##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission file number: 001-33631
 Quicksilver Gas Services LP
  Delaware
    
    56-2639586(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)777 West Rosedale, Fort Worth, Texas
    
    76104(Address of principal executive offices)
    
    (Zip Code)
 (817) 665-8620
 None
 o þ
  o o þ
 o þ
 .




---



##### Table of Contents



EXPLANATORY NOTE
     2




---



##### 



QUICKSILVER GAS SERVICES LP
INDEX TO FORM 10-Q
For the Period Ended June 30, 2007
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Combined Balance Sheets at June 30, 2007 and December 31, 2006
    
    
    4Combined Statements of Income for the Three and Six Months
Ended June 30, 2007 and 2006
    
    
    5Combined Statements of Cash Flows for the Six Months Ended
June 30, 2007 and 2006
    
    
    6Combined Statement of Net Parent Equity for the Six Months Ended June 30, 2007
    
    
    7Notes to Combined Interim Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    30PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    31Item 2. Unregistered Sales of Securities and Use of Proceeds
    
    
    31Item 6. Exhibits
    
    
    31Signatures
    
    
    32
  3




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 QUICKSILVER GAS SERVICES PREDECESSOR
 
 COMBINED BALANCE SHEETS
 In thousands  Unaudited
 June 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assetsCash and cash equivalents
    
    $
    2,999
    
    
    $
    2,797Trade accounts receivable
    
    
    171
    
    
    
    67Receivable from parent for sale of pipeline and
gathering assets
    
    
    29,509
    
    
    
    Other current assets
    
    
    392
    
    
    
    147Total current assets
    
    
    33,071
    
    
    
    3,011Property, plant and equipment  net
    
    
    193,288
    
    
    
    130,791Other assets
    
    
    
    
    
    
    821Total assets
    
    $
    226,359
    
    
    $
    134,623LIABILITIES, REDEEMABLE PARTNERS CAPITAL AND NET
PARENT EQUITYCurrent liabilitiesAccrued additions to property, plant and equipment
    
    $
    16,764
    
    
    $
    6,608Accounts payable and other
    
    
    1,404
    
    
    
    1,294Total current liabilities
    
    
    18,168
    
    
    
    7,902Asset retirement obligations
    
    
    1,540
    
    
    
    503Repurchase obligations to parent
    
    
    38,279
    
    
    
    Deferred income tax liabilities
    
    
    135
    
    
    
    135Commitments and contingent liabilities
    
    
    
    
    
    
    Redeemable partners capital
    
    
    7,879
    
    
    
    7,431Net parent equity
    
    
    160,358
    
    
    
    118,652Total liabilities, redeemable partners capital and
net parent equity
    
    $
    226,359
    
    
    $
    134,623
  4




---



##### Table of Contents



QUICKSILVER GAS SERVICES PREDECESSOR
 
 COMBINED STATEMENTS OF INCOME
 In thousands  Unaudited
 For the Three Months Ended
    
    For the Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Revenues:Gathering and transportation revenue
    
    $
    147
    
    
    $
    
    
    
    $
    338
    
    
    $
    Gathering and transportation
revenue  parent
    
    
    3,100
    
    
    
    1,522
    
    
    
    5,510
    
    
    
    2,714Gas processing revenue
    
    
    124
    
    
    
    
    
    
    
    391
    
    
    
    Gas processing revenue  parent
    
    
    3,714
    
    
    
    1,798
    
    
    
    6,217
    
    
    
    3,202Other revenue  parent
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    Total revenues
    
    
    7,118
    
    
    
    3,320
    
    
    
    12,489
    
    
    
    5,916Expenses:Operations and maintenance  parent
    
    
    2,228
    
    
    
    2,130
    
    
    
    4,945
    
    
    
    3,282General and administrative  parent
    
    
    686
    
    
    
    178
    
    
    
    1,182
    
    
    
    344Depreciation and amortization
    
    
    1,824
    
    
    
    720
    
    
    
    3,119
    
    
    
    1,087Total expenses
    
    
    4,738
    
    
    
    3,028
    
    
    
    9,246
    
    
    
    4,713Operating income
    
    
    2,380
    
    
    
    292
    
    
    
    3,243
    
    
    
    1,203Other income
    
    
    23
    
    
    
    
    
    
    
    35
    
    
    
    Interest expense
    
    
    211
    
    
    
    
    
    
    
    211
    
    
    
    Income before income taxes
    
    
    2,192
    
    
    
    292
    
    
    
    3,067
    
    
    
    1,203Income tax provision
    
    
    57
    
    
    
    
    
    
    
    97
    
    
    
    Net income
    
    $
    2,135
    
    
    $
    292
    
    
    $
    2,970
    
    
    $
    1,203
  5




---



##### Table of Contents



QUICKSILVER GAS SERVICES PREDECESSOR
 
 COMBINED STATEMENTS OF CASH FLOWS
 In thousands  Unaudited
 For the Six Months EndedJune 30,2007
    
    
    2006Operating activities:Net income
    
    $
    2,970
    
    
    $
    1,203Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    3,088
    
    
    
    1,080Accretion of asset retirement obligations
    
    
    31
    
    
    
    7Non-cash interest expense on repurchase obligations
    
    
    211
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    (104
    )
    
    
    Other current assets
    
    
    (246
    )
    
    
    Accounts payable and other
    
    
    108
    
    
    
    830Net cash provided by operating activities
    
    
    6,058
    
    
    
    3,120Investing activities:Additions to property, plant and equipment
    
    
    (45,040
    )
    
    
    (40,201
    )Net cash used in investing activities
    
    
    (45,040
    )
    
    
    (40,201
    )Financing activities:Contributions by parent, net
    
    
    39,017
    
    
    
    32,575Contributions by redeemable partners
    
    
    167
    
    
    
    4,506Net cash provided by financing activities
    
    
    39,184
    
    
    
    37,081Net increase in cash and cash equivalents
    
    
    202
    
    
    
    Cash and cash equivalents at beginning of period
    
    
    2,797
    
    
    
    Cash and cash equivalents at end of period
    
    $
    2,999
    
    
    $
    Non-cash transactions:Changes in working capital related to the acquisition of
property, plant and equipment
    
    $
    (10,156
    )
    
    $
    (83
    )Repurchase obligations to parent:Receivable from parent for sale of pipeline and
gathering assets
    
    
    (29,509
    )
    
    
    Acquisition of property, plant and equipment
    
    
    (8,559
    )
    
    
    $
    (38,068
    )
    
    $
    
  6




---



##### Table of Contents



QUICKSILVER GAS SERVICES PREDECESSOR
 
 COMBINED STATEMENT OF NET PARENT EQUITY
 In thousands  Unaudited
 Balance  December 31, 2006
    
    $
    118,652Net change in parent contributions
    
    
    39,017Parent share of net income
    
    
    2,689Balance  June 30, 2007
    
    $
    160,358
  7




---



##### Table of Contents



QUICKSILVER GAS SERVICES PREDECESSOR
 
 NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS
 UNAUDITED
 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
 Organization
 Initial Public
Offering
  Description
of Business
 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of
Presentation
   8




---



##### Table of Contents



Use of Estimates 
 Cash and Cash Equivalents
 Property, Plant and Equipment
  Asset Retirement Obligations  Accounting for Asset Retirement Obligations Accounting for Conditional Asset
Retirement Obligations
 Repurchase Obligations to Parent
 Cowtown Pipeline Assets Repurchase:
 Lake Arlington Dry System and Hill County Dry System Repurchases:
  9




---



##### Table of Contents



Other Assets
 Impairment of Long-Lived Assets
 Environmental Liabilities
 Redeemable Partners Capital
 Revenue Recognition
  Income
Taxes
 Segment Information Disclosures about Segments of an Enterprise and Related
Information,
 Fair Value of Financial Instruments 
 Recently Issued Accounting
Standards  Share-Based Payment
 Fair Value Measurements
 10




---



##### Table of Contents



Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109
  The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement No. 115
 Amendment of FASB
Interpretation No. 39 Accounting for Derivative Instruments and Hedging Activities
 11




---



##### Table of Contents



3. PROPERTY, PLANT AND EQUIPMENT AND ASSET RETIREMENT OBLIGATIONS
  DepreciableLife
    
    
    June 30, 2007
    
    
    December 31, 2006(in thousands)Gathering and transportation systems
    
    20 years
    
    $
    75,262
    
    
    $
    36,572Processing plants
    
    20-25 years
    
    
    87,327
    
    
    
    53,035Rights-of-way and easements
    
    20 years
    
    
    20,661
    
    
    
    13,135Construction in progress
    
    
    
    
    
    
    16,689
    
    
    
    31,612199,939
    
    
    
    134,354Less: accumulated depreciation and amortization
    
    
    
    
    
    
    (6,651
    )
    
    
    (3,563
    )Net property, plant and equipment
    
    
    
    
    
    $
    193,288
    
    
    $
    130,791
  Asset Retirement Obligations
 Six Months Ended June 30,2007
    
    
    2006(in thousands)Beginning asset retirement obligations
    
    $
    503
    
    
    $
    29Additional liability incurred
    
    
    1,006
    
    
    
    451Accretion expense
    
    
    31
    
    
    
    7Ending asset retirement obligations
    
    $
    1,540
    
    
    $
    487
  4. RELATED PARTY TRANSACTIONS
 Centralized cash management
  Services to affiliates
 Allocation of costs
 12




---



##### Table of Contents



Six Months EndedJune 30,(in thousands)2007
    
    2006Net parent equityBeginning balance
    
    $
    118,652
    
    
    $
    48,949Net change in parent advances:Contribution of property, plant and equipment
    
    
    45,040
    
    
    
    40,201Settled revenue with parent
    
    
    (11,760
    )
    
    
    (5,916
    )Payments received by parent for trade accounts receivable
    
    
    (625
    )
    
    
    Payments made to settle expenses by parent
    
    
    5,350
    
    
    
    2,507Allocation of general and administrative overhead
    
    
    850
    
    
    
    289Contribution of other current assets
    
    
    162
    
    
    
    Distributions to parent
    
    
    
    
    
    
    (4,506
    )Net change in parent advances
    
    
    39,017
    
    
    
    32,575Parent share of net income
    
    
    2,689
    
    
    
    1,164Ending balance
    
    $
    160,358
    
    
    $
    82,688General and administrative expense-parentAllocation of general and administrative overhead
    
    $
    850
    
    
    $
    289Management fee
    
    
    120
    
    
    
    Audit fees
    
    
    166
    
    
    
    45Insurance expense
    
    
    46
    
    
    
    10Total general and administrative expense-parent
    
    $
    1,182
    
    
    $
    344
 5. COMMITMENTS AND CONTINGENT LIABILITIES
 Litigation
 Casualties or Other Risks
    Regulatory Compliance
 13




---



##### Table of Contents



Environmental Compliance
 Commitments
  6. INCOME TAXES
 Accounting for Income Taxes
   14




---



##### Table of Contents



7. SUBSEQUENT EVENTS
 Initial Public
Offering
   
    
    Quicksilver affiliates contributed to the Partnership their 95% interest in
Cowtown Gas Processing Partners L.P., and their 93% interest in Cowtown Pipeline Partners
L.P., and the Private Investors contributed to the Partnership their 5% interests in Cowtown
Gas Processing Partners L.P. and their 7% interests in Cowtown Pipeline Partners L.P.;
    
    the Partnership issued to Quicksilver 5,696,752 common units and 11,513,625 subordinated
units, representing an aggregate 73.2% limited partner interest in it;
    
    the Partnership issued to the Private Investors a total of 816,873 common units,
representing an aggregate 3.5% limited partner interest in it; and
    
    the Partnership issued to the General Partner 469,944 general partner units, representing
its initial 2% general partner interest, and all of the Partnerships incentive distribution
rights, which incentive distribution rights will entitle the General Partner to increasing
percentages of the cash that the Partnership distributes in excess of $0.3450 per unit per
quarter.
   Credit
Agreement
 15




---



##### Table of Contents



.
 Subordinated Promissory Note
   Omnibus Agreement
 
    
    restrictions on Quicksilvers ability to engage in certain midstream
business activities or own certain related assets in eight specified
counties in North Texas referred to in our Registration
Statement on Form S-1 (No. 333-140599) as the Quicksilver
Counties;
    
    Quicksilvers right to construct and operate pipeline assets in the
Lake Arlington area of Tarrant County, Texas and in Hill County,
Texas, and the Partnerships obligation to purchase those assets from
Quicksilver at their fair market value within two years after the
assets commence commercial service;
    
    the Partnerships obligation to reimburse Quicksilver for all expenses
incurred by Quicksilver (or payments made on the Partnerships behalf)
in conjunction with Quicksilvers provision of general and
administrative services to the Partnership, including salary and
benefits of Quicksilver personnel, the Partnerships public company
expenses, general and administrative expenses and salaries and
benefits of the Partnerships executive management who are
Quicksilvers employees;
    
    the Partnerships obligation to reimburse Quicksilver for all
insurance coverage expenses it incurs or payments it makes with
respect to the Partnerships assets; and
    
    Quicksilvers obligation to indemnify the Partnership for certain
liabilities and the Partnerships obligation to indemnify Quicksilver
for certain liabilities.
 Services and Secondment Agreement
 16




---



##### Table of Contents



Gas Gathering
and Processing Agreement
     Contribution,
Conveyance and Assumption Agreement
 
    
    the transfer of all of the interests in Pipeline Partners and Processing Partners to the Partnership and its subsidiaries;
    
    the issuance of the incentive distribution rights to the General Partner and the continuation of its 2.0% general partner
interest in the Partnership;
    
    the Partnerships issuance of 5,696,752 common units, 11,513,625 subordinated units and the right to receive $162.1
million, to Holdings in exchange for the contributed interests; and
    
    the Partnerships issuance of 816,873 common units and the right to receive $7.7 million to the Private Investors in
exchange for the contributed interests.
 17




---



##### Table of Contents



Equity
Plan
 
    
    Awards of 83,000 phantom units, payable in cash with a fair value of $1,743,000,
were granted to executive officers of the General Partner and certain other individuals. One-third
of these phantom units will vest on the first business day coinciding with or following
each of the first three anniversaries of the date of the grant. The phantom units have no
rights to distributions. Each vested phantom unit will entitle the participant to receive
a lump sum cash payment equal to the fair market value per unit determined as of the date
the phantom unit becomes vested.
 
    
    Awards of 5,714 phantom units, payable in units, were granted to the non-employee directors of the General Partner. At the date of grant, the fair value of the award totaled $120,000.
 One-third of these phantom units will vest on the first business day of each of the first three calendar years
beginning after the date of grant. Holders of phantom units have no voting rights
and no distribution rights until such time as the phantom units become vested and
common units are issued to such holders.
 
    
    Awards of 4,286 phantom units, payable in units, were granted to the non-employee directors of the General Partner in lieu of director fees otherwise payable in cash. At the date of grant, the fair value of the award totaled $90,000.
These phantom units will vest January 2, 2008. Each phantom unit will entitle the non-employee director to
receive one common unit with respect to each phantom unit that becomes vested. Holders of
phantom units have no voting rights and no distribution rights until such time as
the phantom units become vested and common units are issued to such holders.
  18




---



##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Information
  
    
    changes in general economic conditions;
    
    fluctuations in natural gas prices;
    
    failure or delays in the Parent and third parties achieving expected production from natural gas projects;
    
    competitive conditions in our industry;
    
    actions taken by third-party operators, processors and transporters;
    
    changes in the availability and cost of capital;
    
    operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control;
    
    construction costs or capital expenditures exceeding estimated or budgeted costs or expenditures;
    
    the effects of existing and future laws and governmental regulations;
    
    the effects of future litigation; and
    
    factors discussed in our Registration Statement on Form S-1 (No. 333-140599).
  Overview
  Our Operations
  How We Evaluate Our Operations
  19




---



##### Table of Contents



Volume
 Adjusted Gross Margin
 Operating Expenses
 EBITDA
  
    
    financial performance of our assets without regard to financing methods, capital
structure or historical cost basis;
    
    our operating performance as compared to those of other companies in the midstream energy
industry without regard to financing methods, capital structure or historical cost basis;
and
    
    the viability of acquisitions and capital expenditure projects and the overall rates of
return on alternative investment opportunities.
  General Trends and Outlook
  20




---



##### Table of Contents



Natural Gas Supply, Demand and Outlook
   Impact of Interest Rates and Inflation
  Items Impacting Comparability of Our Financial Results
  
    
    Quicksilvers Barnett Shale operations began in 2004 and have subsequently grown
significantly.
    
    Our facilities and operations have been in a startup phase, and we have incurred expenses
that we do not expect to be recurring.
    
    Expenses are largely independent of gathering and processing volumes and are more
directly related to the capacity of our facilities and operations.
    
    Revenues have been dependent on Quicksilvers ability to connect wells to our system.
 Critical Accounting Policies and Estimates
  Depreciation Expense and Cost Capitalization Policies.
 21




---



##### Table of Contents



Asset Retirement Obligations  Accounting for Asset Retirement Obligations Accounting for Conditional Asset
Retirement Obligations
 22




---



##### Table of Contents



Results of Operations
 Three
Months Ended June 30, 2007 Compared with Three Months Ended June 30, 2006.
 Combined Overview
  Three months ended June 30,2007
    
    
    2006(in thousands)Total revenues
    
    $
    7,118
    
    
    $
    3,320Operations and maintenance expense
    
    
    2,228
    
    
    
    2,130General and administrative expense
    
    
    686
    
    
    
    178Adjusted gross margin(a)
    
    
    4,204
    
    
    
    1,012Other income
    
    
    23
    
    
    
    EBITDA(b)
    
    
    4,227
    
    
    
    1,012Depreciation and amortization expense
    
    
    1,824
    
    
    
    720Interest expense
    
    
    211
    
    
    
    Income tax provision
    
    
    57
    
    
    
    Net income
    
    $
    2,135
    
    
    $
    292Operating Data:Daily throughput (Mcf)
    
    
    67,621
    
    
    
    32,534Total throughput (Mcf)
    
    
    6,153,510
    
    
    
    2,960,612
 
 (a)
    
    Adjusted gross margin consists of total operating revenues less
operations and maintenance expense and general and administrative
expense.(b)
    
    EBITDA consists of net income plus net interest expense, provision for
taxes on our income and depreciation and amortization expense. Total Revenues 
 Operations and Maintenance Expense 
 General and Administrative Expense 
 Adjusted
Gross Margin 
 23




---



##### Table of Contents



Depreciation and Amortization Expense 
 Six
Months Ended June 30, 2007 Compared with Six Months Ended June 30, 2006.
  Six months ended June 30,2007
    
    
    2006(in thousands)Total revenues
    
    $
    12,489
    
    
    $
    5,916Operations and maintenance expense
    
    
    4,945
    
    
    
    3,282General and administrative expense
    
    
    1,182
    
    
    
    344Adjusted gross margin(a)
    
    
    6,362
    
    
    
    2,290Other income
    
    
    35
    
    
    
    EBITDA(b)
    
    
    6,397
    
    
    
    2,290Depreciation and amortization expense
    
    
    3,119
    
    
    
    1,087Interest expense
    
    
    211
    
    
    
    Income tax provision
    
    
    97
    
    
    
    Net income
    
    $
    2,970
    
    
    $
    1,203Operating Data:Daily throughput (Mcf)
    
    
    60,680
    
    
    
    29,238Total throughput (Mcf)
    
    
    10,983,102
    
    
    
    5,292,094
 
 (a)
    
    Adjusted gross margin consists of total operating revenues less
operation and maintenance expense and general and administrative
expense.(b)
    
    EBITDA consists of net income plus net interest expense, provision for
taxes on our income and depreciation and amortization expense. Total Revenues 
 Operations and Maintenance Expense 
 General and Administrative Expense 
 Adjusted Gross Margin 
 24




---



##### Table of Contents



Depreciation and Amortization Expense 
 Liquidity and Capital Resources
   
    
    cash generated from operations;
    
    borrowings under our revolving credit facility;
    
    future debt offerings; and
    
    issuances of additional partnership units.
  Cash Flows
  
    
    At December 31, 2004, Quicksilver had produced only 103,339 Mcf in the Fort Worth Basin
for the year then ended, and there were only two wells connected to the Partnerships system.
    
    At December 31, 2005, Quicksilver had produced 3,560,605 Mcf in the Fort Worth Basin for
the year then ended, all of which was gathered, processed and transported on the
Partnerships system, and had 39 wells connected to the Partnerships system. At December
31, 2005, we had invested $53.8 million in the Partnerships pipeline and plant assets.
    
    At December 31, 2006, Quicksilver had throughput of 13,495,818 Mcf on the Partnerships
system for the year then ended, and had 88 wells connected to the Partnerships system. The
system consisted of 120 miles of gathering pipelines, a 22-mile NGL transportation pipeline
and two operating units which can process 200 MMcf/d of natural gas.
 Working Capital (Deficit) 
  Cash Flows from Operations 
  Cash Flows Used in Investing Activities 
  25




---



##### Table of Contents



Cash Flows Provided by Financing Activities 
  Capital Expenditures
  
    
    Expansion capital expenditures, which are made to construct additional assets, to expand
and upgrade existing systems and facilities or to acquire additional assets; or
    
    Maintenance capital expenditures, which are made to replace partially or fully
depreciated assets, to maintain the existing operating capacity of our assets and extend
their useful lives or to maintain existing system volumes and related cash flows.
       Revolving Credit Facility
  26




---



##### Table of Contents




    
    incur further indebtedness;
    
    grant liens;
    
    pay dividends; and
    
    engage in transactions with affiliates.
   Subordinated Intercompany Note
  
    
    accrued and unpaid interest on the note will be due and payable quarterly on the last
business day of each calendar quarter, beginning on March 31, 2008, and on the maturity date
of the note, provided that such interest payments may be added to the outstanding principal
amount at any time when the payment of interest is prohibited pursuant to the subordination
provisions described below; and
    
    the principal amount of the note will be due and payable:
 
 
  
    
    an event of default under the revolving credit facility;
    
    the existence of a pending judicial proceeding with respect to any event of default under the revolving credit facility; or
    
    our ratio of total indebtedness (which includes the $50.0 million subordinated note
payable to Quicksilver) to Consolidated EBITDA (as determined in accordance with our
revolving credit facility) as of the end of the fiscal quarter immediately preceding the
date of such payment was equal to or greater than 3.5 to 1.0 or would be greater than 3.5 to
1.0 after giving pro forma effect to such payment.
 27




---



##### Table of Contents



Repurchase Obligations to Parent
  Cowtown
Pipeline Assets Repurchase:
 Lake
Arlington Dry System and Hill County Dry System Repurchases:
  Total Contractual Cash Obligations
  Payments Due by PeriodContractual Obligations
    
    Total
    
    
    2007
    
    
    2008-2010
    
    
    2011-2012
    
    
    Thereafter($Millions)Long-Term Debt (including interest) (1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Repurchase Obligations to Parent (2)
    
    
    38.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Construction Commitments
    
    
    3.8
    
    
    
    3.8
    
    
    
    
    
    
    
    
    
    
    
    Total Contractual Obligations (3)
    
    $
    42.1
    
    
    $
    3.8
    
    
    $
    
    
    
    $
    
    
    
    $
    
 
 (1)
    
    With respect to the revolving credit facility, based on an interest rate of 6.60%, which is
the current LIBOR interest rate of 5.35% plus a margin of 1.25%. With respect to the $50.0
million subordinated note, based on an interest rate of the current LIBOR interest rate of
5.35% plus 2.25% per annum.(2)
    
    As described above under Repurchase Obligations to Parent, QGS Predecessor is obligated to
purchase certain pipeline assets from Quicksilver at their fair market value within two years
of their commencement of commercial operation. The Repurchase
Obligations to Parent balance, of $38.3 million, includes
$25.0 million related to Cowtown Assets that QGS Predecessor has the option to
purchase. QGS Predecessor cannot presently predict the deadline for
completing the purchase of these assets or the ultimate purchase
price. QGS predecessor intends to exercise its purchase rights related
to these assets.(3)
    
    These amounts do not include the $89.9 million that QGS Predecessor expects to spend in
fiscal year 2007 for the construction of additions to its gathering system to connect new
wells and the cost to construct the third processing unit that QGS Predecessor expects to
become operational by the fourth quarter of 2008, a portion of which is budgeted for fiscal
year 2007 capital expenditures. 28




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Recently Issued Accounting Pronouncements
 Share-Based
Payment
 Fair Value
Measurements
 Accounting for Uncertainty in Income
Taxes  an interpretation of FASB Statement No. 109
  The Fair Value Option for Financial Assets and
Financial Liabilities, including an amendment of FASB Statement
No. 115
 Amendment of FASB
Interpretation No. 39 Derivative Instruments and
Hedging Activities
 
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  Credit Risk
  29




---



##### Table of Contents



Interest Rate Risk
   
 ITEM 4. Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  30




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
     
 Item 6. Exhibits:
 Exhibit No.
    
    Description3.1
    
    First Amended and Restated Agreement of Limited Partnership of
Quicksilver Gas Services LP, dated August 10, 2007 (filed as Exhibit
3.1 to the Companys Form 8-K filed August 16, 2007 and included herein
by reference).3.2
    
    First Amended and Restated Limited Liability Company Agreement of
Quicksilver Gas Services GP LLC, dated July 24, 2007 (filed as Exhibit
3.4 to the Companys Form S-1/A, File No. 333-140599, filed July 25,
2007 and included herein by reference).4.1
    
    Form of Common Unit Certificate (filed as Exhibit 4.1 to the Companys
Form S-1/A, File No. 333-140599, filed July 17, 2007 and included
herein by reference).10.1
    
    Assignment and Conveyance, effective April 30, 2007, between Cowtown
Pipeline Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit
10.13 to the Companys Form S-1/A, File No. 333-140599, filed July 30,
2007 and included herein by reference).10.2
    
    Form of Assignment, effective April 30, 2007, between Cowtown Pipeline
Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit 10.14(a) to
the Companys Form S-1/A, File No. 333-140599, filed July 30, 2007 and
included herein by reference).10.3
    
    Schedule of Assignments, effective April 30, 2007, between Cowtown
Pipeline Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit
10.14(b) to the Companys Form S-1/A, File No. 333-140599, filed July
30, 2007 and included herein by reference).*31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 31




---



##### Table of Contents



SIGNATURES
   QUICKSILVER GAS SERVICES LPBy: QUICKSILVER GAS SERVICES GP LLC, its general partnerBy:
    
    /s/ Thomas F. Darden

Thomas F. DardenPresident and Chief Executive OfficerBy:
    
    /s/ Philip CookPhilip CookSenior Vice President  Chief Financial Officer
 32




---



##### Table of Contents



Item 6. Exhibits:
 Exhibit No.
    
    Description3.1
    
    First Amended and Restated Agreement of Limited Partnership of
Quicksilver Gas Services LP, dated August 10, 2007 (filed as Exhibit
3.1 to the Companys Form 8-K filed August 16, 2007 and included herein
by reference).3.2
    
    First Amended and Restated Limited Liability Company Agreement of
Quicksilver Gas Services GP LLC, dated July 24, 2007 (filed as Exhibit
3.4 to the Companys Form S-1/A, File No. 333-140599, filed July 25,
2007 and included herein by reference).4.1
    
    Form of Common Unit Certificate (filed as Exhibit 4.1 to the Companys
Form S-1/A, File No. 333-140599, filed July 17, 2007 and included
herein by reference).10.1
    
    Assignment and Conveyance, effective April 30, 2007, between Cowtown
Pipeline Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit
10.13 to the Companys Form S-1/A, File No. 333-140599, filed July 30,
2007 and included herein by reference).10.2
    
    Form of Assignment, effective April 30, 2007, between Cowtown Pipeline
Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit 10.14(a) to
the Companys Form S-1/A, File No. 333-140599, filed July 30, 2007 and
included herein by reference).10.3
    
    Schedule of Assignments, effective April 30, 2007, between Cowtown
Pipeline Partners L.P. and Cowtown Pipeline L.P. (filed as Exhibit
10.14(b) to the Companys Form S-1/A, File No. 333-140599, filed July
30, 2007 and included herein by reference).*31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith