Verdun Oil Company II LLC, Antitrust Violation, District of Columbia 2021

Oil companies face record civil penalty for violating antitrust laws.

The U.S. government has filed a civil antitrust lawsuit against crude-oil producers XCL Resources Holdings LLC, Verdun Oil Company II LLC, and EP Energy LLC for violating the pre-transaction notification and waiting period requirements of the Hart-Scott-Rodino Act of 1976.

The lawsuit alleges that the three companies failed to observe a required waiting period following a $1.4 billion purchase agreement between Verdun and EP on July 26, 2021. At the time of the transaction, Verdun was under common management with XCL.

According to the complaint, the three companies failed to observe the required waiting period, allowing Verdun and XCL to assume operational and decision-making control over significant aspects of EP’s day-to-day business operations. This included a stoppage to EP’s planned well-drilling and development at a time when the U.S. crude-oil market faced significant supply shortages and consumers faced soaring gasoline prices.

The proposed settlement, subject to court approval, would require the defendants to pay a $5.6 million civil penalty to resolve the lawsuit, a record civil penalty for illegal pre-merger coordination in violation of the HSR Act.

Further details about this matter are described in the FTC’s press release issued today, and in the complaint and competitive impact statement.

Consistent with the requirements of the Tunney Act, the proposed settlement, along with the competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period via email to bccompliance@ftc.gov or by post to Maribeth Petrizzi, Special Attorney, United States, c/o Federal Trade Commission, 600 Pennsylvania Avenue, NW, CC-8416, Washington, D.C. 20580.

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