UNIT-BASED COMPENSATION

9 Months Ended

Sep. 30, 2011

UNIT-BASED COMPENSATION [Abstract]

UNIT-BASED COMPENSATION

NOTE 12 – UNIT-BASED COMPENSATION

On December 22, 2010, in connection with the closing of the IPO, the board of directors of QRE GP adopted the QRE GP, LLC Long Term Incentive Plan (the “Plan”) for employees, officers, consultants and directors and consultants of QRE GP and those of its affiliates, including QRM, who perform services for us. The Plan consists of unit options, restricted units, phantom units, unit appreciation rights, distribution equivalent rights, other unit-based awards and unit awards. The purpose of awards under the long-term incentive plan is to provide additional incentive compensation to employees providing services to us and to align the economic interests of such employees with the interests of our unitholders. The Plan limits the number of common units that may be delivered pursuant to awards under the plan to 1.8 million units. Common units cancelled, forfeited or withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards.

During the three and nine months ended September 30, 2011, we recognized compensation expense of $0.4 million and $1.0 million related to equity awards. As of September 30, 2011 we had 140,170 unit awards outstanding with unrecognized compensation expense related to nonvested restricted unit awards of $2.3 million which we expect to recognize in expense over a weighted average remaining vesting period of approximately 2 years.

On January 4, 2011, we granted common unit awards of 3,750 units to each of our two independent directors. These units vested immediately upon grant. The fair value of the common unit awards granted was calculated based on the closing price of our common units on the grant date, $20.20 per common unit.

On March 9, 2011, we granted restricted common unit awards of 8,985 units each to two of our named executive officers. The fair value of the common unit awards granted was calculated based on the closing price of our common units on the grant date, $22.26 per common unit, and we expect to recognize this in expense over the three year vesting period.

On July 1, 2011, we granted a common unit award of 1,817 units to a newly elected independent director. These units vested immediately upon grant. The fair value of the common unit award granted was calculated based on the closing price of our common units on the grant date, $20.62 per common unit.

The following table summarizes our unit-based awards for the nine months ended September 30, 2011 (units in thousands):

	Nine months ended September 30, 2011
	Number of Unvested Units			Weighted Average Grant-Date Fair Value per unit
Unvested units  at beginning of period		148		$	20.03
Granted (1)		44		$	21.42
Forfeited		(30	)	$	20.66
Vested (1) (2)		(22	)	$	20.14
Unvested units at end of period		140		$	20.32

(1) Includes 9,317 units granted to our independent directors for services performed for us.

(2) Includes 12,750 other units vested during the period.

For the three months ended September 30, 2011, we had approximately 148,345 weighted average restricted units outstanding.