PARTNERS CAPITAL

6 Months Ended

Jun. 30, 2011

PARTNERS CAPITAL [Abstract]

PARTNERS CAPITAL

NOTE 8 - PARTNERS' CAPITAL

Units Outstanding

On January 3, 2011, the underwriters exercised their over-allotment option in full for 2,250,000 common units issued by the Partnership at $20.00 per unit. Total net proceeds from the sale of these common units, after deducting the underwriters' discount and structuring fees of approximately $3.0 million, were approximately $42.0 million.

As of June 30, 2011, our outstanding partnership interests consisted of 28,557,987 outstanding common units and 7,145,866 outstanding subordinated units, representing a 99.9% limited partnership interest in us, and a 0.1% general partnership interest represented by 35,729 general partner units.

Allocations of Net Income (Loss)

Net income (loss) is allocated between QRE GP and the limited partner unitholders in proportion to their pro rata ownership during the period.

Cash Distributions

We intend to continue to make regular cash distributions to unitholders on a quarterly basis, although there is no assurance as to the future cash distributions since they are dependent upon future earnings, cash flows, capital requirements, financial condition and other factors. The Credit Agreement prohibits us from making cash distributions if any potential default or event of default, as defined in the Credit Agreement, occurs or would result from the cash distribution.

Our partnership agreement requires us to distribute all of our available cash on a quarterly basis. Our available cash is our cash on hand at the end of a quarter after the payment of our expenses and the establishment of reserves for future capital expenditures and operational needs, including cash from working capital borrowings. We intend to fund a portion of our capital expenditures with additional borrowings or issuances of additional units. We may also borrow to make distributions to unitholders, for example, in circumstances where we believe that the distribution level is sustainable over the long term, but short-term factors have caused available cash from operations to be insufficient to pay the distribution at the current level. Our cash distribution policy reflects a basic judgment that our unitholders will be better served by us distributing our available cash, after expenses and reserves, rather than retaining it.

Distributions for the six months ended June 30, 2011 were as follows:

		Distributions
				Limited Partners
						Affiliated
Date Paid	For the period ended	General Partner		Public Common		Common		Subordinated		Total		Distributions per unit
		(In thousands, except per unit amounts)
February 11, 2011	December 31, 2010	$	2	$	779	$	506	$	320	$	1,607	$	0.0448
May 13, 2011	March 31, 2011		15		7,186		4,660		2,948		14,809		0.4125