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 Reports Record Quarterly Results
Production Surges 27% to Record Levels
Net Income Increases 34% to $31.7 Million
FORT WORTH, TEXAS (August 8, 2007)– Quicksilver Resources Inc. (NYSE: KWK) today reported record quarterly revenues and production for the period ended June 30, 2007. Net income for the second quarter of 2007 increased approximately 34 percent to $31.7 million ($0.38 per diluted share) as compared to $23.6 million ($0.29 per diluted share) in the prior-year quarter. Total revenues of $136.4 million in the 2007 quarter were up more than 50 percent from the 2006 quarter. Net cash from operating activities for the six months ended June 30, 2007 was $147.0 million, an increase of nearly 12 percent from $131.8 million generated in the same period of 2006, as presented in the attached Condensed Consolidated Statements of Cash Flows.
Second-Quarter 2007 Highlights
| · | Produced record volumes of 208 MMcfe per day |
| · | Generated nearly $74 million of net cash from operating activities |
| · | Drilled a record 64 horizontal wells in the Fort Worth Basin; connected 44 wells |
| · | Increased recoveries of natural gas liquids per million cubic feet of natural gas in the Fort Worth Basin by 125 percent versus the prior-year quarter |
“Record operating and financial results during the quarter highlight Quicksilver’s ability to efficiently execute our development programs and realize increasing value from our low-risk, high-growth asset portfolio,” said Glenn Darden, President and Chief Executive Officer. “These results were driven primarily by our valuable position in the Fort Worth Basin Barnett Shale play. In this area, quarterly production volumes increased 148 percent versus the second quarter of 2006 and increased more than 50 percent since the first quarter of this year. We expect to achieve continued rapid growth from this play, where more than 90 percent of our acreage position remains to be developed.”
Production
Total average production increased nearly 27 percent to a record 208 million cubic feet of natural gas equivalent (MMcfe) per day versus the prior-year period of 164 MMcfe per day. Total daily production volumes increased 11 percent sequentially from the first quarter of 2007, marking the company’s 16th consecutive quarter of production growth. Natural gas, including natural gas liquids (NGL), comprised approximately 95 percent of the company’s total production in the second quarter of 2007.
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Production on a thousand cubic feet of natural gas equivalent per day (Mcfe/d) basis for the company’s primary operating areas for the three months ended June 30 was as follows:
| | | Mcfe/d | | | | |
Area | | 2007 | | | 2006 | | | Change | |
| Texas | | | 76,911 | | | | 31,050 | | | | 148 | % |
| Canada | | | 53,812 | | | | 49,780 | | | | 8 | % |
| Michigan | | | 70,144 | | | | 75,269 | | | | (7 | %) |
| Other | | | 7,294 | | | | 8,132 | | | | (10 | %) |
| Total company | | | 208,161 | | | | 164,231 | | | | 27 | % |
In the Fort Worth Basin, the company drilled 64 wells (62.45 net) and connected 44 wells (41.99 net) to sales during the second quarter. With 15 rigs currently working in the basin, the company now expects to drill at least 180 wells in the area during 2007. Enhancements and expansions completed earlier this year at the Cowtown gas processing facility, which processes the company’s liquids-rich production from the Fort Worth Basin, have improved the efficiency of recoveries of these high-valued products, resulting in more than 110 barrels of NGLs recovered for each million cubic feet of gas processed.
In Canada, drilling activities were suspended, as expected, throughout the second quarter due to the spring break-up period. Drilling activities resumed in late June and the company still expects to achieve a 10 percent annual production growth in 2007 from this area.
Capital expenditures for the second quarter of 2007 totaled approximately $247 million, of which approximately 72 percent was associated with drilling and completion activities, approximately 18 percent for midstream activities, approximately nine percent for acreage purchases, and approximately one percent for corporate capital.
Conference Call
The company will host a conference call to discuss second-quarter 2007 operational and financial results today, 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 6103696, 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 6103696. A replay will also be archived for 30 days on the company’s website.
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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 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; effects of hedging natural gas and crude oil prices; uncertainties inherent in estimates of natural gas and crude oil reserves and predicting natural gas and crude oil reservoir performance; competitive conditions in our industry; actions taken by third-party operators, processors and transporters; 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. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Investor & Media Contact:
Quicksilver Resources Inc.
Rick Buterbaugh
(817) 665-4835
KWK 07-09
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QUICKSILVER RESOURCES INC. | |
Unaudited Selected Operating Results | |
| | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
Production: | | | | | | | | | | | | |
| Natural gas (MMcf) | | | 14,695 | | | | 13,123 | | | | 28,860 | | | | 25,635 | |
| Oil (MBbls) | | | 158 | | | | 154 | | | | 308 | | | | 297 | |
| NGL (MBbls) | | | 550 | | | | 150 | | | | 848 | | | | 234 | |
| Total (MMcfe) | | | 18,943 | | | | 14,945 | | | | 35,797 | | | | 28,823 | |
| | | | | | |
| United States (MMcfe) | | | 14,046 | | | | 10,415 | | | | 25,848 | | | | 19,968 | |
| Canada (MMcfe) | | | 4,897 | | | | 4,530 | | | | 9,949 | | | | 8,855 | |
| Total (MMcfe) | | | 18,943 | | | | 14,945 | | | | 35,797 | | | | 28,823 | |
| | | | | | |
Average Daily Production: | | | | | |
| Natural gas (Mcfd) | | | 161,485 | | | | 144,209 | | | | 159,448 | | | | 141,631 | |
| Oil (Bbld) | | | 1,737 | | | | 1,689 | | | | 1,701 | | | | 1,640 | |
| NGL (Bbld) | | | 6,042 | | | | 1,648 | | | | 4,687 | | | | 1,296 | |
| Total (Mcfed) | | | 208,161 | | | | 164,231 | | | | 197,775 | | | | 159,244 | |
| | | | | | |
Average Sales Price Per Unit (excluding effects of hedging): | | | |
| Natural gas (per Mcf) | | $ | 6.49 | | | $ | 5.24 | | | $ | 6.12 | | | $ | 6.16 | |
| Oil (per Bbl) | | $ | 59.30 | | | $ | 64.54 | | | $ | 55.25 | | | $ | 61.91 | |
| NGL (per Bbl) | | $ | 40.52 | | | $ | 41.80 | | | $ | 38.16 | | | $ | 41.12 | |
| Total (per Mcfe) | | $ | 6.70 | | | $ | 5.69 | | | $ | 6.31 | | | $ | 6.45 | |
| | | | | | |
Average Sales Price Per Unit (including effects of hedging): | | | |
| Natural gas (per Mcf) | | $ | 6.96 | | | $ | 5.54 | | | $ | 6.86 | | | $ | 6.23 | |
| Oil (per Bbl) | | $ | 59.30 | | | $ | 62.03 | | | $ | 55.25 | | | $ | 60.39 | |
| NGL (per Bbl) | | $ | 40.52 | | | $ | 41.80 | | | $ | 38.16 | | | $ | 41.12 | |
| Total (per Mcfe) | | $ | 7.07 | | | $ | 5.92 | | | $ | 6.91 | | | $ | 6.50 | |
| | | | | | |
Expense per Mcfe: | | | | | |
| United States production cost | | $ | 1.78 | | | $ | 1.77 | | | $ | 1.78 | | | $ | 1.73 | |
| Canada production cost | | $ | 1.42 | | | $ | 1.28 | | | $ | 1.46 | | | $ | 1.24 | |
| Total production cost | | $ | 1.69 | | | $ | 1.62 | | | $ | 1.69 | | | $ | 1.59 | |
| | | | | | | | | | | | | | | | | |
| Production and ad valorem taxes | | $ | 0.22 | | | $ | 0.13 | | | $ | 0.24 | | | $ | 0.21 | |
| General and administrative expenses | | $ | 0.54 | | | $ | 0.36 | | | $ | 0.57 | | | $ | 0.41 | |
| Depletion, depreciation and accretion | | $ | 1.47 | | | $ | 1.20 | | | $ | 1.47 | | | $ | 1.24 | |
| | | | | | | | | | | | | | | | | |
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QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except for share data – Unaudited
| | | June 30, | | | December 31, | |
| | | 2007 | | | 2006 | |
ASSETS | | | | | | |
| Current assets | | | | | | |
| Cash and cash equivalents | | $ | 3,258 | | | $ | 5,281 | |
| Accounts receivable, net of allowance for doubtful accounts | | | 67,076 | | | | 76,521 | |
| Current derivative assets | | | 25,968 | | | | 64,086 | |
| Other current assets | | | 32,091 | | | | 25,076 | |
| Total current assets | | | 128,393 | | | | 170,964 | |
| | | | | | | | | |
| Investments in and advances to equity affiliates | | | 7,333 | | | | 7,434 | |
| | | | | | | | | |
| Properties, plant and equipment – net (“full cost”) | | | 2,099,055 | | | | 1,679,280 | |
| | | | | | | | | |
| Deferred derivative assets | | | - | | | | 3,753 | |
| | | | | | | | | |
| Other assets | | | 22,834 | | | | 21,481 | |
| | | $ | 2,257,615 | | | $ | 1,882,912 | |
| | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities | | | | | | | | |
| Current portion of long-term debt | | $ | 220 | | | $ | 400 | |
| Accounts payable | | | 137,888 | | | | 109,914 | |
| Accrued derivative obligations | | | 882 | | | | - | |
| Accrued liabilities | | | 40,887 | | | | 67,697 | |
| Current deferred tax liability | | | 7,923 | | | | 21,378 | |
| Total current liabilities | | | 187,800 | | | | 199,389 | |
| | | | | | | | | |
| Long-term debt | | | 1,217,472 | | | | 919,117 | |
| | | | | | | | | |
| Derivative obligations | | | 6,018 | | | | - | |
| | | | | | | | | |
| Asset retirement obligations | | | 28,666 | | | | 25,058 | |
| | | | | | | | | |
| Deferred income taxes | | | 180,311 | | | | 156,251 | |
| | | | | | | | | |
| Minority interest | | | 7,892 | | | | 7,431 | |
| | | | | | | | | |
| Stockholders’ equity | | | | | | | | |
| Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued | | | - | | | | - | |
| Common stock, $0.01 par value, 200,000,000 shares authorized and 81,207,935 and 80,181,593 shares issued, respectively | | | 812 | | | | 802 | |
| Paid in capital in excess of par value | | | 256,528 | | | | 238,063 | |
| Treasury stock of 2,600,536 and 2,579,671 shares, respectively | | | (11,558 | ) | | | (10,737 | ) |
| Accumulated other comprehensive income (loss) | | | 41,998 | | | | 60,099 | |
| Retained earnings | | | 341,676 | | | | 287,439 | |
| Total stockholders’ equity | | | 629,456 | | | | 575,666 | |
| | | $ | 2,257,615 | | | $ | 1,882,912 | |
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QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
In thousands, except for per share data – Unaudited
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Revenues | | | | | | | | | | | | |
| Oil, gas and related product sales | | $ | 133,959 | | | $ | 88,536 | | | $ | 247,251 | | | $ | 187,225 | |
| Other revenue | | | 2,439 | | | | 929 | | | | 5,727 | | | | 1,890 | |
Total revenues | | | 136,398 | | | | 89,465 | | | | 252,978 | | | | 189,115 | |
| Expenses | | | | | | | | | | | | | | | | |
| Oil and gas production costs | | | 31,989 | | | | 24,220 | | | | 60,558 | | | | 45,630 | |
| Production and ad valorem taxes | | | 4,212 | | | | 1,986 | | | | 8,702 | | | | 6,159 | |
| Other operating costs | | | 301 | | | | 546 | | | | 1,085 | | | | 949 | |
| Depletion, depreciation and accretion | | | 27,905 | | | | 17,954 | | | | 52,499 | | | | 35,627 | |
| Provision for doubtful accounts | | | - | | | | - | | | | (264 | ) | | | - | |
| General and administrative | | | 10,298 | | | | 5,437 | | | | 20,260 | | | | 11,691 | |
Total expenses | | | 74,705 | | | | 50,143 | | | | 142,840 | | | | 100,056 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) from equity affiliates | | | 282 | | | | (80 | ) | | | 397 | | | | 108 | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 61,975 | | | | 39,242 | | | | 110,535 | | | | 89,167 | |
| | | | | | | | | | | | | | | | | |
| Other income-net | | | (870 | ) | | | (498 | ) | | | (1,471 | ) | | | (848 | ) |
| Interest expense | | | 18,216 | | | | 10,566 | | | | 33,168 | | | | 19,768 | |
| | | | | | | | | | | | | | | | | |
| Income before income taxes and minority interest | | | 44,629 | | | | 29,174 | | | | 78,838 | | | | 70,247 | |
| Income tax expense | | | 12,770 | | | | 5,555 | | | | 24,065 | | | | 19,093 | |
| Minority interest expense | | | 128 | | | | 11 | | | | 191 | | | | 11 | |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 31,731 | | | $ | 23,608 | | | $ | 54,582 | | | $ | 51,143 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic net income per common share | | $ | 0.41 | | | $ | 0.31 | | | $ | 0.71 | | | $ | 0.67 | |
| Diluted net income per common share | | $ | 0.38 | | | $ | 0.29 | | | $ | 0.66 | | | $ | 0.63 | |
| | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
| Basic | | | 77,594 | | | | 76,723 | | | | 77,396 | | | | 76,383 | |
| Diluted | | | 84,127 | | | | 83,089 | | | | 84,029 | | | | 82,949 | |
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QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands-Unaudited
| | | For the Six Months Ended | |
| | | June 30, | |
| | | 2007 | | | 2006 | |
| Operating activities: | | | | | | |
| Net income | | $ | 54,582 | | | $ | 51,143 | |
| | | | | | | | | |
| Charges and credits to net income not affecting cash | | | | | | | | |
| Depletion, depreciation and accretion | | | 52,499 | | | | 35,627 | |
| Deferred income taxes | | | 23,907 | | | | 19,063 | |
| Non-cash compensation | | | 6,288 | | | | 2,819 | |
| Amortization of deferred loan costs | | | 929 | | | | 1,255 | |
| Income from equity affiliates | | | (397 | ) | | | (108 | ) |
| Minority interest | | | 191 | | | | 11 | |
| Non-cash gain from hedging activities | | | (981 | ) | | | 77 | |
| Other | | | 1,555 | | | | 129 | |
| Changes in assets and liabilities | | | | | | | | |
| Accounts receivable | | | 9,709 | | | | 27,369 | |
| Inventory, prepaid expenses and other | | | (8,057 | ) | | | (13,674 | ) |
| Accounts payable | | | 8,992 | | | | (1,423 | ) |
| Accrued liabilities and other | | | (2,250 | ) | | | 9,502 | |
| Net cash provided by operating activities | | | 146,967 | | | | 131,790 | |
| | | | | | | | | |
| Investing activities: | | | | | | | | |
| Development and exploration costs and other property additions | | | (435,086 | ) | | | (279,713 | ) |
| Return of investment from equity affiliates | | | 167 | | | | 365 | |
| Proceeds from sale of assets | | | 162 | | | | 4,854 | |
| Net cash used for investing activities | | | (434,757 | ) | | | (274,494 | ) |
| | | | | | | | | |
| Financing activities: | | | | | | | | |
| Issuance of debt | | | 312,157 | | | | 408,742 | |
| Repayments of debt | | | (37,261 | ) | | | (271,719 | ) |
| Debt issuance costs | | | (2,546 | ) | | | (9,192 | ) |
| Proceeds from exercise of stock options | | | 12,187 | | | | 18,366 | |
| Minority interest contributions | | | 167 | | | | 4,506 | |
| Purchase of treasury stock | | | (821 | ) | | | (479 | ) |
| Net cash provided by financing activities | | | 283,883 | | | | 150,224 | |
| | | | | | | | | |
| Effect of exchange rate changes in cash | | | 1,884 | | | | (120 | ) |
| | | | | | | | | |
| Net increase (decrease) in cash and cash equivalents | | | (2,023 | ) | | | 7,400 | |
| | | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 5,281 | | | | 14,318 | |
| | | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 3,258 | | | $ | 21,718 | |
| | | | | | | | | |
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