A. Lee Graham
Reporter
Quicksilver Resources Inc. of Fort Worth has reported Barnett Shale production volumes as 11 percent higher in second-quarter 2014 compared to the first quarter.
What the company called “operational efficiencies” led to improved performance of the newly drilled Barnett wells.
Meanwhile, the oil and natural gas producer began a new drilling initiative in West Texas, executed an agreement to develop acreage in Crockett and Upton counties in West Texas and filed an application to export up to 20 million tons per year of liquefied natural gas from the company’s Discovery LNG site.
“Quicksilver’s top goals for the remainder of 2014 remain unchanged and management is extremely focused on unlocking the value in the Horn River, building cash flow in core areas, and addressing the subordinated notes due in 2016,” said CEO Glenn Darden in a news release.
“In addition, we will push hard to advance our West Texas project and reduce overall company debt,” Darden said.
The quarter saw the company report a $36 million net loss, or $0.21 per diluted share, compared to reported net income of $243 million, or $1.37 per diluted share, in the same quarter last year. Net income in second-quarter 2013 quarter included a non-operational, pre-tax gain on sale of $333 million related to last year’s Tokyo Gas transaction.
The transaction saw Quicksilver sell 25 percent of its Barnett Shale assets to a Tokyo Gas subsidiary for $485 million.
Production-wise, the company produced 23.3 billion cubic feet equivalent in this year’s second quarter, or an average of 255 million cubic feet of natural gas equivalent per day compared to 26.1 billion cubic feet equivalent, or an average of 287 million cubic feet equivalent per day, in the 2013 quarter.
The company attributed the decline mainly to the Tokyo Gas transaction in the middle of the second-quarter 2013 and the natural decline in Canadian volumes due to minimal capital activity.
Meanwhile, Barnett production totaled 15.3 billion cubic feet equivalent in second-quarter 2014, or an average of 168 million cubic feet equivalent per day, about 11 percent higher compared to first-quarter 2014.
Second-quarter 2014 saw the company earn production revenue and realized cash derivative gain-loss of $107 million compared to $118 million in the same quarter last year, excluding about $3 million and $4 million, respectively, of cash proceeds from certain derivatives that will not be recognized until future periods to match their original settlement dates.
The revenue drop was caused by lower production volume, but partly offset by higher prices for natural gas and natural gas liquids, net of derivatives, the company pointed out.
Looking ahead, the company said it expects third-quarter 2014 average daily production volumes to reach between 245 million cubic feet equivalent and 250 million cubic feet equivalent per day. Average daily production volumes are expected to comprise 85 percent natural gas and 15 percent natural gas liquids and crude oil. Full-year 2014 production is expected to reach between 245 million cubic feet equivalent and 255 million cubic feet equivalent per day.
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.