Notice2025-13705
Petition of Respondents Quantum Energy Partners VI, LP, Q-TH Appalachia (VI) Investments Partners, LLC, and QEP Partners, LP To Reopen and Set Aside Order
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 22, 2025
Issuing agencies
Federal Trade Commission
Abstract
Quantum Energy Partners VI, LP, Q-TH Appalachia (VI) Investments Partners, LLC, and QEP Partners, LP (collectively "Quantum") have asked the Federal Trade Commission ("FTC" or "Commission") to reopen and set aside the Commission's Decision and Order entered on October 10, 2023, concerning EQT's purchase of certain assets of Quantum. Publication of Quantum's petition is not intended to affect its legal status or its final disposition.
Full Text
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<title>Federal Register, Volume 90 Issue 138 (Tuesday, July 22, 2025)</title>
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[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Notices]
[Pages 34501-34505]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13705]
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FEDERAL TRADE COMMISSION
[Docket No. C-4799]
Petition of Respondents Quantum Energy Partners VI, LP, Q-TH
Appalachia (VI) Investments Partners, LLC, and QEP Partners, LP To
Reopen and Set Aside Order
AGENCY: Federal Trade Commission.
ACTION: Announcement of petition; request for comment.
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SUMMARY: Quantum Energy Partners VI, LP, Q-TH Appalachia (VI)
Investments Partners, LLC, and QEP Partners, LP (collectively
``Quantum'') have asked the Federal Trade Commission (``FTC'' or
``Commission'') to reopen and set aside the Commission's Decision and
Order entered on October 10, 2023, concerning EQT's purchase of certain
assets of Quantum. Publication of Quantum's petition is not intended to
affect its legal status or its final disposition.
DATES: Comments must be received on or before August 21, 2025.
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: ``EQT/Quantum
Petition to Reopen; Docket No. C-4799'' on your comment and file your
comment online at <a href="http://www.regulations.gov">www.regulations.gov</a> 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 A), Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT: Maribeth Petrizzi (202-326-2564),
Bureau of Competition, Federal Trade Commission, 600 Pennsylvania
Avenue NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(g) of the Federal
Trade Commission Act, 15 U.S.C. 46(g), and FTC Rule 2.51, 16 CFR 2.51,
notice is hereby given that 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 30 days. After the period for public comments
has expired and no later than 120 days after the date of the filing of
the request, the Commission shall determine whether to reopen the
proceeding and modify the Order as requested. In making its
determination, the Commission will consider, among other information,
all timely and responsive comments submitted in connection with this
notification.
The text of the petition is provided below. An electronic copy of
the filed petition and any public exhibits attached to it can be
obtained from the FTC website at this URL: <a href="https://www.ftc.gov/legal-library/browse/cases-proceedings/2210212-qep-partnerseqt-corporation-matter">https://www.ftc.gov/legal-library/browse/cases-proceedings/2210212-qep-partnerseqt-corporation-matter</a>.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before August 21, 2025.
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
<a href="http://www.regulations.gov">www.regulations.gov</a> website. If you prefer to file your comment on
paper, write ``EQT/Quantum Petition to Reopen; Docket No. C-4799'' 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 A), Washington, DC
20580. If possible, submit your paper comment to the Commission by
overnight service.
Because your comment will be placed on the publicly accessible
website at <a href="http://www.regulations.gov">www.regulations.gov</a>, you are solely responsible for making
sure that 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 <a href="http://www.regulations.gov">www.regulations.gov</a>--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 <a href="https://www.ftc.gov">https://www.ftc.gov</a> 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 August 21, 2025. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see <a href="https://www.ftc.gov/site-information/privacy-policy">https://www.ftc.gov/site-information/privacy-policy</a>.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition by Quantum Energy Partners VI, LP, Q-TH Appalachia
(VI) Investments Partners, LLC, and QEP Partners, LP
Under Section 5(b) of the Federal Trade Commission Act, 14 U.S.C.
45(b), and Section 2.51 of the Federal Trade Commission Rules of
Practice, 16 CFR 2.51, Respondents Quantum Energy Partners VI, LP, Q-TH
Appalachia (VI) Investments Partners, LLC, and QEP
[[Page 34502]]
Partners, LP (``Quantum''),\1\ respectfully request that the Commission
reopen and set aside the Commission's Decision and Order entered on
October 10, 2023, in Docket No. C-4799 (the ``Order'').
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\1\ Quantum Capital Group, which was called Quantum Energy
Partners at the time the Commission issued the Order, is a Texas-
based private equity firm focused on the energy industry. The
Quantum entities named as Respondents in the Order may not be the
same Quantum entities relevant to this Petition's discussion of
facts that underly the Order, including obligations under prior
versions of the Purchase Agreement and related exhibits. For
simplicity, references to Quantum in this Petition shall refer to
the relevant Quantum entities, as defined in the Order or Purchase
Agreement, including exhibits thereto, or otherwise.
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In August 2023, the Commission voted \2\ to issue a Complaint
alleging that two aspects of a purchase agreement among THQ Appalachia
I, LLC, THQ-XcL Holdings I, LLC, and certain related entities
(collectively, ``Tug Hill'') and EQT Corporation (``EQT''), and a pre-
existing joint venture between an affiliate of EQT and an affiliate of
Quantum, constituted unfair methods of competition in violation of
Section 5 of the FTC Act and Section 8 of the Clayton Act.\3\
Specifically, the Commission took issue with EQT's agreement to
facilitate the nomination of a Quantum designee to the EQT board and
certain other rights or actions, including Quantum's acquisition of EQT
voting shares as consideration for the transaction. As set forth below,
Quantum voluntarily agreed at the beginning of the investigation not to
seat a Quantum representative on EQT's board, but the Commission was
not satisfied with this voluntary commitment. Rather, following an 11-
month investigation, the Commission filed a simultaneous Complaint and
Consent Order prohibiting a Quantum designee from being on EQT's board
and requiring Quantum over time to divest all of the EQT shares that it
would receive as consideration for the transaction. By October 2024,
Quantum had divested all EQT shares acquired in the transaction and, in
February 2024, an affiliate of EQT and an affiliate of Quantum
completed the dissolution of the referenced joint venture. Quantum
hereby respectfully petitions the Commission to reopen and set aside
the Order because none of the facts giving rise to the Order remain and
it would be in the public interest to do so.
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\2\ At the time of the vote, the Commission consisted of three
Democratic commissioners. Two Republican commissioners--Christine
Wilson and Noah Phillips--had resigned earlier, with Christine
Wilson citing then-Chair Lina Khan's ``disregard for the rule of law
and due process'' as motivating her decision to step down. Christine
Wilson, Why I'm Resigning as an FTC Commissioner, WSJ (Feb. 14,
2023), <a href="https://www.wsj.com/articles/why-imresigning-from-the-ftc-commissioner-ftc-lina-khan-regulation-rule-violation-antitrust-339f115d">https://www.wsj.com/articles/why-imresigning-from-the-ftc-commissioner-ftc-lina-khan-regulation-rule-violation-antitrust-339f115d</a>.
\3\ See Complaint, In the Matter QEP Partners, LP, et al., Dkt.
No. C-4799 (Oct. 10, 2023) (hereinafter Complaint).
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I. Background
A. The Transaction
On September 6, 2022, EQT and Tug Hill entered into a purchase
agreement (the ``Purchase Agreement''), pursuant to which EQT would
acquire specified Quantum-sponsored Tug Hill entities, comprising a
natural gas producer in the Appalachia Basin and a natural gas gatherer
and processor in the Appalachia Basin, for cash and EQT shares totaling
approximately $5.2 billion in value at the time (the ``Transaction'').
In their original Purchase Agreement, the parties agreed in Section
6.23 that EQT would facilitate the appointment of an initial Quantum
designee to EQT's board, subject to the designee satisfying customary
director qualification requirements, including completion of EQT's
customary D&O questionnaire. EQT also agreed to enter into a
Registration Rights and Shareholders' Agreement upon the closing of the
Transaction, which provided in Section 11.1.1 that Quantum's CEO
``shall serve as a member'' of the EQT board, subject to the terms of
the Purchase Agreement.\4\ In Section 11.1.2 of the Registration Rights
and Shareholders' Agreement, EQT also agreed to facilitate Quantum's
CEO or a Quantum designee ``to be included in a slate of director
nominees'' recommended for election as an EQT director at the 2023
shareholders meeting.\5\ EQT and Tug Hill amended the Purchase
Agreement on December 23, 2022--eight months prior to the issuance of
the Complaint--to remove Section 6.23 entirely. The parties also
amended the Registration Rights and Shareholders' Agreement to remove
the right in Section 11.1.1 for Quantum's CEO to join the EQT board,
leaving only EQT's obligation to facilitate Quantum's nomination of a
designee to the board pursuant to Section 11.2.1.\6\ The parties
amended the Purchase Agreement again on August 21, 2023 to delete the
form Registration Rights and Shareholders' Agreement and replace it
with a new form agreement that altogether removed EQT's obligation to
facilitate Quantum's nomination of a designee to the EQT board.\7\ The
parties closed the Transaction on August 22, 2023.
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\4\ See Purchase Agreement dated September 6, 2022, <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0000033213/0c39c98e-09a7-4668-81ec-c75a09bbbd95.pdf">https://d18rn0p25nwr6d.cloudfront.net/CIK-0000033213/0c39c98e-09a7-4668-81ec-c75a09bbbd95.pdf</a>.
\5\ Id.
\6\ See Amended and Restated Purchase Agreement dated December
23, 2022, <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0000033213/2301e32a-6e8d-4f62-bfe1-10247f77fed1.pdf">https://d18rn0p25nwr6d.cloudfront.net/CIK-0000033213/2301e32a-6e8d-4f62-bfe1-10247f77fed1.pdf</a>.
\7\ See Second Amended and Restated Purchase Agreement dated
August 21, 2023, <a href="https://content.edgaronline.com/ExternalLink/EDGAR/0001104659-23-094068.html?hash=21013e7be6ed0bfbc3f69bc0aa08a720eea683b34d4f469ecd0b99ea192f1761&dest=tm2324212d1_ex2-3_htm#tm2324212d1_ex2-3_htm">https://content.edgaronline.com/ExternalLink/EDGAR/0001104659-23-094068.html?hash=21013e7be6ed0bfbc3f69bc0aa08a720eea683b34d4f469ecd0b99ea192f1761&dest=tm2324212d1_ex2-3_htm#tm2324212d1_ex2-3_htm</a>.
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B. The Investigation
The parties submitted their HSR Act filings for the Transaction on
September 16, 2022. While engaging with FTC Staff, the parties withdrew
their filings on October 17, 2022 and refiled on October 19, 2022
pursuant to 16 CFR 803.12(c), to give the FTC a second 30-day initial
review period. During that time, the FTC inquired about Quantum's CEO
joining EQT's board. On October 27, 2022, Quantum informed the FTC in
writing that Quantum had elected not to have a designated person join
the EQT board and would reassess over time if the companies' assets and
operations changed such that a Quantum representative on the EQT board
would not present issues under Section 8 of the Clayton Act.\8\ EQT
reported the same in a securities filing on November 1, 2022, stating
that ``EQT was informed that, out of an abundance of caution and to
ensure compliance with Section 8 of the Clayton Antitrust Act of 1914
(relating to director and officer interlocks), [Quantum] no longer
intend[s] to seek the appointment of Mr. VanLoh, or another individual
designated by Quantum, to the Board at the closing of the
[Transaction].'' \9\
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\8\ Exhibit A, Email from Hill Wellford to FTC staff dated
October 27, 2022.
\9\ EQT Corporation, Form 8-K (Nov. 1, 2022), <a href="https://www.sec.gov/ix?doc=/Archives/edgar/data/33213/000110465922113160/tm2229214d1_8k.htm">https://www.sec.gov/ix?doc=/Archives/edgar/data/33213/000110465922113160/tm2229214d1_8k.htm</a>.
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On November 18, 2022, the FTC issued Requests for Additional
Information and Documentary Materials with respect to both the sale of
Tug Hill and Quantum's acquisition of EQT shares (the ``Second
Requests'') in order ``to investigate a possible violation of Section 5
of the Federal Trade Commission Act, 15 U.S.C. 45, and Section 7 of the
Clayton Act, 15 U.S.C. 18.'' On March 8, 2023, the parties and the FTC
entered a timing agreement, pursuant to which EQT and Tug Hill agreed
not to close the Transaction for an additional 50 days beyond the
statutory 30-day waiting period that follows substantial compliance
with the Second Requests. The parties certified substantial compliance
on April 3, 2023. Following substantial compliance, the parties agreed
to amend the timing
[[Page 34503]]
agreement three times, extending their commitment not to close the
Transaction each time, ultimately committing not to close until August
16, 2023. From the date of the initial HSR filing until close, the
investigation lasted a total of 11 months. As made clear by the
description of the Complaint in Section II of this Petition, the
investigation did not result in any allegations that the Transaction
violated Section 7 of the Clayton Act.
C. The Order
The Commission filed for public comment a proposed consent order on
August 16, 2023, and approved the final Order on October 10, 2023. The
Order mandates several requirements and restrictions to mitigate the
Commission's alleged antitrust concerns arising from the Transaction,
with the vast majority of the Order's restrictions specific to
Quantum's ownership of EQT shares.
The Order required that EQT and Tug Hill remove from the Purchase
Agreement EQT's obligation to facilitate Quantum's nomination of a
designee to serve on EQT's board (Paragraph II) and that the respective
affiliates of EQT and Quantum dissolve their joint venture, The Mineral
Company LLC \10\ (Paragraph XI). It also generally prohibits Quantum
from appointing individuals to the EQT board and EQT personnel from
holding management positions within Quantum (Paragraph III).
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\10\ The Mineral Company was formed in October 2020 as a
financial partnership between an affiliate of Quantum and an
affiliate of EQT to help finance acquisitions of mineral interests
in EQT's near-term development plan during a period of low gas
prices and diminishing cash flow. More than 2 years after an
affiliate of Quantum joined The Mineral Company, Quantum had
invested only a fraction of its total commitment.
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The Order required that Quantum divest, by a non-public outside
date, the EQT shares acquired as consideration for the Transaction and
limited both Quantum's and EQT's ability to exchange non-public
information prior to Quantum's divestiture of the EQT shares (Paragraph
IV). The Order also restricted Quantum's ability to vote the EQT shares
(Paragraph V) and imposes prior approval requirements for Quantum's
acquisition of additional EQT shares (Paragraph VI).
Prior to Quantum divesting the EQT shares, Quantum's personnel were
restricted from serving as officers or directors of any of the top 7
major natural gas producers in the Appalachia Basin (Paragraph VII),
and Quantum and EQT were prohibited from entering into agreements with
each other related to the acquisition of mineral rights or natural gas
exploration or production assets in the Appalachia Basin (Paragraph
IX). The Order also prohibits EQT and Quantum from entering into non-
compete agreements (Paragraph VIII).
The Order required the appointment of a monitor to oversee
compliance with the Order (Paragraph XII) and imposes various
compliance obligations on Quantum (Paragraphs XIV-XVII).
D. Quantum's Compliance With the Order
Quantum has operated in steadfast compliance with the Order since
its issuance. Quantum filed compliance reports with the Commission on
(1) November 9, 2023, (2) January 8, 2024, (3) March 8, 2024, (4) May
7, 2024, (5) July 8, 2024, (6) September 6, 2024, and (7) October 10,
2024, confirming such compliance. In accordance with the Order, Quantum
has conducted an annual training session covering general antitrust
laws and the restrictions in the Order.
Importantly, on August 21, 2023, EQT and Tug Hill amended the
Purchase Agreement to remove EQT's obligation in the form Registration
Rights and Shareholders' Agreement to facilitate Quantum's nomination
of a designee to the EQT board (fully satisfying Quantum's obligations
under Paragraph II of the Order), EQT and Quantum completed the
dissolution of The Mineral Company LLC on February 22, 2024 (fully
satisfying Quantum's obligations under Paragraph XI of the Order), and
Quantum completed its divestiture of EQT shares on October 9, 2024
(fully satisfying Quantum's obligations under Paragraph V, among
others). Quantum completed its divestiture of EQT shares years sooner
than the non-public divestiture deadline required, and its divestiture
moots most of the remaining restrictions in the Order, as most of such
restrictions are only in effect for as long as Quantum is holding the
EQT shares. Even if Quantum's earnest compliance with the Order did not
explicitly moot the majority of restrictions therein (which it does),
its compliance eliminated all of the issues the Commission identified
in its Complaint as giving rise to the violation of Section 5 of the
FTC Act and Section 8 of the Clayton Act. In apparent recognition of
the significant effect of Quantum's prompt divestiture of EQT shares on
the remaining provisions in the Order, on November 6, 2024, the FTC
unilaterally terminated the contract with the compliance monitor tasked
with overseeing the parties' compliance with all aspects of the
Order.\11\ Nonetheless, residual restrictions remain on Quantum's
business, including redundant prior approval obligations on any future
acquisition of EQT shares on the open market or as consideration for
the sale of Appalachia Basin-based companies by Quantum, and such
restrictions are neither supported by the facts nor the public
interest.
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\11\ See Exhibit B, Email from Robert Ogle to Quantum's Counsel
dated November 6, 2024.
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II. The Commission Should Reopen and Set Aside the Order in View of the
Changed Conditions of Fact and Public Interest
A. Changed Conditions of Fact
Section 5(b) of the FTC Act, 15 U.S.C. 45(b), and Section 2.51(b)
of the Commission's Rules of Practice, 16 CFR 2.51(b), provide that the
Commission may reopen and modify an order if the respondent makes a
satisfactory showing that changed conditions of fact or law require the
order to be altered, modified, or set aside, or that the public
interest so requires. The Commission has stated that a ``satisfactory
showing sufficient to require reopening is made when a request
identified significant changes in circumstances and shows that the
changes eliminate the need for the order to make continued application
of it inequitable or harmful to competition.'' \12\
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\12\ Eli Lilly & Co., Dkt. No. C-3594, Order Reopening and
Setting Aside Order, at 2 (May 13, 1999).
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The Commission has recognized that when ``the factual premise
underlying the concern that led to entry of the Order'' has
substantially changed, setting aside the Order is justified.\13\
Crystallizing this principle, the Commission has found that ``there is
no reason to keep the Order in place'' where there is no longer any
reason to be concerned about the potential harm to competition that
formed the ``basic premise of the Order.'' \14\ The Commission recently
applied this reasoning to set aside the Decision and Order in In re
Enbridge Inc. and Spectra Energy Corp.\15\
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\13\ Entergy Corp., Dkt. No. C-3998, Order Reopening and Setting
Aside Order, at 3 (July 1, 2005).
\14\ Johnson & Johnson, Dkt. No. C-4154, Order Reopening and
Setting Aside Order (May 25, 2006).
\15\ Enbridge, Inc., Dkt. No. C-4606, Order Reopening and
Setting Aside Order (April 8, 2025).
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In that case, the concern prompting the Commission's complaint and
consent order had been Enbridge's acquisition of an ownership stake in
a close competitor, the Discovery Pipeline. The Commission's complaint
detailed how this ownership would
[[Page 34504]]
grant Enbridge access to the Discovery Pipeline's competitively
sensitive information and influence its significant capital
expenditures through voting rights. To resolve these concerns, the
Commission issued a final order on March 22, 2017, mandating firewalls
to restrict information access and requiring Enbridge appointees to
recuse themselves from relevant board votes. Subsequently, Enbridge
divested its interest in the Discovery Pipeline on August 1, 2024, and
later filed a petition to reopen and set aside the order. The
Commission granted this petition on April 8, 2025, recognizing the
divestiture as a ``changed condition of law or fact'' under Section
5(b) because the foundational concern--Enbridge's dual ownership of
competing pipelines--no longer existed. Consequently, Enbridge no
longer possessed the means to access or misuse the Discovery Pipeline's
confidential information or influence its operations, effectively
addressing the underlying rationale of the order.\16\
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\16\ Id. (``The Order was premised on the concern that Enbridge
had ownership rights to two competing pipelines and could,
therefore, act in a manner that would reduce the competitiveness of
the Discovery Pipeline. . . . Based on [the divestiture of that
ownership interest] we conclude that Enbridge no longer has access
to, and no longer can potentially misuse, the Discovery Pipeline's
competitively sensitive information; nor can it otherwise influence
the Discovery Pipeline's operations because it no longer has
representation on the Discovery Pipeline's board. . . .Because
Enbridge no longer has an indirect ownership interest in the
Discovery Pipeline . . . , we conclude that this Order should be
reopened and set aside.'').
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The same principles apply here. The Commission's Order was premised
on (i) a right to a board seat (waived and later withdrawn entirely),
(ii) information sharing and coordination risks from Quantum holding
EQT shares (since divested), and (iii) information sharing risks from
an existing joint venture between Quantum and EQT (since dissolved).
This sequence of events and the resulting elimination of the
Commission's initial concerns bear a striking resemblance to the
changed conditions acknowledged in the Enbridge petition and the
Commission's subsequent decision. The fact that the Order in this case
required Quantum to undertake these actions does not diminish the
resulting change in circumstances. Ultimately, as in the Enbridge
situation, the original remedy in this case no longer serves its
intended purpose due to a fundamental shift in the underlying facts.
The concerns underlying the Commission's Complaint and the change in
facts resolving those concerns are set forth in greater detail below.
The Commission's Complaint setting out the competitive harms that
the Order purportedly resolves alleged that two aspects of the Purchase
Agreement constituted unfair methods of competition in violation of
Section 5 of the FTC Act and, with respect to EQT's obligation to
facilitate Quantum's nomination to the EQT board, Section 8 of the
Clayton Act.
First, the Complaint alleged that EQT's obligation in the form
Registration Rights and Shareholders' Agreement of the Purchase
Agreement to facilitate Quantum's nomination of a designee to the EQT
board ``pose[d] a threat'' that Quantum would receive competitively
sensitive information from EQT and that Quantum's designee to the board
would have influence over competitive decisions for both firms.\17\ EQT
and Tug Hill neutralized that supposed threat on August 21, 2023,
through an amendment to the Purchase Agreement \18\ that altogether
removed EQT's obligation in the form Registration Rights and
Shareholders' Agreement to facilitate Quantum's nomination of a
designee to the EQT board.
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\17\ Complaint at ] 47.
\18\ See Second Amended and Restated Purchase Agreement dated
August 21, 2023, <a href="https://content.edgar-online.com/ExternalLink/EDGAR/0001104659-23-094068.html?hash=21013e7be6ed0bfbc3f69bc0aa08a720eea683b34d4f469ecd0b99ea192f1761&dest=tm2324212d1_ex2-3_htm#tm2324212d1_ex2-3_htm">https://content.edgar-online.com/ExternalLink/EDGAR/0001104659-23-094068.html?hash=21013e7be6ed0bfbc3f69bc0aa08a720eea683b34d4f469ecd0b99ea192f1761&dest=tm2324212d1_ex2-3_htm#tm2324212d1_ex2-3_htm</a>.
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Second, the Complaint alleged that Quantum's acquisition of EQT
shares as consideration for the Transaction, which would make Quantum
one of EQT's largest shareholders, would ``create opportunities and a
threat that competitors will directly communicate, solicit, or
facilitate the exchange of competitively sensitive information with the
purpose, tendency, and capacity to facilitate collusion or
coordination.'' \19\ Quantum extinguished the source of this alleged
opportunity and threat on October 9, 2024 when Quantum completed its
divestiture of EQT shares.\20\ What remains is an obligation for
Quantum to seek prior approval from the Commission for the direct
acquisition of EQT shares, or the acquisition of EQT shares as
consideration for the sale of an investment operating in the Appalachia
Basin. Such a prior approval obligation is completely redundant to
existing notification requirements. Quantum would not be able to
replicate even a sliver of its prior ownership of EQT without first
submitting a filing under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (as amended) and observing a waiting period during which
the FTC can reassess effects on competition.\21\
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\19\ Complaint at ] 47.
\20\ Exhibit C, Email from Evan Miller to FTC dated October 10,
2024.
\21\ An acquisition of EQT shares valued at the current HSR
filing threshold of $126.4 million would amount to less than 1% of
EQT's outstanding voting shares.
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Separate from the Purchase Agreement, the Complaint also alleged
that an existing joint venture between an affiliate of EQT and an
affiliate of Quantum, The Mineral Company LLC, ``pose[d] an ongoing and
incipient threat that competitors will'' exchange competitively
sensitive information.\22\ Upon closing the Transaction, EQT and
Quantum began taking steps to dissolve The Mineral Company, LLC, steps
that concluded on February 22, 2024, thereby neutralizing this
``incipient threat'' as well.\23\
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\22\ Complaint at ] 47.
\23\ Exhibit D, Certificate of Cancellation for The Mineral
Company LLC.
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Finally, while the Commission's investigation of the Transaction
was at that time the largest investigation by production capacity that
the Commission had undertaken in the natural gas industry in
Appalachia, this is no longer the case. In January 2024, Chesapeake
Energy agreed to acquire Southwestern Energy for $7.4 billion. That
transaction closed in October 2024, displacing EQT as the largest
producer in Appalachia. The fact that the Commission saw no need to
place conditions on that much larger transaction suggests that the
Commission recognizes that competition among natural gas producers is
robust in Appalachia. This competition is reflected in Henry Hub
natural gas spot prices, which were at approximately $5.88 at the
beginning of the Commission's investigation of the EQT-Quantum
transaction and had declined to approximately $3.12 in May 2025--a
decrease of nearly 50 percent.\24\
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\24\ Henry Hub Natural Gas Spot Price, U.S. Energy Information
Administration, <a href="https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm">https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm</a>.
Prices are inflation-adjusted to May 2025, for ease of comparison.
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Based on the Complaint and the Commission's Press Release
announcing the Order,\25\ there is no question that the facts that
formed the ``basic premise of the Order'' have changed in a
[[Page 34505]]
fundamental way that justifies the Commission reopening and setting
aside the Order.
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\25\ Press Release, FTC Acts to Prevent Interlocking Directorate
Arrangement, Anticompetitive Information Exchange in EQT, Quantum
Energy Deal, Federal Trade Commission (Aug. 16, 2023), <a href="https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-acts-prevent-interlocking-directorate-arrangement-anticompetitive-information-exchange-eqt">https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-acts-prevent-interlocking-directorate-arrangement-anticompetitive-information-exchange-eqt</a> (announcing that the Complaint and Order
address Quantum's right to a board seat, Quantum's ownership of EQT
shares, and a pre-existing joint venture between the parties).
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B. Public Interest
Because changed circumstances warrant reopening and setting aside
the Order here, it is not necessary for the Commission to consider
whether setting aside the Order would serve the public interest.\26\
However, should the Commission deem it necessary to assess the public
interest in setting aside the Order, we believe it would be in the
public interest to set aside the Order.
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\26\ See Entergy Corp., Order Reopening and Setting Aside Order,
at 3 (``[W]e do not need to assess the sufficiency of Entergy's and
EKLP's public interest showing because the Commission has determined
that Entergy and EKP have made the requisite satisfactory showing
that changed conditions of fact require the Order to be reopened and
set aside.'').
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We emphasize four points.
First, Quantum meets the public interest requirement of Section
2.51(b) because the Order's purpose has ``already been achieved.'' \27\
EQT and Tug Hill stripped EQT's obligation to facilitate Quantum's
nomination to the EQT board and a Quantum nominee never joined EQT's
board, EQT and Quantum dissolved a pre-existing joint venture, Quantum
divested all EQT shares acquired in the Transaction, and thus, the
Order--intended to achieve all these outcomes--no longer serves the
public interest.
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\27\ Requests to Reopen, 65 FR 50,637 (Aug. 21, 2000) (amending
16 CFR 2.51(b)).
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Second, setting aside the Order serves the public interest by
supporting economic investment in the Appalachia Basin. Quantum is a
pioneer in private investment in the energy industry, with Quantum and
its affiliates stewarding more than $30 billion in capital commitments
over its history to support energy development, with such capital
commitments coming from key institutional investors, including public
employee pension funds, as limited partners. Over the last several
years, Quantum portfolio companies have averaged more than $3.5 billion
of annual capital expenditures developing Quantum's U.S. oil and gas
assets. In other words, Quantum's investments help support growth in
U.S. energy production, thus contributing to America's energy
independence by reducing America's reliance on foreign energy sources,
and Quantum's returns on those investments support the financial well-
being of this country's teachers, firefighters, and other public
employees. Additionally, Quantum's investment strategy is commendable
and should be empowered, not impeded. Quantum typically builds
companies from scratch, employing a ``start-build-and-sell'' strategy
that creates jobs and increases competition, benefitting local
economies as well as energy consumers nationally. For example, Quantum
has maintained and built new investments in minerals and gas production
companies in the Appalachia Basin, leading to important job
opportunities and economic growth in the West Virginia and Pennsylvania
communities that support gas exploration and production in that region.
At a more general level, setting aside the Order would eliminate
unnecessary costs and burdens to Quantum and the Commission during the
remainder of the term of the Order, allowing for more efficient
operations by both. This is especially true in Quantum's case because
as part of its compliance reporting and training obligations, Quantum
must individually engage with a large number of its portfolio
companies, a significant endeavor, and one that does not serve any
purpose due to the changed facts discussed above. The Commission
rightfully considered the compliance costs associated with the
unnecessary continuation of an order in its recent decision to grant
Enbridge's petition to reopen and set aside its order.\28\
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\28\ Enbridge, Inc., Dkt. No. C-4606, Order Reopening and
Setting Aside Order (April 8, 2025).
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Third, it is in the public interest to reward good faith compliance
with Commission orders. Here, Quantum has gone above and beyond to be
the consummate order respondent, maintaining compliance with all
aspects of the Order from its issuance, engaging constructively with
the monitor (prior to the FTC's termination of the monitorship), and
divesting EQT shares much sooner than the non-public timeline required.
By demonstrating its willingness to promptly set aside orders once
their purpose is achieved, the Commission will further encourage good
faith order compliance and, if applicable, prompt divestitures. Doing
so serves the dual public interest of mitigating potential harms to
competition and not unduly restricting businesses.
Fourth, it is in the public interest for the Commission to
effectively and reliably enforce the antitrust laws. The Complaint
alleged a novel and unfounded legal theory that the mere inclusion of
an obligation for one party to facilitate the nomination of an
individual to a seat on its board violates Section 8 of the Clayton
Act. This theory assumes, among other things, that Quantum would have
nominated a designee to the board of EQT (despite Quantum's assurance
to the Commission and EQT that Quantum would not do so, out of an
abundance of caution for Section 8), that such designee would have
satisfied the required director qualifications, including the
completion of a D&O questionnaire, which typically includes sections
regarding conflicts and seats on boards of competing companies, and
that EQT's shareholders would have approved that nomination. Under the
plain text of Section 8, no violation occurs until a person ``serves''
on the boards of two competing companies.\29\ Because Quantum's
designee had not even been nominated to the EQT board, much less begun
serving on it, it was impossible for a Section 8 violation to have
occurred. Additionally, what constitutes a competitor for purposes of
Section 8 and whether an exception applies based on de minimis
competitive sales is a complex and fact-specific analysis that
companies typically undertake before seating a new director. Indeed,
this was the spirit of Quantum's voluntary commitment at the very
beginning of the investigation not to take a seat on EQT's board. The
Complaint and Order upends this proper application of Section 8, and to
have such a prophylactic prohibition is over-deterrence that Section 8
does not authorize. Thus, setting the Order aside supports the proper
application of Section 8 and, as a result, the public interest in the
effective enforcement of antitrust laws.
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\29\ 15 U.S.C. 19 (a)(1).
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III. Conclusion
For the above reasons, Quantum respectfully requests that the
Commission reopen and set aside the Order. Setting aside the Order is
justified by changed conditions of fact and would further the public
interest.
Dated: June 27, 2025.
Respectfully submitted,
/s/Evan Miller
Evan Miller, Hill Wellford, Vinson & Elkins LLP, 2200 Pennsylvania
Ave NW, Suite 500 West, Counsel for Quantum.
[FR Doc. 2025-13705 Filed 7-21-25; 8:45 am]
BILLING CODE 6750-01-P
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</html>Indexed from Federal Register on July 22, 2025.
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