Quicksilver Completes Mercury and MGV Deals
Quicksilver Resources decided to start 2001 with a bang as the company announced last week that it had completed the acquisition of nearly all of Mercury Exploration Co.'s natural gas processing, gathering, transmission, compression and marketing assets for just over $18 million. The Fort Worth-based company also announced that it has completed the purchase of the remaining minority interest in its Canadian subsidiary, MGV Energy, for the equivalent of 283,669 shares of Quicksilver common stock.
Included in the Mercury asset purchase, was Mercury Michigan Inc., a gas processing company, which gathers and processes about 75 MMcf/d. Also included in the sale, was the remaining 50% interests in Beaver Creek Pipeline LLC and Cinnabar Energy Services & Trading LLC, which Quicksilver did not already own. The Beaver Creek Pipeline is a 107-mile transmission line that runs from Quicksilver's producing area to the Midland, MI, industrial region. The Cinnabar company markets 120 MMcf/d for Quicksilver and other gas producers.
Quicksilver also obtained a 65% interest in Mechanical Technology Services LLC, a company that sells, installs and repairs compression units for the natural gas industry.
"Purchasing these assets will improve the profitability of Quicksilver's Michigan properties by capturing more of the downstream margins, as well as bringing in additional third-party revenues and increasing profits at the bottom line," said Jeff Cook, Quicksilver's senior vice president of operations. "This is one more step in our strategy of becoming a full cycle natural gas company."
The completion of the purchase of MGV's minority interest was expected, since the company bought its initial interest in MGV in August 1999. Quicksilver announced two months ago that MGV Energy had entered into a joint venture with PanCanadian Petroleum Limited to develop coal bed methane reserves in south central Alberta, Canada (see Daily GPI, Nov. 2, 2000).
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