(Mark One) | |
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2013 | |
or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Delaware | 75-2756163 | |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |
incorporation or organization) | ||
801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas | 76102 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer þ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
Title of Class | Outstanding as of July 31, 2013 | |
Common Stock, $0.01 par value | 177,493,512 shares |
• | changes in general economic conditions; |
• | fluctuations in natural gas, NGL and oil prices; |
• | failure or delays in achieving expected production from exploration and development projects; |
• | our ability to achieve anticipated cost savings and other spending reductions; |
• | uncertainties inherent in estimates of natural gas, NGL and oil reserves and predicting natural gas, NGL and oil production and reservoir performance; |
• | effects of hedging natural gas, NGL and oil prices; |
• | fluctuations in the value of certain of our assets and liabilities; |
• | competitive conditions in our industry; |
• | actions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters, customers and counterparties; |
• | changes in the availability and cost of capital; |
• | delays in obtaining oilfield equipment and increases in drilling and other service costs; |
• | delays in construction of transportation pipelines and gathering, processing and treating facilities; |
• | 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, including environmental and climate change requirements; |
• | failure or delay in completing strategic transactions; |
• | the effects of existing or future litigation; and |
• | additional factors described elsewhere in this Quarterly Report. |
ITEM 1. | Condensed Consolidated Interim Financial Statements (Unaudited) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 (1) | 2013 | 2012 (1) | ||||||||||||
(Restated) | (Restated) | ||||||||||||||
Revenue | |||||||||||||||
Production | $ | 121,121 | $ | 150,311 | $ | 253,735 | $ | 316,765 | |||||||
Sales of purchased natural gas | 18,685 | 9,442 | 35,243 | 21,528 | |||||||||||
Net derivative gains (including realized loss of $3,476 and realized gains of $17,100; $6,120 and $22,682, respectively) | 34,837 | 33,139 | 3,468 | 26,475 | |||||||||||
Other | 854 | 1,126 | 1,755 | 2,116 | |||||||||||
Total revenue | 175,497 | 194,018 | 294,201 | 366,884 | |||||||||||
Operating expense | |||||||||||||||
Lease operating | 20,213 | 21,599 | 45,108 | 50,290 | |||||||||||
Gathering, processing and transportation | 36,674 | 42,624 | 76,498 | 85,701 | |||||||||||
Production and ad valorem taxes | 5,300 | 7,189 | 10,784 | 13,952 | |||||||||||
Costs of purchased natural gas | 18,679 | 9,337 | 35,197 | 21,274 | |||||||||||
Depletion, depreciation and accretion | 15,265 | 48,016 | 33,521 | 102,455 | |||||||||||
Impairment | — | 1,199,726 | — | 1,517,654 | |||||||||||
General and administrative | 16,875 | 18,405 | 33,038 | 37,500 | |||||||||||
Other operating | 769 | 134 | 2,205 | 152 | |||||||||||
Total expense | 113,775 | 1,347,030 | 236,351 | 1,828,978 | |||||||||||
Tokyo Gas Transaction gain | 333,172 | — | 333,172 | — | |||||||||||
Crestwood earn-out | — | — | — | 41,097 | |||||||||||
Operating income (loss) | 394,894 | (1,153,012 | ) | 391,022 | (1,420,997 | ) | |||||||||
Other income (expense) | (15,105 | ) | 65 | (15,255 | ) | 158 | |||||||||
Fortune Creek accretion | (4,827 | ) | (4,830 | ) | (9,672 | ) | (9,571 | ) | |||||||
Interest expense | (127,238 | ) | (40,076 | ) | (171,180 | ) | (80,246 | ) | |||||||
Income (loss) before income taxes | 247,724 | (1,197,853 | ) | 194,915 | (1,510,656 | ) | |||||||||
Income tax (expense) benefit | (5,201 | ) | 395,831 | (12,097 | ) | 497,069 | |||||||||
Net income (loss) | $ | 242,523 | $ | (802,022 | ) | $ | 182,818 | $ | (1,013,587 | ) | |||||
Reclassification adjustments related to settlements of derivative contracts into production revenue- net of income tax | (11,287 | ) | (36,992 | ) | (26,042 | ) | (65,581 | ) | |||||||
Net change in derivative fair value - net of income tax | — | 10,923 | — | 72,210 | |||||||||||
Foreign currency translation adjustment | (3,580 | ) | (6,381 | ) | (3,278 | ) | (4,930 | ) | |||||||
Other comprehensive income (loss) | (14,867 | ) | (32,450 | ) | (29,320 | ) | 1,699 | ||||||||
Comprehensive income (loss) | $ | 227,656 | $ | (834,472 | ) | $ | 153,498 | $ | (1,011,888 | ) | |||||
Earnings (loss) per common share - basic | $ | 1.37 | $ | (4.72 | ) | $ | 1.04 | $ | (5.96 | ) | |||||
Earnings (loss) per common share - diluted | $ | 1.37 | $ | (4.72 | ) | $ | 1.04 | $ | (5.96 | ) |
June 30, 2013 | December 31, 2012 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 96,793 | $ | 4,951 | |||
Marketable securities | 118,730 | — | |||||
Total cash, cash equivalents and marketable securities | 215,523 | 4,951 | |||||
Accounts receivable - net of allowance for doubtful accounts | 44,885 | 64,149 | |||||
Derivative assets at fair value | 70,009 | 113,367 | |||||
Other current assets | 25,090 | 25,046 | |||||
Total current assets | 355,507 | 207,513 | |||||
Property, plant and equipment - net | |||||||
Oil and gas properties, full cost method (including unevaluated costs of $281,875 and $307,267, respectively) | 659,935 | 780,960 | |||||
Other property and equipment | 232,915 | 248,098 | |||||
Property, plant and equipment - net | 892,850 | 1,029,058 | |||||
Derivative assets at fair value | 101,141 | 105,270 | |||||
Other assets | 44,653 | 39,947 | |||||
$ | 1,394,151 | $ | 1,381,788 | ||||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 16,074 | $ | 37,131 | |||
Accrued liabilities | 105,766 | 130,660 | |||||
Total current liabilities | 121,840 | 167,791 | |||||
Long-term debt | 1,968,407 | 2,063,206 | |||||
Partnership liability | 128,174 | 130,912 | |||||
Asset retirement obligations | 107,287 | 115,949 | |||||
Derivative liabilities at fair value | 17,693 | 17,485 | |||||
Other liabilities | 19,242 | 19,242 | |||||
Commitments and contingencies (Note 8) | |||||||
Stockholders' equity | |||||||
Preferred stock, par value $0.01, 10,000,000 shares authorized, none outstanding | — | — | |||||
Common stock, $0.01 par value, 400,000,000 shares authorized, and 182,839,101 and 179,015,118 shares issued, respectively | 1,828 | 1,790 | |||||
Paid in capital in excess of par value | 763,288 | 751,394 | |||||
Treasury stock of 6,337,700 and 5,921,102 shares, respectively | (50,620 | ) | (49,495 | ) | |||
Accumulated other comprehensive income | 132,173 | 161,493 | |||||
Retained deficit | (1,815,161 | ) | (1,997,979 | ) | |||
Total stockholders' equity | (968,492 | ) | (1,132,797 | ) | |||
$ | 1,394,151 | $ | 1,381,788 |
Quicksilver Resources Inc. Stockholders’ Equity | |||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Income | Retained Earnings (Deficit) | Total | ||||||||||||||||||
Balances at December 31, 2011 | $ | 1,770 | $ | 737,015 | $ | (46,351 | ) | $ | 214,858 | $ | 354,627 | $ | 1,261,919 | ||||||||||
Net loss | — | — | — | — | (1,013,587 | ) | (1,013,587 | ) | |||||||||||||||
Hedge derivative contract settlements reclassified into earnings from AOCI, net of income tax of $34,238 | — | — | — | (65,581 | ) | — | (65,581 | ) | |||||||||||||||
Net change in derivative fair value, net of income tax of $35,656 | — | — | — | 72,210 | — | 72,210 | |||||||||||||||||
Foreign currency translation adjustment | — | — | — | (4,930 | ) | — | (4,930 | ) | |||||||||||||||
Issuance and vesting of stock compensation | 17 | 10,004 | (2,364 | ) | — | — | 7,657 | ||||||||||||||||
Stock option exercises | 1 | 10 | — | — | — | 11 | |||||||||||||||||
Balances at June 30, 2012, restated (1) | $ | 1,788 | $ | 747,029 | $ | (48,715 | ) | $ | 216,557 | $ | (658,960 | ) | $ | 257,699 | |||||||||
Balances at December 31, 2012 | $ | 1,790 | $ | 751,394 | $ | (49,495 | ) | $ | 161,493 | $ | (1,997,979 | ) | $ | (1,132,797 | ) | ||||||||
Net income | — | — | — | — | 182,818 | 182,818 | |||||||||||||||||
Hedge derivative contract settlements reclassified into production revenue from AOCI, net of income tax of $12,385 | — | — | — | (26,042 | ) | — | (26,042 | ) | |||||||||||||||
Foreign currency translation adjustment | — | — | — | (3,278 | ) | — | (3,278 | ) | |||||||||||||||
Issuance and vesting of stock compensation | 38 | 11,894 | (1,125 | ) | — | — | 10,807 | ||||||||||||||||
Balances at June 30, 2013 | $ | 1,828 | $ | 763,288 | $ | (50,620 | ) | $ | 132,173 | $ | (1,815,161 | ) | $ | (968,492 | ) |
For the Six Months Ended June 30, | |||||||
2013 | 2012 (1) | ||||||
(Restated) | |||||||
Operating activities: | |||||||
Net income (loss) | $ | 182,818 | $ | (1,013,587 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depletion, depreciation and accretion | 33,521 | 102,455 | |||||
Impairment expense | — | 1,517,654 | |||||
Tokyo Gas Transaction gain | (333,172 | ) | — | ||||
Crestwood earn-out | — | (41,097 | ) | ||||
Deferred income tax expense (benefit) | 11,497 | (497,827 | ) | ||||
Non-cash loss from hedging and derivative activities | 9,135 | 8,651 | |||||
Stock-based compensation | 11,163 | 10,021 | |||||
Non-cash interest expense | 21,773 | 3,469 | |||||
Fortune Creek accretion | 9,672 | 9,571 | |||||
Other | 1,548 | 328 | |||||
Changes in assets and liabilities | |||||||
Accounts receivable | 19,264 | 30,600 | |||||
Prepaid expenses and other assets | (1,195 | ) | (5,031 | ) | |||
Accounts payable | (16,443 | ) | (21,838 | ) | |||
Accrued and other liabilities | (27,687 | ) | (3,853 | ) | |||
Net cash provided by (used in) operating activities | (78,106 | ) | 99,516 | ||||
Investing activities: | |||||||
Purchases of property, plant and equipment | (55,849 | ) | (307,169 | ) | |||
Proceeds from Tokyo Gas Transaction | 463,418 | — | |||||
Proceeds from Crestwood earn-out | — | 41,097 | |||||
Proceeds from sale of properties and equipment | 1,681 | 3,372 | |||||
Purchases of marketable securities | (118,656 | ) | — | ||||
Net cash provided by (used in) investing activities | 290,594 | (262,700 | ) | ||||
Financing activities: | |||||||
Issuance of debt | 1,173,306 | 255,775 | |||||
Repayments of debt | (1,264,117 | ) | (88,115 | ) | |||
Debt issuance costs paid | (25,608 | ) | (148 | ) | |||
Distribution of Fortune Creek Partnership funds | (5,009 | ) | (1,845 | ) | |||
Proceeds from exercise of stock options | — | 11 | |||||
Purchase of treasury stock | (1,125 | ) | (2,364 | ) | |||
Net cash provided by (used in) financing activities | (122,553 | ) | 163,314 | ||||
Effect of exchange rate changes in cash | 1,907 | 727 | |||||
Net increase in cash | 91,842 | 857 | |||||
Cash at beginning of period | 4,951 | 13,146 | |||||
Cash at end of period | $ | 96,793 | $ | 14,003 |
Asset Derivatives | Liability Derivatives | ||||||||||||||
June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Level 2 inputs | $ | 163,299 | $ | 207,042 | $ | (31 | ) | $ | 959 | ||||||
Level 3 inputs | 7,851 | 11,595 | 17,724 | 16,526 | |||||||||||
Total | $ | 171,150 | $ | 218,637 | $ | 17,693 | $ | 17,485 |
For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Balance at beginning of period | $ | (9,037 | ) | $ | 21,587 | ||
Total gains (losses) for the period: | |||||||
Unrealized gain (loss) on derivatives | 556 | 35,197 | |||||
Settlements in production revenue | — | (1,037 | ) | ||||
Settlements in net derivative gains (losses) | (1,392 | ) | (8,997 | ) | |||
Unrealized gains reported in OCI | — | (1,405 | ) | ||||
Balance at end of period | $ | (9,873 | ) | $ | 45,345 | ||
Total gains included in net derivative gains attributable to the change in unrealized gains related to assets still held at the reporting date | $ | 2,854 | $ | 35,197 |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Balance at beginning of period | $ | (4,931 | ) | $ | 150,989 | ||
Total gains (losses) for the period: | |||||||
Unrealized gain (loss) on commodity hedges | 538 | 35,525 | |||||
Transfers out of Level 3 | — | (153,418 | ) | ||||
Settlements in Production Revenue | — | (4,775 | ) | ||||
Settlements in Other Revenue | (5,480 | ) | (15,873 | ) | |||
Unrealized gains reported in OCI | — | 32,897 | |||||
Balance at end of period | $ | (9,873 | ) | $ | 45,345 | ||
Total gains included in net derivative gains attributable to the change in unrealized gains related to assets still held at the reporting date | $ | 2,762 | $ | 35,525 |
Production Year | Daily Production Volume | |
MMcfd | ||
Remainder of 2013 | 200 | |
2014 | 170 | |
2015 | 150 | |
2016-2021 | 40 |
(In thousands) | |||
Remainder of 2013 | $ | 32,377 | |
2014 | 37,084 | ||
2015 | 33,191 | ||
2016 | 13,476 | ||
2017 | 12,531 | ||
2018 and thereafter | 41,443 | ||
$ | 170,102 |
(In thousands) | |||
Remainder of 2013 | $ | 965 | |
2014 | 2,039 | ||
2015 | 2,194 | ||
2016 | 569 | ||
$ | 5,767 |
Asset Derivatives | Liability Derivatives | |||||||||||||||
June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||
(In thousands) | (In thousands) | |||||||||||||||
Derivatives not designated as hedges: | ||||||||||||||||
Commodity contracts reported in: | ||||||||||||||||
Current derivative assets | $ | 70,009 | $ | 113,367 | $ | — | $ | — | ||||||||
Noncurrent derivative assets | 103,915 | 107,542 | 2,774 | 2,272 | ||||||||||||
Current derivative liabilities | — | — | — | — | ||||||||||||
Noncurrent derivative liabilities | 315 | 92 | 18,008 | 17,577 | ||||||||||||
Total derivatives not designated as hedges | $ | 174,239 | $ | 221,001 | $ | 20,782 | $ | 19,849 |
For the Three Months Ended June 30, | |||
2012 | |||
Commodity Hedges | |||
(In thousands) | |||
Derivative fair value at beginning of period | $ | 211,163 | |
Settlements in production revenue | (49,999 | ) | |
Ineffectiveness reported in net derivative gains | 6,810 | ||
Unrealized gains reported in OCI | 8,752 | ||
Derivative fair value at end of period | $ | 176,726 | |
For the Six Months Ended June 30, | |||
2012 | |||
Commodity Hedges | |||
(In thousands) | |||
Derivative fair value at beginning of period | $ | 342,799 | |
Settlements in production revenue | (91,736 | ) | |
Settlements in net derivative gains | (3,820 | ) | |
Ineffectiveness reported in net derivative gains | 1,569 | ||
Unrealized gains reported in OCI | 108,646 | ||
Derecognition of hedge | (180,732 | ) | |
Derivative fair value at end of period | $ | 176,726 |
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Net Carrying Value | ||||||||||||
(In thousands) | |||||||||||||||
Marketable securities (held-to-maturity) | |||||||||||||||
Time deposits | $ | 19,880 | $ | 15 | $ | — | $ | 19,895 | |||||||
Commercial paper | 98,776 | 59 | — | 98,835 | |||||||||||
Marketable securities | $ | 118,656 | $ | 74 | $ | — | $ | 118,730 |
June 30, 2013 | December 31, 2012 | ||||||
(In thousands) | |||||||
Oil and gas properties | |||||||
Subject to depletion | $ | 5,639,725 | $ | 5,770,913 | |||
Unevaluated costs | 281,875 | 307,267 | |||||
Accumulated depletion | (5,261,665 | ) | (5,297,220 | ) | |||
Net oil and gas properties | 659,935 | 780,960 | |||||
Other plant and equipment | |||||||
Pipelines and processing facilities | 353,479 | 375,248 | |||||
General properties | 81,628 | 75,147 | |||||
Accumulated depreciation | (202,192 | ) | (202,297 | ) | |||
Net other property and equipment | 232,915 | 248,098 | |||||
Property, plant and equipment, net of accumulated depletion and depreciation | $ | 892,850 | $ | 1,029,058 |
June 30, 2013 | December 31, 2012 | ||||||
(in thousands) | |||||||
Combined Credit Agreements | $ | 190,211 | $ | 388,150 | |||
Senior Secured Second Lien Credit Agreement, net of unamortized discount | 606,250 | — | |||||
Senior Secured Second Lien Notes due 2019, net of unamortized discount | 194,000 | — | |||||
Senior notes due 2015, net of unamortized discount | 12,717 | 435,851 | |||||
Senior notes due 2016, net of unamortized discount | 8,021 | 579,795 | |||||
Senior notes due 2019, net of unamortized discount | 292,925 | 292,622 | |||||
Senior notes due 2021, net of unamortized discount | 308,516 | — | |||||
Senior subordinated notes due 2016 | 350,000 | 350,000 | |||||
Total debt | 1,962,640 | 2,046,418 | |||||
Unamortized deferred gain-terminated interest rate swaps | 5,767 | 16,788 | |||||
Current portion of long-term debt | — | — | |||||
Long-term debt | $ | 1,968,407 | $ | 2,063,206 |
• | Reduce the global borrowing base to $350 million from $850 million, including a reduction due to the Tokyo Gas Transaction |
• | Reduce the minimum required interest coverage ratio to the following: |
Period | Interest Coverage Ratio | Period | Interest Coverage Ratio | |||
Q2 2013 | 1.25 | Q1 2015 | 1.10 | |||
Q3 2013 | 1.25 | Q2 2015 | 1.15 | |||
Q4 2013 | 1.25 | Q3 2015 | 1.15 | |||
Q1 2014 | 1.20 | Q4 2015 | 1.20 | |||
Q2 2014 | 1.15 | Q1 2016 | 1.50 | |||
Q3 2014 | 1.10 | Q2 2016 | 2.00 | |||
Q4 2014 | 1.10 |
• | Permit up to $825 million of second lien debt, subject to customary intercreditor terms |
• | Permit redemption of junior debt with the proceeds from certain asset sales and permitted second lien debt, provided utilization under the global borrowing base after giving effect to such redemption is less than 75% and compliance with other customary conditions |
• | Reduce the maximum senior secured debt leverage ratio to 2.0 and exclude permitted second lien debt from the senior secured debt definition |
• | Increase the applicable margin by 0.75% for each type of loan and issued letters of credit |
• | Increase the minimum mortgage properties requirement to 87.5% from 80% of proved hydrocarbon interests evaluated in the then most recent reserve report |
• | Amend certain definitions which impact the financial covenant calculations. |
Priority on Collateral and Structural Seniority (1) | ||||||||||||||||
Highest priority | Lowest priority | |||||||||||||||
First Lien | Second Lien | Senior Unsecured | Senior Subordinated | |||||||||||||
Combined Credit Agreements | Senior Secured Second Lien Credit Agreement | Senior Secured Second Lien Notes due 2019 | 2015 Senior Notes | 2016 Senior Notes | 2019 Senior Notes | 2021 Senior Notes | Senior Subordinated Notes | |||||||||
Principal amount (2) | $350 million | $625 million | $200 million | $13 million | $8 million | $298 million | $325 million | $350 million | ||||||||
Scheduled maturity date (3) | September 6, 2016 | June 21, 2019 | June 21, 2019 | August 1, 2015 | January 1, 2016 | August 15, 2019 | July 1, 2021 | April 1, 2016 | ||||||||
Interest rate on outstanding borrowings at June 30, 2013 (4) | 3.88% | 7.00% | 7.00% | 8.25% | 11.75% | 9.125% | 11.00% | 7.125% | ||||||||
Base interest rate options (5) (6) | LIBOR, ABR, CDOR | LIBOR floor of 1.25%; ABR floor 2.25% | LIBOR floor of 1.25% | N/A | N/A | N/A | N/A | N/A | ||||||||
Financial covenants (7) | - Minimum current ratio of 1.0 - Minimum EBITDA to cash interest expense ratio of 1.25 - Maximum senior secured debt leverage ratio of 2.0 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||
Significant restrictive covenants (7) | - Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases- Asset sales - Affiliate transactions - Limitations on derivatives and investments | - Incurrence of debt - Incurrence of liens and 1st lien cap -Payment of dividends - Equity purchases - Asset sales - Affiliate transactions | - Incurrence of debt - Incurrence of liens and 1st lien cap -Payment of dividends - Equity purchases - Asset sales - Affiliate transactions | - Asset sales | - Asset sales | - Incurrence of debt - Incurrence of liens -Payment of dividends - Equity purchases - Asset sales - Affiliate transactions | - Incurrence of debt - Incurrence of liens -Payment of dividends - Equity purchases - Asset sales - Affiliate transactions | - Incurrence of debt - Incurrence of liens -Payment of dividends - Equity purchases - Asset sales - Affiliate transactions | ||||||||
Optional redemption (7) | Any time | Any time, subject to re-pricing event June 21, 2014: 102 2015: 101 | Any time, subject to re-pricing event June 21, 2014: 102 2015: 101 | August 1, 2013: 101.938 2014: par | July 1, 2013: 105.875 2014: 102.938 2015: par | August 15, 2014: 104.563 2015: 103.042 2016: 101.521 2017: par | July 1, 2019: 102.000 2020: par | April 1, 2013: 101.188 2014: par | ||||||||
Make-whole redemption (7) | N/A | N/A | N/A | N/A | Callable prior to July 1, 2013 at make-whole call price of Treasury +50 bps | Callable prior to August 15, 2014 at make-whole call price of Treasury +50 bps | N/A | N/A | ||||||||
Change of control (7) | Event of default | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | Put at 101% of principal plus accrued interest | ||||||||
Estimated fair value (8) | $190.2 million | $560.2 million | $179.3 million | $11.1 million | $7.7 million | $253.3 million | $284.4 million | $283.5 million |
(1) | Borrowings under the Amended and Restated U.S. Credit Facility, Senior Secured Second Lien Credit Agreement and Senior Secured Second Lien Notes due 2019 are guaranteed by certain of Quicksilver’s domestic subsidiaries and are secured (on a first priority basis with respect to the Amended and Restated U.S. Credit Facility and on a second priority basis with respect to the Senior Secured Second Lien Credit Agreement and the Senior Secured Second Lien Notes due 2019) by 100% of the equity interests of each of Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., Barnett Shale Operating LLC, Silver Stream Pipeline Company LLC, QPP Parent LLC and QPP Holdings LLC (collectively, the “Domestic Pledged Equity”), 65% of the equity interests of Quicksilver Resources Canada Inc. (“Quicksilver Canada”) and Quicksilver Production Partners Operating Ltd. (with respect to the Amended and Restated U.S. Credit Facility, on a ratable basis with borrowings under the Amended and Restated Canadian Credit Facility) and the majority of Quicksilver's domestic proved oil and gas properties and related assets, (the “Domestic Pledged Property”). Borrowings under the Amended and Restated Canadian Credit Facility are guaranteed by Quicksilver and certain of its domestic subsidiaries and are secured by the Domestic Pledged Equity, the Domestic Pledged Property, 100% of the equity interests of Quicksilver Canada (65% of which is on a ratable basis with the borrowings under the Amended and Restated U.S. Credit Facility) and any Canadian restricted subsidiaries, under the Amended and Restated Canadian Credit Facility, and 65% of the equity interests of Quicksilver Production Partners Operating Ltd. (which is on a ratable basis with the borrowings under the Amended and Restated U.S. Credit Facility) and the majority of Quicksilver Canada's oil and gas properties and related assets. The other debt presented is based upon structural seniority and priority of payment. |
(2) | The principal amount for the Combined Credit Agreements represents the global borrowing base as of June 30, 2013. |
(3) | The Combined Credit Agreements are required to be repaid 91 days prior to the maturity of the 2015 Senior Notes, the 2016 Senior Notes, the 2016 Senior Subordinated Notes, the Senior Secured Second Lien Credit Agreement or the Senior Secured Second Lien Notes due 2019, if on the applicable date any amount of such debt remains outstanding. The Senior Secured Second Lien Credit Agreement and Senior Secured Second Lien Notes due 2019 are required to be repaid (1) 91 days prior the maturity of the 2019 Notes if more than $100 million of 2019 Senior Notes remain outstanding and (2) 91 days prior to the maturity of the 2015 Senior Notes, the 2016 Senior Notes or the 2016 Senior Subordinated Notes if on the applicable date the aggregate amount of all such notes remaining outstanding is greater than $100 million. |
(4) | Represents the weighted average borrowing rate payable to lenders. |
(5) | Amounts outstanding under the Amended and Restated U.S. Credit Facility bear interest, at our election, at (i) adjusted LIBOR (as defined in the Amended and Restated U.S. Credit Facility) plus an applicable margin between 2.75% to 3.75%, (ii) ABR (as defined in the Amended and Restated U.S. Credit Facility), which is the greatest of (a) the prime rate announced by JPMorgan, (b) the federal funds rate plus 0.50% and (c) adjusted LIBOR for an interest period of one month plus 1.00%, plus, in each case under scenario (ii), an applicable margin between 1.75% to 2.75%. We also pay a per annum fee on the LC Exposure (as defined in the Amended and Restated U.S. Credit Facility) of all letters of credit issued under the Amended and Restated U.S. Credit Facility equal to the applicable margin, with respect to adjusted LIBOR loans, and a commitment fee on the unused availability under the Amended and Restated U.S. Credit Facility of 0.50%. |
(6) | Amounts outstanding under the Amended and Restated Canadian Credit Facility bear interest, at our election, at (i) the CDOR Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 2.75% and 3.75%, (ii) the Canadian Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.75% and 2.75%, (iii) the U.S. Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.75% and 2.75% and (iv) adjusted LIBOR (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 2.75% to 3.75%. We pay a per annum fee on the LC Exposure (as defined in the Amended and Restated Canadian Credit Facility) of all letters of credit issued under the Amended and Restated Canadian Credit Facility equal to the applicable margin, with respect to adjusted LIBOR loans, and a commitment fee on the unused availability under the Amended and Restated Canadian Credit Facility of 0.50%. |
(7) | The information presented in this table is qualified in all respects by reference to the full text of the covenants, provisions and related definitions contained in the documents governing the various components of our debt. |
(8) | The estimated fair value is determined using market quotations based on recent trade activity for fixed rate obligations (“Level 2” inputs). Our Senior Secured Second Lien Credit Agreement and Senior Secured Second Lien Notes due 2019 feature variable interest rates and we estimate their fair value by using market quotations based on recent trade activity (“Level 3” input). We consider our Combined Credit Agreements which have a variable interest rate to have a fair value equal to their carrying value (“Level 1” input). |
(In thousands) | |||
Beginning asset retirement obligations | $ | 116,526 | |
Additional liability incurred | 3,124 | ||
Change in estimates | 1,691 | ||
Accretion expense | 2,644 | ||
Asset retirement costs incurred | (1,053 | ) | |
Settlement of liability in excess of obligation recorded | 269 | ||
Disposition | (12,230 | ) | |
Currency translation adjustment | (3,107 | ) | |
Ending asset retirement obligations | 107,864 | ||
Less current portion | (577 | ) | |
Long-term asset retirement obligation | $ | 107,287 |
2013 | 2012 | ||
Weighted avg grant date fair value | $0.99 | $4.21 | |
Weighted avg risk-free interest rate | 0.44% | 1.14% | |
Expected life | 2.9 years | 6.0 years | |
Wtd avg volatility | 64.3% | 68.2% | |
Expected dividends | — | — |
Shares | Wtd Avg Exercise Price | Wtd Avg Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
(In years) | (In thousands) | |||||||||||
Outstanding at January 1, 2013 | 4,979,980 | $ | 10.23 | |||||||||
Granted | 888,197 | 2.33 | ||||||||||
Expired | (53,588 | ) | 9.10 | |||||||||
Outstanding at June 30, 2013 | 5,814,589 | $ | 9.04 | 7.1 | $ | — | ||||||
Exercisable at June 30, 2013 | 4,575,938 | $ | 9.31 | 6.7 | $ | — |
Payable in shares | Payable in cash | ||||||||||||
Shares | Wtd Avg Grant Date Fair Value | Shares | Wtd Avg Grant Date Fair Value | ||||||||||
Outstanding at January 1, 2013 | 3,099,135 | $ | 8.48 | 678,217 | $ | 7.71 | |||||||
Granted | 5,133,495 | 2.96 | 1,322,352 | 2.97 | |||||||||
Vested | (1,419,440 | ) | 9.11 | (271,864 | ) | 8.32 | |||||||
Forfeited | (636,458 | ) | 3.98 | (183,721 | ) | 3.94 | |||||||
Outstanding at June 30, 2013 | 6,176,732 | $ | 4.21 | 1,544,984 | $ | 3.99 |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(Restated) | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income (loss) attributable to Quicksilver | $ | 242,523 | $ | (802,022 | ) | $ | 182,818 | $ | (1,013,587 | ) | |||||
Basic income allocable to participating securities (1) | (7,020 | ) | — | $ | (5,126 | ) | $ | — | |||||||
Income (loss) available to shareholders | $ | 235,503 | $ | (802,022 | ) | $ | 177,692 | $ | (1,013,587 | ) | |||||
Weighted average common shares – basic | 171,357 | 170,043 | 171,261 | 169,991 | |||||||||||
Effect of dilutive securities (2) | |||||||||||||||
Share-based compensation awards | 5 | — | 4 | — | |||||||||||
Weighted average common shares – diluted | 171,362 | 170,043 | 171,265 | 169,991 | |||||||||||
Earnings (loss) per common share – basic | $ | 1.37 | $ | (4.72 | ) | $ | 1.04 | $ | (5.96 | ) | |||||
Earnings (loss) per common share – diluted | $ | 1.37 | $ | (4.72 | ) | $ | 1.04 | $ | (5.96 | ) |
(1) | Restricted share awards that contain nonforfeitable rights to dividends are participating securities and, therefore, should be included in computing earnings using the two-class method. Participating securities, however, do not participate in undistributed net losses because there is no contractual obligation to do so. |
(2) | For the three months ended June 30, 2013, 5.3 million shares associated with our stock options and 1.0 million shares associated with our unvested restricted stock units were antidilutive; therefore, excluded from the diluted share calculation. For the three months ended June 30, 2012, 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units were antidilutive; therefore, excluded from the diluted share calculation. For the six months ended June 30, 2013, 5.2 million shares associated with our stock options and 1.0 million |
June 30, 2013 | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidating Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||||
Current assets | $ | 315,840 | $ | 9,234 | $ | 61,819 | $ | (21,456 | ) | $ | 365,437 | $ | 12,838 | $ | 2,866 | $ | (25,634 | ) | $ | 355,507 | |||||||||||||||
Property and equipment | 496,367 | 16,029 | 295,864 | — | 808,260 | — | 84,590 | — | 892,850 | ||||||||||||||||||||||||||
Investment in subsidiaries (equity method) | (214,588 | ) | — | (31,168 | ) | 214,588 | (31,168 | ) | (31,167 | ) | — | 62,335 | — | ||||||||||||||||||||||
Other assets | 494,776 | — | 41,741 | (390,723 | ) | 145,794 | — | — | — | 145,794 | |||||||||||||||||||||||||
Total assets | $ | 1,092,395 | $ | 25,263 | $ | 368,256 | $ | (197,591 | ) | $ | 1,288,323 | $ | (18,329 | ) | $ | 87,456 | $ | 36,701 | $ | 1,394,151 | |||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||||||||
Current liabilities | $ | 98,542 | $ | 11,417 | $ | 44,472 | $ | (21,456 | ) | $ | 132,975 | $ | 12,819 | $ | 1,680 | $ | (25,634 | ) | $ | 121,840 | |||||||||||||||
Long-term liabilities | 1,962,342 | 19,242 | 520,231 | (390,723 | ) | 2,111,092 | — | 1,537 | 128,174 | 2,240,803 | |||||||||||||||||||||||||
Stockholders' equity | (968,489 | ) | (5,396 | ) | (196,447 | ) | 214,588 | (955,744 | ) | (31,148 | ) | 84,239 | (65,839 | ) | (968,492 | ) | |||||||||||||||||||
Total liabilities and equity | $ | 1,092,395 | $ | 25,263 | $ | 368,256 | $ | (197,591 | ) | $ | 1,288,323 | $ | (18,329 | ) | $ | 87,456 | $ | 36,701 | $ | 1,394,151 |
December 31, 2012 | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidating Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||||
Current assets | $ | 261,130 | $ | 105,695 | $ | 76,088 | $ | (222,586 | ) | $ | 220,327 | $ | 13,250 | $ | 391 | $ | (26,455 | ) | $ | 207,513 | |||||||||||||||
Property and equipment | 621,073 | 20,007 | 296,462 | — | 937,542 | — | 91,516 | — | 1,029,058 | ||||||||||||||||||||||||||
Investment in subsidiaries (equity method) | (191,725 | ) | — | (42,883 | ) | 191,725 | (42,883 | ) | (42,905 | ) | — | 85,788 | — | ||||||||||||||||||||||
Other assets | 346,972 | — | 41,865 | (243,620 | ) | 145,217 | — | — | — | 145,217 | |||||||||||||||||||||||||
Total assets | $ | 1,037,450 | $ | 125,702 | $ | 371,532 | $ | (274,481 | ) | $ | 1,260,203 | $ | (29,655 | ) | $ | 91,907 | $ | 59,333 | $ | 1,381,788 | |||||||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||||||||||||||||||
Current liabilities | $ | 255,678 | $ | 112,133 | $ | 33,475 | $ | (222,586 | ) | $ | 178,700 | $ | 13,230 | $ | 2,316 | $ | (26,455 | ) | $ | 167,791 | |||||||||||||||
Long-term liabilities | 1,914,568 | 19,242 | 524,107 | (243,620 | ) | 2,214,297 | — | 1,585 | 130,912 | 2,346,794 | |||||||||||||||||||||||||
Stockholders' equity | (1,132,796 | ) | (5,673 | ) | (186,050 | ) | 191,725 | (1,132,794 | ) | (42,885 | ) | 88,006 | (45,124 | ) | (1,132,797 | ) | |||||||||||||||||||
Total liabilities and equity | $ | 1,037,450 | $ | 125,702 | $ | 371,532 | $ | (274,481 | ) | $ | 1,260,203 | $ | (29,655 | ) | $ | 91,907 | $ | 59,333 | $ | 1,381,788 |
For the Three Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidated Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Revenue | $ | 131,925 | $ | 202 | $ | 43,370 | $ | — | $ | 175,497 | $ | — | $ | 5,737 | $ | (5,737 | ) | $ | 175,497 | ||||||||||||||||
Operating expenses | 86,194 | 108 | 30,740 | — | 117,042 | — | 2,470 | (5,737 | ) | 113,775 | |||||||||||||||||||||||||
Tokyo Gas Transaction gain | 333,172 | — | — | — | 333,172 | — | — | — | 333,172 | ||||||||||||||||||||||||||
Equity in net earnings of subsidiaries | (8,890 | ) | — | (1,558 | ) | 8,890 | (1,558 | ) | 3,269 | — | (1,711 | ) | — | ||||||||||||||||||||||
Operating income (loss) | 370,013 | 94 | 11,072 | 8,890 | 390,069 | 3,269 | 3,267 | (1,711 | ) | 394,894 | |||||||||||||||||||||||||
Fortune Creek accretion | — | — | — | — | — | — | — | (4,827 | ) | (4,827 | ) | ||||||||||||||||||||||||
Interest expense and other | (122,549 | ) | — | (19,796 | ) | — | (142,345 | ) | — | 2 | — | (142,343 | ) | ||||||||||||||||||||||
Income tax (expense) benefit | (4,941 | ) | — | (260 | ) | — | (5,201 | ) | — | — | — | (5,201 | ) | ||||||||||||||||||||||
Net income (loss) | $ | 242,523 | $ | 94 | $ | (8,984 | ) | $ | 8,890 | $ | 242,523 | $ | 3,269 | $ | 3,269 | $ | (6,538 | ) | $ | 242,523 | |||||||||||||||
Other comprehensive income (loss) | (11,898 | ) | — | (2,969 | ) | 2,969 | (11,898 | ) | — | — | — | (11,898 | ) | ||||||||||||||||||||||
Equity in OCI of subsidiaries | (2,969 | ) | — | — | — | (2,969 | ) | — | — | — | (2,969 | ) | |||||||||||||||||||||||
Comprehensive income (loss) | $ | 227,656 | $ | 94 | $ | (11,953 | ) | $ | 11,859 | $ | 227,656 | $ | 3,269 | $ | 3,269 | $ | (6,538 | ) | $ | 227,656 |
For the Three Months Ended June 30, 2012 (Restated) | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidated Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Revenue | $ | 172,818 | $ | 1,078 | $ | 20,817 | $ | (695 | ) | $ | 194,018 | $ | — | $ | 3,202 | $ | (3,202 | ) | $ | 194,018 | |||||||||||||||
Operating expenses | 1,166,469 | 893 | 181,749 | (695 | ) | 1,348,416 | — | 1,816 | (3,202 | ) | 1,347,030 | ||||||||||||||||||||||||
Equity in net earnings of subsidiaries | (122,952 | ) | — | (1,051 | ) | 122,952 | (1,051 | ) | 1,386 | — | (335 | ) | — | ||||||||||||||||||||||
Operating income (loss) | (1,116,603 | ) | 185 | (161,983 | ) | 122,952 | (1,155,449 | ) | 1,386 | 1,386 | (335 | ) | (1,153,012 | ) | |||||||||||||||||||||
Fortune Creek accretion | — | — | — | — | — | — | — | (4,830 | ) | (4,830 | ) | ||||||||||||||||||||||||
Interest expense and other | (37,971 | ) | — | (2,040 | ) | — | (40,011 | ) | — | — | — | (40,011 | ) | ||||||||||||||||||||||
Income tax (expense) benefit | 352,694 | (65 | ) | 40,809 | — | 393,438 | — | — | 2,393 | 395,831 | |||||||||||||||||||||||||
Net income | $ | (801,880 | ) | $ | 120 | $ | (123,214 | ) | $ | 122,952 | $ | (802,022 | ) | $ | 1,386 | $ | 1,386 | $ | (2,772 | ) | $ | (802,022 | ) | ||||||||||||
Other comprehensive income (loss) | (29,498 | ) | — | (2,952 | ) | 2,952 | (29,498 | ) | — | — | — | (29,498 | ) | ||||||||||||||||||||||
Equity in OCI of subsidiaries | (2,952 | ) | — | — | — | (2,952 | ) | — | — | — | (2,952 | ) | |||||||||||||||||||||||
Comprehensive income (loss) | $ | (834,330 | ) | $ | 120 | $ | (126,166 | ) | $ | 125,904 | $ | (834,472 | ) | $ | 1,386 | $ | 1,386 | $ | (2,772 | ) | $ | (834,472 | ) |
For the Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidated Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Revenue | $ | 220,826 | $ | 416 | $ | 72,959 | $ | — | $ | 294,201 | $ | — | $ | 11,062 | $ | (11,062 | ) | $ | 294,201 | ||||||||||||||||
Operating expenses | 183,217 | 138 | 59,199 | — | 242,554 | — | 4,859 | (11,062 | ) | 236,351 | |||||||||||||||||||||||||
Tokyo Gas Transaction gain | 333,172 | — | — | — | 333,172 | — | — | — | 333,172 | ||||||||||||||||||||||||||
Equity in net earnings of subsidiaries | (13,081 | ) | — | (3,466 | ) | 13,081 | (3,466 | ) | 6,206 | — | (2,740 | ) | — | ||||||||||||||||||||||
Operating income (loss) | 357,700 | 278 | 10,294 | 13,081 | 381,353 | 6,206 | 6,203 | (2,740 | ) | 391,022 | |||||||||||||||||||||||||
Fortune Creek accretion | — | — | — | — | — | — | — | (9,672 | ) | (9,672 | ) | ||||||||||||||||||||||||
Interest expense and other | (163,717 | ) | — | (22,721 | ) | — | (186,438 | ) | — | 3 | — | (186,435 | ) | ||||||||||||||||||||||
Income tax (expense) benefit | (11,165 | ) | — | (932 | ) | — | (12,097 | ) | — | — | — | (12,097 | ) | ||||||||||||||||||||||
Net income (loss) | $ | 182,818 | $ | 278 | $ | (13,359 | ) | $ | 13,081 | $ | 182,818 | $ | 6,206 | $ | 6,206 | $ | (12,412 | ) | $ | 182,818 | |||||||||||||||
Other comprehensive income (loss) | (22,900 | ) | — | (6,420 | ) | 6,420 | (22,900 | ) | — | — | — | (22,900 | ) | ||||||||||||||||||||||
Equity in OCI of subsidiaries | (6,420 | ) | — | — | — | (6,420 | ) | — | — | — | (6,420 | ) | |||||||||||||||||||||||
Comprehensive income (loss) | $ | 153,498 | $ | 278 | $ | (19,779 | ) | $ | 19,501 | $ | 153,498 | $ | 6,206 | $ | 6,206 | $ | (12,412 | ) | $ | 153,498 |
For the Six Months Ended June 30, 2012 (Restated) | |||||||||||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non- Guarantor Subsidiaries | Restricted Subsidiary Eliminations | Quicksilver and Restricted Subsidiaries | Unrestricted Non- Guarantor Subsidiaries | Fortune Creek | Consolidated Eliminations | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Revenue | $ | 321,408 | $ | 2,208 | $ | 44,866 | $ | (1,598 | ) | $ | 366,884 | $ | — | $ | 5,599 | $ | (5,599 | ) | $ | 366,884 | |||||||||||||||
Operating expenses | 1,482,081 | 1,802 | 349,209 | (1,598 | ) | 1,831,494 | — | 3,083 | (5,599 | ) | 1,828,978 | ||||||||||||||||||||||||
Crestwood earn-out | 41,097 | — | — | — | 41,097 | — | — | — | 41,097 | ||||||||||||||||||||||||||
Equity in net earnings of subsidiaries | (233,294 | ) | — | (4,662 | ) | 233,294 | (4,662 | ) | 2,516 | — | 2,146 | — | |||||||||||||||||||||||
Operating income (loss) | (1,352,870 | ) | 406 | (309,005 | ) | 233,294 | (1,428,175 | ) | 2,516 | 2,516 | 2,146 | (1,420,997 | ) | ||||||||||||||||||||||
Fortune Creek accretion | — | — | — | — | — | — | — | (9,571 | ) | (9,571 | ) | ||||||||||||||||||||||||
Interest expense and other | (76,614 | ) | — | (3,474 | ) | — | (80,088 | ) | — | — | — | (80,088 | ) | ||||||||||||||||||||||
Income tax (expense) benefit | 416,039 | (142 | ) | 78,779 | — | 494,676 | — | — | 2,393 | 497,069 | |||||||||||||||||||||||||
Net income | $ | (1,013,445 | ) | $ | 264 | $ | (233,700 | ) | $ | 233,294 | $ | (1,013,587 | ) | $ | 2,516 | $ | 2,516 | $ | (5,032 | ) | $ | (1,013,587 | ) | ||||||||||||
Other comprehensive income (loss) | (7,739 | ) | — | 9,438 | (9,438 | ) | (7,739 | ) | — | — | — | (7,739 | ) | ||||||||||||||||||||||
Equity in OCI of subsidiaries | 9,438 | — | — | — | 9,438 | — | — | — | 9,438 | ||||||||||||||||||||||||||
Comprehensive income (loss) | $ | (1,011,746 | ) | $ | 264 | $ | (224,262 | ) | $ | 223,856 | $ | (1,011,888 | ) | $ | 2,516 | $ | 2,516 | $ | (5,032 | ) | $ | (1,011,888 | ) |
For the Six Months Ended June 30, 2013 | |||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non-Guarantor Subsidiaries | Quicksilver and Restricted Subsidiaries | Unrestricted Non-Guarantor Subsidiaries | Fortune Creek | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Net cash flow provided by (used in) operating activities | $ | (102,770 | ) | $ | (37 | ) | $ | 18,791 | $ | (84,016 | ) | $ | — | $ | 5,910 | $ | (78,106 | ) | |||||||||
Purchases of property, plant and equipment | (36,840 | ) | 37 | (18,558 | ) | (55,361 | ) | — | (488 | ) | (55,849 | ) | |||||||||||||||
Proceeds from Tokyo Gas Transaction | 463,418 | — | — | 463,418 | — | — | 463,418 | ||||||||||||||||||||
Proceeds from sale of properties and equipment | 1,664 | — | 17 | 1,681 | — | — | 1,681 | ||||||||||||||||||||
Purchase of marketable securities | (118,656 | ) | — | — | (118,656 | ) | — | — | (118,656 | ) | |||||||||||||||||
Net cash flow provided by (used in) investing activities | 309,586 | 37 | (18,541 | ) | 291,082 | — | (488 | ) | 290,594 | ||||||||||||||||||
Issuance of debt | 1,170,266 | — | 3,040 | 1,173,306 | — | — | 1,173,306 | ||||||||||||||||||||
Repayments of debt | (1,113,704 | ) | — | (150,413 | ) | (1,264,117 | ) | — | — | (1,264,117 | ) | ||||||||||||||||
Debt issuance costs paid | (25,608 | ) | — | — | (25,608 | ) | — | — | (25,608 | ) | |||||||||||||||||
Intercompany note | (147,103 | ) | — | 147,103 | — | — | — | — | |||||||||||||||||||
Distribution of Fortune Creek Partnership funds | — | — | — | — | — | (5,009 | ) | (5,009 | ) | ||||||||||||||||||
Purchase of treasury stock | (1,125 | ) | — | — | (1,125 | ) | — | — | (1,125 | ) | |||||||||||||||||
Net cash flow provided by (used in) financing activities | (117,274 | ) | — | (270 | ) | (117,544 | ) | — | (5,009 | ) | (122,553 | ) | |||||||||||||||
Effect of exchange rates on cash | — | — | 20 | 20 | — | 1,887 | 1,907 | ||||||||||||||||||||
Net increase (decrease) in cash and equivalents | 89,542 | — | — | 89,542 | — | 2,300 | 91,842 | ||||||||||||||||||||
Cash and equivalents at beginning of period | 4,618 | — | — | 4,618 | — | 333 | 4,951 | ||||||||||||||||||||
Cash and equivalents at end of period | $ | 94,160 | $ | — | $ | — | $ | 94,160 | $ | — | $ | 2,633 | $ | 96,793 |
For the Six Months Ended June 30, 2012 (Restated) | |||||||||||||||||||||||||||
Quicksilver Resources Inc. | Restricted Guarantor Subsidiaries | Restricted Non-Guarantor Subsidiaries | Quicksilver and Restricted Subsidiaries | Unrestricted Non-Guarantor Subsidiaries | Fortune Creek | Quicksilver Resources Inc. Consolidated | |||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Net cash flow provided by operating activities | $ | 57,359 | $ | 590 | $ | 32,987 | $ | 90,936 | $ | 2 | $ | 8,578 | $ | 99,516 | |||||||||||||
Purchases of property, plant and equipment | (140,256 | ) | (590 | ) | (157,508 | ) | (298,354 | ) | — | (8,815 | ) | (307,169 | ) | ||||||||||||||
Proceeds from Crestwood earn-out | 41,097 | — | — | 41,097 | — | — | 41,097 | ||||||||||||||||||||
Proceeds from sale of properties and equipment | 3,060 | — | 312 | 3,372 | — | — | 3,372 | ||||||||||||||||||||
Net cash flow used by investing activities | (96,099 | ) | (590 | ) | (157,196 | ) | (253,885 | ) | — | (8,815 | ) | (262,700 | ) | ||||||||||||||
Issuance of debt | 119,000 | — | 136,775 | 255,775 | — | — | 255,775 | ||||||||||||||||||||
Repayments of debt | (75,018 | ) | — | (13,097 | ) | (88,115 | ) | — | — | (88,115 | ) | ||||||||||||||||
Debt issuance costs paid | (148 | ) | — | — | (148 | ) | — | — | (148 | ) | |||||||||||||||||
Distribution of Fortune Creek Partnership funds | — | — | — | — | — | (1,845 | ) | (1,845 | ) | ||||||||||||||||||
Proceeds from exercise of stock options | 11 | — | — | 11 | — | — | 11 | ||||||||||||||||||||
Purchase of treasury stock | (2,364 | ) | — | — | (2,364 | ) | — | — | (2,364 | ) | |||||||||||||||||
Net cash flow provided by (used in) financing activities | 41,481 | — | 123,678 | 165,159 | — | (1,845 | ) | 163,314 | |||||||||||||||||||
Effect of exchange rates on cash | — | — | 531 | 531 | — | 196 | 727 | ||||||||||||||||||||
Net increase (decrease) in cash and equivalents | 2,741 | — | — | 2,741 | 2 | (1,886 | ) | 857 | |||||||||||||||||||
Cash and equivalents at beginning of period | 363 | — | — | 363 | — | 12,783 | 13,146 | ||||||||||||||||||||
Cash and equivalents at end of period | $ | 3,104 | $ | — | $ | — | $ | 3,104 | $ | 2 | $ | 10,897 | $ | 14,003 |
Exploration & Production | Quicksilver Consolidated | ||||||||||||||||||||||
U.S. | Canada | Midstream | Corporate | Elimination | |||||||||||||||||||
For the Three Months Ended June 30: | (In thousands) | ||||||||||||||||||||||
2013 | |||||||||||||||||||||||
Revenue | $ | 140,393 | $ | 34,264 | $ | 6,576 | $ | — | $ | (5,736 | ) | $ | 175,497 | ||||||||||
DD&A | 10,323 | 3,047 | 1,307 | 588 | — | 15,265 | |||||||||||||||||
Operating income (loss) | 392,786 | 16,209 | 3,362 | (17,463 | ) | — | 394,894 | ||||||||||||||||
Property and equipment costs incurred | 14,760 | 2,620 | 675 | 9,344 | — | 27,399 | |||||||||||||||||
2012 (Restated) | |||||||||||||||||||||||
Revenue | $ | 166,642 | $ | 26,249 | $ | 5,024 | $ | — | $ | (3,897 | ) | $ | 194,018 | ||||||||||
DD&A | 39,410 | 6,700 | 1,320 | 586 | — | 48,016 | |||||||||||||||||
Impairment expense | 1,042,737 | 156,989 | — | — | — | 1,199,726 | |||||||||||||||||
Operating income (loss) | (975,741 | ) | (158,465 | ) | 184 | (18,990 | ) | — | (1,153,012 | ) | |||||||||||||
Property and equipment costs incurred | 44,546 | 103,778 | 5,459 | 1,914 | — | 155,697 | |||||||||||||||||
For the Six Months Ended June 30: | |||||||||||||||||||||||
2013 | |||||||||||||||||||||||
Revenue | $ | 221,949 | $ | 70,523 | $ | 12,791 | $ | — | $ | (11,062 | ) | 294,201 | |||||||||||
DD&A | 23,451 | 6,237 | 2,647 | 1,186 | — | 33,521 | |||||||||||||||||
Operating income (loss) | 399,710 | 19,050 | 6,486 | (34,224 | ) | — | 391,022 | ||||||||||||||||
Property and equipment costs incurred | 35,313 | 5,684 | 755 | 9,984 | — | 51,736 | |||||||||||||||||
2012 (Restated) | |||||||||||||||||||||||
Revenue | $ | 308,418 | $ | 56,382 | $ | 9,282 | $ | — | $ | (7,198 | ) | 366,884 | |||||||||||
DD&A | 81,227 | 17,516 | 2,528 | 1,184 | — | 102,455 | |||||||||||||||||
Impairment expense | 1,220,777 | 296,877 | — | — | — | 1,517,654 | |||||||||||||||||
Operating income (loss) | (1,083,053 | ) | (299,666 | ) | 406 | (38,684 | ) | — | (1,420,997 | ) | |||||||||||||
Property and equipment costs incurred | 116,977 | 157,401 | 11,439 | 5,447 | — | 291,264 | |||||||||||||||||
Property, plant and equipment-net | |||||||||||||||||||||||
June 30, 2013 | $ | 490,516 | $ | 294,405 | $ | 100,619 | $ | 7,310 | $ | — | $ | 892,850 | |||||||||||
December 31, 2012 | 614,071 | 294,921 | 111,523 | 8,543 | — | 1,029,058 | |||||||||||||||||
Total assets | |||||||||||||||||||||||
June 30, 2013 | 905,866 | 368,256 | 112,719 | 7,310 | — | $ | 1,394,151 | ||||||||||||||||
December 31, 2012 | 784,104 | 371,532 | 217,609 | 8,543 | — | 1,381,788 |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Interest, net of capitalized interest | $ | 129,569 | $ | 77,940 | |||
Income taxes | 1,108 | (1,565 | ) |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Working capital related to capital expenditures | $ | 5,742 | $ | 98,692 |
ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | 2013 Highlights – a summary of significant activities and events affecting Quicksilver |
• | 2013 Capital Program – a summary of our planned capital expenditures during 2013 |
• | Results of Operations – an analysis of our consolidated results of operations for the three- and six-month periods presented in our financial statements |
• | Liquidity, Capital Resources and Financial Position – an analysis of our cash flows, sources and uses of cash, contractual obligations and commercial commitments |
Natural Gas | NGL | Oil | Total | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||
Barnett Shale | $ | 50.3 | $ | 41.7 | $ | 17.5 | $ | 34.3 | $ | 1.7 | $ | 3.0 | $ | 69.5 | $ | 79.0 | |||||||||||||||
Other U.S. | — | 0.1 | — | 0.1 | 2.9 | 3.3 | 2.9 | 3.5 | |||||||||||||||||||||||
Hedging | 14.4 | 45.4 | — | 6.3 | — | — | 14.4 | 51.7 | |||||||||||||||||||||||
U.S. | 64.7 | 87.2 | 17.5 | 40.7 | 4.6 | 6.3 | 86.8 | 134.2 | |||||||||||||||||||||||
Horseshoe Canyon | 14.7 | 8.9 | — | — | — | — | 14.7 | 8.9 | |||||||||||||||||||||||
Horn River | 16.8 | 2.6 | — | — | — | — | 16.8 | 2.6 | |||||||||||||||||||||||
Hedging | 2.8 | 4.6 | — | — | — | — | 2.8 | 4.6 | |||||||||||||||||||||||
Canada | 34.3 | 16.1 | — | — | — | — | 34.3 | 16.1 | |||||||||||||||||||||||
Consolidated production revenue | $ | 99.0 | $ | 103.3 | $ | 17.5 | $ | 40.7 | $ | 4.6 | $ | 6.3 | $ | 121.1 | $ | 150.3 | |||||||||||||||
U.S. realized cash derivative gains (losses) | $ | (4.0 | ) | $ | 8.9 | $ | — | $ | — | $ | — | $ | — | $ | (4.0 | ) | $ | 8.9 | |||||||||||||
Canada realized cash derivative gains | 0.5 | 8.2 | — | — | — | — | 0.5 | 8.2 | |||||||||||||||||||||||
Consolidated realized cash derivative gains (losses) | (3.5 | ) | 17.1 | — | — | — | — | (3.5 | ) | 17.1 | |||||||||||||||||||||
Consolidated production revenue and realized cash derivative gains (1) | $ | 95.5 | $ | 120.4 | $ | 17.5 | $ | 40.7 | $ | 4.6 | $ | 6.3 | $ | 117.6 | $ | 167.4 |
(1) | Realized cash derivative gains from derivatives not treated as hedges are included in net derivative gains. Unrealized derivative gains and losses, non-cash loss in fair value from restructured natural gas derivatives and hedge ineffectiveness make up the remainder of net derivative gains as reported on our statement of income. A discussion of net derivative gains is found elsewhere in our discussion of our results of operations. Total revenue is comprised of production revenue, net derivative gains , sales of purchased natural gas and other revenue. |
Natural Gas | NGL | Oil | Equivalent Total | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
(MMcfd) | (Bbld) | (Bbld) | (MMcfed) | ||||||||||||||||||||
Barnett Shale | 137.7 | 216.8 | 7,069 | 11,339 | 207 | 366 | 181.4 | 287.1 | |||||||||||||||
Other U.S. | — | 0.7 | 21 | 26 | 377 | 441 | 2.4 | 3.5 | |||||||||||||||
Total U.S. | 137.7 | 217.5 | 7,090 | 11,365 | 584 | 807 | 183.8 | 290.6 | |||||||||||||||
Horseshoe Canyon | 48.9 | 53.2 | 7 | — | — | — | 48.9 | 53.2 | |||||||||||||||
Horn River | 54.6 | 14.9 | — | — | — | — | 54.6 | 14.9 | |||||||||||||||
Total Canada | 103.5 | 68.1 | 7 | — | — | — | 103.5 | 68.1 | |||||||||||||||
Total | 241.2 | 285.6 | 7,097 | 11,365 | 584 | 807 | 287.3 | 358.7 |
Natural Gas | NGL | Oil | Equivalent Total | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
(per Mcf) | (per Bbl) | (per Bbl) | (per Mcfe) | ||||||||||||||||||||||||||||
Barnett Shale | $ | 4.01 | $ | 2.11 | $ | 27.14 | $ | 33.23 | $ | 88.85 | $ | 89.73 | $ | 4.21 | $ | 3.02 | |||||||||||||||
Other U.S. | 3.94 | 2.04 | 50.05 | 55.18 | 83.80 | 82.42 | 13.70 | 11.26 | |||||||||||||||||||||||
Hedging | 1.15 | 2.29 | — | 6.08 | — | — | 0.86 | 1.95 | |||||||||||||||||||||||
Total U.S. | 5.16 | 4.40 | 27.21 | 39.36 | 85.59 | 85.73 | 5.19 | 5.07 | |||||||||||||||||||||||
Horseshoe Canyon | $ | 3.30 | $ | 1.84 | $ | 57.84 | $ | — | $ | — | $ | — | $ | 3.31 | $ | 1.84 | |||||||||||||||
Horn River | 3.38 | 1.91 | — | — | — | — | 3.38 | 1.91 | |||||||||||||||||||||||
Hedging | 0.29 | 0.75 | — | — | — | — | 0.29 | 0.75 | |||||||||||||||||||||||
Total Canada | $ | 3.64 | $ | 2.61 | $ | 57.84 | $ | — | $ | — | $ | — | $ | 3.64 | $ | 2.61 | |||||||||||||||
Consolidated production revenue | $ | 4.51 | $ | 3.97 | $ | 27.24 | $ | 39.36 | $ | 85.61 | $ | 85.73 | $ | 4.63 | $ | 4.60 | |||||||||||||||
U.S. realized cash derivative gains (losses) | $ | (0.32 | ) | $ | 0.45 | $ | — | $ | — | $ | — | $ | — | $ | (0.24 | ) | $ | 0.34 | |||||||||||||
Canada realized cash derivative gains | 0.06 | 1.33 | — | — | — | — | 0.06 | 1.33 | |||||||||||||||||||||||
Consolidated realized cash derivative gains (losses) | (0.16 | ) | 0.66 | — | — | — | — | (0.13 | ) | 0.52 | |||||||||||||||||||||
Consolidated production revenue and realized cash derivative gains | $ | 4.35 | $ | 4.63 | $ | 27.24 | $ | 39.36 | $ | 85.61 | $ | 85.73 | $ | 4.50 | $ | 5.12 |
Natural Gas | NGL | Oil | Total | ||||||||||||
(In thousands) | |||||||||||||||
Consolidated production revenue and realized cash derivative gains for the 2012 quarter | $ | 120,401 | $ | 40,709 | $ | 6,300 | $ | 167,410 | |||||||
Volume variances | (8,285 | ) | (12,929 | ) | (1,739 | ) | (22,953 | ) | |||||||
Hedge revenue variances | (32,827 | ) | (6,285 | ) | — | (39,112 | ) | ||||||||
Realized cash derivative variance (1) | (20,575 | ) | — | — | (20,575 | ) | |||||||||
Price variances | 36,787 | (3,903 | ) | (8 | ) | 32,876 | |||||||||
Consolidated production revenue and realized cash derivative gains for the 2013 quarter | $ | 95,501 | $ | 17,592 | $ | 4,553 | $ | 117,646 |
(1) | This amount is also included in the production revenue and realized cash derivatives gains table above. |
For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Sales of purchased natural gas | |||||||
Purchases from Eni | $ | 17,903 | $ | 8,724 | |||
Purchases from others | 782 | 718 | |||||
Total | 18,685 | 9,442 | |||||
Costs of purchased natural gas sold | |||||||
Purchases from Eni | 17,906 | 8,723 | |||||
Purchases from others | 773 | 614 | |||||
Total | 18,679 | 9,337 | |||||
Net sales and purchases of natural gas | $ | 6 | $ | 105 |
For the Three Months Ended June 30, | ||||||
2013 | 2012 | |||||
(In thousands) | ||||||
Unrealized mark-to-market changes in fair value of natural gas derivative gains (1) | $ | 38,313 | 9,229 | |||
Realized cash settlements of natural gas derivative gains (losses) | (3,476 | ) | 17,100 | |||
Gain from hedge ineffectiveness | — | 6,810 | ||||
Net derivative gains | 34,837 | 33,139 |
(1) | Unrealized mark-to-market changes in fair value are subject to continuing market risk. |
For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Midstream revenue from third parties: | |||||||
Canada | $ | 638 | $ | 744 | |||
Texas | 216 | 382 | |||||
Total midstream revenue | 854 | 1,126 | |||||
Total | $ | 854 | $ | 1,126 |
For the Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Barnett Shale | |||||||||||||||
Cash expense | $ | 10,274 | $ | 0.62 | $ | 12,936 | $ | 0.50 | |||||||
Equity compensation | 214 | 0.01 | 227 | 0.01 | |||||||||||
$ | 10,488 | $ | 0.63 | $ | 13,163 | $ | 0.51 | ||||||||
Other U.S. | |||||||||||||||
Cash expense | $ | 1,345 | $ | 6.16 | $ | 2,139 | $ | 6.76 | |||||||
Equity compensation | 112 | 0.51 | 38 | 0.12 | |||||||||||
$ | 1,457 | $ | 6.67 | $ | 2,177 | $ | 6.88 | ||||||||
Total U.S. | |||||||||||||||
Cash expense | $ | 11,619 | $ | 0.69 | $ | 15,075 | $ | 0.57 | |||||||
Equity compensation | 326 | 0.02 | 265 | 0.01 | |||||||||||
$ | 11,945 | $ | 0.71 | $ | 15,340 | $ | 0.58 | ||||||||
Horseshoe Canyon | |||||||||||||||
Cash expense | $ | 7,173 | $ | 1.61 | $ | 5,878 | $ | 1.21 | |||||||
Equity compensation | 48 | 0.01 | 83 | 0.01 | |||||||||||
$ | 7,221 | $ | 1.62 | $ | 5,961 | $ | 1.22 | ||||||||
Horn River | |||||||||||||||
Cash expense | $ | 1,047 | $ | 0.21 | $ | 298 | $ | 0.92 | |||||||
Equity compensation | — | — | — | — | |||||||||||
$ | 1,047 | $ | 0.21 | $ | 298 | $ | 0.92 | ||||||||
Total Canada | |||||||||||||||
Cash expense | $ | 8,220 | $ | 0.87 | $ | 6,176 | $ | 1.00 | |||||||
Equity compensation | 48 | 0.01 | 83 | 0.01 | |||||||||||
$ | 8,268 | $ | 0.88 | $ | 6,259 | $ | 1.01 | ||||||||
Total Company | |||||||||||||||
Cash expense | $ | 19,839 | $ | 0.76 | $ | 21,251 | $ | 0.65 | |||||||
Equity compensation | 374 | 0.01 | 348 | 0.01 | |||||||||||
$ | 20,213 | $ | 0.77 | $ | 21,599 | $ | 0.66 |
For the Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Barnett Shale | $ | 25,941 | $ | 1.57 | $ | 36,464 | $ | 1.40 | |||||||
Other U.S. | 2 | 0.01 | 4 | 0.01 | |||||||||||
Total U.S. | 25,943 | 1.55 | 36,468 | 1.38 | |||||||||||
Horseshoe Canyon | 794 | 0.18 | 960 | 0.20 | |||||||||||
Horn River | 9,937 | 2.00 | 5,196 | 3.83 | |||||||||||
Total Canada | 10,731 | 1.14 | 6,156 | 0.99 | |||||||||||
Total | $ | 36,674 | $ | 1.40 | $ | 42,624 | $ | 1.31 |
For the Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Production taxes | |||||||||||||||
Barnett Shale | $ | 1,038 | $ | 0.06 | $ | 1,338 | $ | 0.05 | |||||||
Other U.S. | 226 | 1.03 | 165 | 0.68 | |||||||||||
Total U.S. | 1,264 | 0.08 | 1,503 | 0.06 | |||||||||||
Horseshoe Canyon | (29 | ) | (0.01 | ) | 50 | 0.01 | |||||||||
Horn River | — | — | — | — | |||||||||||
Total Canada | (29 | ) | — | 50 | 0.01 | ||||||||||
Total production taxes | 1,235 | 0.05 | 1,553 | 0.05 | |||||||||||
Ad valorem taxes | |||||||||||||||
Barnett Shale | $ | 3,119 | $ | 0.19 | $ | 4,579 | $ | 0.18 | |||||||
Other U.S. | 104 | 0.48 | 155 | 0.49 | |||||||||||
Total U.S. | 3,223 | 0.19 | 4,734 | 0.18 | |||||||||||
Horseshoe Canyon | 361 | 0.08 | 829 | 0.17 | |||||||||||
Horn River | 481 | 0.10 | 73 | 0.05 | |||||||||||
Total Canada | 842 | 0.09 | 902 | 0.15 | |||||||||||
Total ad valorem taxes | 4,065 | 0.16 | 5,636 | 0.17 | |||||||||||
Total | $ | 5,300 | $ | 0.20 | $ | 7,189 | $ | 0.22 |
For the Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Depletion | |||||||||||||||
U.S. | $ | 8,593 | $ | 0.51 | $ | 36,242 | $ | 1.37 | |||||||
Canada | 1,087 | 0.12 | 6,044 | 0.97 | |||||||||||
Total depletion | 9,680 | 0.37 | 42,286 | 1.30 | |||||||||||
Depreciation of other fixed assets | |||||||||||||||
U.S. | $ | 1,915 | $ | 0.11 | $ | 2,300 | $ | 0.09 | |||||||
Canada | 2,396 | 0.25 | 2,406 | 0.39 | |||||||||||
Total depreciation | 4,311 | 0.16 | 4,706 | 0.14 | |||||||||||
Accretion | 1,274 | 0.05 | 1,024 | 0.03 | |||||||||||
Total | $ | 15,265 | $ | 0.58 | $ | 48,016 | $ | 1.47 |
For the Three Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Cash expense | $ | 8,982 | $ | 0.34 | $ | 11,700 | $ | 0.36 | |||||||
Audit and accounting fees | 318 | 0.01 | 2,661 | 0.08 | |||||||||||
Strategic transaction costs | 1,870 | 0.07 | — | — | |||||||||||
Equity compensation | 5,705 | 0.22 | 4,044 | 0.12 | |||||||||||
Total | $ | 16,875 | $ | 0.64 | $ | 18,405 | $ | 0.56 |
For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Interest costs on debt outstanding | $ | 42,174 | $ | 42,488 | |||
Add: | |||||||
Fees paid on letters of credit outstanding | 53 | 23 | |||||
Net expense paid on debt refinancing | 67,038 | — | |||||
Non-cash interest (1) | 19,914 | 1,727 | |||||
Total interest costs incurred | 129,179 | 44,238 | |||||
Less: | |||||||
Interest capitalized | (1,941 | ) | (4,162 | ) | |||
Interest expense | $ | 127,238 | $ | 40,076 |
(1) | Amortization of deferred financing costs, original issue discount net of interest swap settlement amortization, including portions related to the early redemption of our Senior Notes due 2015 and Senior Notes due 2016 of $18.9 million. |
For the Three Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(in thousands) | |||||||
Income tax (benefit) expense - U.S. | $ | 4,941 | $ | (352,630 | ) | ||
Effective tax rate-U.S. | 1.9 | % | 34.2 | % | |||
Income tax (benefit) expense - Canada | $ | 260 | $ | (43,202 | ) | ||
Effective tax rate-Canada | (3.0 | )% | 26.0 | % | |||
Income tax (benefit) expense - total | $ | 5,201 | $ | (395,832 | ) | ||
Effective tax rate-total | 2.1 | % | 33.0 | % |
Natural Gas | NGL | Oil | Total | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||
Barnett Shale | $ | 102.0 | $ | 96.8 | $ | 41.2 | $ | 78.9 | $ | 3.9 | $ | 6.2 | $ | 147.1 | $ | 181.9 | |||||||||||||||
Other U.S. | 0.1 | 0.3 | 0.2 | 0.2 | 6.0 | 7.4 | 6.3 | 7.9 | |||||||||||||||||||||||
Hedging | 29.7 | 85.0 | — | 6.6 | — | — | 29.7 | 91.6 | |||||||||||||||||||||||
U.S. | 131.8 | 182.1 | 41.4 | 85.7 | 9.9 | 13.6 | 183.1 | 281.4 | |||||||||||||||||||||||
Horseshoe Canyon | 29.9 | 22.3 | 0.1 | 0.1 | — | — | 30.0 | 22.4 | |||||||||||||||||||||||
Horn River | 34.6 | 4.7 | — | — | — | — | 34.6 | 4.7 | |||||||||||||||||||||||
Hedging | 6.0 | 8.3 | — | — | — | — | 6.0 | 8.3 | |||||||||||||||||||||||
Canada | 70.5 | 35.3 | 0.1 | 0.1 | — | — | 70.6 | 35.4 | |||||||||||||||||||||||
Consolidated production revenue | $ | 202.3 | $ | 217.4 | $ | 41.5 | $ | 85.8 | $ | 9.9 | $ | 13.6 | $ | 253.7 | $ | 316.8 | |||||||||||||||
U.S. realized cash derivative gains | $ | 1.5 | $ | 12.5 | $ | — | $ | — | $ | — | $ | — | $ | 1.5 | $ | 12.5 | |||||||||||||||
Canada realized cash derivative gains | 4.7 | 10.2 | — | — | — | — | 4.7 | 10.2 | |||||||||||||||||||||||
Consolidated realized cash derivative gains | 6.2 | 22.7 | — | — | — | — | 6.2 | 22.7 | |||||||||||||||||||||||
Consolidated production revenue and realized cash derivative gains (1) | $ | 208.5 | $ | 240.1 | $ | 41.5 | $ | 85.8 | $ | 9.9 | $ | 13.6 | $ | 259.9 | $ | 339.5 |
(1) | Realized cash derivative gains from derivatives not treated as hedges are included in net derivative gains (losses). Unrealized derivative gains and losses, non-cash loss in fair value from restructured natural gas derivatives and hedge ineffectiveness make up the remainder of net derivative gains (losses) as reported on our statement of income. A discussion of net derivative gains (losses) is found elsewhere in our discussion of our results of operations. Total revenue is comprised of production revenue, net derivative gains (losses), sales of purchased natural gas and other revenue. |
Natural Gas | NGL | Oil | Equivalent Total | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
(MMcfd) | (Bbld) | (Bbld) | (MMcfed) | ||||||||||||||||||||
Barnett Shale | 156.7 | 224.8 | 8,349 | 11,416 | 244 | 363 | 208.3 | 295.5 | |||||||||||||||
Other U.S. | 0.1 | 0.7 | 22 | 26 | 392 | 463 | 2.6 | 3.7 | |||||||||||||||
Total U.S. | 156.8 | 225.5 | 8,371 | 11,442 | 636 | 826 | 210.9 | 299.2 | |||||||||||||||
Horseshoe Canyon | 50.1 | 55.6 | 7 | 7 | — | — | 50.1 | 55.6 | |||||||||||||||
Horn River | 61.3 | 13.1 | — | — | — | — | 61.2 | 13.1 | |||||||||||||||
Total Canada | 111.4 | 68.7 | 7 | 7 | — | — | 111.3 | 68.7 | |||||||||||||||
Total | 268.2 | 294.2 | 8,378 | 11,449 | 636 | 826 | 322.2 | 367.9 |
Natural Gas | NGL | Oil | Equivalent Total | ||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
(per Mcf) | (per Bbl) | (per Bbl) | (per Mcfe) | ||||||||||||||||||||||||||||
Barnett Shale | $ | 3.60 | $ | 2.37 | $ | 27.26 | $ | 37.96 | $ | 89.58 | $ | 94.13 | $ | 3.90 | $ | 3.38 | |||||||||||||||
Other U.S. | 3.49 | 2.22 | 51.34 | 54.33 | 84.89 | 87.25 | 13.59 | 11.84 | |||||||||||||||||||||||
Hedging | 1.05 | 2.07 | — | 3.17 | — | — | 0.78 | 1.68 | |||||||||||||||||||||||
Total U.S. | $ | 4.64 | $ | 4.44 | $ | 27.33 | $ | 41.17 | $ | 86.69 | $ | 90.27 | $ | 4.80 | $ | 5.17 | |||||||||||||||
Horseshoe Canyon | $ | 3.30 | $ | 2.21 | $ | 61.74 | $ | 69.79 | $ | — | $ | — | $ | 3.30 | $ | 2.22 | |||||||||||||||
Horn River | 3.12 | 1.98 | — | — | — | — | 3.12 | 1.98 | |||||||||||||||||||||||
Hedging | 0.30 | 0.66 | — | — | — | — | 0.30 | 0.66 | |||||||||||||||||||||||
Total Canada | $ | 3.50 | $ | 2.82 | $ | 61.74 | $ | 69.79 | $ | — | $ | — | $ | 3.50 | $ | 2.83 | |||||||||||||||
Consolidated production revenue | $ | 4.17 | $ | 4.06 | $ | 27.36 | $ | 41.18 | $ | 86.69 | $ | 90.28 | $ | 4.35 | $ | 4.73 | |||||||||||||||
U.S. realized cash derivative gains | $ | 0.05 | $ | 0.30 | $ | — | $ | — | $ | — | $ | — | $ | 0.04 | $ | 0.23 | |||||||||||||||
Canada realized cash derivative gains | 0.23 | 0.81 | — | — | — | — | 0.23 | 0.81 | |||||||||||||||||||||||
Consolidated realized cash derivative gains | $ | 0.13 | $ | 0.42 | $ | — | $ | — | $ | — | $ | — | $ | 0.10 | $ | 0.34 | |||||||||||||||
Consolidated production revenue and realized cash derivative gains | $ | 4.30 | $ | 4.48 | $ | 27.36 | $ | 41.18 | $ | 86.69 | $ | 90.28 | $ | 4.45 | $ | 5.07 |
Natural Gas | NGL | Oil | Total | ||||||||||||
(In thousands) | |||||||||||||||
Consolidated production revenue and realized cash derivative gains for the 2012 period | $ | 240,059 | $ | 85,809 | $ | 13,578 | $ | 339,446 | |||||||
Volume variances | (11,627 | ) | (21,560 | ) | (3,189 | ) | (36,376 | ) | |||||||
Hedge revenue variances | (57,494 | ) | (6,607 | ) | — | (64,101 | ) | ||||||||
Realized cash derivative variance (1) | (16,563 | ) | — | — | (16,563 | ) | |||||||||
Price variances | 54,022 | (16,160 | ) | (414 | ) | 37,448 | |||||||||
Consolidated production revenue and realized cash derivative gains for the 2013 period | $ | 208,397 | $ | 41,482 | $ | 9,975 | $ | 259,854 |
(1) | This amount is also included in the production revenue and realized cash derivatives gains table above. |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Sales of purchased natural gas | |||||||
Purchases from Eni | $ | 33,803 | $ | 19,870 | |||
Purchases from others | 1,440 | 1,658 | |||||
Total | 35,243 | 21,528 | |||||
Costs of purchased natural gas sold | |||||||
Purchases from Eni | 33,802 | 19,906 | |||||
Purchases from others | 1,395 | 1,368 | |||||
Total | 35,197 | 21,274 | |||||
Net sales and purchases of natural gas | $ | 46 | $ | 254 |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Unrealized mark-to-market changes in fair value of natural gas derivative gains (losses) (1) | $ | (2,652 | ) | $ | 16,060 | ||
Realized cash settlements of natural gas derivative gains | 6,120 | 22,682 | |||||
Non-cash loss in fair value from restructured natural gas derivatives | — | (13,836 | ) | ||||
Gain (loss) from hedge ineffectiveness | — | 1,569 | |||||
Derivative gains (losses), net | 3,468 | 26,475 |
(1) | Unrealized mark-to-market changes in fair value are subject to continuing market risk. |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Midstream revenue from third parties | |||||||
Canada | $ | 1,313 | $ | 1,475 | |||
Texas | 442 | 610 | |||||
Total midstream revenue | 1,755 | 2,085 | |||||
Other | — | 31 | |||||
Total | $ | 1,755 | $ | 2,116 |
For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Barnett Shale | |||||||||||||||
Cash expense | $ | 23,708 | $ | 0.63 | $ | 30,169 | $ | 0.56 | |||||||
Equity compensation | 486 | 0.01 | 642 | 0.01 | |||||||||||
$ | 24,194 | $ | 0.64 | $ | 30,811 | $ | 0.57 | ||||||||
Other U.S. | |||||||||||||||
Cash expense | $ | 2,748 | $ | 5.93 | $ | 4,298 | $ | 6.43 | |||||||
Equity compensation | 180 | 0.39 | 87 | 0.13 | |||||||||||
$ | 2,928 | $ | 6.32 | $ | 4,385 | $ | 6.56 | ||||||||
Total U.S. | |||||||||||||||
Cash expense | $ | 26,456 | $ | 0.69 | $ | 34,467 | $ | 0.63 | |||||||
Equity compensation | 666 | 0.02 | 729 | 0.01 | |||||||||||
$ | 27,122 | $ | 0.71 | $ | 35,196 | $ | 0.64 | ||||||||
Horseshoe Canyon | |||||||||||||||
Cash expense | $ | 15,385 | $ | 1.70 | $ | 13,634 | $ | 1.35 | |||||||
Equity compensation | 113 | 0.01 | 208 | 0.02 | |||||||||||
$ | 15,498 | $ | 1.71 | $ | 13,842 | $ | 1.37 | ||||||||
Horn River | |||||||||||||||
Cash expense | $ | 2,488 | $ | 0.22 | $ | 1,252 | $ | 0.53 | |||||||
Equity compensation | — | — | — | — | |||||||||||
$ | 2,488 | $ | 0.22 | $ | 1,252 | $ | 0.53 | ||||||||
Total Canada | |||||||||||||||
Cash expense | $ | 17,873 | $ | 0.89 | $ | 14,886 | $ | 1.19 | |||||||
Equity compensation | 113 | 0.01 | 208 | 0.02 | |||||||||||
$ | 17,986 | $ | 0.90 | $ | 15,094 | $ | 1.21 | ||||||||
Total Company | |||||||||||||||
Cash expense | $ | 44,329 | $ | 0.76 | $ | 49,353 | $ | 0.74 | |||||||
Equity compensation | 779 | 0.01 | 937 | 0.01 | |||||||||||
$ | 45,108 | $ | 0.77 | $ | 50,290 | $ | 0.75 |
For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Barnett Shale | $ | 56,740 | $ | 1.51 | $ | 75,102 | $ | 1.40 | |||||||
Other U.S. | 5 | 0.01 | 7 | 0.01 | |||||||||||
Total U.S. | 56,745 | 1.49 | 75,109 | 1.38 | |||||||||||
Horseshoe Canyon | 1,617 | 0.18 | 2,029 | 0.20 | |||||||||||
Horn River | 18,136 | 1.64 | 8,563 | 3.59 | |||||||||||
Total Canada | 19,753 | 0.98 | 10,592 | 0.85 | |||||||||||
Total | $ | 76,498 | $ | 1.31 | $ | 85,701 | $ | 1.28 |
For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Production taxes | |||||||||||||||
Barnett Shale | $ | 1,979 | $ | 0.05 | $ | 2,644 | $ | 0.05 | |||||||
Other U.S. | 458 | 0.99 | 411 | 0.69 | |||||||||||
Total U.S. | 2,437 | 0.06 | 3,055 | 0.06 | |||||||||||
Horseshoe Canyon | 36 | — | 52 | 0.01 | |||||||||||
Horn River | — | — | — | — | |||||||||||
Total Canada | 36 | — | 52 | 0.01 | |||||||||||
Total production taxes | 2,473 | 0.04 | 3,107 | 0.05 | |||||||||||
Ad valorem taxes | |||||||||||||||
Barnett Shale | $ | 6,473 | $ | 0.17 | $ | 9,192 | $ | 0.17 | |||||||
Other U.S. | 250 | 0.54 | 253 | 0.38 | |||||||||||
Total U.S. | 6,723 | 0.18 | 9,445 | 0.17 | |||||||||||
Horseshoe Canyon | 1,058 | 0.12 | 1,257 | 0.12 | |||||||||||
Horn River | 530 | 0.05 | 143 | 0.06 | |||||||||||
Total Canada | 1,588 | 0.08 | 1,400 | 0.11 | |||||||||||
Total ad valorem taxes | 8,311 | 0.14 | 10,845 | 0.16 | |||||||||||
Total | $ | 10,784 | $ | 0.18 | $ | 13,952 | $ | 0.21 |
For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Depletion | |||||||||||||||
U.S. | $ | 19,700 | $ | 0.52 | $ | 76,231 | $ | 1.40 | |||||||
Canada | 2,293 | 0.11 | 14,999 | 1.20 | |||||||||||
Total depletion | 21,993 | 0.38 | 91,230 | 1.36 | |||||||||||
Depreciation of other fixed assets | |||||||||||||||
U.S. | $ | 4,030 | 0.11 | $ | 4,679 | 0.09 | |||||||||
Canada | 4,854 | 0.24 | 4,577 | 0.37 | |||||||||||
Total depreciation | 8,884 | 0.15 | 9,256 | 0.14 | |||||||||||
Accretion | 2,644 | 0.05 | 1,969 | 0.03 | |||||||||||
Total | $ | 33,521 | $ | 0.58 | $ | 102,455 | $ | 1.53 |
For the Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | ||||||||||||||
(In thousands, except per unit amounts) | |||||||||||||||
Per Mcfe | Per Mcfe | ||||||||||||||
Cash expense | $ | 19,315 | $ | 0.33 | $ | 23,870 | $ | 0.35 | |||||||
Audit and accounting fees | 1,584 | 0.03 | 4,544 | 0.07 | |||||||||||
Strategic transaction costs | 1,870 | 0.03 | — | — | |||||||||||
Equity compensation | 10,269 | 0.18 | 9,086 | 0.14 | |||||||||||
Total | $ | 33,038 | $ | 0.57 | $ | 37,500 | $ | 0.56 |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Interest costs on debt outstanding | $ | 86,146 | $ | 84,531 | |||
Add: | |||||||
Fees paid on letters of credit outstanding | 103 | 52 | |||||
Net expense paid on debt refinancing | 67,038 | — | |||||
Non-cash interest (1) | 21,773 | 3,469 | |||||
Total interest costs incurred | 175,060 | 88,052 | |||||
Less: | |||||||
Interest capitalized | (3,880 | ) | (7,806 | ) | |||
Interest expense | $ | 171,180 | $ | 80,246 |
(1) | Amortization of deferred financing costs, original issue discount net of interest swap settlement amortization, including portions related to the early redemption of our Senior Notes due 2015 and Senior Notes due 2016 of $18.9 million. |
For the Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
(in thousands) | |||||||
Income tax (benefit) expense - U.S. | $ | 11,165 | $ | (415,897 | ) | ||
Effective tax rate - U.S. | 5.4 | % | 34.8 | % | |||
Income tax (benefit) expense - Canada | $ | 932 | $ | (81,172 | ) | ||
Effective tax rate - Canada | (7.5 | )% | 25.8 | % | |||
Income tax (benefit) expense - total | $ | 12,097 | $ | (497,069 | ) | ||
Effective tax rate - total | 6.2 | % | 32.9 | % |
Production | Daily Production | |
Year | Gas | |
MMcfd | ||
Remainder of 2013 | 200 | |
2014 | 170 | |
2015 | 150 | |
2016-2021 | 40 |
Six months ended, June 30, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
Net cash provided by (used in) operating activities | $ | (78,106 | ) | $ | 99,516 | ||
Net cash provided by (used in) investing activities | 290,594 | (262,700 | ) | ||||
Net cash provided by (used in) financing activities | (122,553 | ) | 163,314 |
United States | Canada | Consolidated | |||||||||
(In thousands) | |||||||||||
For the Six Months Ended June 30, 2013 | |||||||||||
Exploration and development | $ | 35,313 | $ | 5,684 | $ | 40,997 | |||||
Midstream | 25 | 730 | 755 | ||||||||
Administrative | 440 | 9,544 | 9,984 | ||||||||
Total | $ | 35,778 | $ | 15,958 | $ | 51,736 | |||||
For the Six Months Ended June 30, 2012 | |||||||||||
Exploration and development | $ | 116,977 | $ | 157,401 | $ | 274,378 | |||||
Midstream | 636 | 10,803 | 11,439 | ||||||||
Administrative | 2,444 | 3,003 | 5,447 | ||||||||
Total | $ | 120,057 | $ | 171,207 | $ | 291,264 |
• | Permit the sale and transfer of a 25% interest in Quicksilver’s Barnett Shale assets to TGBR |
• | Reduce the global borrowing base to $350 million from $850 million, including a reduction due to the Tokyo Gas Transaction |
• | Reduce the minimum required interest coverage ratio to the following: |
Period | Interest Coverage Ratio | Period | Interest Coverage Ratio | |||
Q2 2013 | 1.25 | Q1 2015 | 1.10 | |||
Q3 2013 | 1.25 | Q2 2015 | 1.15 | |||
Q4 2013 | 1.25 | Q3 2015 | 1.15 | |||
Q1 2014 | 1.20 | Q4 2015 | 1.20 | |||
Q2 2014 | 1.15 | Q1 2016 | 1.50 | |||
Q3 2014 | 1.10 | Q2 2016 | 2.00 | |||
Q4 2014 | 1.10 |
• | Permit up to $825 million of second lien debt, subject to customary intercreditor terms |
• | Permit redemption of junior debt with the proceeds from certain asset sales and permitted second lien debt, provided utilization under the global borrowing base after giving effect to such redemption is less than 75% and compliance with other customary conditions |
• | Reduce the maximum senior secured debt leverage ratio to 2.0 and exclude permitted second lien debt from the senior secured debt definition |
• | Increase the applicable margin by 0.75% for each type of loan and issued letters of credit |
• | Increase the minimum mortgage properties requirement to 87.5% from 80% of proved hydrocarbon interests evaluated in the then most recent reserve report |
• | Amend certain definitions which impact the financial covenant calculations. |
• | Cash, cash equivalents and marketable securities increased $210.6 million as we retained a portion of the Tokyo Gas Transaction payment in cash. |
• | Our accounts receivable balance decreased $19.3 million from December 31, 2012 to June 30, 2013, primarily due to lower production volumes compared to December 31, 2012 as well as a decrease of $3.1 million related to NGL hedge settlement accruals in 2012. |
• | Our net property, plant and equipment balance decreased $136.2 million from December 31, 2012 to June 30, 2013. The decrease was primarily due to the Tokyo Gas Transaction, which resulted in a decrease of $138.0 million and additional decreases due to DD&A incurred of $30.9 million and $21.1 million related to U.S.-Canadian exchange rate changes. Offsetting these decreases, we incurred capital cost of $51.7 million during 2013. |
• | The $21.1 million decrease in accounts payable was due primarily to a reduction in accrued capital expenditures of $4.6 million from the December 31, 2012 amount and a decrease in trade payables of $16.5 million from December 31, 2012 as activity has decreased from year‑end. |
• | Our accrued liabilities decreased $24.9 million, primarily due to early payment of accrued interest of $46.6 million, partially offset by the accrual of the NGTL termination invoice and increase in ad valorem tax accrual. |
• | Long-term debt decreased $94.8 million primarily from net payments under the Combined Credit Agreements of $191.9 million, recognition of $11.0 million of interest rate swaps and changes to the U.S.-Canadian exchange rate resulting in a decrease of $6.1 million, partially offset by net borrowings of $101.1 million as a result of our refinancing of our debt and $13.1 million of amortized discounts, including the impact of the redemption from the refinancing of our debt. |
• oil and gas reserves | • stock-based compensation | |
• full cost ceiling calculations | • income taxes | |
• derivative instruments |
ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk |
Product | Type | Segment | Remaining Contract Period | Volume | Price Per Mcf | |||||
Gas | Swap | Canada | Jul 2013 - Dec 2013 | 10 MMcfd | 5.00 | |||||
Gas | Swap | Canada | Jul 2013 - Dec 2015 | 10 MMcfd | 6.42 | |||||
Gas | Swap | Canada | Jul 2013 - Dec 2015 | 10 MMcfd | 6.45 | |||||
Gas | Swap | Canada | Jul 2013 - Dec 2015 | 10 MMcfd | 4.04 | |||||
Gas | Swap | Canada | Jul 2013 -Dec 2021 | 10 MMcfd | 4.625 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2013 | 20 MMcfd | 5.00 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2013 | 10 MMcfd | 5.00 | |||||
Gas | Swap | U.S | Jul 2013 - Dec 2014 | 10 MMcfd | 3.91 | |||||
Gas | Swap | U.S | Jul 2013 - Dec 2014 | 10 MMcfd | 3.89 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 5 MMcfd | 6.23 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 5 MMcfd | 6.20 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 20 MMcfd | 6.00 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 10 MMcfd | 6.00 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 5 MMcfd | 5.68 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 7.5 MMcfd | 5.48 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 7.5 MMcfd | 5.50 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 5 MMcfd | 4.15 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2015 | 5 MMcfd | 4.13 | |||||
Gas | Swap | U.S. | Jan 2014 - Dec 2015 | 5 MMcfd | 4.26 | |||||
Gas | Swap | U.S. | Jan 2014 - Dec 2015 | 5 MMcfd | 4.25 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2021 | 10 MMcfd | 4.54 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2021 | 5 MMcfd | 4.38 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2021 | 10 MMcfd | 4.37 | |||||
Gas | Swap | U.S. | Jul 2013 - Dec 2021 | 5 MMcfd | 4.35 |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plan (2) | Maximum Number of Shares that May Yet Be Purchased Under the Plan (2) | |||||||||
April 2013 | 42,475 | $ | 2.65 | — | — | ||||||||
May 2013 | — | $ | — | — | — | ||||||||
June 2013 | 2,268 | $ | 2.22 | — | — | ||||||||
Total | 44,743 | $ | 2.63 | — | — |
(1) | Represents shares of common stock surrendered by employees to satisfy income tax withholding obligations arising upon the vesting of restricted stock issued under our stock plan. |
(2) | We do not have a publicly announced plan for repurchasing our common stock. |
ITEM 6. | Exhibits |
Incorporated by Reference | Filed (†) or Furnished (‡) Herewith (as indicated) | |||||||||||
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||||
3.1 | Amended and Restated Bylaws of Quicksilver Resources Inc., effective on May 15, 2013 | 8-K | 001-14837 | 3.1 | 5/16/2013 | |||||||
4.1 | Twenty-first Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.1 | 6/12/2013 | |||||||
4.2 | Twenty-second Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.2 | 6/12/2013 | |||||||
4.3 | Twenty-third Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.3 | 6/12/2013 | |||||||
4.4 | Twenty-fourth Supplemental Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K/A | 001-14837 | 4.4 | 7/1/2013 | |||||||
4.5 | Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K/A | 001-14837 | 4.1 | 7/1/2013 | |||||||
4.6 | Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and second lien collateral agent | 8-K/A | 001-14837 | 4.2 | 7/1/2013 | |||||||
4.7 | Registration Rights Agreement, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as representatives of the initial purchasers | 8-K/A | 001-14837 | 4.3 | 7/1/2013 | |||||||
10.1 | Quicksilver Resources Inc. Seventh Amended and Restated 2006 Equity Plan | † | ||||||||||
10.2 | Agreement, dated as of May 15, 2013, between Quicksilver Resources Inc. and Thomas F. Darden | † | ||||||||||
10.3 | Omnibus Amendment No. 4 to Combined Credit Agreements, dated as of April 30, 2013, among Quicksilver Resources Inc., Quicksilver Reources Canada Inc. and the agents and lenders identified therein | † | ||||||||||
10.4 | Omnibus Amendment No. 5 to the Combined Credit Agreements, dated as of June 21, 2013, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein | 8-K/A | 001-14387 | 10.2 | 7/1/2013 | |||||||
10.5 | Second Lien Credit Agreement, dated as of June 21, 2013, among Quicksilver Resources Inc., the lenders party thereto and Credit Suisse AG, as administrative agent | 8-K/A | 001-14837 | 10.1 | 7/1/2013 | |||||||
31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
31.2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
101.INS | XBRL Instance Document | ‡ | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Linkbase Document | ‡ | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ‡ | ||||||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | ‡ | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ‡ | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ‡ |
Dated: | August 8, 2013 | Quicksilver Resources Inc. | ||
By: | /s/ John C. Regan | |||
John C. Regan | ||||
Senior Vice President-Chief Financial Officer (Duly Authorized Officer, Principal Financial and Accounting Officer) |
Incorporated by Reference | Filed (†) or Furnished (‡) Herewith (as indicated) | |||||||||||
Exhibit No. | Exhibit Description | Form | SEC File No. | Exhibit | Filing Date | |||||||
3.1 | Amended and Restated Bylaws of Quicksilver Resources Inc., effective on May 15, 2013 | 8-K | 001-14837 | 3.1 | 5/16/2013 | |||||||
4.1 | Twenty-first Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.1 | 6/12/2013 | |||||||
4.2 | Twenty-second Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.2 | 6/12/2013 | |||||||
4.3 | Twenty-third Supplemental Indenture, dated as of June 12, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K | 001-14837 | 4.3 | 6/12/2013 | |||||||
4.4 | Twenty-fourth Supplemental Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K/A | 001-14837 | 4.4 | 7/1/2013 | |||||||
4.5 | Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee | 8-K/A | 001-14837 | 4.1 | 7/1/2013 | |||||||
4.6 | Indenture, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee and second lien collateral agent | 8-K/A | 001-14837 | 4.2 | 7/1/2013 | |||||||
4.7 | Registration Rights Agreement, dated as of June 21, 2013, among Quicksilver Resources Inc., the subsidiary guarantors named therein and Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc., as representatives of the initial purchasers | 8-K/A | 001-14837 | 4.3 | 7/1/2013 | |||||||
10.1 | Quicksilver Resources Inc. Seventh Amended and Restated 2006 Equity Plan | † | ||||||||||
10.2 | Agreement, dated as of May 15, 2013, between Quicksilver Resources Inc. and Thomas F. Darden | † | ||||||||||
10.3 | Omnibus Amendment No. 4 to Combined Credit Agreements, dated as of April 30, 2013, among Quicksilver Resources Inc., Quicksilver Reources Canada Inc. and the agents and lenders identified therein | † | ||||||||||
10.4 | Omnibus Amendment No. 5 to the Combined Credit Agreements, dated as of June 21, 2013, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein | 8-K/A | 001-14387 | 10.2 | 7/1/2013 | |||||||
10.5 | Second Lien Credit Agreement, dated as of June 21, 2013, among Quicksilver Resources Inc., the lenders party thereto and Credit Suisse AG, as administrative agent | 8-K/A | 001-14837 | 10.1 | 7/1/2013 | |||||||
31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
31.2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † |
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
101.INS | XBRL Instance Document | ‡ | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Linkbase Document | ‡ | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ‡ | ||||||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | ‡ | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ‡ | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ‡ |
Page | ||
Section 1. | Purpose | |
Section 2. | Term | |
Section 3. | Definitions | |
Section 4. | Shares Available Under Plan | |
Section 5. | Limitations on Awards | |
Section 6. | Stock Options | |
Section 7. | Appreciation Rights | |
Section 8. | Restricted Shares | |
Section 9. | Restricted Stock Units | |
Section 10. | Performance Shares and Performance Units | |
Section 11. | Senior Executive Plan Bonuses | |
Section 12. | Awards to Eligible Directors | |
Section 13. | Transferability | |
Section 14. | Adjustments | |
Section 15. | Fractional Shares | |
Section 16. | Withholding Taxes | |
Section 17. | Administration of the Plan | |
Section 18. | Amendments and Other Matters | |
Section 19. | Governing Law |
Award | Portion to Become Vested |
Restricted Share Award granted January 3, 2011 | 34,722 restricted shares |
Restricted Share Award granted March 11, 2011 | 10,356 restricted shares |
Restricted Share Award granted January 3, 2012 | 148,467 restricted shares |
Restricted Share Award granted April 16, 2012 | 49,179 restricted shares |
Option Award granted January 3, 2011 | Option to purchase 56,582 shares |
Option Award granted January 3, 2012 | Option to purchase 247,825 shares |
Notices to Executive: | Thomas F. Darden 44 Valley Ridge Rd. Fort Worth, Texas 76107 817-239-3078 (Phone) |
With a copy to: | Fred S. Stovall Patton Boggs LLP 2000 McKinney Ave., Suite 1700 Dallas, Texas 75201 214-758-1515 (Phone) 214-758-1550 (Fax) |
Notices to the Company: | Quicksilver Resources Inc. Attn: John C. Cirone 801 Cherry Street, Suite 3700, Unit 19 Fort Worth, Texas 76102 (817) 665-4939 (Phone) (817) 665-5006 (Fax) |
With a copy to: | Stephen A. Kuntz Fulbright & Jaworski L.L.P. Fulbright Tower 1301 McKinney, Suite 5100 Houston, Texas 77010-3095 713-651-5241 (Phone) 713-651-5246 (Fax) |
QUICKSILVER RESOURCES INC. |
/s/ John C. Regan |
Name: John C. Regan |
Title: Senior Vice President – Chief Financial Officer and Chief Accounting Officer |
EXECUTIVE |
/s/ Thomas F. Darden |
Thomas F. Darden |
EXECUTIVE | |
Thomas F. Darden |
QUICKSILVER RESOURCES INC. |
Name: |
Title: |
Global Borrowing Base Utilization Percentage | Commitment Fee Rate | Eurodollar Spread | ABR Spread |
Greater than or equal to 90% | 0.500% | 3.75% | 2.75% |
Greater than or equal 75% but less than 90% | 0.500% | 3.50% | 2.50% |
Greater than or equal to 50% and less than 75% | 0.500% | 3.25% | 2.25% |
Greater than or equal to 25% and less than 50% | 0.500% | 3.00% | 2.00% |
Less than 25% | 0.500% | 2.75% | 1.75% |
Global Borrowing Base Utilization Percentage | Commitment Fee Rate | Canadian Prime Spread | CDOR Spread | U.S. Prime Spread | Eurodollar Spread | |||||
Greater than or equal to 90% | 0.500 | % | 2.75 | % | 3.75 | % | 2.75 | % | 3.75 | % |
Greater than or equal 75% but less than 90% | 0.500 | % | 2.50 | % | 3.50 | % | 2.50 | % | 3.50 | % |
Greater than or equal to 50% and less than 75% | 0.500 | % | 2.25 | % | 3.25 | % | 2.25 | % | 3.25 | % |
Greater than or equal to 25% and less than 50% | 0.500 | % | 2.00 | % | 3.00 | % | 2.00 | % | 3.00 | % |
Less than 25% | 0.500 | % | 1.75 | % | 2.75 | % | 1.75 | % | 2.75 | % |
Fiscal Quarter Ending | Minimum Interest Coverage Ratio |
June 30, 2013 | 1.25 to 1.0 |
September 30, 2013 | 1.25 to 1.0 |
December 31, 2013 | 1.25 to 1.0 |
March 31, 2014 | 1.20 to 1.0 |
June 30, 2014 | 1.15 to 1.0 |
September 30, 2014 | 1.10 to 1.0 |
December 31, 2014 | 1.10 to 1.0 |
March 31, 2015 | 1.10 to 1.0 |
June 30, 2015 | 1.15 to 1.0 |
September 30, 2015 | 1.15 to 1.0 |
December 31, 2015 | 1.20 to 1.0 |
March 31, 2016 | 1.50 to 1.0 |
June 30, 2016 | 2.00 to 1.0 |
Fiscal Quarter Ending | Minimum Interest Coverage Ratio |
June 30, 2013 | 1.25 to 1.0 |
September 30, 2013 | 1.25 to 1.0 |
December 31, 2013 | 1.25 to 1.0 |
March 31, 2014 | 1.20 to 1.0 |
June 30, 2014 | 1.15 to 1.0 |
September 30, 2014 | 1.10 to 1.0 |
December 31, 2014 | 1.10 to 1.0 |
March 31, 2015 | 1.10 to 1.0 |
June 30, 2015 | 1.15 to 1.0 |
September 30, 2015 | 1.15 to 1.0 |
December 31, 2015 | 1.20 to 1.0 |
March 31, 2016 | 1.50 to 1.0 |
June 30, 2016 | 2.00 to 1.0 |
By: | /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer |
By: | /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer |
With respect to Sections 3 and 5 hereof: COWTOWN PIPELINE MANAGEMENT, INC., a Texas corporation | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
COWTOWN PIPELINE FUNDING, INC., a Delaware corporation | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
COWTOWN GAS PROCESSING L.P., a Texas limited partnership By: Cowtown Pipeline Management, Inc., its general partner | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
COWTOWN PIPELINE L.P., a Texas limited partnership By: Cowtown Pipeline Management, Inc., its general partner | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
BARNETT SHALE OPERATING LLC, a Delaware limited liability company | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
SILVER STREAM PIPELINE COMPANY LLC., a Delaware limited liability company | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
QPP HOLDINGS LLC, a Delaware limited liability company | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer | |
QPP PARENT LLC, a Delaware limited liability company | |
By: /s/ Vanessa Gomez LaGatta Name: Vanessa Gomez LaGatta Title: Vice President - Treasurer |
By: | /s/ David Morris Name: David Morris Title: Authorized Officer |
By: | /s/ Michael N. Tam Name: Michael N. Tam Title: Senior Vice President |
By: | /s/ Ronald E. McKaig Name: Ronald E. McKaig Title: Managing Director |
By: | /s/ Medina Sales de Andrade Name: Medina Sales de Andrade Title: Vice President |
By: | /s/ Parul June Name: Parul June Title: Vice President |
By: | /s/ Randy Geislinger Name: Randy Geislinger Title: Executive Director |
By: | /s/ Joelle Chatwin Name: Joelle Chatwin Title: Executive Director |
By: | /s/ Trudy Nelson Name: Trudy Nelson Title: Authorized Signatory |
By: | /s/ Richard Antl Name: Richard Antl Title: Authorized Signatory |
By: | /s/ P.R. Ballard Name: P.R Ballard Title: MD |
By: | /s/ Jonathan Cain Name: Jonathan Cain Title: Authorized Signatory |
By: | /s/ Katya Evseev Name: Katya Evseev Title Assistant Vice President |
By: | /s/ Omer Ahmed Name: Omer Ahmed Title: Portfolio Manager |
By: | /s/ Umar Hassan Name: Umar Hassan Title: Vice President |
By: | /s/ Darrell Stanley Name: Darrell Stanley Title: Managing Director |
By: | /s/ Ting Lee Name: Ting Lee Title: Director |
By: | /s/ Kevin Buddhdew Name: Kevin Buddhdew Title: Authorized Signatory |
By: | /s/ Michael Spaight Name: Michael Spaight Title: Authorized Signatory |
By: | /s/ Alain Daoust Name: Alain Daoust Title: Director |
By: | /s/ Chris Gage Name: Chris Gage Title: Chief Financial Officer |
By: | /s/ Marcus M. Tarkington Name: Marcus M. Tarkington Title: Director |
By: | /s/ Anca Trifan Name: Anca Trifan Title: Managing Director |
By: | /s/ David Gynn Name: David Gynn Title: Chief Financial Officer |
By: | /s/ Marcellus Leung Name: Marcellus Leung Title: Assistant Vice President |
By: | /s/ Richard Leong Name: Richard Leong Title: Asset Manager |
By: | /s/ Talal M. Kairouz Name: Talal M. Kairouz Title: Senior Asset Manager |
By: | /s/ Michelle Latzoni Name: Michelle Latzoni Title: Authorized Signatory |
By: | /s/ Chulley Bogle Name: Chulley Bogle Title: Vice President |
By: | /s/ Shuji Yabe Name: Shuji Yabe Title: Managing Director |
By: | /s/ Terry Donovan Name: Terry Donovan Title: Managing Director |
By: | /s/ Sanjay Remond Name: Sanjay Remond Title: Director |
By: | /s/ Shehan J. De Silva Name: Shehan J. De Silva Title: Vice President |
By: | /s/ David R. Wingfelder Name: David R. Wingfelder Title: Managing Director |
By: | /s/ Marie Fernandes Name: Marie Fernandes Title: Authorized Signatory |
By: | /s/ Marie Fernandes Name: Marie Fernandes Title: Authorized Signatory |
By: | /s/ John C. Springer Name: John C. Springer Title: Vice President |
By: | /s/ Lana Gifas Name: Lana Gifas Title: Director |
By: | /s/ Joselin Fernandes Name: Joselin Fernandes Title: Associate Director |
By: | /s/ Lana Gifas Name: Lana Gifas Title: Director |
By: | /s/ Joselin Fernandes Name: Joselin Fernandes Title: Associate Director |
By: | /s/ E. Pak Name: E. Pak Title: Director |
By: | /s/ Edward Pak Name: Edward Pak Title: Director |
1. | I have reviewed this quarterly report on Form 10-Q of Quicksilver Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
/s/ Glenn Darden | |
Glenn Darden | |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Quicksilver Resources Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
/s/ John C. Regan | |
John C. Regan | |
Senior Vice President – Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report. |
By: | /s/ John C. Regan | By: | /s/ Glenn Darden | |||
John C. Regan | Glenn Darden | |||||
Senior Vice President – Chief Financial Officer | President and Chief Executive Officer | |||||
(Principal Financial and Accounting Officer) |
Quicksilver Stockholders' Equity
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quicksilver Stockholders' Equity | QUICKSILVER STOCKHOLDERS’ EQUITY Common Stock, Preferred Stock and Treasury Stock We are authorized to issue 400 million shares of common stock with a $0.01 par value per share and 10 million shares of preferred stock with a $0.01 par value per share. At June 30, 2013 and December 31, 2012, we had 176.5 million and 173.1 million shares of common stock outstanding, respectively. On May 15, 2013, our stockholders approved an amendment to the 2006 Equity Plan, which increased the shares available for issuance under the plan by 12 million shares. Note 17 to the consolidated financial statements in our 2012 Annual Report on Form 10-K contains additional information about our equity-based compensation plan. Stock Options Options to purchase shares of common stock were granted in 2013 with an estimated fair value of $0.9 million. The following summarizes the values from and assumptions for the Black-Scholes option pricing model for stock options issued during the six months ended June 30:
The following table summarizes our stock option activity for the six months ended June 30, 2013:
As of June 30, 2013, we estimate that a total of 5.7 million stock options will become vested including those options already exercisable. As of June 30, 2013, the unrecognized compensation cost related to outstanding unvested stock options was $2.9 million, which is expected to be recognized in expense through June 2015. Compensation expense related to stock options of $2.7 million and $3.4 million was recognized for each of the six months ended June 30, 2013 and 2012, respectively. Restricted Stock The following table summarizes our restricted stock and stock unit activity for the six months ended June 30, 2013:
As of June 30, 2013, the unrecognized compensation cost related to outstanding unvested restricted stock was $18.8 million, which is expected to be recognized in expense through March 2016. Grants of restricted stock and RSUs during the six months ended June 30, 2013 had an estimated grant date fair value of $19.1 million. The fair value of outstanding RSUs to be settled in cash is $2.6 million at June 30, 2013. For the six months ended June 30, 2013 and 2012, compensation expense of $10.0 million and $7.3 million, respectively, was recognized. The total fair value of shares vested during the six months ended June 30, 2013 was $4.6 million. In the 2nd quarter of 2013, the Company recognized $3.6 million in stock-based compensation to correct for assumptions on forfeitures and vesting for retirement eligible and imminently retirement eligible individuals, including $2.2 million which pertain to periods before 2013. |
Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Unevaluated costs of oil and gas properties | $ 281,875 | $ 307,267 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 182,839,101 | 179,015,118 |
Treasury stock, shares | 6,337,700 | 5,921,102 |
Derivatives And Fair Value Measurements
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Credit Risk Derivatives, at Fair Value, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives And Fair Value Measurements | DERIVATIVES, MARKETABLE SECURITIES AND FAIR VALUE MEASUREMENTS The following table categorizes our commodity derivative instruments based upon the use of input levels:
The fair value of “Level 2” derivative instruments included in these disclosures was estimated using prices quoted in active markets for the periods covered by the derivatives and the value reported by counterparties. The fair value of derivative instruments designated as “Level 3” was estimated using prices quoted in markets where there is insufficient market activity for consideration as “Level 2” instruments. Currently, only our natural gas derivatives with an original tenure of 10 years utilize “Level 3” inputs, primarily due to comparatively less market data available for the later portion of their term compared with our other shorter term derivatives. The fair value of both the “Level 2” and the “Level 3” assets and liabilities are determined using a discounted cash flow model using the terms of the derivative instrument, market prices for the periods covered by the derivatives, and the credit adjusted risk-free interest rates. The “Level 3” unobservable inputs are the market prices for the estimated market values for the period from 2018 to 2021, as there is not an active market for that period of time. These unobservable inputs included within the fair value calculation range from $3.56 to $6.32 and are based upon prices quoted in active markets for the period of time available and applying the differential from this period of time to the market prices for the later years in the term. The following table identifies the changes in “Level 3” net asset derivative fair values for the periods indicated:
In 2012, transfers from Level 3 to Level 2 represent our ten-year derivative instruments that were exchanged in January and February 2012 for derivative instruments with shorter durations and are valued on the date of the transfer. Commodity Price Derivatives As of June 30, 2013, we had natural gas swaps as follows:
Effective December 31, 2012, we discontinued the use of hedge accounting. Changes in value subsequent to this date are recognized in net derivative gains (losses) in the period in which they occur. The net deferred hedge gain that was included in AOCI as of December 31, 2012 is being released into revenue from natural gas, NGL and oil production during the following periods in which we expect the underlying production to occur as follows:
Gains and losses from the effective portion of derivative assets and liabilities held in AOCI expected to be reclassified into earnings during the following twelve months would result in a gain of $51.6 million net of income taxes. Interest Rate Derivatives In 2010, we executed early settlements of our interest rate swaps that were designated as fair value hedges of our senior notes due 2015 and our senior subordinated notes. We received cash of $41.5 million in the settlements, including $10.7 million for interest previously accrued and earned. Upon the early settlements, we recorded the resulting gain as a fair value adjustment to our debt and began to recognize the deferred gain of $30.8 million as a reduction of interest expense over the lives of our senior notes due 2015 and our senior subordinated notes. In June 2013, we repurchased substantially all our senior notes due 2015 resulting in early recognition of the previously deferred gain of $8.3 million. During the six months ended June 30, 2013 and 2012, we recognized $11.0 million and $2.5 million, respectively, of those deferred gains as a reduction of interest expense. The remaining $5.8 million deferral of the 2010 early settlements from the senior subordinated notes interest rate swaps will continue to be recognized as a reduction of interest expense over the life of those instruments currently scheduled as follows:
Fair Value Disclosures The estimated fair values of our derivative instruments at June 30, 2013 and December 31, 2012 were as follows:
Derivative assets and liabilities shown in the table above are presented as gross assets and liabilities, without regard to master netting arrangements which are considered in the presentations of derivative assets and liabilities in the accompanying condensed consolidated balance sheets. The change in carrying value of our commodity price derivatives since December 31, 2012 principally resulted from the overall increase in market prices for natural gas relative to the prices in our open derivative instruments, offset by settlements during the period. The changes in the carrying value of our derivatives accounted for as hedges for the three and six months ended June 30, 2012 are presented below:
Financial instruments not carried at fair value Carrying values and fair values of financial instruments that are not carried at fair value in the consolidated balance sheet as of June 30, 2013 and December 31, 2012 are included in Note 5. Investments We have certain short-term marketable securities related to interest bearing time deposits and commercial paper. These held-to-maturity marketable securities are included in Cash and Cash Equivalents if the maturities at the time we made the investment were three months or less. For maturities greater than three months but less than a year, the marketable securities are included in current Marketable Securities. At June 30, 2013, we had the following marketable securities:
We had no marketable securities at December 31, 2012. |
Property, Plant And Equipment (Tables)
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Jun. 30, 2013
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Public Utility Property, Plant, and Equipment [Table Text Block] |
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Earnings Per Share
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator used for the computation of basic and diluted net income (loss) per common share.
|
Earnings Per Share (Reconciliation Of Components Used To Compute Basic And Diluted Net Income Per Common Share) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Sep. 30, 2011
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||
Net income (loss) attributable to Quicksilver | $ 242,523 | $ (802,022) | $ 182,818 | $ (1,013,587) | ||||||||||||
Undistributed Earnings Allocated to Participating Securities | (7,020) | [1] | 0 | [1] | (5,126) | [1] | 0 | [1] | ||||||||
Income (loss) available to shareholders | $ 235,503 | $ (802,022) | $ 177,692 | $ (1,013,587) | ||||||||||||
Weighted average common shares - basic | 171,357,000 | 170,043,000 | 171,261,000 | 169,991,000 | ||||||||||||
Share-based compensation awards | 5,000 | [2] | 0 | [2] | 4,000 | [2] | 0 | [2] | ||||||||
Weighted average common shares - diluted | 171,362,000 | [2] | 170,043,000 | [2] | 171,265,000 | [2] | 169,991,000 | [2] | ||||||||
Earnings (loss) per common share - basic | $ 1.37 | $ (4.72) | [3] | $ 1.04 | $ (5.96) | [3] | ||||||||||
Earnings (loss) per common share - diluted | $ 1.37 | [2] | $ (4.72) | [2],[3] | $ 1.04 | [2] | $ (5.96) | [2],[3] | ||||||||
Stock Options [Member]
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||
Antidilutive shares excluded from the diluted share calculation | 5,300,000 | 5,200,000 | 5,200,000 | |||||||||||||
Restricted Stock Units (RSUs) [Member]
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||||||
Antidilutive shares excluded from the diluted share calculation | 1,000,000 | 300,000 | 1,000,000 | 300,000 | ||||||||||||
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Derivatives And Fair Value Measurements (Price Collars And Swaps For Anticipated Natural Gas And NGL Production) (Details)
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6 Months Ended |
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Jun. 30, 2013
MMcf
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Credit Risk Derivatives, at Fair Value, Net [Abstract] | |
Gas 2013, MMcfd | 200 |
Gas 2014, MMcfd | 170 |
Gas 2015, MMcfd | 150 |
Gas 2016-2021, MMcfd | 40 |
Quicksilver Stockholders' Equity (Tables)
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Jun. 30, 2013
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Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions For The Black-Scholes Option Pricing Model For Stock Options Issued |
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Stock Option Activity |
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Restricted Stock And Stock Unit Activity |
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Asset Retirement Obligations (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Asset Retirement Obligation Activity |
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Long-Term Debt (Schedule Of Long-Term Debt Instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
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Dec. 31, 2012
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Debt Instrument [Line Items] | ||
Total debt | $ 1,962,640 | $ 2,046,418 |
Unamortized deferred gain - terminated interest rate swaps | 5,767 | 16,788 |
Current portion of long-term debt | 0 | 0 |
Long-term debt | 1,968,407 | 2,063,206 |
Canadian Credit Facility [Member]
|
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Debt Instrument [Line Items] | ||
Percentage of ownership interest | 100.00% | |
Combined Credit Agreements [Member]
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Debt Instrument [Line Items] | ||
Combined Credit Agreements | 190,211 | 388,150 |
Senior Secured Second Lien Credit Facility [Member]
|
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Debt Instrument [Line Items] | ||
Secured Long-term Debt, Noncurrent | 606,250 | 0 |
Senior Secured Second Lien Term Loan Due 2019 [Member]
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Debt Instrument [Line Items] | ||
Secured Long-term Debt, Noncurrent | 194,000 | 0 |
Senior Notes Due 2015 [Member]
|
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Debt Instrument [Line Items] | ||
Senior notes | 12,717 | 435,851 |
Senior notes maturity period | 2015 | |
Senior Notes Due 2016 [Member]
|
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Debt Instrument [Line Items] | ||
Senior notes | 8,021 | 579,795 |
Senior notes maturity period | 2016 | |
Senior Notes Due 2019 [Member]
|
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Debt Instrument [Line Items] | ||
Senior notes | 292,925 | 292,622 |
Senior notes maturity period | 2019 | |
Senior Notes Due 2021 [Member]
|
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Debt Instrument [Line Items] | ||
Senior notes | 308,516 | |
Senior Subordinated Notes [Member]
|
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Debt Instrument [Line Items] | ||
Subordinated Long-term Debt, Noncurrent | $ 350,000 | $ 350,000 |
Divestitures Barnett Shale and Tokyo Gas Divestiture (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Apr. 30, 2013
|
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Barnett Shale [Member]
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Equity Method Investment, Ownership Percentage | 25.00% | |
Significant Acquisitions and Disposals, Terms | 485 | |
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds | $ 464.0 | |
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds, Estimated Final Adjustment | 0.6 | |
Significant Acquisitions and Disposals, Gain (Loss) on Sale or Disposal, Pretax | 333.2 | |
Tokyo Gas [Member]
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Oil and Gas Property Decrease due to Gain | $ 118.5 |
Derivatives And Fair Value Measurements (Estimated Fair Value Of Derivative Instruments) (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Current derivative assets | $ 70,009 | $ 113,367 |
Noncurrent derivative assets | 101,141 | 105,270 |
Noncurrent derivative liabilities | 17,693 | 17,485 |
Asset Derivatives [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Total derivative assets | 174,239 | 221,001 |
Liability Derivatives [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Total derivative liabilities | 20,782 | 19,849 |
Not Designated as Hedging Instrument [Member] | Asset Derivatives [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Current derivative assets | 70,009 | 113,367 |
Noncurrent derivative assets | 103,915 | 107,542 |
Current derivative liabilities | 0 | 0 |
Noncurrent derivative liabilities | 315 | 92 |
Not Designated as Hedging Instrument [Member] | Liability Derivatives [Member]
|
||
Derivatives, Fair Value [Line Items] | ||
Current derivative assets | 0 | 0 |
Noncurrent derivative assets | 2,774 | 2,272 |
Current derivative liabilities | 0 | 0 |
Noncurrent derivative liabilities | $ 18,008 | $ 17,577 |
Asset Retirement Obligations (Estimated Asset Retirement Obligation Activity) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Asset Retirement Obligation [Abstract] | ||
Beginning asset retirement obligations | $ 116,526 | |
Additional liability incurred | 3,124 | |
Change in estimates | 1,691 | |
Accretion expense | 2,644 | |
Asset retirement costs incurred | (1,053) | |
Settlement of liability in excess of obligation recorded | 269 | |
Asset Retirement Obligations, Significant Changes | -12229.51 | |
Currency translation adjustment | (3,107) | |
Ending asset retirement obligations | 107,864 | |
Less current portion | 577 | |
Long-term asset retirement obligation | $ 107,287 | $ 115,949 |
Supplemental Cash Flow Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Paid Or Received For Interest And Income Taxes |
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Other Significant Non-cash Transactions |
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Transactions With Related Parties (Details) (USD $)
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3 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | ||||
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Mar. 31, 2012
Mercury Exploration Company [Member]
|
Jun. 30, 2012
Mercury Exploration Company [Member]
|
Jun. 30, 2013
Darden Family [Member]
|
May 31, 2013
Thomas F. Darden [Member]
|
Jun. 30, 2013
Use Of Airplane [Member]
Darden Family [Member]
|
Jun. 30, 2012
Use Of Airplane [Member]
Darden Family [Member]
|
May 31, 2013
Restricted Stock [Member]
Thomas F. Darden [Member]
|
May 31, 2013
Stock Options [Member]
Thomas F. Darden [Member]
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Related Party Transaction [Line Items] | ||||||||
Revenue from Related Parties | $ 100,000 | $ 100,000 | ||||||
Percentage of ownership interest | 30.00% | |||||||
Payments to related parties | 300,000 | 300,000 | ||||||
Monthly business expense allowance | 12,500 | |||||||
Cash bonus related to Tokyo Gas Transaction | 1,100,000 | |||||||
Cash bonus paid related to Tokyo Gas Transaction | 600,000 | |||||||
Options issued, fair value | 1,100,000 | |||||||
Unvested equity awards | 242,724 | 304,407 | ||||||
Legal fee reimbursement allowance | 40,000 | |||||||
Monthly consulting fee | 45,000 | |||||||
Maximum bonus eligibility | $ 2,500,000 |
Supplemental Cash Flow Information (Other Significant Noncash Transactions) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Supplemental Cash Flow Information [Abstract] | ||
Working capital related to capital expenditures | $ 5,742 | $ 98,692 |
Property, Plant And Equipment (Narrative) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2012
UNITED STATES
|
Mar. 31, 2012
UNITED STATES
|
Jun. 30, 2012
CANADA
|
Mar. 31, 2012
CANADA
|
|||||
Property, Plant and Equipment [Line Items] | ||||||||||||
Impairment expense | $ 0 | $ 1,199,726 | [1] | $ 0 | $ 1,517,654 | [1] | $ 1,042,700 | $ 178,000 | $ 157,000 | $ 139,900 | ||
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Long-Term Debt (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Long-term Debt, Other Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Long-Term Debt Instruments |
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Schedule of Outstanding Debt |
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Condensed Consolidated Statements Of Equity (Parenthetical) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Statement of Stockholders' Equity [Abstract] | ||
Income tax effect related to hedge derivative contract settlements reclassified into earnings from accumulated other comprehensive income | $ (6,944) | $ (14,928) |
Income tax effect related to net change in derivative fair value | $ 0 | $ 33,802 |
Accounting Policies And Disclosures
|
6 Months Ended |
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Jun. 30, 2013
|
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Accounting Policies [Abstract] | |
Accounting Policies And Disclosures | ACCOUNTING POLICIES AND DISCLOSURES The accompanying condensed consolidated interim financial statements have not been audited. In management’s opinion, the accompanying condensed consolidated interim financial statements contain all adjustments necessary to fairly present our financial position as of June 30, 2013 and our results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results for interim periods are not necessarily indicative of annual results. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during each reporting period. We believe our estimates and assumptions are reasonable; however, such estimates and assumptions are subject to a number of risks and uncertainties, which may cause actual results to differ materially from management’s estimates. Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, these financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our 2012 Annual Report on Form 10-K. Restatement of Previously Issued Unaudited Financial Statements The consolidated financial statements as of and for the three and six months ended June 30, 2012 were restated as more fully disclosed within Item 8, Note 2 and the Supplemental Selected Quarterly Financial Data in the 2012 Annual Report on Form 10-K. The restatement is the result of our hedge documentation failing to give consideration to all sources of ineffectiveness for derivatives entered into during 2012 that had fair value on the dates they were initially designated as hedges. These derivatives did not qualify for hedge accounting in 2012 and their changes in value required recognition in earnings. Because the derivatives did not qualify for hedge accounting, their inclusion in the U.S. and Canadian full cost ceiling was inappropriate. Also, we determined that the deferred taxes used in our Canadian ceiling test included temporary differences for non-property related items. Thus, we revised our full cost ceiling calculations, which resulted in restatements to increase impairment expense recognized. Income taxes have also been restated to reflect the foregoing restated items. For the three months ended June 30, 2012, the derivative restatement adjustment increased production revenue by $1.3 million for the U.S. and decreased production revenue by $1.5 million for Canada, while derivative gains increased $22.2 million and $3.5 million for the U.S. and Canada, respectively. Impairment expense increased as the result of these derivatives no longer being included in the cost center ceiling by $144.0 million and $63.8 million for the U.S. and Canada, respectively, while depletion expense decreased $1.3 million and $2.6 million for the U.S. and Canada, respectively. The income tax impact of these adjustments resulted in an increase to the tax benefit of $34.3 million and $14.6 million for the U.S. and Canada, respectively. Our consolidated net loss increased $129.5 million, which decreased our retained earnings by the same amount. Other comprehensive income and AOCI decreased $6.9 million as a result of these adjustments. The restatement increased diluted net loss per share by $0.76, from diluted net loss per share of $3.96 as previously reported, to diluted net loss per share of $4.72. For the six months ended June 30, 2012, the derivative restatement decreased production revenue by $2.3 million and $3.3 million for the U.S. and Canada, respectively, while derivative gains increased $42.9 million and $15.5 million for the U.S. and Canada, respectively. Impairment expense increased as the result of these derivatives no longer being included in the cost center ceiling by $259.7 million and $203.3 million for the U.S. and Canada, respectively, while depletion expense decreased $1.3 million and $2.6 million for the U.S. and Canada, respectively. The income tax impact of these adjustments resulted in an increase to the tax benefit of $76.2 million and $48.8 million for the U.S. and Canada, respectively. Our consolidated net loss increased $281.1 million, which decreased our retained earnings by the same amount. Other comprehensive income and AOCI decreased $39.9 million as a result of these adjustments. The restatement increased diluted net loss per share by $1.65, from diluted net loss per share of $4.31 as previously reported, to diluted net loss per share of $5.96. Recently Issued Accounting Standards Accounting standards-setting organizations frequently issue new or revised accounting rules. We regularly review all new pronouncements to determine their impact, if any, on our financial statements. No pronouncements materially affecting our financial statements have been issued since the filing of our 2012 Annual Report on Form 10-K. |
Property, Plant And Equipment
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant And Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following:
Ceiling Test Analysis and Impairment We recorded impairment expense of $1,042.7 million and $157.0 million for the three months ended June 30, 2012 and $178.0 million and $139.9 million for the three months ended March 31, 2012 for our U.S. and Canadian oil and gas properties, respectively. Notes 2 and 8 to the consolidated financial statements in our 2012 Annual Report on Form 10-K contain additional information regarding our property, plant and equipment and our quarterly ceiling test analysis. |
Divestitures
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | DIVESTITURES In July 2013, we executed an agreement to sell all of our Southern Alberta Asset. The sale is expected to close in the third quarter and is subject to customary closing conditions. In March 2013, we entered into a Purchase and Sale Agreement with TGBR to sell an undivided 25% of our Barnett Shale Asset for a purchase price of $485 million. The transaction closed in April 2013, but was effective as of September 1, 2012. The purchase price was subject to customary purchase price adjustments, which resulted in TGBR paying us $464.0 million, including an estimated final adjustment of $0.6 million in the third quarter of 2013. We recognized a gain of $333.2 million before consideration of income taxes as a result of this transaction. Under the full cost method of accounting, our U.S. exploration and production assets are considered a single asset. The Tokyo Gas Transaction represented a significant disposal of reserves, which resulted in gain recognition for the transaction. Our U.S. oil and gas properties were reduced by $118.5 million as a result of the Tokyo Gas Transaction. In October 2010, we completed the sale of all of our interests in KGS to Crestwood. As part of the sale, we had the right to collect future earn-out payments through 2013. In February 2012, we collected $41 million of these earn-out payments which is presented as “Crestwood earn-out” in the condensed consolidated statement of income. We will not receive additional earn-out payments in 2013. Note 3 to the consolidated financial statements in our 2012 Annual Report on Form 10-K contains additional information regarding the Crestwood Transaction. |
Derivatives And Fair Value Measurements (Carrying Value Of Derivatives) (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
Cash Flow Derivatives [Member]
|
Jun. 30, 2012
Cash Flow Derivatives [Member]
|
Mar. 31, 2012
Cash Flow Derivatives [Member]
|
Jun. 30, 2013
Production Revenue [Member]
Cash Flow Derivatives [Member]
|
Jun. 30, 2012
Production Revenue [Member]
Cash Flow Derivatives [Member]
|
Jun. 30, 2012
Derivative gains (losses) [Member]
Cash Flow Derivatives [Member]
|
|||||
Derivatives, Fair Value [Line Items] | ||||||||||||||
Derivative fair value at beginning of period | $ 342,799 | $ 211,163 | ||||||||||||
Settlements in production revenue | (11,287) | (36,992) | [1] | (26,042) | (65,581) | [1] | (49,999) | 91,736 | ||||||
Settlements in net derivative (gains) losses | 3,820 | |||||||||||||
Ineffectiveness reported in net derivative gains | 6,810 | 1,569 | ||||||||||||
Unrealized gains reported in OCI | 108,646 | 8,752 | ||||||||||||
Derecognition of hedges | (180,732) | |||||||||||||
Derivative fair value at end of period | $ 176,726 | $ 211,163 | ||||||||||||
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Earnings Per Share (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Components Used To Compute Basic And Diluted Earnings (Loss) Per Common Share |
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Accounting Policies And Disclosures (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||
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Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jun. 30, 2012
Restatement Adjustment [Member]
|
Jun. 30, 2012
Restatement Adjustment [Member]
|
Jun. 30, 2012
Scenario, Previously Reported [Member]
|
Jun. 30, 2012
Scenario, Previously Reported [Member]
|
Jun. 30, 2012
UNITED STATES
|
Mar. 31, 2012
UNITED STATES
|
Jun. 30, 2012
UNITED STATES
Restatement Adjustment [Member]
|
Jun. 30, 2012
UNITED STATES
Restatement Adjustment [Member]
|
Jun. 30, 2012
CANADA
|
Mar. 31, 2012
CANADA
|
Jun. 30, 2012
CANADA
Restatement Adjustment [Member]
|
Jun. 30, 2012
CANADA
Restatement Adjustment [Member]
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Significant Accounting Policies [Line Items] | ||||||||||||||||||||||||||||
Production | $ 121,121,000 | $ 150,311,000 | [1] | $ 253,735,000 | $ 316,765,000 | [1] | $ 1,300,000 | $ (2,300,000) | $ (1,500,000) | $ (3,300,000) | ||||||||||||||||||
Shareholders Equity | (968,492,000) | 257,699,000 | [2] | (968,492,000) | 257,699,000 | [2] | (1,132,797,000) | 1,261,919,000 | ||||||||||||||||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | 22,200,000 | 42,900,000 | 3,500,000 | 15,500,000 | ||||||||||||||||||||||||
Impairment of Oil and Gas Properties | 0 | 1,199,726,000 | [1] | 0 | 1,517,654,000 | [1] | 1,042,700,000 | 178,000,000 | 144,000,000 | 259,700,000 | 157,000,000 | 139,900,000 | 63,800,000 | 203,300,000 | ||||||||||||||
Depletion | (1,300,000) | (1,300,000) | (2,600,000) | (2,600,000) | ||||||||||||||||||||||||
Income tax (expense) benefit | (5,201,000) | 395,831,000 | [1] | (12,097,000) | 497,069,000 | [1] | (34,300,000) | (76,200,000) | (14,600,000) | (48,800,000) | ||||||||||||||||||
Net income (loss) | 242,523,000 | (802,022,000) | [1] | 182,818,000 | (1,013,587,000) | [1] | 129,500,000 | 281,100,000 | ||||||||||||||||||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ (14,867,000) | $ (32,450,000) | [1] | $ (29,320,000) | $ 1,699,000 | [1] | $ 7,000,000 | $ 39,900,000 | ||||||||||||||||||||
Earnings (loss) per common share - diluted | $ 1.37 | [3] | $ (4.72) | [1],[3] | $ 1.04 | [3] | $ (5.96) | [1],[3] | $ (0.76) | $ (1.65) | $ (3.96) | $ (4.31) | ||||||||||||||||
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Derivatives And Fair Value Measurements (Changes In Level 3 Fair Values) (Details) (Fair Value Inputs, Level 3 [Member], USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Balance at beginning of period | $ (9,037) | $ 21,587 | $ (4,931) | $ 150,989 |
Unrealized gain (loss) on derivatives | 556 | 35,197 | 538 | (35,525) |
Transfers out of Level 3 | 0 | (153,418) | ||
Unrealized gains reported in OCI | 0 | (1,405) | 0 | 32,897 |
Balance at end of period | (9,873) | 45,345 | (9,873) | 45,345 |
Total gains included in net derivative gains attributable to the change in unrealized gains related to assets still held at the reporting date | 2,854 | 35,197 | 2,762 | 35,525 |
Production Revenue [Member]
|
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Settlements | 0 | (1,037) | 0 | (4,775) |
Other Revenue [Member]
|
||||
Settlements | $ (1,392) | $ (8,997) | $ (5,480) | $ (15,873) |
Quicksilver Stockholders' Equity (Stock Option Activity) (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at beginning of period, Shares | 4,979,980 |
Granted, Shares | 888,197 |
Expired, Shares | (53,588) |
Outstanding at end of period, Shares | 5,814,589 |
Outstanding at beginning of period, Wtd Avg Exercise Price | $ 10.23 |
Exercisable at end of period, Shares | 4,575,938 |
Granted, Wtd Avg Exercise Price | $ 2.33 |
Expired, Wtd Avg Exercise Price | $ 9.10 |
Outstanding at end of period, Wtd Avg Exercise Price | $ 9.04 |
Exercisable at end of period, Wtd Avg Exercise Price | $ 9.31 |
Outstanding at end of period, Wtd Avg Remaining Contractual Life, Years | 7 years 1 month 6 days |
Exercisable at end of period, Wtd Avg Remaining Contractual Life, Years | 6 years 8 months 12 days |
Outstanding at end of period, Aggregate Intrinsic Value | $ 0 |