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Quicksilver Closes CMS Michigan E&P Deal

Quicksilver Closes CMS Michigan E&P Deal

Quicksilver Resources Inc. last week completed a deal acquiring CMS Energy Corp.'s Michigan gas and oil exploration and production properties, including the stock of Terra Energy Ltd., as well as other smaller interests in Ohio, Kentucky, and Indiana. The deal was announced in January (see NGI Jan. 24).

The sale includes 180,000 net leasehold acres producing 49,000 Mcfe/d from the Antrim Shale, as well as from the Niagaran and Prairie du Chien formations. The transaction had an effective date of Jan. 1, 2000. The price was about $163 million, subject to post-closing adjustments. Quicksilver restructured its senior bank facility, sold $43 million in subordinated notes and the monetized a portion of accompanying Section 29 tax credits to raise the money.

"This acquisition has significantly strengthened our position in Michigan," said Houston Kauffman, a Quicksilver vice president. "We are now the largest independent gas producer in the state, and this purchase will enhance our operating and marketing efficiencies. It has also significantly increased our development drilling inventory. We are going to be very busy in Michigan for a long time."

The deal is expected to be accretive to Quicksilver's 2000 cash flow and net income. Proved producing reserves are now almost 70% of the Fort Worth, TX-based company's reserve base, which is now doubled and estimated to be 610 Bcfe, Quicksilver said. Joe Fisher, Houston

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