A. Lee Graham
Reporter
Quicksilver Resources Inc. has reported higher earnings but lower production and revenue in third-quarter 2014 as the Fort Worth firm maintains its Barnett Shale production compared to the same period last year.
Reported net income for third-quarter 2014 reached $24 million compared to $11 million in the same quarter last year.
“Oil discoveries in West Texas, improved well results and cost structure in the Barnett and affirmation of our borrowing base and the covenant changes with our banks are all positive developments,” said CEO Glenn Darden in a news release.
“These achievements have not only strengthened the company’s asset base, but
should also be very helpful in our marketing process and other negotiations,” Darden said.
Meanwhile, third-quarter 2014 production fell to 22.6 billion cubic feet equivalent per day of natural gas compared to 25.2 billion in third-quarter 2013.The company attributes the drop to a natural volume decline in Canadian volumes due to minimal capital activity, a scheduled plant outage in its Horn River asset and lower sales volume in the Barnett Shale.
Barnett production for third-quarter 2014 totaled 15.2 billion cubic feet equivalent per day, compared to 15.4 billion in the same quarter last year.
Due to weak ethane prices, the company in September of this year rejected ethane volumes from the liquids-rich Barnett and sold it as natural gas. As a result, equivalent sales volume dropped by about 2 million cubic feet of natural gas equivalent per day, on average, in third-quarter 2014.
Despite the loss of sales volume, the company said wellhead production was not impacted and net cash margins improved slightly.
Despite the declines, the company reported strong results from its first two West Texas wells.
Meanwhile, production revenue and realized cash derivative gain-loss for third-quarter 2014 totaled $105 million compared to $113 million in the 2013 quarter, excluding about $3 million in each quarter of cash proceeds from certain derivatives that will not be recognized until future periods to match their original settlement dates.
According to the company, the revenue decline is caused by volume impacts but partially offset by higher prices for natural gas, net of derivatives.
As for expanses, consolidated lease operating expense for the quarter totaled $17 million, or $0.76 per million cubic feet equivalent, compared to about $19 million, or $0.74 per million cubic feet per day of cubic feet equivalent in the 2013 quarter.
“The absolute reduction is the result of the sale of the Montana and Colorado assets, lower rates for gas lift in the Barnett Shale resulting from a recent
amendment with third-party midstream providers, and a non-recurring $2
million impairment in the 2013 quarter,” read part of a news release.
Partly offsetting the declines was higher gas lift volume in the Barnett Shale compared to the 2013 quarter due to completion activity.
Quicksilver Resources Inc. specializes in the exploration, development and acquisition of oil and gas from shale plays, coal beds and sands in North America. More information is available at www.qrinc.com.