Quicksilver Resources Inc. announced today that it will purchase producing, leasehold, royalty and midstream assets in the Barnett Shale for $1.307 billion. The assets are in northern Tarrant and southern Denton counties.
The transaction will include $307 million in Quicksilver Resources common stock and $1 billion in cash, the company announced.
Chief Resources LLC, Hillwood Oil & Gas LP and Collins and Young LLC, as well as other private parties, are among the companies with which Quicksilver has entered into purchase and sale agreements. According to a Quicksilver release, assets acquired, on 13,000 net acres, produce about 45 million cubic feet (MMcf) per day, and the company estimates there are more than 1 trillion cubic feet of recoverable natural gas resources net. There are about 350 billion cubic feet (Bcf) of proved reserves – about 40 percent are proved developed – and more than 650 Bcf of additional resource potential, according to the release.
“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,” said Glenn Darden, Quicksilver president and chief executive officer, in a release. “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 MMcf per day.”
The cash will be funded “through a combination of a $700 million 30-month second-lien term loan facility, operating cash flow and its existing credit facility,” according to the press release.
Hillwood founder and chairman Ross Perot Jr. said in a statement he is pleased with the transaction and will continue development.
“We plan to continue the development of our Barnett position and remain in the area for a long time to come. The Barnett field development has a significant economic impact on the entire community, and having two strong local companies involved in this transaction enhances the impact for everyone,” Perot said. “We are committed to continuing to be good neighbors to our customers and residents in the area. Successfully integrating our real estate development and energy projects in a way that benefits everyone will continue to be a hallmark of the Hillwood way of doing business.”