19090 Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Notices 

1. David Schornack and Denise 

Schornack, both of Perham, Minnesota; 

to retain voting shares of Cyrus 

Bancshares, Inc., Alexandria, 

Minnesota, and thereby indirectly retain 

voting shares of Hometown Community 

Bank, Cyrus, Minnesota. 

Board of Governors of the Federal Reserve 

System, March 29, 2022. 

Michele Taylor Fennell, 

Deputy Associate Secretary of the Board. 

[FR Doc. 2022–06913 Filed 3–31–22; 8:45 am] 

BILLING CODE P 

FEDERAL TRADE COMMISSION 

[File No. 211 0158/Docket No. C–4760] 

EnCap/EP Energy; Analysis of 

Agreement Containing Consent Orders 

To Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement; 

request for comment. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair methods 

of competition. The attached Analysis of 

Proposed Consent Orders to Aid Public 

Comment describes both the allegations 

in the complaint and the terms of the 

consent orders—embodied in the 

consent agreement—that would settle 

these allegations. 

DATES: Comments must be received on 

or before May 2, 2022. 

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: ‘‘EnCap/EP Energy; 

File No. 211 0158’’ on your comment 

and file your comment online at https:// 

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, Suite 

CC–5610 (Annex D), Washington, DC 

20580. 

FOR FURTHER INFORMATION CONTACT: 

Nina Thanawala (202–326–2824), 

Bureau of Competition, Federal Trade 

Commission, 400 7th Street SW, 

Washington, DC 20024. 

SUPPLEMENTARY INFORMATION: Pursuant 

to Section 6(f) of the Federal Trade 

Commission Act, 15 U.S.C. 46(f), and 

FTC Rule 2.34, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing a consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis of Agreement Containing 

Consent Orders to Aid Public Comment 

describes the terms of the consent 

agreement and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

website at this web address: https://

www.ftc.gov/news-events/commissionactions. 

You can file a comment online or on 

paper. For the Commission to consider 

your comment, we must receive it on or 

before May 2, 2022. Write ‘‘EnCap/EP 

Energy; File No. 211 0158’’ 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 https://

www.regulations.gov website. 

Due to protective actions in response 

to the COVID–19 pandemic and the 

agency’s heightened security screening, 

postal mail addressed to the 

Commission will be delayed. We 

strongly encourage you to submit your 

comments online through the https://

www.regulations.gov website. 

If you prefer to file your comment on 

paper, write ‘‘EnCap/EP Energy; File No. 

211 0158’’ 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, Suite 

CC–5610 (Annex D), Washington, DC 

20580. 

Because your comment will be placed 

on the publicly accessible website at 

https://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 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 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 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 https://

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 https://

www.ftc.gov to read this Notice and the 

news release describing this matter. The 

FTC Act and other laws 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 it 

receives on or before May 2, 2022. For 

information on the Commission’s 

privacy policy, including routine uses 

permitted by the Privacy Act, see 

https://www.ftc.gov/site-information/ 

privacy-policy. 

Analysis of Agreement Containing 

Consent Orders To Aid Public Comment 

I. Introduction 

The Federal Trade Commission 

(‘‘Commission’’) has accepted for public 

comment, subject to final approval, an 

Agreement Containing Consent Orders 

(‘‘Consent Agreement’’) from EnCap 

Investments L.P., EnCap Energy Capital 

Fund XI, L.P., Verdun Oil Company II 

LLC (‘‘Verdun’’), XCL Resources 

Holdings, LLC (‘‘XCL’’) (collectively, 

‘‘EnCap’’), EP Energy Corporation, and 

EP Energy LLC (collectively, ‘‘EP 

Energy’’) (together with EnCap, 

‘‘Respondents’’). The Consent 

Agreement is designed to remedy the 

anticompetitive effects that otherwise 

would result from EnCap’s acquisition 

of EP Energy’s crude oil production 

operations in the Uinta Basin in Utah. 


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Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Notices 19091 

Under the terms of the proposed 

Decision and Order (‘‘Order’’) contained 

in the Consent Agreement, Respondents 

have agreed to divest to Crescent Energy 

Company (‘‘Crescent’’) the entirety of EP 

Energy’s crude oil production 

operations in the Uinta Basin in Utah. 

Respondents must complete the transfer 

no later than 10 days after EnCap 

consummates its acquisition of EP 

Energy. The Commission has issued, 

and Respondents have agreed to comply 

with, an Order to Maintain Assets that 

requires Respondents to operate and 

maintain the divestiture assets in the 

normal course of business through the 

date the approved buyer acquires the 

divested assets. 

The Commission has placed the 

Consent Agreement on the public record 

for 30 days to solicit comments from 

interested persons. Comments received 

during this period will become part of 

the public record. After 30 days, the 

Commission will review the comments 

received and decide whether it should 

withdraw, modify, or make the 

proposed Order final. 

II. The Respondents 

Respondent EnCap Investments L.P. is 

a limited partnership organized and 

doing business under the laws of Texas 

and serves as the limited partner for 

various private equity funds. EnCap 

Energy Capital Fund XI, L.P. is a private 

equity fund headquartered in Texas and 

operating multiple portfolio companies 

involved in the exploration, production, 

transmission, marketing and sale of 

energy, particularly oil and gas. EnCap 

operates two portfolio companies that 

are implicated by this transaction: XCL, 

a producer of waxy crude oil and 

natural gas in the Uinta Basin 

headquartered in Houston, Texas, and 

Verdun, a company also headquartered 

in Houston, Texas. 

Respondent EP Energy Corporation is 

a corporation organized and doing 

business under the laws of Delaware. 

Respondent EP Energy LLC is a limited 

liability company organized, existing, 

and doing business under and by virtue 

of the laws of the State of Delaware, 

with its office and principal place of 

business located in Houston, Texas. EP 

Energy has production operations in the 

Uinta Basin in Utah and in the Eagle 

Ford Shale in Texas. 

III. The Transaction 

Pursuant to the Membership Interest 

Purchase Agreement dated July 26, 

2021, EnCap, through Verdun, has 

agreed to acquire EP Energy’s crude oil 

and natural gas production operations 

in the Uinta Basin in Utah and in the 

Eagle Ford Shale in Texas (the 

‘‘Transaction’’). 

The Commission’s Complaint alleges 

that the Transaction violated Section 7 

of the Clayton Act, as amended, 15 

U.S.C. 18, and that the Transaction 

agreement constitutes a violation of 

Section 5 of the Federal Trade 

Commission Act, as amended, 15 U.S.C. 

45, by substantially lessening 

competition for the development, 

production, and sale of Uinta Basin 

waxy crude to Salt Lake City area 

refiners. 

IV. The Development, Production, and 

Sale of Uinta Basin Waxy Crude to Salt 

Lake City Area Refiners 

The Commission alleges that the 

relevant product market in which to 

analyze the Transaction is no broader 

than the development, production, and 

sale of Uinta Basin waxy crude to Salt 

Lake City area refiners. Uinta Basin 

waxy crude is classified as yellow or 

black. Yellow wax has lower levels of 

sulfur and asphalt and, as a result, 

requires less processing to refine into 

petroleum products that meet 

environmental standards. A narrower 

market exists for the development, 

production, and sale of Uinta Basin 

yellow waxy crude to Salt Lake City 

area refiners. 

Uinta Basin waxy crude possesses 

distinct characteristics that make it a 

desirable crude oil from which to refine 

petroleum products. Uinta Basin waxy 

crude contains high amounts of paraffin 

and low levels of sulfur and other 

undesirable impurities that would 

otherwise require greater processing to 

remove from petroleum wax and 

transportation fuels. It is also a 

relatively ‘‘light’’ crude oil, requiring 

less processing than other crude oils to 

make valuable transportation fuels and 

other petroleum-based products. Uinta 

Basin waxy crude’s high wax content 

also makes it desirable for production of 

wax products, while its low percentage 

of aromatic hydrocarbons renders it 

useful for making lubricants. Unlike 

many other crudes, Uinta Basin waxy 

crude’s paraffin content makes it almost 

solid at ambient temperatures, requiring 

heat to liquify the resource for transport 

into or out of truck, rail, or storage. 

Salt Lake City area refiners have made 

significant investments in plant and 

equipment to optimize their refineries to 

run Uinta Basin yellow and black waxy 

crudes. Although other crudes are 

available to Salt Lake City area refiners, 

those crudes would not, in the event of 

a small but significant price increase in 

waxy crude, sufficiently constrain the 

price increase to the relevant customers. 

The relevant geographic market in 

which to analyze the Transaction is no 

broader than the Uinta Basin. Almost all 

sales of Uinta Basin waxy crude to the 

Salt Lake City area refineries occur in 

the Uinta Basin, with customers 

providing transportation to their 

locations. Alternatively, the relevant 

geographic market is the Salt Lake City 

area. Producers currently can, and do, 

charge higher net prices for Uinta Basin 

waxy crude sold to Salt Lake City area 

refineries than for sales to other 

customers. The Salt Lake City area 

refineries cannot evade price 

discrimination because producers sell 

Uinta Basin waxy crude to other 

customers on a delivered basis. High 

transportation costs would make it cost 

prohibitive for a Salt Lake City refiner 

to purchase Uinta Basin waxy crude 

delivered to refineries located outside 

the Salt Lake City area. 

The Transaction would substantially 

lessen competition in this market. Four 

producers—EP Energy, XCL, Ovintiv, 

and Uinta Wax/Finley Resources (Uinta 

Wax is a joint venture between Finley 

Resources and CH4 Energy Six)— 

account for over 80 percent of all Uinta 

Basin production. No other producer 

accounts for a significant amount of 

Uinta Basin development and 

production. 

The Transaction, if consummated, 

would eliminate substantial head-tohead competition between EnCap and 

EP Energy for the development, 

production, and sale of Uinta Basin 

waxy crude to targeted Salt Lake City 

area refiners. By dramatically increasing 

the size of EnCap’s Uinta Basin waxy 

crude business and taking the market 

from four significant players to three, 

the Transaction would increase the 

incentive and ability of EnCap to reduce 

supply to these refiners and increase 

prices. 

Producers recognize that 

consolidation with in-basin peers 

materially enhances their leverage with 

refiners in the Salt Lake City area. 

Historically, Uinta Basin producers have 

received higher realized prices when 

Uinta Basin waxy crude production falls 

short of demand from Salt Lake refiners. 

Post-closing, EnCap could increase 

prices for Salt Lake City area refiners by 

slowing development and production, 

and by reducing the quantity of waxy 

crude available to the Salt Lake City 

area refineries through strategic exports 

of waxy crude to Gulf Coast area 

refineries. 

The Transaction would also eliminate 

EP Energy’s head-to-head competition 

with EnCap and other large waxy crude 

producers and increase the risk of 

coordination. Today, EP Energy 


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19092 Federal Register / Vol. 87, No. 63 / Friday, April 1, 2022 / Notices 

1 ENC–FTC–200034640 (Jan. 17, 2021); see also 

EnCap 4(c)–4 (Jan. 15, 2021). 

2 EnCap 4(c)–8 at 63 (May 18, 2021); EnCap Resp. 

to VRL Req. 12 (Feb. 21, 2022). 

3 ENC–FTC–201680452, at ENC–FTC–201680453 

(Aug. 25, 2021). 

competes aggressively with other Uinta 

Basin waxy crude producers. PostTransaction, the smaller number of 

Uinta Basin waxy crude producers 

could more easily coordinate rail 

exports, production plans, and contract 

terms to increase waxy crude prices for 

Salt Lake City area refiners. 

XCL’s internal, high-level analysis 

and strategy documents acknowledged 

the likely competitive effects from the 

Transaction from the beginning of the 

process up to and including during the 

Commission’s investigation. During a 

January 15, 2021 meeting, an XCL Board 

member noted that a combination with 

EPE would create $35–75 million in 

marketing synergies and that it was a 

‘‘[d]efensive move with EP currently 

communicating 20+ wells per year to 

SLC refiners. Go from 14% of wax 

supply to 30–40%.’’ 1 A May 18, 2021 

XCL Technical Meeting presentation, 

attended by most of the XCL Board 

members, stated that the Transaction 

would result in ‘‘Increasing Scale in our 

Basin—taking out 1 of 4 major 

producers, 40%+ of Wax Market, 

Driver’s seat.’’ 2 An August 25, 2021 

memorandum to the Advisory Board of 

EnCap XI similarly emphasized the 

small number of significant players, 

stating that the ‘‘. . . the Uinta is . . . 

largely controlled by three operators.’’ 3

V. The Proposed Order and the Order 

To Maintain Assets 

The proposed Order and the Order to 

Maintain Assets would remedy the 

Transaction’s likely anticompetitive 

effects by requiring EnCap to divest the 

entirety of EP Energy business and 

assets in or relating to the state of Utah, 

including the business of oil and gas 

exploration, production, research, 

development, gathering, transportation, 

distribution, marketing, and sales in or 

from the Uinta Basin, to Crescent. 

Respondents must also divest additional 

assets if the Commission determines 

that additional assets are necessary to 

achieve the purpose of the proposed 

Order within the first year after the 

Order is issued. Crescent is an 

experienced operator in the 

development, production and sale of 

crude oil and natural gas, and will be a 

new entrant in the Uinta Basin. The 

Commission retains the right to appoint 

a Trustee to find another buyer of the 

divestiture assets if it determines 

Crescent is not an acceptable buyer. 

The proposed Order requires that the 

divestiture be completed no later than 

10 days after EnCap consummates the 

Transaction. The proposed Order and 

the Order to Maintain Assets further 

require EnCap to operate and maintain 

the divestiture assets in the ordinary 

course of business, including 

maintaining the economic viability, 

marketability, and competitiveness of 

the divestiture assets until Crescent 

completes its acquisition of the 

divestiture assets. 

The proposed Order contains 

additional provisions designed to 

ensure the effectiveness of the relief. For 

example, the proposed Order also 

requires the Respondents to grant 

Crescent a perpetual license to use any 

retained intellectual property, and to 

obtain all other consents or 

authorizations to consummate the sale 

of the divestiture assets from all 

necessary third parties or governmental 

entities. Respondents are required to 

provide Crescent with transitional 

assistance for up to 180 days following 

the divestiture of the assets and must 

cooperate with and assist Crescent to 

evaluate and offer employment to 

employees involved in the business and 

assets subject to divestiture. 

Respondents have also agreed not to 

enforce any employee noncompete or 

non-solicitation agreements against 

Crescent. Finally, the proposed Order 

also provides for the appointment of an 

independent Monitor to oversee the 

Respondents’ compliance with the 

requirements of the Order. 

In addition to requiring the asset 

divestitures, the proposed Order 

requires EnCap to obtain prior approval 

from the Commission before making 

certain future acquisitions in the Utah 

counties that encompass the Uinta Basin 

(Duchesne, Uintah, Utah, Grand, Emery, 

Carbon, and Wasatch) over the next ten 

years. 

The proposed Order also requires 

Crescent to obtain prior approval from 

the Commission before transferring all 

or substantially all of the divested assets 

to any buyer for the first three years 

after Crescent acquires the divestiture 

assets. For the seven years following the 

initial three-year period, the proposed 

Order requires Crescent to obtain prior 

approval from the Commission before 

transferring all or substantially all of the 

divested assets to a buyer engaged in the 

development, production, or sale of 

waxy crude in the Uinta Basin. 

The purpose of this analysis is to 

facilitate public comment on the 

Consent Agreement, and the 

Commission does not intend this 

analysis to constitute an official 

interpretation of the proposed Order or 

to modify its terms in any way. 

By direction of the Commission. 

April J. Tabor, 

Secretary. 

[FR Doc. 2022–06945 Filed 3–31–22; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Disease Control and 

Prevention 

[60Day–22–22DI; Docket No. CDC–2022– 

0035] 

Proposed Data Collection Submitted 

for Public Comment and 

Recommendations 

AGENCY: Centers for Disease Control and 

Prevention (CDC), Department of Health 

and Human Services (HHS). 

ACTION: Notice with comment period. 

SUMMARY: The Centers for Disease 

Control and Prevention (CDC), located 

within the Department of Health and 

Human Services (HHS), as part of its 

continuing effort to reduce public 

burden and maximize the utility of 

government information, invites the 

general public and other federal 

agencies the opportunity to comment on 

a proposed information collection, as 

required by the Paperwork Reduction 

Act of 1995. This notice invites 

comment on a proposed information 

collection project titled Noise Exposures 

and Hearing Loss in the Oil and Gas 

Extraction Industry. This information 

collection is designed to evaluate oil 

and gas extraction workers’ noise and 

chemical exposures and hearing. 

DATES: CDC must receive written 

comments on or before May 31, 2022. 

ADDRESSES: You may submit comments, 

identified by Docket No. CDC–2022– 

0035, by either of the following 

methods: 

• Federal eRulemaking Portal: 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Jeffrey M. Zirger, Information 

Collection Review Office, Centers for 

Disease Control and Prevention, 1600 

Clifton Road NE, MS H21–8, Atlanta, 

Georgia 30329. 

Instructions: All submissions received 

must include the agency name and 

Docket Number. CDC will post, without 

change, all relevant comments to 

www.regulations.gov. 

Please note: Submit all comments 

through the Federal eRulemaking portal 

(www.regulations.gov) or by U.S. mail to 

the address listed above. 


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