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FTC Reviews Petition to Modify Oil Acquisition Consent Order
The Federal Trade Commission (FTC) has recently invited public commentary on a critical petition that seeks to modify a 2022 Consent Order regarding Verdun Oil Company II LLC's acquisition of EP Energy LLC.
Background on the Order's Intentions
The original 2022 order arose from concerns that the acquisition could stifle competition in the supply of Uinta Basin waxy crude oil to refineries in Salt Lake City. To address these concerns, the FTC mandated the divestiture of EP's business and assets in Utah and imposed restrictions requiring Verdun and its parent companies, EnCap Energy Capital Fund and XCL Resources, to obtain approval for future acquisitions in the area.
Significant Changes Prompting Reevaluation
The parties involved allege that significant industry changes warrant a reexamination of the consent order. Notably, EnCap and XCL exited crude oil exploration and production in the Uinta Basin last year, selling their assets to an unrelated entity. This development, they argue, diminishes the likelihood of competitive harm that the original order sought to prevent and raises questions about the necessity of ongoing oversight.
Public Engagement and Next Steps
As part of the FTC’s procedural framework, public input on this petition is encouraged, with comments due by May 2, 2025. This opens a critical dialogue among stakeholders—including business brokers, regulators, and industry experts—allowing for diverse perspectives on the implications of modifying the consent order.
The ultimate decision will not only impact Verdun and its affiliates but could also set precedents for how similar mergers are evaluated in the future, especially within the volatile energy sector.
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