Attached files
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| 8-K - QUICKSILVER RESOURCES INC. CURRENT REPORT ON FORM 8-K - QUICKSILVER RESOURCES INC | form8-k.htm |
Exhibit
99.1
 |
N e w
s R e l e a s e
QUICKSILVER RESOURCES
INC.
777
West Rosedale Street
Fort
Worth, TX 76104
www.qrinc.com
|
Quicksilver Resources On
Pace For Record Production Year
Volumes
at Alliance Project More Than Double;
Hedge
Volumes Increased
FORT WORTH, TEXAS (November 2,
2009) – Quicksilver Resources Inc. (NYSE: KWK) today announced that its
current average daily production is approximately 340 million cubic feet of
natural gas equivalent (MMcfe), up approximately 10% from its average
third-quarter 2009 rate of approximately 311 MMcfe per day. The
company remains on pace to produce an average of more than 325 MMcfe per day in
2009, another company record and up more than 24% from the prior-year
rate. The growth in volumes is being fueled by continued development
of the Barnett Shale formation in the Fort Worth Basin, primarily from
company-operated projects at Alliance and Lake Arlington. These two
projects, which produce dry gas from Tarrant and Denton counties, complement the
company’s ongoing activities in the liquids-rich southern portion of the basin,
where improved efficiencies have increased the extraction of natural gas liquids
(NGLs) approximately 9%, to approximately 125 barrels per million cubic feet
(MMcf) of gas processed.
Quicksilver’s
net production from its Alliance project is now approximately 71 MMcf per day,
more than double the comparable rate from these properties when they were
acquired just 15 months earlier. In the past 45 days, Quicksilver has
brought on-line 24 new wells and resumed production from 24 existing wells
resulting in a total of 129 wells currently on production in the Alliance
area.
Current
net production from the company’s Lake Arlington project is approximately 34
MMcf per day. Five new wells that came on-line in mid-June of this
year have already produced more than 4 billion cubic feet (Bcf) of natural gas
during their first four months of production. Two additional wells
were brought on-line during the past month resulting in 39 wells on production
in the Lake Arlington area. The company has deferred completion
activities on 36 additional wells that have been drilled and cased in the
area. In total, the project has produced approximately 32 Bcf since
the first wells came on-line in October 2007.
In the
southern portion of the company’s Fort Worth Basin acreage, Quicksilver’s
current production is approximately 160 MMcfe per day. The company
also has 48 wells in this area that have been drilled and cased but has deferred
completion activities. Much of this portion of the Fort Worth Basin
contains natural gas with a much higher Btu content that results in a natural
gas production stream that is rich in NGLs. Based on current NYMEX
pricing of approximately $5.25 per million British thermal units (MMBtu) of
natural gas and a basket of NGLs that yield approximately $33.50 per barrel, the
value of Quicksilver’s production in this portion of the basin is equivalent to
approximately $8.25 per thousand cubic feet (Mcf) at the wellhead.
"Our
Barnett operations continue to perform very well, keeping us on track to achieve
record volumes this year even after factoring in the sale of an interest in our
Alliance project in June," said Glenn Darden, Quicksilver president and chief
executive officer. "Improved pricing for natural gas liquids coupled
with lower service costs for pressure pumping have significantly enhanced our
opportunities to begin accelerating completion activities in the southern
portion of the basin. We now expect to grow total company average
daily production at least 20% in 2010 over the projected 2009
level."
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Quicksilver
continues to operate five rigs in the Fort Worth Basin. Three rigs
are working in the northern portion of the basin at the Alliance and Lake
Arlington projects and two rigs are working in the southern portion of the
basin. The company anticipates that it will continue to utilize just
five rigs in the basin during 2010.
Exploratory
Activities
In
Canada, Quicksilver is finishing pad preparation and expects to begin completion
activities next week on its second exploratory well in the Horn River Basin of
northeast British Columbia. This well, the C-60-D well, with a
4,300-foot horizontal section, will test the Klua/Evie formation and is expected
to include 12 stages of fracture stimulation. In September, the
company announced initial results from its first exploratory well in the basin,
testing the Muskwa formation, which averaged approximately 10 million cubic feet
per day during the first month of production. The well has already
produced greater than 500 MMcf of natural gas and continues to produce at an
average rate of more than 7 MMcf per day from the 3,500-foot horizontal
section. Quicksilver has exploratory licenses covering approximately
127,000 net acres in the Horn River Basin.
Quicksilver
is also in the process of completing its first of two exploratory vertical wells
drilled in the Green River Basin of northern Colorado. Both wells
have encountered a total of approximately 4,000 feet of potential gas-bearing
pay in the Mancos and Niobrara formations. The company currently
holds leases covering approximately 105,000 net acres in this
basin.
Hedged
Volumes Increased
Quicksilver
has added new derivative contracts covering a portion of its expected natural
gas production for calendar 2010 through 2012 and natural gas liquids production
for 2010.
The
company currently has derivatives associated with natural gas production in the
form of collars covering 200,000 MMBtu per day in 2010 with a weighted-average
floor price of approximately $7.40 per MMBtu and a ceiling price of $9.88 per
MMBtu, 120,000 MMBtu per day in 2011 with a weighted-average floor price of
approximately $6.25 per MMBtu and a ceiling price of $7.22 per MMBtu, and 60,000
MMBtu per day in 2012 with a weighted-average floor price of approximately $6.50
per MMBtu and a ceiling price of $7.45 per MMBtu. For 2010, the
company has executed AECO basis swaps at $.45 per MMBtu for the 40,000 MMBtu per
day of NYMEX hedges allocated to Canada. Derivatives associated with
natural gas liquids production cover 10,000 barrels per day at a
weighted-average swap price of $33.47 per barrel.
For the
fourth quarter of 2009, the company has derivatives associated with natural gas
production of 190,000 MMBtu per day, equal to approximately 75% of its estimated
natural gas production for the quarter, at a weighted-average floor price of
$8.75 MMBtu.
Third-Quarter
2009 Earnings Release
As
announced previously, Quicksilver Resources expects to announce its financial
results for the third quarter of 2009 on Monday November 9, 2009, before the
market opens. The company will host a conference call for investors
and analysts at 11:00 a.m. eastern time that day to discuss the operating and
financial results. Quicksilver invites interested parties to listen
to the call via the company’s
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website
at www.qrinc.com or by
calling 1-877-313-7932, using the conference ID number 80367983, approximately
10 minutes prior to 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 accessed at 1-800-642-1687
and reference should be made to the conference ID number
80367983. The replay will also be archived for 30 days on the
company’s website.
About
Quicksilver Resources
Fort
Worth, Texas-based Quicksilver Resources is a natural gas and crude oil
exploration and production company engaged in the development and acquisition of
long-lived, unconventional natural gas reserves, including coalbed methane,
shale gas, and tight sands gas in North America. The company has U.S.
offices in Fort Worth, Texas; Glen Rose, Texas 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 press 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, natural gas liquids and crude
oil prices; failure or delays in achieving expected production from exploration
and development projects; uncertainties inherent in estimates of natural gas,
natural gas liquids and crude oil reserves and predicting natural gas, natural
gas liquids and crude oil reservoir performance; effects of hedging natural gas,
natural gas liquids and crude 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; operating hazards, natural
disasters, weather-related delays, casualty losses and other matters beyond our
control; the effects of existing and future laws and governmental regulations;
and 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 press
release are made only as of the date of this press 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.
Investor
& Media Contact:
Rick
Buterbaugh
(817)
665-4835
KWK
09-19
-end-