pursuant to Section 20(a) of the Exchange
Act for the primary violations of the Exchange Act committed by Anadarko as set forth in Count
I.
PRAYER FOR RELIEF
65
WHEREFORE, Plaintiff, on behalf of itself and the Class, prays for judgment and relief
as follows:
(a) declaring this action to be a proper class action, certifying Plaintiff as a class
representative under Rule 23 of the Federal Rules of Civil Procedure and designating Plaintiff’s
counsel as Lead Counsel;
(b) awarding damages in favor of Plaintiff and the other Class members against all
Defendants, jointly and severally, together with interest thereon;
(c) awarding Plaintiff and the Class reasonable costs and expenses incurred in this action,
including counsel fees and expert fees; and
(d) awarding Plaintiff and other members of the Class such other and further relief as the
Court may deem just and proper.
66
JURY TRIAL DEMANDED
Plaintiff hereby demands a trial by jury.
Dated: August 3, 2018 Respectfully submitted,
THE ROSEN LAW FIRM, P.A.
/s/ Laurence Rosen

Laurence Rosen, Esq. (pro hac vice)
Phillip Kim, Esq. (pro hac vice)
Jonathan Horne (pro hac vice)
275 Madison Avenue, 34th Floor
New York, NY 10116
Phone: (212) 686-1060
Fax: (212) 202-3827
Email: lrosen@rosenlegal.com
Email: pkim@rosenlegal.com
Lead Counsel for Plaintiff and the Class
MOTLEY RICE LLC

Marlon E. Kimpson
Joshua C. Littlejohn
28 Bridgeside Blvd.
Mount Pleasant, SC 29464
Phone: (843) 216-9000
Fax: (843) 216-9450
Email: mkimpson@motleyrice.com
Email: jlittlejohn@motleyrice.com
Additional Counsel for Plaintiff and the Class
67
-and-
STECKLER GRESHAM COCHRAN PLLC
R. Dean Gresham
Texas Bar No. 24027215
Bruce W. Steckler
dean@stecklerlaw.com
L. Kirstine Rogers
krogers@stecklerlaw.com
12720 Hillcrest Road, Suite 1045
Dallas, TX 75230
Telephone: 972-387-4040
Facsimile: 972-387-4041
Liaison Counsel for Plaintiff and the Class
68
CERTIFICATE OF SERVICE
I hereby certify that on this August 3, 2018, a true and correct copy of the foregoing
document was served by CM/ECF to the parties registered to the Court’s CM/ECF system.
/s/ Laurence Rosen
69

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Case 4:17-cv-01372 Document 57 Filed in TXSD on 08/03/18 Page 1 of 69

UNITED STATES DISTRICT COURT

ROBERT EDGAR, Individually and On § CIVIL ACTION NO. 4:17-cv-01372

Defendants Anadarko Petroleum Corp. (“Anadarko”), R. A. Walker, David J. McBride, and

John M. Christiansen (“Defendants”), alleges the following upon personal knowledge as to

investigation made by and through its counsel.

I. NATURE OF THE ACTION

1. This is a securities class action brought on behalf of all persons who

and certain of its top officials.

2. Anadarko engages in oil and gas exploration, development, and production,

as well as other oil industry-related businesses.

settle the resulting liabilities.

that time period.

environmental regulations. Anadarko specifically assured investors that its high-tech

rapidly pinpointing and addressing any potential safety issues.

8. Within six months, Anadarko discovered that up to several hundred of the

9. Anadarko initially authorized a budget of tens of millions of dollars in order

prioritize plugging unsafe wells, focusing solely on economics.

Conservation Commission (the “Commission”) all but guaranteed a disaster. First,

tested only every other year.

appropriate to ignore safety and focus on supporting drilling.

16. Anadarko’s senior Houston executives knew as well. Defendants R.A.

which Colorado’s five Production Superintendents,1 including FE 7, presented their most

which was why they were asking for additional resources.

enshrined in Anadarko’s Colorado Standard Operating Procedures. The Standard Operating

McBride’s review, and summarized for Walker’s benefit.

subsequent layoffs cut its workforce from 1,500 to 1,000 employees.

perform operations safely in the DJ Basin, particularly as Anadarko increased drilling in

2017 attended by a senior Colorado-based Anadarko executive, Anadarko knowingly

21. On April 17, 2017, a home located near an Anadarko-owned well in

window as the house exploded.

Well’s role in the explosion.

it was shutting down 3,000 similar vertical wells in Colorado.

which exploded when the homeowner tried to install a heater.

doubling the number of wells on that list.

29. Following the explosion, Anadarko publicly expressed sympathy. Internally,

which their reckless behavior caused two deaths.

30. Anadarko’s senior executives, including Defendants, callously disregarded

lied about it to investors. They violated the securities laws.

II. JURISDICTION AND VENUE

35. Court-appointed Lead Plaintiff Philadelphia Iron Workers administers benefits

Court and is incorporated by reference, Philadelphia Iron Workers purchased Anadarko

38. Defendant David J. McBride served as Anadarko’s Vice President of Health,

works in The Woodlands.

39. Defendant John M. Christiansen has served as Anadarko’s Vice President -

“responsible for overseeing [Anadarko’s] media relations, public affairs, internal

communications platforms [...]” Christiansen works in The Woodlands.

IV. ANADARKO EMPLOYEES AND CONTRACTORS

41. Bradley J. Holly served as Anadarko’s Senior Vice President of Operations -

in a corporate reshuffling on October 4, 2017.

since June 2013. Bracken works in Colorado and reports to McBride.

Defendant John Christiansen, Vice President of Corporate Communications. FE 2 was

that there were “a lot of them.”

FE 3 worked in Anadarko’s The Woodlands headquarters, and reported to Anadarko’s Health,

Safety, and Environment Manager for the Delaware Basin.

Safety & Health Administration (“OSHA”) regulations.

Colorado. As a safety inspector, FE 5 would inspect individual wells, as well as review

49. Former Employee 6 (“FE 6”) was employed by Anadarko as a contract

entirety of Anadarko’s Colorado operations. There, he was responsible for Anadarko’s

including the maintenance, plugging and abandonment of wells, managing approximately 5