Quicksilver Gas Services LP (KGS) announced today that it would sell 4 million common units at a price of $21.10. The common units represent limited partnership interests in the company.
The offering will raise $84.4 million in gross proceeds before expenses. Quicksilver Gas Services LP will use the funds to pay down the outstanding balance on its credit facility, and then draw down approximately $87.1 million under the same credit facility to purchase additional assets in Texas.
Quicksilver Gas Services LP is buying midstream processing and gathering assets from Quicksilver Resources Inc. (KWK). The assets have the capacity to gather and process 115 million cubic feet per day of natural gas. The deal will close in January 2010.
Quicksilver Gas Services LP is a master limited partnership (MLP) involved in the midstream infrastructure business. This involves the gathering and processing of natural gas so that it’s ready to be delivered to the final customer.
Quicksilver Gas Services LP operates mostly in the Barnett Shale, which is located in the Fort Worth Basin in Texas. The company owns the Cowtown Pipeline, which delivers natural gas to a company owned plant in the area for processing.