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 49,000Mcfe/d from the Antrim Shale, as well as from the Niagaran andPrairie du Chien formations. The transaction had an effective dateof Jan. 1, 2000. The price was about $163 million, subject topost-closing adjustments. Quicksilver restructured its senior bankfacility, sold $43 million in subordinated notes and the monetizeda portion of accompanying Section 29 tax credits to raise themoney.
“This acquisition has significantly strengthened our position inMichigan,” said Houston Kauffman, a Quicksilver vice president. “Weare now the largest independent gas producer in the state, and thispurchase will enhance our operating and marketing efficiencies. Ithas also significantly increased our development drillinginventory. We are going to be very busy in Michigan for a longtime.”
The deal is expected to be accretive to Quicksilver’s 2000 cashflow and net income. Proved producing reserves are now almost 70%of the Fort Worth, TX-based company’s reserve base, which is nowdoubled and estimated to be 610 Bcfe, Quicksilver said. JoeFisher, Houston
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