BlueStone won’t move to Fort Worth after purchase of Quicksilver

Quicksilver Resources, the bankrupt Fort Worth energy company that made a big bet on the Barnett Shale gas field, held a commanding place — and view — in Fort Worth.

But don’t expect Tulsa-based BlueStone Natural Resources II to move into Quicksilver’s space atop Burnett Plaza when it completes its purchase of Quicksilver’s U.S. assets, said John Redmond, president and chief executive of BlueStone.

BlueStone will interview Quicksilver’s 164 employees — 116 at the downtown Fort Worth headquarters and an office on Eagle Parkway plus 48 in a field office in Glen Rose — but it intends to keep its headquarter operation in Tulsa, despite having most of its assets in Texas.

“The vast majority of those in the field will become BlueStone employees,” Redmond said. “The functionality that was in the corporate headquarters will come to Tulsa. … Outside of the field operations, there will not be a long-term presence in Fort Worth.”

Warnings were issued last week by the Texas Workforce Commission that Quicksilver was laying off all of its employees April 1. BlueStone has about 70 employees with 10 people working out of an office in Hill County south of Fort Worth. It bought the asset from EOG in 2013.

The Quicksilver purchase covers about 1,000 wells in the Barnett Shale.

A federal bankruptcy judge in Delaware earlier this month approved BlueStone’s purchase of Quicksilver. BlueStone is paying $240 million in cash for Quicksilver’s Barnett Shale natural gas assets, which include acreage near Alliance Airport and Texas Motor Speedway. Another $5 million will be paid for Quicksilver’s oil-rich property in the Delaware Basin in West Texas.

It will take several months to complete the transaction and for BlueStone to complete its review of Quicksilver’s assets, Redmond said. The company has about 800 wells in Texas, including 150 in the Barnett Shale and another 650 in South Texas, according to Redmond and the company website.

Redmond said BlueStone will have to boost its staff in Tulsa since the Quicksilver purchase marks its largest acquisition so far. But if someone in the Quicksilver headquarters wants to work for the company, they will have to pack up and move.

“Obviously we’re going to have to add staff in Tulsa to handle this acquisition. We’re always looking for bright and talented people,” Redmond said.

As part of the purchase, BlueStone intends to continue partnerships that Quicksilver made with two foreign companies. Quicksilver sold 25 percent of its Barnett Shale holdings to Tokyo Gas in April 2013 and about a quarter of its leasehold in the Alliance area to Italian energy giant Eni, which also was a partner with Quicksilver in the Permian Basin.

BlueStone said at this time it has no interest in Quicksilver’s Canadian assets, which are being sold separately. Quicksilver has holdings in the Horn River Basin in British Columbia and the coal beds in Horseshoe Canyon in Alberta.

While BlueStone is excited about its Quicksilver investment, it doesn’t anticipate many new drilling rigs in the Barnett with natural gas selling at about $2 per thousand cubic feet, Redmond said.

“I think the current price level of natural gas is not terribly supportive of drilling, but quite honestly we have a longer-term view for the assets,” he said.

Various members of the BlueStone management team have been together for 12 years forming three private equity-backed upstream oil and gas companies.

Formed in 2003, AXIO Natural Resources used $15 million in equity to buy assets in South Texas and the Panhandle. The company was sold to Chesapeake in 2006 for $145 million.

BlueStone Natural Resources was formed immediately after that with $89 million in equity capital to complete more than 60 acquisitions of oil and gas assets in South and East Texas. Five years later that company sold its South Texas assets as part of a public offering of Memorial Production Partners, a Houston-based limited partnership. The East Texas assets were sold to EOG in 2013.

BlueStone Natural Resources II was launched in 2012 with a $115 million commitment from management and Natural Gas Partners Fund X. This version of BlueStone, before the Quicksilver deal, had completed more than 30 transactions to date. In 2015, BlueStone increased its equity commitment to $143 million to further its acquisition efforts.

This story was originally published February 9, 2016 at 5:16 PM with the headline "BlueStone won’t move to Fort Worth after purchase of Quicksilver."