The Federal Trade Commission (FTC) has partially approved and partially denied a petition to modify a final consent order related to the acquisition of EP Energy LLC by EnCap Capital Fund XI, L.P. and EnCap Investments L.P.
The original 2022 consent order was designed to address concerns that the acquisition might harm competition in the sale of Uinta Basin waxy crude oil to refiners in the Salt Lake City area. It required EnCap and its subsidiaries, Verdun Oil Company II LLC and XCL Resources Holdings, LLC, to divest EP Energy's business and assets in Utah. Additionally, it mandated prior FTC approval for certain acquisitions within seven Utah counties comprising the Uinta Basin.
Earlier this year, EnCap, Verdun, and XCL submitted a petition seeking removal of the prior-approval requirement. They argued that XCL had sold all its interests in the Uinta Basin and that none of the parties were currently competing in the relevant market.
Upon review, the FTC decided some modifications were warranted. The revised order removes the prior-approval requirement for reentry into the market by EnCap, Verdun, or XCL as requested by them. Instead, it imposes a prior-notice requirement for any future transactions involving oil- or gas-producing assets in the Uinta Basin area.
This change requires EnCap, Verdun, and XCL to notify the FTC about subsequent acquisitions after reentering the market. This approach is similar to existing reporting provisions under the Hart-Scott-Rodino Act.
The shift from requiring prior approval to prior notice aims to reduce delays and uncertainty while maintaining competitive markets as per FTC's mission.
The Commission's vote on this decision was 2-0-1 with Commissioner Melissa Holyoak recused.
The Federal Trade Commission continues its efforts to promote competition while protecting consumers through education. The agency emphasizes it will never demand money or make threats. For more information on competition benefits or filing antitrust complaints, follow FTC updates via social media or their blog.
