[Federal Register Volume 89, Number 52 (Friday, March 15, 2024)]
[Notices]
[Pages 18939-18944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05297]


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FEDERAL TRADE COMMISSION

[Docket No. C-4760]


Petition for Prior Approval of XCL Resources Holdings, LLC's 
Proposed Acquisition of Altamont Energy, LLC

AGENCY: Federal Trade Commission.

ACTION: Announcement of Petition; Request for Comment.

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SUMMARY: XCL Resources Holdings, LLC (``XCL'') has petitioned the 
Federal Trade Commission (``FTC'' or ``Commission'') for approval of 
its acquisition of Altamont Energy, LLC (``Altamont''), an oil and gas 
operator in the Uinta Basin, pursuant to the agreement reached with the 
FTC in the EnCap/EP Energy matter.

DATES: Comments must be received on or before April 15, 2024.

ADDRESSES: Interested parties may file comments online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Please write: ``XCL/Altamont 
Petition for Prior Approval; Docket No. C-4760'' on your comment, and 
file your comment online at www.regulations.gov by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, please mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Mail Stop H-144 (Annex P), Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Kenneth Libby (202-326-2694), Bureau 
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW, 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to FTC Rule 2.41(f), 16 CFR 
2.41(f), notice is hereby given that the public [redacted] version of 
the above-captioned petition has been filed with the Secretary of the 
Commission and is being placed on the public record for a period of 
thirty (30) days. After the period for public comments has expired, the 
Commission shall determine whether to approve the petition. In making 
its determination, the Commission will consider, among other 
information, all timely and responsive comments submitted in connection 
with this document.
    The text of the public [redacted] version of the petition is 
provided below. An electronic copy of the text of the public [redacted] 
version of the petition can be obtained from the FTC website at this 
web address: https://www.ftc.gov/legal-library/browse/cases-proceedings/2110158-encapep-energy-matter.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 15, 2024. 
Write ``XCL/Altamont Petition for Prior Approval; Docket No. C-4760'' 
on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including, to the 
extent practicable, on the www.regulations.gov website.
    Because of the agency's heightened security screening, postal mail 
addressed to the Commission will be subject to delay. We strongly 
encourage you to submit your comments online through the 
www.regulations.gov website.
    If you prefer to file your comment on paper, write ``XCL/Altamont 
Petition for Prior Approval; Docket No. C-4760'' on your comment and on 
the envelope, and mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, 
Mail Stop H-144 (Annex P), Washington, DC 20580.
    Because your comment will be placed on the publicly accessible 
website at www.regulations.gov, you are solely responsible for making 
sure your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure your comment does not include any 
sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on www.regulations.gov--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from that website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at http://www.ftc.gov to read this document 
and the news release describing this matter. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding, as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before April 15, 2024. For information on the 
Commission's privacy policy, including routine uses permitted by the

[[Page 18940]]

Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

April J. Tabor,
Secretary.

Text of Public [Redacted] Version of Petition for Prior Approval of XCL 
Resources Holdings, LLC's Proposed Acquisition of Altamont Energy, LLC

I. Executive Summary

    XCL Resources Holdings, LLC (``XCL'') plans to acquire Altamont 
Energy, LLC (``Altamont'' and, together with XCL, the ``Parties''), an 
oil and gas operator in the Uinta Basin. XCL seeks prior approval from 
the Federal Trade Commission (the ``FTC'' or the ``Commission'') to 
complete this proposed transaction pursuant to the agreement reached 
with the FTC in the EnCap/EP Energy matter.
    The Proposed Transaction will not increase the capacity or share of 
XCL in any relevant market in any appreciable way; nor will it alter in 
any negative way the competitive landscape for supply of waxy crude oil 
to Salt Lake City refiners (or to any other refiner). It will provide 
Altamont, a small operator [REDACTED], the access to capital it needs. 
The transaction will allow the combined entity to increase production, 
execute drilling of new wells at a lower cost, and allow for other 
cost-lowering enhancements, ultimately offering more production at 
competitive prices downstream to buyers in and out of Salt Lake City.

II. Introduction

A. Background on the Order

    Pursuant to Section 2.41(f) of the FTC Rules of Practice and 
Procedure \1\ and Section X(A) of the September 13, 2022, final 
decision and order In the Matter of EnCap Investments L.P., a limited 
partnership, EnCap Energy Capital Fund XI, L.P., a limited partnership, 
Verdun Oil Company II LLC, a limited liability company, XCL Resources 
Holdings, LLC, a limited liability company, EP Energy Corporation, a 
corporation and EP Energy LLC, a limited liability company (the 
``Order''),\2\ XCL hereby petitions the Commission to approve its 
proposed acquisition of Altamont (the ``Proposed Transaction'').
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    \1\ 16 CFR 2.41(f).
    \2\ In the Matter of EnCap Investments L.P., a limited 
partnership, EnCap Energy Capital Fund XI, L.P., a limited 
partnership, Verdun Oil Company II LLC, a limited liability company, 
XCL Resources Holdings, LLC, a limited liability company, EP Energy 
Corporation, a corporation and EP Energy LLC, a limited liability 
company, Decision and Order, Docket No. C-4760, (F.T.C. Sept. 13, 
2022), https://www.ftc.gov/system/files/ftc_gov/pdf/C4760EnCapEPEnergyOrder.pdf (hereinafter, ``Order''), at Sec.  X(A).
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    As part of the Order, the Commission required that EnCap 
Investments L.P., EnCap Energy Capital Fund XI, L.P., Verdun Oil 
Company II LLC and XCL (collectively, ``EnCap'') obtain prior approval 
before acquiring any other producer of waxy crude oil with an output of 
over 2,000 barrels per day in any of the following Utah counties: 
Duchesne, Uintah, Utah, Grand, Emery, Carbon and Wasatch.\3\
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    \3\ Order Sec.  X(A).
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B. The Proposed Transaction

    On August 24, 2023, XCL signed a non-disclosure agreement with 
Altamont in contemplation of the Proposed Transaction. XCL subsequently 
began due diligence and negotiation of initial terms. On October 31, 
2023, XCL and Altamont signed a deal term sheet and entered into an 
exclusivity agreement. XCL notified the FTC of the Proposed Transaction 
on November 5, 2023. On January 16, 2024, XCL and Altamont executed a 
Purchase and Sale Agreement in contemplation of the Proposed 
Transaction, which [REDACTED] makes closing conditional on obtaining 
approval from the Commission.\4\
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    \4\ An executed copy of the Purchase and Sale Agreement between 
Altamont Energy LLC and Altamont Minerals LLC, collectively, as 
Seller and XCL AssetCo, LLC as Buyer, has been provided to the 
Commission in connection with this application.
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    Given that Altamont is a waxy crude oil producer in the Uinta Basin 
with an output of approximately [REDACTED] barrels per day, the 
Proposed Transaction is subject to the requirement for prior approval 
under the Order; and XCL hereby seeks such approval prior to closing 
the Proposed Transaction. As outlined infra in Section IV, the Proposed 
Transaction is procompetitive and does not raise any competitive 
concerns.

III. The Parties and the Transaction Rationale

A. The Parties

    XCL is a privately held, Houston-based independent oil and gas 
company focused on the acquisition and development of liquids-rich 
basins in the United States. XCL owns and operates approximately 135 
horizontal wells across approximately 45,900 net acres in Duchesne and 
Uintah Counties, Utah, where it extracts black and yellow waxy crude 
oil and natural gas. XCL's low-cost, efficient operations strategy 
focuses on the development of horizontal wells and pioneering new 
production methods in the Uinta Basin. The company has three active 
rigs and is drilling 70 new wells per year on average in the Uinta 
Basin. A majority of XCL's production is exported to refiners on the 
U.S. Gulf Coast, due to supply saturation in Salt Lake City. See infra, 
Section IV(A).
    XCL became a subsidiary of EnCap Investments L.P. (``EnCap 
Investments'') in 2018, and EnCap Investments has provided the majority 
of the financial backing for XCL's projects and investments to date. 
EnCap Investments is a private equity firm specializing in investments 
in the energy industry, particularly oil and gas.
    Altamont is a small operator with no active rigs and no material 
growth plans it can achieve without access to capital [REDACTED]. 
Altamont produces [REDACTED] barrels of waxy crude oil per day on 
average, and nearly all of that is purchased by Salt Lake City 
refiners. [REDACTED].
    In 2018, Altamont acquired oil and gas assets from LINN Energy, 
Inc., an oil and gas exploration and production company. Altamont 
focused its operations in and around the Wasatch and Green River 
stacked formations in the Uinta Basin. Altamont completed drilling 
operations for four vertical wells in 2018 and 2019.
    In 2021, Altamont [REDACTED] to drill eight horizontal wells. Those 
wells were begun in 2022 completed in 2023, with five wells beginning 
production in March and three wells beginning production in June, 
[REDACTED].\5\
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    \5\ [REDACTED].
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    Altamont hired Houlihan Lokey as its investment banker and began 
marketing itself for a sale in August 2023. Altamont and its bankers 
reached out to over 300 parties in search of potential bidders. 
[REDACTED].\6\ As the highest bidder, XCL was selected as buyer; and 
discussions kicked off shortly thereafter for the Potential 
Transaction. See supra, Section II(B).
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    \6\ [REDACTED].
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B. The Transaction Rationale

    With the acquisition of Altamont, XCL expects to realize 
substantial economic efficiencies in the development and production of 
oil in the Uinta Basin. XCL projects that the Proposed Transaction will 
not have any significant impact on its own growth or investment plans, 
but it will enable XCL to apply capital and its superior operating 
capabilities to Altamont properties, further XCL's cost-reduction 
objectives, and ultimately bring more product at competitive prices to 
its customers.

[[Page 18941]]

    As the owner of acreage adjacent to Altamont's and an efficient, 
low-cost operator, XCL is uniquely positioned to generate numerous 
efficiencies from combining the contiguous acreage. For example, XCL 
will be able to lower operating costs by combining its water and gas 
infrastructure with Altamont's. Additionally, XCL will be able to 
optimize development plans to limit downtime in drilling and completion 
operations on the contiguous acreage. Reduced operating costs will 
enhance economic viability (i.e., ability to maintain production and 
investment in lower commodity price environments) and increase 
competitive downstream pricing without adding significantly to XCL's 
share of the Uinta Basin production, output to the Sale Lake City 
refiners or the like. See infra, Section IV. [REDACTED].\7\
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    \7\ Altamont acreage shapefiles provided to XCL in the course of 
diligence. XCL acreage shapefiles created by XCL internally in the 
ordinary course.
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    For Altamont specifically, the Proposed Transaction will provide an 
opportunity to generate value for their assets [REDACTED]. XCL plans to 
change this with the goal of tripling Altamont's production. 
[REDACTED].

IV. Competitive Analysis of the Transaction

A. Changes in the Market Structure

    Since the FTC investigated the EPE Transaction, the competitive 
landscape in the Uinta Basin, including its supply into the Salt Lake 
City refiners, has changed significantly.\8\
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    \8\ Please note that, for the purposes of this submission only, 
XCL adopts the view of the market set forth by the Commission in the 
EnCap/EP Energy matter. See In the Matter of EnCap Investments L.P., 
a limited partnership, EnCap Energy Capital Fund XI, L.P., a limited 
partnership, Verdun Oil Company II LLC, a limited liability company, 
XCL Resources Holdings, LLC, a limited liability company, EP Energy 
Corporation, a corporation and EP Energy LLC, a limited liability 
company, Docket No. C-4760 (F.T.C. Mar. 25, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/2110158C4760EnCapEPEComplaint.pdf (hereinafter, ``Complaint'') ] 15.
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    Critically for purposes of the FTC's concern in 2021, the increase 
in waxy crude oil production in the Uinta Basin has saturated supply to 
the Salt Lake City refiners. Current production levels dramatically 
exceed the capacity of the refiners, and Uinta Basin producers are 
selling a growing portion (in XCL's case, a majority) of their output 
outside the Salt Lake City area (primarily to the U.S. Gulf Coast). The 
Salt Lake City's refiners' demand for waxy crude oil remains capped at 
approximately 90,000 barrels per day,\9\ while Uinta Basin waxy crude 
oil production has reached 140,000 barrels per day and is continuing to 
grow.\10\ In addition, Salt Lake City refiners also source other types 
of crude from outside of the Uinta Basin. Moreover, three different 
owners of Salt Lake City refineries also source Uinta waxy crude for 
their other refineries outside of Utah. Both in Salt Lake City and at 
refineries on the Gulf Coast, waxy crude competes with various other 
crude grades as refineries optimize their crude feedstocks to maximize 
profits by producing the combination of products dictated by the 
market.\11\
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    \9\ Based on Utah Geological Survey data for 2022, available at 
https://geology.utah.gov/docs/statistics/petroleum3.0/pdf/T3.13a.pdf. The Complaint estimated the capacity of the Salt Lake 
City refineries at 80,000 barrels per day. See Complaint ] 21.
    \10\ Refinery Demand Data extracted by XCL from Utah Geological 
Survey. Production Data supplied to XCL by Utah Division of Oil Gas 
and Mining.
    \11\ Based on U.S. Geological Survey, Table 3.13a ``Utah 
Refinery Receipts of Crude Oil by St.ate of Origin, 1980-2022'', 
available at https://geology.utah.gov/energy-minerals/info/energy-mineral-statistics/#toggle-id-3.
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    In the Complaint, the Commission expressed concern that increased 
concentration in the Uinta Basin would result in higher prices and 
decreased supply to the Salt Lake City refiners.\12\ But the supply 
today from the Uinta Basin well exceeds the demand for waxy crude oil 
from the Salt Lake refiners. This puts the Salt Lake City refiners in 
the position of driving prices, rather than the Uinta Basin oil 
producers doing so. Because the Uinta Basin oil producers need to pay 
higher transportation and other costs to access customers other than 
the Salt Lake City refiners, the refiners are able to demand low 
prices.
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    \12\ Complaint ] 24.
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    The Salt Lake City refiners also charge high prices for their 
finished product--higher than in most of the United States--and realize 
the highest profits in the nation as compared to refiners in other 
locations. Finished product prices in Salt Lake City are independent of 
the sales price of waxy crude oil.\13\
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    \13\ Data obtained from Utah Office of Energy Development 2022 
Utah Gasoline Prices Report, https://energy.utah.gov/wp-content/uploads/Utah-Gasoline-Prices.pdf.
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    As described above, the production of waxy crude oil in the Uinta 
Basin has grown (well beyond the demand of Salt Lake City refiners) and 
continues to grow, creating opportunities for entry and growth. In the 
last 24 months, at least four new oil producers, Scout Energy Partners, 
Wasatch Energy Management Operating (``WEM Operating''),\14\ Anschutz 
Corporation and Vaquero Energy have entered the Uinta Basin, initiated 
drilling operations and have wells that are producing. Additionally, 
several formerly dormant operators have resumed drilling activities, 
including Berry Corporation\15\ Caerus Uinta, and KGH Operating. 
Ovintiv, Inc., Uinta Wax Operating and Crescent Energy Company (the 
company that ultimately acquired EPE) remain large producers, while 
other competitors, including Middle Fork Energy Partners \16\ as well 
as the new entrants mentioned above, have also built a significant 
presence, as measured by crude production.
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    \14\ [REDACTED]. WEM Operating began drilling in the Uinta Basin 
as an independent operator in 2023 and are not yet listed on the 
UDOGM website as an active producer yet (expected to be listed in 
2024).
    \15\ Primarily drilling vertical wells (so not included in the 
chart below).
    \16\ Listed in the chart below as Koda Resources.
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    The below chart shows the number of new horizontal wells that have 
been drilled by year since 2020 per producer, with a notable increase 
for most producers in 2023.

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                    Producer                           2020            2021            2022            2023
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Altamont Energy.................................               0               0               8               0
Anschutz Corp...................................               0               0               0               2
Crescent Energy.................................               9              41              30              24
Finley Resources................................               2               0               0               0
KGH Operating Co................................               0               0               1               1
Koda Resources..................................               0               0               0               9
Ovintiv.........................................               3              26              14              54
Scout Energy....................................               0               0               0              20
Uinta Wax.......................................              10              16              23              37
WEM Operating...................................               0               0               0               6
XCL Resources...................................               4              48              70              61
                                                 ---------------------------------------------------------------

[[Page 18942]]

 
    Total.......................................              28             131             146             214
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Source: Enverus Data [REDACTED].

    The emergence of at least four new entrants in the last 24 months, 
combined with formerly small producers increasing their shares, 
indicates that competition is robust in the region.

B. Size and Positioning of the Target

    As outlined supra in Section II(A)(2), Altamont is a small producer 
with limited capacity and output. Altamont's limited acreage is 
contiguous to XCL's, and the Parties' infrastructure is complementary, 
allowing XCL to optimize the combined entity's processes and lower 
costs. While XCL expects to realize significant cost savings from the 
Potential Transaction, the increase to XCL's production and share of 
the Uinta Basin will be modest. See supra, Section IV(A). XCL expects 
that the addition of Altamont's current production will only increase 
XCL's total production by 9% and market share of waxy crude oil supply 
to Salt Lake City by 4%, and not materially affect its development or 
investment plans.
    The Parties also expect the Proposed Transaction to have a limited 
effect, if any, on the supply of waxy crude oil to the Salt Lake City 
refiners. As outlined supra in Section IV(A), the production of waxy 
crude oil in the Uinta Basin well exceeds the demand from the Salt Lake 
City refiners. Although XCL's waxy crude oil production has quadrupled 
since 2022, its supply to Salt Lake City refiners remains unchanged, at 
approximately [REDACTED] barrels per day. The Salt Lake City refiners 
have indicated to XCL that they do not intend to purchase any more oil 
from XCL, and XCL does not expect to increase its sales to them in any 
significant measure, even with the acquisition of Altamont. [REDACTED] 
the incremental output from Altamont is only 4% of the waxy crude oil 
sold to Salt Lake City refiners.
    XCL estimates that the HHI index in the market for the supply of 
waxy crude oil to Salt Lake City refiners is currently 1,549 (pre-
Proposed Transaction) and would increase to 1,647 (post-Proposed 
Transaction), for an HHI delta of 98 points.\17\ The chart below shows 
the pre and post-Proposed Transaction market shares and corresponding 
HHI components for the 12 top producers for supply of waxy crude to 
Salt Lake City refiners.\18\
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    \17\ Calculations based on latest available Utah Division of 
Oil, Gas and Mining (UDOGM) data as of January 2024 (July 2023), 
using production data for a 12-month period (August 2022-July 2023). 
Calculations use XCL actual sales to SLC and UDOGM production data 
for other Uinta Basin producers. Estimates assume 100% of production 
in the Uinta Basin is supplied to Salt Lake City for most producers, 
except for Ovintiv and Uinta Wax, which XCL is aware also supply a 
portion (which, for the purposes of this estimate XCL has assumed to 
be 10,000 barrels per day) to the Gulf Coast. XCL is not aware of 
Uinta Basin producers other than itself, Ovintiv, and Uinta Wax that 
supply outside of Salt Lake City in any significant manner. SLC 
demand for waxy crude (for total size of market) obtained from 
UDOGM. [REDACTED].
    \18\ Note the remaining (smaller) producers have a market share 
and HHI component that rounds to 0 and so have not been displayed. 
[REDACTED].

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                                  Share of waxy crude                     Share of waxy crude    HHI component
            Producer              supply to SLC (pre-    HHI component    supply to SLC (post-       (post-
                                      transaction)     (pre-transaction)      transaction)        transaction)
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XCL AssetCo, LLC................  [REDACTED].........                311  [REDACTED].........                475
Javelin Energy Partners           [REDACTED].........                654  [REDACTED].........                654
 Management, LLC.
Ovintiv USA, Inc................  [REDACTED].........                189  [REDACTED].........                189
Uinta Wax Operating, LLC........  [REDACTED].........                178  [REDACTED].........                178
FINLEY RESOURCES, INC...........  [REDACTED].........                 80  [REDACTED].........                 80
Scout Energy Management, LLC....  [REDACTED].........                 29  [REDACTED].........                 29
Altamont Energy Operating LLC...  [REDACTED].........                 17  [REDACTED].........                N/A
Berry Petroleum Company LLC.....  [REDACTED].........                 16  [REDACTED].........                 16
MIDDLE FORK ENERGY UINTA, LLC...  [REDACTED].........                  9  [REDACTED].........                  9
Vaquero Uinta, LLC..............  [REDACTED].........                  2  [REDACTED].........                  2
Greylock Production, LLC........  [REDACTED].........                  1  [REDACTED].........                  1
Caerus Uinta, LLC...............  [REDACTED].........                  1  [REDACTED].........                  0
                                                      ----------------------------------------------------------
    Total \19\..................  100%...............              1,549  100%...............              1,647
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    Neither the starting nor ending HHI figures indicate a highly 
concentrated market and the delta from the transaction is not a 
significant increase under the 2023 Merger Guidelines; instead, the 
delta reflects only a marginal increase in concentration. 
[REDACTED].\20\ Additionally, the HHI calculations do not take into 
account the ample oversupply of waxy crude oil available to Salt Lake 
City refiners. The estimated HHIs also only include waxy crude oil sold 
to Salt Lake City (90,000 barrels per day) and not all crude oil sold 
to Salt Lake City (200,000 barrels per day).
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    \19\ Note that the percentages and HHI numbers are rounded and 
<1% is accounted for by the small producers not listed.
    \20\ A typical horizontal well in Utah can make anywhere between 
800-2,000 barrels per day in its first several months of production. 
However, by month 12, this typically will fall to under 500 barrels 
per day, and typically will fall below 300 barrels per day by month. 
See Appendix A (showing average daily production for Uinta Basin 
horizontal wells with first production since 2019). [REDACTED].
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C. Expected Competitive Effects

    The Proposed Transaction will have no negative competitive effect 
on any relevant market. Since the Commission issued the Order, the 
competitive landscape has shifted in favor of Salt Lake City refiners, 
due to the increase in local output from existing suppliers (XCL and 
others) and the entry of new waxy crude oil producers; while the 
emergence of these producers shows that barriers to entry have 
weakened. Given the ample choice Salt Lake City refiners have, the 
small increase in capacity and output XCL would receive from the 
Altamont assets would have

[[Page 18943]]

little effect.\21\ Additionally, both the size of the target and the 
value of the Proposed Transaction are a small fraction of the size of 
the EPE Transaction that resulted in the Order.
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    \21\ As noted above, for the purposes of this submission, XCL 
has adopted the Complaint's view of the market. However, XCL 
believes that market activity and competitive dynamics have 
demonstrated that waxy crude is not its own product market. It is a 
crude grade that is fungible with and competes with various other 
crude grades as refineries optimize their feedstock to align with 
what the market dictates. Waxy crude has been run at many refineries 
outside of Salt Lake City and in the process, displaced alternative 
crude oils at those destinations. When analyzed in this broader 
market lens, the transaction has negligible impacts on any refining 
markets.
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    The Potential Transaction will, however, result in pro-competitive 
effects, allowing XCL to lower costs, grow production, and optimize its 
processes to deliver high-quality, competitively priced products to the 
downstream markets in Salt Lake City, the Gulf Coast, and elsewhere. 
XCL has demonstrated its desire and ability to significantly grow 
production on its existing position for the benefit of customers (and 
consumers) in all regions, and it is uniquely positioned to employ the 
same strategy on Altamont.

V. Request for Confidential Treatment

    This petition, including its related documents, contains certain 
confidential and competitively sensitive business information relating 
to XCL, Altamont and the Proposed Transaction. Disclosure of such 
confidential information may prejudice XCL and Altamont, and cause harm 
to the ongoing competitiveness of both companies. Pursuant to Sections 
2.41(f)(4) and 4.9(c) of the FTC's Rules of Practice and Procedure,\22\ 
XCL has redacted such information from the public version of this 
application, and requests confidential treatment for such redacted 
information under Section 4.10(a)(2) of the FTC's Rules of Practice and 
Procedure \23\ and Sections 552(b)(4) and (b)(7) of the Freedom of 
Information Act.\24\ In the event that a determination is made that any 
material marked as confidential is not subject to confidential 
treatment, XCL requests that the FTC provide prompt notice of that 
determination and adequate opportunity to appeal such a decision.
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    \22\ 16 CFR 2.41(f)(4), 4.9(c).
    \23\ 16 CFR 4.10(a)(2).
    \24\ 5 U.S.C. 552(b)(4), 552(b)(7).
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Appendix A

Average Daily Production 2019-2023 for Uinta Basin Horizontal Wells 
With First Production in 2019 25
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    \25\ A minimum of 10 wells is required to produce a monthly 
average reducing noise in outer years. Data sourced from Enverus. 
[REDACTED].
[GRAPHIC] [TIFF OMITTED] TN15MR24.025


[[Page 18944]]


    A full color version of this chart is included as a Supporting 
Document in the docket for this matter on www.regulations.gov.

[FR Doc. 2024-05297 Filed 3-14-24; 8:45 am]
BILLING CODE 6750-01-P