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Quicksilver Resources Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 04:17PM

Quicksilver Resources Inc. (KWK) filed Quarterly Report for the period ended 2011-09-30. Quicksilver Resources Inc. has a market cap of $1.33 billion; its shares were traded at around $7.75 with a P/E ratio of 17.6 and P/S ratio of 1.4.



Highlight of Business Operations:

Natural gas revenue for the 2011 quarter decreased from the 2010 quarter despite a 25% increase in production. Realized prices, before hedge settlements, were slightly lower in the U.S. for the 2011 quarter as compared to the 2010 quarter. A 28% increase in natural gas volume from our Barnett Shale Asset was primarily the result of wells tied into sales lines since the 2010 quarter. Canadian natural gas production increased because of an 11 MMcfd production increase from our Horn River Asset attributable to additional producing wells.

Our revenue from natural gas and NGL production for the 2011 quarter and 2010 quarter was higher by $17.4 million and $69.1 million, respectively, because of our hedging activities. During the 2011 quarter we hedged natural gas production of 190 MMcfd at a weighted average NYMEX floor of $5.95 per Mcf and NGL production of 10.5

We recognized income of $14.4 million and $17.0 million for equity earnings from our investment in BBEP for the 2011 quarter and 2010 quarter, respectively. BBEP continues to experience significant volatility in its net earnings primarily due to changes in the unrealized value of its derivative instruments for which it does not employ hedge accounting.

Our production revenue for the 2011 period and 2010 period was higher by $57.1 million and $179.7 million, respectively, because of our hedging activities. During the 2011 period, we hedged natural gas production of 190 MMcfd at a weighted average NYMEX floor of $5.95 per Mcf and NGL production of 10.5 MBbld at a weighted average floor of $38.84 per Bbl. During the 2010 period, we hedged natural gas production of 200 MMcfd at a weighted average NYMEX floor of $7.40 per Mcf and NGL production of 10 MBbld at a weighted average floor of $33.47 per Bbl.

We recognized a $32.7 million loss and income of $24.2 million for equity earnings from our investment in BBEP for the 2011 period and 2010 period, respectively. BBEP continues to experience significant volatility in its net earnings primarily due to changes in the value of its derivative instruments for which it does not employ hedge accounting.

Read the The complete Report



Stocks Discussed: KWK,
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