?Quicksilver Resources Inc., Fort Worth, Texas, (NYSE: KWK) plans to acquire producing, leasehold, royalty and midstream assets in the Barnett shale in North Texas from privately held, Texas-based Chief Resources LLC, Hillwood Oil & Gas LP and Collins and Young LLC and other vendors for $1 billion in cash and $307 million in stock in a total deal valued at $1.3 billion.


The assets include 13,000 net acres in Tarrant and Denton countries. Net production is 45 million cu. ft. of gas per day. Proved reserves are 350 billion cu. ft. (40% proved developed) and proved and probable reserves of 1 trillion cu. ft. Pro forma, Quicksilver will have total production of 275 million cu. ft. of gas equivalent per day.


Quicksilver president and chief executive Glenn Darden says, “Acquisition of these properties in the Fort Worth Basin enhances our production growth profile, expands our inventory of low-risk, high-return development projects, maintains a low full-cycle cost structure, and is expected to be immediately accretive to earnings and cash flow per share. In addition, this transaction enables Quicksilver to lever its existing technical, operating and management efficiencies in the Fort Worth Basin. We believe these acquired properties are similar to the company’s Lake Arlington project, where last week the most recent four wells began production at a combined rate of approximately 26 million cu. ft. per day.”


Quicksilver will fund the cash portion of the deal with a $700-million 30-month second-lien term loan facility and its credit facility. Merrill Lynch is financial advisor to the sellers. The deal is expected to close Aug. 8.

-Steve Toon

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