EP Energy is exploring a sale of oil-producing acreage in Utah it hopes will avert a challenge from a US antitrust regulator to its agreed $1.5 billion takeover by private equity firm EnCap Investments, reported Reuters.
The Federal Trade Commission (FTC) has privately informed EP Energy and EnCap that it would sue to block their deal if they went ahead with it, the sources said. The regulator is concerned that EnCap – which owns XCL Resources, another Utah oil producer – would become too dominant a player in Utah’s Uinta Basin, the sources added.
The FTC has rarely opposed oil and gas producer mergers, with the last challenge more than 20 years ago. It took the view that energy prices are driven by supply and demand worldwide rather than regional consolidation.
Its opposition to EP Energy’s sale marks a potential change in stance and comes amid growing pressure on President Joe Biden’s administration to respond to consumer angst over gasoline prices, which have soared 40% in the last year, US Labor Department figures show.
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