UPDATE 1-Quicksilver to sell Quicksilver Gas for $701 mln

* To sell to Crestwood Midstream Partners II LLC

* Says to repay outstanding borrowings on credit facility

* Shares of Quicksilver Resources up more than 16 pct

July 22 (Reuters) - Oil and natural gas company Quicksilver Resources Inc (KWK.N) said it agreed to sell its limited partnership Quicksilver Gas Services LP KGS.N to Crestwood Midstream Partners II LLC for $701 million in cash, mainly to repay debt.

Shares of Quicksilver Resources rose more than 16 percent in extended trade after closing at $12.75 Thursday on the New York Stock Exchange.

Quicksilver Resources said it will get up to $72 million in additional earn-out payments from Crestwood Midstream Partners, a private energy company.

The company expects to repay all its outstanding borrowings under its $1 billion credit facility. The company has a long-term debt of $2.51 billion, according to Thomson Reuters data.

Separately, Quicksilver Gas said its quarterly cash distribution was raised by 3 cents to 42 cents per common unit.

The deal, which is expected to close in October, comes days after reports that Indian energy major Reliance Industries (RELI.BO) was talking to Texas-based Quicksilver Resources for a possible buyout of the U.S. firm. [ID:nSGE66I03L] (Reporting by Krishna N. Das in Bangalore; Editing by Maju Samuel)