Quicksilver Resources Inc.
) announced the pricing of senior notes of $325 million due to
mature on Jul 1, 2021. The independent exploration and production
company also declared that the notes will carry a yearly interest
The net proceeds from this offering - of 94.928% of the face
value of senior notes, available cash on hand and earnings from
other previous offerings - will be utilized to buy back two
outstanding senior notes that are expected to mature by 2015 and
2016. The notes carry interest rate of 8-1/4% and 11-3/4%,
respectively. The proceeds will also be used to bear
expenses related to tender offers and also to repurchase the
remaining portion of the outstanding 2015 and 2016 senior notes,
if anything remains after the tender offer.
In the first half of May, Quicksilver posted a loss per share of
4 cents for the first quarter of 2013. The reported loss was
wider than the Zacks Consensus Estimate of a loss of 2 cents. The
underperformance was on account of a decline in drilling
activities, diminished output volume and fall in natural gas
liquids (NGL) prices.
Fort Worth, Texas-based Quicksilver 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's strategy is to provide
long-term value to its shareholders by delivering efficient and
reliable services. It prioritizes on effective growth in
production and reserves by focusing on its unconventional
resource plays, onshore North America.The company's ability to
identify and acquire large resources at low cost per acre bodes
well for its future growth.
However, Quicksilver does not have the infrastructure to deliver
its output and so its marketability largely depends upon the
availability, proximity and capacity of pipeline systems owned by
third parties. Disruption in transportation operations resulting
from weather conditions, accidents, loss of pipeline or gathering
system access could severely impact the company's ability to
market, fractionate and deliver production.
Quicksilver currently retains a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next 1 to 3 months.
Three oil exploration and production firms that are expected to
outperform the broader U.S. equity market over the next 1 to 3
Anadarko Petroleum Corporation
EOG Resources Inc.
). All three firms sport a Zacks Rank #2 (Buy).
ANADARKO PETROL (APC): Free Stock Analysis
ENCANA CORP (ECA): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
QUICKSILVER RES (KWK): Free Stock Analysis
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