8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 6, 2016

QUICKSILVER RESOURCES INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction
of incorporation) 001-14837 (Commission
File Number) 75-2756163 (IRS Employer
Identification No.)

801 Cherry Street

Suite 3700, Unit 19

Fort Worth, Texas 76102

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (817) 665-5000

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 1.01. Entry into a Material Definitive Agreement.

As previously disclosed in a Current Report on Form 8-K filed with the SEC on January 28, 2016, Quicksilver Resources Inc. (the “Company”) and its U.S. subsidiaries (together with the Company, the “Sellers”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with BlueStone Natural Resources II, LLC (the “Buyer”) on January 22, 2016 and, as previously disclosed in a Current Report on Form 8-K filed with the SEC on March 31, 2016, the Sellers and the Buyer entered into an amendment to the Purchase Agreement (the “First Amendment”) on March 30, 2016. On April 6, 2016, the Sellers and the Buyer entered into a second amendment to the Purchase Agreement (the “Second Amendment”) pursuant to which, among other things, the Sellers and the Buyer agreed to certain adjustments to the cash purchase price that will result in an aggregate reduction of the cash purchase price of approximately $2.5 million.

Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 6, 2016, the Sellers completed the disposition of substantially all of their U.S. oil and gas assets to the Buyer for a cash purchase price of approximately $236 million, subject to customary post-closing adjustments. The disposition was completed pursuant to the Purchase Agreement, as amended by the First Amendment and the Second Amendment. The disposed U.S. oil and gas assets are located primarily in the Barnett Shale in the Fort Worth basin of North Texas as well as assets in the Delaware basin in West Texas, which are concentrated in Pecos County, Texas and to a lesser extent Crockett and Upton Counties, Texas.

Copies of the Purchase Agreement and the First Amendment are incorporated by reference as Exhibit 2.1 and Exhibit 2.2, respectively, to this Current Report on Form 8-K and are incorporated into this Item 2.01 by reference. A copy of the Second Amendment is filed as Exhibit 2.3 to this Current Report on Form 8-K and is incorporated into this Item 2.01 by reference.

Item 9.01. Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

Unaudited pro forma consolidated financial information of the Company is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 9.01 by reference.

(d) Exhibits

Exhibit Number	Description
2.1#	Asset Purchase Agreement, dated as of January 22, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2016)
2.2	First Amendment to Asset Purchase Agreement, dated as of March 30, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 31, 2016)
2.3*	Second Amendment to Asset Purchase Agreement, dated as of April 6, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC
99.1	Unaudited pro forma consolidated financial information

# Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of these Exhibits and Schedules is included in the index of the Purchase Agreement. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedule to the SEC upon request.

*Annexes have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of the Annexes is included after the signature page to the Second Amendment. The Company agrees to furnish a supplemental copy of any such omitted Annex to the SEC upon request.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

QUICKSILVER RESOURCES INC.
By:	/s/ Vanessa Gomez LaGatta
	Vanessa Gomez LaGatta
	Senior Vice President – Chief Financial Officer and Treasurer

Date: April 12, 2016

INDEX TO EXHIBITS

Exhibit Number	Description
2.1#	Asset Purchase Agreement, dated as of January 22, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2016)
2.2	First Amendment to Asset Purchase Agreement, dated as of March 30, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 31, 2016)
2.3*	Second Amendment to Asset Purchase Agreement, dated as of April 6, 2016, by and among Quicksilver Resources Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., and BlueStone Natural Resources II, LLC
99.1	Unaudited pro forma consolidated financial information

# Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of these Exhibits and Schedules is included in the index of the Purchase Agreement. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedule to the SEC upon request.

*Annexes have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A list of the Annexes is included after the signature page to the Second Amendment. The Company agrees to furnish a supplemental copy of any such omitted Annex to the SEC upon request.

EX-2.3

Exhibit 2.3

SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT dated as of April 6, 2016 (this “Amendment”) to that certain Asset Purchase Agreement, dated as of January 22, 2016, as amended, is entered into by and among Quicksilver Resources Inc., a Delaware corporation (the “Company”), Cowtown Gas Processing L.P., a Texas limited partnership (“Cowtown Gas Processing”), and Cowtown Pipeline L.P., a Texas limited partnership (“Cowtown Pipeline” and together with the Company and Cowtown Gas Processing, each a “Seller”, and collectively, the “Sellers”), and BlueStone Natural Resources II, LLC, a Delaware limited liability company (“Buyer”). Sellers and Buyer are sometimes referred to collectively herein as the “Parties” and individually as a “Party”.

RECITALS

A.Sellers and Buyer are parties to that certain Asset Purchase Agreement, dated as of January 22, 2016, as amended pursuant to that certain First Amendment to Asset Purchase Agreement, dated as of March 30, 2016 (as so amended, the “Purchase Agreement”).

B.Sellers and Buyer now desire to amend the Purchase Agreement in the respects, but only in the respects, hereinafter set forth.

C.Capitalized terms used herein shall have the respective meanings ascribed thereto in the Purchase Agreement, as amended by this Amendment, unless herein defined or the context shall otherwise require.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

SECTION 1. AMENDMENTS.

Section 1.1Amendment of Section 1.1. Section 1.1 of the Purchase Agreement is hereby amended by adding thereto the following definitions, which shall be inserted in proper alphabetical order:

“Affected Asset” has the meaning set forth in Section 2.6.

“FCC” means the United States Federal Communications Commission.

“FCC Licenses” means those certain Permits that constitute licenses, permits and other authorizations, including any temporary waiver or special temporary authorization and any renewals thereof or any transferable pending application therefor, relating exclusively to the Oil and Gas Assets, issued by the FCC to a Seller or its Affiliates, a list of which shall be set forth in Schedule 1 to the Management Services Agreement to be executed by the applicable Parties at Closing pursuant to Section 4.5.

1

“Outstanding Hard Consent” has the meaning set forth in Section 2.6.

“Specified FW Hard Consent” has the meaning set forth in Section 2.6.

Section 1.2Amendment of Section 2.6. Section 2.6 of the Purchase Agreement is hereby amended by adding the following new paragraph to the end of Section 2.6 of the Purchase Agreement:

Notwithstanding the foregoing or anything else to the contrary in this Agreement, Buyer has indicated its desire and willingness to “close over” any and all Hard Consents affecting any Oil and Gas Assets, including all consents contained in the instruments set forth on Schedule 2.6(a), that remain outstanding as of the Closing other than the Specified FW Hard Consents (each such consent, an “Outstanding Hard Consent”), in which case the Oil and Gas Assets affected by any such Outstanding Hard Consent (“Affected Assets”) shall nevertheless be sold and conveyed to Buyer at the Closing and Buyer shall pay for the Affected Assets at Closing (without any reduction in the Base Purchase Price) in accordance with this Agreement as though such Outstanding Hard Consent had been obtained; provided, however, that in no event shall the Parties “close over” any Hard Consent set forth on Schedule 2.6(b) (the “Specified FW Hard Consents”) and the Oil and Gas Assets affected by such Specified FW Hard Consents (if outstanding as of the Closing) shall not be conveyed at the Closing and shall only be conveyed to Buyer from Sellers, if at all, following the Closing in accordance with the first paragraph of this Section 2.6. Following the Closing, Sellers’ sole obligation with respect to any Outstanding Hard Consent that was “closed over” at the Closing shall be to use commercially reasonable efforts to obtain such Outstanding Hard Consent to the extent Sellers have employees and resources available for such purpose; provided that nothing in this paragraph shall (x) require Sellers to make any expenditure or incur any obligation on their own or on behalf of Buyer for which funds in the full amount of such expenditure or obligation are not provided to Sellers by Buyer in advance in cash or (y) prohibit any Seller from ceasing operations or winding up its affairs following the Closing. BUYER SHALL DEFEND, RELEASE, INDEMNIFY AND HOLD HARMLESS EACH SELLER PARTY FROM AND AGAINST ANY AND ALL LIABILITIES (INCLUDING, COURT COSTS, INTEREST, LITIGATION EXPENSES AND ATTORNEY FEES) BASED UPON, ARISING OUT OF, IN RESPECT OF, RESULTING FROM, OR RELATING TO THE FAILURE TO OBTAIN SUCH OUTSTANDING HARD CONSENT OR THE SALE AND TRANSFER OF ANY AFFECTED ASSETS, INCLUDING THOSE ASSERTED OR CLAIMED AGAINST ANY SELLER PARTY BY ANY COUNTERPARTY TO ANY CONTRACT OR LEASE THAT IS THE SUBJECT OF AN OUTSTANDING HARD CONSENT, WITHOUT REGARD TO THE CAUSE OR CAUSES OF ANY SUCH LIABILITY, INCLUDING, EVEN THOUGH SUCH LIABILITY IS CAUSED BY THE NEGLIGENCE (WHETHER SOLE, JOINT, CONCURRENT, COMPARATIVE, CONTRIBUTORY, ACTIVE, PASSIVE, OR OTHERWISE), STRICT LIABILITY OR OTHER FAULT OF ANY PERSON, INCLUDING A SELLER PARTY, BUT EXCLUDING LIABILITIES RESULTING

2

FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SELLER PARTY. Further, at the Closing, the Purchase Price shall be (i) adjusted downward by an amount equal to $2,533,665 in connection with Buyer’s agreement to assume and undertake certain obligations to a third party in connection with obtaining certain Hard Consents and (ii) adjusted upward by an amount equal to $30,000 in connection with obtaining a Hard Consent.

Section 1.3Addition of Section 4.5. The following is hereby added as Section 4.5 of the Purchase Agreement.

4.5    FCC Licenses.

To the extent the FCC Licenses are not transferable at Closing pursuant to applicable Legal Requirements because Buyer does not have the required FCC authority and/or approval to use any FCC License at Closing, Sellers shall authorize such use by Buyer, subject to Sellers’ ultimate ownership and control, under a Management Services Agreement to be executed by the applicable Parties at Closing, in the form attached as Exhibit J, until the Buyer obtains the required FCC authorization and/or approval.

Section 1.4Amendment of Section 13.1.The last sentence of Section 13.1 of the Purchase Agreement is hereby amended and restated in its entirety as follows:

Notwithstanding anything to the contrary, the indemnity obligations set forth in Section 2.6, Section 5.21, Section 6.6, and Section 7.1(e) and the representation and warranties set forth in Section 5.21 and Section 6.6 shall survive indefinitely.

Section 1.5Amendment of Exhibit A. Exhibit A to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Annex I to this Amendment.

Section 1.6Amendment of Exhibit C. Exhibit C to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Annex II to this Amendment.

Section 1.7Amendment of Exhibit D. Exhibit D to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Annex III to this Amendment.

Section 1.8Amendment of Exhibit E. Exhibit E to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Annex IV to this Amendment.

Section 1.9Amendment of Schedule 2.2(j). Schedule 2.2(j) to the Purchase Agreement is hereby amended by deleting the following:

TX SOMERVELL DEED TX4250984.99 DONALD J TALLMAN 12/10/2011 SOMERVELL 20102064

3

Schedule 2.2(j) to the Purchase Agreement is hereby further amended by deleting the entry for Property No. TX4250785.99 and replacing it with the following:

TX SOMERVELL DEED TX4250785.99 BJKS PROPERTIES LTD (insofar as 271.718 acres) 6/22/2007 SOMERVELL 20071926

Section 1.10Addition of Schedules 2.6(a) and 2.6(b). The Purchase Agreement is hereby amended by inserting therein in proper numerical order a new Schedule 2.6(a) and a new Schedule 2.6(b), the forms of which are attached to this Amendment as Annex V and Annex VI, respectively, to this Amendment.

Section 1.11Amendment of Schedule 5.4. Schedule 5.4 to the Purchase Agreement is hereby amended by deleting the Contracts set forth below:

Contract Type	Contract Description	Contract Dates	Debtor Associated with Contract	Counterparty Name
License Agreement	Software License Agreement	03/13/00	Quicksilver Resources Inc.	P2 Energy Solutions, Inc.
NAESB	Base Contract for Sale and Purchase of Natural Gas	03/01/04	Quicksilver Resources Inc.	Cook Inlet Energy Supply LLC (now Macquarie Energy, LLC)
NAESB	Purchase agreement for the sale and purchase of natural gas	07/01/07	Quicksilver Resources Inc.	CenterPoint Energy Services, Inc.
NAESB	Purchase agreement for the sale and purchase of natural gas	06/01/07	Quicksilver Resources Inc.	Houston Pipe Line Company LP
Sublease Agreement	SUBLEASE EXECUTED JULY 2, 2013, BETWEEN QRI AND CRESTWOOD MIDSTREAM PARTNERS LP BY WHICH QRI AGREES TO SUBLEASE TO CRESTWOOD THE SPACE SHOWN ON EXHIBIT A AND CONSISTING OF APPROXIMATELY 25,413 SQ FT OF SPACE (BEING 38TH FLOOR) OF BURNETT PLAZA FOR PERIOD TO END JUNE 30, 2017.	07/02/13	Quicksilver Resources Inc.	Crestwood Midstream Partners LP

Section 1.12Amendment of Schedule 7.4(d). Schedule 7.4(d) to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Annex VII to this Amendment.

Section 1.13Addition of Exhibit J. The Purchase Agreement is hereby amended by inserting therein in proper alphabetical order a new Exhibit J, the form of which is attached to this Amendment as Annex VIII.

4

SECTION 2. MISCELLANEOUS.

Section 2.1Ratification. Each Party hereby consents to this Amendment and acknowledges and agrees that, except as expressly set forth in this Amendment, the terms, provisions and conditions of the Purchase Agreement and the other Transaction Documents are hereby ratified and confirmed and shall remain unchanged and in full force and effect without interruption or impairment of any kind.

Section 2.2No Other Amendments; Reservation of Rights; No Waiver. Other than as otherwise expressly provided herein, this Amendment shall not be deemed to operate as an amendment or waiver of, or to prejudice, any right, power, privilege or remedy of any Party under the Purchase Agreement or any other Transaction Document, nor shall the entering into of this Amendment preclude any Party from refusing to enter into any further amendments with respect to the Purchase Agreement or any other Transaction Document. Other than as expressly provided herein, and without limiting the generality of the provisions of Section 13.5 of the Purchase Agreement, this Amendment shall not constitute a waiver of compliance with any covenant or other provision in the Purchase Agreement or any other Transaction Document or of the occurrence or continuance of any present or future breach thereunder.

Section 2.3Headings; Interpretation. The headings in this Amendment are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment. Each reference to “herein,” “hereinafter,” “hereof,” and “hereunder” and each other similar reference contained in the Purchase Agreement, each reference to “this Agreement” and each other similar reference contained in the Purchase Agreement and each reference contained in this Amendment to the “Agreement” shall on and after the date of this Amendment refer to the Purchase Agreement as amended by this Amendment. Any notices, requests, certificates and other instruments executed and delivered on or after the date of this Amendment may refer to the Purchase Agreement without making specific reference to this Amendment but nevertheless all such references shall mean the Purchase Agreement as amended by this Amendment unless the context otherwise requires. As used in this Amendment, the word “including” or any variation thereof means “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. All words used in this Amendment will be construed to be of such gender or number as the circumstances require. The recitals to this Amendment and all Schedules and Annexes attached hereto or referred to herein are hereby incorporated in and made a part of this Amendment as if set forth herein.

Section 2.4Complete Agreement. The Purchase Agreement, as amended by this Amendment, the Transaction Documents and all other certificates, documents or instruments executed under the Purchase Agreement, as amended by this Amendment, or such other Transaction Documents, together with the Schedules, Annexes and Exhibits hereto and thereto, constitute the entire agreement between the Parties, and supersede all prior agreements and understandings, oral and written, between the Parties, with respect to the subject matter of the Purchase Agreement, as amended by this Amendment; there are no conditions to this Amendment that are not expressly stated in this Amendment.

5

Section 2.5Amendment. This Amendment may not be amended or modified except in the manner specified for an amendment of or modification to the Purchase Agreement in Section 13.6 of the Purchase Agreement.

Section 2.6Governing Law; Consent to Jurisdiction and Venue; Jury Trial Waiver. The provisions of Section 13.11 of the Purchase Agreement shall govern and apply to this Amendment, mutatis mutandis.

Section 2.7Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes of this Amendment, facsimile and .pdf signatures shall be deemed originals for all purposes.

Section 2.8Severability. If any provision of this Amendment shall be declared by any court of competent jurisdiction to be illegal, void or unenforceable, then such provisions shall be construed so that the remaining provisions of this Amendment shall not be affected, but shall remain in full force and effect, and any such illegal, void or unenforceable provisions shall be deemed, without further action on the part of any person or entity, to be modified, amended and/or limited, but only to the extent necessary to render the same valid and enforceable in, and only in, the applicable jurisdiction.

[Remainder of page intentionally left blank.]

6

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed as of the date set forth above by their duly authorized representatives.

QUICKSILVER RESOURCES INC.

By:     /s/ Glenn Darden    

Glenn Darden

President and Chief Executive Officer

COWTOWN GAS PROCESSING, L.P.,

By: COWTOWN PIPELINE MANAGEMENT, INC.,

its General Partner

By:     /s/ Glenn Darden    

Glenn Darden

President and Chief Executive Officer

COWTOWN PIPELINE, L.P.

By: COWTOWN PIPELINE MANAGEMENT, INC.,

its General Partner

By:     /s/ Glenn Darden    

Glenn Darden

President and Chief Executive Officer

BLUESTONE NATURAL RESOURCES II, LLC

By:     /s/ John Redmond    

John Redmond

President and Chief Executive Officer

Signature Page to Second Amendment to Asset Purchase Agreement

ANNEXES

Annex I    Amended and Restated Exhibit A
Annex II    Amended and Restated Exhibit C
Annex III    Amended and Restated Exhibit D
Annex IV    Amended and Restated Exhibit E
Annex V    Schedule 2.6(a) – Outstanding Hard Consents
Annex VI    Schedule 2.6(b) – COFW Hard Consents
Annex VII    Amended and Restated Schedule 7.4(a)
Annex VIII    Exhibit J – Form of Management Services Agreement

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

(DEBTOR IN POSSESSION)

The following unaudited pro forma condensed consolidated balance sheet and statements of operations are derived from the historical consolidated financial statements of Quicksilver Resources Inc. (“Quicksilver”). The pro forma condensed consolidated balance sheet as of September 30, 2015 gives effect to (i) the deconsolidation of Quicksilver Resources Canada Inc. (“QRCI”) and its wholly owned subsidiaries and its affiliates, including Fortune Creek Gathering and Processing Partnership (collectively the “Canadian Entities”) due to commencement of restructuring proceedings of certain of the Canadian Entities under the Companies Creditors Arrangement Act (Canada) and (ii) the sale of substantially all of our U.S. operating assets to BlueStone Natural Resources II, LLC (“BlueStone Transaction”) pursuant to the Asset Purchase Agreement as if these events had occurred on September 30, 2015. The pro forma condensed consolidated statement of operations for the year ended December 31, 2014 and the nine months ended September 30, 2015 reflects the deconsolidation of the Canadian Entities and the BlueStone Transaction as if these events had occurred on January 1, 2014. The pro forma statements of operations exclude any recognition of gain or loss related to the deconsolidation of the Canadian Entities and the BlueStone Transaction as a non-recurring transaction. The unaudited pro forma condensed consolidated balance sheet and statements of operations have been derived from and should be read in conjunction with the related notes and Quicksilver’s historical financial statements, including the related notes, included in its 2014 Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2015.

The preparation of the unaudited pro forma consolidated financial information is based on financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates that affect the reported amounts of revenues and expenses. Actual results could differ from those estimates.

The unaudited pro forma consolidated financial information is provided for illustrative purposes only and does not purport to represent what the actual results of Quicksilver’s operations would have been had the deconsolidation of the Canadian Entities and the BlueStone Transaction occurred on the respective dates assumed, nor is it necessarily indicative of Quicksilver’s future operating results. However, the pro forma adjustments reflected in the accompanying unaudited pro forma consolidated financial information reflect estimates and assumptions that Quicksilver believes to be reasonable.

QUICKSILVER RESOURCES INC. (DEBTOR IN POSSESSION)

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2015

In thousands

	Historical			Pro Forma Adjustments Canada				Pro Forma Adjustments BlueStone				Pro Forma
	(Restated)			(a)
ASSETS
Current assets
Cash and cash equivalents	$	175,673		$	(20,672	)		$	149,807		(d)	$	304,808
Accounts receivable - net of allowance for doubtful accounts	27,537			9,299			(b)	—				36,836
Other current assets	17,794			(7,320		)		(2,393		)	(e)	8,081
Total current assets	221,004			(18,693		)		147,414				349,725
Property, plant and equipment - net
Oil and gas properties, full cost method
Evaluated oil and gas properties	320,111			(115,929		)		(204,182		)	(f)	—
Unevaluated oil and gas properties	21,377			—				(21,377		)	(f)	—
Other property and equipment	99,332			(41,450		)		(50,315		)	(f)	7,567
Property, plant and equipment - net	440,820			(157,379		)		(275,874		)		7,567
Other assets	6,640			(4,665		)		—				1,975
	$	668,464		$	(180,737	)		$	(128,460	)		$	359,267
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt	$	156,985		$	(78,367	)		$	(78,618	)	(d)	$	—
Accounts payable	19,528			(1,094		)		—				18,434
Accrued liabilities	38,004			(4,523		)		(5,544		)	(g)	27,937
Total current liabilities	214,517			(83,984		)		(84,162		)		46,371
Partnership liability	87,935			(87,935		)		—				—
Asset retirement obligations	99,791			(53,554		)		(46,237		)	(h)	—
Other liabilities	10,195			—				(10,195		)	(i)	—
Liabilities subject to compromise	1,884,128			—				—				1,884,128
Stockholders’ equity	(1,628,102		)	44,736			(c)	12,134			(j)	(1,571,232		)
	$	668,464		$	(180,737	)		$	(128,460	)		$	359,267

The accompanying notes are an integral part of this unaudited pro forma condensed consolidated financial information.

QUICKSILVER RESOURCES INC. (DEBTOR IN POSSESSION)

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

In thousands, except for per share data

	Historical			Pro Forma Adjustments Canada				Pro Forma Adjustments BlueStone				Pro Forma
	(Restated)			(a)				(c)
Revenue
Production	$	161,875		$	(38,798	)		$	(123,077	)	(d)	$	—
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		)	(e)	—
Total revenue	227,119			(47,937		)		(159,152		)		20,030
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		)		(5,369		)		14
Costs of purchased natural gas	29,863			—				(29,863		)		—
Depletion, depreciation and accretion	39,793			(17,494		)		(21,965		)		334
Impairment	241,929			(91,113		)		(150,816		)		—
General and administrative	39,312			(3,253		)		4,386			(f)	40,445
Other operating	937			(774		)		(163		)		—
Total expense	464,913			(145,028		)		(279,092		)		40,793
Operating income (loss)	(237,794		)	97,091				119,940				(20,763		)
Other income (expense) - net	(26,106		)	26,245				—				139
Fortune Creek accretion	(9,877		)	9,877				—				—
Interest expense	(43,537		)	5,401			(b)	4,193			(g)	(33,943		)
Reorganization items, net	(148,568		)	—				—				(148,568		)
Income (loss) before income taxes	(465,882		)	138,614				124,133				(203,135		)
Income tax (expense) benefit	(5,836		)	(657		)		6,743			(h)	250
Net income (loss)	$	(471,718	)	$	137,957			$	130,876			$	(202,885	)
Earnings (loss) per common share - basic	$	(2.68	)									$	(1.15	)
Earnings (loss) per common share - diluted	$	(2.68	)									$	(1.15	)
Weighted average common shares outstanding - basic	176,021											176,021
Weighted average common shares outstanding - diluted	176,021											176,021

The accompanying notes are an integral part of this unaudited pro forma condensed consolidated financial information.

QUICKSILVER RESOURCES INC. (DEBTOR IN POSSESSION)

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2014

In thousands, except for per share data

	Historical			Pro Forma Adjustments Canada				Pro Forma Adjustments BlueStone				Pro Forma
				(a)				(c)
Revenue
Production	$	425,154		$	(132,767	)		$	(209,377	)	(d)	$	83,010
Sales of purchased natural gas	70,468			—				(70,468		)		—
Net derivative gains (losses)	65,698			(18,109		)						47,589
Other	8,108			(2,367		)		13,501			(e)	19,242
Total revenue	569,428			(153,243		)		(266,344		)		149,841
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		)		(13,419		)		24
Costs of purchased natural gas	70,376			—				(70,376		)		—
Depletion, depreciation and accretion	61,126			(23,902		)		(36,948		)		276
Impairment	71,988			(69,403		)		(2,066		)		519
General and administrative	47,294			(3,569		)		8,766			(f)	52,491
Other operating	2,608			(2,114		)		(494		)		—
Total expense	483,994			(183,208		)		(247,476		)		53,310
Operating income (loss)	85,434			29,965				(18,868		)		96,531
Other income (expense) - net	(6,581		)	2,889				3,692				—
Fortune Creek accretion	(15,067		)	15,067				—				—
Interest expense	(163,286		)	1,535			(b)	4,078			(g)	(157,673		)
Income (loss) before income taxes	(99,500		)	49,456				(11,098		)		(61,142		)
Income tax (expense) benefit	(3,600		)	986				(18,866		)	(h)	(21,480		)
Net income (loss)	$	(103,100	)	$	50,442			$	(29,964	)		$	(82,622	)
Earnings (loss) per common share - basic	$	(0.59	)									$	(0.48	)
Earnings (loss) per common share - diluted	$	(0.59	)									$	(0.48	)
Weighted average common shares outstanding - basic	173,822											173,822
Weighted average common shares outstanding - diluted	173,822											173,822

The accompanying notes are an integral part of this unaudited pro forma condensed consolidated financial information.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (DEBTOR IN POSSESSION)

(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.

(d) Adjustment to reflect the $166 million in cash retained from the BlueStone Transaction. Of the $235.9 million net cash proceeds received, $78.6 million was used to repay principal amounts under our Combined Credit Agreements and $7.4 million was used to pay transaction fees associated with the closing.

(e) Adjustment to reflect sale of all inventory in the BlueStone Transaction.

(f) Adjustment to reflect sale of all oil and gas operated properties and certain non-oil and gas properties in the BlueStone Transaction. Any ownership retained, or the effects thereto, due to non-consenting Leases pursuant to the Asset Purchase Agreement is considered immaterial for purposes of this unaudited pro forma condensed consolidated financial information.

(g) Adjustment to reflect the accrued liabilities conveyed in the BlueStone Transaction.

(h) Adjustment to reflect the elimination of $46.2 million of asset retirement obligations associated with our assets sold in the BlueStone Transaction.

(i) Adjustment to reflect the recognition of the deferred revenue related to a contract that was conveyed in the BlueStone Transaction.

(j) Adjustment to reflect the loss on the BlueStone Transaction net of transaction fees incurred and the net impact of the recognition of the accumulated other comprehensive income related to deferred hedge gains.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (DEBTOR IN POSSESSION)

(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.

(c) Adjustment to eliminate revenue and direct operating expenses related to the assets sold in the BlueStone Transaction.

(d) Adjustment to recognize the net deferred hedge gains previously included in accumulated other comprehensive income related to hedges accounted under hedge accounting as the underlying transaction is no longer probable to occur. There is no further balance deferred in accumulated other comprehensive income related to these hedges.

(e) Adjustment to recognize the previously deferred revenue related to a contract that was conveyed in the BlueStone Transaction.

(f) Adjustment to include previously capitalized general and administrative costs as no activity would be capitalized following the BlueStone Transaction as substantially all U.S. oil and gas assets were sold.

(g) Adjustment to reflect the reduction in interest expense associated with the repayment of the outstanding principal and accrued interest under the Combined Credit Agreement.

(h) Adjustment to recognize the tax impact of the release of the hedge revenue previously included in other comprehensive income. As we have a full valuation allowance applied during the period, there is no further adjustment to income tax expense as a result of the BlueStone Transaction.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2014 (DEBTOR IN POSSESSION)

(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.

(c) Adjustment to eliminate revenue and direct operating expenses related to the assets sold in the BlueStone Transaction.

(d) Adjustment to reverse previously recognized net deferred hedge gains which were released from accumulated other comprehensive income related to hedges accounted for under hedge accounting.

(e) Adjustment to recognize the previously deferred revenue related to a contract that was conveyed in the BlueStone Transaction.

(f) Adjustment to include previously capitalized general and administrative costs as no activity would be capitalized following the BlueStone Transaction as substantially all U.S. oil and gas assets were sold.

(g) Adjustment to reflect the reduction in interest expense associated with the repayment of the outstanding principal and accrued interest under the Combined Credit Agreement.

(h) Adjustment to reverse the tax impact of the release of the hedge revenue previously included in other comprehensive income. As we have a full valuation allowance applied during the period, there is no further adjustment to income tax expense as a result of the BlueStone Transaction.