Quicksilver sells 25% interest in Barnett Shale assets to Tokyo Gas for $485 million

Fort Worth, Texas-based Quicksilver Resources Inc. [NYSE: KWK] said March 29 that it has agreed to sell an undivided 25% interest in its Barnett Shale oil and gas assets for US$485 million to TG Barnett Resources LP, a wholly-owned US subsidiary of Tokyo Gas Co. Ltd.

Quicksilver will remain as operator of the assets. Future development spending will be shared in proportion to each party’s working interest in accordance with applicable operating agreements.

The effective date of the transaction is Sept. 1, 2012. Closing is expected to occur on April 30, 2013 and is subject to customary closing conditions.

“We are very pleased to have Tokyo Gas as a partner to develop the full potential of our Barnett Shale asset base,” said Glenn Darden, Quicksilver’s president and CEO. “We look forward to a successful long-term relationship, which will benefit both of our companies.”

Darden told Oil & Gas Financial Journal that Quicksilver first met representatives from Tokyo Gas back in November 2011 when they visited the Barnett Shale with a larger group of Japanese visitors who were in Texas to learn more about shale gas. Discussions about a partnership began about six months later, he said.

Darden said he believes Tokyo Gas’s motivation to get into the upstream gas sector in the US is to lower its supply costs. The utility has been importing gas in the form of LNG for about 40 years, he said, adding that he expected a push on their side to export the gas “at some point.”

Quicksilver said it will use proceeds from the transaction to reduce its debt.

“We have a game plan to delever this company,” Darden said. “We have a lot of assets, and we want to reduce our debt. We’re not really public about the moves we’ll make, but we are active and we will communicate as we execute on this plan, which will involve some other areas as well.”

In addition to the Barnett Shale, Quicksilver has assets in the Midland/Delaware Basin in West Texas; in the Niobrara Shale of northwestern Colorado and southern Wyoming; and in the South Alberta Basin of Montana near the Canadian border. In Canada, Quicksilver has more than 300,000 net acres in a coalbed methane field in central Alberta and 170,000 net acres in the Horn River Basin of northeastern British Columbia.

Quicksilver was advised by Jason Nye of OBV Group LLC, Prairie Bayou LLC, Credit Suisse Securities (USA) LLC and JP Morgan.

Quicksilver has US offices in Fort Worth, Texas; Glen Rose, Texas; Craig, Colo.; Steamboat Springs, Colo.; and Cut Bank, Mont. Quicksilver’s Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta.

Tokyo Gas Co. Ltd., headquartered in Tokyo, is Japan’s largest provider of city gas, serving more than 10 million customers, primarily in the Tokyo metropolitan area and surrounding Kanto region.

Related Articles

Total’s investment a big step for the future of UK shale - but don't get too excited just yet

01/13/2014 On January 13th, 2014, French company Total confirmed that it had become the first global oil and gas major to invest in the burgeoning UK shale gas industry. This is a huge early milestone for the...

Quicksilver Resources, Eni to jointly explore Delaware Basin

11/05/2013 Fort Worth, TX-based Quicksilver Resources Inc. has entered into an agreement with Eni whereby Quicksilver and Eni will jointly evaluate, explore and develop approximately 52,500 gross acres in the...

Laredo Petroleum appoints Buterbaugh CFO

12/20/2012

Laredo Petroleum Holdings Inc. has appointed Richard C. Buterbaugh executive vice president and CFO of the company.

Quicksilver Resources to create MLP with Barnett assets to reduce debt

10/20/2011 Forth Worth, TX-based natural gas and crude oil exploration and production company Quicksilver Resources Inc. announced its intent October 19 to create an MLP with a portion of its Barnett Shale as...

'Old' Barnett Shale play still yields some surprises

02/01/2011 The Barnett Shale gas play of North Central Texas may be the grandfather of shale gas plays in the United States, but it is still making news.

More Oil & Gas Financial Articles

Total’s investment a big step for the future of UK shale - but don't get too excited just yet

Mon, Jan 13, 2014

On January 13th, 2014, French company Total confirmed that it had become the first global oil and gas major to invest in the burgeoning UK shale gas industry. This is a huge early milestone for the sector to have achieved, but Evaluate Energy argues that whilst this does bring the UK closer to widespread domestic onshore gas production, it will still be a long time before even the possibility of this becomes a reality.

Quicksilver Resources, Eni to jointly explore Delaware Basin

Tue, Nov 5, 2013

Fort Worth, TX-based Quicksilver Resources Inc. has entered into an agreement with Eni whereby Quicksilver and Eni will jointly evaluate, explore and develop approximately 52,500 gross acres in the Delaware Basin currently held by Quicksilver in the Leon Valley area located in Pecos County, Texas.

Laredo Petroleum appoints Buterbaugh CFO

Thu, Dec 20, 2012

Laredo Petroleum Holdings Inc. has appointed Richard C. Buterbaugh executive vice president and CFO of the company.

Quicksilver Resources to create MLP with Barnett assets to reduce debt

Thu, Oct 20, 2011

Forth Worth, TX-based natural gas and crude oil exploration and production company Quicksilver Resources Inc. announced its intent October 19 to create an MLP with a portion of its Barnett Shale assets.

'Old' Barnett Shale play still yields some surprises

Tue, Feb 1, 2011 The Barnett Shale gas play of North Central Texas may be the grandfather of shale gas plays in the United States, but it is still making news.

Most Popular

Oil & Gas Jobs

Search More Job Listings >>
Subscribe to OGFJ