Natural-gas focused Quicksilver Resources Inc, whose cash flows have been drained by plunging prices for the fuel, is hoping to raise up to $250 million through an initial public offering of units in Quicksilver Production Partners.
The limited partnership holds proved reserves of 430.4 billion cubic feet of natural gas equivalent in the Barnett Shale. The partnership, which was formed in November, did not say how many units it planned to sell or their expected price in a filing with the US Securities and Exchange Commission.
In October last year, Forth Worth, Texas-based Quicksilver unveiled its plans to generate funds through an IPO of its Barnett shale assets. At that time, the company had said it plans to raise more than $400 million through the offering "Quicksilver has advised us that it intends to use the cash consideration received for the partnership properties to retire a portion of its existing debt," the filing read.
Quicksilver Resources had debt of about $2.1 billion and cash and equivalents of 6.6 million as of September-end. Natural gas prices have hit decade-lows, as output has soared, straining balance sheets of producers who typically outspend cash flow to fund expensive drilling projects.
Quicksilver Production Partners said J.P. Morgan and Credit Suisse would underwrite the IPO. It has applied to have its common units listed on the New York Stock Exchange under the symbol "QPP."
The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different. Quicksilver shares, which have lost two-thirds of their value in the past year, fell 5 percent to $5.08 in early morning trade on Friday on the New York Stock Exchange.
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