Quicksilver Resources Announces Closing of Barnett Transaction and Amendment
to the Combined Credit Agreements
FORT WORTH, Texas, May 1, 2013 (GLOBE NEWSWIRE) -- Quicksilver Resources Inc.
(NYSE:KWK) today announced the closing of the previously announced Barnett
sale to TG Barnett Resources LP, a wholly-owned U.S. subsidiary of Tokyo Gas
Co., Ltd., and the closing of an amendment to its credit facility.
"We welcome Tokyo Gas as a partner in our Barnett Shale project. Together, we
anticipate efficiently developing natural gas volumes over many years. This
sale is also an important step in realizing value for that asset base," said
Quicksilver CEO Glenn Darden. "In addition, our newly amended credit facility
has created significant financial flexibility to execute our refinancing plan,
as we bring value to our Horn River and other projects."
On April 30, 2013, Quicksilver received net proceeds of $463 million for the
sale of 25% of its Barnett assets to TG Barnett Resources LP ("TG").
The effective date of the transaction is September 1, 2012. TG's ratable share
of production, operating expenses, and capital spending from the effective
date to the closing date, as well as other customary adjustments at closing,
amounted to approximately $22 million, which was included in the adjustment to
the previously announced $485 million purchase price. Quicksilver's
first-quarter 2013 results will not include the impact of this transaction as
the conveyance to TG was reflected on the date proceeds were received, in
accordance with accounting rules.
Credit Facility Amendment
The company also closed an amendment to its Combined Credit Agreements on
April 30, 2013, resulting in, among other things, a decreased borrowing base,
relaxed financial covenants, and additional flexibility to support the
company's efforts to reduce leverage. The global borrowing base was
redetermined at $350 million, which includes the effects of the TG
The amendment permits the issuance of second-lien financing to repay a portion
of outstanding senior notes. It also allows for repayment of senior notes and
senior subordinated notes with the proceeds from asset sales and second-lien
issuance if the borrowing base is less than 75% utilized. Previously, the
company was restricted from repaying bonds with asset sale proceeds until
utilization was less than 25% and certain other conditions were met.
Further, the company has the ability to retain cash from the Barnett sale and
is only required to reduce the balance outstanding under the credit facility
to the extent that utilization exceeds the newly redetermined global borrowing
The minimum interest coverage ratio was also amended to provide additional
flexibility. The ratio was relaxed to 1.25x through the end of 2013, and it is
scheduled to further decline in stages to 1.1x by the third quarter of 2014,
where it will remain through the first quarter of 2015. The ratio will then
increase in stages to 2.0x by the second quarter of 2016, which is the last
test period prior to the facility's scheduled maturity.
Additionally, the maximum senior secured debt leverage ratio was reduced to
2.0 and was amended to include only first lien debt, and the applicable margin
was increased by 75 basis points for each type of loan and issued letters of
About Quicksilver Resources
Fort Worth, Texas-based Quicksilver Resources is an independent oil and gas
company engaged in the exploration, development and acquisition of oil and
gas, primarily from unconventional reservoirs including gas from shales and
coal beds in North America. Quicksilver's Canadian subsidiary, Quicksilver
Resources Canada Inc., is headquartered in Calgary, Alberta. For more
information about Quicksilver Resources, visit www.qrinc.com.
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