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KWK's Q2 Loss Wider than Expected

Zacks Equity Research

Quicksilver Resources Inc. (KWK) posted an adjusted loss per share of 6 cents in the second quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 3 cents and year-ago loss of 4 cents.

Including a gain of $1.43 per share, the company reported earnings of 1.37 per share compared with a loss of $4.72 per share a year ago.

Total Revenue

Quicksilver Resources' total revenue was $175.5 million, beating the Zacks Consensus Estimate by $44.5 million. On a year-over-year basis, quarterly total revenue decreased primarily due to a decline in production revenues.

Operational Update

Quicksilver Resources achieved overall average daily production of 287.3 million cubic feet of natural gas equivalent (MMcfe), down 20% year over year due to a drop in production volumes in the U.S., partially offset by a rise in output levels from the Canadian operations mainly at the Horn River.

Total realized prices decreased 12.1% year over year to $4.50 per thousand cubic feet (Mcfe), resulting from downswings in natural gas, NGL and oil prices.

Total expenses dropped 91.6% year over year to $113.8 million, primarily due to the absence of impairment, and a decrease in gathering, processing and transportation and depreciation expenses.

Quicksilver Resources' operating income was $395 million versus an operating loss of $1.2 billion a year ago.


Quicksilver Resources' cash balance as of Jun 30, 2013 was $96.8 million versus $5.0 million as of Dec 31, 2012. The improvement in cash position was primarily driven by strong results from the net cash provided by investing activities.

Long-term debt as of Jun 30, 2013 was $2 billion versus $2.1 billion as of Dec 31, 2012.

Net cash used in operating activities during the first six months of 2013 was $78.1 million versus net cash provided by operating activities of $99.5 million in the year-ago comparable period.

During second-quarter, Quicksilver Resources invested $27 million under its capital spending program. Of the total expenditure, $5 million was allocated for drilling and completion activities, $16 million used for acreage and surface purchases, $2 million for interest on capital and $4 million for overhead costs on capital.


Quicksilver Resources expects production volumes in third-quarter to be 275 – 280 MMcfe per day. The company also provided full-year 2013 production volume guidance in the range of 290–300 MMcfe per day.

Other Company Releases

Anadarko Petroleum Corp. (APC) posted net earnings from continuing operations of $1.05 per share for the second quarter, beating the Zacks Consensus Estimate by 15 cents.

Noble Energy Inc. (NBL) reported adjusted earnings per share of 69 cents for the second quarter, lagging the Zacks Consensus Estimate by 4 cents.

Apache Corporation (APA) reported second quarter pro forma earnings per share of $2.01, missing the Zacks Consensus Estimate by a penny.

Fort Worth, Texas-based Quicksilver Resources is primarily engaged in the development of long-lived, unconventional reservoirs, which include fractured shales, coalbeds and tight sands in the North American continent. The company currently has a Zacks Rank #3 (Hold).

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