Fort Worth-based Quicksilver Resources on Thursday said it closed its previously announced agreement with SWEPI LP, a subsidiary of Royal Dutch Shell, for a 50/50 interest in about 320,000 net acres in the Sand Wash Basin in northwest Colorado. The deal also establishes an Area of Mutual Interest covering more than 850,000 acres in the basin. Quicksilver also received an undisclosed payment for chipping in more acreage than SWEPI. It said those proceeds "will be used to reduce the company's credit facility borrowings and to fund future project development."
Quicksilver also said it "is engaged in confidential negotiations with a potential buyer to sell a non-operated minority working interest in its Barnett Shale" holdings. Spokesman David Erdman said that means the company wants to sell a minority stake in all its Barnett Shale in which is 100 percent owner. That's everything except its Alliance area holdings, in which Italian oil giant Eni has a 27.5 percent stake acquired in 2009, Erdman said.
In November CEO Glenn Darden told financial analysts the company was looking for help developing Barnett assets, and the preferred option was "selling a minority stake and bringing in a partner who helps us over time." Speaking during an earnings call, Darden said the company expected the deal to be worth "a significant amount," and the proceeds would be used to reduce debt.
Finally, the company said it continues to negotiate "a potential joint venture" in the Canada's Horn River Basin aimed at boosting downstream sales. "The company plans minimal capital spending in teh basin until this joint venture is executed," it said. Quicksilver has struggled to deal with low natural gas prices in the face of its $2.17 billion in long-term debt as of Sept. 30
-- Jim Fuquay
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