BreitBurn Energy Partners LP and Quicksilver Resources Inc. have completed the $1.45 billion sale of all of Quicksilver’s natural gas, oil and midstream assets in Michigan, Indiana and Kentucky to BreitBurn, they said Thursday. BreitBurn paid $750 million in cash and approximately 21.348 million common units of its stock.

The transaction, which was announced in September (see Daily GPI, Sept. 13), is 94% weighted to gas, which helps diversify BreitBurn’s oil-weighted portfolio. BreitBurn, the Los Angeles-based master limited partnership (MLP) subsidiary of Calgary’s Provident Energy Trust, said the current output of the new assets is 72 MMcfe/d from more than 5,400 wells. Proved reserves are estimated to be 660 Bcfe (530 Bcfe net), with a proved reserve life of 19 years and commodity hedges for approximately 80% of proved developed producing production for three years beginning Jan. 1, 2008. Included are related gas gathering and processing systems and Quicksilver’s interests in 260,000 net undeveloped acres.

Up to now the MLP has been 95% weighted to oil, with its operations centered in Southern California and Wyoming. Provident did not participate in the equity offering, so the transaction reduced its ownership in the MLP to 23% from 51%. However, Provident will continue to control the entire BreitBurn entity through its ownership of the general partner.

Fort Worth, TX-based Quicksilver said it intends to use the cash proceeds from the transaction to repay borrowings under its existing revolving credit facility and for capital expenditures.

“This transaction enables Quicksilver to achieve its objectives of significantly improving our financial position while retaining meaningful upside in these properties through our ownership of the BreitBurn units,” said Quicksilver CEO Glenn Darden. “As a result of this divestment, Quicksilver’s development activities will be focused on its high-growth properties in the Fort Worth Basin of Texas and the Horseshoe Canyon area in Alberta.”

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.