Quicksilver Resources Inc. (KWK), an independent oil and gas company, said Friday that it has agreed to sell an undivided 25 percent interest in its Barnett Shale oil and gas assets to TG Barnett Resources LP, a wholly-owned U.S. subsidiary of Japan's Tokyo Gas Co., Ltd., for $485 million.
The transaction is effective September 1, 2012, with closing expected to occur on April 30, 2013. Quicksilver intends to use the proceeds from the transaction to reduce its debt.
Glenn Darden, president and CEO of Quicksilver stated, "We are very pleased to have Tokyo Gas as a partner to develop the full potential of our Barnett Shale asset base. We look forward to a successful long-term relationship, which will benefit both of our companies."
Quicksilver will remain as operator of the assets and future development spending will be shared in proportion to each party's working interest in accordance with applicable operating agreements.
The Texas-based firm has interests in assets covering an area of about 127,000 net acres located in the Barnett Shale, Fort Worth basin, North Texas. As of December 31, 2012, the company had total proved reserves of about 1.5 trillion cubic feet of natural gas equivalents.
In February end, Quicksilver reported a significant loss for its fourth quarter, compared to a profit last year. Results reflected a $1.2 billion non-cash ceiling test impairment, of which 63 percent was attributable to a change in accounting policy, while the remaining 37 percent was due to reserve revisions related to price, performance and reclassification of existing proved undeveloped reserves in 2012 owing to a reduction in drilling activity, amid depressed natural gas and NGL prices.
KWK closed Thursday's regular trading at $2.25, down 1.75 percent, on a volume of 3.26 million shares.
For comments and feedback: editorial@rttnews.com