Quicksilver Gas Services LP Reports Operating Results (10-Q)

Quicksilver Gas Services LP (KGS) filed Quarterly Report for the period ended 2011-03-31.

Quicksilver Gas Services Lp has a market cap of $229.93 million; its shares were traded at around $0 with a P/E ratio of 37.1. The dividend yield of Quicksilver Gas Services Lp stocks is 6.9%.


Highlight of Business Operations:

General and Administrative Expense — The increase in general and administrative expense was primarily due to transaction costs associated with the Frontier Gas Acquisition, an increase in compensation and benefits costs, costs of a new corporate location and transition costs related to the transition services agreement with Quicksilver, which expired March 31, 2011. Transaction costs related to the Crestwood Transaction and Frontier Gas Acquisition amount to approximately $2.0 million for the 2011 period. General and administrative expense includes $0.2 million and $0.7 million of equity-based compensation expense for the quarters ended March 31, 2011 and 2010, respectively.

Cash Flows Used in Investing Activities — The decrease in cash flows used in investing activities resulted from the distribution to Quicksilver of $80.3 million related to the purchase of the Alliance Midstream Assets in the prior year. For the 2011 period, we spent $13.1 million for gathering assets and processing facilities, of which $5.1 million relates to the purchase of the Las Animas acquisition.

Cash Flows Used in Financing Activities — Changes in cash flows used in financing activities during the 2011 period resulted primarily from the net borrowings under our Credit Facility of $9.3 million compared with the 2010 period net borrowings of $100.4 million. This change is largely reflective of our funding of the purchase of the Alliance Midstream Assets for $84.4 million in the 2010 period. In addition, we distributed $2.7 million more to our unitholders during the 2011 period. We have increased our quarterly distribution by 12.8% from the 2010 period to the 2011 period. In January 2010, the underwriters of our equity offering exercised their option to purchase an additional 549,200 common units, which generated proceeds of $11.1 million for which there was no comparable 2011 event.

We budgeted approximately $90 million in capital expenditures for 2011, of which approximately $30-$35 million relates to the Fort Worth Basin and approximately $45-$50 million relates to the Frontier capital program. In addition, we have budgeted approximately $8 million as maintenance capital expenditures.

During the three months ended March 31, 2011, we increased gross property, plant and equipment by $6 million, including expansion capital expenditures of approximately $5.5 million, $0.4 million in maintenance capital expenditures and $0.1 million in asset retirement cost.

Credit Facility — At March 31, 2011, we had $292.8 million outstanding under our $400 million Credit Facility. Our Credit Facility permits us to expand our borrowing capacity up to $500 million subject to certain financial ratios being met and lender approval. The weighted-average interest rate as of March 31, 2011 was 3.1% on our Credit Facility. Note 7 to the consolidated financial statements in our 2010 Annual Report on Form 10-K contains a more complete description of our indebtedness. On April 1, 2011, we entered into a Joinder Agreement with certain lenders under our Credit Facility, which expanded our borrowing capacity to $500 million from $400 million.