Quicksilver Resources decided to start 2001 with a bang as thecompany announced last week that it had completed the acquisitionof nearly all of Mercury Exploration Co.’s natural gas processing,gathering, transmission, compression and marketing assets for justover $18 million. The Fort Worth-based company also announced thatit has completed the purchase of the remaining minority interest inits Canadian subsidiary, MGV Energy, for the equivalent of 283,669shares of Quicksilver common stock.

Included in the Mercury asset purchase, was Mercury MichiganInc., a gas processing company, which gathers and processes about75 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. TheBeaver Creek Pipeline is a 107-mile transmission line that runsfrom Quicksilver’s producing area to the Midland, MI, industrialregion. The Cinnabar company markets 120 MMcf/d for Quicksilver andother gas producers.

Quicksilver also obtained a 65% interest in MechanicalTechnology Services LLC, a company that sells, installs and repairscompression units for the natural gas industry.

“Purchasing these assets will improve the profitability ofQuicksilver’s Michigan properties by capturing more of thedownstream margins, as well as bringing in additional third-partyrevenues and increasing profits at the bottom line,” said JeffCook, Quicksilver’s senior vice president of operations. “This isone more step in our strategy of becoming a full cycle natural gascompany.”

The completion of the purchase of MGV’s minority interest wasexpected, since the company bought its initial interest in MGV inAugust 1999. Quicksilver announced two months ago that MGV Energyhad entered into a joint venture with PanCanadian Petroleum Limitedto develop coal bed methane reserves in south central Alberta,Canada (see Daily GPI, Nov. 2, 2000).

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