Quicksilver Resources Inc. (KWK) made a public offering of 7 million units of BreitBurn Energy Partners L.P. (BBEP). The underwriters to the issue will have a 30-day option to purchase up to 1.05 million additional units to cover over-allotments.
The company intends to utilize the proceeds from the offering to repay a portion of its outstanding borrowings under the senior secured credit facility and for general corporate purposes.
During November 2007, Quicksilver sold all of its legacy oil and gas assets in Michigan, Indiana and Kentucky to BreitBurn Energy Partners for $750 million and 21.3 million common units, obtaining as a result 40% limited partner interest in BreitBurn Energy Partners. As of April 2011, Quicksilver owned approximately 15.6 million units of BreitBurn Energy Partners, which translated into 26% interest of the partnership.
In the first quarter of 2011, Quicksilver received $6.4 million in cash distributions for its equity investment in BreitBurn Energy Partners. In addition, Quicksilver sold approximately 0.1 million units of BreitBurn Energy Partners during the quarter and recognized a gain of $1.3 million on the transaction.
During the said quarter, Quicksilver's earnings per share of 2 cents were lower than the year-ago figure as well as the Zacks Consensus Estimate. The Zacks Consensus Estimates for second-quarter 2011, fiscal year 2011 and fiscal year 2012 are, respectively, 5 cents per share, 24 cents per share and 44 cents per share.
Quicksilver Resources currently retains a Zacks #3 Rank (short-term Hold rating) on the stock. The company competes with Chesapeake Energy Corporation (CHK) and Denbury Resources Inc. (DNR).
Based in Fort Worth, Texas, independent exploration and production company Quicksilver Resources is primarily engaged in the development of long-lived, unconventional onshore natural gas reserves in the North American continent.
BREITBURN EGY (BBEP): Free Stock Analysis Report
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