Mark Druskoff, Contributing Editor

In March, EnCap Investments-backed XCL Resources petitioned the U.S. Federal Trade Commission (FTC) for approval of its acquisition of Altamont Energy. The petition was required under a prior agreement EnCap Energy Capital Fund XI struck with the FTC in 2022, which required the private equity group to sell off EP Energy’s Utah oil business.

“Without this divestiture, Salt Lake City refiners would likely have faced increased prices for Uinta Basin crude oil, whether from EnCap alone, or as part of a small group—and would likely try to pass on those costs to consumers,” said the FTC’s Bureau of Competition Director Holly Vedova.  

Terms of the agreement required EnCap and XCL to obtain prior approval before acquiring another producer of waxy crude with output of more than 2,000 bbl/d in the Utah counties of Duchesne, Uintah, Utah, Grand, Emery, Carbon and Wasatch.

Altamont’s position was built from assets acquired from the defunct Linn Energy in the Wasatch and Green River formations in 2018. After four initial vertical wells, Altamont drilled eight horizontal wells. Altamont hired Houlihan Lokey in August 2023 to begin a sales process that included reaching out to more than 300 different parties, according to the petition. XCL was the highest bidder and executed a purchase and sale agreement in early 2024. 

XCL Resources launched in 2018 with a commitment from EnCap. The company has assembled a position of 45,900 net acres in Duchesne and Uintah counties where it owns and operates 135 horizontal wells producing black and yellow waxy crude oil and natural gas, the petition stated. XCL has three active rigs and is drilling 70 new wells per year on average.

Refinery demand from the nearby Salt Lake area stands around 90,000 bbl/d, while Uinta Basin waxy crude production has reached 140,000 bbl/d. At issue is concern that consolidation in the basin might result in high prices and decreased supply for the Salt Lake area, but oversupply has obviated that issue, the petition states. 

In 2023, the basin saw 214 new horizontal wells drilled by a raft of operators beyond XCL Resources and Altamont, the petition showed. Other Uinta operators include Anschutz Corp., Berry Corp., Caerus Uinta, Crescent Energy (through its Javelin Energy Partners subsidiary), Finley Resources, KGH Operating, Middle Fork Energy Partners (formerly Koda Resources), Ovintiv, Scout Energy, Uinta Wax Operating and WEM Operating. 

EnCap is reportedly exploring a sale of XCL Resources. Jefferies has been retained to run a sales process, and the company could fetch more than $2.8 billion including debt.

Meanwhile, the FTC is accepting public comment on XCL’s pending application to purchase Altamont.

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