Quicksilver Resources Inc. (OTCQB: KWKA) and its US subsidiaries Barnett Shale Operating LLC, Cowtown Drilling Inc., Cowtown Gas Processing LP, Cowtown Pipeline Funding Inc., Cowtown Pipeline LP, Cowtown Pipeline Management Inc., Makarios Resources International Holdings LLC, Makarios Resources International Inc., QPP Holdings LLC, QPP Parent LLC, Quicksilver Production Partners GP LLC, Quicksilver Production Partners LP, and Silver Stream Pipeline Co. LLC each filed a voluntary petition under chapter 11 of title 11 of the US Code in the US Bankruptcy Court for the District of Delaware.
Quicksilver's Canadian subsidiaries were not included in the chapter 11 filing and will not be subject to the requirements of the US Bankruptcy Code. Quicksilver Resources Canada Inc. (QRCI) has reached an agreement with its first lien secured lenders regarding a forbearance for a period up to and including June 16 of any default under QRCI's first lien credit agreement arising due to the chapter 11 filing. The company does not anticipate that US and Canadian operations will be interrupted as a result of the chapter 11 filing.
Glenn Darden, Quicksilver's CEO, said, "Quicksilver's strategic marketing process has not produced viable options for asset sales or other alternatives to fully address the company's liquidity and capital structure issues. We believe that chapter 11 provides the flexibility to accomplish an effective restructuring of Quicksilver for its stakeholders."
Quicksilver has filed a series of motions with the Court to ensure the continuation of normal operations, including requesting Court approval to continue paying employee wages and salaries and providing employee benefits without interruption. The company has also asked for authority to continue honoring royalty obligations, working interest obligations, and other obligations related to oil and gas leases. The company expects that the Court will approve these requests. During the chapter 11 process, suppliers will be paid in full for all goods and services provided after the filing date as required by the Bankruptcy Code.
The company's legal advisors are Akin Gump Strauss Hauer & Feld LLP in the US and Bennett Jones in Canada. Houlihan Lokey Capital Inc. is serving as financial advisor.