ex99_1.htm

Net cash provided by operating activities before changes in working capital, a non-GAAP measure, was $206.7 million for the fourth quarter of 2008, more than a four-fold increase from $47.4 million in the comparable 2007 period. For the full year of 2008, net cash provided by operating activities before changes in working capital was $580.1 million, more than double the $263.4 million in the comparable 2007 period.

Reconciliations of net cash provided by operating activities before working capital changes to net cash provided by operating activities and net income to adjusted net income are provided on page 10 of this news release.

“Quicksilver achieved numerous successes in 2008 including record production volumes, reduced unit production costs and a 42% increase in reserves at one of the lowest finding and development costs reported by industry,” said Glenn Darden, Quicksilver president and chief executive officer. “Quicksilver’s strength is being a low-cost producer. We expect to become an even lower cost company in the current environment. Capitalizing on this platform, we have locked in attractive margins by hedging more than 75% and 65% of our expected natural gas production for 2009 and 2010, respectively, which underpins our anticipated cash flows. We are committed to operate within these cash flows during the current period of low oil and natural gas prices.”

Production

For the fourth quarter of 2008, average production was 327 million cubic feet of natural gas equivalent (MMcfe) per day compared to 220 MMcfe per day for the same period in 2007, an increase of approximately 48%. The 2007 quarter included production of approximately 25 MMcfe per day associated with the company’s previously owned Northeast Operations, which were divested as of November 1, 2007. Excluding the divested volumes from the Northeast Operations, production grew nearly 67% year-over-year. This increase was driven by higher volumes from the Fort Worth Basin where successful development drilling activities coupled with the August 2008 Alliance acquisition, which included approximately 40 MMcfe per day of production, increased volumes from the basin 96% versus the 2007 level. The 2008 production volumes were comprised of approximately 74% natural gas, approximately 24% natural gas liquids (NGL) and approximately 2% crude oil and condensate.

Total production for the full year of 2008 averaged 263 MMcfe per day, up 23% from the 2007 average.

Revenue and Costs

Total revenue for the fourth quarter of 2008 was $208.9 million compared to $149.1 million in the prior-year quarter. Sales of natural gas, NGLs and crude oil totaled $206.1 million in the fourth quarter of 2008, up approximately 40% from the 2007 quarter. The increase reflects a 48% increase in equivalent daily production volumes that more than offset a 5% decrease in the average realized price per thousand cubic feet of natural gas equivalent (Mcfe). Total revenue for 2008 was $800.6 million, an increase of 43% from 2007.

Production costs of $36.1 million for the 2008 fourth quarter represent a $4.1 million increase from the prior-year quarter. This increase was primarily due to increased production volumes from Texas. The company continued to reduce its unit production costs, which declined to $1.20 per Mcfe in the fourth

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quarter of 2008, down approximately 22% as compared to $1.53 per Mcfe, excluding divestment-related expenses, in the prior-year quarter.

Capital Structure

At December 31, 2008, the company’s total debt outstanding was $2.6 billion, including $175 million of debt of the company’s subsidiary, Quicksilver Gas Services, which is non-recourse to the company. At year-end 2008, Quicksilver Resources had approximately $369 million of available capacity under its $1.2 billion senior secured revolving credit facility.

Operational Update

In the Fort Worth Basin, the company drilled 67 (63.2 net) operated wells and connected 58 (53.8 net) operated wells to sales during the fourth quarter. For the full year of 2008, the company drilled 257 (240.6 net) operated wells and connected 237 (224.3 net) operated wells to sales. In the Horseshoe Canyon area of Alberta, Canada, the company drilled 69 (50.3 net) operated wells during the fourth quarter of 2008, resulting in 203 (141.6 net) operated wells in this area for the full year of 2008.

During 2009, the company has budgeted to drill approximately 180 operated wells and connect approximately 100 operated wells to sales in the Fort Worth Basin. In the Horseshoe Canyon area approximately 175 (92 net) operated wells are budgeted in 2009. With these budgeted amounts for drilling and completion activity, the company expects to maintain total production roughly flat with the fourth quarter of 2008, resulting in annual production growth of approximately 23% in 2009.

Total company capital expenditures for the fourth quarter of 2008 were approximately $333 million, of which approximately 70% was associated with drilling and completion activities, approximately 20% was for midstream activities, approximately 7% was for acreage purchases and approximately 3% was for corporate. For the year, capital expenditures, excluding acquisitions, totaled approximately $1.3 billion.

Finding and Development Costs

The company’s estimated all-in finding and development cost (F&D) for 2008 has been finalized based upon the total 2008 capital expenditures. All-in F&D cost for 2008 was $2.14 per Mcfe. Finding, development and acquisitions cost (FD&A) for 2008 was $2.50 per Mcfe. Reconciliations of the “2008 Finding & Development Cost” and “2008 Finding, Development & Acquisition Cost” are available on the company’s website – www.qrinc.com. For a description of the calculation of, and certain other information regarding, F&D and FD&A costs, please see the discussion below under the heading “F&D and FD&A Costs.”

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First-Quarter 2009 Outlook

First-quarter 2009 production volumes are expected to average in the range of 325 MMcfe to 330 MMcfe per day. Average unit expenses, on an Mcfe basis, are expected to be in the following ranges:

·	Production costs	$	1.30	-	$	1.40
·	Production taxes		.13	-		.16
·	General and administrative		.55	-		.60
·	Depletion, depreciation & accretion		2.00	-		2.10

Conference Call and Investor Meeting

The company will host a conference call to discuss fourth-quarter 2008 operating and financial results and its outlook for the future at 11:00 a.m. eastern time today.

Quicksilver invites interested parties to participate in the call via the company’s website at http://www.qrinc.com or by calling 1-877-313-7932, using the conference ID number 80367072, prior to 10:55 a.m. eastern time. 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 80367072. The replay will also be archived for 30 days on the company’s website.

Use of Non-GAAP Financial Measures

This press release and the accompanying schedule include the non-generally accepted accounting principles ("non-GAAP") financial measures of adjusted net income and cash provided by operating activities before working capital changes. The accompanying schedule provides 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 an alternative to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance.

About Quicksilver Resources

Fort Worth, Texas-based Quicksilver Resources is a natural gas and crude oil exploration and production company engaged in the development and acquisition of long-lived, unconventional natural gas reserves, including coalbed methane, shale gas, and tight sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas and Cut Bank, Montana. Quicksilver’s Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. For more information about Quicksilver Resources, visit www.qrinc.com.

Forward-Looking Statements

The statements in this press release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although these statements reflect the current views, assumptions and expectations of Quicksilver Resources’ 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

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Resources’ financial condition, results of operations and cash flows include: changes in general economic conditions; fluctuations in natural gas, natural gas liquids and crude oil prices; failure or delays in achieving expected production exploration and development projects; uncertainties inherent in estimates of natural gas, natural gas liquids and crude oil reserves and predicting natural gas, natural gas liquids and crude oil reservoir performance; effects of hedging natural gas, natural gas liquids and crude oil; fluctuations in the value of certain of our assets and liabilities; competitive conditions in our industry; actions taken on non-performance by third parties, including suppliers, contractors, operators, processors, customers and counterparties; changes in the availability and cost of capital; delays in obtaining oilfield equipment and increases in drilling and other service costs; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; the effects of existing and future laws and governmental regulations; and the effects of existing or future litigation; as well as, other factors disclosed in Quicksilver Resources’ filings with the Securities and Exchange Commission. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

F&D and FD&A Costs

Finding and development cost, or F&D cost, is calculated by dividing (x) development, exploitation, and exploration capital expenditures for the period, plus unevaluated capital expenditures as of the beginning of the period, less unevaluated capital expenditures as of the end of the period, by (y) reserve additions for the period, excluding acquired reserves. Finding, development and acquisition cost, or FD&A cost, is calculated by dividing (x) development, exploitation, exploration and acquisition capital expenditures for the period, plus unevaluated capital expenditures as of the beginning of the period, less unevaluated capital expenditures as of the end of the period, by (y) reserve additions for the period from all sources. Our calculation of “all-in” FD&A cost includes costs and reserve additions related to the purchase of proved reserves. The methods we use to calculate our F&D and FD&A costs may differ significantly from methods used by other companies to compute similar measures. As a result, our F&D and FD&A costs may not be comparable to similar measures provided by other companies. We believe that providing a measure of F&D and FD&A costs is useful in evaluating the costs, on a per thousand cubic feet of natural gas equivalent basis, to add proved reserves.

However, these measures are provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our financial statements prepared in accordance with generally accepted accounting principles. Due to various factors, including timing differences in the addition of proved reserves and the related costs to develop those reserves, F&D and FD&A costs do not necessarily reflect precisely the costs associated with particular reserves. As a result of various factors that could materially affect the timing and amounts of future increases in reserves and the timing and amounts of future costs, we cannot assure you that our future F&D and FD&A costs will not differ materially from those presented.

A reconciliation of F&D and FD&A costs is available on the company’s website at www.qrinc.com.

# # #

Investor & Media Contact:

Rick Buterbaugh

(817) 665-4835

KWK 09-02

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QUICKSILVER RESOURCES INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

In thousands, except per share data - Unaudited

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
	2008			2007 (1)			2008			2007 (1)
Revenue
Natural gas, NGL and crude oil	$	206,071		$	146,792		$	780,788		$	545,089
Other		2,790			2,289			19,853			16,169
Total revenue		208,861			149,081			800,641			561,258

Operating expenses
Oil and gas production expense		36,104			32,027			135,661			136,831
Production and ad valorem taxes		7,479			3,074			16,794			16,142
Other operating costs		984			852			3,918			2,792
Depletion, depreciation and accretion		62,440			36,083			188,196			120,697
General and administrative		15,852			12,736			72,254			47,060
Total expenses		122,859			84,772			416,823			323,522
Impairment related to oil and gas properties		(633,515	)		-			(633,515	)		-
Income (loss) from equity affiliates		-			(21	)		-			661
Gain on sale of oil and gas properties		-			628,709			-			628,709
Loss on natural gas sales contract		-			(63,525	)		-			(63,525	)
Operating income (loss)		(547,513	)		629,472			(249,697	)		803,581
Income from earnings of BBEP		187,162			-			93,298			-
Impairment of investment in BBEP		(320,387	)		-			(320,387	)		-
Other income - net		1,862			2,031			807			3,887
Interest expense		(41,885	)		(16,669	)		(102,510	)		(70,527	)
Income (loss) before income taxes and minority interest		(720,761	)		614,834			(578,489	)		736,941
Income tax (expense) benefit		256,903			(218,350	)		209,149			(256,508	)
Minority interest expense, net of income tax		(2,033	)		(407	)		(4,654	)		(1,055	)
Net income (loss)	$	(465,891	)	$	396,077		$	(373,994	)	$	479,378


Earnings (loss) per common share - basic	$	(2.79	)	$	2.53		$	(2.31	)	$	3.08

Earnings (loss) per common share - diluted	$	(2.79	)	$	2.35		$	(2.31	)	$	2.86

Basic weighted average shares outstanding		166,709			156,547			161,622			155,475

Diluted weighted average shares outstanding		166,709			168,818			161,622			168,029

(1) Share amounts have been adjusted to reflect a two-for-one stock split effected in the form of a stock dividend in January 2008. The split did not affect treasury shares.

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QUICKSILVER RESOURCES INC.

CONSOLIDATED BALANCE SHEETS

In thousands, except share data - Unaudited

	December 31,			December 31,
	2008			2007
ASSETS
Current assets
Cash and cash equivalents	$	2,848		$	28,226
Accounts receivable - net of allowance for doubtful accounts		143,315			90,244
Derivative assets at fair value		171,740			10,797
Current deferred income tax asset		-			18,946
Other current assets		75,433			42,188
Total current assets		393,336			190,401
Investment in Breitburn Energy Partners		150,503			420,171
Property, plant and equipment
Oil and gas properties, full cost method (including unevaluated costs of $543,533 and $215,228, respectively)		3,142,608			1,764,400
Other property and equipment		655,107			377,946
Property, plant and equipment - net		3,797,715			2,142,346
Derivative assets at fair value		116,006			354
Other assets		43,011			22,574
	$	4,500,571		$	2,775,846
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt	$	6,579		$	34
Accounts payable		282,636			192,855
Income taxes payable		40			46,601
Accrued liabilities		66,923			54,981
Derivative liabilities at fair value		9,928			64,104
Current deferred tax liability		52,393			-
Total current liabilities		418,499			358,575
Long-term debt		2,605,025			813,817
Asset retirement obligations		34,753			23,864
Derivative liabilities at fair value		-			16,327
Other liabilities		12,962			10,609
Deferred income taxes		225,440			374,645
Deferred gain on sale of partnership interests		79,316			79,316
Minority interests in consolidated subsidiaries		29,867			30,338
Stockholders' equity
Preferred stock, par value $0.01, 10,000,000 shares authorized, none outstanding		-			-
Common stock, $0.01 par value, 400,000,000 and 200,000,000 shares authorized respectively; 171,742,699 and 160,633,270 shares issued, respectively		1,717			1,606
Paid in capital in excess of par value		550,851			272,515
Treasury stock of 4,572,795 and 2,616,726 shares, respectively		(35,441	)		(12,304	)
Accumulated other comprehensive income		185,104			40,066
Retained earnings		392,478			766,472
Total stockholders' equity		1,094,709			1,068,355
	$	4,500,571		$	2,775,846

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QUICKSILVER RESOURCES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands - Unaudited

	Year Ended
	December 31,
	2008			2007
Operating activities:
Net income (loss)	$	(373,994	)	$	479,378
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and accretion		188,196			120,697
Impairment related to oil and gas properties		633,515			-
Deferred income tax expense (benefit)		(164,134	)		209,943
(Gain) loss from sale of properties		605			(627,348	)
Non-cash (gain) loss from hedging and derivative activities		(1,139	)		62,515
Stock-based compensation		16,128			11,243
Amortization of deferred charges		2,527			2,189
Amortization of deferred loan costs		4,100			2,050
Minority interest expense		4,654			1,055
Income from equity affiliates in excess of cash distributions		(50,762	)		-
Impairment of investment in BBEP		320,387
Provision for doubtful accounts		-			(349	)
Divestiture expenses		-			2,015
Changes in assets and liabilities:
Accounts receivable		(53,071	)		(14,423	)
Prepaid expenses and other assets		(5,448	)		(4,805	)
Accounts payable		7,602			18,939
Income taxes payable		(46,561	)		46,012
Accrued and other liabilities		(26,039	)		9,993
Net cash provided by operating activities		456,566			319,104

Investing activities:
Purchases of property, plant and equipment		(1,286,715	)		(1,020,684	)
Alliance Acquisition		(993,212	)		-
Return of investment from equity affiliates		-			9,635
Proceeds from sales of properties and equipment		1,339			741,297
Net cash used in investing activities		(2,278,588	)		(269,752	)

Financing activities:
Issuance debt		2,948,672			817,821
Repayments of debt		(1,096,163	)		(968,557	)
Debt issuance costs		(25,219	)		(5,130	)
Minority interest contributions		-			109,809
Minority interest distributions		(8,644	)		(8,794	)
Proceeds from exercise of stock options		1,244			21,387
Excess tax benefits on exercise of stock options		-			2,755
Purchase of treasury stock		(23,137	)		(1,567	)
Net cash provided by (used in) financing activities		1,796,753			(32,276	)

Effect of exchange rate changes in cash		(109	)		5,869

Net increase (decrease) in cash		(25,378	)		22,945
Cash and cash equivalents at beginning of period		28,226			5,281
Cash and cash equivalents at end of period	$	2,848		$	28,226

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QUICKSILVER RESOURCES INC.

Production, on a thousand cubic feet of natural gas equivalent (Mcfe) per day basis, by operating area

	Three Months Ended December 31,							Year Ended December 31,
	2008		2007		Change			2008		2007		Change

Texas		259,014		131,857		96	%		196,563		90,577		117	%
Other U.S.		2,855		3,064		-7	%		3,230		3,194		1	%
		261,869		134,921		94	%		199,793		93,771		113	%

Canada		64,668		60,492		7	%		63,051		56,880		11	%
		326,537		195,413		67	%		262,844		150,651		74	%
Northeast Operations*		-		25,074					-		62,901
Total		326,537		220,487		48	%		262,844		213,552		23	%

*The Company's Northeast Operations were divested as of November 1, 2007

QUICKSILVER RESOURCES INC.

Unaudited Selected Operating Results

	Three Months Ended				Year Ended
	December 31,				December 31,
	2008		2007		2008		2007
Average Daily Production:
Natural Gas (Mcfd)		241,979		156,089		186,142		163,340
NGL (Bbld)		12,792		9,403		11,464		6,768
Oil (Bbld)		1,301		1,330		1,320		1,600
Total (Mcfed)		326,537		220,487		262,844		213,552

Average Realized Prices:
Natural Gas (per Mcf)	$	7.49	$	6.58	$	8.10	$	6.73
NGL (per Bbl)	$	26.86	$	49.44	$	45.44	$	43.23
Oil (per Bbl)	$	64.03	$	78.26	$	78.83	$	63.87
Total (Mcfe)	$	6.86	$	7.24	$	8.12	$	6.99

Expense per Mcfe:
Oil and gas production cost	$	1.20	$	1.58	$	1.41	$	1.76
Production and ad valorem taxes	$	0.25	$	0.15	$	0.17	$	0.21
Depletion, depreciation and accretion	$	2.08	$	1.78	$	1.96	$	1.55
General and administrative expense:
Cash expense	$	0.43	$	0.53	$	0.52	$	0.49
Litigation resolution		-		-		0.10		-
Equity compensation		0.10		0.10		0.13		0.11
Total general and administrative expense	$	0.53	$	0.63	$	0.75	$	0.60

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QUICKSILVER RESOURCES INC.

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME

In thousands, except per share data - Unaudited

	For the Three Months Ended						For the Year Ended
	December 31,						December 31,
	2008			2007 (1)			2008			2007 (1)

Net income (loss)	$	(465,891	)	$	396,077		$	(373,994	)	$	479,378

Adjustments
Related hedges - Northeast Operations		-			-			-			(2,000	)
Termination-related expenses		-			910			-			6,306
Divestiture-related profession fees		-			-			-			2,000
Gain on sale of oil and gas properties		-			(628,709	)		-			(628,709	)
Loss on natural gas sales contract		-			63,525			-			63,525
Legal settlement		-			-			9,633			-
Impairment of E&P properties		633,515			-			633,515			-
Impairment of investment in BBEP		320,387			-			320,387			-
Equity portion of derivative loss (income) from BBEP		(175,034	)		-			(48,674	)		-
Total adjustments before income tax expense		778,868			(564,274	)		914,861			(558,878	)
Income tax expense		(272,604	)		197,496			(320,201	)		195,607
Adjustments for items after taxes		506,264			(366,778	)		594,660			(363,271	)

Adjusted net income	$	40,373		$	29,299		$	220,666		$	116,107

Adjusted net income per common share - Diluted	$	0.23		$	0.18		$	1.28		$	0.70

Diluted weighed average common shares outstanding		177,981			168,818			173,377			168,029

(1) Share amounts have been adjusted to reflect a two-for-one stock split effected in the form of a stock dividend in January 2008. The split did not affect treasury shares.

QUICKSILVER RESOURCES INC.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES BEFORE WORKING

CAPITAL CHANGES TO NET CASH PROVIDED BY OPERATING ACTIVITIES

In thousands - Unaudited

	For the Three Months						For the Year
	Ended December 31,						Ended December 31,
	2008			2007			2008			2007
Net cash provided by operating activities before working capital changes	$	206,688		$	47,406		$	580,083		$	263,388

Working capital changes:
Accounts receivable		(36,539	)		(21,177	)		(53,071	)		(14,423	)
Prepaid expenses and other assets		(629	)		(6,350	)		(5,448	)		(4,805	)
Accounts payable		17,221			18,428			7,602			18,939
Income taxes payable		(147	)		45,855			(46,561	)		46,012
Accrued and other liabilities		(4,148	)		(26,757	)		(26,039	)		9,993
Total working capital changes		(24,242	)		9,999			(123,517	)		55,716

Net cash provided by operating activities	$	182,446		$	57,405		$	456,566		$	319,104

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