FTC Oil Companies Gun-Jumping Fine


On Jan. 7, FTC fined oil companies $5.6mn for unlawful gun-jumping.


  • FTC, DoJ reported on lawsuit against crude oil producers XCL Resources Holdings LLC, Verdun Oil, and EP Energy LLC for violating pre-transaction notification requirements.
  • Companies also violated waiting period requirements of Hart-Scott-Rodino act (HSR act) (15 USC 18a), following Verdun’s $1.4bn purchase agreement for EP in 2021.
  • The civil penalty settlement reached with XCL Resources, Verdun Oil, and EP provides for the largest dollar penalty ever imposed for a gun-jumping violation in US history.
  • Alleged Conduct
  • Verdun, which was under common management with XCL at time of the transaction, agreed to acquire EP in a $1.4 billion transaction that was subject to the HSR act.
  • 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 closing.
  • Violated HSR act’s waiting period requirements, where merging parties must submit form to federal antitrust agencies, observe waiting period before completing deal.
  • Unlawful gun-jumping activities during HSR waiting period included XCL and Verdun ordering stoppage to EP’s planned well-drilling and development activities.
  • XCL and EP coordinating to manage EP’s customer contracts, relationships, and deliveries in Uinta Basin region of Utah; coordinated prices for EP’s customers in Texas.
  • Led to crude oil supply shortage for EP when the US market was facing significant supply shortages and multi-year highs in oil prices, resulting in skyrocketing prices.
  • Enforcement
  • Request for decree that parties violated HSR act; pay $5.6mn civil penalty; that parties enjoined from any activity for 10 years with same effect as alleged violations.

Regulators DoJ; FTC
Entity Types Corp
Reference DoJ: PR 25-20, FTC: PR, LR 1:25-cv-00041, 1/7/2025; Citation: 15 USC 18a;
Functions Compliance; C-Suite; Financial; Legal; Market Conduct; Operations; Reporting
Countries United States of America
Category Central Government; National Regulator
State
Products Commodities; Corporate
Regions Am
Rule Type Enforcement
Rule Date 1/7/2025
Effective Date 1/7/2025
Rule Id 239511
Linked to N/A
Reg. Last Update 1/7/2025
Report Section AML & Enforcement

Last substantive update on 01/09/2025