Shares of Quicksilver Resources Inc. jumped an additional 5 percent Thursday, one day after the energy exploration and production company said it was selling off its Midwest natural gas and oil assets.
The company said early Wednesday it would sell assets in Michigan, Indiana and Kentucky for nearly $1.44 billion in cash and a 31.9 percent stake in BreitBurn Energy Partners LP. The stock rose 3.2 percent to close at $44.39 after the announcement.
On Thursday, the stock extended its rally amid plaudits from Wall Street analysts. Jefferies & Co.'s Subash Chandra praised the deal's "perfect execution," while Canaccord Adams analyst Irene Haas said the "impact is very positive."
"Overall, we view the transaction as positive for KWK as it should allow them to aggressively develop its higher growth/higher return Barnett Shale drilling inventory, while eliminating investor concerns that Quicksilver will have to issue equity to fund its Barnett program," Banc of America Securities analyst Michael Schmitz wrote in a client note.
Quicksilver extracts natural gas from the Barnett Shale formation of the Fort Worth Basin in north Texas.
Lehman Brothers analyst Jeffrey Robertson raised his price target on the stock to $56 from $54.
"Proceeds from the sale of KWK's Michigan, Kentucky, and Indiana properties along with capacity under the credit facility could provide ample liquidity to fund the Barnett Shale drilling program which is expected to drive strong volume and reserve growth over the next several years," he wrote.
Capital One Southcoast and Deutsche Bank analysts also boosted their price targets, to $53 and $57, respectively.
By midday, the stock had added $2.28, or 5.1 percent, to trade at $46.67.
NEW YORK (AP)
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