Quicksilver Gas Services Reports First-Quarter 2010 Results
FORT WORTH, TEXAS (May 10, 2010) – Quicksilver Gas Services LP (NYSE: KGS) today reported net income for the first quarter of 2010 of $6.2 million and earnings before interest, income taxes, depreciation and accretion ("EBITDA"), a non-GAAP measure, of $14.3 million. Comparable first-quarter 2009 net income was $9.4 million and EBITDA was $16.8 million.
The company’s total gathered volumes for the 2010 first quarter averaged 286.6 million cubic feet (MMcf) per day, an increase of 3% from the prior-year period. Continued development of the Alliance and Lake Arlington properties is expected to result in average gathered volumes for Quicksilver Gas Services increasing to a range of approximately 340 MMcf to 350 MMcf per day for all of 2010. In January, the company purchased the Alliance midstream assets from Quicksilver Resources Inc. (NYSE: KWK).
“Low natural gas prices have contributed to an overall reduction in activity in the Fort Worth Basin,” said Toby Darden, Quicksilver Gas Services president and chief executive officer. “However, we are seeing continued activity around our Lake Arlington system and our newly acquired Alliance system, and are seeing increased interest by third-party producers in bringing additional volumes to those systems.”
For the first quarter of 2010, the company incurred approximately $24 million of capital costs excluding acquisitions but including $1.7 million of maintenance capital. Expenditures during the quarter included the connection of approximately four miles of gathering lines and 21 new wells to the gathering system.
At March 31, 2010, the company had $226 million drawn on its $320 million credit facility.
On April 19, 2010, the company announced a cash distribution for the 2010 first quarter of $.39 per common unit. For the three months ended March 31, 2010, distributable cash flow, a non-GAAP financial measure, totaled $11.4 million.
Conference Call
Quicksilver Gas Services will host a conference call for investors and analysts at 10:00 a.m. eastern time today to discuss the first-quarter 2010 operating and financial results and its outlook for the future. The company invites interested parties to listen to the call via the company’s website at www.kgslp.com or by calling 1-877-313-7932, using the conference ID number 44422035, approximately 10 minutes prior to the call. 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 using the conference ID number 44422035. The replay will also be archived for 30 days on the company’s website.
Use of Non-GAAP Financial Measures
This news release and the accompanying schedules include the non-generally accepted accounting principles ("non-GAAP") financial measures of EBITDA, adjusted gross margin and distributable cash flow. The accompanying schedules on page 7 of this news release provide reconciliations of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP financial measures should not be considered as alternatives to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance.
About Quicksilver Gas Services
Fort Worth, Texas-based Quicksilver Gas Services is a growth-oriented limited partnership in the business of gathering and processing natural gas produced from the Barnett Shale geologic formation in the Fort Worth Basin of north Texas. The company began operation in 2004 to provide these services to Quicksilver Resources Inc., which owns our general partner. For more information about Quicksilver Gas Services, visit www.kgslp.com.
Forward-Looking Statements
The statements in this news release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements. Although these statements reflect the current views, assumptions and expectations of Quicksilver Gas Services LP’s 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 Gas Services LP’s financial condition, results of operations and cash flows include: changes in general economic conditions; fluctuations in natural gas prices; failure or delays in Quicksilver Resources Inc. a nd third parties achieving expected production from natural gas projects; competitive conditions in our industry; actions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters and customers; fluctuations in the value of certain of our assets and liabilities; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; construction costs or capital expenditures exceeding estimated or budgeted amounts; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; and the effects of existing and future litigation; as well as other factors disclosed in Quicksilver Gas Services LP’s filings with the Securities and Exchange Commission. The forward-looking statements included in this news release are made only as of the date of this news release, and we undertake no obligati on to update any of these forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.
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Investor and Media Contact
Rick Buterbaugh
817-665-4835
KGS 10-06
