FTC Probes XCL Deal as Oil and Gas Antitrust Scrutiny Grows

The US Federal Trade Commission is reviewing oil and gas company XCL Resources’ bid to acquire Utah-based Altamont Energy, amid a wave of consolidation in the oil and gas sector that has already prompted federal antitrust investigations.

The FTC on Thursday said it’s seeking public comment on the proposed deal, per provisions of a settlement requiring Houston-based XCL and its private equity owner EnCap Investments to secure the agency’s approval before buying waxy crude oil producers in northeastern Utah. The agency’s announcement of its review comes just one day after lawmakers urged the FTC to launch a full investigation into recent oil and gas acquisitions, arguing the consolidation threatens competition and could lead to higher prices.

The FTC sought additional information in December about two high-profile oil and gas deals: Exxon Mobil Corp.’s proposed $60 billion acquisition of Pioneer Natural Resources Co., and Chevron Corp.’s proposed $53 billion purchase of Hess Corp.

“Even more consolidation is still on the horizon,” lawmakers including Senate Majority Leader Chuck Schumer (D-N.Y.) said in a letter on Wednesday calling on the FTC to expand its existing investigations. “This industry is already far too concentrated, resulting in anticompetitive behavior that harms businesses across the supply chain and Americans looking to fuel their cars and heat their homes.”

Permian Basin drillers Diamondback Energy Inc. and Endeavor Energy Resources LP also announced a $26 billion merger in February—a deal that could pose a test for the FTC’s scrutiny of consolidation in the industry.

Read More: Diamondback Deal Poses Next Test for FTC Scrutiny of Oil Mergers

Private equity firm EnCap previously confronted FTC scrutiny when it attempted to acquire EP Energy Corp. in 2022, raising concerns that the deal would eliminate competition between producers in Utah’s Uinta Basin. EnCap agreed to divest EP’s assets in Utah and obtain FTC approval for future deals in the region.

Members of the public have 30 days to submit comments to the FTC on the XCL and Altamont deal.