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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
   þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    001-33631
  QUICKSILVER GAS SERVICES
    LP
 (Exact name of registrant as
    specified in its charter)
   Delaware

56-2639586(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)777 West Rosedale St., Fort Worth, Texas(Address of principal
    executive offices)

76104(Zip Code)   817-665-8620
 (Registrants telephone number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Units of Limited Partner Interests

NYSE Arca     o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
    Large accelerated filer
    o

Accelerated filer
    o

Non-accelerated
    filer þ

Smaller Reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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DEFINITIONS
    Bbl Bbls
 Bbld
 Bcf
 Bcfd
 Bcfe
 Btu
 EPA
 Exchange Act
 LIBOR
 MMBtu
 MMBtud
 Mcf
 MMcf
 MMcfd
 MMcfe
 MMcfed
 Oil
 SEC
 Tcf
 Tcfe
  COMMONLY
    USED TERMS
    IPO
 Omnibus Agreement
 Partnership Agreement
 Quicksilver
 Quicksilver Counties
 2




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##### 



INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
  For the
    Year Ended December 31, 2007
  PART IITEM 1.


Business


5ITEM 1A.


Risk Factors


13ITEM 1B.


Unresolved Staff Comments


21ITEM 2.


Properties


21ITEM 3.


Legal Proceedings


21ITEM 4.


Submission of Matters to a Vote of Security
    Holders


21PART IIITEM 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


21ITEM 6.


Selected Financial Data


24ITEM 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


25ITEM 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


35ITEM 8.


Financial Statements and Supplementary Data


36ITEM 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


59ITEM 9A(T).


Controls and Procedures


59ITEM 9B.


Other Information


59PART IIIITEM 10.


Directors and Executive Officers and Corporate
    Governance


59ITEM 11.


Executive Compensation


63ITEM 12.


Security Ownership of Certain Management and
    Beneficial Owners and Management and Related Unitholder
    Matters


70ITEM 13.


Certain Relationships and Related Transactions
    and Director Independence


74ITEM 14.


Principal Accountant Fees and Services


80PART IVITEM 15.


Exhibits and Financial Statement Schedules


81Signatures


83Description of Non-Employee Director CompensationList of SubsidiariesConsent of Deloitte & Touche LLPCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906     3




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EXPLANATORY
    NOTE
       4




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PART I  Item 1.
    Business  General
    817-665-8620).
  Formation
    and Development of Business
    Initial Public Offering
            
    Quicksilver affiliates contributed to us their 95% interest in
    Cowtown Gas Processing Partners L.P. and their 93% interest in
    Cowtown Pipeline Partners L.P.;
    The two private investors contributed to us their 5% interests
    in Cowtown Gas Processing Partners L.P. and their 7% interests
    in Cowtown Pipeline Partners L.P.;
    We issued to Quicksilver 5,696,752 common units and 11,513,625
    subordinated units;
    We issued to the two private investors a total of 816,873 common
    units; and 5




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
    We issued to our general partner  
    an initial 2% general partner interest, and
    all of our incentive distribution rights, which entitle the
    general partner to increasing percentages of any cash that we
    distribute in excess of $0.3450 per unit per quarter.    PercentageUnits


OwnershipCommon Unitholders:Public


6,566,873



27.1
%Quicksilver


5,696,752



23.5
%Subordinated Unitholders:Quicksilver


11,513,625



47.5
%General Partner Interest:Quicksilver


469,944



1.9
%Total


24,247,194



100.0
%       Our
    Relationship with Quicksilver
    
    Access to management expertise and
    insight.  Our relationship with Quicksilver
    provides us with access to a significant pool of management
    talent and insight, specifically as it relates to its
    development and production plans in the Fort Worth Basin.
    We also have the benefit of Quicksilvers broad
    operational, commercial, technical, risk management and
    administrative infrastructure.
    Large, long-lived reserve base.  Based on a
    report prepared by its independent petroleum engineers,
    Quicksilver had approximately 1.2 Tcfe of proved reserves
    in the Quicksilver Counties as of December 31, 2007 with
    total production of approximately 33 Bcfe, in 2007. 6




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
    Substantial Fort Worth Basin acreage
    position.  As of December 31, 2007,
    Quicksilver held approximately 247,000 net acres in the
    Fort Worth Basin with more than 1,600 remaining estimated
    drilling locations.
    Proven track record.  As of December 31,
    2007, Quicksilver had drilled a total of 426 gross (377
    net) wells in the Fort Worth Basin since they began
    exploration and development operations in 2003. In 2007,
    Quicksilver drilled 201 gross (184 net) wells and tied
    187 gross (163 net) wells into sales.
    Active drilling program in the Fort Worth
    Basin.  Quicksilver has allocated approximately
    $550 million of its 2008 capital budget to the
    Fort Worth Basin for drilling approximately 200 net
    wells.  Business
    Strategies
    
    Organically growing our capacity to meet our customers
    gathering and processing needs.We expect that
    the primary growth in our gathering and processing volumes will
    come from Quicksilvers increased production volume
    resulting in increased throughput on our system.
    Quicksilvers announced capital plans for 2008 indicate
    continued growing investment in the Fort Worth Basin that
    should require increased gathering and processing needs.
    Attracting volumes from third parties to our
    facilities.We believe that the Fort Worth
    Basin will continue to be an area of significant capital
    investment by energy companies. Our agreements with Quicksilver
    do not restrict us from providing services to other natural gas
    producers. We intend to attract increased volumes from third
    parties to our gathering and processing systems by actively
    marketing our midstream services, further building our gathering
    system and processing capabilities and providing superior
    customer service to these natural gas producers.
    Minimizing commodity price exposure and maintaining a
    disciplined financial policy.All of our service
    agreements are on a fixed-fee basis without direct commodity
    price exposure, and we intend to structure all of our future
    contracts similarly. We also intend to continue to pursue a
    disciplined financial policy by maintaining a prudent cash
    distribution policy and capital structure.
    Improving operating efficiency and increasing throughput
    while prudently managing our growth.As we expand
    our operations, we intend to increase throughput, which improves
    operational efficiencies and enhances overall asset utilization.
    We completed an upgrade of the existing 75 MMcfd processing
    unit at our Cowtown Plant in the first quarter of 2008.
    Additionally, in the fourth quarter of 2007 we entered into an
    agreement to construct an additional 125 MMcfd processing
    unit. We expect it to become operational during the first
    quarter of 2009 bringing our total processing capacity to
    325 MMcfd. We expect these projects will significantly
    increase our processing and gathering operating capacity and
    efficiency.
    Pursuing midstream acquisitions.  We plan to
    pursue strategic midstream acquisition opportunities that will
    complement and expand our existing business, both from
    Quicksilver and from third parties. We will seek acquisition
    opportunities in our existing area of operation with the
    opportunity for operational efficiencies and the potential for
    higher capacity utilization and expansion of those assets. To a
    lesser extent, we may also consider acquisitions in areas where
    we currently have no operations as well as new geographic areas
    of operation. Because we have significant organic growth
    opportunities related to the Quicksilver assets, the factors
    that will be considered in deciding whether to acquire assets
    include, but are not limited to, the economic characteristics of
    the acquisition, such as return on capital and cash flow
    stability, the region in which the assets are located and the
    availability and sources of capital to finance any potential
    acquisition. 7




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Business
    Strengths
    
    Quicksilver has a significant equity ownership in
    us.  Quicksilver owns 73% of our outstanding
    units, including 100% of our general partner. Given its
    relationship with us, we believe Quicksilver will have a vested
    interest in our growth and overall success.
    Our relationship with Quicksilver reduces the uncertainty of
    financial returns associated with our capacity
    additions.Our relationship with Quicksilver
    improves our ability to forecast future throughput volumes and
    the need and timing for capacity additions. Consequently, we
    believe there is less risk associated with our capital
    expenditures, because we can coordinate our capacity additions
    with Quicksilvers production growth and associated
    gathering and processing needs.
    Quicksilver is an active operator and growing producer in the
    Fort Worth Basin.Quicksilvers average
    natural gas production from the Fort Worth Basin has grown
    from 0.5 MMcfed in 2004 to 130 MMcfed as of
    December 31, 2007.  Quicksilver is actively exploiting its
    acreage in the Quicksilver Counties in pursuit of additional
    growth. We expect this increased drilling activity will
    significantly increase throughput at our facilities.
    Our assets are strategically located in the Fort Worth
    Basin to attract volumes from third parties.We
    believe that the Fort Worth Basin is one of the largest,
    fastest growing natural gas producing areas in the U.S. We
    believe that our established position in this area, together
    with its anticipated growth in production, gives us an
    opportunity to expand our gathering system footprint and
    increase our throughput volumes and plant utilization,
    ultimately increasing cash flows.
    We provide an integrated package of midstream
    services.We provide a broad range of bundled
    midstream services to natural gas producers, including
    gathering, compressing, treating and processing natural gas and
    transporting NGLs.
    We have the financial flexibility to pursue growth
    opportunities.On August 10, 2007, we
    entered into a five-year $150 million senior secured
    revolving credit facility, with options to extend the facility
    for up to two additional years and to increase the facility up
    to $250 million, with the consent of the lenders. This
    credit facility is available for capital expenditures,
    acquisitions and other general partnership purposes. Borrowings
    under this facility are guaranteed by our subsidiaries and are
    secured by substantially all of our assets.  We believe that the
    capacity under this credit facility, combined with internally
    generated funds and our ability to access the capital markets,
    will enable us to complete our near-term growth projects and
    will provide us with a flexible financial structure that will
    facilitate our strategic expansion and acquisition strategies.
    Although the credit agreement governing this facility
    contemplates up to $150 million in aggregate borrowings, it
    also requires us to maintain certain financial ratios (including
    a ratio of total debt to EBITDA below a specified maximum),
    which will initially limit our aggregate borrowing capacity.  We
    expect our borrowing capacity to increase over time as we grow
    our operations and cash flow and consequently improve our ratio
    of total debt to EBITDA. At December 31, 2007, our
    borrowing capacity was $82.7 million, of which
    $5.0 million was outstanding.
    We have an experienced, knowledgeable management team with a
    proven record of performance.  Our management team
    has a proven record of enhancing value through the development
    and operation of midstream assets in the natural gas industry.
    We believe that this team provides us with a strong foundation
    for developing additional new natural gas gathering and
    processing assets and pursuing strategic acquisition
    opportunities.  Financial
    Information about Segment and Geographical Areas
   8




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Properties
  Our
    Assets and Operations
        
    A third processing unit is being constructed at a separate
    location from our existing Cowtown Plant and we expect it to
    become operational during the first quarter of 2009. This new
    unit is designed to provide 125 MMcfd of additional
    capacity and bring our total processing capacity to
    325 MMcfd; and
    Additions to our Cowtown Pipeline to gather and transport
    natural gas to our processing facilities from the wells that
    Quicksilver and other operators drill and complete in the
    Quicksilver Counties.    rights-of-way rights-of-way rights-of-way
    Overview
    of the Fort Worth Basin
   9




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Marketing
    Competition
      Safety
    and Maintenance Regulation
     10




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right-to-know
  Governmental
    Regulation
    Environmental
    Matters
    
    require the acquisition of a permit before drilling commences;
    restrict the types, quantities and concentrations of various
    substances that can be released into the environment in
    connection with drilling, production, processing and pipeline
    gathering activities;
    limit or prohibit drilling activities on certain lands lying
    within wilderness, wetlands, frontier and other protected areas;
    require remedial action to prevent pollution from former
    operations such as plugging abandoned wells; and
    impose substantial liabilities for pollution resulting from
    operations. 11




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clean-up
           12




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Employees
    Available
    Information and Corporate Governance Documents
  http://www.kgslp.com, Form 10-K, Form 10-Q, Form 8-K,
  http://www.kgslp.com
  Item 1A.
    Risk
    Factors    We are
    dependent on a single natural gas producer, Quicksilver, for a
    majority of our natural gas. The loss of this customer would
    result in a material decline in our volumes, revenues and cash
    available for distribution.
  10-year
   13




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We may
    not have sufficient cash from operations following the
    establishment of cash reserves and payment of fees and expenses,
    including cost reimbursements to our general partner, to enable
    us to make cash distributions to holders of our common units and
    subordinated units at the initial distribution rate under our
    cash distribution policy.
    
    the fees we charge and the margins we realize for our services;
    the level of production of, the demand for and, indirectly, the
    price of natural gas, natural gas liquids, or NGLs, and
    condensate;
    the volume of natural gas and NGLs we gather and process;
    the level of competition from other midstream energy companies;
    the level of our operating and maintenance and general and
    administrative costs; and
    prevailing economic conditions.    
    the level of capital expenditures we make;
    our ability to make borrowings under our revolving credit
    facility to pay distributions;
    the cost of acquisitions;
    our service requirements on our debt and other liabilities;
    fluctuations in our working capital needs;
    our ability to access capital markets;
    compliance with our debt agreements; and
    the amount of cash reserves established by our general partner.    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.
     14




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Estimates
    of oil and gas reserves depend on many assumptions that may be
    inaccurate and any material inaccuracies could materially reduce
    the production that we gather and process and consequently could
    adversely affect our financial performance and our ability to
    make cash distributions.
    
    historical production from the area compared with production
    from other comparable producing areas;
    the assumed effects of regulations by governmental agencies;
    assumptions concerning future oil and gas prices; and
    assumptions concerning future operating costs, severance and
    excise taxes, development costs and workover and remedial costs.    Because
    of the natural decline in production from existing wells in our
    area of operations, our success depends on our ability to obtain
    new sources of supplies of natural gas, which depends on certain
    factors beyond our control. Any decrease in supplies of natural
    gas could result in a material decline in the volumes we gather
    and process.
     15




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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.
  rights-of-way rights-of-way rights-of-way rights-of-way. rights-of-way
  If we
    do not make acquisitions on economically acceptable terms, our
    future growth will be limited.
      
    mistaken assumptions about volumes, revenues and costs,
    including synergies;
    an inability to integrate successfully the businesses we acquire;
    the assumption of unknown liabilities;
    the inability to integrate acquisitions into our operations;
    limitations on rights to indemnity from the seller;
    mistaken assumptions about the overall costs of equity or debt;
    the diversion of managements and employees attention
    from other business concerns;
    unforeseen difficulties operating in new product areas, with new
    customers, or new geographic areas; and
    customer or key employee losses at the acquired businesses. 16




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We
    depend primarily on our Cowtown Plant and our Cowtown Pipeline
    to generate our revenues, and if the utilization of these assets
    were reduced significantly, there could be a material adverse
    effect on our revenues, earnings, and ability to make
    distributions to our unitholders.
    
    operational problems, labor difficulties or environmental
    proceedings or other litigation that compel cessation of all or
    a portion of the operations at our Cowtown Plant;
    catastrophic events at our facilities;
    an inability to obtain sufficient quantities of natural gas for
    the Cowtown Plant; or
    reductions in exploration or production activity by producers in
    the areas in which we operate.      If
    pipelines and other facilities interconnected to our natural gas
    and NGL pipelines and facilities become unavailable to transport
    natural gas and NGLs, our revenues 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 revenues to
    decline and operating expenses to increase.
   17




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We are
    subject to environmental laws and regulations that may expose us
    to significant costs and liabilities.
      We may
    incur significant costs and liabilities as a result of pipeline
    integrity management program testing and any related pipeline
    repair or preventative or remedial measures.
    
    perform ongoing assessments of pipeline integrity;
    identify and characterize applicable threats to pipeline
    segments that could impact a high consequence area; 18




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
    improve data collection, integration and analysis;
    repair and remediate the pipeline as necessary; and
    implement preventive and mitigating actions.    We
    will be required to make substantial capital expenditures to
    increase our asset base. If we are unable to obtain needed
    capital or financing on satisfactory terms, our ability to make
    cash distributions may be diminished or our financial leverage
    could increase.
    We do
    not own all of the land on which our pipelines and facilities
    are located, which could disrupt our operations.
  and/or rights-of-way rights-of-way right-of-way
  Our
    business involves many hazards and operational risks, some of
    which may not be fully covered by insurance. The occurrence of a
    significant accident or other event that is not fully insured
    could curtail our operations and have a material adverse effect
    on our cash flows and, accordingly, the market price for our
    common units.
    
    damage to pipelines and plants, related equipment and
    surrounding properties caused by hurricanes, tornadoes, floods,
    fires and other natural disasters and acts of terrorism;
    inadvertent damage from construction, farm and utility equipment;
    leaks or losses of natural gas or NGLs as a result of the
    malfunction of equipment or facilities; 19




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
    fires and explosions; and
    other hazards that could also result in personal injury and loss
    of life, pollution and suspension of operations.  and/or
    Restrictions
    in our revolving credit facility will limit our ability to make
    distributions to unitholders and may limit our ability to
    capitalize on acquisitions and other business
    opportunities.
    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.
    The
    loss of key personnel could adversely affect our ability to
    operate.
   20




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchase of Equity Securities  Market
    Information
    Distributions PerQuarter Ended

High


Low


Common Unit


Record Date

Payment DateSeptember 30, 2007

$
24.98


$
20.17


$
0.1675(1
)

Oct 31, 2007

Nov. 14, 2007December 31, 2007

$
25.02


$
23.15


$
0.30(2
)

Jan 31, 2008

Feb. 14, 2008     (1)
    
    Represents a pro rata portion of a $0.30 quarterly distribution
    from the date of the closing of our IPO paid on all units to
    holders of record as of the close of business on
    October 31, 2007.(2)
    
    Approved by the Board of Directors of our general partner on
    January 15, 2008.      Cash
    Distribution Policy
     21




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Section 17-607
  Use of
    Proceeds
  Form S-1 No. 333-140599)
         22




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Performance
    Graph
    Comparison
    of Cumulative Total Return
  
  Equity
    Plan
    Payable in Cash


Payable in UnitsWeighted





WeightedAverage Grant





Average GrantDate Fair





Date FairUnits


Value


Units


ValueNumber of unvested unitsOutstanding  January 1, 2007





$







$
Vested














Issued


84,961



21.36



9,833



21.36Cancelled














Unvested Phantom Units -December 31, 2007


84,961


$
21.36



9,833


$
21.36  23




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Item 6.
    Selected
    Financial Data    Selected
    Financial Data
  Period fromJanuary 21,2004 toYear Ended December 31,


December 31,2007


2006


2005


2004(In thousands, except per unit and volume data)Operating Results Data:Total revenues

$
35,941


$
13,918


$
4,868


$
36Total operating expenses


22,961



11,375



3,315



33Operating income


12,980



2,543



1,553



3Income before income taxes


8,569



2,556



1,553



3Net income


8,256



2,421



1,553



3Earnings per unit (for the period from August 10, 2007 to
    December 31, 2007)

$
0.20Distributions per
    unit(1)

$
0.4675Net cash provided by (used in):Operating activities

$
14,949


$
6,445


$
2,304


$
29Investing activities


(73,797
)


(78,360
)


(43,707
)


(6,020
)Financing activities

$
57,176


$
74,712


$
41,403


$
5,991Volumes gathered (MMcf)


34,995



14,263



3,561



103Volumes processed (MMcf)


30,802



13,496



3,561



103Adjusted gross
    margin(2)

$
21,050


$
5,506


$
2,167


$
11EBITDA(3)

$
21,286


$
5,519


$
2,167


$
11Financial Condition Information:Property, plant and equipment, net

$
273,948


$
130,791


$
53,783


$
6,603Total assets


278,410



134,623



53,783



6,603Long-term debt


5,000











Net equity

$
110,200


$
118,652


$
48,949


$
5,993     (1)
    
    Includes a $0.30 distribution for the fourth quarter of 2007 on
    all common units to holders of record as of the close of
    business on January 31, 2008.(2)
    
    Defined as total revenues less operations and maintenance
    expense and general and administrative expense. Adjusted gross
    margin of $11,000 for the period from January 21, 2004 to
    December 31, 2004 was determined based on total revenues of
    $36,000 less operations and maintenance expense of $14,000 and
    general and administrative expense of $12,000. For additional
    information regarding adjusted gross margin, including a
    reconciliation of adjusted gross margin to net income as
    determined in accordance with GAAP, see Item 7 which is
    incorporated by reference. Managements Discussion and
    Analysis of Financial Condition and Results of Operations.(3)
    
    Defined as net income plus income tax provision, interest
    expense, and depreciation and amortization expense. EBITDA of
    $11,000 for the period from January 21, 2004 to
    December 31, 2004 was determined based on net income of
    $3,000 plus depreciation and accretion expense of $8,000. For
    additional information regarding EBITDA, including a
    reconciliation of EBITDA to Net Income as determined in
    accordance with GAAP, see Item 7 which is incorporated by
    reference. 24




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ITEM 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following is a discussion of our historical consolidated
    financial condition and results of operations that is intended
    to help the reader understand our business, results of
    operations and financial condition. It should be read in
    conjunction with other sections of this Annual Report, including
    our historical consolidated financial statements and
    accompanying notes thereto included in Item 8 of this
    annual report.
    
    Overview
    Application of Critical Accounting Policies
    Results of Operations
    Liquidity and Capital Resources
    Forward-Looking Information  OVERVIEW
        Volume
  
    the level of successful drilling and production activity in
    areas where we operate,
    our ability to compete with other midstream companies for
    volumes from successful new wells, and
    our pursuit of new opportunities where a limited number of
    midstream companies conduct business.    Adjusted Gross Margin
 25




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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.    Year Ended December 31,2007


2006


2005Volumes gathered (MMcf)


34,995



14,263



3,561Volumes processed (MMcf)


30,802



13,496



3,561Adjusted gross
    margin(1)

$
21,050


$
5,506


$
2,167Operations and maintenance expense

$
11,512


$
7,475


$
2,372EBITDA(1)

$
21,286


$
5,519


$
2,167     (1)
    
    See the reconciliation of these amounts to net income in
    Results of Operations.  Items Impacting
    Comparability of Our Financial Results
    
    Quicksilvers Barnett Shale operations began in 2004 and
    have grown significantly;
    our facilities and operations have been in a startup phase,
    resulting in expenses that we do not expect to recur;
    expenses are largely independent of gathering and processing
    volumes and are more directly related to the capacity of our
    facilities and operations; and 26




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##### Table of Contents




    revenues are highly dependent on Quicksilvers ability to
    find reserves and to connect producing wells to our system.  APPLICATION
    OF CRITICAL ACCOUNTING POLICIES
    Use of
    Estimates
    Depreciation
    Expense and Cost Capitalization Policies
      Repurchase
    Obligations to Parent
    Asset
    Retirement Obligations
   27




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##### Table of Contents



Equity-Based
    Compensation
    RESULTS
    OF OPERATIONS
    (In thousands except volume data)Year Ended December 31,2007


2006


2005Total revenues

$
35,941


$
13,918


$
4,868Operations and maintenance expense


11,512



7,475



2,372General and administrative expense


3,379



937



329Adjusted gross margin


21,050



5,506



2,167Other income


236



13



EBITDA


21,286



5,519



2,167Depreciation and amortization expense


8,070



2,963



614Operating Income

$
12,980


$
2,543


$
1,553Volume Data:Volumes gathered (MMcf)


34,995



14,263



3,561Volumes processed (MMcf)


30,802



13,496



3,561   2007
    Compared with 2006
  Revenues 
  Operations and Maintenance Expense 
  General and Administrative Expense 
  Adjusted Gross Margin 
  Depreciation and Amortization Expense 
 28




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##### Table of Contents



Interest Expense
  Income Tax Provision
  Operating Income
  2006
    Compared with 2005
  Revenues
  Operations and Maintenance Expense
  General and Administrative Expense
  Adjusted Gross Margin
  Depreciation and Amortization Expense
  Operating Income
  LIQUIDITY
    AND CAPITAL RESOURCES
    
    cash generated from operations; 29




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##### Table of Contents




    borrowings under our revolving credit facility;
    future debt offerings; and
    issuances of additional partnership units.    Cash
    Flows
    Working Capital (Deficit) 
    2007
    Cash Flows Compared to 2006
  Cash Flows from Operations 
  Cash Flows from Investing Activities 
  Cash Flows from Financing Activities 
  2006
    Cash Flows Compared to 2005
  Cash Flows from Operations 
  Cash Flows from Investing Activities 
  Cash Flows from Financing Activities 
 30




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##### Table of Contents



Capital
    Expenditures
              Revolving
    Credit Facility
    Minimum EBITDA to


Maximum Debt toQuarters Ended

Interest


EBITDADecember 31, 2007


2.50 to 1



5.00 to 1March 31, 2008


2.50 to 1



5.00 to 1June 30, 2008


2.50 to 1



4.75 to 1September 30, 2008


2.50 to 1



4.75 to 1December 31, 2008 and thereafter


2.50 to 1



4.50 to 1    31




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##### Table of Contents




    incur further indebtedness;
    grant liens;
    make distributions; and
    engage in transactions with affiliates.    Subordinated
    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:  
    in equal consecutive quarterly installments of $275,000 on the
    last business day of each calendar quarter, beginning on
    March 31, 2008; plus
    a final payment of the then-remaining balance of the aggregate
    principal amount of the note on the maturity date; provided,
    however, that in the event of any extension of the maturity of
    our revolving credit facility, described above, the maturity
    date of the note shall be the date that is six months after such
    revolving credit facilitys maturity date.    
    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.    Repurchase
    Obligations to Parent
   32




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##### Table of Contents



Cowtown Pipeline Assets Repurchase:
  Lake Arlington Dry System and Hill County Dry System
    Repurchases:
    Total
    Contractual Cash Obligations
    Payments Due by PeriodContractual Obligations

Total


2008


2009-2011


2012-2013


Thereafter(In millions)Long-Term
    Debt(1)

$
56.7


$
1.1


$
3.3


$
7.2


$
45.1Contractual
    Obligations(2)

$
65.6


$
42.1


$
23.5


$



$
Repurchase
    Obligations(3)

$
82.3


$



$



$



$
Asset Retirement
    Obligations(4)

$
2.8


$



$



$



$
2.8Total Contractual Obligations

$
207.4


$
43.2


$
26.8


$
7.2


$
47.9     (1)
    
    As of December 31, 2007, we had $5.0 million
    outstanding under our revolving credit facility and a
    $51.7 million subordinated note payable to Parent.  Based
    on our debt outstanding and interest rates in effect at
    December 31, 2007, we anticipate interest payments to be
    approximately $4.0 million in 2008. 33




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##### Table of Contents



We expect to increase borrowings under our revolving credit
    facility to fund much of our capital spending program throughout
    2008.  For each additional $10.0 million in borrowings,
    annual interest payments will increase by approximately
    $0.6 million.  If the borrowing base under our revolving
    credit facility were to be fully utilized by year-end 2008 at
    interest rates in effect at December 31, 2007, we estimate
    that interest payments would increase by approximately
    $8.9 million.  If interest rates on our December 31,
    2007 variable debt balance of $56.7 million increase or
    decrease by one percentage point, our annual income will
    decrease or increase by $0.6 million. See Note 6 in
    Item 8. Financial Statements and Supplementary
    Data of this annual report for more information regarding
    Long-Term Debt.(2)
    
    These amounts include agreements for which we have signed
    contracts to construct natural gas processing and compression
    facilities in various locations, as well as an operating lease
    for equipment.  See Note 8 in Item 8. Financial
    Statements and Supplementary Data of this annual report
    for more information regarding Commitments and Contingent
    Liabilities.(3)
    
    As described above under Repurchase Obligations to
    Parent, we are 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 $82.3 million
    includes $39.0 million related to Cowtown Pipeline Assets
    that we have the option to purchase.  We cannot presently
    predict the deadline for completing the purchase of these assets
    or the ultimate purchase price. We intend to exercise our
    purchase rights related to these assets.  The estimated
    remaining total to complete the construction of the assets
    subject to the repurchase obligation is approximately
    $85.8 million. Based on our interest rates in effect at
    December 31, 2007, we anticipate interest payments to be
    approximately $5.9 million in 2008.(4)
    
    For more information regarding our Asset Retirement Obligations,
    see Note 7 to our consolidated financial statements,
    included in Item 8. Financial Statements and Supplementary
    Data of this annual report.  Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Recently
    Issued Accounting Pronouncements
    Recent
    Developments
      FORWARD-LOOKING
    INFORMATION
   34




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##### Table of Contents




    changes in general economic conditions;
    fluctuations in natural gas prices;
    failure or delays in Quicksilver and third parties achieving
    expected production from natural gas projects;
    competitive conditions in our industry;
    actions taken by unaffiliated 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; and
    the effects of future litigation.    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Credit
    Risk
    Interest
    Rate Risk
   35




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##### 



Item 8.
    Financial
    Statements and Supplementary Data  QUICKSILVER
    GAS SERVICES LP
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


37Consolidated Balance Sheets as of
    December 31, 2007 and 2006


38Consolidated Statements of Income for the Years
    Ended December 31, 2007, 2006 and 2005


39Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


40Consolidated Statements of Changes in
    Partners Capital for the Years ended December 31,
    2007, 2006 and 2005


41Notes to Consolidated Financial Statements for
    the Years Ended December 31, 2007, 2006 and 2005


42   36




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM        .
     
    37




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
    CONSOLIDATED BALANCE SHEETSIn thousands, except for unit data December 31,


December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
1,125


$
2,797Trade accounts receivable


882



67Accounts receivable from parent


800



Prepaid expenses and other current assets


690



147Total current assets


3,497



3,011Properties, plant and equipment, net


273,948



130,791Other assets


965



821$
278,410


$
134,623LIABILITIES, REDEEMABLE PARTNERS CAPITAL AND
    PARTNERS CAPITALCurrent liabilitiesCurrent portion of note payable to parent

$
1,100


$
Accrued additions to property, plant and equipment


23,624



6,608Accounts payable and other


2,700



1,294Total current liabilities


27,424



7,902Long-term debt


5,000



Note payable to parent


50,569



Repurchase obligations to parent


82,251



Asset retirement obligations


2,793



503Deferred income tax liability


173



135Commitments and contingent liabilities (Note 8)Redeemable partners capital






7,431Partners capitalCommon unitholders (12,263,625 units issued and outstanding
    at December 31, 2007)


109,830



Subordinated unitholders (11,513,625 units issued and
    outstanding at December 31, 2007)


356



General partner


14



Net parent equity






118,652Total partners capital


110,200



118,652$
278,410


$
134,623    38




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
    CONSOLIDATED STATEMENTS OF INCOMEIn thousands, except for per unit data Year Ended December 31,2007


2006


2005RevenuesGathering and transportation revenue  parent

$
15,089


$
6,460


$
2,042Gathering and transportation revenue


1,773



53



Gas processing revenue  parent


16,564



7,342



2,826Gas processing revenue


1,990



63



Other revenue  parent


525







Total revenues


35,941



13,918



4,868ExpensesOperations and maintenance  parent


11,512



7,475



2,372General and administrative  parent


3,379



937



329Depreciation and accretion


8,070



2,963



614Total expenses


22,961



11,375



3,315Operating income


12,980



2,543



1,553Other income


236



13



Interest expense


4,647







Income before income taxes


8,569



2,556



1,553Income tax provision


313



135



Net income

$
8,256


$
2,421


$
1,553Allocation of net income for the twelve month period ended
    December 31, 2007:Net income attributable to the period from beginning of period
    to August 9, 2007

$
3,444Net income attributable to the period from August 10, 2007
    to December 31, 2007


4,812Net income

$
8,256General partner interest in net income for the period from
    August 10, 2007 to December 31, 2007

$
93Common and subordinated unitholders interest in net income
    for the period from August 10, 2007 to December 31,
    2007

$
4,719Earnings per common and subordinated unit  basic

$
0.20Earnings per common and subordinated unit  diluted

$
0.20Weighted average number of common and subordinated units
    outstanding  basic


23,777Weighted average number of common and subordinated units
    outstanding  diluted


23,787    39




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
    CONSOLIDATED STATEMENTS OF CASH FLOWSIn thousands Year Ended December 31,2007


2006


2005Operating activities:Net income

$
8,256


$
2,421


$
1,553Items included in net income not affecting cashDepreciation


7,987



2,942



614Accretion of asset retirement obligation


83



21



Deferred income taxes


38



135



Equity-based compensation


130







Amortization of debt issuance costs


88







Non-cash interest expense on repurchase obligations to parent


2,625







Non-cash interest expense on note payable to parent


1,669







Changes in assets and liabilitiesAccounts receivable


(815
)


(66
)


Prepaid expenses and other current assets


(543
)


(146
)


Accounts receivable from parent


(5,975
)






Accounts payable and other


1,406



1,138



137Net cash provided by operating activities


14,949



6,445



2,304Investing activities:Additions to properties, plant and equipment


(73,797
)


(77,539
)


(43,707
)Long-term deposit






(821
)


Net cash used in investing activities


(73,797
)


(78,360
)


(43,707
)Financing activities:Proceeds from sale of assets to parent


29,508







Proceeds from revolving credit facility borrowings


5,000







Debt issuance costs paid


(1,041
)






Net proceeds from issuance of equity units


112,298







Issuance costs of equity units paid


(2,933
)






Distribution of offering proceeds to partners


(119,806
)






Contributions by parent


38,045



67,421



41,403Contributions by other partners


167



7,291



Distributions to unitholders


(4,062
)






Net cash provided by financing activities


57,176



74,712



41,403Net increase (decrease) in cash


(1,672
)


2,797



Cash at beginning of period


2,797







Cash at end of period

$
1,125


$
2,797


$
Non-cash transactions:Changes in working capital related to the acquisition of
    property, plant and equipment

$
(25,022
)

$
(1,959
)

$
(4,058
)Debt issuance costs paid by parent


(12
)






Cost in connection with the initial public offering paid by
    parent


(275
)






Issuance of subordinated note payable to parent


50,000







Repurchase obligations to parent  acquisition of
    property, plant and equipment by parent

$
(50,118
)

$



$
    40




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
    CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS CAPITALIn thousands Net


Redeemable


Partners CapitalParent


Partners


Limited Partners


GeneralEquity


Capital


Common


Subordinated


Partner


TotalBalance at January 1, 2005

$
5,993


$



$



$



$



$
5,993Contributions


41,403



















41,403Net income


1,553



















1,553Balance at December 31, 2005


48,949



















48,949Contributions


71,930



7,291















79,221Distributions


(4,508
)


















(4,508
)Net income


2,281



140















2,421Balance at December 31, 2006


118,652



7,431















126,083Net income attributable to the period from January 1, 2007
    through August 9, 2007


3,119



326















3,445Contributions


38,045



167















38,212Initial public offering, net of offering and other costs










109,090











109,090Distribution of initial public offering proceeds


(112,112
)


(7,694
)














(119,806
)Distribution of subordinated note payable to parent


(50,000
)


















(50,000
)Reclass parents equity balance to receivable from parent


2,296



















2,296Reclass redeemable partners capital






(230
)


230











Distributions paid to partners










(2,054
)


(1,929
)


(79
)


(4,062
)Equity-based compensation










130











130Net income attributable to the period from August 10, 2007
    through December 31, 2007










2,434



2,285



93



4,812Balance at December 31, 2007

$



$



$
109,830


$
356


$
14


$
110,200    41




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    ORGANIZATION
    AND DESCRIPTION OF BUSINESS  Organization
    Form S-1 (File No. 333-140599)
        PercentageUnits


OwnershipCommon Unitholders:Public


6,566,873



27.1
%Quicksilver


5,696,752



23.5
%Subordinated Unitholders:Quicksilver


11,513,625



47.5
%General Partner Interest:Quicksilver


469,944



1.9
%Total


24,247,194



100.0
%     Description of Business
 42




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Basis of Presentation
      Use of Estimates 
  Cash and Cash Equivalents
  Accounts receivable 30-60 days.
 43




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Property, Plant and Equipment
    Asset Retirement Obligations 
  Repurchase Obligations to Parent 
  Cowtown Pipeline Assets Repurchase:
  Lake Arlington Dry System and Hill County Dry System
    Repurchases:
   44




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Impairment of Long-Lived Assets
  Other Assets
  Environmental Liabilities and/or
  Redeemable Partners Capital
  Revenue Recognition
  
    persuasive evidence of an exchange arrangement exists;
    delivery has occurred or services have been rendered;
    the price is fixed or determinable; and
    collectibility is reasonably assured.  Income Taxes
  Earnings per Limited Partner Unit
 45




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Segment Information
  Fair Value of Financial Instruments 
  Equity-Based Compensation 
  Recently Issued Accounting Standards Fair
    Value Measurements
  Accounting for Uncertainty in
    Income Taxes  An Interpretation of FASB Statement
    No. 109 Accounting for Income Taxes
 46




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  The
    Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement
    No. 115
  No. 39-1, Amendment of FASB Interpretation No. 39 Accounting for
    Derivative Instruments and Hedging Activities No. 39-1
  Noncontrolling Interests in
    Consolidated Financial Statements  an amendment of
    ARB No. 15
  Business
    Combinations Business Combinations
  3.
    NET
    INCOME PER COMMON AND SUBORDINATED UNIT     47




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    4.  PROPERTY,
    PLANT AND EQUIPMENT
    December 31,Depreciable Life

2007


2006(In thousands)Gathering and transportation systems

20 years

$
106,478


$
36,572Processing plants

20-25 years


117,571



53,035Construction in progress




32,682



31,612Rights-of-way and easements

20 years


26,906



13,135Land




952



Buildings

40 years


802



Field equipment

20 years


108



285,498



134,354Less: accumulated depreciation




(11,550
)


(3,563
)Net property, plant and equipment



$
273,948


$
130,791   5.
    ACCOUNTS
    PAYABLE AND OTHER    December 31,2007


2006(In thousands)Accrued operating expenses

$
882


$
862Accrued property taxes


895



228State income taxes


276



Equity compensation payable


275



Interest payable


147



Other


225



204$
2,700


$
1,294   6.
    LONG-TERM
    DEBT  Credit Agreement
 48




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Subordinated Promissory Note to Parent
        Payments Due by PeriodLong-Term Debt

Total


2008


2009-2011


2012-2013


Thereafter(In millions)Credit Agreement

$
5.0


$



$



$
5.0


$
Subordinated Note to Parent


51.7



1.1



3.3



2.2



45.1Total Long-Term Debt

$
56.7


$
1.1


$
3.3


$
7.2


$
45.1  49




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  7.
    ASSET
    RETIREMENT OBLIGATIONS    Year Ended December 31,2007


2006(In thousands)Beginning asset retirement obligations

$
503


$
29Additional liability incurred


2,207



453Accretion expense


83



21Ending asset retirement obligations

$
2,793


$
503     8.
    COMMITMENTS
    AND CONTINGENT LIABILITIES  Litigation
  Casualties or Other Risks
      Regulatory Compliance
  Environmental Compliance
 50




---



##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Commitments
    Payments Due by PeriodContractual Obligations

Total


2008


2009-2011


2012-2013


Thereafter(In millions)Construction commitments

$
65.5


$
42.0


$
23.5


$



$
Equipment lease


0.1



0.1











Total Contractual Obligations

$
65.6


$
42.1


$
23.5


$



$
   9.
    INCOME
    TAXES        10.
    EQUITY
    PLAN   51




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Payable in Cash


Payable in UnitsWeighted





WeightedAverage Grant





Average GrantDate Fair





Date FairUnits


Value


Units


ValueNumber of unvested unitsOutstanding  January 1, 2007





$







$
Vested














Issued


84,961



21.36



9,833



21.36Cancelled














Unvested Phantom Units  December 31, 2007


84,961


$
21.36



9,833


$
21.36       11.
    TRANSACTIONS
    WITH RELATED PARTIES    Omnibus Agreement
  
    restrictions on Quicksilvers ability to engage in certain
    midstream business activities in eight specified counties in
    North Texas referred to 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 KGS obligations to purchase
    those assets from Quicksilver at their fair market value within
    two years after the completion of construction of the assets and
    the assets have commenced commercial service;
    KGS obligation to reimburse Quicksilver for all general
    and administrative expenses incurred by Quicksilver on behalf of
    KGS, including salary and benefits of Quicksilver personnel,
    plus KGS public company expenses;
    KGS obligation to reimburse Quicksilver for all insurance
    coverage expenses it incurs or payments it makes with respect to
    KGS assets; and
    Quicksilvers obligation to indemnify KGS for certain
    liabilities and KGS obligation to indemnify Quicksilver
    for certain liabilities.  Services and Secondment Agreement
 52




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Gas Gathering and Processing Agreement
          Contribution, Conveyance and Assumption
    Agreement
  
    the transfer of all of the interests in Pipeline Partners and
    Processing Partners to KGS 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 KGS; 53




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   
    KGS 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
    KGS issuance of 816,873 common units and the right to
    receive $7.7 million to the two private investors in
    exchange for the contributed interests.  Centralized cash management
  Services to affiliates
  Allocation of costs
 54




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended December 31,2007


2006


2005(In thousands)Net parent equityBeginning balance

$
118,652


$
48,949


$
5,993Net change in parent advances:Contribution of property, plant and equipment


45,040



77,539



43,708Distribution to parent






(4,506
)


Settled revenue with parent


(11,760
)


(13,802
)


(4,868
)Payments received by parent for trade accounts receivable


(625
)


(49
)


Payments made to settle expenses by parent


4,378



6,665



2,284Allocation of general and administrative overhead


850



667



279Contribution of long-term deposit






821



Contribution of other current assets


162



87



Net change in parent advances


38,045



67,422



41,403Parent share of net income


3,119



2,281



1,553Distribution of initial public offering proceeds


(112,112
)






Distribution of subordinated note payable to parent


(50,000
)






Reclassify to receivable from parent


2,296







Ending balance

$



$
118,652


$
48,949General and administrative expense  parentAllocation of general and administrative overhead

$
1,978


$
667


$
279Equity-based compensation expense


405







Insurance expense


232







Management fee






180



Audit, legal expense and other


764



90



50Total general and administrative expense  parent

$
3,379


$
937


$
329   12.
    PARTNERS
    CAPITAL AND DISTRIBUTIONS  General.
    
    provide for the proper conduct of KGS business;
    comply with applicable law, any of KGS debt instruments or
    other agreements; or 55




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   
    provide funds for distributions to the unitholders and to the
    general partner for any one or more of the next four quarters.      General Partner Interest and Incentive Distribution
    Rights.
  Subordinated Units.
  Distributions of Available Cash from Operating Surplus during
    the Subordination Period.
  
    first, (A) to the general partner in accordance with
    its percentage interest and (B) to the unitholders holding
    common units, pro rata, a percentage equal to 100% less the
    general partners percentage interest, until there has been
    distributed in respect of each common unit then outstanding an
    amount equal to the minimum quarterly distribution for such
    quarter;
    second, (A) to the general partner in accordance
    with its percentage interest and (B) to the unitholders
    holding common units, pro rata, a percentage equal to 100% less
    the general partners percentage interest, until there has
    been distributed in respect of each common unit then outstanding
    an amount equal to the cumulative common unit arrearage existing
    with respect to such quarter; 56




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   
    third, (A) to the general partner in accordance with
    its percentage interest and (B) to the unitholders holding
    subordinated units, pro rata, a percentage equal to 100% less
    the general partners percentage interest, until there has
    been distributed in respect of each subordinated unit then
    outstanding an amount equal to the minimum quarterly
    distribution for such quarter;
    fourth, to the general partner and all unitholders, in
    accordance with their respective percentage interests, until
    there has been distributed in respect of each unit then
    outstanding an amount equal to the excess of the first target
    distribution over the minimum quarterly distribution for such
    quarter;
    fifth, (A) to the general partner in accordance with
    its percentage interest; (B) 13% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages applicable to subclauses (A) and
    (B) of this clause until there has been distributed in
    respect of each unit then outstanding an amount equal to the
    excess of the second target distribution over the first target
    distribution for such quarter;
    sixth, (A) to the general partner in accordance with
    its percentage interest, (B) 23% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages applicable to subclauses (A) and
    (B) of this clause, until there has been distributed in
    respect of each unit then outstanding an amount equal to the
    excess of the third target distribution over the second target
    distribution for such quarter; and
    thereafter, (A) to the general partner in accordance with
    its percentage interest; (B) 48% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages described in the first two bullet points.  Distributions of Available Cash from Operating Surplus after
    the Subordination Period.
  
    first, 100% to the general partner and the unitholders in
    accordance with their respective percentage interests, until
    there has been distributed in respect of each unit then
    outstanding an amount equal to the minimum quarterly
    distribution for such quarter;
    second, 100% to the general partner and the unitholders
    in accordance with their respective percentage interests, until
    there has been distributed in respect of each unit then
    outstanding an amount equal to the excess of the first target
    distribution over the minimum quarterly distribution for such
    quarter;
    third, (A) to the general partner in accordance with
    its percentage interest; (B) 13% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages described in the first two bullet points,
    until there has been distributed in respect of each unit then
    outstanding an amount equal to the excess of the second target
    distribution over the first target distribution for such quarter;
    fourth, (A) to the general partner in accordance
    with its percentage interest; (B) 23% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages described in the first two bullet points,
    until there has been distributed in respect of each unit then
    outstanding an amount equal to the excess of the third target
    distribution over the second target distribution for such
    quarter; and
    thereafter, (A) to the general partner in accordance with
    its percentage interest; (B) 48% to the holders of the
    incentive distribution rights, pro rata; and (C) to all
    unitholders, pro rata, a percentage equal to 100% less the sum
    of the percentages described in the first two bullet points. 57




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##### Table of Contents



QUICKSILVER
    GAS SERVICES LP
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   13.
    SELECTED
    QUARTERLY DATA  First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except per unit data)(Unaudited)2007Operating revenues

$
5,372


$
7,118


$
10,282


$
13,169Operating income


864



2,380



3,805



5,931Net income


835



2,135



2,099



3,187Earnings per common and subordinated unit


N/A



N/A


$
0.07


$
0.13Diluted earnings per common and subordinated unit


N/A



N/A


$
0.07


$
0.132006Operating Revenues

$
2,598


$
3,320


$
4,073


$
3,927Operating Income


912



292



143



1,196Net Income


912



292



143



1,074  58




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A(T).
    Controls
    and Procedures      Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  General
      Directors
    and Executive Officers
    Name

Age

Position with Quicksilver Gas Services GP LLCGlenn Darden*


52


Chairman of the BoardThomas F. Darden*


54


President and Chief Executive Officer and DirectorP. Jeff Cook*


51


Executive Vice President  Chief Operating Officer and
    DirectorPhilip W. Cook*


46


Senior Vice President  Chief Financial Officer and
    DirectorJohn C. Cirone*


58


Senior Vice President, General Counsel and SecretaryJohn C. Regan*


38


Vice President  Chief Accounting OfficerMarLu Hiller


45


Vice President  TreasurerClifford C. Rupnow


54


Vice President  Business DevelopmentDavid L. Ishmael


52


Vice President  EngineeringAlvin Bledsoe


59


DirectorPhilip D. Gettig


62


DirectorJohn W. Somerhalder II


52


Director  59




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##### Table of Contents



Glenn Darden
  Thomas F. Darden
  P. Jeff Cook
  Philip W. Cook
  John C. Cirone
  John C. Regan
 60




---



##### Table of Contents



MarLu Hiller
  Clifford C. Rupnow
  David L. Ishmael
  Alvin Bledsoe
  Philip D. Gettig
  John W. Somerhalder II
 61




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##### Table of Contents



Family
    Relationships
    Committees
    of the Board of Directors
    Regulation S-K.
    Code of
    Business Conduct and Ethics
  (http://www.kgslp.com/corporate/corporate 
  Section 16(a)
    Beneficial Ownership Reporting Compliance
     62




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##### Table of Contents



Item 11.
    Executive
    Compensation  Compensation
    Discussion and Analysis
  Overview
    Name

TitleGlenn Darden

Chairman of the BoardThomas F. Darden

President and Chief Executive OfficerP. Jeff Cook

Executive Vice President  Chief Operating OfficerPhilip W. Cook

Senior Vice President  Chief Financial OfficerJohn C. Cirone

Senior Vice President   General Counsel and Secretary         Compensation
    Objectives, Strategies and Elements for 2007
     63




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##### Table of Contents



change-in-control)
  Compensation
    Objectives, Strategies and Elements for 2008
  th th
        Number ofExecutive

Phantom UnitsGlenn Darden


29,813Thomas F. Darden


29,813P. Jeff Cook


15,041Philip W. Cook


11,818John C. Cirone


6,983   change-in-control)
 64




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##### Table of Contents



Change-in-Control
    Arrangements
  change-in-control
  Summary
    Compensation Table
    EquityName and




Awards


TotalPrincipal Position

Year


($)(1)


($)Glenn Darden


2007


$
32,318


$
32,318Chairman of the BoardThomas F. Darden


2007



32,318



32,318President and
    Chief Executive OfficerP. Jeff Cook


2007



16,159



16,159Executive Vice President
    Chief Operating OfficerPhilip W. Cook


2007



16,159



16,159Senior Vice President
    Chief Financial OfficerJohn C. Cirone


2007



12,297



12,297Senior Vice President
    General Counsel and Secretary     (1)
    
    This column reports the dollar amounts recognized for financial
    statement reporting purposes with respect to the year ended
    December 31, 2007, for the fair value of phantom units
    granted to the named executive officers in 2007 in accordance
    with FAS 123(R). Additional information regarding the
    calculation of these amounts is included in Notes 2 and 10
    to the consolidated financial statements included in
    Item 8. Financial Statements and Supplementary
    Data of this annual report. 65




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##### Table of Contents



Grants of
    Plan-Based Awards in 2007
    Grant DateEquity Awards


Fair Value ofNumber of Units


AwardsName

Grant Date


(#)


($)(1)Glenn Darden


8/10/2007



10,000


$
213,600Thomas F. Darden


8/10/2007



10,000



213,600P. Jeff Cook


8/10/2007



5,000



106,800Philip W. Cook


8/10/2007



5,000



106,800John C. Cirone


8/10/2007



4,000



85,440     (1)
    
    This column reports the dollar amounts to be recognized for
    financial statement reporting purposes with respect to the year
    ended December 31, 2007, for the fair value of phantom
    units granted to the named executive officers in 2007 in
    accordance with FAS 123(R). Additional information regarding the
    calculation of these amounts is included in Notes 2 and 10
    to the consolidated financial statements included in
    Item 8. Financial Statements and Supplementary
    Data of this annual report.  Outstanding
    Equity Awards at Year-End 2007
    Equity AwardsNumber of


Market Value ofUnits


Unitsthat have


that havenot Vested


not VestedName

(#)


($)(1)Glenn Darden


10,000


$
250,200Thomas F. Darden


10,000



250,200P. Jeff Cook


5,000



125,100Philip W. Cook


5,000



125,100John C. Cirone


4,000



100,080     (1)
    
    The market value of unit awards is based on the closing market
    price of KGS common units on December 31, 2007, which was
    $25.02.  Potential
    Payments upon Termination or in Connection with a Change in
    Control Death, Disability or Change in Control
    Payments
   66




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##### Table of Contents



Potential
    Payments upon Termination or Change in Control Table
    Equity AwardsNumber of


Market ValueUnits


or UnitsThat Have


That HaveNot Vested


Not VestedName

(#)


($)(1)Glenn Darden


10,000


$
250,200Thomas F. Darden


10,000



250,200P. Jeff Cook


5,000



125,100Philip W. Cook


5,000



125,100John C. Cirone


4,000



100,080     (1)
    
    The market value of unit awards is based on the closing market
    price of KGS common units on December 31, 2007, which was
    $25.02.  Compensation
    of Directors
      Fees Earned or


EquityPaid in Cash


Awards


TotalName

($)(1)


($)(2)


($)Alvin Bledsoe

$




53,343
(3)

$
53,343Philip D. Gettig


30,000



23,332
(4)


53,332John W. Somerhalder II






53,332
(5)


53,332     (1)
    
    This column reports the amount of compensation earned in 2007
    and paid in cash for Board and committee service, excluding
    $40,000 that Mr. Bledsoe elected to receive in the form of
    phantom units, $10,000 that Mr. Gettig elected to receive
    in the form of phantom units, and $40,000 that
    Mr. Somerhalder elected to receive in the form of phantom
    units.(2)
    
    This column reports the dollar amounts recognized for financial
    statement reporting purposes with respect to the year ended
    December 31, 2007, for the fair value of phantom units
    granted in 2007 in accordance with FAS 123(R). Additional
    information regarding the calculation of these amounts is
    included in Notes 2 and 10 to the consolidated financial
    statements included in Item 8. Financial Statements
    and Supplementary Data of this annual report.(3)
    
    The grant date fair value calculated in accordance with
    FAS 123(R) of the 3,746 phantom units granted to
    Mr. Bledsoe in 2007, including those phantom units he
    acquired in lieu of $40,000 of his cash fees, was $80,015. As of
    December 31, 2007, Mr. Bledsoe held 3,746 phantom
    units. 67




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##### Table of Contents



(4)
    
    The grant date fair value calculated in accordance with
    FAS 123(R) of the 2,341 phantom units granted to
    Mr. Gettig in 2007, including those phantom units he
    acquired in lieu of $10,000 of his cash fees, was $50,004. As of
    December 31, 2007, Mr. Gettig held 2,341 phantom units.(5)
    
    The grant date fair value calculated in accordance with
    FAS 123(R) of the 3,746 phantom units granted to
    Mr. Somerhalder in 2007, including those phantom units he
    acquired in lieu of $40,000 of his cash fees, was $80,015. As of
    December 31, 2007, Mr. Somerhalder held 3,746 phantom
    units. 68




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##### Table of Contents



Compensation
    Committee Interlocks and Insider Participations
      Compensation
    Committee Report
  Form 10-K
  Members
    of the Board of Directors of Quicksilver Gas Services GP
    LLC
  Alvin Bledsoe

Thomas F. DardenP. Jeff Cook

Philip D. GettigPhilip Cook

John W. Somerhalder IIGlenn Darden  69




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##### Table of Contents



Item.
    12
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Quicksilver
    Gas Services LP
    
    each person known to us to beneficially own more than 5% of our
    common or subordinated units;
    each named executive officer of Quicksilver Gas Services GP LLC;
    each director of Quicksilver Gas Services GP LLC; and
    all directors and executive officers of Quicksilver Gas Services
    GP LLC as a group.    Percentage ofPercentage





Percentage of


Common andCommon


of Common


Subordinated


Subordinated


SubordinatedBeneficial Owner

Units


Units


Units


Units


UnitsDirectors and Executive OfficersGlenn
    Darden(1)


80,800



*











*Thomas F.
    Darden(1)


80,800



*











*P. Jeff Cook






*











*Philip W.
    Cook(2)


1,000



*











*John C. Cirone


900



*











*Alvin Bledsoe


33,143



*











*Philip D. Gettig


2,093



*











*John W. Somerhalder II


9,598



*











*Directors and executive officers as a group (9 persons)


132,234



1.1
%










*Holders of More Than 5% Not
    Named AboveQuicksilver Resources
    Inc.(3)(5)


5,696,752



46.5
%


11,513,625



100.0
%


72.4
%Quicksilver Gas Services Holdings
    LLC(4)(5)


5,696,752



46.5
%


11,513,625



100.0
%


72.4
%Little Hoss Cowtown Pipeline
    Partners(6)


368,311



3.0
%










1.5
%Little Hoss Cowtown Processing
    Partners(7)


316,357



2.6
%










1.3
%Lehman Brothers Holdings
    Inc.(8)


829,725



6.8
%










3.5
%     *
    
    Indicates less than 1%(1)
    
    Includes, as to each of Messrs. G. Darden and T. Darden,
    76,100 common units held in a trust for which he has shared
    voting and investment power as a co-trustee. Each of
    Messrs. G. Darden and T. Darden disclaims beneficial
    ownership of the shares held in this trust, except to the extent
    of his pecuniary interest therein.(2)
    
    Includes 1,000 common units held by Mr. Philip
    W. Cook jointly with his spouse.(3)
    
    Quicksilver Resources Inc. is the ultimate parent company of
    Quicksilver Gas Services Holdings LLC and may, therefore, be
    deemed to beneficially own the units held by Holdings. 70




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##### Table of Contents



(4)
    
    Holdings, an indirect wholly owned subsidiary of Quicksilver,
    owns a 100% interest in our general partner and a 72.4% limited
    partner interest in us.(5)
    
    Quicksilver has shared voting power and shared investment power
    with Holdings, Cowtown Gas Processing LP (Processing
    LP), Cowtown Pipeline LP (Pipeline LP),
    Cowtown Pipeline Management, Inc. (Management) and
    Cowtown Pipeline Funding, Inc. (Funding) over
    5,696,752 common units of Quicksilver Gas Services LP. Holdings
    also owns 11,513,625 subordinated units representing limited
    partner interests in Quicksilver Gas Services LP, which may be
    converted into common units on a one-for-one basis upon the
    termination of the subordination period under certain
    circumstances as set forth in the Partnership Agreement.
    Quicksilver, Processing LP, Pipeline LP, Management and Funding
    may also be deemed to beneficially own the 11,513,625
    subordinated units owned by Holdings. Quicksilver Gas Services
    GP LLC, the sole general partner of Quicksilver Gas Services LP,
    owns 469,944 general partner units and incentive distribution
    rights (which represent the right to receive increasing
    percentages of quarterly distributions in excess of specified
    amounts) in Quicksilver Gas Services LP. The address of
    Quicksilver is 777 West Rosedale Street, Fort Worth,
    Texas 76104.(6)
    
    According to a Schedule 13G filed with the SEC on
    November 16, 2007, Little Hoss Cowtown Pipeline Partners
    (Little Hoss Pipeline) beneficially owned 368,311
    common units constituting 3.0% of our outstanding common units.
    The Schedule 13G indicates that Little Hoss Pipeline,
    together with Little Hoss Cowtown Processing Partners
    (Little Hoss Processing, and together with Little
    Hoss Pipeline, the Little Hoss Partnerships) and
    each of the controlling persons identified in the
    Schedule 13G, may be deemed to constitute a group, and that
    the group and each member of the group (other than the Little
    Hoss Partnerships) may be deemed to beneficially own 684,668
    common units constituting 5.6% of our outstanding common units.(7)
    
    According to a Schedule 13G filed with the SEC on
    November 16, 2007, Little Hoss Processing beneficially
    owned 316,357 common units constituting 2.6% of our outstanding
    common units. The Schedule 13G indicates that Little Hoss
    Processing, together with Little Hoss Pipeline and each of the
    controlling persons identified in the Schedule 13G, may be
    deemed to constitute a group, and that the group and each member
    of the group (other than the Little Hoss Partnerships) may be
    deemed to beneficially own 684,668 common units constituting
    5.6% of our outstanding common units.(8)
    
    According to a Schedule 13G/A filed by Lehman Brothers
    Holdings Inc. with the SEC on February 13, 2008, Lehman
    Brothers Holdings Inc. had sole voting power and sole investment
    power over 826,122 common units, Lehman Brothers Inc. had sole
    voting power and sole investment power over 292,772 common
    units, LB I Group Inc. had sole voting power and sole investment
    power over 150,000 common units, Lehman Brothers MLP Opportunity
    Associates LLC had sole voting power and sole investment power
    over 533,350 common units, Lehman Brothers MLP Opportunity
    Associates LP had sole voting power and sole investment power
    over 533,350 common units, Lehman Brothers MLP Opportunity Fund
    LP had sole voting power and sole investment power over 533,350
    common units, Lehman Brothers MLP Associates, L.P. had sole
    voting power and sole investment power of 150,000 common units,
    and Lehman Brothers MLP Partners, LP had sole voting power and
    sole investment power over 150,000 common units of Quicksilver
    Gas Services LP. The address of Lehman Brothers Holdings Inc.
    and Lehman Brothers Inc. is 745 Seventh Avenue, New York, New
    York 10019. The address of LB I Group Inc., Lehman Brothers MLP
    Opportunity Associates LLC, Lehman Brothers MLP Opportunity
    Associates LP, Lehman Brothers MLP Opportunity Fund LP,
    Lehman Brothers MLP Associates, L.P., and Lehman Brothers MLP
    Partners, LP is 399 Park Avenue, New York, New York 10022. 71




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##### Table of Contents



Quicksilver
    Resources Inc.
    
    each named executive officer of Quicksilver Gas Services GP LLC;
    each director of Quicksilver Gas Services GP LLC; and
    all directors and executive officers of Quicksilver Gas Services
    GP LLC as a group.    Beneficial Share OwnershipNumber


Percent ofBeneficial Owner

of Shares


Outstanding SharesGlenn
    Darden(1)(2)(3)(4)(5)


48,608,394



30.7
%Thomas F.
    Darden(1)(2)(3)(4)(5)


48,641,736



30.7
%P. Jeff
    Cook(3)(5)


563,000



*Philip W.
    Cook(4)(5)(6)


71,639



*John C.
    Cirone(3)(5)


109,126



*Alvin Bledsoe







%Philip D. Gettig







%John W. Somerhalder II







%Directors and executive officers as a group
    (9 persons)(1)(2)(3)(4)(5)


52,443,117



33.1
%     *
    
    Indicates less than 1%(1)
    
    Includes as to each of Messrs. G. Darden and T. Darden:
    (i) 311,690 and 342,056, respectively, shares held in
    grantor retained annuity trusts; and
    (ii) 45,566,912 shares beneficially owned by
    Quicksilver Energy L.P. for which he has shared voting and
    investment power as a member of Pennsylvania Management, LLC,
    the sole general partner of Quicksilver Energy L.P. Each of
    Messrs. G. Darden and T. Darden disclaims beneficial
    ownership of all shares owned by Quicksilver Energy L.P., except
    to the extent of his pecuniary interest therein.(2)
    
    Includes with respect to each of the following individuals and
    the directors and executive officers as a group, the following
    approximate numbers of shares represented by units in a Unitized
    Stock Fund held through Quicksilvers 401(k) Plan:
    Mr. G. Darden  22,984; Mr. T.
    Darden  87,016; and all directors and executive
    officers as a group  112,431.(3)
    
    Includes with respect to each of the following individuals and
    the directors and executive officers as a group, the following
    numbers of shares subject to options that will vest on or before
    April 12, 2008: Mr. G. Darden  106,126;
    Mr. T. Darden  70,126; Mr. P. Jeff
    Cook  24,646; Mr. Cirone  46,726; and
    all directors and executive officers as a group 
    247,624.(4)
    
    Includes with respect to each of the following individuals and
    the directors and executive officers as a group, the following
    numbers of shares pledged as collateral security for loans or
    loan commitments or in accordance with customary terms and
    conditions of standard margin account arrangements: Mr. G.
    Darden  5,064,573 (including
    4,330,861 shares beneficially owned by Quicksilver Energy
    L.P.); Mr. T. Darden  5,041,275
    (including 4,330,861 shares beneficially owned by
    Quicksilver Energy L.P.); Mr. Philip
    W. Cook  12,084; and all directors and executive
    officers as a group  5,787,071 (including
    4,330,861 shares beneficially owned by Quicksilver Energy
    L.P.). 72




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##### Table of Contents



(5)
    
    Includes with respect to each of the following individuals and
    the directors and executive officers as a group, the following
    numbers of shares of unvested restricted stock for which the
    indicated beneficial owners have no investment power:
    Mr. G. Darden  121,808; Mr. T.
    Darden  92,474; Mr. P. Jeff Cook 
    64,734; Mr. Philip W. Cook  57,124;
    Mr. Cirone  27,210; and all directors and
    officers as a group  379,484.(6)
    
    Includes 14,515 shares held by Mr. Philip W. Cook
    jointly with his spouse.  Equity
    Compensation Plan Information
  Number of SecuritiesRemaining Available forFuture Issuance underNumber of Securities to


Weighted-Average


Equity Compensationbe Issued upon Exercise


Exercise Price of


Plans (Excludingof Outstanding Options,


Outstanding Options,


Securities Reflected inPlan Category

Warrants and Rights


Warrants and Rights


Column (a))(a)


(b)


(c)Equity compensation plans approved by security holders


N/A



N/A



N/AEquity compensation plans not approved by security
    holders(1)






N/A
(2)


Total






N/A
(2)


     (1)
    
    The board of directors of our general partner adopted the
    Quicksilver Gas Services LP 2007 Equity Plan prior to the
    initial public offering of our common units. For a description
    of the material features of this plan, see Note 10 to the
    consolidated financial statements included in Item 8.
    Financial Statements and Supplementary Data of this annual
    report.(2)
    
    Phantom units constitute the only rights outstanding under the
    Quicksilver Gas Services LP 2007 Equity Plan. Each phantom unit
    that may be settled in common units entitles the holder to
    receive, upon vesting, one common unit with respect to each
    phantom unit, without payment of any cash. Accordingly, there is
    no reportable weighted-average exercise price. 73




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence  General
    Distributions
    and Payments to Our General Partner and its Affiliates
    Formation
    Stage
    The consideration received by Quicksilver and its subsidiaries
    and the two private investors for the contribution to us of
    certain assets and liabilities (with a pro forma net book value
    of $169.8 million as of March 31, 2007):
    
     6,513,625 common units; 11,513,625 subordinated units; 469,944 general partner units; the incentive distribution rights; and $94.7 million cash payment from the proceeds of
    our initial public offering, $25.1 million from cash on
    hand and the issuance of a $50.0 million subordinated note
    payable to Quicksilver, as reimbursement for capital
    expenditures incurred by Quicksilver and the two private
    investors prior to the closing of the offering related to the
    assets contributed to us upon the closing of the offering.  Operational
    Stage
  Distributions of available cash to our general partner and its
    affiliates:
    
    We generally make cash distributions 98% to our unitholders pro
    rata, including our general partner and its affiliates, as the
    holders of an aggregate 5,696,752 common units and 11,513,625
    subordinated units, and 1.9% to our general partner. In
    addition, if distributions exceed the minimum quarterly
    distribution and other higher target distribution levels, our
    general partner is entitled to increasing percentages of the
    distributions, up to 50% of the distributions above the highest
    target distribution level.Assuming we have sufficient available cash to pay the full
    minimum quarterly distribution on all of our outstanding units
    for four quarters, our general partner and its affiliates would
    receive an annual distribution of approximately
    $0.6 million on their general 74




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##### Table of Contents



partner interest and $20.6 million on their common and
    subordinated units.Payments to our general partner and its affiliates:
    
    Our general partner and its affiliates are entitled to
    reimbursement for all expenses they incur on our behalf,
    including salaries and employee benefit costs for their
    employees who provide services to us, and all other necessary or
    appropriate expenses allocable to us or reasonably incurred by
    our general partner and its affiliates in connection with
    operating our business. The Partnership Agreement provides that
    our general partner will determine the expenses that are
    allocable to us in good faith.Withdrawal or removal of our general partner:
    
    If our general partner withdraws or is removed, its general
    partner interest and its incentive distribution rights will
    either be sold to the new general partner for cash or converted
    into common units, in each case for an amount equal to the fair
    market value of those interests.  Liquidation
    Stage
  Liquidation:
    
    Upon our liquidation, the partners, including our general
    partner, will be entitled to receive liquidating distributions
    according to their respective capital account balances.  Sales of
    Certain Assets to Quicksilver
    Omnibus
    Agreement
    
    restrictions on Quicksilvers ability to engage in certain
    midstream business activities or own certain related assets in
    the Quicksilver Counties;
    Quicksilvers right to construct and operate the Lake
    Arlington Dry System and Hill County Dry System and our
    obligation to purchase those assets from Quicksilver at the fair
    market value of those assets within two years after the
    completion of construction of the assets and the assets have
    commenced commercial service.
    Quicksilvers obligation to indemnify us for certain
    liabilities and our obligation to indemnify Quicksilver for
    certain liabilities; 75




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##### Table of Contents




    our obligation to reimburse Quicksilver for all expenses
    incurred by Quicksilver (or payments made on our behalf) in
    conjunction with Quicksilvers provision of general and
    administrative services to us, including salary and benefits of
    Quicksilver personnel, our public company expenses, general and
    administrative expenses and salaries and benefits of our
    executive management who are Quicksilvers employees; and
    our obligation to reimburse Quicksilver for all insurance
    coverage expenses it incurs or payments it makes with respect to
    our assets.    2007


Estimates for 2008(In millions)


(In millions)Reimbursement of general and administrative expenses

$
1.9


$
2.0Reimbursement of public company expenses


0.9



1.5Reimbursement of compensation and benefits for executive
    management of our general partner


0.2



0.4Total

$
3.0


$
3.9       Reimbursement
    of Operating and General and Administrative
    Expense
    Indemnification
   76




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##### Table of Contents



Regulation Section 1.1502-6
        Competition
   77




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##### Table of Contents



Contracts
    with Affiliates
  Services
    and Secondment Agreement
  12-month 12-month
  Equity
    Awards to Certain Quicksilver Executive Officers
    Gas
    Gathering and Processing Agreement
     78




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##### Table of Contents



Policies
    and Procedures for Review and Approval of Transactions with
    Related Parties
    Director
    Independence
  (http://www.kgslp.com/corporate/corporate 
 79




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##### Table of Contents



Item 14.
    Principal
    Accountant Fees and Services    Fees Billed for the YearEnded December 31,2007


2006Audit
    fees(1)

$
316,000


$
20,000Audit-related
    fees(2)


324,000



Total

$
640,000


$
20,000     (1)
    
    Includes fees for audits of annual financial statements, reviews
    of the related quarterly financial statements, and services that
    are normally provided by the independent accountants in
    connection with statutory and regulatory filings or engagements,
    including reviews of interim financial statements, audits of
    businesses acquired and other customary documents filed with the
    SEC.(2)
    
    Includes fees related to consultations concerning financial
    accounting and reporting standards and services related to the
    completion of the initial public offering.   80




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules    1.
    Financial Statements:  Form 10-K.
              2.
    Financial Statement Schedules:      Exhibit No.

Description3
.1

Certificate of Limited Partnership of Quicksilver Gas Services
    LP (filed as Exhibit 3.1 to the Companys Form S-1, File
    No. 33-140599, filed February 12, 2007 and included herein by
    reference).3
.2

Second Amended and Restated Agreement of Limited Partnership of
    Quicksilver Gas Services LP, dated February 19, 2008 (filed as
    Exhibit 3.1 to the Companys Form 8-K filed February 22,
    2008 and included herein by reference).3
.3

Certificate of Formation of Quicksilver Gas Services GP LLC
    (filed as Exhibit 3.3 to the Companys Form S-1, File No.
    333-140599, filed February 12, 2007 and included herein by
    reference).3
.4

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(a)

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
.2(b)

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).10
.3

Credit Agreement, dated as of August 10, 2007, among Quicksilver
    Gas Services LP and the lenders and agents identified therein
    (filed as Exhibit 10.1 to the Companys Form 8-K filed
    August 16, 2007 and included herein by reference). 81




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##### Table of Contents



Exhibit No.

Description10
.4

Subordinated Promissory Note, dated as of August 10, 2007, made
    by Quicksilver Gas Services LP payable to the order of
    Quicksilver Resources Inc. (filed as Exhibit 10.2 to the
    Companys
    Form 8-K
    filed August 16, 2007 and included herein by reference).10
.5

Fifth Amended and Restated Gas Gathering and Processing
    Agreement, dated August 10, 2007, among Quicksilver Resources
    Inc., Cowtown Pipeline Partners L.P. and Cowtown Gas Processing
    Partners L.P. (filed as Exhibit 10.6 to the Companys Form
    8-K filed August 16, 2007 and included herein by reference).10
.6

Omnibus Agreement, dated August 10, 2007, among Quicksilver Gas
    Services LP, Quicksilver Gas Services GP LLC and Quicksilver
    Resources Inc. (filed as Exhibit 10.4 to the Companys
    Form 8-K
    filed August 16, 2007 and included herein by reference).10
.7

Services and Secondment Agreement, dated August 10, 2007,
    between Quicksilver Resources Inc. and Quicksilver Gas Services
    GP LLC (filed as Exhibit 10.5 to the Companys Form 8-K
    filed August 16, 2007 and included herein by reference).10
.8

Contribution, Conveyance and Assumption Agreement, dated August
    10, 2007, among Quicksilver Gas Services LP, Quicksilver Gas
    Services GP LLC, Cowtown Gas Processing L.P., Cowtown Pipeline
    L.P., Quicksilver Gas Services Holdings LLC, Quicksilver Gas
    Services Operating GP LLC, Quicksilver Gas Services Operating
    LLC and the private investors named therein (filed as Exhibit
    10.3 to the Companys Form 8-K filed August 16, 2007 and
    included herein by reference).+ 10
.9

2007 Equity Plan (filed as Exhibit 99.1 to the Companys
    Form S-8, File No. 333-145326, filed August 10, 2007 and
    included herein by reference).+ 10
.10

Form of Phantom Unit Award Agreement for Directors (3-year)
    (filed as Exhibit 10.8 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference).+ 10
.11

Form of Phantom Unit Award Agreement for Directors (1-year)
    (filed as Exhibit 10.9 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference).+ 10
.12

Form of Phantom Unit Award Agreement for Non-Directors (Cash)
    (filed as Exhibit 10.10 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference).+ 10
.13

Form of Phantom Unit Award Agreement for Non-Directors (Units)
    (filed as Exhibit 10.11 to the Companys Form S-1/A, File
    No. 333-140599, filed July 25, 2007 and included herein by
    reference).*+ 10
.14

Description of Non-Employee Director Compensation+ 10
.15

Quicksilver Gas Services LP Annual Bonus Plan (filed as Exhibit
    10.1 to the Companys Form 8-K filed December 13, 2007 and
    included herein by reference).+ 10
.16

Form of Indemnification Agreement by and between Quicksilver Gas
    Services GP LLC and its officers and directors (filed as Exhibit
    10.7 to the Companys Form S-1/A, File No. 333-140599,
    filed July 17, 2007 and included herein by reference).*21
.1

List of Subsidiaries of Quicksilver Gas Services LP*23
.1

Consent of Deloitte & Touche LLP*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+
    
    Identifies management contracts and compensatory plans or
    arrangements. 82




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##### Table of Contents



SIGNATURES    QUICKSILVER GAS SERVICES LP
   By: QUICKSILVER GAS SERVICES GP LLC,
    General Partner
  By:
    /s/  Thomas
    F. Darden         Signature

Title

Date/s/  Glenn
    DardenGlenn
    Darden

Chairman of the Board; Director

February 27, 2008/s/  Thomas
    F. DardenThomas
    F. Darden

President and Chief Executive Officer (Principal Executive
    Officer); Director

February 27, 2008/s/  P.
    Jeff CookP.
    Jeff Cook

Executive Vice President  Chief Operating Officer;
    Director

February 27, 2008/s/  Philip
    CookPhilip
    Cook

Senior Vice President  Chief Financial Officer
    (Principal Financial Officer); Director

February 27, 2008/s/  John
    ReganJohn
    Regan

Vice President  Chief Accounting Officer (Principal
    Accounting Officer)

February 27, 2008/s/  Alvin
    BledsoeAlvin
    Bledsoe

Director

February 27, 2008/s/  Philip
    D. GettigPhilip
    D. Gettig

Director

February 27, 2008/s/  John
    W. Somerhalder IIJohn
    W. Somerhalder II

Director

February 27, 2008  83




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##### Table of Contents



Exhibit No.

Description3
.1

Certificate of Limited Partnership of Quicksilver Gas Services
    LP (filed as Exhibit 3.1 to the Companys Form S-1, File
    No. 33-140599, filed February 12, 2007 and included herein by
    reference).3
.2

Second Amended and Restated Agreement of Limited Partnership of
    Quicksilver Gas Services LP, dated February 19, 2008 (filed as
    Exhibit 3.1 to the Companys Form 8-K filed February 22,
    2008 and included herein by reference).3
.3

Certificate of Formation of Quicksilver Gas Services GP LLC
    (filed as Exhibit 3.3 to the Companys Form S-1, File No.
    333-140599, filed February 12, 2007 and included herein by
    reference).3
.4

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(a)

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
.2(b)

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).10
.3

Credit Agreement, dated as of August 10, 2007, among Quicksilver
    Gas Services LP and the lenders and agents identified therein
    (filed as Exhibit 10.1 to the Companys Form 8-K filed
    August 16, 2007 and included herein by reference).10
.4

Subordinated Promissory Note, dated as of August 10, 2007, made
    by Quicksilver Gas Services LP payable to the order of
    Quicksilver Resources Inc. (filed as Exhibit 10.2 to the
    Companys
    Form 8-K
    filed August 16, 2007 and included herein by reference).10
.5

Fifth Amended and Restated Gas Gathering and Processing
    Agreement, dated August 10, 2007, among Quicksilver Resources
    Inc., Cowtown Pipeline Partners L.P. and Cowtown Gas Processing
    Partners L.P. (filed as Exhibit 10.6 to the Companys Form
    8-K filed August 16, 2007 and included herein by reference).10
.6

Omnibus Agreement, dated August 10, 2007, among Quicksilver Gas
    Services LP, Quicksilver Gas Services GP LLC and Quicksilver
    Resources Inc. (filed as Exhibit 10.4 to the Companys
    Form 8-K
    filed August 16, 2007 and included herein by reference).10
.7

Services and Secondment Agreement, dated August 10, 2007,
    between Quicksilver Resources Inc. and Quicksilver Gas Services
    GP LLC (filed as Exhibit 10.5 to the Companys Form 8-K
    filed August 16, 2007 and included herein by reference).10
.8

Contribution, Conveyance and Assumption Agreement, dated August
    10, 2007, among Quicksilver Gas Services LP, Quicksilver Gas
    Services GP LLC, Cowtown Gas Processing L.P., Cowtown Pipeline
    L.P., Quicksilver Gas Services Holdings LLC, Quicksilver Gas
    Services Operating GP LLC, Quicksilver Gas Services Operating
    LLC and the private investors named therein (filed as Exhibit
    10.3 to the Companys Form 8-K filed August 16, 2007 and
    included herein by reference).+ 10
.9

2007 Equity Plan (filed as Exhibit 99.1 to the Companys
    Form S-8, File No. 333-145326, filed August 10, 2007 and
    included herein by reference).+ 10
.10

Form of Phantom Unit Award Agreement for Directors (3-year)
    (filed as Exhibit 10.8 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference).+ 10
.11

Form of Phantom Unit Award Agreement for Directors (1-year)
    (filed as Exhibit 10.9 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference). 84




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##### Table of Contents



Exhibit No.

Description+ 10
.12

Form of Phantom Unit Award Agreement for Non-Directors (Cash)
    (filed as Exhibit 10.10 to the Companys Form S-1/A, File
    No. 333-140599, filed July 17, 2007 and included herein by
    reference).+ 10
.13

Form of Phantom Unit Award Agreement for Non-Directors (Units)
    (filed as Exhibit 10.11 to the Companys Form S-1/A, File
    No. 333-140599, filed July 25, 2007 and included herein by
    reference).*+ 10
.14

Description of Non-Employee Director Compensation+ 10
.15

Quicksilver Gas Services LP Annual Bonus Plan (filed as Exhibit
    10.1 to the Companys Form 8-K filed December 13, 2007 and
    included herein by reference).+ 10
.16

Form of Indemnification Agreement by and between Quicksilver Gas
    Services GP LLC and its officers and directors (filed as Exhibit
    10.7 to the Companys Form S-1/A, File No. 333-140599,
    filed July 17, 2007 and included herein by reference).*21
.1

List of Subsidiaries of Quicksilver Gas Services LP*23
.1

Consent of Deloitte & Touche LLP*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+
    
    Identifies management contracts and compensatory plans or
    arrangements. 85