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’ First-Quarter Net Income Surges 85% in 2008
Fort Worth Basin Production Increases 183%
FORT WORTH, TEXAS (May 7, 2008) – Quicksilver Resources Inc. (NYSE: KWK) today reported net income for the first quarter of 2008 of $42.2 million ($.25 per diluted share), up 85% from the 2007 first-quarter net income of $22.9 million ($.14 per diluted share). Net cash from operating activities before changes in working capital, a non-GAAP measure, was $111.7 million for the first quarter of 2008, up 79% versus the comparable 2007 level of $62.3 million, as presented in the attached Condensed Consolidated Statements of Cash Flows. Per share data reflects the two-for-one stock split effected in the form of a stock dividend on January 31, 2008.
First-Quarter 2008 Highlights
| · | Increased Fort Worth Basin daily production volumes 183% year-over-year |
| · | Increased Canadian daily production volumes 11% year-over-year |
| · | Drilled 55 horizontal wells in the Fort Worth Basin; connected 56 wells to sales |
| · | Acquired additional acreage in the Horn River Basin to total more than 127,000 net acres |
“The solid production growth achieved by our team in the first quarter is further validation of the quality of Quicksilver’s core development areas,” said Glenn Darden, Quicksilver president and chief executive officer. “Additionally, we have secured a very attractive lease position in the Horn River Basin in British Columbia that, along with our existing acreage in the Delaware Basin of West Texas, provides future growth opportunities for the company. Quicksilver is on target to increase comparable total company production by nearly 70% and average 255 MMcfe per day in 2008.”
Production
For the first quarter of 2008, average daily production was approximately 211 million cubic feet of natural gas equivalent (MMcfe) per day compared to approximately 187 MMcfe per day for the same period in 2007, an increase of approximately 13%. The 2007 quarter included production of approximately 77 MMcfe per day associated with the company’s previously owned Northeast Operations, which were divested as of November 1, 2007. Total production for the first quarter of 2008 was approximately 19.2 billion cubic feet of natural gas equivalent (Bcfe) compared to approximately 16.9 Bcfe for the first quarter of 2007. The 2008 production volumes were comprised of approximately 68% natural gas, approximately 29% natural gas liquids (NGL) and approximately 3% crude oil and condensate.
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Production, on a thousand cubic feet of natural gas equivalent (Mcfe) per day basis, by operating area, for the three months ended March 31, was as follows:
| Quarter Ended March 31, | ||||||||||||
| 2008 | 2007 | Change | ||||||||||
| Texas | 145,023 | 51,195 | 183 | % | ||||||||
| Other U.S. | 3,598 | 3,272 | 10 | % | ||||||||
| 148,621 | 54,467 | 173 | % | |||||||||
| Canada | 62,529 | 56,123 | 11 | % | ||||||||
| 211,150 | 110,590 | 91 | % | |||||||||
| Northeast Operations* | – | 76,675 | ||||||||||
| Total | 211,150 | 187,265 | 13 | % | ||||||||
| *The company’s Northeast Operations were divested as of November 1, 2007. | ||||||||||||
Revenues and Costs
Sales of natural gas, NGLs and crude oil increased approximately 40% to $158.4 million in the first quarter of 2008 as compared to $113.3 million in the 2007 quarter. The increase reflects a 13% increase in equivalent daily production volumes and a 23% increase in the average realized price per Mcfe.
Production expense of $32.5 million for the 2008 first quarter represents a $4.0 million increase from the prior-year quarter. This increase was primarily due to increased production volumes from the Fort Worth Basin in Texas, which more than offset the divested production from our Northeast Operations. Unit production expense, including production, gathering and processing and transportation expense, was $1.69 per Mcfe during the first quarter of 2008 down $.01 per Mcfe as compared to $1.70 per Mcfe expense in the prior-year quarter.
Capital Structure
At March 31, 2008, the company’s total debt outstanding was $1.1 billion. Total debt as a percent of total capitalization was approximately 52% at March 31, 2008 versus approximately 65% at March 31, 2007.
Income from Earnings of Unconsolidated Affiliate
Quicksilver reported $6.2 million of pre-tax earnings attributable to the company’s approximate 32% interest in BreitBurn Energy Partners L.P.’s (BBEP) fourth-quarter 2007 results for the period after Quicksilver’s acquisition of the BBEP units. Quicksilver received approximately $9.7 million of cash distributions during the first quarter of 2008 associated with the ownership of these units.
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Operational Update
The company continued to focus on the exploitation and development of the 160,000 net acres in its core fairway within the Barnett Shale formation of the Fort Worth Basin. During the first quarter of 2008, the company drilled 55 (50.02 net) wells and connected 56 (54.25 net) wells to sales. At March 31, 2008, the company had 12 rigs working in the basin, including two rigs dedicated to the Lake Arlington area in Tarrant County.
In Canada, the company drilled 50 (35.5 net) wells in the Horseshoe Canyon area during the first quarter of 2008. Drilling, completion and pipeline operations are currently suspended for the seasonal breakup period in Canada. The company still anticipates drilling a total of approximately 265 (165 net) wells in this area during 2008. As a result, the company remains on track to achieve annual production growth in the range of 7% to 9% from its Canadian operations in 2008.
Total company capital expenditures for the first quarter of 2008 were approximately $343 million, with approximately 62% for drilling and completion activities, approximately 20% for acreage purchases and approximately 17% for midstream activities.
Second-Quarter 2008 Outlook
Second-quarter 2008 production volumes are expected to average in the range of 225 MMcfe to 235 MMcfe per day. Average unit expenses, on a Mcfe basis, are expected as follows:
· Production | $ | 1.25 | - | $ | 1.30 | |||
· Gathering and processing | .20 | - | .23 | |||||
· Transportation | .22 | - | .25 | |||||
· Production taxes | .13 | - | .15 | |||||
· General and administrative | .75 | - | .85 | |||||
· Depletion, depreciation & accretion | 1.80 | - | 1.85 |
Conference Call
The company will host a conference call to discuss first-quarter 2008 operating and financial results and its outlook for the future at 11:00 a.m. eastern time today.
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 27095177, prior to 10:55 a.m. eastern time. A digital replay of the conference call will be available at 3:00 p.m. eastern time today, and will remain available for 30 days. The replay can be accessed at 1-800-642-1687 and enter the conference ID number 27095177. The replay will also be archived for 30 days on the company’s website.
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Use of Non-GAAP Financial Measure
This press release and the accompanying schedule include the non-generally accepted accounting principles (“non-GAAP”) financial measure of net cash from operating activities before changes in working capital. The accompanying schedule provides a reconciliation of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP financial measure should not be considered as an alternative to the GAAP measures of net cash provided by operating activities or any other GAAP measure of liquidity or financial performance. The items excluded from our calculation of net cash flow from operating activities before working capital changes include cash items that may significantly affect our cash flows.
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 coalbed methane, shale gas, and tight sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas 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, natural gas liquids and crude oil prices; failure or delays in achieving expected production from natural gas, natural gas liquids and crude oil exploration and development projects; effects of hedging natural gas, natural gas liquids and crude oil prices; uncertainties inherent in estimates of natural gas, natural gas liquids and crude oil reserves and predicting natural gas, natural gas liquids and crude oil reservoir performance; effects of hedging natural gas, natural gas liquids and crude oil; competitive conditions in our industry; actions taken by third parties, including 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:
Rick Buterbaugh
(817) 665-4835
KWK 08-10
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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 | ||||||||
| March 31, | ||||||||
| 2008 | 2007 (1) | |||||||
| Revenues | ||||||||
| Natural gas, NGL and crude oil sales | $ | 158,356 | $ | 113,292 | ||||
| Other | (853 | ) | 3,288 | |||||
| Total revenues | 157,503 | 116,580 | ||||||
| Operating expenses | ||||||||
| Oil and gas production expense | 32,530 | 28,569 | ||||||
| Production and ad valorem taxes | 2,659 | 4,490 | ||||||
| Other operating costs | 1,231 | 784 | ||||||
| Depletion, depreciation and accretion | 35,059 | 24,594 | ||||||
| General and administrative | 15,415 | 9,698 | ||||||
| Total expenses | 86,894 | 68,135 | ||||||
| Income from equity affiliates | - | 115 | ||||||
| Operating income | 70,609 | 48,560 | ||||||
| Income from earnings of unconsolidated affiliate | 6,219 | - | ||||||
| Other income - net | 1,600 | 601 | ||||||
| Interest expense | (11,832 | ) | (14,952 | ) | ||||
Income from continuing operations before income taxes and minority interest | 66,596 | 34,209 | ||||||
| Income tax expense | 23,912 | 11,295 | ||||||
| Minority interest expense, net of income tax | 508 | 63 | ||||||
| Net income | $ | 42,176 | $ | 22,851 | ||||
| Earnings per common share - basic | $ | 0.27 | $ | 0.15 | ||||
| Earnings per common share - diluted | $ | 0.25 | $ | 0.14 | ||||
| Basic weighted average shares outstanding | 157,731 | 154,389 | ||||||
| Diluted weighted average shares outstanding | 169,730 | 167,659 | ||||||
| (1) | Share amounts have been adjusted to reflect a two-for-one stock split effected in the form of a stock dividend in January 2008. The split did not affect treasury shares. |
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QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands, except for share data – Unaudited
| March 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,976 | $ | 28,226 | ||||
| Accounts receivable - net of allowance for doubtful accounts | 115,957 | 90,244 | ||||||
| Derivative assets at fair value | 22,125 | 10,797 | ||||||
| Current deferred income tax asset | 54,180 | 18,946 | ||||||
| Other current assets | 42,769 | 42,188 | ||||||
| Total current assets | 237,007 | 190,401 | ||||||
| Investments in unconsolidated affiliate | 416,731 | 420,171 | ||||||
| Property, plant and equipment - net | ||||||||
Oil and gas properties, full cost method (including unevaluated costs of $281,130 and $215,228, respectively) | 2,001,458 | 1,764,400 | ||||||
| Other property and equipment | 429,306 | 377,946 | ||||||
| Property, plant and equipment - net | 2,430,764 | 2,142,346 | ||||||
| Derivative assets at fair value | - | 354 | ||||||
| Other assets | 25,439 | 22,574 | ||||||
| $ | 3,109,941 | $ | 2,775,846 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Current portion of long-term debt | $ | - | $ | 34 | ||||
| Accounts payable | 182,606 | 192,855 | ||||||
| Income taxes payable | 1,457 | 46,601 | ||||||
| Accrued liabilities | 40,406 | 54,981 | ||||||
| Derivative liabilities at fair value | 186,301 | 64,104 | ||||||
| Total current liabilities | 410,770 | 358,575 | ||||||
| Long-term debt | 1,115,811 | 813,817 | ||||||
| Asset retirement obligations | 24,989 | 23,864 | ||||||
| Derivative liabilities at fair value | 20,474 | 16,327 | ||||||
| Other liabilities | 10,609 | 10,609 | ||||||
| Deferred income taxes | 392,286 | 374,645 | ||||||
| Deferred gain on sale of partnership interests | 79,316 | 79,316 | ||||||
| Minority interests in consolidated subsidiaries | 29,412 | 30,338 | ||||||
| Stockholders' equity | ||||||||
| Preferred stock, par value $0.01, 10,000,000 shares authorized, none outstanding | - | - | ||||||
Common stock, $0.01 par value, 200,000,000 shares authorized; 161,244,642 and 160,633,270 shares issued, respectively | 1,612 | 1,606 | ||||||
| Paid in capital in excess of par value | 277,112 | 272,515 | ||||||
| Treasury stock of 2,652,981 and 2,616,726 shares, respectively | (14,284 | ) | (12,304 | ) | ||||
| Accumulated other comprehensive (loss) income | (46,814 | ) | 40,066 | |||||
| Retained earnings | 808,648 | 766,472 | ||||||
| Total stockholders' equity | 1,026,274 | 1,068,355 | ||||||
| $ | 3,109,941 | $ | 2,775,846 | |||||
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QUICKSILVER RESOURCES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands-Unaudited
For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 42,176 | $ | 22,851 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depletion, depreciation and accretion | 35,059 | 24,594 | ||||||
| Deferred income taxes | 23,016 | 11,265 | ||||||
| Stock-based compensation | 4,009 | 2,899 | ||||||
| Amortization of deferred charges | 458 | 563 | ||||||
| Amortization of deferred loan costs | 589 | 456 | ||||||
| Minority interest expense | 508 | 63 | ||||||
| Non-cash loss from hedging and derivative activities | 5,735 | 29 | ||||||
| Income from equity affiliates | - | (115 | ) | |||||
| Other | 197 | (264 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (5,226 | ) | 605 | |||||
| Prepaid expenses and other assets | (1,109 | ) | (3,777 | ) | ||||
| Accounts payable | 5,027 | 6,507 | ||||||
| Income taxes payable | (45,144 | ) | (394 | ) | ||||
| Accrued and other liabilities | (22,011 | ) | 7,724 | |||||
| Net cash provided by operating activities | 43,284 | 73,006 | ||||||
| Investing activities: | ||||||||
| Purchases of property, plant and equipment | (331,936 | ) | (209,926 | ) | ||||
| Advances to BreitBurn Energy Partners | (50,150 | ) | - | |||||
| Return of investment from BreitBurn Energy Partners and equity affiliates | 3,440 | 202 | ||||||
| Net cash used for investing activities | (378,646 | ) | (209,724 | ) | ||||
| Financing activities: | ||||||||
| Issuance of debt | 330,741 | 143,446 | ||||||
| Repayments of debt | (18,061 | ) | (6,868 | ) | ||||
| Debt issuance costs | - | (2,303 | ) | |||||
| Minority interest contributions | - | 167 | ||||||
| Minority interest distributions | (1,972 | ) | - | |||||
| Proceeds from exercise of stock options | 858 | 2,976 | ||||||
| Purchase of treasury stock | (1,980 | ) | (494 | ) | ||||
| Net cash provided by financing activities | 309,586 | 136,924 | ||||||
| Effect of exchange rate changes in cash | (474 | ) | 231 | |||||
| Net (decrease) increase in cash | (26,250 | ) | 437 | |||||
| Cash and cash equivalents at beginning of period | 28,226 | 5,281 | ||||||
| Cash and cash equivalents at end of period | $ | 1,976 | $ | 5,718 | ||||
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QUICKSILVER RESOURCES INC.
Unaudited Selected Operating Results
Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| Average Daily Production: | ||||||||
| Natural Gas (Mcfd) | 143,463 | 157,389 | ||||||
| NGL (Bbld) | 10,030 | 3,316 | ||||||
| Oil (Bbld) | 1,251 | 1,665 | ||||||
| Total (MMcfed) | 211,150 | 187,265 | ||||||
| Average Realized Prices: | ||||||||
| Natural Gas (per Mcf) | $ | 8.00 | $ | 6.75 | ||||
| NGL (per Bbl) | $ | 49.36 | $ | 33.81 | ||||
| Oil (per Bbl) | $ | 77.46 | $ | 50.99 | ||||
| Total (Mcfe) | $ | 8.24 | $ | 6.72 | ||||
| Expense per Mcfe: | ||||||||
| Oil and gas production cost | $ | 1.69 | $ | 1.70 | ||||
| Production and ad valorem taxes | $ | 0.14 | $ | 0.27 | ||||
| Depletion, depreciation and accretion | $ | 1.82 | $ | 1.46 | ||||
| General and administrative expense: | ||||||||
| Cash expense | $ | 0.64 | $ | 0.46 | ||||
| Stock-based compensation | 0.16 | 0.12 | ||||||
| Total general and administrative expense | $ | 0.80 | $ | 0.58 | ||||
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QUICKSILVER RESOURCES INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES BEFORE WORKING
CAPITAL CHANGES TO NET CASH PROVIDED BY OPERATING ACTIVITIES
In thousands – Unaudited
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
| Net cash provided by operating activities before working capital changes | $ | 111,747 | $ | 62,341 | ||||
| Working capital changes: | ||||||||
| Accounts receivable | (5,226 | ) | 605 | |||||
| Prepaid expenses and other assets | (1,109 | ) | (3,777 | ) | ||||
| Accounts payable | 5,027 | 6,507 | ||||||
| Income taxes payable | (45,144 | ) | (394 | ) | ||||
| Accrued and other liabilities | (22,011 | ) | 7,724 | |||||
| Total working capital changes | (68,463 | ) | 10,665 | |||||
| Net cash provided by operating activities | $ | 43,284 | $ | 73,006 | ||||
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