Quicksilver Resources Announces 2011 Third-Quarter Results Sets Another Production Record and Reduces Unit Operating Costs
Sets Another Production Record and Reduces Unit Operating Costs
FORT WORTH, TX -- (Marketwire) -- 11/07/11 -- Quicksilver Resources Inc. (NYSE: KWK) today announced third quarter 2011 results.
Highlights:
- Produced a record 427 million cubic feet of natural gas equivalents (MMcfed), an 18% increase over the same prior-year period and a 2.5% increase over the previous quarter. The year-over-year increase is a result of a 19% increase in production from our Barnett Shale asset and an increase of over 200% in our Horn River Asset in Northeast British Columbia
- Reduced unit operating costs from the prior-year quarter
- Drilled 13 new wells and connected 44 wells in the Barnett Shale asset
- Increased total revenue for the quarter ended September 30, 2011 to $260 million from $238 million in the prior-year quarter
- Reduced debt $317 million from the prior-year quarter
- Secured new U.S. and Canadian credit facilities with combined availability of approximately $1.1 billion. Both facilities were oversubscribed, with lower interest rate spreads than the previous facility
- Acquired additional oil-prospective acreage in the Permian and Delaware basins of West Texas, bringing our land position in the Bone Springs/Wolfcamp play to approximately 150,000 net acres and increasing our footprint in new projects
'Our goals for Quicksilver remain: to increase production in our core projects, continue to knock down unit operating costs, establish new oil and gas production areas, and significantly improve the company's balance sheet. I can say that we are moving forward on all fronts,' said Glenn Darden, Quicksilver's President and CEO.
Net Income
Net income for the third quarter was $29 million, or $0.17 per diluted share, compared to net income of $22 million, or $0.13 per diluted share, in the prior-year quarter. Third-quarter 2011 adjusted net income, a non-GAAP measure, was $6 million, or $0.03 per diluted share, compared to $29 million, or $0.17 per diluted share, in the prior year quarter. Financial results for the current quarter were impacted by a non-cash gain of $30 million related to the mark-to-market impact of long-term derivatives, a non-cash gain of $12 million associated with the company's equity interest in BreitBurn Energy Partners' (NASDAQ: BBEP) second-quarter 2011 unrealized derivative adjustments, a gain of $10 million for the sale of BBEP units, and a loss of $15 million for acceleration of unamortized debt issuance costs, professional services in connection with strategic transactions, and to settle pending claims associated with the Eagle litigation as previously disclosed in regulatory filings. Details of adjusted net income are included in the attached tables of this earnings release.
Revenues and Expenses
Total revenue for the third quarter of 2011 increased to $260 million from $238 million from the prior-year quarter. Production revenue for the third quarter of 2011 was $208 million, down 5% from the prior-year quarter. The decrease in production revenue was due to lower realized prices for natural gas including the effects of hedging, partially offset by higher sales volumes of natural gas and higher realized prices for NGLs and crude oil.
Lease operating expense for the third quarter of 2011 was $28 million, or $0.70/Mcfe, versus $21 million, or $0.63/Mcfe in the prior-year quarter. The increase on a unit basis is largely due to higher spending on well work-over activity and gas lift expenses compared to the prior-year period. In the third quarter of 2011, on a unit of production basis, production and ad valorem tax expense declined 29%; depletion, depreciation and accretion expense declined 7%; general and administrative expense declined 3% and interest expense declined 20% versus the prior-year quarter, resulting in a total cost reduction of $0.53 per Mcfe across these categories. Gathering, processing and transportation expense was $1.30 per Mcfe for the third quarter of 2011.
Earnings from BreitBurn Ownership
Quicksilver received $3 million in cash distributions and reported income of $14 million attributable to its interest in BreitBurn Energy Partners' second quarter 2011 results, including our share of BBEP net unrealized derivative gains of approximately $12 million. Quicksilver owns approximately 8 million units of BBEP, representing a 13.6% interest.
Debt
At September 30, 2011, the company's total debt was approximately $2.1 billion, a reduction of approximately $317 million from the September 30, 2010 balance. On September 30, 2011, Quicksilver notified holders of its 1.875% convertible notes of the right to require the company to repurchase the notes on November 1, 2011 at par. We repaid debenture holders approximately $150 million for notes presented to us for repurchase. Because interest expense on the convertible notes was recognized at an effective rate of 6.75%, noncash interest will decrease approximately $1 million in the fourth quarter. As a result of the repurchase and cancellation of the convertible notes beginning on November 1, 2011, our diluted earnings per share calculation will exclude the conversion effects of 9.8 million shares that were associated with the notes.
In September 2011, Quicksilver terminated and replaced its existing $1.0 billion global Senior Secured Credit Facility with two separate five-year syndicated senior secured revolving credit facilities for its U.S. and Canadian operations. The $1.25 billion U.S. credit facility has an initial borrowing base and commitments of $850 million, including letter of credit capacity of $75 million. The C$500 million Canadian credit facility has an initial borrowing base and commitments of C$225 million, including letter of credit capacity of C$100 million. Both facilities were oversubscribed by two times, and have lower interest rate spreads than the previous credit facility.
Currently, Quicksilver has a total of approximately $590 million available under its $1.1 billion U.S and Canadian credit facilities. The available capacity includes the $150 million repayment of the 1.875% convertible notes with the U.S. credit facility on November 1.
Operational Update
United States -- Barnett Shale
During the third quarter, Quicksilver's development activity was concentrated in its Barnett Shale asset. The company utilized two rigs in the basin, which drilled 13 (11.9 net) operated wells and also connected 44 (38.1 net) operated wells to sales. At September 30, 2011, Quicksilver had a remaining inventory of 53 gross operated wells that have been drilled in the Barnett Shale but await completion or connection to sales lines. The company expects to exit the year with an estimated 50 wells in its uncompleted well inventory.
United States -- Sandwash Basin
Quicksilver holds approximately 210,000 net acres in the Sandwash Basin in Northwest Colorado, and continues to drill test wells on its oil-prospective exploratory acreage position. Six vertical wells and one horizontal well have been drilled to date. Four of the vertical wells are in the early stages of completion and two are in flowback. The company expects to complete the horizontal well in the next few weeks and anticipates all seven wells to be online by the end of the year. We continue to be encouraged by the results of the test program, and anticipate disclosing well performance by year-end once more data is gathered and evaluated.
United States -- Delaware and Permian Basins
The company expanded its acreage position in West Texas during the third quarter to approximately 150,000 net acres in the Delaware and Permian Basins. The company plans to begin drilling and completion operations in the first quarter of 2012.
Canada -- Horseshoe Canyon
The company expects to drill 8 (6.6 net) more wells by the end of the year, resulting in a total of 16 (11.6 net) wells drilled for the full year. Current net production from the Horseshoe Canyon coal bed methane project is approximately 57 MMcfed.
Canada -- Horn River Basin
Quicksilver has drilled a total of eight horizontal wells into the Muskwa and Klua formations, of which four wells have commenced production. Only two additional wells are required to be drilled to validate virtually all of Quicksilver's exploratory licenses and convert all of our licenses, covering approximately 130,000 net acres, into 10-year development leases. The company has been pleased by the performance of its four producing wells. The actual average daily wellhead production through October 31, 2011 for the four wells on line was 18.4 MMcfd compared to the estimated production of 16.2 MMcfd in our December 31, 2010 reserve report, an increase of 14%. The company is drilling four additional wells in the fourth quarter of 2011 and plans to complete them by the end of the first quarter of 2012. The company has also begun testing of its first horizontal well drilled into the shallower Exshaw oil formation.
Capital Investments
During the third quarter of 2011, the company invested approximately $165 million of capital, of which approximately 60% was for drilling and completion activities, 10% for midstream activities -- primarily for the Horn River gathering system -- and 30% for lease acquisition.
Total capital spending for the year is expected to be approximately $690 million, down slightly from the guidance provided in the second quarter.
Fourth-Quarter 2011 Outlook
Fourth-quarter average daily production volume is expected to be 425-435 MMcfe per day; full-year production guidance is 415-420 MMcfe per day.
Average unit expenses, on a Mcfe basis, are expected as follows:
-- Lease operating expense $0.68 - $0.72
-- Gathering, processing & transportation 1.28 - 1.32
-- Production taxes 0.23 - 0.25
-- General and administrative 0.42 - 0.45
-- Depletion, depreciation & accretion 1.46 - 1.48
Hedging Activity
The company has hedges in place to cover approximately 60% of expected production for the fourth quarter of 2011. A total of 190 MMcf per day of natural gas is covered by collars or fixed-price swaps with a weighted average floor price of $5.95 per thousand cubic feet (Mcf) and 10,500 barrels per day of NGLs are covered by fixed-price swaps with a weighted-average price of $38.84 per barrel.
Conference Call
The company will host a conference call to discuss third-quarter 2011 operating and financial results at 11:00 a.m. eastern time today.
Quicksilver invites interested parties to listen to the call via the company's website at www.qrinc.com or by calling 1-877-313-7932, using the conference ID number 33143474, approximately 10 minutes before the call. A digital replay of the conference call will be available at 3:00 p.m. Eastern time the same day, and will remain available for 30 days. The replay can be dialed at 1-855-859-2056 using the conference ID number 33143474. The replay will also be archived for 30 days on the company's website.
Use of Non-GAAP Financial Measure
This news release and the accompanying schedule include the non-generally accepted accounting principles ('non-GAAP') financial measure of adjusted net income. The accompanying schedule provides reconciliations of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ('GAAP'). Our non-GAAP financial measure should not be considered as an alternative to GAAP measures, such as net income or operating income or any other GAAP measure of liquidity or financial performance.
About Quicksilver Resources
Fort Worth, Texas-based Quicksilver Resources is an independent oil and gas company engaged in the exploration, development and acquisition of oil and gas, primarily from unconventional reservoirs including gas from shales, coal beds and tight sands in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas; Steamboat Springs, Colorado and Cut Bank, Montana. Quicksilver's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. For more information about Quicksilver Resources, visit www.qrinc.com.
Forward-Looking Statements
The statements in this news release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although these statements reflect the current views, assumptions and expectations of Quicksilver Resources' management, the matters addressed herein are subject to numerous risks and uncertainties, which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Factors that could result in such differences or otherwise materially affect Quicksilver Resources' financial condition, results of operations and cash flows include: changes in general economic conditions; fluctuations in natural gas, NGLs and oil prices; failure or delays in achieving expected production from exploration and development projects; uncertainties inherent in estimates of natural gas, NGLs and oil reserves and predicting natural gas, NGLs and oil reservoir performance; effects of hedging natural gas, NGLs and oil prices; fluctuations in the value of certain of our assets and liabilities; competitive conditions in our industry; actions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters, customers and counterparties; changes in the availability and cost of capital; delays in obtaining oilfield equipment and increases in drilling and other service costs; delays in construction of transportation pipelines and gathering and treating facilities; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; failure or inability to covert drilling licenses to leases and the exploration of our leases; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; the effects of existing or future litigation; as well as, other factors disclosed in Quicksilver Resources' filings with the Securities and Exchange Commission. The forward-looking statements included in this news release are made only as of the date of this news release, and we undertake no obligation to update any of these forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
In thousands, except for per share data - Unaudited
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2011 2010 2011 2010
------------- ------------- ------------- -------------
Revenue:
Production $ 208,064 $ 218,249 $ 606,070 $ 631,499
Sales of
purchased
natural gas 20,130 16,982 60,116 50,027
Other 31,699 2,469 54,340 6,902
------------- ------------- ------------- -------------
Total revenue 259,893 237,700 720,526 688,428
------------- ------------- ------------- -------------
Operating
expense:
Lease operating 27,673 20,949 73,366 62,438
Gathering,
processing and
transportation 51,113 18,422 142,201 51,080
Production and
ad valorem
taxes 7,757 9,201 23,844 26,617
Costs of
purchased
natural gas 19,954 14,638 59,254 51,701
Other operating 145 1,320 328 3,544
Depletion,
depreciation
and accretion 57,686 52,542 164,861 149,968
Impairment - 31,531 49,063 31,531
General and
administrative 27,584 24,005 61,745 61,745
------------- ------------- ------------- -------------
Total expense 191,912 172,608 574,662 438,624
------------- ------------- ------------- -------------
Operating income 67,981 65,092 145,864 249,804
Income (loss)
from earnings of
BBEP 14,370 17,024 (32,721) 24,203
Other income -
net 11,142 14,253 135,441 67,646
Interest expense (48,393) (51,532) (142,123) (142,171)
------------- ------------- ------------- -------------
Income before
income taxes 45,100 44,837 106,461 199,482
Income tax
expense (16,414) (18,268) (39,946) (71,569)
------------- ------------- ------------- -------------
Net income 28,686 26,569 66,515 127,913
Net income
attributable to
noncontrolling
interests - (4,766) - (11,119)
------------- ------------- ------------- -------------
Net income
attributable to
Quicksilver $ 28,686 $ 21,803 $ 66,515 $ 116,794
============= ============= ============= =============
Earnings per
common share -
basic $ 0.17 $ 0.13 $ 0.39 $ 0.69
Earnings per
common share -
diluted $ 0.17 $ 0.13 $ 0.39 $ 0.68
Basic weighted
average shares
outstanding 169,031 168,053 168,963 167,962
Diluted weighted
average shares
outstanding 169,736 168,783 169,768 178,566
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except share data - Unaudited
September 30, December 31,
2011 2010
------------- -------------
ASSETS
Current assets
Cash $ 6,602 $ 54,937
Accounts receivable - net of allowance for
doubtful accounts 61,270 63,380
Derivative assets at fair value 101,006 89,205
Other current assets 48,786 30,650
------------- -------------
Total current assets 217,664 238,172
Investment in equity affiliates 21,725 83,341
Property, plant and equipment
Oil and gas properties, full cost method
(including unevaluated costs of $460,158
and $304,269, respectively) 3,068,952 2,834,645
Other property and equipment 307,853 233,200
------------- -------------
Property, plant and equipment - net 3,376,805 3,067,845
Assets of midstream operations held for sale - 27,178
Derivative assets at fair value 106,844 57,557
Other assets 40,436 38,241
------------- -------------
$ 3,763,474 $ 3,512,334
============= =============
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt $ 149,331 $ 143,478
Accounts payable 113,248 167,857
Accrued liabilities 123,937 122,904
Derivative liabilities at fair value 1,677 -
Current deferred tax liability 27,445 28,861
------------- -------------
Total current liabilities 415,638 463,100
------------- -------------
Long-term debt 1,930,529 1,746,716
Liabilities of midstream operations held for
sale - 1,431
Asset retirement obligations 58,223 56,235
Other liabilities 28,461 28,461
Deferred income taxes 212,829 156,983
Commitments and contingencies
Stockholders' Equity
Preferred stock, par value $0.01, 10,000,000
shares authorized, none outstanding - -
Common stock, $0.01 par value, 400,000,000
shares authorized; 176,894,542 and
175,524,816 shares issued, respectively 1,769 1,755
Paid in capital in excess of par value 731,063 714,869
Treasury stock of 5,376,615 and 5,050,450
shares, respectively (46,328) (41,487)
Accumulated other comprehensive income 110,691 130,187
Retained earnings 320,599 254,084
------------- -------------
Total stockholders' equity 1,117,794 1,059,408
------------- -------------
$ 3,763,474 $ 3,512,334
============= =============
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands - Unaudited
For the Nine Months Ended
September 30,
----------------------------
2011 2010
------------- -------------
Operating activities:
Net income $ 66,515 $ 127,913
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, depreciation and accretion 164,861 149,968
Impairment expense 49,063 31,531
Deferred income tax expense 50,960 71,569
Non-cash gain from commodity derivatives (48,852) (48,200)
Non-cash (gain) loss from hedging
activities (1,698) 2,399
Stock-based compensation 15,475 17,343
Non-cash interest expense 13,109 13,372
Gain on disposition of BBEP units (133,248) (49,850)
(Income) loss from BBEP in excess of cash
distributions 49,065 (9,416)
Other (897) (337)
Changes in assets and liabilities:
Accounts receivable 2,101 25,101
Derivative assets at fair value - 30,816
Prepaid expenses and other assets (20,791) 4,974
Accounts payable (29,430) (18,793)
Accrued and other liabilities (1,567) (1,000)
------------- -------------
Net cash provided by operating activities 174,666 347,390
------------- -------------
Investing activities:
Capital expenditures (550,954) (494,338)
Proceeds from sale of BBEP units 145,799 22,498
Proceeds from sales of properties and
equipment 3,719 1,030
------------- -------------
Net cash used for investing activities (401,436) (470,810)
------------- -------------
Financing activities:
Issuance of debt 648,819 661,232
Repayments of debt (455,886) (491,043)
Debt issuance costs paid (10,276) (109)
Gas Purchase Commitment repayments - (25,900)
Issuance of KGS common units - net of
offering costs - 11,054
Distributions paid on KGS common units - (13,550)
Proceeds from exercise of stock options 733 1,388
Taxes paid on vesting of KGS equity
compensation - (1,144)
Purchase of treasury stock (4,841) (4,851)
------------- -------------
Net cash provided by financing activities 178,549 137,077
------------- -------------
Effect of exchange rate changes in cash (114) (306)
------------- -------------
Net increase (decrease) in cash (48,335) 13,351
Cash at beginning of period 54,937 1,785
------------- -------------
Cash at end of period $ 6,602 $ 15,136
============= =============
QUICKSILVER RESOURCES INC.
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME
In thousands, except per share data - Unaudited
Three Months Ended September 30, 2011
Adjusted Net
As Reported Adjustments Income
--------------- --------------- ---------------
Revenue:
Production $ 208,064 $ - $ 208,064
Sales of purchased
natural gas 20,130 - 20,130
Other 31,699 (29,737) 1,962
--------------- --------------- ---------------
Total revenue 259,893 (29,737) 230,156
--------------- --------------- ---------------
Operating expense:
Lease operating 27,673 - 27,673
Gathering, processing and
transportation 51,113 - 51,113
Production and ad valorem
taxes 7,757 - 7,757
Costs of purchased
natural gas 19,954 - 19,954
Other operating 145 - 145
Depletion, depreciation
and accretion 57,686 - 57,686
Impairment - - -
General and
administrative 27,584 (11,555) 16,029
--------------- --------------- ---------------
Total expense 191,912 (11,555) 180,357
--------------- --------------- ---------------
Operating income 67,981 (18,182) 49,799
Income (loss) from
earnings of BBEP - net 14,370 (11,542) 2,828
Other income - net 11,142 (9,496) 1,646
Interest expense (48,393) 3,304 (45,089)
--------------- --------------- ---------------
Income (loss) before
income taxes 45,100 (35,916) 9,184
Income tax (16,414) 12,969 (3,445)
--------------- --------------- ---------------
Net income $ 28,686 $ (22,947) $ 5,739
=============== =============== ===============
Earnings per common share
- diluted $ 0.17 $ 0.03
Weighted average shares
outstanding 169,736 169,736
Three Months Ended September 30, 2010
Adjusted Net
As Reported Adjustments Income
--------------- --------------- ---------------
Revenue:
Production $ 218,249 $ - $ 218,249
Sales of purchased natural
gas 16,982 - 16,982
Other 2,469 - 2,469
--------------- --------------- ---------------
Total revenue 237,700 - 237,700
--------------- --------------- ---------------
Operating expense:
Lease operating 20,949 - 20,949
Gathering, processing, and
transportation 18,422 - 18,422
Production and ad valorem
taxes 9,201 - 9,201
Costs of purchased natural
gas 14,638 5,496 20,134
Other operating 1,320 - 1,320
Depletion, depreciation and
accretion 52,542 - 52,542
Impairment 31,531 (31,531) -
General and administrative 24,005 (4,960) 19,045
--------------- --------------- ---------------
Total expense 172,608 (30,995) 141,613
--------------- --------------- ---------------
Operating income 65,092 30,995 96,087
Income from earnings of BBEP
- net 17,024 (9,420) 7,604
Other income (expense) - net 14,253 (14,424) (171)
Interest expense (51,532) - (51,532)
--------------- --------------- ---------------
Income (loss) before income
taxes 44,837 7,151 51,988
Income tax (18,268) (277) (18,545)
--------------- --------------- ---------------
Net income 26,569 6,874 33,443
Net income attributable to
noncontrolling interests (4,766) - (4,766)
--------------- --------------- ---------------
Net income attributable to
Quicksilver $ 21,803 $ 6,874 $ 28,677
=============== =============== ===============
Earnings per common share -
diluted $ 0.13 $ 0.17
Weighted average shares
outstanding 168,783 168,783
QUICKSILVER RESOURCES INC.
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME
In thousands, except per share data - Unaudited
Nine Months Ended September 30, 2011
Adjusted Net
As Reported Adjustments Income
--------------- --------------- ---------------
Revenue:
Production $ 606,070 $ - $ 606,070
Sales of purchased
natural gas 60,116 - 60,116
Other 54,340 (48,852) 5,488
--------------- --------------- ---------------
Total Revenue 720,526 (48,852) 671,674
--------------- --------------- ---------------
Operating expense:
Lease operating 73,366 - 73,366
Gathering, processing,
and transportation 142,201 - 142,201
Production and ad valorem
taxes 23,844 - 23,844
Costs of purchased
natural gas 59,254 - 59,254
Other operating 328 - 328
Depletion, depreciation
and accretion 164,861 - 164,861
Impairment 49,063 (49,063) -
General and
administrative 61,745 (13,032) 48,713
--------------- --------------- ---------------
Total expense 574,662 (62,095) 512,567
--------------- --------------- ---------------
Operating income 145,864 13,243 159,107
Income (loss) from
earnings of BBEP - net (32,721) 42,553 9,832
Other income - net 135,441 (133,248) 2,193
Interest expense (142,123) 3,960 (138,163)
--------------- --------------- ---------------
Income (loss) before
income taxes 106,461 (73,492) 32,969
Income tax (39,946) 27,576 (12,370)
--------------- --------------- ---------------
Net income 66,515 (45,916) 20,599
=============== =============== ===============
Earnings per common share
- diluted $ 0.39 $ 0.12
Weighted average shares
outstanding 169,768 169,768
Nine Months Ended September 30, 2010
Adjusted Net
As Reported Adjustments Income
--------------- --------------- ---------------
Revenue:
Production $ 631,499 $ - $ 631,499
Sales of purchased
natural gas 50,027 - 50,027
Other 6,902 - 6,902
--------------- --------------- ---------------
Total revenue 688,428 - 688,428
--------------- --------------- ---------------
Operating expense:
Lease operating 62,438 - 62,438
Gathering, processing,
and transportation 51,080 - 51,080
Production and ad valorem
taxes 26,617 - 26,617
Costs of purchased
natural gas 51,701 5,960 57,661
Other operating 3,544 - 3,544
Depletion, depreciation
and accretion 149,968 - 149,968
Impairment 31,531 (31,531) -
General and
administrative 61,745 (4,960) 56,785
--------------- --------------- ---------------
Total expense 438,624 (30,531) 408,093
--------------- --------------- ---------------
Operating income 249,804 30,531 280,335
Income from earnings of
BBEP - net 24,203 (4,035) 20,168
Other income (expense) -
net 67,646 (67,850) (204)
Interest expense (142,171) - (142,171)
--------------- --------------- ---------------
Income (loss) before
income taxes 199,482 (41,354) 158,128
Income tax (71,569) 14,474 (57,095)
--------------- --------------- ---------------
Net income 127,913 (26,880) 101,033
Net income attributable to
noncontrolling interests (11,119) - (11,119)
--------------- --------------- ---------------
Net income attributable to
Quicksilver $ 116,794 $ (26,880) $ 89,914
=============== =============== ===============
Earnings per common share
- diluted $ 0.68 $ 0.53
Weighted average shares
outstanding 178,566 178,566
QUICKSILVER RESOURCES INC.
Unaudited Selected Operating Results
Three Months Ended Sep 30, Nine Months Ended Sep 30,
--------------------------- --------------------------
2011 2010 2011 2010
------------ ------------ ------------ ------------
Average Daily
Production:
Natural Gas (MMcfd) 351.6 282.0 334.6 267.2
NGL (Bbld) 11,945 12,562 12,234 11,895
Oil (Bbld) 696 834 745 851
Total (MMcfed) 427.4 362.4 412.4 343.7
Average Realized
Prices:
Natural Gas (per
Mcf) $ 4.96 $ 6.83 $ 5.02 $ 7.05
NGL (per Bbl) $ 38.68 $ 30.91 $ 38.67 $ 31.12
Oil (per Bbl) $ 82.58 $ 69.32 $ 89.05 $ 70.31
Total (Mcfe) $ 5.29 $ 6.55 $ 5.38 $ 6.73
Expense per Mcfe:
Lease operating
expense:
Cash expense $ 0.69 $ 0.61 $ 0.64 $ 0.65
Equity
compensation 0.01 0.02 0.01 0.02
------------ ------------ ------------ ------------
Total lease
operating expense: $ 0.70 $ 0.63 $ 0.65 $ 0.67
Gathering,
processing and
transportation
expense $ 1.30 $ 0.55 $ 1.26 $ 0.54
Production and ad
valorem taxes $ 0.20 $ 0.28 $ 0.21 $ 0.28
Depletion,
depreciation and
accretion $ 1.47 $ 1.58 $ 1.46 $ 1.60
General and
administrative
expense:
Cash expense $ 0.29 $ 0.42 $ 0.31 $ 0.44
Other costs
(strategic
transaction &
litigation) $ 0.30 $ 0.15 $ 0.12 $ 0.06
Equity
compensation 0.11 0.15 0.12 0.16
------------ ------------ ------------ ------------
Total general and
administrative
expense $ 0.70 $ 0.72 $ 0.55 $ 0.66
Interest expense:
Cash expense on
debt outstanding $ 1.09 $ 1.49 $ 1.16 $ 1.42
Fees and premiums 0.06 - 0.04 0.00
Non-cash interest 0.13 0.10 0.11 0.14
Capitalized
interest (0.05) (0.04) (0.05) (0.04)
------------ ------------ ------------ ------------
Total interest
expense $ 1.23 $ 1.55 $ 1.26 $ 1.52
QUICKSILVER RESOURCES INC.
Production, on a million cubic feet of natural gas equivalent (MMcfe) per
day basis, by operating area
Three Months Ended September Nine Months Ended September
30, 30,
----------------------------- -----------------------------
2011 2010 2011 2010
-------------- -------------- -------------- --------------
Barnett Shale 350.9 295.1 336.1 272.7
Other U.S. 3.7 3.7 3.3 4.2
-------------- -------------- -------------- --------------
Total U.S. 354.6 298.8 339.4 276.9
Horseshoe Canyon 57.6 58.9 58.5 60.7
Horn River 15.2 4.7 14.5 6.1
-------------- -------------- -------------- --------------
Total Canada 72.8 63.6 73.0 66.8
-------------- -------------- -------------- --------------
Total Company 427.4 362.4 412.4 343.7
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KWK 11-17
Investor and Media Contact:
John Hinton
(817) 665-4990
