Exhibit
10.40


Cause No.
048-233656-08





Quicksilver
      Resources, Inc.
            §
            IN
      THE 48TH
      DISTRICT COUT§
            OF
      TARRANT COUNTY, TEXASv.
            §§BreitBurn
      Energy Partners L.P., et al.
            §





SETTLEMENT
AGREEMENT





The
Parties hereto settle all claims and controversies between them in this lawsuit
according to the following terms:





1.
            BreitBurn
      Energy Partners (“BreitBurn”) will pay Quicksilver Resources
      (“Quicksilver”) the sum o f $13,000,000.00 on or before April 2,
      2010.




2.
            Exhibit
      A is incorporated by reference.




3.
            Provident
      Energy Trust (“Provident”) will pay Quicksilver $5,000,000.00 on or before
      March 22, 2010, but will undertake best efforts to pay by March 5,
      2010.




4.
            [INTENTIONALLY
      LEFT BLANK]




5.
            The
      parties will execute and file an agreed order dismissing all claims in the
      above styled and numbered case with prejudice within 2 days after receipt
      of payment by Quicksilver.  Each party will bear its own
      costs.




6.
            Each
      party to the above lawsuit, including each party’s affiliates, agents,
      officers, directors, and attorneys, hereby mutually release and discharge
      each other from any and all claims, demands, or suits, known or unknown,
      fixed or contingent, liquidated or unliquidated, whether or not asserted
      in the above case, as of this date, arising from or related to the events
      and transactions which are the subject matter of this
      case.  Provided, however, BreitBurn and Provident do not intend
      to release each other with respect to rights and obligations under the
      documents related to the June 17, 2008, transaction unrelated to the
      lawsuit or claims asserted by
Quicksilver.




7.
            Each
      signatory hereto warrants and represents that he or she has authority to
      bind the parties for whom that signatory
acts.







8.
            Counsel
      for Defendants shall deliver drafts of any further settlement documents,
      such as formal agreement, order of dismissal, formal release, etc., to the
      other parties by Monday, February 8, 2010.  The parties agree to
      cooperate with each other in the drafting and execution of such additional
      documents as are reasonably requested or required to implement the terms
      and spirit of this agreement.  Nevertheless, the parties hereto
      intend to be bound by this
Agreement.




9.
            If
      one or more disputes arise with regard to the interpretation and/or
      performance of this agreement or any of its provisions, the parties agree
      to resolve same by phone conference with the mediator that facilitated
      this settlement.  If the parties cannot resolve their
      differences by phone conference, then each agrees to schedule one day of
      mediation with the mediator within 30 days to resolve the disputes and to
      share the cost of same equally.




10.
            Each
      signatory to this settlement has entered into same freely and without
      duress after having consulted with professionals of his or her
      choice.  Each party hereto acknowledges (a) the mediator is not
      the attorney for any party, (b) the party has conferred with counsel
      regarding the advisability of entering this agreement prior to signing it,
      and (c) the party’s counsel has independently reviewed this agreement
      prior to its execution.




Signed
this 3rd day of
February, 2010.





Plaintiff(s):
            /s/ Glenn DardenQuicksilverApproved
      by Attorney for Plaintiff(s):
            /s/ Gerald PechtDefendant(s):
            /s/ Halbert S. WashburnBreitBurnApproved
      by Attorney for Defendant(s):
            /s/ Gregory C. BrownDefendant(s):
            /s/ Tom BuchananProvidentApproved
      by Attorney for Defendant(s):
            /s/ Greg
Waller


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EXHIBIT
A


Mediation
February 3, 2010 –


Agreement
between the BreitBurn Defendants and Quicksilver




1.           CEOs.  One
CEO — Hal as the CEO and Randy as President.




2.           Piggyback
rights.  Quicksilver’s option to participate in every equity offering
up to 20% of the equity offered.  Amend existing Registration Rights
Agreement accordingly.




3.           Distributions.  Reinstitute
regular distributions beginning in the first quarter of 2010 at a minimum amount
of $1.50 (annual rate) and minimum coverage ratio of no less than
1.2x.  The first quarter’s distribution shall be payable in the second
quarter of 2010.




4.           Devco.  Devco
ASA will not be amended or renewed without the approval of the new BreitBurn
Board.




5.           Independent
Chairman - John Butler.




6.           Hal
and Randy shall resign from the Board.




7.           Voting
rights.  Quicksilver retains right to vote all its units (currently
41%) on all matters on which it has the right to vote, except as provided in
paragraph 11 with respect to voting on directors and as provided in paragraph 12
with respect to voting on the removal of the GP.




8.           Size
of Board: 2 of 6 designated by Quicksilver.  The Board size will not
be increased without Quicksilver’s prior written consent.  Subject to
applicable NASDAQ and SEC rules, at least one Quicksilver designee will serve on
each Board Committee.




9.           Standstill.




(a)          For
a period ending on the date on which Quicksilver ceases to hold at least 10% of
the units, Quicksilver will agree to the following standstill provisions that
prohibit Quicksilver from:




(i)           engaging
in any hostile/takeover activities (including tender offer; soliciting proxies
or written consents - other than as recommended by the Board);




(ii)          acquiring
or proposing to acquire additional units, securities or properties of BreitBurn,
except pursuant to a distribution, reclassification or reorganization involving
BreitBurn or its units or other securities approved by the Board;




(iii)         calling
a special meeting of the unitholders; or




(iv)         proposing
to remove the GP or voting for removal of the GP other than in accordance with
paragraph 12.







(b)           Specifics.  Without
the prior written consent of BreitBurn, Quicksilver will not, directly or
indirectly:




(i)           acquire
any securities or property of BreitBurn (or its affiliates), except pursuant to
a distribution, reclassification or reorganization involving BreitBurn or its
units or other securities approved by the Board;




(ii)          propose
to enter into (directly or indirectly) any merger/consolidation/recap/business
combination/partnership/JV, etc. involving BreitBurn (or its affiliates), except
as permitted hereby;




(iii)         make
or in any way participate in any solicitation of proxies (per SEC’s proxy rules)
or written consents to vote/seek to influence/advise others with respect to the
voting BreitBurn’s (or its affiliates’) voting securities;




(iv)        form/join/participate
in a “group” (per SEC’s Sec 13(d) rules/defs) with respect to any voting
securities of BreitBurn (or its affiliates);




(v)        
act to seek to control or influence the management/Board/policies of BreitBurn
except through Quicksilver’s Board designees or as provided below;




(vi)        propose
to remove the GP of BreitBurn or, other than in accordance with paragraph 12,
vote to remove the GP;




(vii)       publicly
disclose any intent/plan/arrangement inconsistent with this agreement;
or




(viii)     
advise/assist/encourage others in connection with the above.




(c)           Quicksilver
will agree not to sell/transfer its units without the prior written consent of
BreitBurn, except:




(i)           to
a party that would not own more than 20% of the outstanding units after such
transfer;




(ii)          in
connection with a business combination approved by the Board and/or the
BreitBurn unitholders;




(iii)         in
a pledge of any voting securities to a financial institution/brokerage firm;
or




(iv)        in
an underwritten offering where the units will be widely distributed or would not
result in any purchaser in such offering owning more than 20% of the outstanding
units after the offering.




(d)           The
foregoing provisions shall not, and are not intended to:




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(i)           prohibit
Quicksilver from privately communicating with, including making any offer or
proposal to, the Board;




(ii)          restrict
in any manner how Quicksilver votes its units, except as provided in paragraphs
11 and 12;




(iii)         restrict
the manner in which Quicksilver’s designees to the Board (A) may vote on any
matter submitted to the Board or the unitholders, or (B) participate in
deliberations or discussions of the Board (including making suggestions or
raising issues to the Board) in their capacity as members of the Board, or (C)
may take actions required by their exercise of legal duties and obligations as
members of the Board or refrain from taking any action prohibited by their legal
duties and obligations as members of the Board; or




(iv)     
   restrict Quicksilver from selling or transferring any of its
units to any affiliate or successor of Quicksilver which agrees to be bound by
the standstill agreement.




(e)           The
provisions contained in paragraph 9 shall immediately and automatically be
suspended upon the increase or acceleration of a material financial obligation
of BreitBurn that results from the breach of a material provision thereof or the
occurrence of a material event of default thereunder, unless such breach is
caused solely by the action or inaction of Quicksilver or its nominated
directors.




10.           Voting
Rights as set forth in Original Amendment No. 1 to the Partnership
Agreement.  Subject to paragraph 12 below, Quicksilver will accept and
agree not to challenge the voting rights as set forth in original Amendment No.
1 to the Partnership Agreement dated June 17, 2008.  BreitBurn will
agree not to effect any amendment that would restrict in any manner
Quicksilver’s rights to vote any or all of its units on the election of
directors or any other matters presented to the
unitholders.  BreitBurn will immediately withdraw the Revised
Amendment and will not propose or adopt any new amendment, provision,
resolution, or change that would limit, deprive, or restrict Quicksilver’s right
to vote all its units, one vote per unit, on any matter.  Quicksilver
will support and, if necessary, vote to approve, all amendments to the Limited
Partnership Agreement, the BreitBurn GP, LLC Agreement, and all related
agreements solely necessary to implement the terms of this
agreement.




11.           Designation,
Nomination and Election of Directors.  Quicksilver will designate two
directors, one of whom must meet the independence standards established by the
NASDAQ Stock Market and SEC rules and must be independent of BreitBurn and
Quicksilver.  The second will be a current independent member of
Quicksilver’s board (not a member of Quicksilver’s management).  The
initial designees will be agreed on at time of settlement.  The Board
will nominate and add the new directors to the Board to fill the newly created
vacancies.  The new directors will be categorized one each to Class II
(up for election in 2010) and Class III (up for election in 2011).  At
each applicable election of directors, the Board will agree to nominate the
directors designated by Quicksilver (or such substitutes as Quicksilver may
designate), each of whom must meet the standards set forth above as part of the
slate of directors nominated by the Board for election by the
unitholders.  Quicksilver will agree to cast its votes in the election
of directors in favor of the slate of directors nominated by the
Board.  The number of directors that may be designated by Quicksilver
as described above will be reduced if Quicksilver’s ownership percentage of
common units of Breitburn (“Common Units”) is reduced.  At such time
as Quicksilver owns fewer than 10% of the Common Units but at least 2,638,500
Common Units, one of the directors designated by Quicksilver (as selected by
Quicksilver) will resign, or if the director’s term is expiring, not stand for
reelection, at the next annual meeting.  At such time as Quicksilver
owns fewer than 2,638,500 Common Units, the remaining director designated by
Quicksilver will resign, or if the director’s term is expiring at the next
annual meeting, he will not stand for reelection.




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12.           Voting
on Removal of GP.  With respect to any proposal to remove the GP,
Quicksilver may not vote a proportion of its units in favor of removal which
exceeds the proportion of the units voted in favor of such proposal by
unitholders other than Quicksilver as compared to all units held by unitholders
other than Quicksilver.




13.           Waiver
of Voting Cap.  With respect to units currently owned by Quicksilver,
and any units or other voting securities received pursuant to a distribution,
reclassification or reorganization involving BreitBurn or its units or other
voting securities, the Board will permanently and irrevocably waive the 20%
voting cap for the election of directors as applicable to
Quicksilver.




14.           Termination
of Registration Rights Agreement.  The registration rights agreement
will terminate on the date on which Quicksilver is no longer an affiliate of
BreitBurn.




15.           Termination
of Certain Other Provisions.  Paragraphs 1, 3, 4, 5 and 8 will
terminate when Quicksilver owns less than 10% of the outstanding Common
Units.




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