The Justice Department’s Antitrust Division, at the request of the Federal Trade Commission, filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia against crude oil producers XCL Resources Holdings LLC, Verdun Oil Company II LLC and EP Energy LLC.
The lawsuit alleges that the three companies violated the pre-transaction notification and waiting period requirements of the Hart-Scott-Rodino Act of 1976 (HSR Act) following Verdun’s $1.4 billion purchase agreement for 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 a required waiting period following such a large transaction, in which federal agencies can investigate a potential merger before it closes.
Instead, EP allowed Verdun and XCL to assume operational and decision-making control over significant aspects of its day-to-day business operations, including 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.
Simultaneous to filing its complaint, the department filed a proposed settlement, subject to approval by the court, under which the defendants have agreed 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.
