Oil Companies to Pay Record FTC Gun-Jumping Fine for Antitrust Law Violation [View all]

XCL Resources, EP Energy, Verdun Oil to pay $5.6 million penalty for unlawful coordination that led to crude oil supply shortage for EP

January 7, 2025


Today, the Federal Trade Commission announced that crude oil producers XCL Resources Holdings, LLC (XCL), Verdun Oil Company II LLC (Verdun), and EP Energy LLC (EP) will pay a record $5.6 million civil penalty to settle allegations they engaged in illegal pre-merger coordination, known as gun jumping, in violation of the Hart-Scott-Rodino Act (HSR Act).

According to the complaint, Verdun, which was under common management with XCL at the time of the transaction, agreed to acquire EP in a $1.4 billion transaction that was subject to the HSR Act. The HSR Act requires merging parties to submit an HSR form to the federal antitrust agencies and observe a waiting period before completing a transaction. EP, however, allowed XCL and Verdun to assume operational and decision-making control over significant aspects of EP’s day-to-day business operations prior to the transaction closing, in violation of the HSR Act’s waiting period requirements, the complaint states.

The three companies’ unlawful gun-jumping activities during the HSR waiting period included XCL and Verdun ordering a stoppage to EP’s planned well-drilling and development activities; XCL and EP coordinating to manage EP’s customer contracts, relationships, and deliveries in the Uinta Basin region of Utah; and Verdun and EP coordinating on prices for EP’s customers in the Eagle Ford region of Texas. This led to a crude oil supply shortage for EP when the U.S. market was facing significant supply shortages and multi-year highs in oil prices, resulting in Americans paying skyrocketing prices at the pump, the complaint states.

The civil penalty settlement reached with XCL, Verdun, and EP provides for the largest dollar penalty ever imposed for a gun-jumping violation in U.S. history.
https://www.ftc.gov/news-events/news/press-releases/2025/01/oil-companies-pay-record-ftc-gun-jumping-fine-antitrust-law-violation

My hero, Lina Khan.