Quicksilver has acquired additional interests, representing an approximate 25% working interest and related assets, in the company's operated Lake Arlington project in Tarrant County, Texas from a private party for $62 million in cash, subject to customary adjustments as provided in the purchase agreement, and 3,619,901 units of BreitBurn that were previously owned by Quicksilver. The acquired interests include reserves of approximately 125 billion cubic feet (Bcf) of natural gas of which 82% are proved developed; approximately 20 Bcf of additional potential resources; and net daily production of approximately 10 million cubic feet of natural gas equivalents (MMcfe), at the time of the transaction.
"The Lake Arlington acquisition provided the company with an opportunity to use a portion of our BreitBurn unit holdings to acquire reserves in a core operating area for below our drill-bit finding and development costs," said Glenn Darden, Quicksilver president and chief executive officer. "This is a very efficient transaction for the company."
As a result of the acquisition, the company now expects its 2010 capital program to total approximately $450 million, excluding acquisitions. Production in 2010 is still expected to average in the range of 360 MMcfe to 370 MMcfe per day in 2010, an increase of approximately 11%-14% from the 2009 average daily volumes.
With this transaction, Quicksilver now holds approximately 17.7 million units of BBEP representing an approximate 33% interest in the BBEP limited partnership. Quicksilver will receive the full distribution attributable to the first quarter of 2010 on all of its previously owned 21.3 million units, which will be approximately $8.0 million and is expected to be received in mid-May.
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