Quicksilver Resources Inc.
) reported fourth quarter 2011 adjusted earnings per share (
) of 17 cents, flat with the year-ago figure, but way ahead of the
Zacks Consensus Estimate of 2 cents.
On a GAAP basis, the company reported EPS of 28 cents compared
with $1.82 in the year-ago quarter.
Quicksilver Resources' 2011 operating EPS was 12 cents compared
with 69 cents reported in 2010. Fiscal 2011 earnings were also
lower than the Zacks Consensus Estimate of 14 cents.
Total revenue at the end of the fourth quarter 2011 was $216.0
million, down 14% from $239.9 million reported in the year-ago
Reported quarter revenue marginally surpassed the Zacks
Consensus Estimate of $215 million.
The company generated total revenue of $936 million in 2011, up
1% from $928.3 million reported in 2010.
Total 2011 revenue outstripped the Zacks Consensus Estimate of
Quicksilver Resources achieved average daily production of 412
million cubic feet of natural gas equivalent (MMcfe) in the fourth
quarter 2011, an increase of 6.0% from 389.2 MMcfe in the fourth
quarter of 2010.
For full-year 2011, production averaged 412 MMcfe per day,
reflecting a growth of 16% from the 2010 level. The year-over-year
production hike was primarily due to higher volumes from the
Annual production volumes comprised roughly 81% natural gas, 19%
natural gas liquids (
), crude oil and condensate.
Total realized prices during 2011 declined 19.5% to $5.32 per
Mcfe, driven by lower natural gas prices realized in the year,
offset by a rise in oil and NGL prices. The average realized oil,
NGL and natural gas prices during the year were $88.15 per barrel
(up 22.6%), $38.63 per barrel (up 22.8%), and $4.95 per thousand
cubic feet (Mcf) (down 27.8%), respectively.
Lease operating expenses incurred by the company during the
reported quarter and the fiscal year rose 36.4% and 21.2% year over
year, respectively. The rise in expenses, both in the quarter
and the fiscal year, was due to higher spending on well work-over
activity, salt-water disposal costs, and gas lift expenses.
Capital expenditure for 2011 amounted to $694 million. Out
of the total expenditure, $409.5 million was allocated for drilling
to completion activities, $76 million for midstream activities,
$166.5 million used for nee acreage purchases and $42 million on
Long-term debt at Quicksilver, as of December 31, 2011, was $1.9
billion versus $1.74 billion as of December 31, 2010.
The company expects production volumes in the first quarter 2012
to be in the range of 375- 385 MMcfe per day.
The company estimates production taxes; gathering, processing,
and transportation expenses; and lease operating expenses in the
corresponding range of 23-25 cents per Mcfe, $1.24-$1.28 per Mcfe
and 68-72 cents per Mcfe. General & administrative expenses and
Depreciation, deletion and amortization expenses are expected to be
53-57 cents per Mcfe and $1.49-$1.53 per Mcfe, respectively.
Additionally, the company has hedged about 65% of its expected
total production for the remainder of 2012. About 230 MMcf per day
of Quicksilver's natural gas for the remainder of 2012 is hedged
through collars at a floor price of $5.75 per Mcf. The company also
has in place fixed-price swaps at a price of $45.01 per barrel for
about 7,000 barrels per day of its NGL production for the first
quarter and full year 2012.
Chesapeake Energy Corporation
) competes with Quicksilver Resources. The former announced
operating earnings for the fourth quarter 2011 of 58 cents per
share, missing the Zacks Consensus Estimate by a penny, and also
falling short of the year-ago quarter earnings of 70 cents per
Fiscal 2011 ongoing earnings came in at $2.80 per share, falling
short of both the Zacks Consensus Estimate of $2.81 and the
year-ago figure of $2.95 per share.
Quicksilver posted a mixed performance in the final quarter of
the year. Undeniably, the overall decline in the realized price for
natural gas impacted results.
The good thing for the company was that it ended the year with a
proved reserve of 2.8 trillion cubic feet of natural gas
equivalents and replaced 165% of production during the year. We
expect the significant investment made by the company in its
different acreage position in United States and Canada will boost
Quicksilver Resources currently retains a Zacks #3 Rank which
translates into a short-term Hold rating on the stock.
Based in Fort Worth, Texas, independent exploration and
production company Quicksilver Resources is primarily engaged in
the development of long-lived, unconventional onshore natural gas
reserves in the North American continent.
CHESAPEAKE ENGY (
): Free Stock Analysis Report
QUICKSILVER RES (
): Free Stock Analysis Report
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