Oil Companies Hit with Record FTC Fine for Violating Antitrust Rules

On the same afternoon they signed a $1.445 billion (enough to fund free school lunches for every child in America for nearly two years) merger agreement, oil executives sent a company-wide email ordering a competitor’s workers to shut down their own oil wells — and celebrated it.

Three Oil Companies Ran a Secret Merger for 94 Days While You Paid Record Gas Prices

In July 2021, as COVID-19 restrictions lifted and Americans began filling their tanks again, crude oil demand surged. Prices spiked. Families felt it at every pump visit. At the exact same moment, three Houston-based oil companies were quietly dismantling the legal boundary between them — illegally — in a scheme that choked off supply and made the crisis worse.

XCL Resources Holdings, Verdun Oil Company II, and EP Energy violated a federal law called the Hart-Scott-Rodino Act — the HSR Act — which requires companies planning a merger to wait for antitrust regulators to finish their review before combining operations. The companies didn’t wait. According to a federal complaint filed by the Department of Justice on January 7, 2025, they began operating as a single, coordinated entity on the same day they signed their merger agreement: July 26, 2021.

They kept up the charade for 94 days, finally stopping only after an amendment to the Purchase Agreement on October 27, 2021 forced EP Energy to operate independently again.

They Knew It Would Cause Shortages. They Did It Anyway.

The most jaw-dropping detail buried in the federal complaint is this: the companies knew, before they even signed the deal, that XCL taking over EP’s operations would create crude oil supply shortages. They wrote it into the contract. The Purchase Agreement specifically shifted all financial risk and liability from those shortages onto XCL and Verdun — because they were the ones making the decisions that would cause them.

EP Energy faced real supply shortfalls in September and October 2021 as a direct result of XCL halting EP’s well-completion activities. This happened while the United States was experiencing significant supply shortages and multi-year highs in oil prices. The people paying for that at the pump had no idea that two oil companies had illegally merged their operations to the detriment of market competition.

The companies had anticipated every consequence. They structured the contract to absorb their own liability. And they moved forward anyway, betting on a deposit large enough to offset the damages — while ordinary Americans absorbed the real-world cost at gas stations across the country.

A $1.445 Billion Deal Built on Illegal Control From Day One

The merger was worth $1.445 billion (roughly what it would cost to give every public school teacher in America a $22,000 raise for an entire year). Verdun agreed to buy EP Energy, with the Utah oil assets going to XCL — Verdun’s sister company — and the Texas assets staying with Verdun. Both companies individually contributed more than $368 million (more than enough to wipe out the medical debt of approximately 70,000 American families) each, which triggered the HSR filing requirement for both.

The filings were made. The waiting period began. And then the companies immediately ignored the waiting period. The Purchase Agreement itself — the contract they signed — contained provisions that handed XCL and Verdun approval rights over EP’s ordinary-course business operations starting the moment the ink dried. This was the gun-jumping violation baked directly into the contract structure.

XCL didn’t wait weeks before asserting control. Executives moved that same afternoon. By the next morning, XCL employees were supervising EP’s well designs, vendor selections, and planning activities — describing their approach to taking over EP’s operations as “boots on the ground.”

The Non-Financial Ledger: What This Actually Cost People

The federal complaint focuses on legal violations, antitrust procedure, and corporate conduct. But underneath the legalese is something simpler and uglier: a group of oil executives decided their deal was more important than the law, more important than fair competition, and more important than the Americans who were already struggling with rising energy costs in the summer and fall of 2021.

When XCL halted EP’s well-completion activities, they didn’t just pause some paperwork. They stopped oil from moving toward the market at a moment when the entire country was desperate for supply. The supply shortfalls EP experienced in September and October 2021 were a direct consequence of decisions XCL made from its Houston office. Those shortfalls rippled outward to EP’s customers, who scrambled to find alternative supply on the spot market. Every spot-market purchase made under emergency conditions costs more. That cost lands on end consumers. That’s the person filling their gas tank before a job interview, or a small trucking company owner calculating whether they can still make payroll this week.

EP’s own customers were effectively robbed of their business relationship. The complaint documents that EP’s customers began contacting XCL directly — sometimes cutting EP out of the conversation entirely — to ask about supply forecasts and delivery schedules for their own contracts with EP. These customers didn’t sign a contract with XCL. They had no relationship with XCL. But XCL had made itself the de facto operator of EP’s business, and the customers had no choice but to follow the power wherever it moved. Their agency in their own supply chains was stripped away without their knowledge or consent.

There is also the matter of Verdun directing EP to raise its prices in the Eagle Ford region of Texas. Verdun reviewed EP’s existing customer contracts, decided some of the prices were below market, and told EP to charge more in the next contracting period. EP complied. Real businesses in Texas paid higher prices for crude oil because a competitor secretly gained the power to dictate another company’s pricing strategy. Those businesses had no idea their supplier was taking pricing direction from a competitor that was in the middle of buying them. That is not a technical antitrust issue. That is a company reaching into someone else’s business relationship and picking their pocket.

Employees Became Informants Against Their Own Employer

EP’s workers were placed in an impossible position. The company’s Chief Operating Officer sent XCL and Verdun executives — including both companies’ CEOs — a daily operations report starting August 4, 2021. These reports covered drilling status, completions, workovers, and production figures in real time. EP employees effectively reported to their XCL counterparts while still drawing a paycheck from EP. They were, in essence, feeding competitive intelligence about their own employer to a rival company — because the deal required it.

That dynamic — where workers become unwitting instruments of corporate espionage against their own company — deserves to be named plainly. The people who drilled the wells, filed the permits, managed the customer relationships, and showed up to work every day at EP Energy had no meaningful say in any of this. Their daily labor generated proprietary data — production volumes, customer pricing, supply projections — that flowed without restriction into the systems and inboxes of a competitor. No one asked them. No one protected them. The executives who structured this arrangement faced potential civil penalties. The workers faced nothing except the quiet indignity of working for a company that had already been handed over to someone else.

No Safeguards. Not a Single One.

The DOJ complaint makes a point of documenting the absence of any information-protection measures. EP placed no limits on which XCL or Verdun employees could access its competitively sensitive information. EP placed no limits on how that information could be used. XCL and Verdun offered no protections of their own. Even the virtual data room created for legitimate due diligence lacked appropriate safeguards — and Verdun’s sales employees used data from that room to advise on EP’s customer pricing while EP and Verdun were still legally independent competitors.

This was a complete and total collapse of the firewall that antitrust law requires between competing companies. The HSR Act exists precisely to prevent this kind of pre-merger contamination — to ensure that if a deal falls apart or gets blocked, both companies can still function as genuine rivals. After 94 days of this information-sharing, that firewall didn’t exist. XCL and Verdun knew everything about EP’s customers, prices, supply volumes, vendor relationships, site designs, geological reports, permitting status, and development plans. Genuine competition between these companies — in the event the deal had been blocked — would have been functionally impossible.

Legal Receipts: In Their Own Words

These are direct quotes from the federal court complaint, taken from internal emails and contract language. They are not paraphrased. They are not interpreted. Read them and decide for yourself what kind of people run these companies.

“Congratulations on getting the Purchase Agreement signed and deposit sent! Now we can move forward with your requested changes. Please confirm that you approve the following: Shut down all currently planned fracs until after the close. Per the attached spreadsheet, by shutting down these fracs we have sold more oil than we will be able to deliver and XCL accepts the contractual and reputational ramifications of not delivering these barrels.” — EP Energy Executive, emailed to XCL counterparts on July 26, 2021 — the same afternoon the Purchase Agreement was signed. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶37.

“XCL Confirmations of EP Operational Changes . . . . We confirm the request to suspend any operations related to completions between sign to close.” (emphasis in original) — XCL Resources, written response confirming the operational shutdown of EP’s drilling activities. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶38.

“Thanks for taking my call today, and working through operational planning with us. As discussed, we would like to complete the Moose Hollow and Bluebell wells as a combined team, where XCL leads on frac design and vendor selection, and EP teams with XCL to execute the operations.” — XCL Vice-President, email to EP’s Chief Operating Officer, August 2, 2021. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶40.

“However, as XCL has been directing EP Energy’s completions and has agreed to fulfill EP Energy’s contractual commitments between sign and close any shortfall [in EP’s ability to fulfil its supply commitments] would be due to XCL’s decisions.” — EP Energy employee, internal email to XCL, October 2021, acknowledging XCL’s operational command over EP’s operations. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶43.

“[XCL’s parent] is providing a deposit that more than offsets potential damages from 60 days of delayed production and initial operation planning, we moved materially on price and included this term in our initial offer sheet, we are unable to move off this point.” (emphasis in original) — XCL Executives, internal notes from Purchase Agreement negotiations, documenting that XCL made immediate operational control a non-negotiable condition of the deal. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶26.

“You will start receiving the attached Operations Report daily. This report covers drilling, completions, workovers and production.” — EP Energy’s Chief Operating Officer, email dated August 4, 2021, addressed to the CEOs and heads of operations of both XCL and Verdun — rival companies. Filed in U.S. v. XCL Resources et al., DOJ Complaint, ¶62.

Societal Impact: How This Hurt Real People

Economic Inequality: The Supply Squeeze You Paid For

The DOJ complaint states directly that XCL’s halting of EP’s well-completion activities contributed to crude oil supply shortages in September and October 2021 — months when Americans were already experiencing multi-year highs in oil prices and significant shortages driven by post-pandemic demand surges. These two facts are not coincidental. They are causally linked. XCL took an action that reduced market supply. Market supply was already low. Prices were already high. The people at the bottom of that equation — drivers, small businesses, logistics workers — absorbed the shock.

Verdun’s coordination with EP on customer pricing in the Eagle Ford region of Texas adds another layer. Verdun reviewed EP’s existing customer contracts and directed EP to raise its prices for the next contracting period. EP complied. The businesses on the receiving end of those price increases — refineries, distributors, or industrial consumers of crude oil — paid more because a competitor was secretly setting another company’s prices. Those upstream cost increases travel downstream. They show up in the price of everything made or moved with petroleum products, which is nearly everything.

The HSR Act’s waiting-period requirement exists precisely to prevent this kind of anticompetitive coordination. The law gives regulators time to assess whether a merger reduces competition in a way that harms consumers. In this case, the companies skipped that step. They merged first and asked permission later. The cost of that decision — in the form of supply shortfalls and inflated prices — was transferred directly to American consumers and businesses during one of the worst economic recovery periods in recent history.

Public Health: Energy Poverty Is a Health Crisis

Rising energy costs are not abstract. When crude oil supply drops and prices spike, the effects ripple through home heating costs, transportation costs, and the cost of manufacturing the goods that low-income households cannot go without. In the fall of 2021, supply was already stressed. Any contribution to further tightening — including the kind of artificial supply suppression caused by XCL halting EP’s drilling operations for weeks — directly raised the cost of energy for the people least able to afford it.

Energy poverty — the condition of spending more than 10% of household income on energy bills — disproportionately affects low-income households, elderly people on fixed incomes, and communities of color. Every point of artificial upward pressure on crude oil prices translates into higher utility bills, higher gas costs, and tighter household budgets for the most vulnerable Americans. The executives who made these decisions did so from offices in Houston office towers, insulated from the consequences by wealth. The families rationing their driving miles or setting their thermostats lower in October 2021 had no such protection.

What Now? Who’s Watching. What You Can Do.

The Defendants

• XCL Resources Holdings, LLC — 600 N. Shepherd Drive, Suite 390, Houston, TX 77007
• Verdun Oil Company II, LLC — 945 Bunker Hill Road, Suite 1300, Houston, TX 77024
• EP Energy LLC — 945 Bunker Hill Road, Suite 100, Houston, TX 77024

Regulatory Bodies With Jurisdiction

• Federal Trade Commission (FTC) — investigated the merger, obtained the consent agreement requiring divestiture to Crescent Energy
• U.S. Department of Justice Antitrust Division — filed the civil penalty suit on January 7, 2025
• Federal Trade Commission Bureau of Competition — primary HSR Act enforcement authority

What the DOJ Is Asking For

The DOJ complaint requests civil penalties for each of the 94 days of violation, a 10-year injunction barring XCL, Verdun, and EP from entering any agreement with the “same effect” as the violation, and costs. The maximum civil penalty under the HSR Act at the time relevant to this complaint was $43,792 per day of violation (roughly $28 per second, enough to cover an average American’s monthly grocery bill every 53 minutes of violation). With 94 days of violation, three defendants, the potential penalty ceiling is significant — though actual penalty amounts are set by the court based on the facts and equities of the case.

What You Can Do Right Now