1389030--3/15/2010--Quicksilver_Gas_Services

related topics

{gas, price, oil}

{debt, indebtedness, cash}

{operation, natural, condition}

{tax, income, asset}

{cost, regulation, environmental}

{regulation, change, law}

{acquisition, growth, future}

{operation, international, foreign}

{financial, litigation, operation}

We are dependent on a limited number of natural gas producers, including Quicksilver, for our volumes. The loss of such a customer would result in a material decline in our volumes, revenue and cash available for distribution. We may not have sufficient available cash to enable us to make cash distributions to holders of our common units and subordinated units at the current distribution rate under our cash distribution policy. The amount of cash we have available for distribution to holders of our common units and subordinated units depends primarily on our cash flow and not solely on profitability. Estimates of oil and gas reserves depend on many assumptions that may turn out to be inaccurate and any material inaccuracies in these reserve estimates could materially reduce the volumes that we gather and process and consequently could adversely affect our financial performance and our ability to make cash distributions. Because of the natural decline in production from existing wells in our area of operations, our success depends on our ability to obtain new supplies of natural gas. Any decrease in supplies of natural gas could result in a material decline in the volumes we gather and process. Our construction of new assets may not result in revenue increases and is subject to regulatory, environmental, political, legal and economic risks, which could adversely affect our cash flows, results of operations and financial condition. If we do not make acquisitions on economically acceptable terms, our future growth will be limited. We depend on our midstream assets to generate our revenue, and if the utilization of these assets was reduced significantly, there could be a material adverse effect on our revenue, earnings, and ability to make distributions to our unitholders. We cannot control the operations of gas processing, liquids fractionation and transportation facilities we do not own or operate, and our revenue and cash available for distribution could be adversely affected. A change in the jurisdictional characterization of some of our assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may cause our revenue to decline and operating expenses to increase. We are subject to environmental laws, regulations and permits, including greenhouse gas requirements, that may expose us to significant costs, liabilities and obligations. We may incur significant costs as a result of pipeline integrity management program testing. We do not own all of the land on which our pipelines and facilities are located, which could disrupt our operations. Our business involves many hazards and operational risks, some of which may not be adequately covered by insurance. The occurrence of a significant accident or other event that is not adequately insured could curtail our operations and have a material adverse effect on our business, results of operations, financial condition and ability to make cash distributions. The provisions of our Credit Agreement and the risks associated with our debt could adversely affect our business, financial condition, results of operations, ability to make distributions to unitholders and value of our units. We are exposed to the credit risks of Quicksilver, and any material nonpayment by Quicksilver could reduce our ability to make distributions to our unitholders.

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1389030--3/15/2010--Quicksilver_Gas_Services_LP