Quicksilver Resources and Eni Form Strategic Alliance to
Develop Unconventional Natural Gas Resources
FORT WORTH, TEXAS (May 18, 2009) – Quicksilver Resources Inc. (NYSE: KWK) announced today that it has formed a strategic alliance with major integrated energy company Eni (NYSE: E) for acquisition, development and exploitation of unconventional natural gas resources in an area covering approximately 270,000 acres surrounding Quicksilver’s Alliance properties in the Fort Worth Basin. The parties have executed a definitive purchase agreement whereby Eni will acquire 27.5% of Quicksilver’s Alliance leasehold interests for $280 million in cash. Quicksilver will be the operator of the alliance properties. The alliance will foresee a mutual technical exchange between the two companies, particularly in drilling and completion technologies and geophysics.
“We are excited to join forces with Eni for the development of these properties,” said Glenn Darden, Quicksilver president and chief executive officer. “This transaction, which represents just five percent of our company’s total proved reserves at year-end 2008, is the initial step to de-lever our balance sheet while establishing a framework that provides meaningful opportunities to capitalize on Quicksilver’s expertise in the identification, acquisition and development of shale gas resources. Our agreement with Eni will enable us to expand our footprint beyond the existing Alliance acreage and could lead to additional opportunities in unconventional plays outside of this basin.”
Quicksilver’s existing Alliance natural gas leasehold covers approximately 13,000 net acres in Denton and Tarrant counties, Texas and is currently producing approximately 60 million cubic feet of natural gas per day. The transaction does not include Quicksilver’s midstream gathering infrastructure or any of its existing leasehold beyond the Alliance properties.
The transaction, which includes the sale of 131 billion cubic feet (Bcf) of proved reserves and 96 Bcf of probable and possible resources, is effective as of April 1, 2009 and is expected to close on or before June 15, 2009. Net proceeds from the transaction will be used to repay Quicksilver’s existing indebtedness.
Merrill Lynch & Co. acted as Quicksilver’s financial advisor in connection with the transaction.
About Quicksilver Resources
Fort Worth, Texas-based Quicksilver Resources is a natural gas and crude oil exploration and production company engaged in the development and acquisition of long-lived, unconventional natural gas reserves, including coalbed methane, shale gas, and tight sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas and Cut Bank, Montana. Quicksilver’s Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. For more information about Quicksilver Resources, visit www.qrinc.com.
