Exhibit 99.1
INVESTOR RELATIONS:
Quicksilver Resources Inc.
Rick Buterbaugh (817) 665-4835
Diane Weaver (817) 665-4834
FOR RELEASE AFTER MARKET CLOSE
May 2, 2007
QUICKSILVER RESOURCES REPORTS FIRST-QUARTER 2007 RESULTS
Organic Growth Fuels 21% Increase in Production
Net Cash from Operating Activities Grows 16%
FORT WORTH (May 2, 2007) - Quicksilver Resources Inc. (NYSE: KWK) today reported net income for the first quarter of 2007 of $22.9 million ($0.28 per diluted share) on revenues of $116.6 million as compared to $27.5 million ($0.34 per diluted share) on revenues of $99.7 million in the prior-year quarter. Net cash from operating activities for the first quarter of 2007 was $73.3 million, an increase of 16 percent from $63.3 million generated in the same period of 2006, as presented in the attached Condensed Consolidated Statements of Cash Flows.
Production
Total daily average production increased 21 percent to a record 187 million cubic feet equivalent (MMcfe) versus the prior-year period of 154 MMcfe. Daily production volumes increased five percent sequentially from the fourth quarter of 2006, marking the company’s 15th consecutive quarter of production growth. Natural gas, including natural gas liquids (NGL), comprised approximately 95 percent of the company’s total production in the first quarter of 2007.
“Continued success of our accelerating development activities in the Fort Worth Basin Barnett Shale is driving our organic growth,” said Glenn Darden, President and Chief Executive Officer. “Production from the Barnett Shale has increased 125% in the past year. With more than 2,000 identified development locations on our acreage, we believe we are well positioned to achieve our total company production growth target of approximately 25 percent for 2007 and expect to maintain double-digit volume growth for several years to come.”
Quicksilver Resources First Quarter 2007 Financial Results - Page 2 of 7
Production on an MMcfe per day basis for the company’s primary operating areas for the three months ended March 31 was as follows:
| Area | 2007 | | 2006 | Change |
| Texas | 51,195 | | 22,718 | 125% |
| Canada | 56,131 | | 48,052 | 17% |
| Michigan | 72,189 | | 74,924 | (4%) |
| Other | 7,759 | | 8,508 | (9%) |
| Total Company | 187,274 | | 154,202 | 21% |
Operations Update
Total capital expenditures for the first quarter of 2007 totaled approximately $183 million, which included approximately 68 percent for drilling and completion activities, approximately 11 percent for acreage purchases, approximately 20 percent for midstream activities and one percent for corporate.
In the Fort Worth Basin, the company drilled 46 net wells and connected 17 net wells to sales during the first quarter. To keep pace with the growing production and to maximize the value of the natural gas produced, the company completed a 125 MMcf per day expansion of its Cowtown Gas Plant during the quarter, bringing total throughput capacity to 200 MMcf per day.
In Canada, the company drilled 36 net wells and connected 41 net wells to sales during the first quarter. Canada is currently in the spring “break-up” period and drilling and completion activity has ceased temporarily. Activity is expected to resume by early summer.
Conference Call
The company will host a conference call to discuss operational and financial results for the first quarter 2007 on Thursday, May 3, 2007, at 10:00 a.m. central time.
Quicksilver invites interested parties to participate in the call via the company’s website at http://www.qrinc.com or by calling 1-877-313-7932, using the conference ID number 6102596, prior to 9:55 a.m. central time. A digital replay of the conference call will be available at 1:00 p.m. central time the same day, and will remain available for 30 days. The replay can be dialed at 1-800-642-1687 and reference should be made to the conference ID number 6102596. A 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 coal bed methane, shale gas, and tight
Quicksilver Resources First Quarter 2007 Financial Results - Page 3 of 7
sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Granbury, Texas; Gaylord, Michigan; Corydon, Indiana 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 and crude oil prices; failure or delays in achieving expected production from natural gas and crude oil exploration and development projects; uncertainties inherent in estimates of natural gas and crude oil reserves and predicting natural gas and crude oil reservoir performance; effects of hedging natural gas and crude oil prices; competitive conditions in our industry; actions taken by third-party operators, processors and transporters; changes in the availability and cost of capital; 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.
Quicksilver Resources First Quarter 2007 Financial Results - Page 4 of 7
QUICKSILVER RESOURCES INC.
Unaudited Selected Operating Results
| | | Three Months Ended March 31, | |
| | | 2007 | | 2006 | |
Production: | | | | | |
| Natural gas (MMcf) | | | 14,165 | | | 12,512 | |
| Oil (MBbls) | | | 150 | | | 143 | |
| NGL (MBbls) | | | 298 | | | 85 | |
| Total (MMcfe) | | | 16,855 | | | 13,878 | |
| | | |
| United States (MMcfe) | | | 11,803 | | | 9,553 | |
| Canada (MMcfe) | | | 5,052 | | | 4,325 | |
| Total (MMcfe) | | | 16,855 | | | 13,878 | |
| | | |
Average Daily Production: | | |
| Natural gas (Mcfd) | | | 157,389 | | | 139,025 | |
| Oil (Bbld) | | | 1,665 | | | 1,590 | |
| NGL (Bbld) | | | 3,316 | | | 939 | |
| Total (Mcfed) | | | 187,274 | | | 154,202 | |
| | | |
Average Sales Price Per Unit (excluding effects of hedging): |
| Natural gas (per Mcf) | | $ | 5.73 | | $ | 7.13 | |
| Oil (per Bbl) | | $ | 50.99 | | $ | 59.08 | |
| NGL (per Bbl) | | $ | 33.81 | | $ | 39.91 | |
| Total (per Mcfe) | | $ | 5.87 | | $ | 7.28 | |
| | | |
Average Sales Price Per Unit (including effects of hedging): |
| Natural gas (per Mcf) | | $ | 6.75 | | $ | 6.95 | |
| Oil (per Bbl) | | $ | 50.99 | | $ | 58.64 | |
| NGL (per Bbl) | | $ | 33.81 | | $ | 39.91 | |
| Total (per Mcfe) | | $ | 6.72 | | $ | 7.11 | |
| | | |
Expense per Mcfe: | | |
| United States production cost | | $ | 1.78 | | $ | 1.70 | |
| Canada production cost | | $ | 1.49 | | $ | 1.20 | |
| Total production cost | | $ | 1.69 | | $ | 1.54 | |
| | | | | | | | |
| Production and ad valorem taxes | | $ | 0.27 | | $ | 0.30 | |
| General and administrative expenses | | $ | 0.59 | | $ | 0.45 | |
| Depletion, depreciation and accretion | | $ | 1.46 | | $ | 1.27 | |
| | | | | | | | |
Quicksilver Resources First Quarter 2007 Financial Results - Page 5 of 7
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except for share data - Unaudited
| | | March 31, | | December 31, | |
| | | 2007 | | 2006 | |
ASSETS | | | | | |
| Current assets | | | | | | | |
| Cash and cash equivalents | | $ | 5,718 | | $ | 5,281 | |
| Accounts receivable, net of allowance for doubtful accounts | | | 76,180 | | | 76,521 | |
| Current derivative assets | | | 8,037 | | | 64,086 | |
| Other current assets | | | 27,611 | | | 25,076 | |
| Total current assets | | | 117,546 | | | 170,964 | |
| | | | | | | | |
| Investments in and advances to equity affiliates | | | 7,396 | | | 7,434 | |
| | | | | | | | |
| Properties, plant and equipment - net (“full cost”) | | | 1,843,645 | | | 1,679,280 | |
| | | | | | | | |
| Deferred derivative assets | | | - | | | 3,753 | |
| | | | | | | | |
| Other assets | | | 23,846 | | | 21,481 | |
| | | $ | 1,992,433 | | $ | 1,882,912 | |
| | | | | | | | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| Current liabilities | | | | | | | |
| Current portion of long-term debt | | $ | 312 | | $ | 400 | |
| Accounts payable | | | 108,141 | | | 109,914 | |
| Accrued liabilities | | | 55,710 | | | 67,697 | |
| Accrued derivative obligations | | | 2,509 | | | - | |
| Current deferred income taxes | | | 2,062 | | | 21,378 | |
| Total current liabilities | | | 168,734 | | | 199,389 | |
| | | | | | | | |
| Long-term debt | | | 1,058,604 | | | 919,117 | |
| | | | | | | | |
| Derivative obligations | | | 5,252 | | | - | |
| | | | | | | | |
| Asset retirement obligations | | | 26,987 | | | 25,058 | |
| | | | | | | | |
| Deferred income taxes | | | 165,174 | | | 156,251 | |
| | | | | | | | |
| Minority interest | | | 7,694 | | | 7,431 | |
| | | | | | | | |
| Stockholders’ equity | | | | | | | |
| Preferred stock, $0.01 par value, 10,000,000 shares authorized, | | | | | | | |
| no shares issued and outstanding | | | - | | | - | |
| Common stock, $0.01 par value, 200,000,000 shares authorized and | | | | | | | |
| 80,746,547 and 80,181,593 shares issued, respectively | | | 807 | | | 802 | |
| Paid in capital in excess of par value | | | 243,933 | | | 238,063 | |
| Treasury stock of 2,592,769 and 2,579,671 shares, respectively | | | (11,231 | ) | | (10,737 | ) |
| Accumulated other comprehensive income | | | 16,534 | | | 60,099 | |
| Retained earnings | | | 309,945 | | | 287,439 | |
| Total stockholders’ equity | | | 559,988 | | | 575,666 | |
| | | $ | 1,992,433 | | $ | 1,882,912 | |
Quicksilver Resources First Quarter 2007 Financial Results - Page 6 of 7
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
In thousands, except for per share data - Unaudited
| | | For the Three Months Ended | |
| | | March 31, | |
| | | 2007 | | 2006 | |
| Revenues | | | | | | | |
| Oil, gas and related product sales | | $ | 113,292 | | $ | 98,689 | |
| Other revenue | | | 3,288 | | | 961 | |
Total revenues | | | 116,580 | | | 99,650 | |
| Expenses | | | | | | | |
| Oil and gas production costs | | | 28,569 | | | 21,410 | |
| Production and ad valorem taxes | | | 4,490 | | | 4,173 | |
| Other operating costs | | | 784 | | | 403 | |
| Depletion, depreciation and accretion | | | 24,594 | | | 17,673 | |
| Provision for doubtful accounts | | | (264 | ) | | - | |
| General and administrative | | | 9,962 | | | 6,254 | |
Total expenses | | | 68,135 | | | 49,913 | |
| | | | | | | | |
| Income from equity affiliates | | | 115 | | | 188 | |
| | | | | | | | |
| Operating income | | | 48,560 | | | 49,925 | |
| | | | | | | | |
| Other income-net | | | (601 | ) | | (350 | ) |
| Interest expense | | | 14,952 | | | 9,202 | |
| | | | | | | | |
| Income from continuing operations before | | | | | | | |
| income taxes and minority interest | | | 34,209 | | | 41,073 | |
| Income tax expense | | | 11,295 | | | 13,538 | |
| Minority interest expense | | | 63 | | | - | |
| | | | | | | | |
| Net income | | $ | 22,851 | | $ | 27,535 | |
| | | | | | | | |
| | | | | | | | |
| Basic net income per common share | | $ | 0.30 | | $ | 0.36 | |
| | | | | | | | |
| Diluted net income per common share | | $ | 0.28 | | $ | 0.34 | |
| | | | | | | | |
| Weighted average common shares outstanding | | | | | | | |
| Basic | | | 77,194 | | | 76,039 | |
| Diluted | | | 83,830 | | | 82,808 | |
Quicksilver Resources First Quarter 2007 Financial Results - Page 7 of 7
QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands - Unaudited
| | | For the Three Months Ended | |
| | | March 31, | |
| | | 2007 | | 2006 | |
| Operating activities: | | | | | |
| Net income | | $ | 22,851 | | $ | 27,535 | |
| Charges and credits to net income not affecting cash | | | | | | | |
| Depletion, depreciation and accretion | | | 24,594 | | | 17,673 | |
| Deferred income taxes | | | 11,265 | | | 13,400 | |
| Non-cash compensation | | | 2,899 | | | 1,246 | |
| Amortization of deferred loan costs | | | 456 | | | 735 | |
| Income from equity affiliates | | | (115 | ) | | (188 | ) |
| Minority interest expense | | | 63 | | | - | |
| Other | | | 328 | | | 80 | |
| Changes in assets and liabilities | | | | | | | |
| Accounts receivable | | | 605 | | | 8,468 | |
| Inventory, prepaid expenses and other | | | (3,528 | ) | | (11,278 | ) |
| Accounts payable | | | 6,507 | | | 3,262 | |
| Accrued liabilities and other | | | 7,330 | | | 2,406 | |
| Net cash provided by operating activities | | | 73,255 | | | 63,339 | |
| | | | | | | | |
| Investing activities: | | | | | | | |
| Development and exploration costs and other property additions | | | (210,175 | ) | | (139,955 | ) |
| Return of investment from equity affiliates | | | 202 | | | 250 | |
| Proceeds from sale of assets | | | - | | | 341 | |
| Net cash used for investing activities | | | (209,973 | ) | | (139,364 | ) |
| | | | | | | | |
| Financing activities: | | | | | | | |
| Issuance of debt | | | 143,446 | | | 392,182 | |
| Repayments of debt | | | (6,868 | ) | | (198,082 | ) |
| Debt issuance costs | | | (2,303 | ) | | (8,283 | ) |
| Proceeds from exercise of stock options | | | 2,976 | | | 1,430 | |
| Purchase of treasury stock | | | (494 | ) | | (29 | ) |
| Minority interest contributions | | | 167 | | | - | |
| Net cash provided by financing activities | | | 136,924 | | | 187,218 | |
| | | | | | | | |
| Effect of exchange rate changes in cash | | | 231 | | | 246 | |
| | | | | | | | |
| Net increase in cash and cash equivalents | | | 437 | | | 111,439 | |
| | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 5,281 | | | 14,318 | |
| | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 5,718 | | $ | 125,757 | |
| | | | | | | | |
-end-
