Quicksilver Production Partners LP, a new master limited partnership formed by Fort Worth-based natural gas producer Quicksilver Resources, made a filing today with the U.S. Securities and Exchange Commission to raise $250 million in an initial public offering.
Net proceeds, along with $150 million in borrowings from a planned new bank credit line, would go toward reducing debt of Quicksilver Resources, a natural gas and oil producer that has seen its cash flows reduced and its stock price deflated by depressed natural gas prices. Quicksilver, which realizes the bulk of its production from North Texas’ Barnett Shale, has a substantial debt of about $1.9 billion.
QPP would be publicly traded on the New York Stock Exchange under the symbol QPP. The $250 million figure in the SEC filing is a placeholder amount used to help calculate registration fees. The final size of the IPO could be different.
QPP didn’t disclose the number of partnership common units that would be sold, nor their price. The units cannot be sold until after QPP’s registration statement with the SEC is declared effective.
Quicksilver announced plans in October to create the master limited partnership with a portion of its Barnett Shale properties. Such partnerships generally take established energy properties and distribute a relatively predictable revenue stream to owners in the partnership, known as unitholders. QPP plans to make quarterly distribution payments to unitholders, Quicksilver spokesman Stephen Lindsey said today.
As the basis for its revenues, the partnership holds proved Barnett Shale reserves equivalent to 430.4 billion cubic feet of natural gas. QPP, a wholly owned subsidiary of Quicksilver, said JP Morgan Chase and Credit Suisse would be lead underwriters for the IPO.
Quicksilver stock (ticker: KWK) was trading this morning at $5.14 a share, down 22 cents.
--Jack Z. Smith
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