Pomerantz Appointed Lead Counsel in Range Resources Securities Litigation
On June 16, 2021, U.S. District Judge Robert J. Colville of the Western District of Pennsylvania appointed Pomerantz LLP as Lead Counsel on behalf of Lead Plaintiff Hugh Melnick in Jacobowitz v. Range Resources Corporation, No. 21-cv-301 (W.D. Pa.), a securities action brought on behalf of a class of defrauded investors concerning allegations that Range Resources Corporation (“Range Resources” or the “Company”) improperly reported the status of wells it owns and operates in Pennsylvania.
Range Resources is an independent natural gas producer that engages in the development and acquisition of natural gas and oil properties in the Appalachian Basin of the United States.
Allegations include that: (i) Range Resources had improperly designated the status of its wells in Pennsylvania since at least 2013; (ii) the foregoing conduct subjected the Company to a heightened risk of regulatory investigation and enforcement, as well as artificially decreased the Company's periodically reported cost estimates to plug and abandon its wells; (iii) Range Resources was the subject of an investigation by Pennsylvania’s Department of Environmental Protection (“DEP”) from sometime between September 2017 to January 2021 for improperly designating the status of its wells; and (iv) the DEP investigation foreseeably would and ultimately did lead to the Company incurring regulatory fines.
On April 29, 2016, Range Resources announced its first quarter financial results in which it stated that its asset retirement obligations (“AROs”) (legal obligations associated with the retirement, removal or cleaning up of an asset involving hazardous materials) represent the "estimated present value of the amounts we will incur to plug, abandon and remediate our [wells] at the end of their productive lives.” The Company further stated that it used “[s]ignificant inputs” to determine its AROs, including “estimates of plugging and abandonment costs, estimated future inflation rates and well lives." These inputs are "calculated based on historical data as well as current estimated costs."
On February 22, 2017, Range Resources issued its 2016 annual report in which it revealed that it "decreased [its] existing AROs by $26.8 million or approximately 10%," which "was primarily due [to] a decrease in [the] estimated costs to plug and abandon certain wells in Pennsylvania." The Company further stated that “we believe we are in substantial compliance with currently applicable laws and regulations," including, among other things, "environmental laws and regulations." Range Resources also asserted that continued compliance would "not have a material adverse effect on [its] financial position."
On February 28, 2018, Range Resources issued its 2017 annual report in which it failed to disclose that it was the subject of a DEP investigation despite revealing that it was “the subject of, or party to, a number of pending or threatened legal actions and claims arising in the ordinary course” of business. The Company asserted that “the amount of the liability, if any, ultimately incurred… will not have a material adverse effect” on its financial position.
The truth emerged on February 10, 2021, when the DEP announced that it had “executed a consent assessment of civil penalty (CACP)” with Range Resources on January 7, 2021, “in the amount of $294,000 for violations of the 2012 Oil and Gas Act regarding wells ineligible for inactive status listed on its inactive status request to DEP.” According to the DEP, “Range Resources used the inactive status period to delay the eventual plugging of unproductive wells without returning them to active status” and “should have classified the wells with no viable future use as abandoned and plugged them.” In describing the events leading up to the Company’s payment of the civil penalty on January 8, 2021, the DEP revealed that it had discovered additional wells that the Company had improperly designated as inactive between 2013 and 2017. On this news, Range Resources share price fell $0.62 per share, or 6.08%, to close at $9.57 per share on February 11, 2021.