UPDATE 1-Quicksilver Resources, Shell unit to develop Colorado assets
Sept 24 (Reuters) - Quicksilver Resources Inc struck a deal with a unit of Royal Dutch Shell Plc to jointly develop oil and gas properties in the Sand Wash Basin in northwest Colorado.
The companies will own 50 percent interest each in about 330,000 acres, with SWEPI LP, the Shell unit, operating a majority of the properties.
Quicksilver, which will bring 210,000 net acres to the joint venture, will be paid an undisclosed amount to compensate for its larger share.
Quicksilver shares were up 6 percent at $4.36 in morning trading on the New York Stock Exchange. They have lost nearly half their value in the last year.
The natural gas producer, which has been actively pursuing joint venture options to help fund drilling, said it had also established an area of mutual interest with SWEPI covering more than 850,000 acres in the basin.
The agreement gives the companies a right to participate equally in any acquisition within the area of mutual interest, Quicksilver said.
Quicksilver said last month that it was in advanced talks on two ventures. Chairman Toby Darden said the deal with SWEPI was not part of those discussions.
Quicksilver has been hit by a decline in prices of natural gas, which formed 80 percent of its production in the latest quarter.
Natural gas prices, which were as high as $14 per million British thermal units (mmBtu) in 2005, are slightly below $3 per mmBtu now.