Dwight’s EnergyData, Inc. (Dwight’s), the largest supplier of U.S. gas and oil production data, has agreed to license its data to settle Federal Trade Commission charges that its merger with a major competitor could create a monopoly for production and well history data, in violation of federal antitrust laws. Dwight’s will merge with Petroleum Information Corporation (PI), its principal competitor in the collection and sale of well history and production data to the oil and gas industry.
Dwight’s is headquartered in Richardson, Texas. PI is based in Houston, Texas. They have been competitors in compiling and selling petroleum data, including geological information and past performance data. The data are used by geologists and petroleum engineers to find additional oil and gas reserves and produce from them efficiently.
According to the complaint detailing the charges, Dwight’s and PI are the only firms that have extensive multi-state collections of historical information on oil and gas properties and are the only competitive providers of well history and production data for many areas of the country. Firms lacking similar databases cannot compete effectively. Assembling similar databases would be difficult, expensive and time consuming, the complaint alleges; thus, entry by a new competitor in these markets is unlikely. Eliminating direct competition between Dwight’s and PI would likely result in higher prices and reduced services to customers of well history and production data, according to the complaint. Absent relief, the merger is also likely to lead to reduced service for customers and a decline in technological innovation as competition to enhance products is lost.
To settle the FTC charges, Dwight’s will license a set of complete well history and production data to a Commission-approved buyer, which will be an independent competitor. In addition, Tobin Data Graphics, L.L.C., a Dwight’s affiliate, will provide the licensee the same rights to distribute its well location data as it provides to Dwight’s/PI.
HPDI, the current licensee candidate, is a Texas corporation that provides production data to customers but lacks historical information that predates 1974. If after a public comment period HPDI is approved as the licensee, the license provided under the consent agreement will supply HPDI with a complete set of Dwight’s data, including this historical data. If HPDI is not approved as the licensee, a trustee will be appointed to find a licensee acceptable to the Commission. In addition, Dwight’s and PI will be required to provide prior notification to the Commission before either firm acquires any interest in any provider of well history or production data.
The Commission vote to accept the proposed consent agreement was 5-0. It will be published in the Federal Register shortly and will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint, proposed consent agreement and an analysis of the agreement to assist the public in commenting are available on the Internet at the FTC’s World Wide Web Site at: http://www.ftc.gov or by calling 202-326-3627. FTC documents are also available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC’s NewsPhone recording at 202-326-2710.
(FTC File No. 951 0130)