QUICKSILVER RESOURCES INC - FORM 8-K - March 14, 2016


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 
 
 

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): March 8, 2016


QUICKSILVER RESOURCES INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)
001-14837
(Commission
File Number)
75-2756163
(IRS Employer
Identification No.)

801 Cherry Street
Suite 3700, Unit 19
Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (817) 665-5000

 
 
 


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Item 4.02.
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On March 8, 2016, the Audit Committee of the Board of Directors of Quicksilver Resources Inc. (the “Company”) concluded that the Company would restate its financial statements as of and for the three and nine months ended September 30, 2015 after identifying certain non-cash errors in such financial statements and, therefore, those financial statements should no longer be relied upon. The Company’s proved oil and natural gas reserves as of September 30, 2015 overstated the net proved reserves, with the error in such report occurring as the result of all applicable costs not being considered. The Company was required to record an impairment charge to its full cost pool as of September 30, 2015 due to the ceiling test limitation. The exclusion of costs in the reserve report resulted in a understatement of the applicable non-cash impairment charge in the Company’s financial statements as of and for the three and nine months ended September 30, 2015. The error also resulted in an understatement of the net loss and loss per common share recorded for the three and nine months ended September 30, 2015. There was no effect on the total net cash provided by operating activities included in the statement of cash flows for the nine months ended September 30, 2015.
The Company plans to file an amended quarterly report on Form 10-Q/A for the fiscal quarter ended September 30, 2015, with such amended report containing a restatement of the consolidated financial statements of the Company as of and for the three and nine months ended September 30, 2015. The Company’s Audit Committee and management discussed the amended report and the restated financial statements included therein with the Company’s independent public accounting firm.
The following tables show the effects of the errors in the originally filed financial statements and the adjustments incorporated in the restated financial statements, in each case as of and for the three and nine months ended September 30, 2015.
Condensed Consolidated Balance Sheets
 
 
As of September 30, 2015
 
 
Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
 
 
 
(in thousands)
Oil and natural gas properties, full cost method
 
$
403,248

 
(61,760
)
 
$
341,488

Property, plant and equipment - net
 
502,580

 
(61,760
)
 
440,820

Total assets
 
730,224

 
(61,760
)
 
668,464

Retained deficit
 
(2,349,419
)
 
(61,760
)
 
(2,411,179
)
Total stockholders' equity
 
(1,566,342
)
 
(61,760
)
 
(1,628,102
)
Total liabilities and stockholders' equity
 
730,224

 
(61,760
)
 
668,464



Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
 
 
For the Three Months Ended
September 30, 2015
 
For the Nine Months Ended
September 30, 2015
 
 
Previously Reported
 
Adjustments
 
As Restated
 
Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands), except for per share data
Impairment
 
$
102,758

 
$
61,760

 
$
164,518

 
$
180,169

 
$
61,760

 
$
241,929

Total expense
 
164,274

 
61,760

 
226,034

 
403,153

 
61,760

 
464,913

Operating income (loss)
 
(105,287
)
 
(61,760
)
 
(167,047
)
 
(176,034
)
 
(61,760
)
 
(237,794
)
Income (loss) before income taxes
 
(120,300
)
 
(61,760
)
 
(182,060
)
 
(404,122
)
 
(61,760
)
 
(465,882
)
Net income (loss)
 
(122,452
)
 
(61,760
)
 
(184,212
)
 
(409,958
)
 
(61,760
)
 
(471,718
)
Comprehensive income (loss)
 
(128,111
)
 
(61,760
)
 
(189,871
)
 
(433,507
)
 
(61,760
)
 
(495,267
)
Earnings (loss) per common share - basic
 
$
(0.69
)
 
$
(0.36
)
 
$
(1.05
)
 
$
(2.33
)
 
$
(0.35
)
 
$
(2.68
)
Earnings (loss) per common share - diluted
 
$
(0.69
)
 
$
(0.36
)
 
$
(1.05
)
 
$
(2.33
)
 
$
(0.35
)
 
$
(2.68
)
Condensed Consolidated Statements of Cash Flows
 
 
For the nine months ended September 30, 2015
 
 
Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
 
 
 
(in thousands)
Net loss
 
$
(409,958
)
 
(61,760
)
 
$
(471,718
)
Impairment expense
 
180,169

 
61,760

 
241,929





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
QUICKSILVER RESOURCES INC.

 
 
 
 
By:
/s/ Glenn Darden
 
 
Glenn Darden
 
 
President and Chief Executive Officer

Date: March 14, 2016

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