Delaware (State or other jurisdiction of incorporation) | 001-14837 (Commission File Number) | 75-2756163 (IRS Employer Identification No.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
• | On March 17, 2015, the Company and its U.S. subsidiaries each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). |
• | On January 22, 2016, the Company and its U.S. subsidiaries entered into an asset purchase agreement pursuant to which they will dispose of substantially all of their U.S. oil and gas assets. |
• | On March 1, 2016, QRCI entered into an asset purchase agreement pursuant to which it will dispose of its oil and gas assets primarily located in the Horseshoe Canyon area of Alberta, Canada. |
• | As disclosed in Item 2.01 of this Current Report on Form 8-K, on March 8, 2016, the Canadian Entities applied for and received protection from their creditors under the Companies’ Creditors Arrangement Act (Canada) in the Court of Queen’s Bench in Alberta, Canada and, as a result of the filing, the Canadian Entities were deconsolidated from the Company’s financial statements as of the date of the submission. |
Exhibit Number | Description |
16.1 | Letter dated March 14, 2016 from Ernst & Young LLP to the SEC |
99.1 | Unaudited pro forma consolidated financial information |
QUICKSILVER RESOURCES INC. | ||
By: | /s/ Glenn Darden | |
Glenn Darden | ||
President and Chief Executive Officer |
Exhibit Number | Description |
16.1 | Letter dated March 14, 2016 from Ernst & Young LLP to the SEC |
99.1 | Unaudited pro forma consolidated financial information |
Historical | Pro Forma Adjustments | Pro Forma | |||||||||
(Restated) | (a) | ||||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 175,673 | $ | (20,672 | ) | $ | 155,001 | ||||
Accounts receivable - net of allowance for doubtful accounts | 27,537 | 9,299 | (b) | 36,836 | |||||||
Other current assets | 17,794 | (7,320 | ) | 10,474 | |||||||
Total current assets | 221,004 | (18,693 | ) | 202,311 | |||||||
Property, plant and equipment - net | |||||||||||
Oil and gas properties, full cost method | |||||||||||
Evaluated oil and gas properties | 320,111 | (115,929 | ) | 204,182 | |||||||
Unevaluated oil and gas properties | 21,377 | — | 21,377 | ||||||||
Other property and equipment | 99,332 | (41,450 | ) | 57,882 | |||||||
Property, plant and equipment - net | 440,820 | (157,379 | ) | 283,441 | |||||||
Other assets | 6,640 | (4,665 | ) | 1,975 | |||||||
$ | 668,464 | $ | (180,737 | ) | $ | 487,727 | |||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | |||||||||||
Current portion of long-term debt | $ | 156,985 | $ | (78,367 | ) | $ | 78,618 | ||||
Accounts payable | 19,528 | (1,094 | ) | 18,434 | |||||||
Accrued liabilities | 38,004 | (4,523 | ) | 33,481 | |||||||
Total current liabilities | 214,517 | (83,984 | ) | 130,533 | |||||||
Partnership liability | 87,935 | (87,935 | ) | — | |||||||
Asset retirement obligations | 99,791 | (53,554 | ) | 46,237 | |||||||
Other liabilities | 10,195 | — | 10,195 | ||||||||
Liabilities subject to compromise | 1,884,128 | — | 1,884,128 | ||||||||
Stockholders' equity | (1,628,102 | ) | 44,736 | (c) | (1,583,366 | ) | |||||
$ | 668,464 | $ | (180,737 | ) | $ | 487,727 |
Historical | Pro Forma Adjustments | Pro Forma | |||||||||
(Restated) | (a) | ||||||||||
Revenue | |||||||||||
Production | $ | 161,875 | $ | (38,798 | ) | $ | 123,077 | ||||
Sales of purchased natural gas | 29,921 | — | 29,921 | ||||||||
Net derivative gains (losses) | 27,863 | (7,833 | ) | 20,030 | |||||||
Other | 7,460 | (1,306 | ) | 6,154 | |||||||
Total revenue | 227,119 | (47,937 | ) | 179,182 | |||||||
Operating expense | |||||||||||
Lease operating | 39,763 | (19,928 | ) | 19,835 | |||||||
Gathering, processing and transportation | 65,270 | (9,803 | ) | 55,467 | |||||||
Production and ad valorem taxes | 8,046 | (2,663 | ) | 5,383 | |||||||
Costs of purchased natural gas | 29,863 | — | 29,863 | ||||||||
Depletion, depreciation and accretion | 39,793 | (17,494 | ) | 22,299 | |||||||
Impairment | 241,929 | (91,113 | ) | 150,816 | |||||||
General and administrative | 39,312 | (3,253 | ) | 36,059 | |||||||
Other operating | 937 | (774 | ) | 163 | |||||||
Total expense | 464,913 | (145,028 | ) | 319,885 | |||||||
Operating income (loss) | (237,794 | ) | 97,091 | (140,703 | ) | ||||||
Other income (expense) - net | (26,106 | ) | 26,245 | 139 | |||||||
Fortune Creek accretion | (9,877 | ) | 9,877 | — | |||||||
Interest expense | (43,537 | ) | 5,401 | (b) | (38,136 | ) | |||||
Reorganization items, net | (148,568 | ) | — | (148,568 | ) | ||||||
Income (loss) before income taxes | (465,882 | ) | 138,614 | (327,268 | ) | ||||||
Income tax (expense) benefit | (5,836 | ) | (657 | ) | (6,493 | ) | |||||
Net income (loss) | $ | (471,718 | ) | $ | 137,957 | $ | (333,761 | ) | |||
Earnings (loss) per common share - basic | $ | (2.68 | ) | $ | (1.90 | ) | |||||
Earnings (loss) per common share - diluted | $ | (2.68 | ) | $ | (1.90 | ) | |||||
Weighted average common shares outstanding - basic | 176,021 | 176,021 | |||||||||
Weighted average common shares outstanding - diluted | 176,021 | 176,021 |
Historical | Pro Forma Adjustments | Pro Forma | |||||||||
(a) | |||||||||||
Revenue | |||||||||||
Production | $ | 425,154 | $ | (132,767 | ) | $ | 292,387 | ||||
Sales of purchased natural gas | 70,468 | — | 70,468 | ||||||||
Net derivative gains (losses) | 65,698 | (18,109 | ) | 47,589 | |||||||
Other | 8,108 | (2,367 | ) | 5,741 | |||||||
Total revenue | 569,428 | (153,243 | ) | 416,185 | |||||||
Operating expense | |||||||||||
Lease operating | 76,975 | (37,024 | ) | 39,951 | |||||||
Gathering, processing and transportation | 136,283 | (43,295 | ) | 92,988 | |||||||
Production and ad valorem taxes | 17,344 | (3,901 | ) | 13,443 | |||||||
Costs of purchased natural gas | 70,376 | — | 70,376 | ||||||||
Depletion, depreciation and accretion | 61,126 | (23,902 | ) | 37,224 | |||||||
Impairment | 71,988 | (69,403 | ) | 2,585 | |||||||
General and administrative | 47,294 | (3,569 | ) | 43,725 | |||||||
Other operating | 2,608 | (2,114 | ) | 494 | |||||||
Total expense | 483,994 | (183,208 | ) | 300,786 | |||||||
Operating income (loss) | 85,434 | 29,965 | 115,399 | ||||||||
Other income (expense) - net | (6,581 | ) | 2,889 | (3,692 | ) | ||||||
Fortune Creek accretion | (15,067 | ) | 15,067 | — | |||||||
Interest expense | (163,286 | ) | 1,535 | (b) | (161,751 | ) | |||||
Income (loss) before income taxes | (99,500 | ) | 49,456 | (50,044 | ) | ||||||
Income tax (expense) benefit | (3,600 | ) | 986 | (2,614 | ) | ||||||
Net income (loss) | $ | (103,100 | ) | $ | 50,442 | $ | (52,658 | ) | |||
Earnings (loss) per common share - basic | $ | (0.59 | ) | $ | (0.30 | ) | |||||
Earnings (loss) per common share - diluted | $ | (0.59 | ) | $ | (0.30 | ) | |||||
Weighted average common shares outstanding - basic | 173,822 | 173,822 | |||||||||
Weighted average common shares outstanding - diluted | 173,822 | 173,822 |
(a) | Reflects the deconsolidation of the Canadian Entities’ assets and liabilities (including intercompany balances) at their historical carrying amounts included in Quicksilver's financial statements as of September 30, 2015. |
(b) | Accounts receivable has been adjusted to reflect the estimated fair value of our accounts receivable and loan receivable from QRCI. Prior to deconsolidation, both these receivables were considered intercompany balances with QRCI and were eliminated in consolidation. Subsequent to the deconsolidation, these amounts are recorded as balances with QRCI at an estimated fair value based on their carrying amounts. We have estimated a recovery rate based upon the estimated fair value of the net assets of QRCI available for distribution in relation to the secured and unsecured claims in the CCAA filing. |
(c) | Retained earnings has been adjusted to reflect the impairment loss on our investment in the Canadian Entities and the pro forma adjustments including the estimated fair value of our receivables as discussed above. |
(a) | Reflects the deconsolidation of production revenue, direct operating expenses and other income/expense from Canadian Entities. |
(b) | Adjustment to increase interest expense by $6.2 million to reflect the removal of intercompany interest income. |
(a) | Reflects the deconsolidation of production revenue, direct operating expenses and other income/expense from Canadian Entities. |
(b) | Adjustment to increase interest expense by $8.2 million to reflect the removal of intercompany interest income. |