Quicksilver Resources’ Board Approves 2009 Capital Budget
FORT WORTH, TEXAS (November 20, 2008) – Quicksilver Resources Inc. (NYSE: KWK) announced that its board of directors has approved a $600 million capital budget for 2009, which includes approximately $400 million for drilling, $155 million for gathering and processing facilities (including approximately $35 million to be funded by Quicksilver Gas Services LP), $40 million for leasehold and $5 million for other property and equipment. On a geographic basis, approximately $475 million is anticipated to be spent in Texas, $110 million in Canada and $15 million combined in other areas in the United States.
“Quicksilver’s 2009 capital program should once again provide for meaningful growth in reserves and production and, given our significant hedge position, it can be entirely funded from internally-generated cash flow inclusive of $50 million each for expected distributions to be received from BreitBurn Energy Partners L.P. and federal income tax refunds. In fact, given our substantial hedge position, we could sustain an additional $2 reduction to NYMEX natural gas prices and should still have sufficient cash flow to fund our $600 million capital program,” said Glenn Darden, Quicksilver president and chief executive officer. “We are committed to operate within our expected cash flow and have the flexibility to reduce budgeted expenditures if needed. Additionally, we believe our exploratory program will provide significant development opportunities for the company’s future growth.”
Total capital expenditures include approximately $65 million for exploratory drilling activities, primarily associated with the company’s extensive leasehold in the Horn River Basin of British Columbia and the Delaware Basin of west Texas.
Production volumes for 2009 are projected to average in the range of 325 to 330 million cubic feet of natural gas equivalents per day (MMcfe/d), up more than 20% from the projected 2008 average. Average daily production volumes for 2009 are expected to consist of approximately 76% natural gas, 22% natural gas liquids and 2% crude oil. The company estimates that capital expenditures of approximately $250 million would be required to maintain existing annual production levels. This expenditure level provides substantial flexibility in the timing and development of the resource base.
Quicksilver expects to fully comply with all financial covenants on its debt outstanding, none of which requires any principal repayments until 2012 .
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 shales, coalbed methane, 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.
