10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(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, 2012
or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to

Commission file number: 001-14837

Quicksilver Resources Inc.

(Exact name of registrant as specified in its charter)

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)

(817) 665-5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  þ  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  þ  No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  No   þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Class	Outstanding as of July 31, 2012
Common Stock, $0.01 par value	172,971,660 shares

DEFINITIONS

As used in this Quarterly Report unless the context otherwise requires:

“ABR” means alternate base rate

“AOCI” means accumulated other comprehensive income

“Bbl” or “Bbls” means barrel or barrels

“Bbld” means barrel or barrels per day

“Bcf” means billion cubic feet

“Bcfe” means Bcf of natural gas equivalents

“Canada” means our oil and natural gas operations located principally in British Columbia and Alberta, Canada

“C$” means Canadian dollars

“DD&A” means Depletion, Depreciation and Accretion

“GPT” means gathering, processing and transportation expense

“LIBOR” means London Interbank Offered Rate

“MBbl” or “MBbls” means thousand barrels

“MBbld” means MBbl per day

“Mcf” means thousand cubic feet

“Mcfe” means Mcf natural gas equivalents, calculated as one Bbl of oil or NGLs equaling six Mcf of gas

“MMcf” means million cubic feet

“MMcfd” means million cubic feet per day

“MMcfe” means MMcf of natural gas equivalents

“MMcfed” means MMcfe per day

“NGL” or “NGLs” means natural gas liquids

“OCI” means other comprehensive income

“Oil” includes crude oil and condensate

“RSU” means restricted stock unit

COMMONLY USED TERMS

Other commonly used terms and abbreviations include:

“2007 Senior Secured Credit Facility” means collectively our U.S. senior secured revolving credit facility and our Canadian senior secured revolving credit facility, each dated as of February 9, 2007, which were terminated September 6, 2011 and replaced at that time by the Initial U.S. Credit Facility and the Initial Canadian Credit Facility

“Amended and Restated Canadian Credit Facility” means our new Canadian senior secured revolving credit facility which was amended and restated, effective December 22, 2011

“Amended and Restated U.S. Credit Facility” means our new U.S. senior secured revolving credit facility which was amended and restated, effective December 22, 2011

“Bakken Asset” means our operations and our assets in the Southern Alberta basin in the Bakken formation of northern Wyoming and Montana, including our Cutbank field operations and assets

“Barnett Shale Asset” means our operations and our assets in the Barnett Shale located in the Fort Worth basin of North Texas

“BBEP” means BreitBurn Energy Partners L.P.

“BBEP Unit” means BBEP limited partner unit

“CMLP” means Crestwood Midstream Partners LP

“Combined Credit Agreements” means collectively our Amended and Restated U.S. Credit Facility and our Amended and Restated Canadian Credit Facility

“Crestwood” means Crestwood Holdings LLC

“Crestwood Transaction” means the sale to Crestwood of all our interests in KGS, including general partner interests and incentive distribution rights

“Eni” means, depending on the context, either or both Eni Petroleum US LLC and Eni US Operating Co. Inc., which are subsidiaries of Eni SpA

“FASB” means the Financial Accounting Standards Board, which promulgates accounting standards in the U.S.

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“Fortune Creek” means Fortune Creek Gathering and Processing Partnership, a midstream partnership formed December 2011 with KKR for the construction and operation of assets to provide natural gas midstream services within the Horn River, Liard and Cordova basins of British Columbia, Canada

“GAAP” means accounting principles generally accepted in the U.S.

“Horn River Asset” means our operations and our assets in the Horn River basin of northeast British Columbia

“Horseshoe Canyon Asset” means our operations and our assets in Horseshoe Canyon, the coalbed methane fields of southern and central Alberta

“Initial Canadian Credit Facility” means our initial Canadian senior secured revolving credit facility, dated as of September 6, 2011, which was amended and restated by the Amended and Restated Canadian Credit Facility on December 22, 2011

“Initial U.S. Credit Facility” means our initial U.S. senior secured revolving credit facility, dated as of September 6, 2011, which was amended and restated by the Amended and Restated U.S. Credit Facility on December 22, 2011

“KGS” means Quicksilver Gas Services LP, a publicly-traded partnership, which we formerly owned that traded under the ticker symbol of “KGS” and subsequent to the Crestwood Transaction renamed itself Crestwood Midstream Partners LP and trades under the ticker symbol “CMLP”

“KKR” means Kohlberg Kravis Roberts & Co. L.P. with whom we formed Fortune Creek

“Mercury” means Mercury Exploration Company, which is owned by members of the Darden family

“NGTL” means NOVA Gas Transmission Ltd., a subsidiary of TransCanada PipeLines Limited

“NGTL Project” means the series of contracts with NGTL for the construction of a pipeline and meter station, which will serve our and others’ operations in the Horn River basin

“Sand Wash Asset” means our operations and our assets in the Sand Wash basin located in Colorado and southern Wyoming

“SEC” means the U.S. Securities and Exchange Commission

“VIE” means variable interest entity

“West Texas Asset” means our operations and our assets in the Midland and Delaware basins in West Texas prospective in the Bone Springs and Wolfcamp formations, principally concentrated in three areas: Jeff Davis and Reeves Counties, Upton and Crockett Counties, and Pecos County

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INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended June 30, 2012

PART I. FINANCIAL INFORMATION	6
Item 1. Condensed Consolidated Interim Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	51
PART II. OTHER INFORMATION	52
Item 1. Legal Proceedings	52
Item 1A. Risk Factors	52
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3. Defaults Upon Senior Securities	52
Item 4. Mine Safety Disclosures	52
Item 5. Entry into a Material Definitive Agreement	53
Item 6. Exhibits	54
Signature	56

Except as otherwise specified and unless the context otherwise requires, references to the “Company,” “Quicksilver,” “we,” “us,” and “our” refer to Quicksilver Resources Inc. and its subsidiaries.

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Forward-Looking Information

Certain statements contained in this Quarterly Report and other materials we file with the SEC, or in other written or oral statements made or to be made by us, other than statements of historical fact, are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events. Words such as “may,” “assume,” “forecast,” “position,” “predict,” “strategy,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” “project,” “budget,” “potential,” or “continue,” and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include:

• 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;

• uncertainties inherent in estimates of natural gas, NGL and oil reserves and predicting natural gas, NGL and oil 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;

• the effects of existing or future litigation;

• failure or delays in completing Quicksilver’s proposed initial public offering of common units representing limited partner interests in a master limited partnership holding portions of our Barnett Shale Asset; and

• additional factors described elsewhere in this Quarterly Report.

This list of factors is not exhaustive, and new factors may emerge or changes to these factors may occur that would impact our business. Additional information regarding these and other factors may be contained in our filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. All such risk factors are difficult to predict, and are subject to material uncertainties that may affect actual results and may be beyond our control. The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report, and we undertake no obligation to update any of these forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.

All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.

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PART I    FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Interim Financial Statements (Unaudited)

QUICKSILVER RESOURCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

In thousands, except for per share data – Unaudited

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
Revenue
Production	$	150,503	$	207,706	$	322,323	$	398,006
Sales of purchased natural gas		9,442		19,560		21,529		39,986
Other		8,617		21,180		(29,820)		22,641
Total revenue		168,562		248,446		314,032		460,633
Operating expense
Lease operating		21,599		24,484		50,290		45,693
Gathering, processing and transportation		42,624		46,726		85,701		91,088
Production and ad valorem taxes		7,189		8,506		13,952		16,087
Costs of purchased natural gas		9,337		19,557		21,274		39,300
Depletion, depreciation and accretion		51,942		54,704		106,381		107,175
Impairment		991,921		-		1,054,668		49,063
General and administrative		18,405		15,770		37,501		34,161
Other operating		134		23		150		183
Total expense		1,143,151		169,770		1,369,917		382,750
Crestwood earn-out		-		-		41,097		-
Operating income (loss)		(974,589)		78,676		(1,014,788)		77,883
Loss from earnings of BBEP		-		(26,207)		-		(47,091)
Other income - net		65		123,178		157		124,299
Fortune Creek accretion		(4,830)		-		(9,571)		-
Interest expense		(40,076)		(47,552)		(80,246)		(93,730)
Income (loss) before income taxes		(1,019,430)		128,095		(1,104,448)		61,361
Income tax (expense) benefit		346,889		(19,508)		371,983		(23,532)
Net income (loss)	$	(672,541)	$	108,587	$	(732,465)	$	37,829
Reclassification adjustments related to settlements of derivative contracts - net of income tax		(37,133)		(10,798)		(69,667)		(27,017)
Net change in derivative fair value - net of income tax		20,219		10,482		112,008		(6,713)
Foreign currency translation adjustment		(8,598)		(1,572)		(670)		10,432
Other comprehensive income (loss)		(25,512)		(1,888)		41,671		(23,298)
Comprehensive income (loss)	$	(698,053)	$	106,699	$	(690,794)	$	14,531
Earnings (loss) per common share - basic	$	(3.96)	$	0.63	$	(4.31)	$	0.22
Earnings (loss) per common share - diluted	$	(3.96)	$	0.61	$	(4.31)	$	0.22

The accompanying notes are an integral part of these condensed consolidated financial statements.

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QUICKSILVER RESOURCES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands, except for share data – Unaudited

	June 30, 2012		December 31, 2011
ASSETS
Current assets
Cash	$	14,003	$	13,146
Accounts receivable - net of allowance for doubtful accounts		64,667		95,282
Derivative assets at fair value		189,536		162,845
Other current assets		36,690		29,154
Total current assets		304,896		300,427
Property, plant and equipment - net
Oil and gas properties, full cost method (including unevaluated costs of $481,735 and $433,341, respectively)		2,346,209		3,226,476
Other property and equipment		249,857		234,043
Property, plant and equipment - net		2,596,066		3,460,519
Derivative assets at fair value		159,189		183,982
Deferred income taxes		134,190		-
Other assets		50,183		50,534
	$	3,244,524	$	3,995,462
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt	$	-	$	18
Accounts payable		111,941		142,672
Accrued liabilities		139,257		142,193
Derivative liabilities at fair value		-		4,028
Current deferred tax liability		45,968		45,262
Total current liabilities		297,166		334,173
Long-term debt		2,069,726		1,903,431
Partnership liability		130,357		122,913
Asset retirement obligations		94,872		85,568
Derivative liabilities at fair value		6,538		-
Other liabilities		28,461		28,461
Deferred income taxes		38,611		258,997
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 178,811,191 and 176,980,483 shares issued, respectively		1,788		1,770
Paid in capital in excess of par value		747,029		737,015
Treasury stock of 5,735,074 and 5,379,702 shares, respectively		(48,715)		(46,351)
Accumulated other comprehensive income		256,529		214,858
Retained earnings (deficit)		(377,838)		354,627
Total stockholders' equity		578,793		1,261,919
	$	3,244,524	$	3,995,462

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

QUICKSILVER RESOURCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

In thousands – Unaudited

	Quicksilver Resources Inc. Stockholders’ Equity
	Common Stock		Additional Paid-in Capital		Treasury Stock		Accumulated Other Comprehensive Income		Retained Earnings		Total
Balances at December 31, 2010	$	1,755	$	714,869	$	(41,487)	$	130,187	$	264,581	$	1,069,905
Net income		-		-		-		-		37,829		37,829
Hedge derivative contract settlements reclassified into earnings from AOCI, net of income tax of $12,703		-		-		-		(27,017)		-		(27,017)
Net change in derivative fair value, net of income tax of $3,924		-		-		-		(6,713)		-		(6,713)
Foreign currency translation adjustment		-		-		-		10,432		-		10,432
Issuance & vesting of stock compensation		11		10,376		(4,801)		-		-		5,586
Stock option exercises		1		620		-		-		-		621
Balances at June 30, 2011, restated (1)	$	1,767	$	725,865	$	(46,288)	$	106,889	$	302,410	$	1,090,643
Balances at December 31, 2011	$	1,770	$	737,015	$	(46,351)	$	214,858	$	354,627	$	1,261,919
Net loss		-		-		-		-		(732,465)		(732,465)
Hedge derivative contract settlements reclassified into earnings from AOCI, net of income tax of $35,711		-		-		-		(69,667)		-		(69,667)
Net change in derivative fair value, net of income tax of $54,270		-		-		-		112,008		-		112,008
Foreign currency translation adjustment		-		-		-		(670)		-		(670)
Issuance & vesting of stock compensation		17		10,004		(2,364)		-		-		7,657
Stock option exercises		1		10		-		-		-		11
Balances at June 30, 2012	$	1,788	$	747,029	$	(48,715)	$	256,529	$	(377,838)	$	578,793

⁽¹⁾ Note 1 contains additional information.

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

QUICKSILVER RESOURCES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

In thousands – Unaudited

	For the Six Months Ended June 30,
	2012		2011
Operating activities:
Net income (loss)	$	(732,465)	$	37,829
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and accretion		106,381		107,175
Impairment expense		1,054,668		49,063
Crestwood earn-out		(41,097)		-
Deferred income tax expense (benefit)		(372,741)		17,667
Non-cash (gain) loss from hedging and derivative activities		61,503		(19,933)
Stock-based compensation		10,021		10,386
Non-cash interest expense		3,469		7,872
Fortune Creek accretion		9,571		-
Gain on disposition of BBEP Units		-		(123,752)
Loss from BBEP in excess of cash distributions		-		60,050
Other		328		1,111
Changes in assets and liabilities
Accounts receivable		30,600		(8,608)
Prepaid expenses and other assets		(5,031)		(4,426)
Accounts payable		(21,838)		(25,859)
Accrued and other liabilities		(3,853)		14,777
Net cash provided by operating activities		99,516		123,352
Investing activities:
Purchases of property, plant and equipment		(307,169)		(396,156)
Proceeds from Crestwood earn-out		41,097		-
Proceeds from sale of BBEP Units		-		134,423
Proceeds from sale of properties and equipment		3,372		3,123
Net cash used by investing activities		(262,700)		(258,610)
Financing activities:
Issuance of debt		255,775		256,445
Repayments of debt		(88,115)		(170,172)
Debt issuance costs paid		(148)		-
Distribution of Fortune Creek Partnership funds		(1,845)
Proceeds from exercise of stock options		11		622
Purchase of treasury stock		(2,364)		(4,801)
Net cash provided by financing activities		163,314		82,094
Effect of exchange rate changes in cash		727		(1,771)
Net increase (decrease) in cash		857		(54,935)
Cash at beginning of period		13,146		54,937
Cash at end of period	$	14,003	$	2

The accompanying notes are an integral part of these condensed consolidated financial statements.

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QUICKSILVER RESOURCES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

1. 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, 2012 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 our management 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. Management believes its 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 2011 Annual Report on Form 10-K.

Immaterial Restatement

The consolidated financial statements as of and for the year ended December 31, 2010 were restated as disclosed within Item 8, Note 2 in the 2011 Annual Report on Form 10-K to increase the previously recognized gain related to the sale of our interests in KGS by $20.7 million and to provide additional deferred taxes on the increased gain. The previously reported gain excluded certain liabilities for intercompany transactions related to services performed by KGS for our U.S. exploration and production segment, which should have been included in the gain calculation. Additional depletion expense was recognized due to the inclusion of additional future development costs in the 2010 depletion calculation. The results of this restatement, which had no impact on our total cash flow from operations, investing and financing activities as reported, impacted the retained earnings and the total stockholder’s equity as of June 30, 2011. Previously, retained earnings and total stockholder’s equity were reported as $291.9 million and $1,080 million, respectively, in the Form 10-Q for the quarter ended June 30, 2011. These balances have been restated to $302.4 million and $1,091 million, respectively, within the Condensed Consolidated Statement of Equity as of June 30, 2011.

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.

In June 2011, the FASB issued an amendment to accounting guidance to update the presentation of comprehensive income in consolidated financial statements. Under the amended guidance, the presentation of total comprehensive income, the components of net income, and the components of other comprehensive income may be made either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance became effective for us beginning with the quarter ended March 31, 2012, and requires retrospective application to earlier periods presented. Our condensed consolidated statements of income (loss) and comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011 contain the required disclosures. The implementation of this accounting pronouncement also resulted in increased disclosure in Note 12.

In May 2011, the FASB issued an amendment to the accounting guidance for fair value measurement and disclosure. Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in stockholders’ equity. This guidance became effective for us beginning with the quarter ended March 31, 2012. The adoption of this accounting pronouncement did not have an effect on the fair value measurement, but rather expanded upon existing disclosures.

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In December 2011, the FASB issued an amendment to the accounting guidance for disclosure of arrangements that permit offsetting assets and liabilities. The amendment expands the disclosure requirements to require both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The amendment will be effective for us, beginning on January 1, 2013, and must be applied retrospectively. We do not expect the adoption of this accounting pronouncement to have a material impact on our financial statements when implemented.

No other pronouncements materially affecting our financial statements have been issued since the filing of our 2011 Annual Report on Form 10-K.

2. CRESTWOOD EARN-OUT

In October 2010, we completed the sale of all of our interests in KGS to Crestwood. As part of the sale, we have 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 have the right to collect up to an additional $31 million in future earn-out payments in 2013. As of June 30, 2012, we do not anticipate receiving any additional payment and have recognized no assets related to these opportunities.

Note 3 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains additional information regarding the Crestwood Transaction.

3. DERIVATIVES AND FAIR VALUE MEASUREMENTS

The following table categorizes our commodity derivative instruments based upon the use of input levels:

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(in thousands)				(in thousands)
Level 2 inputs	$	296,842	$	195,838	$	-	$	4,028
Level 3 inputs		51,883		150,989		6,538		-
Total	$	348,725	$	346,827	$	6,538	$	4,028

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 “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 latter half of the 10-year term as there is not an active market for that period of time. These unobservable inputs included within the fair value calculation range from $3.59 to $5.44 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. Changes in the “Level 3” inputs are correlated to the changes in the quoted market prices for the period of time available. Estimates were determined by applying the differential between the prices in each derivative and market prices for future periods to the amounts stipulated in each contract to arrive at an estimated future value. This estimated future value was discounted on each contract at the credit adjusted risk-free rate.

11

The following table identifies the changes in “Level 3” net asset derivative fair values for the periods indicated:

	For the Three Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	24,857	$	-
Total gains (losses) for the period:
Unrealized gain on commodity hedges		-		19,115
Gain from hedge ineffectiveness		4,319		-
Settlements in Production Revenue		(4,101)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		28,356		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	6,964	$	19,115

	For the Six Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	150,989	$	-
Total gains (losses) for the period:
Unrealized gain (loss) on commodity hedges		(21,670)		19,115
Realized loss on hedge restructure		(14,555)		-
Gain from hedge ineffectiveness		3,709		-
Transfers out of Level 3		(109,685)		-
Settlements in Production Revenue		(10,675)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		55,318		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	(15,316)	$	19,115

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.

12

Commodity Price Derivatives

As of June 30, 2012, we had price collars and swaps hedging our anticipated natural gas and NGL production as follows:

Production Year	Daily Production Volume
	Gas	NGL
	MMcfd	MBbld
2012	230	7
2013	150	-
2014-2015	110	-
2016-2021	45	-

In July 2012, we entered into a 10 MMcfd natural gas derivative covering January 2013 to December 2014 for $3.91 per Mcf.

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.

During the six months ended June 30, 2012 and 2011, we recognized $2.5 million and $2.4 million, respectively of those deferred gains as a reduction of interest expense. The remaining $19.4 million deferral of the 2010 early settlements from all interest rate swaps will continue to be recognized as a reduction of interest expense over the life of the associated underlying debt instruments currently scheduled as follows:

(In thousands)
Remainder of 2012	$	2,604
2013		5,539
2014		6,012
2015		4,669
2016		569
	$	19,393

Fair Value Disclosures

The estimated fair value of our derivative instruments at June 30, 2012 and December 31, 2011 were as follows:

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(In thousands)				(In thousands)
Derivatives designated as hedges:
Commodity contracts reported in:
Current derivative assets	$	189,536	$	165,484	$	-	$	2,639
Noncurrent derivative assets		159,189		183,982		-		-
Current derivative liabilities		-		-		-		4,028
Noncurrent derivative liabilities		-		-		6,538		-
Total derivatives designated as hedges	$	348,725	$	349,466	$	6,538	$	6,667
Derivatives not designated as hedges:	$	-	$	-	$	-	$	-
Total derivatives	$	348,725	$	349,466	$	6,538	$	6,667

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The change in carrying value of our commodity price derivatives since December 31, 2011 principally resulted from the overall decrease in market prices for natural gas relative to the prices in our open derivative instruments as well as additional derivative instruments entered into during the six months ended June 30, 2012, offset by settlements during the period.

The changes in the carrying value of our derivatives for the three and six months ended June 30, 2012 and 2011 are presented below:

	For the Three Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	373,467	$	96,203
Change in net amounts receivable and payable		(3,368)		(167)
Settlements in production revenue		(56,495)		(15,546)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		8,100		872
Unrealized gains reported in other revenue		-		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gains reported in OCI		42,857		15,872
Derivative fair value at end of period	$	342,187	$	116,349
	For the Six Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	342,799	$	146,762
Change in net amounts receivable and payable		(7,811)		(384)
Settlements in production revenue		(105,379)		(39,328)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		4,899		818
Realized losses reported in other revenue		(14,555)		-
Unrealized gains (losses) reported in other revenue		(21,670)		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gain (losses) reported in OCI		166,278		(10,634)
Derivative fair value at end of period	$	342,187	$	116,349

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 $91.2 million net of income taxes. Hedge derivative ineffectiveness resulted in gains of $4.9 million and $0.8 million for the six months ended June 30, 2012 and 2011, respectively. In January and February 2012, we terminated a number of our ten-year derivative instruments in exchange for derivative instruments with shorter durations at above market terms. The decrease in the fair value between the terminated ten-year instrument and the new shorter-term instrument was recognized in the current period as a realized loss. Unrealized losses recognized in 2012 is the difference between the estimated fair value at the inception date and transaction cost for ten-year derivative instruments entered into during the period.

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4. INVESTMENT IN BBEP

At June 30, 2011, we owned 8.6 million BBEP Units, or 15%, of BBEP, whose price closed at $19.46 per unit as of that date. During the six months ended June 30, 2011, gains of $123.8 million were recognized in Other Income from the sale of 7.1 million BBEP Units. During the fourth quarter of 2011, we sold all of our remaining BBEP Units.

Changes in the balance of our investment in BBEP were as follows:

(In thousands)
Balance at December 31, 2010	$	83,341
Equity loss in BBEP		(47,091)
Distributions from BBEP		(12,959)
BBEP Units sold		(10,671)
Balance at June 30, 2011	$	12,620

We accounted for our investment in BBEP Units using the equity method, utilizing a one-quarter lag from BBEP’s publicly available information. Summarized estimated financial information for BBEP is as follows:

	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2011		2011
	(In thousands)		(In thousands)
Revenue (1)	$	(12,704)	$	5,461
Operating expense		73,937		153,420
Operating income (loss)		(86,641)		(147,959)
Interest and other (2)		9,074		19,063
Income tax expense (benefit)		(1,002)		(1,441)
Noncontrolling interests		34		69
Net income (loss) available to BBEP	$	(94,747)	$	(165,650)

⁽¹⁾  For the three months ended March 31, 2011, unrealized losses of $112.6 million on commodity derivatives were recognized. For the six months ended March 31, 2011, unrealized losses of $194.9 million on commodity derivatives were recognized.

⁽²⁾  The three months ended March 31, 2011 included unrealized gains of $1.4 million from interest rate swaps. The six months ended March 31, 2011 included unrealized gains of $4.5 million from interest rate swaps.

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5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	June 30, 2012		December 31, 2011
	(In thousands)
Oil and gas properties
Subject to depletion	$	5,529,652	$	5,309,330
Unevaluated costs		481,735		433,341
Accumulated depletion		(3,665,178)		(2,516,195)
Net oil and gas properties		2,346,209		3,226,476
Other plant and equipment
Pipelines and processing facilities		360,596		340,242
General properties		75,418		71,297
Accumulated depreciation		(186,157)		(177,496)
Net other property and equipment		249,857		234,043
Property, plant and equipment, net of accumulated depletion and depreciation	$	2,596,066	$	3,460,519

Ceiling Test Analysis

We recorded impairment expense of $898.7 million and $93.2 million at June 30, 2012 and $62.3 million and $0.4 million at March 31, 2012 for our U.S. and Canadian oil and gas properties, respectively. For our U.S. oil and gas properties, we computed the June 30, 2012 and March 31, 2012 ceiling amounts using Henry Hub prices of $3.15 and $3.73 per MMBtu of natural gas, respectively, calculated as the unweighted average of the preceding 12 month first-day-of-the-month prices. The Henry Hub natural gas prices used to compute the ceiling amounts at June 30, 2012 and March 31, 2012 were 23.5% and 9.5% lower than the comparable price used at December 31, 2011. For our Canadian oil and gas properties, we computed the June 30, 2012 and March 31, 2012 ceiling amounts using AECO prices of $2.72 and $3.64 per MMBtu of natural gas, respectively, calculated as the unweighted average of the preceding 12-month first-day-of-the-month prices. The AECO natural gas prices used to compute the ceiling amount at June 30, 2012 and March 31, 2012 were 25.5% and 1% lower than the comparable price used at December 31, 2011. For our U.S. oil and gas properties, we computed the June 30, 2012 ceiling amounts using a Mont Belvieu, Texas price of $35.61 per Bbl of NGL, calculated as the unweighted average of the preceding 12-month first-day-of-the-month prices. The Mont Belvieu, Texas NGL price used to compute the ceiling amounts at June 30, 2012 was 24.5% lower than the comparable price used at December 31, 2011. These charges resulted in the recognition of a deferred tax asset at June 30, 2012.

As of June 30, 2012, our U.S. and Canadian ceiling tests included $337 million and $125 million, respectively, in value for our derivatives treated as hedges. Absent this recognition, after tax we would have recognized $337 million of additional impairment expense for our U.S. oil and gas properties and $125 million for our Canadian oil and gas properties. Because of the volatility of petroleum prices and prevailing prices subsequent to June 30, 2012, it is reasonably possible we may experience additional impairment in future periods.

Notes 2 and 8 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contain additional information regarding our property, plant and equipment and our quarterly ceiling test analysis.

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6. LONG-TERM DEBT

Long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
Combined Credit Agreements	$	394,223	$	227,482
Senior notes due 2015, net of unamortized discount		435,436		435,020
Senior notes due 2016, net of unamortized discount		578,343		576,977
Senior notes due 2019, net of unamortized discount		292,332		292,055
Senior subordinated notes due 2016		350,000		350,000
Convertible debentures, net of unamortized discount		-		18
Total debt		2,050,334		1,881,552
Unamortized deferred gain-terminated interest rate swaps		19,392		21,897
Current portion of long-term debt		-		(18)
Long-term debt	$	2,069,726	$	1,903,431

Credit Facilities

The Combined Credit Agreements’ global borrowing base remained at $1.075 billion as of June 30, 2012 and the global letter of credit capacity increased from $175 million to $200 million in June 2012 in accordance with the Combined Credit Agreements. At June 30, 2012, we had $619 million available under the facility.

In light of current prices for natural gas and NGLs, we amended our Combined Credit Agreements in August 2012 primarily to loosen the financial covenants contained therein through the second quarter of 2014. The next semi-annual redetermination of our global borrowing base was scheduled to be completed in October 2012. However, in conjunction with the amendments to our Combined Credit Agreements, our borrowing base was also redetermined. As a result of the amendment and the redetermination process, the following changes were made to the Combined Credit Agreements:

• Reduction of the currently applicable global borrowing base to $850 million from $1.075 billion

• Increase of the applicable margin by 0.50% for each type of loan and issued letters of credit, and setting of the commitment fee on unutilized availability to 0.50%

• Reduction of the minimum required interest coverage ratio from 2.5 to 1.5 for the quarter ending September 30, 2012 through the quarter ending March 31, 2014, then increasing to 2.0 for the quarter ending June 30, 2014, and reverting to 2.5 thereafter

• Addition of a maximum senior secured debt leverage ratio of 2.5 beginning in the quarter ending September 30, 2012

• Until the later of June 30, 2013, or such time as the total leverage ratio for the prior twelve month period is less than or equal to 4.0:

• Restrict the ability to issue certain additional types of debt;

• Limit the aggregate amount of restricted payments to $15 million;

• Restrict the ability to repay existing debt securities if global borrowing base utilization equals or exceeds 25%; and

• Require a dollar for dollar repayment of the Combined Credit Agreements together with any repayment of existing debt securities if the global borrowing base utilization is less than 25% until the Combined Credit Agreements are paid in full, at which time existing debt securities may be repaid in any amounts; and

• Restrict the ability to terminate certain oil and gas hedging arrangements through 2014.

Summary of All Outstanding Debt

As of June 30, 2012, the following subsidiaries are guarantors under our debt obligations: Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., Silver Stream Pipeline Company LLC, and Barnett Shale Operating LLC and, with respect to only our senior notes and senior subordinated notes, QPP Parent LLC and QPP Holdings LLC. The following table summarizes other significant aspects of our long-term debt outstanding at June 30, 2012:

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	Priority on Collateral and Structural Seniority (1)
	Highest priority				Lowest priority
	Equal priority	Equal Priority
	Combined Credit Agreements	2015 Senior Notes	2016 Senior Notes	2019 Senior Notes	Senior Subordinated Notes
Principal amount	$1.075 billion (2)	$438 million	$591 million	$298 million	$350 million
Scheduled maturity date	September 6, 2016	August 1, 2015	January 1, 2016	August 15, 2019	April 1, 2016
Interest rate on outstanding borrowings at
June 30, 2012 (3)	2.42%	8.25%	11.75%	9.125%	7.125%
Base interest rate options	LIBOR, ABR, CDOR (4) (5)	N/A	N/A	N/A	N/A
Financial covenants (6)	- Minimum current ratio of 1.0	N/A	N/A	N/A	N/A
	- Minimum EBITDA to cash interest expense ratio of 2.5
Significant restrictive covenants (6)	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions - Limitations on derivatives	- 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	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions
Optional redemption (6)	Any time	August 1, 2012: 103.875 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	April 1, 2012: 102.375 2013: 101.188 2014: par
Make-whole redemption (6)	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
Change of control (6)	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
Equity clawback (6)	N/A	N/A	N/A	Redeemable until August 15, 2012 at 109.125%, plus accrued interest for up to 35%	N/A
Estimated fair value (7)	$394.2 million	$409.5 million	$572.9 million	$271.2 million	$268.6 million

⁽¹⁾  Borrowings under the Amended and Restated U.S. Credit Facility are guaranteed by certain of Quicksilver’s domestic subsidiaries and are secured 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, Quicksilver Production Partners Operating Ltd., QPP Parent LLC and QPP Holdings LLC (collectively, the “Domestic Pledged Equity”), 65% of the equity interests of Quicksilver Resources Canada Inc. (“QRCI”) and certain oil and gas properties and related assets of Quicksilver. 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, 100% of the equity interests of QRCI and any of its Canadian subsidiaries, and certain oil and gas properties and related assets of Quicksilver and QRCI. The other debt presented is based upon structural seniority and priority of payment.

18

⁽²⁾  The principal amount for the Combined Credit Agreements represents the global borrowing base as of June 30, 2012.

⁽³⁾ Represents the weighted average borrowing rate payable to lenders.

⁽⁴⁾ 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 1.50% to 2.50%, (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 1.0%, plus, in each case under scenario (ii), an applicable margin between 0.50% to 1.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁵⁾ 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 1.50% and 2.50%, (ii) the Canadian Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50%, (iii) the U.S. Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50% and (iv) adjusted LIBOR (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.50% to 2.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁶⁾ 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.

⁽⁷⁾  The estimated fair value is determined using market quotations based on recent trade activity for fixed rate obligations (“Level 2” inputs). We consider debt with variable interest rates to have a fair value equal to its carrying value (“Level 1” input).

7. ASSET RETIREMENT OBLIGATIONS

The following table provides a reconciliation of the changes in the estimated asset retirement obligation for the six months ended June 30, 2012.

(In thousands)
Beginning asset retirement obligations	$	85,822
Additional liability incurred		2,125
Change in estimates		4,665
Accretion expense		1,969
Asset retirement costs incurred		(917)
Settlement of liability in excess of obligation recorded		1,544
Currency translation adjustment		(82)
Ending asset retirement obligations		95,126
Less current portion		(254)
Long-term asset retirement obligation	$	94,872

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8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations, Commitments and Contingencies

On July 26, 2011, we received a subpoena duces tecum from the SEC requesting certain documents. The SEC has informed us that their investigation arises out of press releases in 2011 questioning the projected decline curves and economics of shale gas wells.

On June 15, 2012, we received a subpoena duces tecum from the SEC requesting certain information regarding our assessment for impairment of unevaluated properties and plans for development of unevaluated properties.

In July 2012, we increased our letters of credit provided by C$35.6 million to a total of C$68.3 million in accordance with the agreement for construction of the NGTL Project. Subsequently, construction has been delayed for one year. This delay is the result of the in-service date having been moved to the summer of 2015. Accordingly, we anticipate the financial assurances will be reduced by approximately C$45 million and the schedule for increasing financial assurances will also be adjusted for the delay in construction with no additional letters of credit to be provided until 2014.

There have been no other significant changes to our contractual obligations and commitments as reported in our 2011 Annual Report on Form 10-K. Note 14 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains a more complete description of our contractual obligations, commitments and contingencies for which there are no other significant updates during the quarter ended June 30, 2012.

9. FORTUNE CREEK

In December 2011, we entered into an agreement with KKR to form Fortune Creek to construct and operate midstream assets for natural gas produced by us and others primarily in British Columbia. The partnership established an area of mutual interest for the midstream business covering approximately 30 million potential acres which includes transportation and processing infrastructure and agreements.

In forming Fortune Creek, our Canadian subsidiary contributed an existing 20-mile, 20-inch gathering line and its related compression facilities, committed to minimum expenditures of $300 million for drilling and completion activities in our Horn River Asset between 2012 and 2014, and committed gas production from our Horn River Asset for ten years beginning 2012, as more fully described below. KKR contributed $125 million cash in exchange for a 50% interest in Fortune Creek. Our Canadian subsidiary has responsibility for the day-to-day operations of Fortune Creek.

Our Canadian subsidiary entered into a firm gathering agreement with Fortune Creek which is guaranteed by us. At our election, KKR has the responsibility to fund up to C$130 million of the capital required for construction of a new gas treatment facility in exchange for preferential cash flow distributions. If our subsidiary does not meet its obligations under the gathering agreement, KKR has the right to liquidate the partnership and consequently we have recorded the funds contributed by KKR as a liability in our consolidated financial statements. We recognize accretion expense to reflect the rate of return earned by KKR via its investment. During May 2012, Fortune Creek made cash distributions to KKR, which is reported as cash used by financing activities.

Based on an analysis of the partners’ equity at risk, we have determined the partnership to be a VIE. Further, based on our ability to direct the activities surrounding the production of natural gas and our direct management of the operations of the Fortune Creek facilities, we have determined we are the primary beneficiary and, therefore, we consolidate Fortune Creek.

Note 12 contains financial information for Fortune Creek in our condensed consolidating financial statements.

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10. 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, 2012 and December 31, 2011, we had 173.1 million and 171.6 million shares of common stock outstanding, respectively.

Note 17 to the consolidated financial statements in our 2011 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 2012 with an estimated fair value of $8.5 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:

	2012	2011
Weighted avg grant date fair value	$4.21	$9.16
Weighted avg risk-free interest rate	1.14%	2.38%
Expected life (in years)	6.0	6.0
Wtd avg volatility	68.2%	66.8%
Expected dividends	-	-

The following table summarizes our stock option activity for the six months ended June 30, 2012:

	Shares		Wtd Avg Exercise Price		Wtd Avg Remaining Contractual Life		Aggregate Intrinsic Value
					(In years)		(In thousands)
Outstanding at January 1, 2012		3,760,696	$	12.01
Granted		2,020,685		6.90
Exercised		(1,572)		6.21
Forfeited		(469,976)		8.79
Expired		(84,349)		12.05
Outstanding at June 30, 2012		5,225,484	$	10.33		7.5	$	56
Exercisable at June 30, 2012		2,904,497	$	11.14		6.1	$	-

As of June 30, 2012, we estimate that a total of 5.2 million stock options will become vested including those options already exercisable. As of December 31, 2011, the unrecognized compensation cost related to outstanding unvested stock options was $7.5 million, which is expected to be recognized in expense through January 2014. Compensation expense related to stock options of $3.4 million and $3.5 million was recognized for each of the six months ended June 30, 2012 and 2011, respectively. Cash received from the exercise of stock options totaled less than $0.1 million for the six months ended June 30, 2012. The total intrinsic value of those options exercised was less than $0.1 million.

21

Restricted Stock

The following table summarizes our restricted stock and stock unit activity for the six months ended June 30, 2012:

	Payable in shares				Payable in cash
	Shares		Wtd Avg Grant Date Fair Value		Shares		Wtd Avg Grant Date Fair Value
Outstanding at January 1, 2012		2,460,300	$	12.29		369,846	$	13.12
Granted		2,975,885		6.43		653,195		6.19
Vested		(1,256,620)		10.71		(186,526)		11.22
Forfeited		(764,429)		8.97		(135,624)		9.68
Outstanding at June 30, 2012		3,415,136	$	8.51		700,891	$	7.83

As of December 31, 2011, the unrecognized compensation cost related to outstanding unvested restricted stock was $17.3 million, which is expected to be recognized in expense through March 2014. Grants of restricted stock and RSUs during the six months ended June 30, 2012 had an estimated grant date fair value of $23.2 million. The fair value of RSUs settled in cash was $3.8 million at June 30, 2012. For the six months ended June 30, 2012 and 2011, compensation expense of $7.3 million and $6.8 million, respectively, was recognized. The total fair value of shares vested during the six months ended June 30, 2012 was $9.6 million.

11. 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.

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
	(In thousands, except per share data)
Net income (loss) attributable to Quicksilver	$	(672,541)	$	108,587	$	(732,465)	$	37,829
Basic income allocable to participating securities (1)		-		(1,331)		-		(454)
Basic net income (loss) attributable to Quicksilver	$	(672,541)	$	107,256	$	(732,465)	$	37,375
Impact of assumed conversions – interest on 1.875% convertible debentures, net of income taxes		-		1,880		-		-
Income (loss) available to stockholders assuming conversion of convertible debentures	$	(672,541)	$	109,136	$	(732,465)	$	37,375
Weighted average common shares – basic		170,043		168,984		169,991		168,928
Effect of dilutive securities (2):
Share-based compensation awards		-		868		-		858
Contingently convertible debentures		-		9,816		-		-
Weighted average common shares – diluted		170,043		179,668		169,991		169,786
Earnings (loss) per common share – basic	$	(3.96)	$	0.63	$	(4.31)	$	0.22
Earnings (loss) per common share – diluted	$	(3.96)	$	0.61	$	(4.31)	$	0.22

⁽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.

⁽²⁾ For the six months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculation: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculations: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the six months ended

22

June 30, 2011, we had the following antidilutive shares excluded from the dilution calculation: 9.8 million shares associated with our contingently convertible debt, 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2011, we had the following antidilutive shares excluded from the dilutive calculation: 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units.

12. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Note 19 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains a more complete description of our guarantor, non-guarantor, restricted and unrestricted subsidiaries.

The following tables present financial information about Quicksilver and our restricted subsidiaries for the three-month periods covered by the consolidated financial statements. Under the indentures for our senior notes and senior subordinated notes, Fortune Creek is not considered to be a subsidiary and therefore it is presented separately from the other subsidiaries for these purposes.

Condensed Consolidating Balance Sheets

	June 30, 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	$	327,459	$	89,675	$	89,179	$	(203,093)	$	303,220	$	9,375	$	11,049	$	(18,748)	$	304,896
Property and equipment		1,824,415		37,768		644,780		-		2,506,963		-		89,103		-		2,596,066
Investment in subsidiaries (equity method)		166,008		-		(33,991)		(166,008)		(33,991)		(36,384)		-		70,375		-
Other assets		531,863		-		55,319		(243,620)		343,562		-		-		-		343,562
Total assets	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524
LIABILITIES AND EQUITY
Current liabilities	$	293,146	$	111,207	$	99,182	$	(203,093)	$	300,442	$	9,375	$	6,097	$	(18,748)	$	297,166
Long-term liabilities		1,977,806		21,969		484,364		(243,620)		2,240,519		-		82		127,964		2,368,565
Stockholders' equity		578,793		(5,733)		171,741		(166,008)		578,793		(36,384)		93,973		(57,589)		578,793
Total liabilities and equity	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524

	December 31, 2011
	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	$	336,893	$	87,767	$	63,711	$	(200,727)	$	287,644	$	-	$	27,533	$	(14,750)	$	300,427
Property and equipment		2,743,379		37,936		598,443		-		3,379,758		-		80,761		-		3,460,519
Investment in subsidiaries (equity method)		241,680		-		(29,449)		(241,680)		(29,449)		(29,449)		-		58,898		-
Other assets		401,279		-		76,857		(243,620)		234,516		-		-		-		234,516
Total assets	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462
LIABILITIES AND EQUITY
Current liabilities	$	348,512	$	109,938	$	76,450	$	(200,727)	$	334,173	$	-	$	14,750	$	(14,750)	$	334,173
Long-term liabilities		2,112,800		21,903		385,294		(243,620)		2,276,377		-		80		122,913		2,399,370
Stockholders' equity		1,261,919		(6,138)		247,818		(241,680)		1,261,919		(29,449)		93,464		(64,015)		1,261,919
Total liabilities and equity	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462

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Condensed Consolidating Statements of Income

	For the Three Months Ended June 30, 2012
	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	$	149,333	$	1,078	$	18,846	$	(695)	$	168,562	$	-	$	3,202	$	(3,202)	$	168,562
Operating expenses		1,023,740		893		120,599		(695)		1,144,537		-		1,816		(3,202)		1,143,151
Equity in net earnings of subsidiaries		(78,560)		-		(1,051)		78,560		(1,051)		1,386		-		(335)		-
Operating income		(952,967)		185		(102,804)		78,560		(977,026)		1,386		1,386		(335)		(974,589)
Fortune Creek Accretion		-		-		-		-		-		-		-		(4,830)		(4,830)
Interest expense and other		(37,971)		-		(2,040)		-		(40,011)		-		-		-		(40,011)
Income tax (expense) benefit		318,397		(65)		26,164		-		344,496		-		-		2,393		346,889
Net income	$	(672,541)	$	120	$	(78,680)	$	78,560	$	(672,541)	$	1,386	$	1,386	$	(2,772)	$	(672,541)
Other comprehensive income		(15,218)		-		(10,294)		10,294		(15,218)		-		-		-		(15,218)
Equity in OCI of subsidiaries		(10,294)		-		-		-		(10,294)		-		-		-		(10,294)
Comprehensive income (loss)	$	(698,053)	$	120	$	(88,974)	$	88,854	$	(698,053)	$	1,386	$	1,386	$	(2,772)	$	(698,053)

	For the Three Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non-Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	202,788	$	1,222	$	45,383	$	(947)	$	248,446
Operating expenses		142,389		782		27,546		(947)		169,770
Equity in net earnings of subsidiaries		11,855		-		-		(11,855)		-
Operating income (loss)		72,254		440		17,837		(11,855)		78,676
Loss from earnings of BBEP		(26,207)		-		-		-		(26,207)
Interest expense and other		77,085		-		(1,459)		-		75,626
Income tax expense (benefit)		(14,545)		(154)		(4,809)		-		(19,508)
Net income	$	108,587	$	286	$	11,569	$	(11,855)	$	108,587
Other comprehensive income		3,270		-		(5,158)		5,158		3,270
Equity in OCI of subsidiaries		(5,158)		-		-		-		(5,158)
Comprehensive income (loss)	$	106,699	$	286	$	6,411	$	(6,697)	$	106,699

	For the Six Months Ended June 30, 2012
	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	$	280,796	$	2,208	$	32,626	$	(1,598)	$	314,032	$	-	$	5,599	$	(5,599)	$	314,032
Operating expenses		1,223,655		1,802		148,574		(1,598)		1,372,433		-		3,083		(5,599)		1,369,917
Crestwood earn-out		41,097		-		-		-		41,097		-		-		-		41,097
Equity in net earnings of subsidiaries		(93,893)		-		(4,662)		93,893		(4,662)		2,516		-		2,146		-
Operating income		(995,655)		406		(120,610)		93,893		(1,021,966)		2,516		2,516		2,146		(1,014,788)
Fortune Creek Accretion		-		-		-		-		-		-		-		(9,571)		(9,571)
Interest expense and other		(76,615)		-		(3,474)		-		(80,089)		-		-		-		(80,089)
Income tax (expense) benefit		339,805		(142)		29,927		-		369,590		-		-		2,393		371,983
Net income	$	(732,465)	$	264	$	(94,157)	$	93,893	$	(732,465)	$	2,516	$	2,516	$	(5,032)	$	(732,465)
Other comprehensive income		23,589		-		18,082		(18,082)		23,589		-		-		-		23,589
Equity in OCI of subsidiaries		18,082		-		-		-		18,082		-		-		-		18,082
Comprehensive income (loss)	$	(690,794)	$	264	$	(76,075)	$	75,811	$	(690,794)	$	2,516	$	2,516	$	(5,032)	$	(690,794)

	For the Six Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non- Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	382,359	$	2,489	$	77,724	$	(1,939)	$	460,633
Operating expenses		279,559		2,804		102,326		(1,939)		382,750
Equity in net earnings of subsidiaries		(21,954)		-		-		21,954		-
Operating income (loss)		80,846		(315)		(24,602)		21,954		77,883
Loss from earnings of BBEP		(47,091)		-		-		-		(47,091)
Interest expense and other		33,815		-		(3,246)		-		30,569
Income tax (expense) benefit		(29,741)		109		6,100		-		(23,532)
Net income (loss)	$	37,829	$	(206)	$	(21,748)	$	21,954	$	37,829
Other comprehensive income		(24,975)		-		1,677		(1,677)		(24,975)
Equity in OCI of subsidiaries		1,677		-		-		-		1,677
Comprehensive income (loss)	$	14,531	$	(206)	$	(20,071)	$	20,277	$	14,531

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Condensed Consolidating Statements of Cash Flows

	For the Six Months Ended June 30, 2012
	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 (used) 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 Crestood 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		(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 (used) by 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

	For the Six Months Ended June 30, 2011
			Restricted		Restricted				Quicksilver
	Quicksilver		Guarantor		Non-Guarantor		Consolidating		Resources Inc.
	Resources Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(In thousands)
Net cash flow provided by operations	$	96,029	$	1,137	$	26,186	$	-	$	123,352
Capital expenditures		(275,753)		(1,137)		(119,266)		-		(396,156)
Proceeds from sale of BBEP units		134,423		-		-		-		134,423
Proceeds from sale of properties and equipment		1,925		-		1,198		-		3,123
Net cash flow used by investing activities		(139,405)		(1,137)		(118,068)		-		(258,610)
Issuance of debt		153,500		-		102,945		-		256,445
Repayments of debt		(160,880)		-		(9,292)		-		(170,172)
Proceeds from exercise of stock options		622		-		-		-		622
Purchase of treasury stock		(4,801)		-		-		-		(4,801)
Net cash flow provided (used) by financing activities		(11,559)		-		93,653		-		82,094
Effect of exchange rates on cash		-		-		(1,771)		-		(1,771)
Net decrease in cash and equivalents		(54,935)		-		-		-		(54,935)
Cash and equivalents at beginning of period		54,937		-		-		-		54,937
Cash and equivalents at end of period	$	2	$	-	$	-	$	-	$	2

13. SEGMENT INFORMATION

We operate in two geographic segments, the U.S. and Canada, where we are engaged in the exploration and production segment of the oil and gas industry. Additionally, we operate a significantly smaller midstream segment in the U.S. and Canada, where we provide natural gas gathering and processing services, primarily to our U.S. and Canadian exploration and production segments. Following the formation of our partnership with KKR, beginning in January 2012, we have additional midstream operations in Canada through Fortune Creek. Based on the immateriality of our midstream segment, we have combined U.S. and Canadian information. We evaluate performance based on operating income and property and equipment costs incurred.

25

	Exploration & Production										Quicksilver
	U.S.		Canada		Midstream		Corporate		Elimination		Consolidated
For the Three Months Ended June 30:		(In thousands)
2012
Revenue	$	149,333	$	18,847	$	4,280	$	-	$	(3,898)		168,562
DD&A		39,416		10,627		1,314		585		-		51,942
Impairment expense		898,715		93,206		-		-		-		991,921
Operating income (loss)		(856,498)		(100,671)		1,570		(18,990)		-		(974,589)
Property and equipment costs incurred		44,546		103,778		5,459		1,914		-		155,697
2011
Revenue	$	202,788	$	45,383	$	1,222	$	-	$	(947)	$	248,446
DD&A		41,580		12,087		466		571		-		54,704
Operating income (loss)		75,615		18,962		440		(16,341)		-		78,676
Property and equipment costs incurred		136,454		23,640		1,339		-		-		161,433
For the Six Months Ended June 30:
2012
Revenue	$	280,796	$	32,627	$	7,807	$	-	$	(7,198)		314,032
DD&A		81,239		21,442		2,515		1,185		-		106,381
Impairment expense		961,057		93,611		-		-		-		1,054,668
Operating income (loss)		(865,239)		(113,786)		2,922		(38,685)		-		(1,014,788)
Property and equipment costs incurred		116,977		157,401		11,439		5,447		-		291,264
2011
Revenue	$	382,359	$	77,724	$	2,489	$	-	$	(1,939)	$	460,633
DD&A		80,335		23,511		2,179		1,150		-		107,175
Impairment expense		-		49,063		-		-		-		49,063
Operating income (loss)		135,862		(22,352)		(316)		(35,311)		-		77,883
Property and equipment costs incurred		259,146		98,868		1,730		506		-		360,250
Property, plant and equipment-net
June 30, 2012	$	1,833,524	$	643,274	$	110,279	$	8,989	$	-	$	2,596,066
December 31, 2011		2,752,101		596,935		102,237		9,246		-		3,460,519

14. SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid (received) for interest and income taxes was as follows:

	For the Six Months Ended
	June 30,
	2012			2011
	(In thousands)
Interest, net of capitalized interest	$	77,940		$	86,198
Income taxes		(1,565	)		5,904

Other significant non-cash transactions were as follows:

	For the Six  Months Ended June 30,
	2012		2011
	(In thousands)
Working capital related to capital expenditures	$	98,692	$	64,285

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15. TRANSACTIONS WITH RELATED PARTIES

As of June 30, 2012, members of the Darden family and entities controlled by them beneficially own approximately 30% of our outstanding common stock. Thomas Darden, Glenn Darden and Anne Darden Self are officers and directors of Quicksilver.

During both the first six months of 2012 and 2011, we paid $0.3 million for use of an airplane owned by an entity controlled by members of the Darden family. Usage rates were determined based upon comparable rates charged by third parties.

Payments received from Mercury for sublease rentals, employee insurance coverage and administrative services were negligible for the first six months of 2012 and 2011.

We paid $0.1 million in the first six months of 2011 for rent on buildings owned by entities controlled by members of the Darden family. Rental rates were determined based on comparable rates charged by third parties. No similar payments were made in the first six months of 2012.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help readers of our financial statements understand our business, results of operations, financial condition, liquidity and capital resources. MD&A is provided as a supplement to, and should be read in conjunction with, the other sections of this Quarterly Report as well as our 2011 Annual Report on Form 10-K. We conduct our operations in two segments: (1) our more dominant exploration and production segment, and (2) our significantly smaller midstream segment. Except as otherwise specifically noted, or as the context requires otherwise, and except to the extent that differences between these segments or our geographic segments are material to an understanding of our business taken as a whole, we present this MD&A on a consolidated basis.

Our MD&A includes the following sections:

• 2012 Highlights – a summary of significant activities and events affecting Quicksilver

• 2012 Capital Program – a summary of our planned capital expenditures during 2012

• 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

2012 HIGHLIGHTS

Master Limited Partnership

On February 10, 2012, we filed a Form S-1 with the SEC to begin the registration and sale of limited partnership interests in a master limited partnership holding certain of our mature properties in our Barnett Shale Asset. We amended the registration statement in May to include financial statements for 2011 and to address comments received from the SEC and in June to include financial statements for the first quarter of 2012 and to address further comments received from the SEC. In July 2012, we were informed that the SEC had no further comments. We have been advised by our investment bankers that current market conditions are not conducive for a launch of an initial public offering, however we plan to continue to monitor market conditions.

Emerging Basins

We deployed a rig in March 2012 to commence drilling operations in our West Texas Asset to target oil production. In the second quarter of 2012, we drilled two vertical wells to the Wolfcamp and Bone Springs formations, and re-entered an existing well to drill a horizontal lateral. Our plan for the remainder of 2012 is to drill and complete two wells. We hold a position of approximately 155,000 net acres in the Delaware and Midland basins. In the first quarter of 2012, we retained an investment bank to help evaluate opportunities for a joint venture partner to acquire an interest in and participate in the development of our West Texas acreage. We will evaluate the results of our drilling program prior to recommencing the marketing effort. At December 31, 2011, we had recognized no proved reserves in our West Texas Asset.

We deployed a rig in April 2012 to commence drilling operations in our Sand Wash Asset to target oil production. In the second quarter, we drilled two vertical wells and recompleted a 2011 well. Our plan for the remainder of 2012 is to drill one well and complete two wells. We hold approximately 210,000 net acres in the Sand Wash Basin. At December 31, 2011, we had recognized no proved reserves in our Sand Wash Asset.

Horn River Development

We completed our first multi-well pad in our Horn River Asset during June and July 2012, and have begun flowback activities. Our initial production results are consistent with our existing producing wells. Three of the wells on this pad targeted the Klua formation and five wells targeted the Muskwa formation.

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Crestwood Earn-Out

In October 2010, we completed the sale of all of our interests in KGS to Crestwood. As part of the sale, we have 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 for the six-months ended June 30, 2012. We have the right to collect up to an additional $31 million in future earn-out payments in 2013. As of June 30, 2012, we do not anticipate receiving any additional payment and have recognized no assets related to these opportunities.

2012 CAPITAL PROGRAM

We incurred costs related to our capital program of $291.3 million for the first six months of 2012. In response to the continued depression in natural gas prices and the sharp decline in NGL prices in the second quarter of 2012, we have reduced our capital program in the second half of 2012 to approximately $70 million, for a total 2012 capital program of approximately $360 million.

Average production is expected to be between 365 MMcfed and 380 MMcfed for all of 2012.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2012 and 2011

The following discussion compares the results of operations for the three months ended June 30, 2012 and 2011, or the 2012 quarter and 2011 quarter, respectively. “Other U.S.” refers to the combined amounts for our Sand Wash Asset and Bakken Asset.

Revenue

Production Revenue:

	Natural Gas				NGL				Oil				Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(In millions)
Barnett Shale	$	41.7	$	98.7	$	34.3	$	59.6	$	3.0	$	4.1	$	79.0	$	162.4
Other U.S.		0.1		0.2		0.1		0.3		3.3		3.1		3.5		3.6
Hedging		45.4		21.5		6.3		(12.6)		-		-		51.7		8.9
U.S.		87.2		120.4		40.7		47.3		6.3		7.2		134.2		174.9
Horseshoe Canyon		8.9		20.2		-		-		-		-		8.9		20.2
Horn River		2.6		5.8		-		-		-		-		2.6		5.8
Hedging		4.8		6.8		-		-		-		-		4.8		6.8
Canada		16.3		32.8		-		-		-		-		16.3		32.8
Consolidated	$	103.5	$	153.2	$	40.7	$	47.3	$	6.3	$	7.2	$	150.5	$	207.7

29

Average Daily Production Volume:

	Natural Gas				NGL				Oil				Equivalent Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(MMcfd)				(Bbld)				(Bbld)				(MMcfed)
Barnett Shale		216.8		256.9		11,339		13,165		366		448		287.1		338.6
Other U.S.		0.7		0.7		26		22		441		375		3.5		3.1
Total U.S.		217.5		257.6		11,365		13,187		807		823		290.6		341.7
Horseshoe Canyon		53.2		58.2		-		4		-		-		53.2		58.3
Horn River		14.9		17.3		-		-		-		-		14.9		17.2
Total Canada		68.1		75.5		-		4		-		-		68.1		75.5
Total		285.6		333.1		11,365		13,191		807		823		358.7		417.2

Average Realized Price:

	Natural Gas				NGL				Oil				Equivalent Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(per Mcf)				(per Bbl)				(per Bbl)				(per Mcfe)
Barnett Shale	$	2.11	$	4.22	$	33.23	$	49.79	$	89.73	$	99.76	$	3.02	$	5.27
Other U.S.		2.04		3.99		55.18		78.25		82.42		92.12		11.26		12.54
Hedging		2.29		0.92		6.08		(10.47)		-		-		1.95		0.29
Total U.S.		4.40		5.14		39.36		39.36		85.73		96.28		5.07		5.62
Horseshoe Canyon	$	1.84	$	3.82	$	-	$	77.84	$	-	$	-	$	1.84	$	3.82
Horn River		1.91		3.65		-		-		-		-		1.91		3.65
Hedging		0.78		0.99		-		-		-		-		0.78		0.99
Total Canada	$	2.64	$	4.78	$	-	$	77.84	$	-	$	-	$	2.64	$	4.78
Total	$	3.98	$	5.06	$	39.36	$	39.38	$	85.73	$	96.28	$	4.61	$	5.47

The following table summarizes the changes in our natural gas, NGL and oil revenue:

	Natural Gas
			NGL		Oil		Total
	(In thousands)
Revenue for the 2011 quarter	$	153,223	$	47,269	$	7,214	$	207,706
Volume variances		(12,370)		(8,284)		(139)		(20,793)
Hedge revenue variances		21,920		18,855		-		40,775
Price variances		(59,280)		(17,130)		(775)		(77,185)
Revenue for the 2012 quarter	$	103,493	$	40,710	$	6,300	$	150,503

Natural gas and NGL revenue for the 2012 quarter decreased from the 2011 quarter due to lower volumes produced and realized prices. The decrease in natural gas volume from our Barnett Shale Asset was primarily due to production decline resulting from the aging of existing wells, and our capital spending pattern. Natural gas production volumes were also impacted by temporary shut-ins in support of new development activity.

Utilization of derivatives to hedge our sales of natural gas and NGL may result in realized prices varying from market prices that we receive from the sale of our production. Our production revenue for the 2012 quarter and 2011 quarter was higher by $56.5 million and $15.7 million, respectively, because of our hedging activities.

We monitor the economic impact of continuing to produce from certain of our wells in the current price environment and, as a result, we may temporarily shut-in wells. Wells shut-in during the 2012 quarter had an immaterial impact on our production volumes. We believe these and any possible future shut-ins would result in increases to operating income and operating cash flows, and continue to have only an immaterial impact on our production volumes.

30

Sales of Purchased Natural Gas and Costs of Purchased Natural Gas

	Three Months Ended June 30,
	2012		2011
	(In thousands)
Sales of purchased natural gas
Purchases from Eni	$	8,724	$	15,482
Purchases from others		718		4,078
Total		9,442		19,560
Costs of purchased natural gas sold
Purchases from Eni		8,723		15,493
Purchases from others		614		4,064
Total		9,337		19,557
Net sales and purchases of natural gas	$	105	$	3

Other Revenue

	Three Months Ended June 30,
	2012		2011
	(In thousands)
Midstream revenue:
Canada	$	744	$	786
Texas		382		275
Total midstream revenue		1,126		1,061
Gain from hedge ineffectiveness		8,100		872
Unrealized gain on commodity derivatives		-		19,115
Other		(609)		132
Total	$	8,617	$	21,180

In the 2011 quarter, we recognized $19.1 million of unrealized gain for derivatives that we entered into during 2011 that were not designated as hedges for accounting purposes. Gains from hedge ineffectiveness were $8.1 million for the 2012 quarter as compared to less than $0.9 million for the 2011 quarter as our derivate instruments are based on NYMEX pricing and our production is sold at market prices other than NYMEX. At June 30, 2012, we did not have any basis swaps to offset the price differential.

31

Operating Expense

Lease Operating

	Three Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Barnett Shale
Cash expense	$	12,936	$	0.50	$	14,003	$	0.45
Equity compensation		227		0.01		211		0.01
	$	13,163	$	0.51	$	14,214	$	0.46
Other U.S.
Cash expense	$	2,139	$	6.76	$	1,370	$	4.81
Equity compensation		38		0.12		44		0.16
	$	2,177	$	6.88	$	1,414	$	4.97
Total U.S.
Cash expense	$	15,075	$	0.57	$	15,373	$	0.49
Equity compensation		265		0.01		255		0.01
	$	15,340	$	0.58	$	15,628	$	0.50
Horseshoe Canyon
Cash expense	$	5,878	$	1.21	$	8,246	$	1.56
Equity compensation		83		0.02		105		0.02
	$	5,961	$	1.23	$	8,351	$	1.58
Horn River
Cash expense	$	298	$	0.22	$	505	$	0.32
Equity compensation		-		-		-		-
	$	298	$	0.22	$	505	$	0.32
Total Canada
Cash expense	$	6,176	$	1.00	$	8,751	$	1.27
Equity compensation		83		0.01		105		0.02
	$	6,259	$	1.01	$	8,856	$	1.29
Total Company
Cash expense	$	21,251	$	0.65	$	24,124	$	0.63
Equity compensation		348		0.01		360		0.01
	$	21,599	$	0.66	$	24,484	$	0.64

The Barnett Shale Asset experienced lower gas lift costs, compression expense and saltwater disposal costs compared to the 2011 quarter as certain higher cost wells were shut-in during the 2012 quarter. Other U.S. lease operating costs were impacted on a gross and unit basis by increased production and costs for our Sand Wash Asset.

Lease operating expense for the 2012 quarter in Canada decreased compared to the 2011 quarter primarily due to lower well and compressor repair and maintenance costs incurred during the 2012 quarter in the Horseshoe Canyon Asset.

32

Gathering, Processing and Transportation

	Three Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Barnett Shale	$	36,464	$	1.40	$	42,004	$	1.35
Other U.S.		4		0.01		-		-
Total U.S.		36,468		1.38		42,004		1.35
Horseshoe Canyon		960		0.20		1,215		0.23
Horn River		5,196		3.83		3,507		2.24
Total Canada		6,156		0.99		4,722		0.69
Total	$	42,624	$	1.31	$	46,726	$	1.23

Canadian GPT increased for the 2012 quarter as compared to the 2011 quarter both in total dollars and on a per Mcfe basis primarily as a result of fixed costs under our firm agreements with third parties. Canadian GPT includes unused firm capacity of $1.8 million and $0.9 million for the 2012 quarter and 2011 quarter, respectively. US GPT per Mcfe in the 2011 quarter was reduced by adjustments from third parties.

Production and Ad Valorem Taxes

	Three Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Production taxes
Barnett Shale	$	1,338	$	0.05	$	2,625	$	0.09
Other U.S.		165		0.68		266		0.92
Total U.S.		1,503		0.06		2,891		0.09
Horseshoe Canyon		50		0.01		61		0.01
Horn River		-		-		-		-
Total Canada		50		0.01		61		0.01
Total production taxes		1,553		0.05		2,952		0.07
Ad valorem taxes
U.S.	$	4,734		0.18	$	4,859		0.16
Canada		902		0.15		695		0.10
Total ad valorem taxes		5,636		0.17		5,554		0.15
Total	$	7,189	$	0.22	$	8,506	$	0.22

33

Depletion, Depreciation and Accretion

	Three Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Depletion
U.S.	$	37,536	$	1.42	$	39,879	$	1.28
Canada		8,676		1.40		9,901		1.44
Total depletion		46,212		1.42		49,780		1.31
Depreciation of other fixed assets
U.S.	$	2,300	$	0.09	$	2,434	$	0.08
Canada		2,406		0.39		1,810		0.26
Total depreciation		4,706		0.14		4,244		0.11
Accretion		1,024		0.03		680		0.02
Total	$	51,942	$	1.59	$	54,704	$	1.44

U.S. depletion for the 2012 quarter reflected a decrease in U.S. production partially offset by an increase in the U.S. depletion rate when compared to the 2011 quarter. Canadian depletion decreased in 2012 due to a decrease in Canadian production when compared to the 2011 quarter. Following the impairment recognized in the 2012 quarter, we expect U.S. and Canadian depletion rates will be $1.05 and $1.31 per Mcfe, respectively.

U.S. depreciation for the 2012 quarter was lower than the 2011 quarter primarily because of reduced carrying value of our midstream assets following their impairment in late 2011. Canada depreciation was higher due to increased capital spending on the Fortune Creek non-oil and gas properties in the second half of 2011.

Impairment Expense

We perform quarterly ceiling tests to assess impairment of our oil and gas properties. We also assess our fixed assets reported outside the full-cost pool when circumstances indicate impairment may have occurred. The calculation of impairment expense is more fully described in Note 5 to the condensed consolidated financial statements in Item 1 of this Quarterly Report.

In the 2012 quarter, we recognized $898.7 million and $93.2 million in non-cash charges for impairment of our U.S. and Canadian oil and gas properties, respectively.

In performing our quarterly ceiling tests, we utilize first-day-of-the-month prices for the preceding 12 months. Due to the decrease in forecasted natural gas and NGL prices during the third quarter 2012 compared to the third quarter 2011, there is a significant likelihood of further impairment of oil and gas properties. As of June 30, 2012, our U.S. and Canadian ceiling tests included $337 million and $125 million, respectively, in value for our derivatives treated as hedges. Absent this recognition, after tax we would have recognized $337 million of additional impairment expense for our U.S. oil and gas properties and $125 million for our Canadian oil and gas properties. If any of our derivatives we treat as hedges become ineligible for hedge treatment, it could significantly impact the amount of impairment that we recognize.

34

General and Administrative

	Three Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Cash expense	$	11,700	$	0.36	$	10,772	$	0.28
Audit and accounting fees		2,661		0.08		450		0.02
Equity compensation		4,044		0.12		4,548		0.12
Total	$	18,405	$	0.56	$	15,770	$	0.42

General and administrative expense for the 2012 quarter was greater than the 2011 quarter primarily due to an increase in professional services fees, primarily to our registered independent accounting firm.

Loss from Earnings of BBEP

We recorded our portion of BBEP’s earnings during the quarter in which its financial statements became publicly available. As a result, our 2011 quarter results of operations included BBEP’s earnings for the three months ended March 31, 2011. We sold the last of our BBEP Units in the fourth quarter of 2011.

We recognized losses of $26.2 million for equity earnings from our investment in BBEP for the 2011 quarter.

Other Income

Gains of $122.5 million were recognized in the 2011 quarter from the sale of 7.0 million BBEP Units in June 2011.

Fortune Creek Accretion

In December 2011, we entered into an agreement with KKR to form Fortune Creek to construct and operate midstream assets for natural gas produced by us and others primarily in British Columbia. In connection with the partnership formation, KKR contributed $125 million cash in exchange for a 50% interest in Fortune Creek. KKR’s contribution is shown as Partnership liability in the condensed consolidated balance sheet, and we recognize accretion expense to reflect the rate of return earned by KKR via its investment.

Interest Expense

	Three Months Ended June 30,
	2012		2011
		(In thousands)
Interest costs on debt outstanding	$	42,488	$	43,917
Add:
Fees paid on letters of credit outstanding		23		1,010
Premium paid-senior notes repurchased		-		571
Non-cash interest (1)		1,727		3,992
Total interest costs incurred		44,238		49,490
Less:
Interest capitalized		(4,162)		(1,938)
Interest expense	$	40,076	$	47,552

⁽¹⁾ Amortization of deferred financing costs, original issue discount net of interest swap settlement amortization.

Interest costs on debt outstanding for the 2012 quarter were lower when compared to the 2011 quarter primarily because of the lower amortization of deferred financing costs due to costs expensed in late 2011 related to the termination of the 2007 Senior Secured Credit Facility and the Initial U.S Credit Facility and the increase in capitalized interest on capital expenditures related to our exploratory plays.

35

Income Taxes

The effective tax rates for the three months ended June 30, 2012 and 2011 are as follows:

	Three Months Ended June 30,
	2012			2011
	(in thousands)
Income tax (benefit) expense-U.S.	$	(319,517	)	$	14,700
Effective tax rate-U.S.		35.0	%		13.2	%
Income tax (benefit) expense-Canada	$	(27,372	)	$	4,808
Effective tax rate-Canada		25.5	%		29.4	%
Income tax (benefit) expense-total	$	(346,889	)	$	19,508
Effective tax rate-total		34.0	%		15.2	%

The effective tax rate for the 2012 quarter reflects a projection of a full year of U.S. and Canadian taxable losses. Our income tax provision for the 2011 quarter reflected changes in the projected effective tax rate for 2011 as of June 30, 2011 to adjust for the sale of BBEP units in June 2011 and include the effects of our recognition of an assessment of $0.6 million in Canada related to a predecessor’s activities in 1997. The effective rate for the 2011 quarter reflected a projection of full year Canadian taxable loss partially offset by the projection of a full year of U.S. taxable income.

36

RESULTS OF OPERATIONS

Six Months Ended June 30, 2012 and 2011

The following discussion compares the results of operations for the six months ended June 30, 2012 and 2011, or the 2012 period and 2011 period, respectively. “Other U.S.” refers to the combined amounts for our Sand Wash Asset and Bakken Asset.

Revenue

Production Revenue:

	Natural Gas				NGL				Oil				Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(In millions)
Barnett Shale	$	96.8	$	188.1	$	78.9	$	106.0	$	6.2	$	6.8	$	181.9	$	300.9
Other U.S.		0.3		0.7		0.2		0.3		7.4		6.0		7.9		7.0
Hedging		85.0		45.4		6.6		(19.8)		-		-		91.6		25.6
Total U.S.		182.1		234.2		85.7		86.5		13.6		12.8		281.4		333.5
Horseshoe Canyon		22.3		41.1		0.1		0.1		-		-		22.4		41.2
Horn River		4.7		9.2		-		-		-		-		4.7		9.2
Hedging		13.8		14.1		-		-		-		-		13.8		14.1
Total Canada		40.8		64.4		0.1		0.1		-		-		40.9		64.5
Total	$	222.9	$	298.6	$	85.8	$	86.6	$	13.6	$	12.8	$	322.3	$	398.0

Average Daily Production Volume:

	Natural Gas				NGL				Oil				Equivalent Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(MMcfd)				(Bbld)				(Bbld)				(MMcfed)
Barnett Shale		224.8		252.2		11,416		12,352		363		392		295.5		328.6
Other U.S.		0.7		0.7		26		24		463		378		3.7		3.2
Total U.S.		225.5		252.9		11,442		12,376		826		770		299.2		331.8
Horseshoe Canyon		55.6		58.8		7		5		-		-		55.6		58.8
Horn River		13.1		14.2		-		-		-		-		13.1		14.2
Total Canada		68.7		73.0		7		5		-		-		68.7		73.0
Total		294.2		325.9		11,449		12,381		826		770		367.9		404.8

37

Average Realized Price:

	Natural Gas				NGL				Oil				Equivalent Total
	2012		2011		2012		2011		2012		2011		2012		2011
	(per Mcf)				(per Bbl)				(per Bbl)				(per Mcfe)
Barnett Shale	$	2.37	$	4.12	$	37.96	$	47.42	$	94.13	$	95.92	$	3.38	$	5.06
Other U.S.		2.22		4.22		54.33		77.89		87.95		87.95		11.84		12.02
Hedging		2.07		0.99		3.17		(8.83)		-		-		1.68		0.43
Total U.S.	$	4.44	$	5.11	$	41.17	$	38.65	$	90.27	$	92.02	$	5.17	$	5.55
Horseshoe Canyon	$	2.21	$	3.86	$	70.16	$	75.33	$	-	$	-	$	2.22	$	3.87
Horn River		1.98		3.60		13.98		-		-		-		1.98		3.60
Hedging		1.10		1.07		-		-		-		-		1.10		1.07
Total Canada	$	3.27	$	4.88	$	69.79	$	75.33	$	-	$	-	$	3.27	$	4.88
Total	$	4.16	$	5.06	$	41.18	$	38.66	$	90.28	$	92.02	$	4.81	$	5.43

The following table summarized the changes in our production revenue:

	Natural Gas
			NGL		Oil		Total
	(In thousands)
Revenue for the 2011 period	$	298,549	$	86,640	$	12,817	$	398,006
Volume variances		(9,615)		(7,470)		1,023		(16,062)
Hedge revenue variances		39,278		26,380		-		65,658
Price variances		(105,276)		(19,742)		(261)		(125,279)
Revenue for the 2012 period	$	222,936	$	85,808	$	13,579	$	322,323

Natural gas and NGL revenue for the 2012 period decreased from the 2011 period primarily due to lower realized prices without hedge gains. The decrease in natural gas volume from our Barnett Shale Asset was primarily due to production decline resulting from the aging of existing wells, and our capital spending pattern. Natural gas production volumes were also impacted by temporary shut-ins in support of new development activity.

Utilization of derivatives to hedge our sales of natural gas and NGL may result in realized prices varying from market prices that we receive from the sale of our production. Our production revenue for the 2012 period and 2011 period was higher by $105.4 million and $39.7 million, respectively, because of our hedging activities.

Sales of Purchased Natural Gas and Costs of Purchased Natural Gas

	Six Months Ended June 30,
	2012		2011
	(In thousands)
Sales of purchased natural gas
Purchases from Eni	$	19,870	$	29,399
Purchases from others		1,659		10,587
Total		21,529		39,986
Costs of purchased natural gas sold
Purchases from Eni		19,906		29,287
Purchases from others		1,368		10,013
Total		21,274		39,300
Net sales and purchases of natural gas	$	255	$	686

38

Other Revenue

	Six Months Ended June 30,
	2012		2011
	(In thousands)
Midstream revenue from third parties
Canada	$	1,475	$	1,630
Texas		609		550
Total midstream revenue		2,084		2,180
Gain from hedge ineffectiveness		4,899		818
Loss from hedge restructure		(14,555)		-
Gain (Loss) on commodity derivatives		(21,670)		19,115
Other		(578)		528
Total	$	(29,820)	$	22,641

In the 2011 period, we recognized $19.1 million of unrealized gain for derivatives that we entered into during 2011 that were not designated as hedges for accounting purposes. In January and February 2012, we terminated a number of our ten-year derivative instruments in exchange for derivative instruments with shorter durations at above market terms. The decrease in the fair value between the terminated ten-year instrument and the new shorter term instrument was recognized in the current period as a realized loss. Gains from hedge ineffectiveness were $4.9 million for the 2012 period as compared to $0.8 million for the 2011 period as our derivate instruments are based on NYMEX pricing and our production is sold at market prices other than NYMEX. At June 30, 2012, we did not have any basis swaps to offset the price differential. Unrealized losses recognized in 2012 is equal to the difference between the estimated fair value at the inception date and transaction cost for ten-year derivative instruments entered into during the period.

39

Operating Expense

Lease Operating

	Six Months Ended June 30,
	2012				2011
		(In thousands, except per unit amounts)
			Per				Per
			Mcfe				Mcfe
Barnett Shale
Cash expense	$	30,169	$	0.56	$	25,109	$	0.42
Equity compensation		642		0.01		480		0.01
	$	30,811	$	0.57	$	25,589	$	0.43
Other U.S.
Cash expense	$	4,298	$	6.43	$	2,617	$	4.54
Equity compensation		87		0.13		99		0.17
	$	4,385	$	6.56	$	2,716	$	4.71
Total U.S.
Cash expense	$	34,467	$	0.63	$	27,726	$	0.46
Equity compensation		729		0.01		579		0.01
	$	35,196	$	0.64	$	28,305	$	0.47
Horseshoe Canyon
Cash expense	$	13,634	$	1.35	$	15,985	$	1.50
Equity compensation		208		0.02		269		0.03
	$	13,842	$	1.37	$	16,254	$	1.53
Horn River
Cash expense	$	1,252	$	0.53	$	1,134	$	0.44
Equity compensation		-		-		-		-
	$	1,252	$	0.53	$	1,134	$	0.44
Total Canada
Cash expense	$	14,886	$	1.19	$	17,119	$	1.30
Equity compensation		208		0.02		269		0.02
	$	15,094	$	1.21	$	17,388	$	1.32
Total Company
Cash expense	$	49,353	$	0.74	$	44,845	$	0.61
Equity compensation		937		0.01		848		0.01
	$	50,290	$	0.75	$	45,693	$	0.62

The Barnett Shale Asset experienced higher gas lift costs, workover expense and saltwater disposal costs compared to the 2011 period due to the aging of existing wells and costs to maintain production. Other U.S. lease operating costs were impacted on a gross and unit basis by increased production and costs for our Sand Wash Asset.

Lease operating expense for the 2012 period in Canada decreased compared to the 2011 period due to lower well and compressor repair and maintenance costs incurred during the 2012 period in the Horseshoe Canyon Asset.

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Gathering, Processing and Transportation

	Six Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Barnett Shale	$	75,102	$	1.40	$	82,389	$	1.39
Other U.S.		7		0.01		7		0.01
Total U.S.		75,109		1.38		82,396		1.37
Horseshoe Canyon		2,029		0.20		2,235		0.21
Horn River		8,563		3.59		6,457		2.52
Total Canada		10,592		0.85		8,692		0.66
Total	$	85,701	$	1.28	$	91,088	$	1.24

Canadian GPT increased for the 2012 period as compared to the 2011 period both in total dollars and on a per Mcfe basis primarily as a result of fixed costs under our firm agreements with third parties. Canadian GPT includes unused firm capacity of $3.8 million and $1.2 million for the 2012 period and the 2011 period, respectively. GPT per Mcfe was flat in the U.S.

Production and Ad Valorem Taxes

	Six Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Production taxes
Barnett Shale	$	2,644	$	0.05	$	4,032	$	0.07
Other U.S.		411		0.69		543		0.92
Total U.S.		3,055		0.06		4,575		0.08
Horseshoe Canyon		52		0.01		75		0.01
Horn River		-		-		-		-
Total Canada		52		0.01		75		0.01
Total production taxes		3,107		0.05		4,650		0.06
Ad valorem taxes
U.S.		9,445		0.17		10,090		0.17
Canada		1,400		0.11		1,347		0.10
Total ad valorem taxes		10,845		0.16		11,437		0.16
Total	$	13,952	$	0.21	$	16,087	$	0.22

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Depletion, Depreciation and Accretion

	Six Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Depletion
U.S.	$	77,525	$	1.42	$	77,024	$	1.28
Canada		17,631		1.41		19,756		1.49
Total depletion		95,156		1.42		96,780		1.32
Depreciation of other fixed assets
U.S.	$	4,679		0.09	$	6,057		0.10
Canada		4,577		0.37		3,029		0.23
Total depreciation		9,256		0.14		9,086		0.12
Accretion		1,969		0.03		1,309		0.02
Total	$	106,381	$	1.59	$	107,175	$	1.46

U.S. depletion for the 2012 period reflected an increase in the U.S. depletion rate partially offset by a decrease in U.S. production when compared to the 2011 period. Canadian depletion decreased in 2012 due to both a decrease in Canadian production and a decrease in the Canadian depletion rate when compared to the 2011 period. Following the impairment recognized in the 2012 period, we expect U.S. and Canadian depletion rates will be $1.05 and $1.31 per Mcfe, respectively.

U.S. depreciation for the 2012 period was lower than the 2011 period primarily because of reduced carrying value of our midstream assets following their impairment in late 2011. Canada depreciation was higher due to increased capital spending on the Fortune Creek non-oil and gas properties in the second half of 2011.

Impairment Expense

As required under GAAP, we perform quarterly ceiling tests to assess impairment of our oil and gas properties. We also assess our fixed assets reported outside the full-cost pool when circumstances indicate impairment may have occurred. The calculation of impairment expense is more fully described in Note 5 to the condensed consolidated financial statements in Item 1 of this Quarterly Report.

In the 2012 period, we recognized $961.0 million and $93.6 million in non-cash charges for impairment of our U.S. and Canadian oil and gas properties, respectively, as of June 30, 2012.

General and Administrative

	Six Months Ended June 30,
	2012				2011
	(In thousands, except per unit amounts)
			Per Mcfe				Per Mcfe
Cash expense	$	23,871	$	0.35	$	24,002	$	0.33
Audit and accounting fees		4,544		0.07		622		0.01
Equity compensation		9,086		0.14		9,537		0.13
Total	$	37,501	$	0.56	$	34,161	$	0.47

General and administrative expense for the 2012 period was greater than the 2011 period primarily due to an increase in professional services fees, primarily to our registered independent accounting firm.

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Crestwood Earn-Out

In February 2012, we collected $41 million of earn-out payments from Crestwood, which is presented as Crestwood earn-out in the condensed consolidated statement of income for the six months ended June 30, 2012.

Loss from Earnings of BBEP

We recorded our portion of BBEP’s earnings during the quarter in which its financial statements became publicly available. As a result, our 2011 period results of operations included BBEP’s earnings for the six months ended March 31, 2011. We sold the last of our BBEP Units in the fourth quarter of 2011.

We recognized losses of $47.1 million for equity earnings from our investment in BBEP for the 2011 period.

Other Income

Gains of $123.8 million were recognized in the 2011 period from the sale of 7.1 million BBEP Units.

Fortune Creek Accretion

In December 2011, we entered into an agreement with KKR to form Fortune Creek to construct and operate midstream assets for natural gas produced by us and others primarily in British Columbia. In connection with the partnership formation, KKR contributed $125 million cash in exchange for a 50% interest in Fortune Creek. KKR’s contribution is shown as Partnership liability in the condensed consolidated balance sheet, and we recognize accretion expense to reflect the rate of return earned by KKR via its investment.

Interest Expense

	Six Months Ended June 30,
	2012		2011
		(In thousands)
Interest costs on debt outstanding	$	84,531	$	87,114
Add:
Fees paid on letters of credit outstanding		52		1,259
Premium paid - senior notes repurchased		-		571
Non-cash interest (1)		3,469		7,872
Total interest costs incurred		88,052		96,816
Less:
Interest capitalized		(7,806)		(3,086)
Interest expense	$	80,246	$	93,730

⁽¹⁾ Amortization of deferred financing costs, original issue discount net of interest swap settlement amortization.

Interest costs on debt outstanding for the 2012 period were lower when compared to the 2011 period primarily because of the lower amortization of deferred financing costs due to costs expensed in late 2011 related to the termination of the 2007 Senior Secured Credit Facility and the Initial U.S Credit Facility and the increase in capitalized interest on capital expenditures related to our exploratory plays.

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Income Taxes

The effective tax rates for the six months ended June 30, 2012 and 2011 are as follows:

	Six Months Ended June 30,
	2012		2011
	(in thousands)
Income tax (benefit) expense - U.S.	$	(339,663)	$	29,632
Effective tax rate - U.S.		34.7%		34.2%
Income tax (benefit) expense - Canada	$	(32,320)	$	(6,100)
Effective tax rate - Canada		25.6%		21.9%
Income tax (benefit) expense - total	$	(371,983)	$	23,532
Effective tax rate - total		33.7%		38.4%

The effective tax rate for the 2012 period reflects a projection of a full year of U.S. and Canadian taxable losses. We expect that the consolidated effective tax rate of 33.7% for the 2012 period will be our effective tax rate for all of 2012 based upon our projection of pretax income and estimated permanent differences for 2012. The effective rate for the 2011 period reflected a projection of full year Canadian taxable loss partially offset by the projection of a full year of U.S. taxable income.

Quicksilver Resources Inc. and its Restricted Subsidiaries

Information about Quicksilver and our restricted and unrestricted subsidiaries is included in Note 12 to our condensed consolidated financial statements included in Item 1 of this Quarterly Report.

The combined results of operations for Quicksilver and our restricted subsidiaries are substantially similar to our consolidated results of operations, which are discussed above under “Results of Operations,” except for Fortune Creek accretion expense. The combined financial position of Quicksilver and our restricted subsidiaries and our consolidated financial position are materially the same except for balances related to Fortune Creek which were included in the consolidated financial position as of June 30, 2012. The combined operating cash flows, financing cash flows and investing cash flows for Quicksilver and our restricted subsidiaries are substantially similar to our consolidated operating cash flows, financing cash flows and investing cash flows, which are discussed below in “Cash Flow Activity,” except for cash flows associated with the operations and development of Fortune Creek.

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LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL POSITION

Cash Flow Activity

Our financial condition and results of operations, including our liquidity and profitability, are significantly affected by the prices that we realize for our natural gas, NGL and oil production and the volumes of natural gas, NGL and oil that we produce.

The natural gas, NGLs and oil that we produce are commodity products for which established trading markets exist. Accordingly, product pricing is generally influenced by the relationship between supply and demand for these products. Product supply is affected primarily by fluctuations in production volumes, and product demand is affected by the state of the economy in general, the availability and price of alternative fuels and a variety of other factors. Prices for our products historically have been volatile, and we have no meaningful influence over the timing and extent of price changes for our products. Although we have mitigated our near-term exposure to such price declines through derivative financial instruments covering substantial portions of our expected near-term production, we cannot confidently predict whether or when market prices for natural gas, NGL and oil will increase or decrease.

The volumes that we produce may be significantly affected by the rates at which we acquire leaseholds and other mineral interests and explore, exploit and develop our leasehold and other mineral interests through drilling and production activities. These activities require substantial capital expenditures, and our ability to fund these activities through cash flow from our operations, borrowings and other sources may be affected by instability in the capital markets.

For the remainder of 2012 through 2021, price collars and swaps hedge a portion of our natural gas and NGL revenue. The following summarizes future production hedged with commodity derivatives as of June 30, 2012.

Production	Daily Production
Year	Gas	NGL
	MMcfd	MBbld
2012	230	7
2013	150	-
2014-2015	110	-
2016-2021	45	-

The following summarizes our cash flow activity for the 2012 period and 2011 period:

	Six Months Ended June 30,
	2012			2011
	(In thousands)
Net cash provided by operating activities	$	99,516		$	123,352
Net cash used by investing activities		(262,700	)		(258,610	)
Net cash provided by financing activities		163,314			82,094

Operating Cash Flows

Net cash provided by operations for the 2012 period decreased from the 2011 period due to lower realized prices (including hedging effects) partially offset by positive changes in working capital.

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Investing Cash Flows

Costs incurred for property, plant and equipment for the 2012 period and 2011 period were as follows:

	United States		Canada		Consolidated
	(In thousands)
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
For the Six Months Ended June 30, 2011
Exploration and development	$	246,515	$	49,870	$	296,385
Midstream		9,671		48,754		58,425
Administrative		5,196		244		5,440
Total	$	261,382	$	98,868	$	360,250

Costs incurred reflect the true nature of the activity of the 2012 capital program, while capital expenditures per the condensed consolidated statement of cash flows also reflect the related changes in working capital. Our 2012 capital costs incurred have decreased for the U.S. as a result of our overall decrease in capital spend in 2012 compared to 2011. The increase in the costs incurred for exploration and development activities in Canada in 2012 when compared to 2011 relates to a significant completion program in the Horn River Basin. Our capital costs incurred for midstream operations during the 2011 period reflect the construction of infrastructure to gather, compress and deliver our Horn River gas production to third-party processing facilities.

We received a $41.1 million earn-out payment from Crestwood in February 2012. During the 2011 period, we sold 7.1 million BBEP Units for total proceeds of $134.4 million. Both of these receipts were recorded as investing activities.

Financing Cash Flows

Net financing cash flows in the 2012 period include net borrowings of $167.7 million under our Combined Credit Agreements. Net financing cash flows in the 2011 period included $7.4 million of purchases and retirements of our senior notes and net borrowings of $93.7 million under our 2007 Senior Secured Credit facility.

Liquidity and Borrowing Capacity

At June 30, 2012, the Combined Credit Agreements’ global borrowing base was $1.075 billion and the global letter of credit capacity increased from $175 million to $200 million in June 2012 in accordance with the Combined Credit Agreements. At June 30, 2012, there was $619 million available under the Combined Credit Agreements. In light of current prices for natural gas and NGLs, we amended our Combined Credit Agreements in August 2012 primarily to loosen the financial covenants contained therein through the second quarter of 2014. The next semi-annual redetermination of our global borrowing base was scheduled to be completed in October 2012. However, in conjunction with the amendments to our Combined Credit Agreements, our borrowing base was also redetermined. Our ability to remain in compliance with the amended financial covenants in our Combined Credit Agreements may be affected by events beyond our control, including market prices for our products, the success of our drilling efforts and production volumes. Any future inability to comply with these covenants, unless waived by the requisite lenders, could adversely affect our liquidity by rendering us unable to borrow further under our credit facilities and by accelerating the maturity of our indebtedness. As a result of the amendment and the redetermination process, the following changes were made to the Combined Credit Agreements:

• Reduction of the currently applicable global borrowing base to $850 million from $1.075 billion

• Increase of the applicable margin by 0.50% for each type of loan and issued letters of credit, and setting of the commitment fee on unutilized availability to 0.50%

• Reduction of the minimum required interest coverage ratio from 2.5 to 1.5 for the quarter ending September 30, 2012 through the quarter ending March 31, 2014, then increasing to 2.0 for the quarter ending June 30, 2014, and reverting to 2.5 thereafter

• Addition of a maximum senior secured debt leverage ratio of 2.5 beginning in the quarter ending September 30, 2012

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• Until the later of June 30, 2013, or such time as the total leverage ratio for the prior twelve month period is less than or equal to 4.0:

• Restrict the ability to issue certain additional types of debt;

• Limit the aggregate amount of restricted payments to $15 million;

• Restrict the ability to repay existing debt securities if global borrowing base utilization equals or exceeds 25%; and

• Require a dollar for dollar repayment of the Combined Credit Agreements together with any repayment of existing debt securities if the global borrowing base utilization is less than 25% until the Combined Credit Agreements are paid in full, at which time existing debt securities may be repaid in any amounts; and

• Restrict the ability to terminate certain oil and gas hedging arrangements through 2014.

Our debt ratings were recently reduced by Moody’s and by Standard & Poors and remain on review for downgrade and on negative outlook, respectively. If the rating agencies were to further reduce our debt or credit ratings, our borrowing costs may increase, our potential pool of investors and funding resources may be reduced, and we may be required to post collateral under selected contracts and with counterparties. These events may have an adverse effect on our results of operations, financial condition and cash flows. In addition, any such reduction in our debt or credit ratings may adversely affect the trading price of our outstanding securities.

Additional information about our debt and related covenants are more fully described in Note 6 to the condensed consolidated financial statements in Item 1 of this Quarterly Report. The information presented above 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.

We anticipate that our remaining 2012 capital program of approximately $70 million will be funded by cash flow from operations and will not require further utilization of our Combined Credit Agreements. We have significant commitments to deliver gas for gathering and transport, in particular from our Horn River Asset, and must pay fees related to those services whether or not we deliver gas. These commitments limit our flexibility to further reduce our capital program. In addition, if our drilling efforts are not successful or production volumes are lower than we anticipate, we may expand our capital program in order to satisfy our delivery commitments or be required to pay fees with respect to gas delivery shortfalls. Any significant increase in our capital program could require us to raise additional capital, which we cannot provide assurance that we could do on acceptable terms or at all.

Depending upon conditions in the capital markets and other factors, we will from time to time consider the issuance of debt or other securities, other possible capital markets transactions or the sale of assets, the proceeds of which could be used to repay current indebtedness or for other corporate purposes. We will also consider from time to time additional acquisitions of, and investments in, assets or businesses that complement our existing asset portfolio. Acquisition transactions, if any, are expected to be financed through cash on hand and from operations, utilization of our Combined Credit Agreements, the issuance of debt or other securities or a combination of those sources.

Financial Position

The following impacted our balance sheet as of June 30, 2012, as compared to our balance sheet as of December 31, 2011:

• Our accounts receivable balance decreased $30.6 million from December 31, 2011 to June 30, 2012 primarily due to the collection of $14.8 million for a non-income tax matter in Canada and a decrease of $22.6 million in production receivables due to lower realized prices before hedges at June 30, 2012 compared to December 31, 2011, partially offset by an increase of $9.7 million in a non-income tax receivable from the Canadian government from year-end.

• Our net property, plant and equipment balance decreased $864.5 million from December 31, 2011 to June 30, 2012. We incurred capital cost of $291 million during 2012 and also recognized assets for retirement obligations established for new wells and facilities. Changes to U.S.-Canadian exchange rates further increased our property, plant and equipment balances $2.4 million. Offsetting the increases was $1,159.0 million of DD&A and impairment expense.

• The valuation of our current and non-current net deferred income tax liability was $353.9 million lower from December 31, 2011 to June 30, 2012 due to a deferred income tax benefit recognized on book impairment charges recorded in 2012.

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• The $30.7 million decrease in accounts payable was due to a reduction in accrued capital expenditures of $8.9 million from the December 31, 2011 amount and a decrease in trade payables of $21.8 million from December 31, 2011.

• Long-term debt increased $167.7 million for net borrowings under the Combined Credit Agreements.

Contractual Obligations and Commercial Commitments

There have been no significant changes to our contractual obligations and commitments as reported in our 2011 Annual Report on Form 10-K.

Critical Accounting Estimates

Management’s discussion and analysis of financial condition and results of operations are based on our condensed consolidated interim financial statements and related footnotes contained within this report. The process of preparing financial statements in conformity with GAAP requires the use of estimates and assumptions to determine certain of the assets, liabilities, revenue and expense. Our more critical accounting estimates used in the preparation of the consolidated financial statements were discussed in our 2011 Annual Report on Form 10-K. These critical estimates, for which no significant changes occurred during the six months ended June, 2012, include estimates and assumptions for:

•     oil and gas reserves	•     stock-based compensation
•     full cost ceiling calculations	•     income taxes
•     derivative instruments

These estimates and assumptions are based upon what we believe is the best information available at the time we make the estimate or assumption. The estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from those estimates and assumptions.

OFF-BALANCE SHEET ARRANGEMENTS

Our contracts with NGTL provide financial assurances to it during the construction phase of the NGTL Project, which as of July 2012 is expected to continue through 2015. Assuming the project is fully constructed at estimated costs of C$257.4 million, we expect to provide letters of credit through 2015. Item 8, Note 14 in our 2011 Annual Report on Form 10-K contains additional information about our contracts with NGTL.

In July 2012, we increased our letters of credit provided by C$35.6 million to a total of C$68.3 million in accordance with the agreement for construction of the NGTL Project. Subsequently, construction has been delayed for one year. This delay is the result of the in-service date having been moved to the summer of 2015. Accordingly, we anticipate the financial assurances will be reduced by approximately C$45 million and the schedule for increasing financial assurances will also be adjusted for the delay in construction with no additional letters of credit to be provided until 2014.

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.

In June 2011, the FASB issued an amendment to accounting guidance to update the presentation of comprehensive income in consolidated financial statements. Under the amended guidance, the presentation of total comprehensive income, the components of net income, and the components of other comprehensive income may be made either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance became effective for us beginning with the quarter ended March 31, 2012, and requires retrospective application to earlier periods presented. Our condensed consolidated statements of income (loss) and comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011 contain the required disclosures. The implementation of this accounting pronouncement resulted in increased disclosure in Note 12.

In May 2011, the FASB issued an amendment to the accounting guidance for fair value measurement and disclosure. Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items

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that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in stockholders’ equity. This guidance became effective for us beginning with the quarter ended March 31, 2012. The adoption of this accounting pronouncement did not have an effect on the fair value measurement, but rather expanded upon existing disclosures.

In December 2011, the FASB issued an amendment to the accounting guidance for disclosure of arrangements that permit offsetting assets and liabilities. The amendment expands the disclosure requirements to require both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The amendment will be effective for us, beginning on January 1, 2013, and must be applied retrospectively. We do not expect the adoption of this accounting pronouncement to have a material impact on our financial statements when implemented.

No other pronouncements materially affecting our financial statements have been issued since the filing of our 2011 Annual Report on Form 10-K.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

We have established internal control policies and procedures for managing risk within our organization. The possibility of decreasing prices received for our natural gas, NGL and oil production is among the several risks that we face. We seek to manage this risk by entering into derivative contracts which we strive to treat as financial hedges. We have mitigated the downside risk of adverse price movements through the use of derivatives but, in doing so, we have also limited our ability to benefit from favorable price movements. This commodity price strategy enhances our ability to execute our development, exploitation and exploration programs, meet debt service requirements and pursue acquisition opportunities even in periods of price volatility or depression.

We enter into financial derivative contracts to mitigate our exposure to commodity price risk associated with anticipated future production and to increase the predictability of our revenue. Utilization of our financial hedging program will most often result in realized prices from the sale of our natural gas and NGLs that vary from market prices. As a result of settlements of derivative contracts, our revenue from natural gas and NGL production was greater by $105.4 million and $39.7 million for the 2012 period and 2011 period, respectively. Other revenue was $31.3 million lower for the 2012 period due to hedge ineffectiveness, unrealized losses at inception of new long-dated derivative instruments and realized losses on hedge restructuring. Other revenue was $19.9 million higher for the 2011 period due to hedge ineffectiveness and unrealized losses on derivatives that we entered into during 2011 that were not designated as hedges for accounting purposes.

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The following table details our open derivative positions at June 30, 2012:

Product	Type	Production Hedged	Remaining Contract Period	Volume	Weighted Avg Price Per Mcf or Bbl
Gas	Collar	U.S.	Jul 2012 -Dec 2012	20 MMcfd	6.50- 7.15
Gas	Collar	U.S.	Jul 2012 -Dec 2012	20 MMcfd	6.50- 7.18
Gas	Collar	U.S.	Jul 2012 -Dec 2012	20 MMcfd	6.50- 8.01
Gas	Swap	Canada	Jul 2012 -Dec 2012	5 MMcfd	6.20
Gas	Swap	Canada	Jul 2012 -Dec 2012	5 MMcfd	6.20
Gas	Swap	Canada	Jul 2012 -Dec 2012	10 MMcfd	6.22
Gas	Swap	Canada	Jul 2012 - Dec 2013	10 MMcfd	5.00
Gas	Swap	Canada	Jul 2012 - Dec 2015	10 MMcfd	6.42
Gas	Swap	Canada	Jul 2012 - Dec 2015	10 MMcfd	6.45
Gas	Swap	Canada	Jul 2012 -Dec 2021	10 MMcfd	4.63
Gas	Swap	U.S.	Jul 2012 - Dec 2013	10 MMcfd	5.00
Gas	Swap	U.S.	Jul 2012 - Dec 2013	10 MMcfd	5.00
Gas	Swap	U.S.	Jul 2012 - Dec 2013	10 MMcfd	5.00
Gas	Swap	U.S.	Jul 2012 - Dec 2015	20 MMcfd	6.00
Gas	Swap	U.S.	Jul 2012 - Dec 2015	10 MMcfd	6.00
Gas	Swap	U.S.	Jul 2012 - Dec 2015	5 MMcfd	6.23
Gas	Swap	U.S.	Jul 2012 - Dec 2015	5 MMcfd	6.20
Gas	Swap	U.S.	Jul 2012 - Dec 2015	5 MMcfd	5.68
Gas	Swap	U.S.	Jul 2012 -Dec 2021	5 MMcfd	6.20
Gas	Swap	U.S.	Jul 2012 -Dec 2021	10 MMcfd	4.54
Gas	Swap	U.S.	Jul 2012 -Dec 2021	5 MMcfd	4.38
Gas	Swap	U.S.	Jul 2012 -Dec 2021	5 MMcfd	4.35
Gas	Swap	U.S.	Jul 2012 -Dec 2021	10 MMcfd	4.37
NGL	Swap	U.S.	Jul 2012-Dec 2012	1 MBbld	42.81
NGL	Swap	U.S.	Jul 2012-Dec 2012	1 MBbld	43.07
NGL	Swap	U.S.	Jul 2012-Dec 2012	2 MBbld	43.94
NGL	Swap	U.S.	Jul 2012-Dec 2012	1 MBbld	47.99
NGL	Swap	U.S.	Jul 2012-Dec 2012	1 MBbld	46.55
NGL	Swap	U.S.	Jul 2012-Dec 2012	1 MBbld	46.75

These open derivative positions had a net fair value of $342.2 million as of June 30, 2012. In July 2012, we entered into a 10 MMcfd natural gas derivative covering January 2013 to December 2014 for $3.91 per Mcf.

The fair value of all derivative instruments included in these disclosures was estimated using prices quoted in active markets for the periods covered by the derivatives and the value confirmed by counterparties. Estimates were determined by applying the differential between the prices in each derivative and market prices for future periods to the amounts stipulated in each contract to arrive at an estimated future value. This estimated future value was discounted on each contract at credit adjusted rates commensurate with federal treasury instruments with similar contractual lives.

Interest Rate Risk

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 deferred gains of $30.8 million as a fair value adjustment to our debt, which we began to recognize over the life of the associated debt instruments. During the 2012 period and the 2011 period, we recognized $2.5 million and 2.4 million, respectively, of those deferred gains as a reduction of interest expense.

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Should we be required to borrow under our Combined Credit Agreements and based on interest rates as of June 30, 2012, each $50 million in borrowings would result in additional annual interest payments of $1.2 million. If the current borrowing availability under our Combined Credit Agreements were to be fully utilized by year-end 2012 at interest rates as of June 30, 2012, we estimate that annual interest payments would increase by $15.0 million. If interest rates change by 1% on our June 30, 2012 variable debt balances of $394.2 million, our annual pre-tax loss would decrease or increase by $3.9 million.

In the future, we may enter into interest rate derivative contracts on a portion of our outstanding debt to mitigate the risk of fluctuation of rates or manage the floating versus fixed rate risk.

Foreign Currency Risk

Our Canadian subsidiary uses the Canadian dollar as its functional currency. To the extent that business transactions in Canada are not denominated in Canadian dollars, we are exposed to foreign currency exchange rate risk. Non-functional currency transactions for the 2012 period and the 2011 period resulted in a loss of $0.1 million and $0.9 million, respectively, and were included in other income. Furthermore, the Amended and Restated Canadian Credit Facility permits Canadian borrowings to be made in either U.S. or Canadian-denominated amounts. However, the aggregate borrowing capacity of the entire facility is calculated using the U.S. dollar equivalent. Accordingly, there is a risk that exchange rate movements could impact our available borrowing capacity.

ITEM 4.  Controls and Procedures

Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Securities Exchange Act Rule 13a-15. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2012, our disclosure controls and procedures were not effective to provide reasonable assurance that material information required to be disclosed by us (including our consolidated subsidiaries) in reports that we file or submit under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In light of the material weakness regarding hedge accounting described below, we recorded an unrealized loss on hedge derivatives and have concluded that the financial statements in this Quarterly Report on Form 10-Q present fairly, in all material respects, our consolidated financial condition, results of operation and cash flows in conformity with generally accepted accounting principles.

Changes in Internal Control Over Financial Reporting

As disclosed in our 2011 Annual Report on Form 10-K, a material weakness was identified related to the design and operating effectiveness of the computation of impairment of our non-oil and gas assets. In response to the identification of the material weakness, management has enhanced its process for documenting identification of impairment indicators, and the preparation and review of undiscounted recovery tests and discounted cash flow analyses for the quarters ended March 31 and June 30, 2012. Additionally management enhanced the process for preparation and review of the inputs to the asset retirement obligation and the depletion calculation for the quarters ended March 31 and June 30, 2012 in response to identified significant deficiencies as of December 31, 2011 related to these calculations. Management believes that these enhancements and improvements will, as performed in the current period and when repeated in future periods, remediate the material weakness and significant deficiencies described above.

For the quarter ended March 31, 2012, a material weakness was identified related to the operating effectiveness of the controls surrounding the computation of derivative value. The weakness principally relates to the inception valuation methodology used on our ten-year derivatives entered into during the quarter ended March 31, 2012. Although the valuation produced an accounting result that conformed to GAAP, it was not consistent with the valuation methodology we use for our other derivatives. To a lesser extent, the weakness relates to the preparation and review of the inputs to the valuation model. In response to this material weakness, for the quarter ended June 30, 2012, management has enhanced its process to value derivatives with particular emphasis on long-dated derivatives. Management believes that these enhancements and improvements will, as performed in the current period and when repeated in future periods, remediate the material weakness.

51

There has been no other change in our internal control over financial reporting during the quarter ended June 30, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.   Legal Proceedings

There have been no other material changes in the legal proceedings described in Part I, Item 3 included in our 2011 Annual Report on Form 10-K.

ITEM 1A.   Risk Factors

There have been no material changes in the risk factors described in Part I, Item 1A included in our 2011 Annual Report on Form 10-K.

ITEM 2.   Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table summarizes our repurchases of Quicksilver common stock during the quarter ended June 30, 2012.

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 2012		4,487	$	5.04		-		-
May 2012		-	$	-		-		-
June 2012		-	$	-		-		-
Total		4,487	$	5.04		-		-

⁽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.

We have not paid cash dividends on our common stock and intend to retain our cash flows from operations for future operations and development of our business. In addition, we have debt agreements that restrict the payment of dividends.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

None.

52

ITEM 5. Entry into a Material Definitive Agreement

On August 6, 2012, Quicksilver Resources Inc. (“Quicksilver”) and Quicksilver Resources Canada Inc. (“Quicksilver Canada”) entered into an Omnibus Amendment to the Combined Credit Agreements, among Quicksilver, Quicksilver Canada, the U.S. lenders party thereto, the Canadian lenders party thereto, JPMorgan Chase Bank, N.A., as Global Administrative Agent, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent (the “Amendment”). The Amendment amended the terms of the Combined Credit Agreement to, among other things:

• Reduce the currently applicable Global Borrowing Base to $850 million from $1.075 billion;

• Increase the applicable margin by 0.50% for each type of loan and issued letters of credit, and set the commitment fee on unutilized availability to 0.50%;

• Reduce the minimum required interest coverage ratio from 2.5 to 1.5 for the quarter ending September 30, 2012 through the quarter ending March 31, 2014, then increasing to 2.0 for the quarter ending June 30, 2014, and reverting to 2.5 thereafter;

• Add a maximum senior secured debt leverage ratio of 2.5 beginning in the quarter ending September 30, 2012;

• Until the later of June 30, 2013, or so long as the total leverage ratio for the prior twelve month period is less than or equal to 4.0:

• Restrict the ability to issue certain types of debt;

• Limit the aggregate amount of restricted payments to $15 million;

• Restrict the ability to repay of existing debt securities if global borrowing base utilization equals or exceeds 25%; and

• Require a dollar for dollar repayment of the Combined Credit Agreements together with any repayment of existing debt securities if the global borrowing base utilization is less than 25% until the Combined Credit Agreements are paid in full, at which time existing debt securities may be repaid in any amount; and

• Restrict the ability to terminate certain oil and gas hedging arrangements through 2014.

The foregoing description is qualified in its entirety by reference to the full text of the Amendment, which is attached as Exhibit 10.4 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

Certain of the parties to the Amendment and their respective affiliates have, from time to time, performed, and may in the future perform, various financial, advisory, commercial banking and investment banking services for Quicksilver and Quicksilver’s affiliates in the ordinary course of business for fees and expenses.

53

ITEM 6. Exhibits

		Incorporated by Reference								Filed (†) or Furnished (‡) Herewith (as indicated)
Exhibit No.	Exhibit Description	Form		SEC File No.		Exhibit		Filing Date
4.1	Seventeenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.2	Eighteenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.3	Nineteenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.4	Twentieth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
10.1	Quicksilver Resources Inc. Fifth Amended and Restated 2006 Equity Plan									†
10.2	Quicksilver Resources Inc. 2012 Executive Bonus Plan		8-K		001-14837		10.1		4/19/12
10.3	Omnibus Amendment No.1 to Combined Credit Agreements, dated as of May 23, 2012, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein									†
10.4	Omnibus Amendment No.2 to Combined Credit Agreements, dated as of August 6, 2012, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein									†
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									‡

54

		Incorporated by Reference				Filed (†) or Furnished (‡) Herewith (as indicated)
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date
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					‡

55

SIGNATURES

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 thereunto duly authorized.

Dated: August 9, 2012	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)

56

EXHIBIT INDEX

		Incorporated by Reference								Filed (†) or Furnished (‡) Herewith (as indicated)
Exhibit No.	Exhibit Description	Form		SEC File No.		Exhibit		Filing Date
4.1	Seventeenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.2	Eighteenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.3	Nineteenth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
4.4	Twentieth Supplemental Indenture, dated as of June 13, 2012, among Quicksilver Resources Inc., the subsidiary guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as trustee									†
10.1	Quicksilver Resources Inc. Fifth Amended and Restated 2006 Equity Plan									†
10.2	Quicksilver Resources Inc. 2012 Executive Bonus Plan		8-K		001-14837		10.1		4/19/12
10.3	Omnibus Amendment No.1 to Combined Credit Agreements, dated as of May 23, 2012, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein									†
10.4	Omnibus Amendment No.2 to Combined Credit Agreements, dated as of August 6, 2012, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and the agents and lenders identified therein									†
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									‡

57

		Incorporated by Reference				Filed (†) or Furnished (‡) Herewith (as indicated)
Exhibit No.	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date
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					‡

58

EX-4.1

Exhibit 4.1

SEVENTEENTH SUPPLEMENTAL INDENTURE

This SEVENTEENTH SUPPLEMENTAL INDENTURE, dated as of June 13, 2012, among QPP Parent LLC, a Delaware limited liability company (“QPP Parent”), a subsidiary of Quicksilver Resources Inc. (or its permitted successor), a Delaware corporation (the “Company”), QPP Holdings LLC, a Delaware limited liability company (“QPP Holdings,” and together with QPP Parent, the “Guaranteeing Subsidiaries”), a subsidiary of the Company (or its permitted successor), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company N.A. (as successor in interest to JPMorgan Chase Bank, National Association (the “Initial Trustee”)), as Trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the Trustee (as successor in interest to the Initial Trustee) are parties to an Indenture (the “Original Indenture”), dated as of December 22, 2005, as supplemented by a First Supplemental Indenture, dated as of March 16, 2006 among the Company, the Subsidiary Guarantors and the Trustee (as successor in interest to the Initial Trustee) (the “First Supplemental Indenture”), a Second Supplemental Indenture, dated as of July 31, 2006 among the Company, the Subsidiary Guarantors and the Trustee (as successor in interest to the Initial Trustee) (the “Second Supplemental Indenture”), a Third Supplemental Indenture, dated as of September 26, 2006 among the Company, the Subsidiary Guarantors and the Trustee (as successor in interest to the Initial Trustee) (the “Third Supplemental Indenture”), a Fourth Supplemental Indenture, dated as of October 31, 2007 among the Company, the Subsidiary Guarantors and the Trustee (the “Fourth Supplemental Indenture”), a Ninth Supplemental Indenture, dated as of December 23, 2011 among the Company, the Subsidiary Guarantors and the Trustee (the “Ninth Supplemental Indenture”) and a Thirteenth Supplemental Indenture, dated as of February 28, 2012 among the Company, the Subsidiary Guarantors and the Trustee (the “Thirteenth Supplemental Indenture”; and together with the Original Indenture, the First Supplemental Indenture, the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture and the Ninth Supplemental Indenture, the “Indenture”), pursuant to which the Company has issued $350,000,000 of aggregate principal amount of 71/8 % Senior Subordinated Notes due 2016 (the “Notes”);

WHEREAS, Section 6.01(b) of the First Supplemental Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture in order to add Subsidiary Guarantees with respect to the Notes, without the consent of the Holders of the Notes; and

WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee, in accordance with its terms, have been duly done and performed;

1

NOW THEREFORE, to comply with the provisions of the Indenture, and in consideration of the foregoing, each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

ARTICLE 1

Section 1.01. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

Section 1.02. This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee.

ARTICLE 2

Section 2.01. Each of the Guaranteeing Subsidiaries hereby agrees to be bound by the terms, conditions and other provisions of the Indenture with all attendant rights, duties and obligations stated therein, on a joint and several basis with the Subsidiary Guarantors parties hereto and thereto, with the same force and effect as if originally named as a Subsidiary Guarantor therein and as if such party executed the Indenture on the date thereof.

ARTICLE 3

Section 3.01. Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.

Section 3.02. All capitalized terms used but not defined herein shall have the same respective meanings ascribed to them in the Indenture.

Section 3.03. Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all of the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

Section 3.04. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 3.05. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

2

Section 3.06. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Supplemental Indenture.

Section 3.07. The recitals hereto are statements only of the Company, the Subsidiary Guarantors and each of the Guaranteeing Subsidiaries and shall not be considered statements of or attributable to the Trustee.

3

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

QPP PARENT LLC
By:	QUICKSILVER RESOURCES INC., its sole member
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief           Executive Officer
QPP HOLDINGS LLC
By:	QPP PARENT LLC, one of its members
	By: QUICKSILVER RESOURCES INC.,           its sole member
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief           Executive Officer
By: QUICKSILVER RESOURCES INC., one of         its members
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief           Executive Officer
QUICKSILVER RESOURCES INC.
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer

[Signature Page to Seventeenth Supplemental Indenture]

4

COWTOWN PIPELINE FUNDING, INC.
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer

COWTOWN PIPELINE MANAGEMENT, INC.
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer

COWTOWN PIPELINE L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner

By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer

COWTOWN GAS PROCESSING L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner

By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer

[Signature Page to Seventeenth Supplemental Indenture]

5

BARNETT SHALE OPERATING LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer
SILVER STREAM PIPELINE COMPANY LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name: Glenn Darden
	Title: President and Chief Executive Officer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Julie H. Ramos
	Name: Julie Hoffman-Ramos
	Title: Vice President

[Signature Page to Seventeenth Supplemental Indenture]

6

EX-4.2

Exhibit 4.2

EIGHTEENTH SUPPLEMENTAL INDENTURE

This EIGHTEENTH SUPPLEMENTAL INDENTURE, dated as of June 13, 2012, among QPP Parent LLC, a Delaware limited liability company (“QPP Parent”), a subsidiary of Quicksilver Resources Inc. (or its permitted successor), a Delaware corporation (the “Company”), QPP Holdings LLC, a Delaware limited liability company (“QPP Holdings,” and together with QPP Parent, the “Guaranteeing Subsidiaries”), a subsidiary of the Company (or its permitted successor), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the Trustee are parties to an Indenture (the “Original Indenture”), dated as of December 22, 2005, as supplemented by a Fifth Supplemental Indenture, dated as of June 27, 2008 among the Company, the Subsidiary Guarantors and the Trustee (the “Fifth Supplemental Indenture”), a Sixth Supplemental Indenture, dated as of July 10, 2008 among the Company, the Subsidiary Guarantors and the Trustee (the “Sixth Supplemental Indenture”), a Tenth Supplemental Indenture, dated as of December 23, 2011 among the Company, the Subsidiary Guarantors and the Trustee (the “Tenth Supplemental Indenture”) and a Fourteenth Supplemental Indenture, dated as of February 28, 2012 among the Company, the Subsidiary Guarantors and the Trustee (the “Fourteenth Supplemental Indenture”; and together with the Original Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture and the Tenth Supplemental Indenture, the “Indenture”), pursuant to which the Company has issued $475,000,000 of aggregate principal amount of 81/4% Senior Notes due 2015 (the “Notes”);

WHEREAS, Section 5.01(b) of the Fifth Supplemental Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture in order to add Subsidiary Guarantees with respect to the Notes, without the consent of the Holders of the Notes; and

WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation and the Bylaws (or comparable constituent documents) of the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee, in accordance with its terms, have been duly done and performed;

NOW THEREFORE, to comply with the provisions of the Indenture, and in consideration of the foregoing, each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

ARTICLE 1

Section 1.01 This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

Section 1.02 This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee.

ARTICLE 2

Section 2.01 Each of the Guaranteeing Subsidiaries hereby agrees to be bound by the terms, conditions and other provisions of the Indenture with all attendant rights, duties and obligations stated therein, on a joint and several basis with the Subsidiary Guarantors parties hereto and thereto, with the same force and effect as if originally named as a Subsidiary Guarantor therein and as if such party executed the Indenture on the date thereof.

ARTICLE 3

Section 3.01 Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.

Section 3.02 All capitalized terms used but not defined herein shall have the same respective meanings ascribed to them in the Indenture.

Section 3.03 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all of the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

Section 3.04 THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 3.05 The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 3.06 The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Supplemental Indenture.

2

Section 3.07 The recitals hereto are statements only of the Company, the Subsidiary Guarantors and each of the Guaranteeing Subsidiaries and shall not be considered statements of or attributable to the Trustee.

Section 3.08 Each of the Guaranteeing Subsidiaries hereby designates the obligations with respect to the Notes and the Subsidiary Guarantees as Senior Indebtedness which is senior in right of payment in full to any Subordinated Obligation of the Company or any Subsidiary Guarantor. Each of the Guaranteeing Subsidiaries further designates the obligations with respect to the Notes and the Subsidiary Guarantees as “Designated Senior Indebtedness” (as defined by the (i) 1.875% Convertible Subordinated Debentures Indenture and (ii) the 7 ¹/₈% Senior Subordinated Notes Indenture) for all purposes under (x) the 1.875% Convertible Subordinated Debentures Indenture and (y) the 7 ¹/₈% Senior Subordinated Notes Indenture, with respect to the Notes and the Subsidiary Guarantees, respectively.

3

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

QPP PARENT LLC
By:	QUICKSILVER RESOURCES INC., its sole member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

QPP HOLDINGS LLC
By:	QPP PARENT LLC, one of its members
		By:	QUICKSILVER RESOURCES INC., its sole member

By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

By:	QUICKSILVER RESOURCES INC., one of its members
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
QUICKSILVER RESOURCES INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Eighteenth Supplemental Indenture]

4

COWTOWN PIPELINE FUNDING, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE MANAGEMENT, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN GAS PROCESSING L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Eighteenth Supplemental Indenture]

5

BARNETT SHALE OPERATING LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
SILVER STREAM PIPELINE COMPANY LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Julie H. Ramos
	Name:	Julie Hoffman-Ramos
	Title:	Vice President

[Signature Page to Eighteenth Supplemental Indenture]

6

EX-4.3

Exhibit 4.3

NINETEENTH SUPPLEMENTAL INDENTURE

This NINETEENTH SUPPLEMENTAL INDENTURE, dated as of June 13, 2012, among QPP Parent LLC, a Delaware limited liability company (“QPP Parent”), a subsidiary of Quicksilver Resources Inc. (or its permitted successor), a Delaware corporation (the “Company”), QPP Holdings LLC, a Delaware limited liability company (“QPP Holdings,” and together with QPP Parent, the “Guaranteeing Subsidiaries”), a subsidiary of the Company (or its permitted successor), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the Trustee are parties to an Indenture (the “Original Indenture”), dated as of December 22, 2005, as supplemented by a Seventh Supplemental Indenture, dated as of June 25, 2009 among the Company, the Subsidiary Guarantors and the Trustee (the “Seventh Supplemental Indenture”), an Eleventh Supplemental Indenture, dated as of December 23, 2011 among the Company, the Subsidiary Guarantors and the Trustee (the “Eleventh Supplemental Indenture”) and a Fifteenth Supplemental Indenture, dated February 28, 2012 among the Company, the Subsidiary Guarantors and the Trustee (the “Fifteenth Supplemental Indenture”; and together with the Original Indenture, the Seventh Supplemental Indenture and the Eleventh Supplemental Indenture, the “Indenture”), pursuant to which the Company has issued $600,000,000 of aggregate principal amount of 11 ³/₄% Senior Notes due 2016 (the “Notes”);

WHEREAS, Section 5.01(b) of the Seventh Supplemental Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture in order to add Subsidiary Guarantees with respect to the Notes, without the consent of the Holders; and

WHEREAS, all acts and things prescribed by the Indenture, by law and by the certificate of incorporation and the bylaws (or comparable constituent documents) of the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee, in accordance with its terms, have been duly done and performed;

NOW THEREFORE, to comply with the provisions of the Indenture, and in consideration of the foregoing, each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

ARTICLE 1

Section 1.01 This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

Section 1.02 This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee.

ARTICLE 2

Section 2.01 Each of the Guaranteeing Subsidiaries hereby agrees to be bound by the terms, conditions and other provisions of the Indenture with all attendant rights, duties and obligations stated therein, on a joint and several basis with the Subsidiary Guarantors parties hereto and thereto, with the same force and effect as if originally named as a Subsidiary Guarantor therein and as if such party executed the Indenture on the date thereof.

ARTICLE 3

Section 3.01 Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.

Section 3.02 All capitalized terms used but not defined herein shall have the same respective meanings ascribed to them in the Indenture.

Section 3.03 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all of the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

Section 3.04 THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 3.05 The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 3.06 The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Supplemental Indenture.

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Section 3.07 The recitals hereto are statements only of the Company, the Subsidiary Guarantors and each of the Guaranteeing Subsidiaries and shall not be considered statements of or attributable to the Trustee.

Section 3.08 Each of the Guaranteeing Subsidiaries hereby designates the obligations with respect to the Notes and the Subsidiary Guarantees as Senior Indebtedness which is senior in right of payment in full to any Subordinated Obligation of the Company or any Subsidiary Guarantor. Each of rhe Guaranteeing Subsidiaries further designates the obligations with respect to the Notes and the Subsidiary Guarantees as “Designated Senior Indebtedness” (as defined by the (i) 2024 Convertible Subordinated Debentures Indenture and (ii) the 2016 Senior Subordinated Notes Indenture) for all purposes under (x) the 2024 Convertible Subordinated Debentures Indenture and (y) the 2016 Senior Subordinated Notes Indenture, with respect to the Notes and the Subsidiary Guarantees, respectively.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

QPP PARENT LLC
By:	QUICKSILVER RESOURCES INC., its sole member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

QPP HOLDINGS LLC
By:	QPP PARENT LLC, one of its members
		By:	QUICKSILVER RESOURCES INC., its sole member

By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

By:	QUICKSILVER RESOURCES INC., one of its members
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
QUICKSILVER RESOURCES INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Nineteenth Supplemental Indenture]

4

COWTOWN PIPELINE FUNDING, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE MANAGEMENT, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN GAS PROCESSING L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Nineteenth Supplemental Indenture]

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BARNETT SHALE OPERATING LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
SILVER STREAM PIPELINE COMPANY LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Julie H. Ramos
	Name:	Julie Hoffman-Ramos
	Title:	Vice President

[Signature Page to Nineteenth Supplemental Indenture]

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EX-4.4

Exhibit 4.4

TWENTIETH SUPPLEMENTAL INDENTURE

This TWENTIETH SUPPLEMENTAL INDENTURE, dated as of June 13, 2012, among QPP Parent LLC, a Delaware limited liability company (“QPP Parent”), a subsidiary of Quicksilver Resources Inc. (or its permitted successor), a Delaware corporation (the “Company”), QPP Holdings LLC, a Delaware limited liability company (“QPP Holdings,” and together with QPP Parent, the “Guaranteeing Subsidiaries”), a subsidiary of the Company (or its permitted successor), the Company, the other Subsidiary Guarantors (as defined in the Indenture referred to herein) and The Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).

W I T NE S S E T H

WHEREAS, the Company and the Trustee are parties to an Indenture (the “Original Indenture”), dated as of December 22, 2005, as supplemented by an Eighth Supplemental Indenture, dated as of August 14, 2009 among the Company, the Subsidiary Guarantors and the Trustee (the “Eighth Supplemental Indenture”), a Twelfth Supplemental Indenture, dated as of December 23, 2011 among the Company, the Subsidiary Guarantors and the Trustee (the “Twelfth Supplemental Indenture”) and a Sixteenth Supplemental Indenture, dated as of February 28, 2012 among the Company, the Subsidiary Guarantors and the Trustee (the “Sixteenth Supplemental Indenture”; and together with the Original Indenture, the Eighth Supplemental Indenture and the Twelfth Supplemental Indenture, the “Indenture”), pursuant to which the Company has issued $300,000,000 of aggregate principal amount of 9 ¹/₈% Senior Notes due 2019 (the “Notes”);

WHEREAS, Section 5.01(b) of the Eighth Supplemental Indenture provides that the Company, the Subsidiary Guarantors and the Trustee may amend or supplement the Indenture in order to add Subsidiary Guarantees with respect to the Notes, without the consent of the Holders; and

WHEREAS, all acts and things prescribed by the Indenture, by law and by the certificate of incorporation and the bylaws (or comparable constituent documents) of the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee necessary to make this Supplemental Indenture a valid instrument legally binding on the Company, the Subsidiary Guarantors, each of the Guaranteeing Subsidiaries and the Trustee, in accordance with its terms, have been duly done and performed;

NOW THEREFORE, to comply with the provisions of the Indenture, and in consideration of the foregoing, each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

ARTICLE 1

Section 1.01 This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.

Section 1.02 This Supplemental Indenture shall become effective immediately upon its execution and delivery by each of the Guaranteeing Subsidiaries, the Company, the Subsidiary Guarantors and the Trustee.

ARTICLE 2

Section 2.01 Each of the Guaranteeing Subsidiaries hereby agrees to be bound by the terms, conditions and other provisions of the Indenture with all attendant rights, duties and obligations stated therein, on a joint and several basis with the Subsidiary Guarantors parties hereto and thereto, with the same force and effect as if originally named as a Subsidiary Guarantor therein and as if such party executed the Indenture on the date thereof.

ARTICLE 3

Section 3.01 Except as specifically modified herein, the Indenture and the Notes are in all respects ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.

Section 3.02 All capitalized terms used but not defined herein shall have the same respective meanings ascribed to them in the Indenture.

Section 3.03 Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed and accepted by the Trustee subject to all of the terms and conditions set forth in the Indenture with the same force and effect as if those terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto.

Section 3.04 THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 3.05 The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

Section 3.06 The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Supplemental Indenture.

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Section 3.07 The recitals hereto are statements only of the Company, the Subsidiary Guarantors and each of the Guaranteeing Subsidiaries and shall not be considered statements of or attributable to the Trustee.

Section 3.08 Each of the Guaranteeing Subsidiaries hereby designates the obligations with respect to the Notes and the Subsidiary Guarantees as Senior Indebtedness which is senior in right of payment in full to any Subordinated Obligation of the Company or any Subsidiary Guarantor. Each of the Guaranteeing Subsidiaries further designates the obligations with respect to the Notes and the Subsidiary Guarantees as “Designated Senior Indebtedness” (as defined by the (i) 2024 Convertible Subordinated Debentures Indenture and (ii) the 2016 Senior Subordinated Notes Indenture) for all purposes under (x) the 2024 Convertible Subordinated Debentures Indenture and (y) the 2016 Senior Subordinated Notes Indenture, with respect to the Notes and the Subsidiary Guarantees, respectively.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

QPP PARENT LLC
By:	QUICKSILVER RESOURCES INC., its sole member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

QPP HOLDINGS LLC
By:	QPP PARENT LLC, one of its members
		By:	QUICKSILVER RESOURCES INC., its sole member

By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

By:	QUICKSILVER RESOURCES INC., one of its members
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
QUICKSILVER RESOURCES INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Twentieth Supplemental Indenture]

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COWTOWN PIPELINE FUNDING, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE MANAGEMENT, INC.
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN PIPELINE L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
COWTOWN GAS PROCESSING L.P.
By:	COWTOWN PIPELINE MANAGEMENT, INC., its general partner
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer

[Signature Page to Twentieth Supplemental Indenture]

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BARNETT SHALE OPERATING LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
SILVER STREAM PIPELINE COMPANY LLC
By:	QUICKSILVER RESOURCES INC., its member
By:	/s/ Glenn Darden
	Name:	Glenn Darden
	Title:	President and Chief Executive Officer
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
By:	/s/ Julie H. Ramos
	Name:	Julie Hoffman-Ramos
	Title:	Vice President

[Signature Page to Twentieth Supplemental Indenture]

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EX-10.1

Exhibit 10.1

QUICKSILVER RESOURCES INC.

FIFTH AMENDED AND RESTATED

2006 EQUITY PLAN

QUICKSILVER RESOURCES INC.

FIFTH AMENDED AND RESTATED

2006 EQUITY PLAN

SECTION		PAGE
1.	Purpose		1
2.	Term		1
3.	Definitions		1
4.	Shares Available Under Plan		5
5.	Limitations on Awards		6
6.	Stock Options		6
7.	Appreciation Rights		8
8.	Restricted Shares		9
9.	Restricted Stock Units		10
10.	Performance Shares and Performance Units		11
11.	Senior Executive Plan Bonuses		12
12.	Awards to Eligible Directors		13
13.	Transferability		18
14.	Adjustments		18
15.	Fractional Shares		19
16.	Withholding Taxes		19
17.	Administration of the Plan		19
18.	Amendments and Other Matters		20
19.	Governing Law		21

QUICKSILVER RESOURCES INC.

FIFTH AMENDED AND RESTATED

2006 EQUITY PLAN

The Quicksilver Resources Inc. 2006 Equity Plan (the “Plan”) was established by Quicksilver Resources Inc., a Delaware corporation (the “Company”), effective as of May 23, 2006, and approved by stockholders of the Company on May 23, 2006. The Company amended and restated the Plan effective as of May 23, 2007, November 24, 2008 and May 20, 2009, November 16, 2011, and again amends and restates the Plan effective as of April 13, 2012.

1. Purpose. The purpose of the Plan is to attract and retain the best available talent and encourage the highest level of performance by directors, executive officers and selected employees and consultants, and to provide them incentives to put forth maximum efforts for the success of the Company’s business, in order to serve the best interests of the Company and its stockholders.

2. Term. The Plan will expire on May 23, 2016. No further Awards will be made under the Plan on or after such date. Awards that are outstanding on the date the Plan terminates will remain in effect according to their terms and the provisions of the Plan.

3. Definitions. The following terms, when used in the Plan with initial capital letters, will have the following meanings:

(a) Appreciation Right means a right granted pursuant to Section 7.

(b) Award means the award of a Senior Executive Plan Bonus; the grant of Appreciation Rights, Stock Options, Performance Shares, Performance Units or Restricted Stock Units; or the grant or sale of Restricted Shares. An Award may be an obligation of the Company or any Subsidiary.

(c) Board means the Board of Directors of the Company.

(d) Change in Control means the occurrence of any of the following events:

(i) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) is or becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided, however, that the following acquisitions will not constitute a Change in Control: (A) any acquisition of Voting Stock of the Company directly from the Company that is approved by a majority of the Incumbent Directors; (B) any acquisition of Voting Stock of the Company by the Company or any subsidiary of the Company; (C) any acquisition of Voting Stock of the Company by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company; and (D) any acquisition of Voting Stock of the Company by Mercury Exploration Company, Quicksilver Energy, L.P., The

Discovery Fund, Pennsylvania Avenue Limited Partnership, Pennsylvania Management Company, the estate of Frank Darden, Lucy Darden, Anne Darden Self, Glenn Darden or Thomas Darden, or their respective successors, assigns, designees, heirs, beneficiaries, trusts, estates or controlled affiliates;

(ii) a majority of the Board ceases to be comprised of Incumbent Directors; or

(iii) the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the consolidated assets of the Company (each, a “Business Combination Transaction”) immediately after which (A) the Voting Stock of the Company outstanding immediately prior to such Business Combination Transaction does not continue to represent (either by remaining outstanding or by being converted into Voting Stock of the entity surviving, resulting from, or succeeding to all or substantially all of the Company’s consolidated assets as a result of, such Business Combination Transaction or any parent of such entity), at least 50% of the combined voting power of the then outstanding shares of Voting Stock of the entity surviving, resulting from, or succeeding to all or substantially all of the Company’s consolidated assets as a result of, such Business Combination Transaction or any parent of any such entity (including, without limitation, an entity which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries).

(e) Code means the Internal Revenue Code of 1986, as amended.

(f) Committee means the Compensation Committee of the Board and, to the extent the administration of the Plan has been assumed by the Board pursuant to Section 17 or with respect to the administration of Section 12, the Board.

(g) Common Stock means the common stock, par value $.01 per share, of the Company or any security into which such Common Stock may be changed by reason of any transaction or event of the type described in Section 14.

(h) Covered Employee means a Participant who is, or is determined by the Committee to be likely to become, a “covered employee” within the meaning of Section 162(m) of the Code (or any successor provision) and who is identified in writing by the Committee as a Covered Employee within the period specified in Section 11(a) for the fiscal year.

(i) Date of Grant means the date specified by the Committee on which an Award will become effective.

(j) Deferral Period means the period of time during which Restricted Stock Units are subject to deferral limitations under Section 9.

(k) Eligible Director means a member of the Board who is not an employee of the Company or any Subsidiary.

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(l) Evidence of Award means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Evidence of Award may be in any electronic medium, may be limited to a notation on the books and records of the Company and need not be signed by a representative of the Company or a Participant.

(m) Exchange Act means the Securities Exchange Act of 1934, as amended.

(n) Grant Price means the price per share of Common Stock at which an Appreciation Right is granted.

(o) Incumbent Directors means the individuals who, as of the date first set forth above, are Directors of the Company and any individual becoming a Director subsequent to the date thereof whose election, nomination for election by the Company’s stockholders, or appointment, was approved by a vote of a majority of the then-Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination).

(p) Management Objectives means the measurable performance objectives, if any, established by the Committee for a Performance Period that are to be achieved with respect to an Award. Management Objectives may be described in terms of company-wide objectives (i.e., the performance of the Company and all of its Subsidiaries) or in terms of objectives that are related to the performance of the individual Participant or of the division, Subsidiary, department, region or function within the Company or a Subsidiary in which the Participant receiving the Award is employed or on which the Participant’s efforts have the most influence. The achievement of the Management Objectives established by the Committee for any Performance Period will be determined without regard to the effect on such Management Objectives of any acquisition or disposition by the Company of a trade or business, or of substantially all of the assets of a trade or business, during the Performance Period and without regard to any change in accounting standards by the Financial Accounting Standards Board or any successor entity.

The Management Objectives applicable to any Award to a Participant who is a Covered Employee for the fiscal year will be limited to specified levels of, growth in, or performance in, one or more of the following performance measures (excluding the effect of extraordinary or nonrecurring items unless the Committee specifically includes any such extraordinary or nonrecurring item at the time such Award is granted):

(i) profitability measures;

(ii) cash flow measures;

(iii) proven reserves;

(iv) production growth rate;

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(v) revenue measures;

(vi) business unit performance;

(vii) leverage measures;

(viii) stockholder return;

(ix) expense management;

(x) asset and liability measures;

(xi) individual performance;

(xii) supply chain efficiency;

(xiii) productivity measures;

(xiv) return measures; or

(xv) product development and/or performance.

If the Committee determines that, as a result of a change in the business, operations, corporate structure or capital structure of the Company (other than an acquisition or disposition described in the first paragraph of this Section 3(p)), or the manner in which the Company conducts its business, or any other events or circumstances, the Management Objectives are no longer suitable, the Committee may in its discretion modify such Management Objectives or the related minimum acceptable level of achievement, in whole or in part, with respect to a Performance Period as the Committee deems appropriate and equitable.

(q) Market Value per Share means, at any date, the closing sale price of the Common Stock on that date (or, if there are no sales on that date, the last preceding date on which there was a sale) on the principal national securities exchange or in the principal market on or in which the Common Stock is traded.

(r) Option Price means the purchase price per share payable on exercise of a Stock Option.

(s) Participant means a (i) person who is selected by the Committee to receive an Award under the Plan and who at that time is an executive officer or other employee of or a consultant to the Company or any Subsidiary or (ii) an Eligible Director.

(t) Performance Period means, with respect to an Award, a period of time within which the Management Objectives relating to such Award are to be measured. The Performance Period for a Senior Executive Plan Bonus will be the fiscal year of the Company, and, unless otherwise expressly provided in the Plan, the Performance Period for all other Awards will be established by the Committee at the time of the Award.

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(u) Performance Share means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 10.

(v) Performance Unit means a unit equivalent to $1.00 (or such other value as the Committee determines) granted pursuant to Section 10.

(w) Restricted Stock Units means an Award pursuant to Section 9 of the right to receive shares of Common Stock, cash or other consideration at the end of a specified Deferral Period.

(x) Restricted Shares means shares of Common Stock granted or sold pursuant to Section 8 or Section 12 as to which neither the ownership restrictions nor the restrictions on transfer have expired.

(y) Rule 16b-3 means Rule 16b-3 under Section 16 of the Exchange Act, as amended (or any successor rule to the same effect).

(z) Senior Executive Plan Bonus means an Award of annual incentive compensation made pursuant to and subject to the conditions set forth in Section 11.

(aa) Spread means the excess of the Market Value per Share on the date an Appreciation Right is exercised over (i) the Option Price provided for in the Stock Option granted in tandem with the Appreciation Right or (ii) if there is no tandem Stock Option, the Grant Price provided for in the Appreciation Right, in either case multiplied by the number of shares of Common Stock in respect of which the Appreciation Right is exercised.

(bb) Stock Option means the right to purchase shares of Common Stock upon exercise of an option granted pursuant to Section 6 or Section 12.

(cc) Subsidiary means (i) any corporation of which at least 50% of the combined voting power of the then outstanding shares of Voting Stock is owned directly or indirectly by the Company, (ii) any partnership of which at least 50% of the profits interest or capital interest is owned directly or indirectly by the Company and (iii) any other entity of which at least 50% of the total equity interest is owned directly or indirectly by the Company.

(dd) Voting Stock means the securities entitled to vote generally in the election of directors or persons who serve similar functions.

4. Shares Available Under Plan. The aggregate number of shares of Common Stock that may be (a) subject to an Award of Appreciation Rights or Stock Options or (b) issued or transferred as Restricted Shares and released from all restrictions or in payment of Performance Shares, Performance Units, Restricted Stock Units or Senior Executive Plan Bonuses will not exceed in the aggregate 15 million shares. Such shares may be shares of

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original issuance, treasury shares, shares acquired by the Company or any of its Subsidiaries in the open market or otherwise or a combination of the foregoing. The number of shares of Common Stock available under this Section 4 will be subject to adjustment as provided in Section 14 and will be further adjusted to include shares that relate to Awards that (i) expire or are forfeited, (ii) are withheld by, or tendered to, the Company or a Subsidiary in payment of the Option Price with respect to a Stock Option or in satisfaction of the taxes required to be withheld in connection with any Award granted under the Plan or (iii) are subject to an Appreciation Right that are not transferred to a Participant upon exercise of the Appreciation Right.

5. Limitations on Awards. Awards under the Plan will be subject to the following limitations:

(a) No more than 15 million shares of Common Stock, subject to adjustment as provided in Section 4, may be subject to an Award of Stock Options that are intended to qualify as incentive stock options under Section 422 of the Code.

(b) The maximum number of shares of Common Stock that may be subject to all Awards granted to a Participant during any calendar year will not exceed 1,500,000 shares. The limitations set forth in this Section 5(b) will apply without regard to whether an Award is settled in cash or in shares of Common Stock.

(c) The maximum aggregate cash value of payments to any Participant for any Performance Period pursuant to an award of Performance Units will not exceed $5 million.

(d) The payment of a Senior Executive Plan Bonus to any Participant will not exceed $5 million.

6. Stock Options. The Committee may from time to time authorize grants of options to any Participant to purchase shares of Common Stock upon such terms and conditions as it may determine in accordance with this Section 6. Each Participant who is an employee of the Company or any Subsidiary will be eligible to receive a grant of Stock Options that are intended to qualify as incentive stock options within the meaning of Section 422 of the Code. Each grant of Stock Options may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a) Each grant will specify the number of shares of Common Stock to which it relates.

(b) Each grant will specify the Option Price, which will not be less than 100% of the Market Value per Share on the Date of Grant.

(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check acceptable to the Company or a Subsidiary, as the case may be, or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company or a Subsidiary of shares of Common Stock owned by the Participant and having an aggregate Market Value per Share at the date of exercise equal to the aggregate Option Price, (iii) with the consent of the Committee, by authorizing the Company or a

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Subsidiary to withhold a number of shares of Common Stock otherwise issuable or deliverable to the Participant having an aggregate Market Value per Share on the date of exercise equal to the aggregate Option Price, (iv) by a combination of such methods of payment or (v) by any other method of payment approved by the Committee; provided, however, that the payment methods described in clauses (ii) and (iii) will not be available at any time that the Company or, if applicable, the Subsidiary is prohibited from purchasing or acquiring such shares of Common Stock.

(d) To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker of some or all of the shares to which such exercise relates.

(e) Successive grants may be made to the same Participant whether or not any Stock Options or other Awards previously granted to such Participant remain unexercised or outstanding.

(f) Each grant will specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary that are necessary before the Stock Options or installments thereof will become exercisable.

(g) Any grant may specify the Management Objectives that must be achieved as a condition to the exercise of the Stock Options.

(h) Any grant may provide for the earlier exercise of the Stock Options in the event of a Change in Control or other similar transaction or event.

(i) Stock Options may be (i) options which are intended to qualify under particular provisions of the Code, (ii) options which are not intended to so qualify or (iii) combinations of the foregoing.

(j) On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred or contingent basis.

(k) No Stock Option will be exercisable more than ten years from the Date of Grant, unless the Evidence of Award provides for an extended exercise period in the event of death, disability or retirement.

(l) The Committee will have the right to substitute Appreciation Rights for outstanding Options granted to one or more Participants, provided the terms and the economic benefit of the substituted Appreciation Rights are at least equivalent to the terms and economic benefit of such Options, as determined by the Committee in its discretion.

(m) Any grant may provide for the effect on the Stock Options or any shares of Common Stock issued, or other payment made, with respect to the Stock Options of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

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(n) Each grant will be evidenced by an Evidence of Award, which may contain such terms and provisions, consistent with the Plan, as the Committee may approve, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

7. Appreciation Rights. The Committee may also from time to time authorize grants to any Participant of Appreciation Rights upon such terms and conditions as it may determine in accordance with this Section 7. Appreciation Rights may be granted in tandem with Stock Options or separate and apart from a grant of Stock Options. An Appreciation Right will be a right of the Participant to receive from the Company or a Subsidiary upon exercise an amount which will be determined by the Committee at the Date of Grant and will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise. An Appreciation Right granted in tandem with a Stock Option may be exercised only by surrender of the related Stock Option. Each grant of an Appreciation Right may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a) Each grant will state whether it is made in tandem with Stock Options and, if not made in tandem with any Stock Options, will specify the number of shares of Common Stock in respect of which it is made.

(b) Each grant made in tandem with Stock Options will specify the Option Price and each grant not made in tandem with Stock Options will specify the Grant Price, which in either case will not be less than 100% of the Market Value per Share on the Date of Grant.

(c) Any grant may provide that the amount payable on exercise of an Appreciation Right may be paid (i) in cash or other consideration, (ii) in shares of Common Stock having an aggregate Market Value per Share equal to the Spread (or the designated percentage of the Spread) or (iii) in a combination thereof, as determined by the Committee in its discretion.

(d) Any grant may specify that the amount payable to the Participant on exercise of an Appreciation Right may not exceed a maximum amount specified by the Committee at the Date of Grant.

(e) Successive grants may be made to the same Participant whether or not any Appreciation Rights or other Awards previously granted to such Participant remain unexercised or outstanding.

(f) Each grant will specify the required period or periods of continuous service by the Participant with the Company or any Subsidiary that are necessary before the Appreciation Rights or installments thereof will become exercisable, and will provide that no Appreciation Rights may be exercised except at a time when the Spread is positive and, with respect to any grant made in tandem with Stock Options, when the related Stock Options are also exercisable.

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(g) Any grant may specify the Management Objectives that must be achieved as a condition to the exercise of the Appreciation Rights.

(h) Any grant may provide for the earlier exercise of the Appreciation Rights in the event of a Change in Control or other similar transaction or event.

(i) On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents thereon in cash or Common Stock on a current, deferred or contingent basis.

(j) No Appreciation Right will be exercisable more than ten years from the Date of Grant.

(k) Any grant may provide for the effect on the Appreciation Rights or any shares of Common Stock issued, or other payment made, with respect to the Appreciation Rights of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(l) Each grant will be evidenced by an Evidence of Award, which may contain such terms and provisions, consistent with the Plan, as the Committee may approve, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

8. Restricted Shares. The Committee may also from time to time authorize grants or sales to any Participant of Restricted Shares upon such terms and conditions as it may determine in accordance with this Section 8. Each grant or sale will constitute an immediate transfer of the ownership of shares of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting and other ownership rights, but subject to the restrictions set forth in this Section 8. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a) Each grant or sale may be made without additional consideration or in consideration of a payment by the Participant that is less than the Market Value per Share at the Date of Grant, except as may otherwise be required by the Delaware General Corporation Law or other applicable law.

(b) Each grant or sale may limit the Participant’s dividend rights during the period in which the shares of Restricted Shares are subject to any such restrictions.

(c) Each grant or sale will provide that the Restricted Shares will be subject, for a period to be determined by the Committee at the Date of Grant, to one or more restrictions, including without limitation a restriction that constitutes a “substantial risk of forfeiture” within the meaning of Section 83 of the Code and the regulations of the Internal Revenue Service under such section.

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(d) Any grant or sale may specify the Management Objectives that, if achieved, will result in the termination or early termination of the restrictions applicable to the shares, provided that the Performance Period associated with such Management Objectives will be a period of no less than 12 calendar months.

(e) Any grant or sale may provide for the early termination of any such restrictions in the event of a Change in Control or other similar transaction or event or the Participant’s termination of employment or service by reason of death, disability, retirement or otherwise.

(f) Each grant or sale will provide that during the period for which such restriction or restrictions are to continue, the transferability of the Restricted Shares will be prohibited or restricted in a manner and to the extent prescribed by the Committee at the Date of Grant (which restrictions may include without limitation rights of repurchase or first refusal in favor of the Company or provisions subjecting the Restricted Shares to continuing restrictions in the hands of any transferee).

(g) Any grant or sale may provide for the effect on the Restricted Shares or any shares of Common Stock issued free of restrictions, or other payment made, with respect to the Restricted Shares of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(h) Each grant or sale will be evidenced by an Evidence of Award, which may contain such terms and provisions, consistent with the Plan, as the Committee may approve, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

9. Restricted Stock Units. The Committee may also from time to time authorize grants or sales to any Participant of Restricted Stock Units upon such terms and conditions as it may determine in accordance with this Section 9. Each grant or sale will constitute the agreement by the Company or a Subsidiary to deliver shares of Common Stock, cash or other consideration to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a) Each grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Market Value per Share on the Date of Grant, except as may otherwise be required by the Delaware General Corporation Law or other applicable law.

(b) Each grant or sale will provide that the Restricted Stock Units will be subject to a Deferral Period, which will be fixed by the Committee on the Date of Grant.

(c) Any grant or sale may specify the Management Objectives that, if achieved, will result in the termination or early termination of the Deferral Period, provided that the Performance Period associated with such Management Objectives will be a period of no less than 12 calendar months.

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(d) Any grant or sale may provide for the earlier termination of the Deferral Period in the event of a Change in Control or other similar transaction or event or the Participant’s termination of employment or service by reason of death, disability, retirement or otherwise.

(e) During the Deferral Period, the Participant will not have any right to transfer any rights under the Restricted Stock Units, and will not have any rights of ownership in or any right to vote any shares of Common Stock that may be issued in settlement of Restricted Stock Units, but the Committee may on or after the Date of Grant authorize the payment of dividend equivalents on such shares in cash or Common Stock on a current, deferred or contingent basis.

(f) Any grant or sale may provide for the effect on the Restricted Stock Units or any shares of Common Stock issued free of restrictions, or other payment made, with respect to the Restricted Stock Units of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(g) Each grant or sale will be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

10. Performance Shares and Performance Units. The Committee may also from time to time authorize grants to any Participant of Performance Shares and Performance Units, which will become payable upon achievement of specified Management Objectives, upon such terms and conditions as it may determine in accordance with this Section 10. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(a) Each grant will specify the number of Performance Shares or Performance Units to which it relates.

(b) The Performance Period with respect to each Performance Share and Performance Unit will be determined by the Committee at the time of grant and will be a period of no less than 12 calendar months.

(c) Each grant will specify the Management Objectives that, if achieved, will result in the payment of the Performance Shares or Performance Units.

(d) Each grant will specify the time and manner of payment of Performance Shares or Performance Units which have become payable, which payment may be made in (i) cash, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the aggregate value of the Performance Shares or Performance Units which have become payable or (iii) any combination thereof, as determined by the Committee in its discretion at the time of payment.

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(e) Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Committee on the Date of Grant. Any grant of Performance Units may specify that the amount payable, or the number of shares of Common Stock issued, with respect to the Performance Units may not exceed maximums specified by the Committee on the Date of Grant.

(f) On or after the Date of Grant, the Committee may provide for the payment to the Participant of dividend equivalents on Performance Shares in cash or Common Stock on a current, deferred or contingent basis.

(g) Any grant may provide for the effect on the Performance Shares or Performance Units or any shares of Common Stock issued, or other payment made, with respect to the Performance Shares or Performance Units of any conduct of the Participant determined by the Committee to be injurious, detrimental or prejudicial to any significant interest of the Company or any Subsidiary.

(h) Each grant will be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the payment of the Performance Shares or Performance Units in the event of a Change in Control or other similar transaction or event and provisions relating to the Participant’s termination of employment or other termination of service by reason of retirement, death, disability or otherwise.

11. Senior Executive Plan Bonuses. The Committee may from time to time authorize the payment of annual incentive compensation to a Participant who is a Covered Employee, which incentive compensation will become payable upon achievement of specified Management Objectives. Subject to Section 5(d), Senior Executive Plan Bonuses will be payable upon such terms and conditions as the Committee may determine in accordance with the following provisions:

(a) No later than 90 days after the first day of the Company’s fiscal year, the Committee will specify the Management Objectives that, if achieved, will result in the payment of a Senior Executive Plan Bonus for such year.

(b) Following the close of the Company’s fiscal year, the Committee will certify in writing whether the specified Management Objectives have been achieved. Approved minutes of a meeting of the Committee at which such certification is made will be treated as written certification for this purpose. The Committee will also specify the time and manner of payment of a Senior Executive Plan Bonus which becomes payable, which payment may be made in (i) cash or other consideration, (ii) shares of Common Stock having an aggregate Market Value per Share equal to the aggregate value of the Senior Executive Plan Bonus which has become payable or (iii) any combination thereof, as determined by the Committee in its discretion at the time of payment.

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(c) If a Change in Control occurs during a Performance Period, the Senior Executive Plan Bonus payable to each Participant for the Performance Period will be determined at the highest level of achievement of the Management Objectives, without regard to actual performance and without proration for less than a full Performance Period. The Senior Executive Plan Bonus will be paid at such time following the Change in Control as the Committee determines in its discretion, but in no event later than 30 days after the date of an event which results in a Change in Control.

(d) Each grant may be evidenced by an Evidence of Award, which will contain such terms and provisions as the Committee may determine consistent with the Plan, including without limitation provisions relating to the Participant’s termination of employment by reason of retirement, death, disability or otherwise.

12. Awards to Eligible Directors.

(a) Each individual who first becomes an Eligible Director after December 31, 2008, on a date subsequent to the first business day of a calendar year will be granted (i) a number of Restricted Shares as of the date such individual becomes an Eligible Director equal to $49,500 (if the individual becomes an Eligible Director prior to July 1 of any year) or $24,750 (if the individual becomes an Eligible Director on or after July 1 of any year) divided by the Market Value per Share as of the date the individual first becomes an Eligible Director, and (ii) a Stock Option as of the date the individual first becomes an Eligible Director to purchase a number of shares of Common Stock equal to $49,500 (if the individual becomes an Eligible Director prior to July 1 of any year) or $24,750 (if the individual becomes an Eligible Director on or after July 1 of any year) divided by the Fair Value (as hereinafter defined). For purposes of this Section 12(a), an Eligible Director who ceases to be a member of the Board and thereafter becomes an Eligible Director again will be deemed to first become an Eligible Director on the date that such individual again becomes an Eligible Director.

(b) On the first business day of each calendar year beginning during the term of the Plan and after December 31, 2008, each individual who is an Eligible Director (i) will be granted as of such first business day a number of Restricted Shares equal to $49,500 divided by the Market Value per Share as of that date, (ii) will be granted as of such first business day a Stock Option to purchase a number of shares of Common Stock determined by dividing $49,500 by the Fair Value as of that date, and (iii) may elect to receive either an additional grant of Restricted Shares or a Stock Option to purchase shares of Common Stock in lieu of all or any portion of additional cash compensation of $106,000, provided that, in either case, the Eligible Director has elected in writing on or prior to the last day of the preceding calendar year to receive the Restricted Shares or the Stock Option described in this Section 12(b)(iii) in lieu of an equivalent amount of cash compensation from the Company. If applicable, the number of Restricted Shares to be granted under Section 12(b)(iii) will be determined by dividing the amount of cash compensation the Restricted Shares are replacing by the Market Value per Share as of such first business day of the calendar year, and the number of shares covered by a Stock Option elected under Section 12(b)(iii) will be determined by dividing the amount of cash compensation the Stock Option is replacing by the Fair Value as of such first business day of the calendar year.

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(c) For purposes of this Section 12, “Fair Value” means either the Black Scholes Value (described below) or the value of a Stock Option to purchase one share of Common Stock calculated using such other valuation methodology as may at the time of grant be used by the Company to value Stock Options for financial reporting purposes, in each case calculated as of the date of grant of the Stock Option. For this purpose, “Black Scholes Value” means the value of a Stock Option to purchase one share of Common Stock calculated using the Black Scholes option value model. Unless otherwise provided by the Board prior to the applicable date of grant, the Black Scholes option valuation for a Stock Option to be granted on any date will be based on the following assumptions:

(i) the then current price of a share of Common Stock is equal to the Market Value per Share of Common Stock as of the date of grant of the Stock Option;

(ii) the per share Option Price is equal to the Market Value per Share of Common Stock as of the date of grant of the Stock Option;

(iii) the time until expiration of the Stock Option is equal to the actual time until expiration of the Stock Option (determined without regard to the provisions of Sections 12(e)(vii) and 12(e)(viii));

(iv) the risk-free interest rate is the asked yield rate, as of the business day preceding the date of grant of the Stock Option and as reported in the Wall Street Journal, for the U.S. Treasury Note or Bond having a maturity date that is closest to the date that is five years after the date of grant of the Stock Option;

(v) the volatility of the price of the Common Stock is calculated based on the closing price of a share of Common Stock on the last trading day of each month for each of the 60 months preceding the month in which the date of grant of the Stock Option occurs; and

(vi) the dividend yield on the Common Stock equals the rate determined by dividing the product of four and the most recent quarterly dividend on the Common Stock as of the date of grant of the Stock Option by the Market Value per Share of Common Stock as of the date of grant of the Stock Option.

(d) Each grant of Restricted Shares to an Eligible Director may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:

(i) At the time of grant of Restricted Shares to an Eligible Director, either (A) a stock certificate evidencing the shares of Common Stock granted will be registered in the Eligible Director’s name to be held by the Company for his or her account or (B) an appropriate entry evidencing the Eligible Director’s ownership of the shares of Common Stock granted will be made in the stock

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ownership records or other books and records maintained by or on behalf of the Company. The Eligible Director will have the entire beneficial ownership interest in, and all rights and privileges of a stockholder as to, such Restricted Shares, including the right to vote such Restricted Shares and, unless the Board will determine otherwise, the right to receive dividends thereon, subject to the following: (1) subject to Section 12(d)(iii), the Eligible Director will not be entitled to delivery of any stock certificate evidencing such Restricted Shares until the expiration of the restriction period described in Section 12(d)(ii); (2) none of the Restricted Shares may be sold, transferred, assigned, pledged, or otherwise encumbered or disposed of during the restriction period; and (3) all of the Restricted Shares will be forfeited and all rights of the Eligible Director to the Restricted Shares will terminate without further obligation on the part of the Company unless the Eligible Director remains as a member of the Board for the entire restriction period, except as provided by Section 12(d)(iii). Any shares of Common Stock or other securities or property received as a result of a transaction described in Section 14 will be subject to the same restrictions as such Restricted Shares.

(ii) Each grant of Restricted Shares under Section 12(a) or 12(b)(i) will become nonforfeitable and the restrictions described in Section 12(d)(i) will expire as to 1/3rd of the total number of shares subject thereto on each of the first three anniversaries of the date of grant of Restricted Shares; provided, in each case, that the Eligible Director who received the Restricted Shares has remained a member of the Board through each such anniversary date. Each grant of Restricted Shares under Section 12(b)(iii) will become nonforfeitable and the restrictions described in Section 12(d)(i) will expire as to the total number of shares subject thereto on the first anniversary of the date of grant of Restricted Shares; provided, in each case, that the Eligible Director who received the Restricted Shares has remained a member of the Board through such anniversary date.

(iii) Except as provided in an Evidence of Award, upon an Eligible Director’s ceasing to be a member of the Board prior to the end of a restriction period for any reason, the Eligible Director will immediately forfeit all Restricted Shares then subject to the restrictions of Section 12(d)(i), unless the Board, in its discretion, allows the Eligible Director to retain any or all of the Restricted Shares then subject to such restrictions, in which case the restriction period applicable to the retained shares will immediately expire and all restrictions applicable to the retained shares will immediately lapse.

(iv) At the end of the restriction period, or at such earlier time as provided for in Section 12(d)(iii) or as the Board, in its sole discretion, may otherwise determine, all restrictions applicable to the Restricted Shares will lapse and, if the Restricted Shares are evidenced by a stock certificate, a stock certificate evidencing a number of shares of Common Stock equal to the number of Restricted Shares, free of all restrictions, will be delivered to the Eligible Director.

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(e) Each grant of Stock Options to an Eligible Director may utilize any or all of the authorizations, and will be subject to all the requirements, contained in the following provisions:

(i) Each grant will specify the Option Price, which will equal 100% of the Market Value per Share on the Date of Grant.

(ii) Each Stock Option will be exercisable only to the extent that it is vested. Each Stock Option granted under Section 12(a) or 12(b)(ii) will vest as to 1/3rd of the total number of shares of Common Stock subject thereto (rounded up to the nearest whole share) on each of the first three anniversaries of the date of grant of the Stock Option; provided, in each case, that the Eligible Director who received the Stock Option has remained a member of the Board through each such anniversary date. Except as may otherwise be provided in the agreement evidencing the Stock Option or as determined by the Board, each Stock Option granted under Section 12(b)(iii) will vest as to 1/12th of the total number of shares of Common Stock subject thereto (rounded up to the nearest whole share) on the last day of the first full calendar month following the date of grant of the Stock Option, as to 1/12th of the total number of shares subject thereto (rounded up to the nearest whole share) on the last day of each of the 10 succeeding calendar months, and as to the balance of the shares of Common Stock subject thereto on the last day of the calendar month preceding the one-year anniversary of the date of grant of the Stock Option; provided, in each case, that the Eligible Director who received the Stock Option has remained a member of the Board through the respective vesting date.

(iii) No Stock Option will be exercisable more than ten years from the Date of Grant.

(iv) Each Stock Option granted to an Eligible Director will be a nonqualified stock option and will not be an “incentive stock option” within the meaning of Section 422 of the Code.

(v) Each grant will specify whether the Option Price will be payable (A) in cash or by check acceptable to the Company, (B) by the actual or constructive transfer to the Company of shares of Common Stock owned by the Eligible Director and having an aggregate Market Value per Share at the date of exercise equal to the aggregate Option Price, (C) by authorizing the Company to withhold a number of shares of Common Stock otherwise issuable to the Eligible Director having an aggregate Market Value per Share on the date of exercise equal to the aggregate Option Price, (D) by a combination of such methods of payment or (E) by any other method of payment approved by the Board; provided, however, that the payment methods described in clauses (B) and (C) will not be available at any time that the Company is prohibited from purchasing or acquiring such shares of Common Stock.

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(vi) During an Eligible Director’s lifetime, the Stock Option may be exercised only by the Eligible Director. Stock Options will not be transferable, except for exercise by the Eligible Director’s legal representatives or heirs; provided, however, that an Eligible Director may, with prior approval from the Board (or its designee), transfer an exercisable Stock Option to (A) a member or members of the Eligible Director’s immediate family, (B) a trust, the beneficiaries of which consist exclusively of members of the Eligible Director’s immediate family, (C) a partnership, the partners of which consist exclusively of members of the Eligible Director’s immediate family, or (D) any similar entity created for the exclusive benefit of members of the Eligible Director’s immediate family; provided that no such transfer may be made in connection with a divorce or marital dissolution proceeding. The Board or its designee must approve the form of any transfer of a Stock Option to or for the benefit of any immediate family member or members before such transfer will be recognized as valid hereunder. For purposes of the preceding sentence, any remote, contingent interest of persons other than a member of the Eligible Director’s immediate family will be disregarded. For purposes of this Section 12(e)(vi), immediate family means an Eligible Director’s spouse, children and grandchildren, including step and adopted children and grandchildren, but shall not include a former spouse.

(vii) Upon an Eligible Director’s ceasing to be a member of the Board for any reason other than death, each Stock Option of such Eligible Director will be exercisable only as to those shares of Common Stock which were then subject to the exercise of such Stock Option. The Stock Option will expire: (A) unless exercised, five years after the Eligible Director’s retirement from the Board if the Eligible Director retires at or after age 55 with at least five years of service on the Board; (B) unless exercised, five years after the date the Eligible Director’s service on the Board is terminated due to the Eligible Director’s total and permanent disability; (C) upon the Eligible Director’s service on the Board being terminated for cause pursuant to Section 141(k) of the Delaware General Corporation Law (or any successor provision); or (D) unless exercised, three months after the date of such termination. In no event, however, will any Stock Option be exercisable pursuant to this Section 12(e)(vii) after the tenth anniversary of the Date of Grant or after any earlier termination in accordance with the terms of the agreement evidencing the Stock Option.

(viii) Upon the death of an Eligible Director during his or her term of service on the Board, a Stock Option will be exercisable only as to those shares of Common Stock which were subject to the exercise of the Stock Option at the time of his or her death. The Stock Option will expire, unless exercised by the Eligible Director’s legal representatives or heirs, five years after the date of death. In no event, however, will any Stock Option be exercisable pursuant to this Section 12(e)(viii) after the tenth anniversary of the Date of Grant or after any earlier termination in accordance with the terms of the agreement evidencing the Stock Option.

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(ix) Except as otherwise determined by the Board, the vesting schedule applicable to a Stock Option requires continued service through each applicable vesting date as a condition to the vesting of the applicable installment of the Stock Option. Service for only a portion of a vesting period, even if substantial, will not entitle the Eligible Director to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of service as a Board member as provided in Section 12(e)(vii) or 12(e)(viii).

13. Transferability. Except as provided in Section 12(e)(vi) or as otherwise authorized by the Committee, no Award may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution; provided, however, that a Participant who is an officer of the Company may, with the prior approval of the Committee, transfer a Stock Option that is not intended to be an “incentive stock option” (within the meaning of Section 422 of the Code) to family members of the Participant, including to trusts in which family members of the Participant own more than 50% of the beneficial interests, to foundations in which family members of the Participant or the Participant controls the management of assets and to other entities in which more than 50% of the voting interests are owned by family members of the Participant or the Participant; provided further that no such transfer may be made in connection with a divorce or marital dissolution proceeding. For purposes of this Section 13, family member shall not include a former spouse. Except as otherwise authorized by the Committee, no Stock Option or Appreciation Right granted to a Participant will be exercisable during the Participant’s lifetime by any person other than the Participant or the Participant’s guardian or legal representative or any permitted transferee.

14. Adjustments.

(a) The Committee will make or provide for such adjustments in (i) the maximum number of shares of Common Stock specified in Sections 4 and 5, (ii) the number of shares of Common Stock covered by outstanding Stock Options, Appreciation Rights, Performance Shares and Restricted Stock Units granted under the Plan, (iii) the Option Price or Grant Price applicable to any Stock Options and Appreciation Rights, and (iv) the kind of shares covered by any such Awards (including shares of another issuer), as is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (x) any stock dividend, stock split, combination or exchange of shares, recapitalization or other change in the capital structure of the Company, or (y) any merger, consolidation, separation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (z) any other corporate transaction or event having an effect similar to any of the foregoing. In the event of any such transaction or event, the Committee, in its discretion, may provide in substitution for any or all outstanding Awards such alternative consideration as it, in good faith, may determine to be equitable in the circumstances and may require in connection with such substitution the surrender of all Awards so replaced.

(b) The Committee may accelerate the payment of, or vesting with respect to, any Award under the Plan upon the occurrence of a transaction or event described in this Section 14; provided, however, that in the case of any Award that constitutes a deferral of

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compensation within the meaning of Section 409A of the Code, the Committee will not accelerate the payment of the Award unless it determines in good faith that such transaction or event satisfies the requirements of a change in control event under guidance issued by the Secretary of the Treasury under Section 409A of the Code.

15. Fractional Shares. Neither the Company nor any Subsidiary will be required to deliver any fractional share of Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.

16. Withholding Taxes. To the extent that the Company or a Subsidiary is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under the Plan, and the amounts available to the Company or the Subsidiary for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. If a Participant’s Award is to be paid in the form of shares of Common Stock and the Participant fails to make arrangements for the payment of tax, the Company or the Subsidiary may withhold shares of Common Stock having a value equal to the amount required to be withheld. In addition, if permitted by the Committee, the Participant or such other person may elect to have any withholding obligation of the Company or the Subsidiary satisfied with shares of Common Stock that would otherwise be transferred to the Participant or such other person in payment of the Participant’s Award. However, without the consent of the Committee, shares of Common Stock will not be withheld in excess of the minimum number of shares required to satisfy the withholding obligation of the Company or the Subsidiary.

17. Administration of the Plan.

(a) Unless the administration of the Plan has been expressly assumed by the Board pursuant to a resolution of the Board, the Plan will be administered by the Committee, which at all times will consist of three or more Directors appointed by the Board, all of whom are intended (i) to meet all applicable independence requirements of the New York Stock Exchange or the principal national securities exchange or principal market on or in which the Common Stock is traded and (ii) to qualify as “non-employee directors” as defined in Rule 16b-3 and as “outside directors” as defined in regulations adopted under Section 162(m) of the Code, as such terms may be amended from time to time; provided, however, that the failure of a member of the Committee to so qualify will not invalidate any Award granted under the Plan. Notwithstanding the foregoing, the provisions of Section 12 will be administered by the Board. A majority of the Committee will constitute a quorum, and the action of the members of the Committee present at any meeting at which a quorum is present, or acts unanimously approved in writing, will be the acts of the Committee.

(b) The Committee has the full authority and discretion to administer the Plan and to take any action that is necessary or advisable in connection with the administration of the Plan, including without limitation the authority and discretion to interpret and construe any provision of the Plan or of any agreement, notification or document evidencing an Award. The interpretation and construction by the Committee of any such

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provision and any determination by the Committee pursuant to any provision of the Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee will be liable for any such action or determination made in good faith.

(c) To the extent permitted by applicable law, the Committee may delegate its authority under the Plan to a subcommittee of the Committee, to one or more committees of the Board or to one or more executive officers of the Company; provided, however, that no delegation may be made of authority to take an action which is required by Rule 16b-3 to be taken by “non-employee directors” in order that the Plan and transactions thereunder meet the requirements of such Rule.

(d) It is the Company’s intention that any Award granted under the Plan that constitutes a deferral of compensation within the meaning of Section 409A of the Code and the guidance issued by the Secretary of the Treasury under Section 409A satisfy the requirements of Section 409A. In granting such an Award, the Committee will use its best efforts to exercise its authority under the Plan with respect to the terms of such Award in a manner that the Committee determines in good faith will cause the Award to comply with Section 409A and thereby avoid the imposition of penalty taxes and interest upon the Participant receiving the Award. Notwithstanding any provision of the Plan or an Evidence of Award to the contrary, (i) if the Company makes a good faith determination that a payment of an Award (A) constitutes a deferral of compensation for purposes of Section 409A of the Code, (B) is made to a Participant by reason of his or her “separation from service” (within the meaning of Section 409A of the Code) and (C) at the time such payment would otherwise be made the Participant is a “specified employee” (within the meaning of Section 409A of the Code), the payment will be delayed until the first day of the seventh month following the date of such separation from service, and (ii) if a Change in Control would be the date of payment of an Award that is determined to constitute a deferral of compensation, but the Change in Control does not constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company (within the meaning of Section 409A of the Code), then the date of payment will be determined without regard to the occurrence of the Change in Control.

(e) With respect to the administration of the provisions of Section 12 or if the administration of the Plan is assumed by the Board pursuant to Section 17(a), the Board will have the same authority, power, duties, responsibilities and discretion given to the Committee under the terms of the Plan.

18. Amendments and Other Matters.

(a) The Plan may be amended from time to time by the Board or, with respect to those provisions of the Plan other than Section 12, the Committee; provided, however, that the Plan may not be amended without further approval by the stockholders of the Company if such amendment would result in the Plan no longer satisfying any applicable requirements of the New York Stock Exchange (or the principal national securities exchange on which the Common Stock is traded), Rule 16b-3 or Section 162(m) of the Code.

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(b) Neither the Committee nor the Board will authorize the amendment of any outstanding Stock Option to reduce the Option Price without the further approval of the stockholders of the Company. Furthermore, no Stock Option will be cancelled and replaced with Stock Options having a lower Option Price without further approval of the stockholders of the Company. The provisions of this Section 18(b) are intended to prohibit the repricing of “underwater” Stock Options and will not be construed to prohibit the adjustments provided for in Section 14.

(c) The Plan may be terminated at any time by action of the Board. The termination of the Plan will not adversely affect the terms of any outstanding Award.

(d) The Company will not be required to issue, and neither the Company nor a Subsidiary will be required to transfer, shares of Common Stock under the Plan prior to (i) the obtaining of any approval from any governmental agency which the Company, in its sole discretion, determines to be necessary or advisable, (ii) the admission of such shares to listing on any stock exchange on which the Common Stock may then be listed, and (iii) the completion of any registration or other qualification of such shares under any state or Federal law or rulings or regulations of any governmental body which the Company, in its sole discretion, determines to be necessary or advisable.

(e) The Plan does not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.

(f) If the Committee determines, with the advice of legal counsel, that any provision of the Plan would prevent the payment of any Award intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code from so qualifying, such Plan provision will be invalid and cease to have any effect without affecting the validity or effectiveness of any other provision of the Plan.

(g) No Participant will have any of the rights of a stockholder with respect to shares of Common Stock subject to an Award prior to the date as of which he or she is actually recorded as the holder of such shares upon the stock records of the Company.

19. Governing Law. The Plan, all Awards and all actions taken under the Plan and the Awards will be governed in all respects in accordance with the laws of the State of Delaware, including without limitation, the Delaware statute of limitations, but without giving effect to the principles of conflicts of laws of such State.

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EX-10.3

Exhibit 10.3

Execution Version

OMNIBUS AMENDMENT NO. 1

TO COMBINED CREDIT AGREEMENTS

THIS OMNIBUS AMENDMENT NO. 1 TO COMBINED CREDIT AGREEMENTS (this “Amendment”), dated as of May 23, 2012, is among QUICKSILVER RESOURCES INC., (the “U.S. Borrower”), QUICKSILVER RESOURCES CANADA, INC., (the “Canadian Borrower”) (collectively, the “Combined Borrowers”), JPMORGAN CHASE BANK, N.A., as global administrative agent (in such capacity, the “Global Administrative Agent”), JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian administrative agent (in such capacity, the “Canadian Administrative Agent”), and each of the U.S. Lenders and Canadian Lenders party hereto.

R E C I T A L S

A. The U.S. Borrower, the Global Administrative Agent, and the various financial institutions party thereto as Agents or Lenders (the “U.S. Lenders”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as amended, supplemented or modified, the “U.S. Credit Agreement”).

B. Quicksilver Resources Inc., as parent, the Canadian Borrower, the Canadian Administrative Agent, the Global Administrative Agent, and the various financial institutions party thereto as agents or lenders (the “Canadian Lenders”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as amended, supplemented or modified, the “Canadian Credit Agreement”) (the U.S. Credit Agreement and the Canadian Credit Agreement being collectively referred to as the “Combined Credit Agreements”).

B. The Combined Borrowers have requested that the Majority Lenders agree, and the Majority Lenders have agreed, to amend certain provisions of the Combined Credit Agreements.

C. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined herein has the meaning given to such term in the U.S. Credit Agreement, as amended by this Amendment. Unless otherwise indicated, all section references in this Amendment refer to applicable section of the Combined Credit Agreements.

Section 2. Amendments to Combined Credit Agreements.

2.1 Amendment to Section 1.02. The second sentence of the definition of “Barnett Shale Transaction” in each of the Combined Credit Agreements is hereby amended by adding the words “prior to or” immediately after the words “These transactions shall be consummated”.

2.2 Amendment to Section 8.11(c). (a) Section 8.11(c) of the U.S. Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(c) With the delivery of each Reserve Report, the Borrower shall (or, in connection with the Canadian Reserve Report, shall cause QRCI to) provide to the Global Administrative Agent, the Lenders and the Canadian Lenders a certificate from a Responsible Officer of the Borrower or QRCI, as applicable, certifying that in all material respects: (i) the information contained in the Reserve Reports and any other information delivered in connection therewith are true and correct, (ii) subject to Immaterial Title Deficiencies, (x) the Borrower or a U.S. Guarantor owns good and defensible title to the Oil and Gas Properties located in the United States evaluated in the applicable U.S. Reserve Report and such Properties are free of all Liens except for Permitted Liens and Liens securing the Secured Indebtedness and (y) QRCI or a Canadian Guarantor owns good and defensible title to the Oil and Gas Properties located in Canada evaluated in the applicable Canadian Reserve Report and such Properties are free of all Liens except for Permitted Liens and Liens securing the Canadian Secured Indebtedness, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments (x) in excess of one half bcf of gas in the aggregate with respect to its Oil and Gas Properties located in the United States evaluated in the applicable U.S. Reserve Report which would require the Borrower or any U.S. Guarantor to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor and (y) in excess of one half bcf of gas in the aggregate with respect to its Oil and Gas Properties located in Canada evaluated in the applicable Canadian Reserve Report which would require QRCI or any Canadian Guarantor to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered Reserve Reports which pertain to the sale of production at a fixed price and have a maturity date of longer than six (6) months from the date of such certificate, and (v) a true and complete list of all Oil and Gas Swap Agreements of the Borrower and each Restricted Subsidiary is included, which list contains the material terms thereof (including the type, remaining term, counterparty, mark-to-market value as of the end of the second month immediately preceding the date of such certificate and notional amounts or volumes), any credit support agreements relating thereto, any margin required or supplied under any credit support document, and the counterparty to each such agreement.”

(b) Section 8.11(c) of the Canadian Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(c) With the delivery of each Reserve Report, the Parent shall (or, in connection with the Canadian Reserve Report, shall cause the Borrower to) provide to the Global Administrative Agent, the Lenders and the U.S. Lenders a certificate from a Responsible Officer of the Parent or the Borrower, as applicable, certifying that in all material respects: (i) the information contained in the Reserve Reports and any other information delivered in connection therewith are true and correct, (ii) subject to Immaterial Title Deficiencies, (x) the Parent or a U.S. Guarantor owns good and defensible title to the Oil and Gas Properties located in the United States evaluated in the applicable U.S. Reserve Report and such Properties are free of all Liens except for

2

Permitted Liens and Liens securing the U.S. Secured Indebtedness and (y) the Borrower or a Canadian Guarantor owns good and defensible title to the Oil and Gas Properties located in Canada evaluated in the applicable Canadian Reserve Report and such Properties are free of all Liens except for Permitted Liens and Liens securing the Secured Indebtedness, (iii) except as set forth on an exhibit to the certificate, on a net basis there are no gas imbalances, take or pay or other prepayments (x) in excess of one half bcf of gas in the aggregate with respect to its Oil and Gas Properties located in the United States evaluated in the applicable U.S. Reserve Report which would require the Parent or any U.S. Guarantor to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor and (y) in excess of one half bcf of gas in the aggregate with respect to its Oil and Gas Properties located in Canada evaluated in the applicable Canadian Reserve Report which would require the Borrower or any Canadian Guarantor to deliver Hydrocarbons either generally or produced from such Oil and Gas Properties at some future time without then or thereafter receiving full payment therefor, (iv) attached to the certificate is a list of all marketing agreements entered into subsequent to the later of the date hereof or the most recently delivered Reserve Reports which pertain to the sale of production at a fixed price and have a maturity date of longer than six (6) months from the date of such certificate, and (v) a true and complete list of all Oil and Gas Swap Agreements of the Parent and each Restricted Subsidiary is included, which list contains the material terms thereof (including the type, remaining term, counterparty, mark-to-market value as of the end of the second month immediately preceding the date of such certificate and notional amounts or volumes), any credit support agreements relating thereto, any margin required or supplied under any credit support document, and the counterparty to each such agreement.”

2.3 Amendment to Section 9.10. (a) Section 9.10(i) of the U.S. Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(i) transfers and other dispositions of Oil and Gas Properties and Oil and Gas Swap Agreements as contemplated by the Barnett Shale Transaction; provided that (x) if the contribution of the Equity Interests of MLP Opco to MLP in connection with the Barnett Shale Transaction is consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in October 2012, then each of the Global Borrowing Base and U.S. Borrowing Base will be reduced by $200,000,000 and (y) if on or prior to the date that is 45 days after the consummation of the Barnett Shale Transaction the Borrower fails to repay, repurchase (including, without limitation, through a tender offer) or retire at least $300,000,000 of principal amount of Existing Debt of the Borrower, the Global Borrowing Base and U.S. Borrowing Base will each be reduced by an additional $75,000,000; provided further, however, that if the Barnett Shale Transaction has not been consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in October 2012, the preceding proviso shall not apply and instead the Global Borrowing Base and the U.S. Borrowing Base shall be reduced in a manner consistent with the requirements and procedures set forth in Section 9.10(d)(iii)-(v).”

3

(b) Section 9.10(i) of the Canadian Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(i) transfers and other dispositions of Oil and Gas Properties and Oil and Gas Swap Agreements as contemplated by the Barnett Shale Transaction; provided that (x) if the contribution of the Equity Interests of MLP Opco to MLP in connection with the Barnett Shale Transaction is consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in October 2012, then each of the Global Borrowing Base and U.S. Borrowing Base will be reduced by US$200,000,000 and (y) if on or prior to the date that is 45 days after the consummation of the Barnett Shale Transaction the Parent fails to repay, repurchase (including, without limitation, through a tender offer) or retire at least US$300,000,000 of principal amount of Existing Debt of the Parent, the Global Borrowing Base and U.S. Borrowing Base will each be reduced by an additional US$75,000,000; provided further, however, that if the Barnett Shale Transaction has not been consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in October 2012, the preceding proviso shall not apply and instead the Global Borrowing Base and the U.S. Borrowing Base shall be reduced in a manner consistent with the requirements and procedures set forth in Section 9.10(d)(iii)-(v).”

2.4 Amendment to Section 12.01. Section 12.01(a) of each of the Combined Credit Agreements is hereby amended by (a) deleting the word ‘and’ at the end of Section 12.01(a)(ii), replacing the period at the end of Section 12.01(a)(iii) with “; and” and (c) adding the following text as Section 12.01(a)(iv):

“(iv) if to any Bank Products Provider or Secured Swap Provider, in its capacity as such, to it at its address (or telecopy number) set forth in the Administrative Questionnaire of the applicable financial institution, who is or whose Affiliate is the relevant Bank Products Provider or Secured Swap Provider, or, if not available, such other address received by the Global Administrative Agent for such institution.”

Section 3. Authorization of Intercreditor Amendment. Attached hereto as Exhibit A is an amendment to the Intercreditor Agreement (the “Intercreditor Amendment”). Each party to the Intercreditor Agreement who is a party hereto hereby authorizes the Global Administrative Agent and/or Canadian Administrative Agent, as applicable, to enter the Intercreditor Amendment.

Section 4. Conditions Precedent. This Amendment shall not become effective until the date on which each of the following conditions is satisfied (the “Amendment Effective Date”):

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4.1 The Global Administrative Agent shall have received from each of the Combined Borrowers, the Majority Lenders, the Global Administrative Agent and the Canadian Administrative Agent counterparts of this Amendment signed on behalf of such Person.

4.2 The Global Administrative Agent, the Canadian Administrative Agent and the Lenders shall have received all fees and amounts due and payable on or prior to the Amendment Effective Date, including, to the extent invoiced at least one (1) Business Day prior to such date, reimbursement or payment of all documented out-of-pocket expenses required to be reimbursed or paid by the Combined Borrowers under the Combined Credit Agreement.

Section 5. Miscellaneous.

5.1 Confirmation. The provisions of the Combined Credit Agreements, as amended by this Amendment, shall remain in full force and effect following the effectiveness of this Amendment.

5.2 Ratification and Affirmation; Representations and Warranties. Each Combined Borrower hereby (a) acknowledges the terms of this Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document (as defined in the applicable Combined Credit Agreement as used in this Section) to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, notwithstanding the amendments contained herein; and (c) represents and warrants to the Lenders (as defined in the applicable Combined Credit Agreement) that as of the date hereof, after giving effect to the terms of this Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects on and as of the Amendment Effective Date, except that to the extent any such representations and warranties are (x) expressly limited to an earlier date, in which case, on the Amendment Effective Date such representations and warranties shall continue to be true and correct as of such specified earlier date and (y) qualified by materiality, such representations and warranties (as so qualified) shall continue to be true and correct in all respects and (ii) no Default (as defined in the applicable Combined Credit Agreement) has occurred and is continuing as of the Amendment Effective Date.

5.3 Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart hereof.

5.4 Governing Law, Jurisdiction, etc. Sections 12.09 and 12.18 of the Canadian Credit Agreement shall be incorporated herein mutatis mutandis as this Amendment relates to the Canadian Credit Agreement and Sections 12.09 and 12.18 of the U.S. Credit Agreement shall be incorporated herein mutatis mutandis as this Amendment relates to the U.S. Credit Agreement.

[SIGNATURES BEGIN NEXT PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

QUICKSILVER RESOURCES INC., a Delaware corporation
By:	/s/ Vanessa Gomez LaGatta
	Name: Vanessa Gomez LaGatta
	Title: Vice President - Treasurer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

QUICKSILVER RESOURCES CANADA INC., an Alberta, Canada corporation
By:	/s/ Vanessa Gomez LaGatta
	Name: Vanessa Gomez LaGatta
	Title: Vice President - Treasurer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

JPMORGAN CHASE BANK, N.A., as a Lender under the U.S. Credit Agreement and as Global Administrative Agent
By:	/s/ David Morris
	Name: David Morris
	Title: Authorized Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as a Lender under the Canadian Credit Agreement and as Canadian Administrative Agent
By:	/s/ Michael N. Tam
	Name: Michael N. Tam
	Title: Authorized Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

BANK OF AMERICA, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Ronald E. McKaig
	Name: Ronald E. McKaig
	Title: Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

BANK OF AMERICA, N.A., (by its Canada Branch) as a Lender under the Canadian Credit Agreement
By:	/s/ Medina Sales de Andrade
	Name: Medina Sales de Andrade
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

BRANCH BANKING & TRUST COMPANY, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Jeff Forbis
	Name: Jeff Forbis
	Title: Senior Vice President
	BB&T Capital Markets

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CANADIAN IMPERIAL BANK OF COMMERCE, as a Lender under the Canadian Credit Agreement
By:	/s/ Randy Geislinger
	Name: Randy Geislinger
	Title: Executive Director
By:	/s/ Chris Perks
	Name: Chris Perks
	Title: Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CIBC INC., as a Lender under the U.S. Credit Agreement
By:	/s/ Trudy Nelson
	Name: Trudy Nelson
	Title: Authorized Signatory
By:	/s/ Richard Antl
	Name: Richard Antl
	Title: Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CITIBANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ John Miller
	Name: John Miller
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CITIBANK, N.A., CANADIAN BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Gordon Dekuyper
	Name: Gordon Dekuyper
	Title: Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

COMERICA BANK, as a Lender under the U.S. Credit Agreement
By:	/s/ Katya Evseev
	Name: Katya Evseev
	Title: Corporate Banking Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

COMERICA BANK, CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Omer Ahmed
	Name: Omer Ahmed
	Title: Portfolio Manager

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

COMPASS BANK, as a Lender under the U.S. Credit Agreement
By:	/s/ Umar Hassan
	Name: Umar Hassan
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Mark A. Roche
	Name: Mark A. Roche
	Title: Managing Director
By:	/s/ Sharada Manne
	Name: Sharada Manne
	Title: Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender under the U.S. Credit Agreement
By:	/s/ Mikhail Faybusovich
	Name: Mikhail Faybusovich Title: Director

By:	/s/ Michael Spaight
	Name: Michael Spaight Title: Associate

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

CREDIT SUISSE AG, TORONTO BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Alain Daoust
	Name: Alain Daoust Title: Director

By:	/s/ Paul White
	Name: Paul White Title: Vice-President
	Credit Suisse, AG, Toronto Branch

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender under the U.S. Credit Agreement
By:	/s/ Michael Getz
	Name: Michael Getz Title: Vice President

By:	/s/ Erin Morrissey
	Name: Erin Morrissey Title: Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

DEUTSCHE BANK AG CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Rupert Gomes
	Name: Rupert Gomes Title: Vice President

By:	/s/ Marcellus Leung
	Name: Marcellus Leung Title: Assistant Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

EXPORT DEVELOPMENT CANADA, as a Lender under the U.S. Credit Agreement
By:	/s/ Richard Leong
	Name: Richard Leong Title: Asset Manager

By:	/s/ Talal M. Kairouz
	Name: Talal Kairouz Title: Senior Asset Manager

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

GOLDMAN SACHS BANK USA, as a Lender under the U.S. Credit Agreement
By:	/s/ Michelle Latzoni
	Name:	Michelle Latzoni
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

KEYBANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Craig Hanselman
	Name:	Craig Hanselman
	Title:	Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

SUMITOMO MITSUI BANKING CORPORATION, as a Lender under the U.S. Credit Agreement
By:	/s/ Shuji Yabe
	Name:	Shuji Yabe
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

THE BANK OF NOVA SCOTIA, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Terry Donovan
	Name:	Terry Donovan
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

THE ROYAL BANK OF SCOTLAND plc, as a Lender under the U.S. Credit Agreement
By:	/s/ Sanjay Remond
	Name:	Sanjay Remond
	Title:	Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

THE ROYAL BANK OF SCOTLAND N.V. (CANADA) BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ David R. Wingfelder
	Name: David R. Wingfelder
	Title: Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

TORONTO DOMINION (NEW YORK) LLC, as a Lender under the U.S. Credit Agreement
By:	/s/ Vicki Ferguson
	Name: Vicki Ferguson
	Title: Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

THE TORONTO-DOMINION BANK, as a Lender under the Canadian Credit Agreement
By:	/s/ Vicki Ferguson
	Name: Vicki Ferguson
	Title: Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

U.S. BANK NATIONAL ASSOCIATION, as a Lender under the U.S. Credit Agreement
By:	/s/ Daria Mahoney
	Name: Daria Mahoney
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

UBS LOAN FINANCE LLC, as a Lender under the U.S. Credit Agreement
By:	/s/ Irja R. Otsa
	Name: Irja R. Otsa
	Title: Associate Director
By:	/s/ Mary E. Evans
	Name: Mary E. Evans
	Title: Associate Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

UBS AG CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Irja R. Otsa
	Name: Irja R. Otsa
	Title: Associate Director
By:	/s/ Mary E. Evans
	Name: Mary E. Evans
	Title: Associate Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

WELLS FARGO BANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Catherine Cook
	Name: Catherine Cook
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

WELLS FARGO FINANCIAL CORPORATION CANADA, as a Lender under the Canadian Credit Agreement
By:	/s/ Catherine Cook
	Name: Catherine Cook
	Title: Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 1 TO

COMBINED CREDIT AGREEMENTS

EXHIBIT A

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

[Please see attached]

Execution Version

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

THIS FIRST AMENDMENT TO INTERCREDITOR AGREEMENT (this “Amendment”), dated as of May 23, 2012, is among JPMORGAN CHASE BANK, N.A., as Global Administrative Agent (the “Global Administrative Agent”), and JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as the Canadian Administrative Agent (the “Canadian Administrative Agent”, and together with the Global Administrative Agent, the “Administrative Agents”), on behalf of the various financial institutions as are or may become parties to the U.S. Credit Agreement (the “U.S. Lenders”), the various financial institutions as are or may become parties to the Canadian Credit Agreement (the “Canadian Lenders”), the Secured Swap Providers and the Bank Product Providers (each as defined in both of the Combined Credit Agreements), the Combined Issuing Banks, the other Agents party to the U.S. Credit Agreement, and the other Agents party to the Canadian Credit Agreement.

RECITALS

A. The U.S. Borrower, the U.S. Lenders, the various financial institutions party thereto as Agents and the Global Administrative Agent (collectively, the “U.S. Agents”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as heretofore amended, supplemented or modified, the “U.S. Credit Agreement”).

B. The Canadian Borrower, the Canadian Lenders, the various financial institutions party thereto as Agents and the Canadian Administrative Agent (collectively, the “Canadian Agents”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as heretofore amended, supplemented or modified, the “Canadian Credit Agreement”) (the U.S. Credit Agreement and the Canadian Credit Agreement being collectively referred to as the “Combined Credit Agreements”).

C. The parties hereto entered into that certain Intercreditor Agreement dated as of December 22, 2011 (as amended, supplemented or modified, the “Intercreditor Agreement”).

D. The parties hereto have agreed to amend the Intercreditor Agreement as set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

DEFINITIONS AND TERMS OF CONSTRUCTION

1.1. Certain Definitions. When used herein, and unless otherwise defined herein, terms and expressions defined in the U.S. Credit Agreement shall have those meanings; terms defined in only one of the Combined Credit Agreements shall have the meanings specified in such Combined Credit Agreement. Unless otherwise indicated, all section references in this Amendment refer to sections of the Intercreditor Agreement.

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ARTICLE 2

AMENDMENTS TO INTERCREDITOR AGREEMENT

2.1. Amendment to Section 1.1.

(a) Section 1.1 is hereby amended to add after the second semicolon and before the word “and” the following text: “the terms Bank Product Obligations, Bank Product Providers, Secured Swap Providers and Secured Indebtedness shall have the meanings assigned to them in the U.S. Credit Agreement, the Canadian Agreements or in both of the Combined Credit Agreements as the context may require;”

(b) Section 1.1 is hereby amended to add the following definitions in the appropriate alphabetical order:

“Canadian Creditors” means the Canadian Lenders, the Canadian Agents, the Canadian Issuing Banks, the “Bank Product Providers” as defined in the Canadian Credit Agreement and the “Secured Swap Providers” as defined in the Canadian Credit Agreement.

“U.S. Creditors” means the U.S. Lenders, the U.S. Agents, the U.S. Issuing Banks, the “Bank Product Providers” as defined in the U.S. Credit Agreement and the “Secured Swap Providers” as defined in the U.S. Credit Agreement.

(c) The definition of “Sharing Percentage” in Section 1.1 is hereby amended by adding the words “and other U.S. Creditors” after the words “U.S. Lenders” in clause (a) and adding the words “and other Canadian Creditors” after the words “Canadian Lenders” in clause (b).

2.2. Amendment to Section 5.2. Section 5.2 is hereby amended by adding the following words to the end of such Section prior to the period:

“or, with respect to any Creditor, in accordance with any other delivery instructions such Creditor shall have provided to parties hereto”.

2.3. Amendment to Section 5.7. Section 5.7(c) is hereby amended by adding in fifth line after the word “SPECIFIED” and before the word “PURSUANT” the words “HEREUNDER OR”.

ARTICLE 3

CONDITIONS PRECEDENT

3.1. Executed Counterparts. The effectiveness of this Amendment is subject to the receipt by the Global Administrative Agent of (a) the Amendment, executed and delivered by a duly authorized officer of each of the Administrative Agents and (b) written consent from the Majority Lenders authorizing the execution of the Amendment by the Administrative Agents.

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ARTICLE 4

MISCELLANEOUS

4.1. Confirmation. The provisions of the Intercreditor Agreement, as amended by this Amendment, shall remain in full force and effect following the effectiveness of this Amendment.

4.2. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original, and all of which taken together shall constitute a single agreement, with the same effect as if the signatories thereto and hereto were upon the same instrument.

4.3. GOVERNING LAW; JURISDICTION.

(a) This Amendment and all claims or causes of action (whether in contract, tort, or otherwise) that may be based upon, arise out of or relate in any way to this Amendment or the negotiation, execution or performance of this Amendment or the transactions contemplated hereby shall be governed by, and construed in accordance with, the laws of the State of New York.

(b) Section 5.7(b), (c), and (d) of the Intercreditor Agreement shall be incorporated mutatis mutandis, to this Amendment.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date hereof by their respective officers thereunto duly authorized.

JPMORGAN CHASE BANK, N.A., as Global Administrative Agent
By:	/s/ David Morris
Name:	David Morris
Title:	Authorized Officer

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian Administrative Agent
By:	/s/ Michael N. Tam
Name:	Michael N. Tam
Title:	Senior Vice President

[Signature Page to First Amendment to Intercreditor Agreement]

EX-10.4

Exhibit 10.4

EXECUTION VERSION

OMNIBUS AMENDMENT NO. 2

TO COMBINED CREDIT AGREEMENTS

THIS OMNIBUS AMENDMENT NO. 2 TO COMBINED CREDIT AGREEMENTS (this “Amendment”), dated as of August 6, 2012, is among QUICKSILVER RESOURCES INC., (the “U.S. Borrower”), QUICKSILVER RESOURCES CANADA, INC., (the “Canadian Borrower”) (collectively, the “Combined Borrowers”), JPMORGAN CHASE BANK, N.A., as global administrative agent (in such capacity, the “Global Administrative Agent”), JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Canadian administrative agent (in such capacity, the “Canadian Administrative Agent”), and each of the U.S. Lenders and Canadian Lenders party hereto.

R E C I T A L S

A. The U.S. Borrower, the Global Administrative Agent, and the various financial institutions party thereto as Agents or Lenders (the “U.S. Lenders”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as amended by Omnibus Amendment No. 1 dated as of May 23, 2012, and as amended, supplemented or modified, the “U.S. Credit Agreement”).

B. Quicksilver Resources Inc., as parent, the Canadian Borrower, the Canadian Administrative Agent, the Global Administrative Agent, and the various financial institutions party thereto as agents or lenders (the “Canadian Lenders”) entered into that certain Amended and Restated Credit Agreement dated as of December 22, 2011 (as amended by Omnibus Amendment No. 1 dated as of May 23, 2012, and as amended, supplemented or modified, the “Canadian Credit Agreement”) (the U.S. Credit Agreement and the Canadian Credit Agreement being collectively referred to as the “Combined Credit Agreements”).

B. The Combined Borrowers have requested that the Required Lenders agree, and the Required Lenders have agreed, to amend certain provisions of the Combined Credit Agreements.

C. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined herein has the meaning given to such term in the U.S. Credit Agreement, as amended by this Amendment. Unless otherwise indicated, all section references in this Amendment refer to applicable section of the Combined Credit Agreements.

Section 2. Amendments to Combined Credit Agreements.

2.1 Amendments to Section 1.02.

2.1.1 The definition of “Applicable Margin” in the U.S. Credit Agreement is hereby amended to read:

““Applicable Margin” means, for any day from and after the Second Amendment Effective Date, with respect to the commitment fees payable hereunder, or with respect to any Eurodollar Loan or ABR Loan, as the case may be, the rate per annum set forth in the appropriate column below under the caption “Commitment Fee Rate”, “Eurodollar Spread,” or “ABR Spread,” as the case may be, for the Global Borrowing Base Utilization Percentage then in effect:

Global Borrowing Base Utilization Percentage	Commitment Fee Rate			Eurodollar Spread			ABR Spread
Greater than 90%		0.500	%		3.00	%		2.00	%
Greater than 75% but less than or equal to 90%		0.500	%		2.75	%		1.75	%
Greater than 50% and less than or equal to 75%		0.500	%		2.50	%		1.50	%
Greater than 25% and less than or equal to 50%		0.500	%		2.25	%		1.25	%
Less than or equal to 25%		0.500	%		2.00	%		1.00	%

Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.”

2.1.2 The definition of “Applicable Margin” in the Canadian Credit Agreement is hereby amended to read:

““Applicable Margin” means, for any day from and after the Second Amendment Effective Date, with respect to the commitment fees payable hereunder, or with respect to any Canadian Prime Loan, CDOR Loan, U.S. Prime Loan or Eurodollar Loan, as the case may be, the rate per annum set forth in the appropriate column below under the caption “Commitment Fee Rate”, “Canadian Prime Spread,” “CDOR Spread,” “U.S. Prime Spread”, or “Eurodollar Spread”, as the case may be, for the Global Borrowing Base Utilization Percentage then in effect:

Global Borrowing Base Utilization Percentage	Commitment Fee Rate			Canadian Prime Spread			CDOR Spread			U.S. Prime Spread			Eurodollar Spread
Greater than 90%		0.500	%		2.00	%		3.00	%		2.00	%		3.00	%
Greater than 75% but less than or equal to 90%		0.500	%		1.75	%		2.75	%		1.75	%		2.75	%
Greater than 50% and less than or equal to 75%		0.500	%		1.50	%		2.50	%		1.50	%		2.50	%
Greater than 25% and less than or equal to 50%		0.500	%		1.25	%		2.25	%		1.25	%		2.25	%
Less than or equal to 25%		0.500	%		1.00	%		2.00	%		1.00	%		2.00	%

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Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change.”.

2.1.3 The definition of “Consolidated Net Income” in the U.S. Credit Agreement is hereby amended as follows: (i) the word “and” at the end of clause (f) is deleted, (ii) the period at the end of clause (g) is replaced with a semi-colon, and (iii) the following new clauses are inserted which read:

“(h) any fees and expenses incurred in connection with (i) the proposed Barnett Shale Transaction in an aggregate amount not to exceed $9,000,000 and (ii) the Second Omnibus Amendment;

(i) audit fees and expenses incurred prior to the Second Amendment Effective Date in an aggregate amount not to exceed $2,800,000;

(j) legal fees and expenses incurred prior to the Second Amendment Effective Date in an aggregate amount not to exceed $1,200,000;

(k) severance costs and expenses in an aggregate amount not to exceed $2,500,000; and

(l) any gains realized from the repurchase by the Borrower or any Restricted Subsidiary of any of their Debt at a discount.”.

2.1.4 The definition of “Consolidated Net Income” in the Canadian Credit Agreement is hereby amended as follows: (i) the word “and” at the end of clause (f) is deleted, (ii) the period at the end of clause (g) is replaced with a semi-colon, and (iii) the following new clauses are inserted which read:

“(h) any fees and expenses incurred in connection with (i) the proposed Barnett Shale Transaction in an aggregate amount not to exceed $9,000,000 and (ii) the Second Omnibus Amendment;

(i) audit fees and expenses incurred prior to the Second Amendment Effective Date in an aggregate amount not to exceed $2,800,000;

(j) legal fees and expenses incurred prior to the Second Amendment Effective Date in an aggregate amount not to exceed $1,200,000;

(k) severance costs and expenses in an aggregate amount not to exceed $2,500,000; and

(l) any gains realized from the repurchase by the Parent or any Restricted Subsidiary of any of their Debt at a discount.”.

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2.1.5 The definition of “MLP Barnett Shale Assets” in the U.S. Credit Agreement is hereby amended to read:

“MLP Barnett Shale Assets” means those assets, which have been disclosed by the Borrower to the Global Administrative Agent prior to the Effective Date (or such other associated assets not material and adverse to the Combined Lenders, taken as a whole), owned by the Borrower located in the Barnett Shale in the Fort Worth Basin of North Texas consisting of, but not limited to, producing wells, undeveloped locations (including proved and unproved reserves) and related well equipment leases and surface rights.

2.1.6 The definition of “MLP Barnett Shale Assets” in the Canadian Credit Agreement is hereby amended to read:

“MLP Barnett Shale Assets” means those assets, which have been disclosed by the Parent to the Global Administrative Agent prior to the Effective Date (or such other associated assets not material and adverse to the Combined Lenders, taken as a whole), owned by the Borrower located in the Barnett Shale in the Fort Worth Basin of North Texas consisting of, but not limited to, producing wells, undeveloped locations (including proved and unproved reserves) and related well equipment leases and surface rights.

2.1.7 The definitions of “Combined LC Exposure”, “Second Amendment Effective Date”, “Post 8/6/12 Incremental Combined LC Exposure”, “Second Omnibus Amendment”, “Senior Secured Debt”, “Total Debt” and “Total Debt Leverage Condition” are added where alphabetically appropriate to the U.S. Credit Agreement, which definitions read:

“Combined LC Exposure” means, collectively, the LC Exposure and the Canadian LC Exposure.

“Post 8/6/12 Incremental Combined LC Exposure” means, as of any day, the amount (if any) by which (i) the Combined LC Exposure as of such day exceeds (ii) the Combined LC Exposure as of the Second Amendment Effective Date.

“Second Amendment Effective Date” means August 6, 2012.

“Second Omnibus Amendment” means that certain Omnibus Amendment No. 2 To Combined Credit Agreements, dated as of the Second Amendment Effective Date, among the Borrower, QRCI, the Global Administrative Agent, the Canadian Administrative Agent, and each of the Lenders and Canadian Lenders party thereto.

“Senior Secured Debt” means, as of any date of determination, all Debt of the Borrower and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, which is secured by a Lien on any of their Properties, as of such date, including the Secured Indebtedness and the Canadian Secured Indebtedness, but for the avoidance of doubt, excluding any of the Existing Debt.

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“Total Debt” means, as of any date of determination, all Debt of the Borrower and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of such date.

“Total Debt Leverage Condition” means, as of any date of determination occurring after June 30, 2013, a condition that shall be satisfied if the ratio of (i) Total Debt as of such day to (ii) EBITDAX for the most recent period of four fiscal quarters then ended is less than or equal to 4.0 to 1.0.

2.1.8 The definitions of “Combined LC Exposure”, “Post 8/6/12 Incremental Combined LC Exposure”, “Second Amendment Effective Date”, “Second Omnibus Amendment”, “Senior Secured Debt”, “Total Debt” and “Total Debt Leverage Condition” are added where alphabetically appropriate to the Canadian Credit Agreement, which definitions read:

“Combined LC Exposure” means, collectively, the LC Exposure and the U.S. LC Exposure.

“Post 8/6/12 Incremental Combined LC Exposure” means, as of any day, the amount (if any) by which (i) the Combined LC Exposure as of such day exceeds (ii) the Combined LC Exposure as of the Second Amendment Effective Date.

“Second Amendment Effective Date” means August 6, 2012.

“Second Omnibus Amendment” means that certain Omnibus Amendment No. 2 To Combined Credit Agreements, dated as of the Second Amendment Effective Date, among the Parent, Borrower, the Global Administrative Agent, the Administrative Agent, and each of the U.S. Lenders and Lenders party thereto.

“Senior Secured Debt” means, as of any date of determination, all Debt of the Parent and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, which is secured by a Lien on any of their Properties, including the Secured Indebtedness and the U.S. Secured Indebtedness, but for the avoidance of doubt, excluding any of the Existing Debt.

“Total Debt” means, as of any date of determination, all Debt of the Parent and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of such date.

“Total Debt Leverage Condition” means, as of any date of determination occurring after June 30, 2013, a condition that shall be satisfied if the ratio of (i) Total Debt as of such day to (ii) EBITDAX for the most recent period of four fiscal quarters then ended is less than or equal to 4.0 to 1.0.

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2.2 Amendments to Section 9.01(a)—Interest Coverage Ratio.

2.2.1 Section 9.01(a) of the U.S. Credit Agreement is hereby amended to read:

“(a) Interest Coverage Ratio. The Borrower will not, as of the last day of any fiscal quarter set forth below, permit its ratio of (i) EBITDAX for the period of four fiscal quarters then ending to (ii) Cash Interest Expense for such period, to be less than the ratio set forth opposite such date:

Fiscal Quarter Ending	Minimum Interest Coverage Ratio
September 30, 2012—March 31, 2014	1.5 to 1.0
June 30, 2014	2.0 to 1.0
September 30, 2014 and thereafter	2.5 to 1.0.”

2.2.2 Section 9.01(a) of the Canadian Credit Agreement is hereby amended to read:

“(a) Interest Coverage Ratio. The Parent will not, as of the last day of any fiscal quarter set forth below, permit its ratio of (i) EBITDAX for the period of four fiscal quarters then ending to (ii) Cash Interest Expense for such period, to be less than the ratio set forth opposite such date:

Fiscal Quarter Ending	Minimum Interest Coverage Ratio
September 30, 2012—March 31, 2014	1.5 to 1.0
June 30, 2014	2.0 to 1.0
September 30, 2014 and thereafter	2.5 to 1.0.”

2.3 Addition of Section 9.01(c)-Senior Secured Leverage Ratio.

2.3.1 Section 9.01 of the U.S. Credit Agreement is hereby amended to add the following Section 9.01(c), which reads:

“(c) Senior Secured Debt Ratio. The Borrower will not, as of the last day of any fiscal quarter, commencing with the fiscal quarter ending September 30, 2012, permit its ratio of (i) Senior Secured Debt as of such day to (ii) EBITDAX for the period of four fiscal quarters then ending to be greater than 2.5 to 1.0.”.

2.3.2 Section 9.01 of the Canadian Credit Agreement is hereby amended to add the following Section 9.01(c), which reads:

“(c) Senior Secured Debt Ratio. The Parent will not, as of the last day of any fiscal quarter, commencing with the fiscal quarter ending September 30, 2012, permit its ratio of (i) Senior Secured Debt as of such day to (ii) EBITDAX for the period of four fiscal quarters then ending to be greater than 2.5 to 1.0.”.

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2.4 Amendments to Section 9.02.

2.4.1 Section 9.02(e) of the U.S. Credit Agreement is hereby amended to read:

“(e) Debt of a Person which becomes a Restricted Subsidiary after the date hereof, provided that (i) such Debt existed at the time such Person became a Restricted Subsidiary and was not created in anticipation thereof, (ii) immediately after giving effect to the acquisition of such Person by the Borrower or a Restricted Subsidiary, no Default or Event of Default shall have occurred and be continuing and (iii) that all Debt incurred under this clause (e), together with all Debt incurred pursuant to clause (j) below, does not exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $45,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.2 Section 9.02(e) of the Canadian Credit Agreement is hereby amended to read:

“(e) Debt of a Person which becomes a Restricted Subsidiary after the date hereof, provided that (i) such Debt existed at the time such Person became a Restricted Subsidiary and was not created in anticipation thereof, (ii) immediately after giving effect to the acquisition of such Person by the Parent or a Restricted Subsidiary, no Default or Event of Default shall have occurred and be continuing and (iii) that all Debt incurred under this clause (e), together with all Debt incurred pursuant to clause (j) below, does not exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $45,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.3 Section 9.02(j) of the U.S. Credit Agreement is hereby amended to read:

“(j) Debt incurred to finance the acquisition, construction or improvement of fixed or capital assets (including, without limitation, obligations in connection with Capital Leases) secured by Liens permitted by Section 9.03(i); provided that all Debt incurred under this clause (j), together with all Debt incurred pursuant to clause (e) above, does not exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $45,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.4 Section 9.02(j) of the Canadian Credit Agreement is hereby amended to read:

“(j) Debt incurred to finance the acquisition, construction or improvement of fixed or capital assets (including, without limitation, obligations in connection with Capital Leases) secured by Liens permitted by Section 9.03(i); provided that all Debt incurred under this clause (j), together with all Debt

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incurred pursuant to clause (e) above, does not exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $45,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.5 Section 9.02(k) of the U.S. Credit Agreement is hereby amended to read:

“(k) other Debt not to exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $65,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.6 Section 9.02(k) of the Canadian Credit Agreement is hereby amended to read

“(k) other Debt not to exceed (x) if the Total Debt Leverage Condition is not satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt), $25,000,000 and (y) otherwise, $65,000,000, in each case, in the aggregate at any one time outstanding;”.

2.4.7 Section 9.02(n) of the U.S. Credit Agreement is hereby amended to add the words “if the Total Debt Leverage Condition is satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt),” to the beginning of Section 9.02(n).

2.4.8 Section 9.02(n) of the Canadian Credit Agreement is hereby amended to add the words “if the Total Debt Leverage Condition is satisfied at the time of the incurrence thereof (after giving effect to such incurrence and any concurrent repayment of Debt),” to the beginning of Section 9.02(n).

2.5 Amendments to Section 9.04(d)—Dividends and Distributions.

2.5.1 Section 9.04(d) of the U.S. Credit Agreement is hereby amended to read:

“(d) to the extent not permitted by clauses (a) to (c) above, the Borrower may make Restricted Payments up to an aggregate amount of $15,000,000; provided that, if the Total Debt Leverage Condition is satisfied at the time when the Restricted Payment is made, the Borrower may make (i) Restricted Payments up to an aggregate amount of $20,000,000 and (ii) additional Restricted Payments up to an aggregate amount of $55,000,000 (not including Restricted Payments made under the foregoing clause (i)) or dividends, distributions or transfers of Equity Interests or other assets or Debt of an Unrestricted Subsidiary if, in the case of Restricted Payments or such dividends, distributions or transfers in respect of an Unrestricted Subsidiary, in each case, made under this clause (ii), (A) no Default has occurred and is continuing at the time such Restricted Payment or such dividend, transfer or distribution is made or

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would result from the making of such Restricted Payment or such dividend, transfer or distribution, (B) the Minimum Liquidity after giving effect to such Restricted Payment or such dividend, transfer or distribution is not less than the greater of (x) 25% of the Global Borrowing Base then in effect and (y) $250,000,000, and (C) after giving effect to such Restricted Payment or such dividend, transfer or distribution, the Borrower is in pro forma compliance with Section 9.01;”.

2.5.2 Section 9.04(d) of the Canadian Credit Agreement is hereby amended to read:

“(d) to the extent not permitted by clauses (a) to (c) above, the Parent may make Restricted Payments up to an aggregate amount of $15,000,000; provided that, if the Total Debt Leverage Condition is satisfied at the time when the Restricted Payment is made, the Parent may make (i) Restricted Payments up to an aggregate amount of US$20,000,000 and (ii) additional Restricted Payments up to an aggregate amount of US$55,000,000 (not including Restricted Payments made under the foregoing clause (i)) or dividends, distributions or transfers of Equity Interests or other assets or Debt of an Unrestricted Subsidiary if, in the case of Restricted Payments or such dividends, distributions or transfers in respect of an Unrestricted Subsidiary, in each case, made under this clause (ii), (A) no Default has occurred and is continuing at the time such Restricted Payment or such dividend, transfer or distribution is made or would result from the making of such Restricted Payment or such dividend, transfer or distribution, (B) the Minimum Liquidity after giving effect to such Restricted Payment or such dividend, transfer or distribution is not less than the greater of (x) 25% of the Global Borrowing Base then in effect and (y) US$250,000,000, and (C) after giving effect to such Restricted Payment or such dividend, transfer or distribution, the Borrower is in pro forma compliance with Section 9.01;”.

2.6 Amendment to Section 9.05(a)-Limitations on Repayment of Debt.

2.6.1 Section 9.05(a) of the U.S. Credit Agreement is hereby amended to read:

“(a) call, make or offer to make any optional or voluntary Redemption (whether in whole or in part) of any Existing Debt or Permitted Additional Debt, provided, however, that the Borrower and its Restricted Subsidiaries may:

(I) so long as the Total Debt Leverage Condition is not satisfied, Redeem Existing Debt or Permitted Additional Debt if (w) no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, (x) the Global Borrowing Base Utilization Percentage, after giving effect to the making of such Redemption, is less than 25% (it being understood that for purposes of this clause (x) any amount of Combined LC Exposure that has been cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent shall be deemed not to constitute Combined Credit Exposure for purposes of determining the Global Borrowing Base Utilization Percentage), (y) the Combined Loans are concurrently prepaid and,

9

after prepaying all of the Combined Loans, any Post 8/6/12 Incremental Combined LC Exposure at such time is cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent, in an aggregate amount equal to the amount of such Redemption (or, if less, an amount equal to the sum of (1) the outstanding principal amount of all Combined Loans and (2) any Post 8/6/12 Combined LC Exposure at such time) and (z) after giving effect to such Redemption, the Borrower is in pro forma compliance with Section 9.01, and

(II) so long as the Total Debt Leverage Condition is satisfied, (i) Redeem Existing Debt (other than the Existing Subordinated Notes and Existing Convertible Debentures) or Permitted Additional Debt up to an aggregate amount of $20,000,000, (ii) Redeem the Existing Subordinated Notes and Existing Convertible Debentures if, in the case of Redemptions made under this clause (ii), (A) no Default or Global Borrowing Base Deficiency has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, and (B) the Minimum Liquidity after giving effect to such Redemption is not less than the greater of (1) 15% of the Global Borrowing Base then in effect and (2) $150,000,000, and (iii) Redeem additional Existing Debt or Permitted Additional Debt if, in the case of Redemptions made under this clause (iii), (x) no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, (y) the Minimum Liquidity after giving effect to such Redemption is not less than the greater of (1) 25% of the Global Borrowing Base then in effect and (2) $250,000,000 and (z) after giving effect to such Redemption, the Borrower is in pro forma compliance with Section 9.01; and

(III) at any time,

(i) Redeem Existing Debt or Permitted Additional Debt using the net cash proceeds of sales of Equity Interests of the Borrower if no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption;

(ii) Redeem Existing Debt or Permitted Additional Debt in connection with any refinancing thereof permitted pursuant to Section 9.02(o);”.

2.6.2 Section 9.05(a) of the Canadian Credit Agreement is hereby amended to read:

“(a) call, make or offer to make any optional or voluntary Redemption (whether in whole or in part) of any Existing Debt or Permitted Additional Debt, provided, however, that the Parent and its Restricted Subsidiaries may:

(I) so long as the Total Debt Leverage Condition is not satisfied, Redeem Existing Debt or Permitted Additional Debt if (w) no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, (x) the Global Borrowing Base Utilization Percentage, after

10

giving effect to the making of such Redemption, is less than 25% (it being understood that for purposes of this clause (x) any amount of Combined LC Exposure that has been cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent shall be deemed not to constitute Combined Credit Exposure for purposes of determining the Global Borrowing Base Utilization Percentage), (y) the Combined Loans are concurrently prepaid and, after prepaying all of the Combined Loans, any Post 8/6/12 Incremental Combined LC Exposure at such time is cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent, in an aggregate amount equal to the amount of such Redemption (or, if less, an amount equal to the sum of (1) the outstanding principal amount of all Combined Loans and (2) any Post 8/6/12 Combined LC Exposure at such time) and (z) after giving effect to such Redemption, the Borrower is in pro forma compliance with Section 9.01, and

(II) so long as the Total Debt Leverage Condition is satisfied, (i) Redeem Existing Debt (other than the Existing Subordinated Notes and Existing Convertible Debentures) or Permitted Additional Debt up to an aggregate amount of US$20,000,000, (ii) Redeem the Existing Subordinated Notes and Existing Convertible Debentures if, in the case of Redemptions made under this clause (ii), (A) no Default or Global Borrowing Base Deficiency has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, and (B) the Minimum Liquidity after giving effect to such Redemption is not less than the greater of (1) 15% of the Global Borrowing Base then in effect and (2) US$150,000,000 and (iii) Redeem additional Existing Debt or Permitted Additional Debt if, in the case of Redemptions made under this clause (iii), (x) no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption, (y) the Minimum Liquidity after giving effect to such Redemption is not less than the greater of (1) 25% of the Global Borrowing Base then in effect and (2) US$250,000,000 and (z) after giving effect to such Redemption, the Parent is in pro forma compliance with Section 9.01;

(III) at any time,

(i) Redeem Existing Debt or Permitted Additional Debt using the net cash proceeds of sales of Equity Interests of the Parent if no Default has occurred and is continuing at the time such Redemption is made or would result from the making of such Redemption;

(ii) Redeem Existing Debt or Permitted Additional Debt in connection with any refinancing thereof permitted pursuant to Section 9.02(o);”.

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2.7 Amendment to Section 9.10(d).

2.7.1 The following sentence is hereby added at the end of Section 9.10(d) of the U.S. Credit Agreement: “Notwithstanding the foregoing, in no event shall the Borrower or any Restricted Subsidiary terminate, unwind, cancel or otherwise dispose of any Oil and Gas Swap Agreements having settlement payments calculated with respect to the price of Hydrocarbons during any period prior to December 31, 2014; provided that the Borrower and any Restricted Subsidiary may (x) consent to the assignment of any Oil and Gas Swap Agreement (whether effected by means of novation, substantially concurrent termination and replacement that serves as a substitute for novation, or other mechanism reasonably acceptable to the Administrative Agent) from a Secured Swap Provider to a Person who is, or after giving effect to such assignment, will be, a Secured Swap Provider (it being understood that any such assignment shall not change the economic terms (for example, price, volume, the timing of settlement payments, tenor and similar terms) of such assigned Oil and Gas Swap Agreement) and (y) exercise all rights and remedies under any Oil and Gas Swap Agreement following the occurrence of an event of default or termination event with respect to the applicable counterparty thereunder.”

2.7.2 The following sentence is hereby added at the end of Section 9.10(d) of the Canadian Credit Agreement: “Notwithstanding the foregoing, in no event shall the Parent or any Restricted Subsidiary terminate, unwind, cancel or otherwise dispose of any Oil and Gas Swap Agreements having settlement payments calculated with respect to the price of Hydrocarbons during any period prior to December 31, 2014; provided that the Borrower and any Restricted Subsidiary may (x) consent to the assignment of any Oil and Gas Swap Agreement (whether effected by means of novation, substantially concurrent termination and replacement that serves as a substitute for novation, or other mechanism reasonably acceptable to the Administrative Agent) from a Secured Swap Provider to a Person who is, or after giving effect to such assignment, will be, a Secured Swap Provider (it being understood that any such assignment shall not change the economic terms (for example, price, volume, the timing of settlement payments, tenor and similar terms) of such assigned Oil and Gas Swap Agreement) and (y) exercise all rights and remedies under any Oil and Gas Swap Agreement following the occurrence of an event of default or termination event with respect to the applicable counterparty thereunder.”

2.8 Amendment to Section 9.10(i).

2.8.1 Section 9.10(i) of the U.S. Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(i) transfers and other dispositions of Oil and Gas Properties and Oil and Gas Swap Agreements as contemplated by the Barnett Shale Transaction;

provided that:

(x) if the contribution of the Equity Interests of MLP Opco to MLP in connection with the Barnett Shale Transaction is consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in April 2013, then each of the Global Borrowing Base and U.S. Borrowing Base will be reduced by $200,000,000, and

12

(y) if the Total Debt Leverage Condition is not satisfied immediately after the consummation of the Barnett Shale Transaction, the Borrower shall use the net cash proceeds of the Contribution Consideration first to prepay Combined Loans and, as necessary, cash collateralize Combined LC Exposure in a manner satisfactory to each Issuing Bank and the Administrative Agent in an amount so that, after giving effect to any such prepayments or cash collateralization (it being understood that for purposes of this clause first any amount of Combined LC Exposure that has been cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent shall be deemed not to constitute Combined Credit Exposure for purposes of determining the Global Borrowing Base Utilization Percentage) the Global Borrowing Base Utilization Percentage is less than 25% (or, if greater, an amount sufficient to cure any borrowing base deficiencies), second to, in equal amounts, (1) prepay Combined Loans and, after prepaying all of the Combined Loans, to cash collateralize all Post 8/6/12 Incremental Combined LC Exposure in a manner satisfactory to each Issuing Bank and the Administrative Agent and (2) repay, repurchase, retire or otherwise Redeem Existing Debt or Permitted Additional Debt until the outstanding principal amount of the Combined Loans equals $0 and all Post 8/6/12 Incremental Combined LC Exposure has been collateralized as indicated above and third to repay, repurchase, retire or otherwise Redeem Existing Debt or Permitted Additional Debt;

provided further, however, that if the Barnett Shale Transaction has not been consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in April 2013, clause (x) of the preceding proviso shall not apply and instead the Global Borrowing Base and the U.S. Borrowing Base shall be reduced in a manner consistent with the requirements and procedures set forth in Section 9.10(d)(iii)-(v), to the extent applicable, and the net cash proceeds of the Contribution Consideration shall be applied according to the preceding clause (y), if clause (y) is applicable, and otherwise pursuant to Section 9.10(d)(v), to the extent applicable.”

2.8.2 Section 9.10(i) of the Canadian Credit Agreement is hereby deleted and replaced in its entirety with the following text:

“(i) transfers and other dispositions of Oil and Gas Properties and Oil and Gas Swap Agreements as contemplated by the Barnett Shale Transaction;

provided that:

(x) if the contribution of the Equity Interests of MLP Opco to MLP in connection with the Barnett Shale Transaction is consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in April 2013, then each of the Global Borrowing Base and U.S. Borrowing Base will be reduced by US$200,000,000, and

13

(y) if the Total Debt Leverage Condition is not satisfied immediately after the consummation of the Barnett Shale Transaction, the Parent shall use the net cash proceeds of the Contribution Consideration first to prepay Combined Loans and, as necessary, cash collateralize Combined LC Exposure in a manner satisfactory to each Issuing Bank and the Administrative Agent in an amount so that, after giving effect to any such prepayments or cash collateralization (it being understood that for purposes of this clause first any amount of Combined LC Exposure that has been cash collateralized in a manner satisfactory to each Issuing Bank and the Administrative Agent shall be deemed not to constitute Combined Credit Exposure for purposes of determining the Global Borrowing Base Utilization Percentage) the Global Borrowing Base Utilization Percentage is less than 25% (or, if greater, an amount sufficient to cure any borrowing base deficiencies), second to, in equal amounts, (1) prepay Combined Loans and, after prepaying all of the Combined Loans, to cash collateralize all Post 8/6/12 Incremental Combined LC Exposure in a manner satisfactory to each Issuing Bank and the Administrative Agent and (2) repay, repurchase, retire or otherwise Redeem Existing Debt or Permitted Additional Debt until the outstanding principal amount of the Combined Loans equals $0 and all Post 8/6/12 Incremental Combined LC Exposure has been collateralized as indicated above and third to repay, repurchase, retire or otherwise Redeem Existing Debt or Permitted Additional Debt;

provided further, however, that if the Barnett Shale Transaction has not been consummated prior to delivery by the Global Administrative Agent of the Proposed Borrowing Base Notice relating to the Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base in April 2013, clause (x) of the preceding proviso shall not apply and instead the Global Borrowing Base and the U.S. Borrowing Base shall be reduced in a manner consistent with the requirements and procedures set forth in Section 9.10(d)(iii)-(v), to the extent applicable, and the net cash proceeds of the Contribution Consideration shall be applied according to the preceding clause (y), if clause (y) is applicable, and otherwise pursuant to Section 9.10(d)(v), to the extent applicable.”

Section 3. Global Borrowing Base Redetermination; Allocation of U.S. Borrowing Base and Canadian Borrowing Base. The Required Lenders and the Combined Borrowers agree that from and after the Amendment Effective Date, the amount of the Global Borrowing Base shall be $850,000,000 and the amount of the U.S. Borrowing Base shall be $670,000,000, with an Allocated U.S. Borrowing Base of $530,000,000 and an Allocated Canadian Borrowing Base of $320,000,000. This provision does not limit redeterminations of the Borrowing Base in accordance with Section 2.07(c) or further adjustments thereto pursuant to Section 8.12(c), Section 9.02(n), Section 9.10(d) or Section 9.10(i) of the Combined Credit Agreements. This Section 3 constitutes a New Borrowing Base Notice in accordance with Section 2.07(d) of the Combined Credit Agreements and a Borrowing Base Allocation Notice in accordance with Section 2.07(e) of the Combined Credit Agreements, in each case, delivered in connection with this second Scheduled Redetermination of the Global Borrowing Base and U.S. Borrowing Base for the 2012 calendar year.

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Section 4. Conditions Precedent. This Amendment shall not become effective until the date on which each of the following conditions is satisfied (the “Second Amendment Effective Date”):

4.1 The Global Administrative Agent shall have received from each of the Combined Borrowers, the Required Lenders, the Global Administrative Agent and the Canadian Administrative Agent counterparts of this Amendment signed on behalf of such Person.

4.2 The Combined Borrowers shall have paid all fees and amounts due and payable in connection with this Amendment on or prior to the Second Amendment Effective Date, including, to the extent invoiced at least one (1) Business Day prior to such date, reimbursement or payment of all documented out-of-pocket expenses required to be reimbursed or paid by the Combined Borrowers under the Combined Credit Agreements.

Section 5. Miscellaneous.

5.1 Confirmation. The provisions of the Combined Credit Agreements, as amended by this Amendment, shall remain in full force and effect following the effectiveness of this Amendment.

5.2 Ratification and Affirmation; Representations and Warranties. Each Combined Borrower hereby (a) acknowledges the terms of this Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document (as defined in the applicable Combined Credit Agreement as used in this Section) to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, notwithstanding the amendments contained herein; and (c) represents and warrants to the Lenders (as defined in the applicable Combined Credit Agreement) that as of the date hereof, after giving effect to the terms of this Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects on and as of the Second Amendment Effective Date, except that to the extent any such representations and warranties are (x) expressly limited to an earlier date, in which case, on the Second Amendment Effective Date such representations and warranties shall continue to be true and correct as of such specified earlier date and (y) qualified by materiality, such representations and warranties (as so qualified) shall continue to be true and correct in all respects and (ii) no Default (as defined in the applicable Combined Credit Agreement) has occurred and is continuing as of the Second Amendment Effective Date.

5.3 Counterparts. This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart hereof.

5.4 Governing Law, Jurisdiction, etc. Sections 12.09 and 12.18 of the Canadian Credit Agreement shall be incorporated herein mutatis mutandis as this Amendment relates to the Canadian Credit Agreement and Sections 12.09 and 12.18 of the U.S. Credit Agreement shall be incorporated herein mutatis mutandis as this Amendment relates to the U.S. Credit Agreement.

[SIGNATURES BEGIN NEXT PAGE]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

QUICKSILVER RESOURCES INC., a Delaware corporation
By:	/s/ John C. Regan
	Name:	John C. Regan
	Title:	Senior Vice president – Chief Financial Officer, Controller and Chief Accounting Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

QUICKSILVER RESOURCES CANADA INC., an Alberta, Canada corporation
By:	/s/ John C. Regan
	Name:  John C. Regan
	Title:    Senior Vice president – Chief Financial Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

JPMORGAN CHASE BANK, N.A., as a Lender under the U.S. Credit Agreement and as Global Administrative Agent
By:	/s/ David Morris
	Name:   David Morris
	Title:    Authorized Officer

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as a Lender under the Canadian Credit Agreement and as Canadian Administrative Agent
By:	/s/ Michael N. Tam
	Name:	Michael N. Tam
	Title:	Senior Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

BANK OF AMERICA, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Ronald E. McKaig
	Name:	Ronald E. McKaig
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

BANK OF AMERICA, N.A., (by its Canada Branch) as a Lender under the Canadian Credit Agreement
By:	/s/ Medina Sales de Andrade
	Name:	Medina Sales de Andrade
	Title:	Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

BRANCH BANKING & TRUST COMPANY, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Ryan K. Michael
	Name:	Ryan K. Michael
	Title:	Senior Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CANADIAN IMPERIAL BANK OF COMMERCE, as a Lender under the Canadian Credit Agreement
By:	/s/ Joelle Chatwin
	Name:	Joelle Chatwin
	Title:	Executive Director
By:	/s/ Brad Kay
	Name:	Brad Kay
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CIBC INC., as a Lender under the U.S. Credit Agreement
By:	/s/ Trudy Nelson
	Name:	Trudy Nelson
	Title:	Authorized Signatory
By:	/s/ Richard Antl
	Name:	Richard Antl
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CITIBANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Phil Ballard
	Name:	Phil Ballard
	Title:	Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CITIBANK, N.A., CANADIAN BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Gordon DeKuyper
	Name:	Gordon DeKuyper
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

COMERICA BANK, as a Lender under the U.S. Credit Agreement
By:	/s/ John S. Lesikar
	Name:	John S. Lesikar
	Title:	Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

COMERICA BANK, CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Omer Ahmed
	Name:	Omer Ahmed
	Title:	Portfolio Manager

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

COMPASS BANK, as a Lender under the U.S. Credit Agreement
By:	/s/ Umar Hassan
	Name:	Umar Hassan
	Title:	Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Tom Byargeon
	Name:	Tom Byargeon
	Title:	Managing Director
By:	/s/ Sharada Manne
	Name:	Sharada Manne
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender under the U.S. Credit Agreement
By:	/s/ Bill O’Daly
	Name:	Bill O’Daly
	Title:	Director
By:	/s/ Michael Spaight
	Name:	Michael Spaight
	Title:	Associate

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

CREDIT SUISSE AG, TORONTO BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Alain Daoust
	Name:	Alain Daoust
	Title:	Director
By:	/s/ Chris Gage
	Name:	Chris Gage
	Title:	Vice President, Product Control

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender under the U.S. Credit Agreement
By:	/s/ Michael Getz
	Name:	Michael Getz
	Title:	Vice President
By:	/s/ Carin Keegan
	Name:	Carin Keegan
	Title:	Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

DEUTSCHE BANK AG CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Paul Jurist
	Name:	Paul Jurist
	Title:	Managing Director and Principal Officer
By:	/s/ Leigh Knowles
	Name:	Leigh Knowles
	Title:	Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

EXPORT DEVELOPMENT CANADA, as a Lender under the U.S. Credit Agreement
By:	/s/ Richard Leong
	Name:	Richard Leong
	Title:	Asset Manager
By:	/s/ Trevor Mulligan
	Name:	Trevor Mulligan
	Title:	Asset Manager

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

GOLDMAN SACHS BANK USA, as a Lender under the U.S. Credit Agreement
By:	/s/ Michelle Latzoni
	Name:	Michelle Latzoni
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

KEYBANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Paul J. Pace
	Name:	Paul J. Pace
	Title:	Senior Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

SUMITOMO MITSUI BANKING CORPORATION, as a Lender under the U.S. Credit Agreement
By:	/s/ Yasuhiro Shirai
	Name:	Yasuhiro Shirai
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

THE BANK OF NOVA SCOTIA, as a Lender under the U.S. Credit Agreement and the Canadian Credit Agreement
By:	/s/ Terry Donovan
	Name:	Terry Donovan
	Title:	Managing Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

THE ROYAL BANK OF SCOTLAND plc, as a Lender under the U.S. Credit Agreement
By:	/s/ James L. Moyes
	Name:	James L. Moyes
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

THE ROYAL BANK OF SCOTLAND N.V. (CANADA) BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Shehan J. De Silva
	Name:	Shehan J. De Silva
	Title:	Vice President
By:	/s/ David Wright
	Name:	David Wright
	Title:	Director Head of Client Management Canada

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

TORONTO DOMINION (NEW YORK) LLC, as a Lender under the U.S. Credit Agreement
By:	/s/ Kelly Hundal
	Name:	Kelly Hundal
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

THE TORONTO-DOMINION BANK, as a Lender under the Canadian Credit Agreement
By:	/s/ Kelly Hundal
	Name:	Kelly Hundal
	Title:	Authorized Signatory

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

U.S. BANK NATIONAL ASSOCIATION, as a Lender under the U.S. Credit Agreement
By:	/s/ Monte E. Deckerd
	Name:	Monte E. Deckerd
	Title:	Senior Vice President

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

UBS LOAN FINANCE LLC, as a Lender under the U.S. Credit Agreement
By:	/s/ Irja R. Otsa
	Name:	Irja R. Otsa
	Title:	Associate Director
By:	/s/ Mary E. Evans
	Name:	Mary E. Evans
	Title:	Associate Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

UBS AG CANADA BRANCH, as a Lender under the Canadian Credit Agreement
By:	/s/ Irja R. Otsa
	Name:	Irja R. Otsa
	Title:	Attorney-in Fact
By:	/s/ Mary E. Evans
	Name:	Mary E. Evans
	Title:	Attorney-in Fact

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

WELLS FARGO BANK, N.A., as a Lender under the U.S. Credit Agreement
By:	/s/ Juan Carlos Sandoval
	Name:	Juan Carlos Sandoval
	Title:	Director

SIGNATURE PAGE TO OMNIBUS AMENDMENT NO. 2 TO

COMBINED CREDIT AGREEMENTS

WELLS FARGO FINANCIAL CORPORATION CANADA, as a Lender under the Canadian Credit Agreement
By:	/s/ Juan Carlos Sandoval
	Name:	Juan Carlos Sandoval
	Title:	Director

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Glenn Darden, certify that:

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:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012

/s/ Glenn Darden

Glenn Darden

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John C. Regan, certify that:

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:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2012

/s/John C. Regan

John C. Regan

Senior Vice President – Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the Quarterly Report on Form 10-Q of Quicksilver Resources Inc. (the “Company”) for the quarter ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, John C. Regan, Senior Vice President – Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, and Glenn Darden, President and Chief Executive Officer of the Company, each certifies that, to his knowledge:

(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.

Date: August 9, 2012

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)

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Derivatives And Fair Value Measurements (Price Collars And Swaps For Anticipated Natural Gas And NGL Production) (Details)	6 Months Ended
	Jun. 30, 2012 MBbls MMcf
Derivatives And Fair Value Measurements [Abstract]
Gas 2012, MMcfd	230
NGL 2012, MBbld	7.0
Gas 2013, MMcfd	150
Gas 2014-2015, MMcfd	110
Gas 2016-2021, MMcfd	45

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Quicksilver Stockholders' Equity (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares authorized	400,000,000		400,000,000
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
Shares of common stock outstanding	173,100,000		171,600,000
Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued, fair value	$ 8.5
Estimate of options expected to vest, and already exercisable	5,200,000
Cash received from the exercise of stock options	0.1
Total intrinsic values of options	0.1
Unrecognized compensation cost related to outstanding unvested restricted stock	7.5
Unrecognized compensation cost, period of recognition	January 2014
Compensation expense	3.4	3.5
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to outstanding unvested restricted stock			17.3
Unrecognized compensation cost, period of recognition			March 2014
Estimated grant date fair value	23.2
Fair value of RSUs settled in cash	3.8
Compensation expense	7.3	6.8
Total fair value of shares vested	$ 9.6

XML

Long-Term Debt (Narrative) (Details) (USD $)	6 Months Ended	0 Months Ended	6 Months Ended			3 Months Ended			21 Months Ended	6 Months Ended		0 Months Ended	6 Months Ended		0 Months Ended
	Jun. 30, 2012 U.S. Credit Facility [Member]	Aug. 09, 2012 Combined Credit Agreements [Member]	Jun. 30, 2012 Combined Credit Agreements [Member]	Jun. 30, 2012 Global Letter Of Credit [Member]	Apr. 30, 2012 Global Letter Of Credit [Member]	Sep. 30, 2014 Scenario, Forecast [Member] Combined Credit Agreements [Member]	Jun. 30, 2014 Scenario, Forecast [Member] Combined Credit Agreements [Member]	Sep. 30, 2012 Scenario, Forecast [Member] Combined Credit Agreements [Member]	Mar. 31, 2014 Scenario, Forecast [Member] Combined Credit Agreements [Member]	Jun. 30, 2012 Maximum [Member] U.S. Credit Facility [Member]	Jun. 30, 2012 Maximum [Member] Canadian Credit Facility [Member]	Aug. 09, 2012 Maximum [Member] Combined Credit Agreements [Member]	Jun. 30, 2012 Minimum [Member] U.S. Credit Facility [Member]	Jun. 30, 2012 Minimum [Member] Canadian Credit Facility [Member]	Aug. 09, 2012 Minimum [Member] Combined Credit Agreements [Member]
Debt Instrument [Line Items]
Principal amount	$ 1,075,000.000
Borrowing capacity		850,000,000		200,000,000	175,000,000
Available borrowing under combined credit agreements			619,000,000
Increase in applicable margin		0.50%
Commitment fee percentage		0.50%								0.50%	0.50%		0.375%	0.375%
Interest coverage ratio			2.5			2.5	2.0		1.5
Senior secured debt leverage ratio								2.5
Total leverage ratio		4.0
Line of credit facilty restricted payments												$ 15,000,000
Line of credit facility borrowing base utilization percentage												25.00%			25.00%

XML

Quicksilver Stockholders' Equity (Assumptions For The Black-Scholes Option Pricing Model For Stock Options Issued) (Details) (USD $)	6 Months Ended
	Jun. 30, 2012 Y	Jun. 30, 2011 Y
Quicksilver Stockholders' Equity [Abstract]
Weighted average grant date fair value	$ 4.21	$ 9.16
Weighted average risk-free interest rate	1.14%	2.38%
Expected life (in years)	6.0	6.0
Wtd avg volatility	68.20%	66.80%
Expected dividends

XML

Property, Plant And Equipment (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Mar. 31, 2012	Jun. 30, 2012	Jun. 30, 2011
Property, Plant and Equipment [Line Items]
Impairment related to oil and gas properties	$ 991,921,000		$ 1,054,668,000	$ 49,063,000
Percentage decrease of Henry Hub stated price		9.50%	23.50%
Percentage decrease of AECO stated price		1.00%	25.50%
U.S. Oil And Gas Properties [Member]
Property, Plant and Equipment [Line Items]
Impairment related to oil and gas properties		62,300,000	898,700,000
Ceiling amount using Henry Hub price		3.73	3.15
Ceiling price using Mont Belvieu price			35.61
Percentage decrease of Mont Belvieu stated price			24.50%
Amount of ceiling tests included in value of derivatives treated as hedges			337,000,000
Additional impairment expenses			337,000,000
Canadian Oil And Gas Properties [Member]
Property, Plant and Equipment [Line Items]
Impairment related to oil and gas properties		400,000	93,200,000
Ceiling amount using AECO price		3.64	2.72
Amount of ceiling tests included in value of derivatives treated as hedges			125,000,000
Additional impairment expenses			$ 125,000,000

XML

Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information [Abstract]

Cash Paid Or Received For Interest And Income Taxes

	For the Six Months Ended
	June 30,
	2012			2011
	(In thousands)
Interest, net of capitalized interest	$	77,940		$	86,198
Income taxes		(1,565	)		5,904

Other Significant Non-cash Transactions

	For the Six  Months Ended June 30,
	2012		2011
	(In thousands)
Working capital related to capital expenditures	$	98,692	$	64,285

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Quicksilver Stockholders' Equity (Restricted Stock And Stock Unit Activity) (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at January 1, 2012, Shares	3,760,696
Granted, Shares	2,020,685
Forfeited, Shares	(469,976)
Outstanding at June 30, 2012, Shares	5,225,484
Payable In Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at January 1, 2012, Shares	2,460,300
Granted, Shares	2,975,885
Vested, Shares	(1,256,620)
Forfeited, Shares	(764,429)
Outstanding at June 30, 2012, Shares	3,415,136
Outstanding at January 1, 2012, Weighted Avg Grant Date Fair Value	12.29
Granted, Weighted Avg Grant Date Fair Value	6.43
Vested, Weighted Avg Grant Date Fair Value	10.71
Forfeited, Weighted Avg Grant Date Fair Value	8.97
Outstanding at June 30, 2012, Wtd Avg Grant Date Fair Value	8.51
Payable In Cash [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding at January 1, 2012, Shares	369,846
Granted, Shares	653,195
Vested, Shares	(186,526)
Forfeited, Shares	(135,624)
Outstanding at June 30, 2012, Shares	700,891
Outstanding at January 1, 2012, Weighted Avg Grant Date Fair Value	13.12
Granted, Weighted Avg Grant Date Fair Value	6.19
Vested, Weighted Avg Grant Date Fair Value	11.22
Forfeited, Weighted Avg Grant Date Fair Value	9.68
Outstanding at June 30, 2012, Wtd Avg Grant Date Fair Value	7.83

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Investment In BBEP (Tables)

6 Months Ended

Jun. 30, 2012

Investment In BBEP [Abstract]

Changes In Balance Of Investment In BBEP

(In thousands)
Balance at December 31, 2010	$	83,341
Equity loss in BBEP		(47,091)
Distributions from BBEP		(12,959)
BBEP Units sold		(10,671)
Balance at June 30, 2011	$	12,620

XML

Long-Term Debt (Schedule Of Outstanding Debt) (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Principal amount	$ 1,075,000.000
Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Equity interests	100.00%
Multiple Subsidiaries Set One [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Equity interests	100.00%
Multiple Subsidiaries Set Two [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Equity interests	65.00%
Maximum [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.50%
Applicable margin in addition to interest rate	1.50%
Maximum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.50%
Minimum [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.375%
Applicable margin in addition to interest rate	0.50%
Minimum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Commitment fee percentage	0.375%
Highest [Member] | Combined Credit Agreements [Member]
Debt Instrument [Line Items]
Principal amount	1,075,000,000	[1]
Scheduled maturity date	Sep. 06, 2016
Interest rate on outstanding borrowings at June 30, 2012	2.42%	[2]
Base interest rate options	LIBOR, ABR, CDOR(4) (5)	[3],[4]
Financial covenants	- Minimum current ratio of 1.0- Minimum EBITDAto cash interest expenseratio of 2.5	[5]
Significant restrictive covenants	- Incurrence of debt - Incurrence of liens- Payment of dividends - Equity purchases - Asset sales - Affiliate transactions - Limitations onderivatives	[5]
Optional redemption	Any time	[5]
Make-whole redemption	N/A	[5]
Change of control	Event of default	[5]
Equity clawback	N/A	[5]
Estimated fair value	394,200,000	[6]
Current ratio	1.0
Minimum EBITDA to cash interest expense ratio	2.5
Equal [Member] | Senior Notes Due 2015 [Member]
Debt Instrument [Line Items]
Principal amount	438,000,000
Scheduled maturity date	Aug. 01, 2015
Interest rate on outstanding borrowings at June 30, 2012	8.25%	[2]
Base interest rate options	N/A
Financial covenants	N/A	[5]
Significant restrictive covenants	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions	[5]
Optional redemption	August 1, 2012: 103.875 2013: 101.938 2014: par	[5]
Make-whole redemption	N/A	[5]
Change of control	Put at 101% of principal plus accrued interest	[5]
Equity clawback	N/A	[5]
Estimated fair value	409,500,000	[6]
Percentage of principal plus accrued interest for change of control	101.00%
Equal [Member] | Senior Notes Due 2016 [Member]
Debt Instrument [Line Items]
Principal amount	591,000,000
Scheduled maturity date	Jan. 01, 2016
Interest rate on outstanding borrowings at June 30, 2012	11.75%	[2]
Base interest rate options	N/A
Financial covenants	N/A	[5]
Significant restrictive covenants	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions	[5]
Optional redemption	July 1, 2013: 105.875 2014: 102.938 2015: par	[5]
Make-whole redemption	Callable prior to July 1, 2013 at make-whole call price of Treasury + 50 bps	[5]
Change of control	Put at 101% of principal plus accrued interest	[5]
Equity clawback	N/A	[5]
Estimated fair value	572,900,000	[6]
Applicable margin in addition to interest rate	50.00%
Percentage of principal plus accrued interest for change of control	101.00%
Equal [Member] | Senior Notes Due 2019 [Member]
Debt Instrument [Line Items]
Principal amount	298,000,000
Scheduled maturity date	Aug. 15, 2019
Interest rate on outstanding borrowings at June 30, 2012	9.125%	[2]
Base interest rate options	N/A
Financial covenants	N/A	[5]
Significant restrictive covenants	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions	[5]
Optional redemption	August 15, 2014: 104.563 2015: 103.042 2016: 101.521 2017: par	[5]
Make-whole redemption	Callable prior to August 15, 2014 at make-whole call price of Treasury + 50 bps	[5]
Change of control	Put at 101% of principal plus accrued interest	[5]
Equity clawback	Redeemable until August 15, 2012 at 109.125%, plus accrued interest for up to 35%	[5]
Estimated fair value	271,200,000	[6]
Applicable margin in addition to interest rate	50.00%
Percentage of principal plus accrued interest for change of control	101.00%
Redemption percentage of equity clawback	109.125%
Maximum accrued interest for equity clawback	35.00%
Lowest [Member] | Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Principal amount	350,000,000	[7]
Scheduled maturity date	Apr. 01, 2016	[7]
Interest rate on outstanding borrowings at June 30, 2012	7.125%	[2],[7]
Base interest rate options	N/A	[7]
Financial covenants	N/A	[5],[7]
Significant restrictive covenants	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions	[5],[7]
Optional redemption	April 1, 2012: 102.375 2013: 101.188 2014: par	[5],[7]
Make-whole redemption	N/A	[5],[7]
Change of control	Put at 101% of principal plus accrued interest	[5],[7]
Equity clawback	N/A	[5],[7]
Estimated fair value	$ 268,600,000	[6],[7]
Percentage of principal plus accrued interest for change of control	101.00%
CDOR Rate [Member] | Maximum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	2.50%
CDOR Rate [Member] | Minimum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.50%
LIBOR [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.00%
LIBOR [Member] | Maximum [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	2.50%
LIBOR [Member] | Minimum [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.50%
Canadian Prime Rate [Member] | Maximum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.50%
Canadian Prime Rate [Member] | Minimum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	0.50%
U.S. Prime Rate [Member] | Maximum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.50%
U.S. Prime Rate [Member] | Minimum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	0.50%
Eurodollar Loans [Member] | Maximum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	2.50%
Eurodollar Loans [Member] | Minimum [Member] | Canadian Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	1.50%
Federal Funds Rate [Member] | U.S. Credit Facility [Member]
Debt Instrument [Line Items]
Applicable margin in addition to interest rate	0.50%
2012 [Member] | Equal [Member] | Senior Notes Due 2015 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	103.875%
2012 [Member] | Lowest [Member] | Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	102.375%
2013 [Member] | Equal [Member] | Senior Notes Due 2015 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	101.938%
2013 [Member] | Equal [Member] | Senior Notes Due 2016 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	105.875%
2013 [Member] | Lowest [Member] | Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	101.188%
2014 [Member] | Equal [Member] | Senior Notes Due 2016 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	102.938%
2014 [Member] | Equal [Member] | Senior Notes Due 2019 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	104.563%
2015 [Member] | Equal [Member] | Senior Notes Due 2019 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	103.042%
2016 [Member] | Equal [Member] | Senior Notes Due 2019 [Member]
Debt Instrument [Line Items]
Redemption percentage of par value	101.521%

[1] The principal amount for the Combined Credit Agreements represents the global borrowing base as of June 30, 2012.

[2] Represents the weighted average borrowing rate payable to lenders.

[3] 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 1.50% to 2.50%, (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 1.0%, plus, in each case under scenario (ii), an applicable margin between 0.50% to 1.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

[4] 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 1.50% and 2.50%, (ii) the Canadian Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50%, (iii) the U.S. Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50% and (iv) adjusted LIBOR (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.50% to 2.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

[5] 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

[6] The estimated fair value is determined using market quotations based on recent trade activity for fixed rate obligations ("Level 2" inputs). We consider debt with variable interest rates to have a fair value equal to its carrying value ("Level 1" input).

[7] Borrowings under the Amended and Restated U.S. Credit Facility are guaranteed by certain of Quicksilver's domestic subsidiaries and are secured 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, Quicksilver Production Partners Operating Ltd., QPP Parent LLC and QPP Holdings LLC (collectively, the "Domestic Pledged Equity"), 65% of the equity interests of Quicksilver Resources Canada Inc. ("QRCI") and certain oil and gas properties and related assets of Quicksilver. 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, 100% of the equity interests of QRCI and any of its Canadian subsidiaries, and certain oil and gas properties and related assets of Quicksilver and QRCI. The other debt presented is based upon structural seniority and priority of payment.

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Derivatives And Fair Value Measurements (Carrying Value Of Derivatives) (Details) (Cash Flow Derivatives [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Derivatives, Fair Value [Line Items]
Derivative fair value at beginning of period	$ 373,467	$ 96,203	$ 342,799	$ 146,762
Change in net amounts receivable and payable	(3,368)	(167)	(7,811)	(384)
Ineffectiveness reported in revenue	8,100	872	4,899	818
Realized losses reported in other revenue			(14,555)
Unrealized gains (losses) reported in other revenue			(21,670)	19,115
Other changes reported in other revenue	(2,630)		(2,630)
Unrealized gains (losses) reported in OCI	42,857	15,872	166,278	(10,634)
Derivative fair value at end of period	342,187	116,349	342,187	116,349
Production Revenue [Member]
Derivatives, Fair Value [Line Items]
Settlements	(56,495)	(15,546)	(105,379)	(39,328)
Other Revenue [Member]
Derivatives, Fair Value [Line Items]
Settlements	$ (19,744)		$ (19,744)

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Derivatives And Fair Value Measurements (Estimated Fair Value Of Derivative Instruments Under Input Levels) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Asset Derivatives [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments	$ 348,725	$ 346,827
Asset Derivatives [Member] | Fair Value, Inputs, Level 2 [Member] | Commodity Contracts [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments	296,842	195,838
Asset Derivatives [Member] | Fair Value, Inputs, Level 3 [Member] | Commodity Contracts [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments	51,883	150,989
Liability Derivatives [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments	6,538	4,028
Liability Derivatives [Member] | Fair Value, Inputs, Level 2 [Member] | Commodity Contracts [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments		4,028
Liability Derivatives [Member] | Fair Value, Inputs, Level 3 [Member] | Commodity Contracts [Member]
Derivatives, Fair Value [Line Items]
Estimated fair value of derivative instruments	$ 6,538

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Commitments And Contingencies (Details) (NGTL [Member], CAD)	6 Months Ended
	Jun. 30, 2012
NGTL [Member]
Increase in letter of credit	35,600,000
Outstanding letters of credit	68,300,000
Delay in construction	1 year
Reduction in financial assurcances	45,000,000

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Condensed Consolidating Financial Information (Schedule of Condensed Consolidated Statements of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	$ 99,516	$ 123,352
Purchases of property, plant and equipment	(307,169)	(396,156)
Proceeds from Crestwood earn-out	41,097
Proceeds from sale of BBEP units		134,423
Proceeds from sale of properties and equipment	3,372	3,123
Net cash used by investing activities	(262,700)	(258,610)
Issuance of debt	255,775	256,445
Repayments of debt	(88,115)	(170,172)
Debt issuance costs	(148)
Distribution of Fortune Creek Partnership funds	(1,845)
Proceeds from exercise of stock options	11	622
Purchase of treasury stock	(2,364)	(4,801)
Net cash provided by financing activities	163,314	82,094
Effect of exchange rates on cash	727	(1,771)
Net increase (decrease) in cash and equivalents	857	(54,935)
Cash and cash equivalents at beginning of period	13,146	54,937
Cash and cash equivalents at end of period	14,003	2
Quicksilver Resources Inc. [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	57,359	96,029
Purchases of property, plant and equipment	(140,256)	(275,753)
Proceeds from Crestwood earn-out	41,097
Proceeds from sale of BBEP units		134,423
Proceeds from sale of properties and equipment	3,060	1,925
Net cash used by investing activities	(96,099)	(139,405)
Issuance of debt	119,000	153,500
Repayments of debt	(75,018)	(160,880)
Debt issuance costs	(148)
Proceeds from exercise of stock options	11	622
Purchase of treasury stock	(2,364)	(4,801)
Net cash provided by financing activities	41,481	(11,559)
Effect of exchange rates on cash
Net increase (decrease) in cash and equivalents	2,741	(54,935)
Cash and cash equivalents at beginning of period	363	54,937
Cash and cash equivalents at end of period	3,104	2
Restricted Guarantor Subsidiaries [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	590	1,137
Purchases of property, plant and equipment	(590)	(1,137)
Proceeds from sale of properties and equipment
Net cash used by investing activities	(590)	(1,137)
Issuance of debt
Repayments of debt
Proceeds from exercise of stock options
Purchase of treasury stock
Net cash provided by financing activities
Effect of exchange rates on cash
Net increase (decrease) in cash and equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Restricted Non-Guarantor Subsidiaries [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	32,987	26,186
Purchases of property, plant and equipment	(157,508)	(119,266)
Proceeds from sale of properties and equipment	312	1,198
Net cash used by investing activities	(157,196)	(118,068)
Issuance of debt	136,775	102,945
Repayments of debt	(13,097)	(9,292)
Net cash provided by financing activities	123,678	93,653
Effect of exchange rates on cash	531	(1,771)
Restricted Subsidiary Eliminations [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities
Purchases of property, plant and equipment
Proceeds from sale of BBEP units
Proceeds from sale of properties and equipment
Net cash used by investing activities
Issuance of debt
Repayments of debt
Proceeds from exercise of stock options
Purchase of treasury stock
Net cash provided by financing activities
Effect of exchange rates on cash
Net increase (decrease) in cash and equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Quicksilver And Restricted Subsidiaries [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	90,936
Purchases of property, plant and equipment	(298,354)
Proceeds from Crestwood earn-out	41,097
Proceeds from sale of properties and equipment	3,372
Net cash used by investing activities	(253,885)
Issuance of debt	255,775
Repayments of debt	(88,115)
Debt issuance costs	(148)
Proceeds from exercise of stock options	11
Purchase of treasury stock	(2,364)
Net cash provided by financing activities	165,159
Effect of exchange rates on cash	531
Net increase (decrease) in cash and equivalents	2,741
Cash and cash equivalents at beginning of period	363
Cash and cash equivalents at end of period	3,104
Unrestricted Non-Guarantor Subsidiaries [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	2
Net increase (decrease) in cash and equivalents	2
Cash and cash equivalents at end of period	2
Fortune Creek [Member]
Schedule of Equity Method Investments [Line Items]
Net cash flow provided (used) by operating activities	8,578
Purchases of property, plant and equipment	(8,815)
Net cash used by investing activities	(8,815)
Distribution of Fortune Creek Partnership funds	(1,845)
Net cash provided by financing activities	(1,845)
Effect of exchange rates on cash	196
Net increase (decrease) in cash and equivalents	(1,886)
Cash and cash equivalents at beginning of period	12,783
Cash and cash equivalents at end of period	$ 10,897

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Property, Plant And Equipment (Schedule Of Property, Plant And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Property, Plant And Equipment [Abstract]
Subject to depletion	$ 5,529,652	$ 5,309,330
Unevaluated costs	481,735	433,341
Accumulated depletion	(3,665,178)	(2,516,195)
Net oil and gas properties	2,346,209	3,226,476
Pipelines and processing facilities	360,596	340,242
General properties	75,418	71,297
Accumulated depreciation	(186,157)	(177,496)
Net other property and equipment	249,857	234,043
Property, plant and equipment - net	$ 2,596,066	$ 3,460,519

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Crestwood Earn-Out

6 Months Ended

Jun. 30, 2012

Crestwood Earn-Out [Abstract]

Crestwood Earn-Out

2. CRESTWOOD EARN-OUT

In October 2010, we completed the sale of all of our interests in KGS to Crestwood. As part of the sale, we have 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 have the right to collect up to an additional $31 million in future earn-out payments in 2013. As of June 30, 2012, we do not anticipate receiving any additional payment and have recognized no assets related to these opportunities.

Note 3 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains additional information regarding the Crestwood Transaction.

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Segment Information (Operating Income And Property And Equipment Costs Incurred) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Segment Reporting Information [Line Items]
Number of geographical segments	2		2
Revenue	$ 168,562	$ 248,446	$ 314,032	$ 460,633
DD&A	51,942	54,704	106,381	107,175
Impairment expense	991,921		1,054,668	49,063
Operating income (loss)	(974,589)	78,676	(1,014,788)	77,883
Property and equipment costs incurred	155,697	161,433	291,264	360,250
Property, plant and equipment, net	2,596,066		2,596,066		3,460,519
U.S. [Member]
Segment Reporting Information [Line Items]
Revenue	149,333	202,788	280,796	382,359
DD&A	39,416	41,580	81,239	80,335
Impairment expense	898,715		961,057
Operating income (loss)	(856,498)	75,615	(865,239)	135,862
Property and equipment costs incurred	44,546	136,454	116,977	259,146
Property, plant and equipment, net	1,833,524		1,833,524		2,752,101
Canada [Member]
Segment Reporting Information [Line Items]
Revenue	18,847	45,383	32,627	77,724
DD&A	10,627	12,087	21,442	23,511
Impairment expense	93,206		93,611	49,063
Operating income (loss)	(100,671)	18,962	(113,786)	(22,352)
Property and equipment costs incurred	103,778	23,640	157,401	98,868
Property, plant and equipment, net	643,274		643,274		596,935
Midstream [Member]
Segment Reporting Information [Line Items]
Revenue	4,280	1,222	7,807	2,489
DD&A	1,314	466	2,515	2,179
Operating income (loss)	1,570	440	2,922	(316)
Property and equipment costs incurred	5,459	1,339	11,439	1,730
Property, plant and equipment, net	110,279		110,279		102,237
Corporate [Member]
Segment Reporting Information [Line Items]
DD&A	585	571	1,185	1,150
Operating income (loss)	(18,990)	(16,341)	(38,685)	(35,311)
Property and equipment costs incurred	1,914		5,447	506
Property, plant and equipment, net	8,989		8,989		9,246
Elimination [Member]
Segment Reporting Information [Line Items]
Revenue	$ (3,898)	$ (947)	$ (7,198)	$ (1,939)

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Investment In BBEP (Narrative) (Details) (USD $)	3 Months Ended	6 Months Ended
	Mar. 31, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2011
Business Acquisition [Line Items]
Gain on sale and disposition of BBEP units			123,752,000
BBEP [Member]
Business Acquisition [Line Items]
Common units of investee owned, units		8,600,000
Percentage of ownership interest		15.00%
Closing price of BBEP		19.46
Equity method investment, units sold			7,100,000
Unrealized loss on commodity derivatives	112,600,000			194,900,000
Unrealized gains on interest rate swaps	$ 1,400,000			$ 4,500,000

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Quicksilver Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2012

Quicksilver Stockholders' Equity [Abstract]

Assumptions For The Black-Scholes Option Pricing Model For Stock Options Issued

	2012	2011
Weighted avg grant date fair value	$4.21	$9.16
Weighted avg risk-free interest rate	1.14%	2.38%
Expected life (in years)	6.0	6.0
Wtd avg volatility	68.2%	66.8%
Expected dividends	-	-

Stock Option Activity

	Shares		Wtd Avg Exercise Price		Wtd Avg Remaining Contractual Life		Aggregate Intrinsic Value
					(In years)		(In thousands)
Outstanding at January 1, 2012		3,760,696	$	12.01
Granted		2,020,685		6.90
Exercised		(1,572)		6.21
Forfeited		(469,976)		8.79
Expired		(84,349)		12.05
Outstanding at June 30, 2012		5,225,484	$	10.33		7.5	$	56
Exercisable at June 30, 2012		2,904,497	$	11.14		6.1	$	-

Restricted Stock And Stock Unit Activity

	Payable in shares				Payable in cash
	Shares		Wtd Avg Grant Date Fair Value		Shares		Wtd Avg Grant Date Fair Value
Outstanding at January 1, 2012		2,460,300	$	12.29		369,846	$	13.12
Granted		2,975,885		6.43		653,195		6.19
Vested		(1,256,620)		10.71		(186,526)		11.22
Forfeited		(764,429)		8.97		(135,624)		9.68
Outstanding at June 30, 2012		3,415,136	$	8.51		700,891	$	7.83

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Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligations [Abstract]

Estimated Asset Retirement Obligation Activity

(In thousands)
Beginning asset retirement obligations	$	85,822
Additional liability incurred		2,125
Change in estimates		4,665
Accretion expense		1,969
Asset retirement costs incurred		(917)
Settlement of liability in excess of obligation recorded		1,544
Currency translation adjustment		(82)
Ending asset retirement obligations		95,126
Less current portion		(254)
Long-term asset retirement obligation	$	94,872

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Quicksilver Stockholders' Equity (Stock Option Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 Y
Quicksilver Stockholders' Equity [Abstract]
Outstanding at January 1, 2012, Shares	3,760,696
Granted, Shares	2,020,685
Exercised, Shares	(1,572)
Forfeited, Shares	(469,976)
Expired, Shares	(84,349)
Outstanding at June 30, 2012, Shares	5,225,484
Exercisable at March 31, 2012, Shares	2,904,497
Outstanding at January 1, 2012, Wtd Avg Exercise Price	$ 12.01
Granted, Wtd Avg Exercise Price	$ 6.90
Exercised, Wtd Avg Exercise Price	$ 6.21
Forfeited, Wtd Avg Exercise Price	$ 8.79
Expired, Wtd Avg Exercise Price	$ 12.05
Outstanding at June 30, 2012, Wtd Avg Exercise Price	$ 10.33
Exercisable at June 30, 2012, Wtd Avg Exercise Price	$ 11.14
Outstanding at June 30, 2012, Wtd Avg Remaining Contractual Life, Years	7.5
Exercisable at June 30, 2012, Wtd Avg Remaining Contractual Life, Years	6.1
Outstanding at June 30, 2012, Aggregate Intrinsic Value	$ 56

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Investment In BBEP (Changes In Balance Of Investment In BBEP) (Details) (BBEP [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
BBEP [Member]
Business Acquisition [Line Items]
Balance at December 31, 2010	$ 83,341
Equity loss in BBEP	(47,091)
Distributions from BBEP	(12,959)
BBEP Units sold	(10,671)
Ending investment balance	$ 12,620

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Reconciliation Of Components Used To Compute Basic And Diluted Net Income Per Common Share

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
	(In thousands, except per share data)
Net income (loss) attributable to Quicksilver	$	(672,541)	$	108,587	$	(732,465)	$	37,829
Basic income allocable to participating securities (1)		-		(1,331)		-		(454)
Basic net income (loss) attributable to Quicksilver	$	(672,541)	$	107,256	$	(732,465)	$	37,375
Impact of assumed conversions – interest on 1.875% convertible debentures, net of income taxes		-		1,880		-		-
Income (loss) available to stockholders assuming conversion of convertible debentures	$	(672,541)	$	109,136	$	(732,465)	$	37,375
Weighted average common shares – basic		170,043		168,984		169,991		168,928
Effect of dilutive securities (2):
Share-based compensation awards		-		868		-		858
Contingently convertible debentures		-		9,816		-		-
Weighted average common shares – diluted		170,043		179,668		169,991		169,786
Earnings (loss) per common share – basic	$	(3.96)	$	0.63	$	(4.31)	$	0.22
Earnings (loss) per common share – diluted	$	(3.96)	$	0.61	$	(4.31)	$	0.22

⁽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.

⁽²⁾ For the six months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculation: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculations: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the six months ended June 30, 2011, we had the following antidilutive shares excluded from the dilution calculation: 9.8 million shares associated with our contingently convertible debt, 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2011, we had the following antidilutive shares excluded from the dilutive calculation: 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units.

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Condensed Consolidating Financial Information (Tables)

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Information [Abstract]

Schedule Of Condensed Consolidated Balance Sheets

	June 30, 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	$	327,459	$	89,675	$	89,179	$	(203,093)	$	303,220	$	9,375	$	11,049	$	(18,748)	$	304,896
Property and equipment		1,824,415		37,768		644,780		-		2,506,963		-		89,103		-		2,596,066
Investment in subsidiaries (equity method)		166,008		-		(33,991)		(166,008)		(33,991)		(36,384)		-		70,375		-
Other assets		531,863		-		55,319		(243,620)		343,562		-		-		-		343,562
Total assets	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524
LIABILITIES AND EQUITY
Current liabilities	$	293,146	$	111,207	$	99,182	$	(203,093)	$	300,442	$	9,375	$	6,097	$	(18,748)	$	297,166
Long-term liabilities		1,977,806		21,969		484,364		(243,620)		2,240,519		-		82		127,964		2,368,565
Stockholders' equity		578,793		(5,733)		171,741		(166,008)		578,793		(36,384)		93,973		(57,589)		578,793
Total liabilities and equity	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524

	December 31, 2011
	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	$	336,893	$	87,767	$	63,711	$	(200,727)	$	287,644	$	-	$	27,533	$	(14,750)	$	300,427
Property and equipment		2,743,379		37,936		598,443		-		3,379,758		-		80,761		-		3,460,519
Investment in subsidiaries (equity method)		241,680		-		(29,449)		(241,680)		(29,449)		(29,449)		-		58,898		-
Other assets		401,279		-		76,857		(243,620)		234,516		-		-		-		234,516
Total assets	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462
LIABILITIES AND EQUITY
Current liabilities	$	348,512	$	109,938	$	76,450	$	(200,727)	$	334,173	$	-	$	14,750	$	(14,750)	$	334,173
Long-term liabilities		2,112,800		21,903		385,294		(243,620)		2,276,377		-		80		122,913		2,399,370
Stockholders' equity		1,261,919		(6,138)		247,818		(241,680)		1,261,919		(29,449)		93,464		(64,015)		1,261,919
Total liabilities and equity	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462

Schedule Of Condensed Consolidated Statements Of Income

	For the Three Months Ended June 30, 2012
	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	$	149,333	$	1,078	$	18,846	$	(695)	$	168,562	$	-	$	3,202	$	(3,202)	$	168,562
Operating expenses		1,023,740		893		120,599		(695)		1,144,537		-		1,816		(3,202)		1,143,151
Equity in net earnings of subsidiaries		(78,560)		-		(1,051)		78,560		(1,051)		1,386		-		(335)		-
Operating income		(952,967)		185		(102,804)		78,560		(977,026)		1,386		1,386		(335)		(974,589)
Fortune Creek Accretion		-		-		-		-		-		-		-		(4,830)		(4,830)
Interest expense and other		(37,971)		-		(2,040)		-		(40,011)		-		-		-		(40,011)
Income tax (expense) benefit		318,397		(65)		26,164		-		344,496		-		-		2,393		346,889
Net income	$	(672,541)	$	120	$	(78,680)	$	78,560	$	(672,541)	$	1,386	$	1,386	$	(2,772)	$	(672,541)
Other comprehensive income		(15,218)		-		(10,294)		10,294		(15,218)		-		-		-		(15,218)
Equity in OCI of subsidiaries		(10,294)		-		-		-		(10,294)		-		-		-		(10,294)
Comprehensive income (loss)	$	(698,053)	$	120	$	(88,974)	$	88,854	$	(698,053)	$	1,386	$	1,386	$	(2,772)	$	(698,053)

	For the Three Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non-Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	202,788	$	1,222	$	45,383	$	(947)	$	248,446
Operating expenses		142,389		782		27,546		(947)		169,770
Equity in net earnings of subsidiaries		11,855		-		-		(11,855)		-
Operating income (loss)		72,254		440		17,837		(11,855)		78,676
Loss from earnings of BBEP		(26,207)		-		-		-		(26,207)
Interest expense and other		77,085		-		(1,459)		-		75,626
Income tax expense (benefit)		(14,545)		(154)		(4,809)		-		(19,508)
Net income	$	108,587	$	286	$	11,569	$	(11,855)	$	108,587
Other comprehensive income		3,270		-		(5,158)		5,158		3,270
Equity in OCI of subsidiaries		(5,158)		-		-		-		(5,158)
Comprehensive income (loss)	$	106,699	$	286	$	6,411	$	(6,697)	$	106,699

	For the Six Months Ended June 30, 2012
	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	$	280,796	$	2,208	$	32,626	$	(1,598)	$	314,032	$	-	$	5,599	$	(5,599)	$	314,032
Operating expenses		1,223,655		1,802		148,574		(1,598)		1,372,433		-		3,083		(5,599)		1,369,917
Crestwood earn-out		41,097		-		-		-		41,097		-		-		-		41,097
Equity in net earnings of subsidiaries		(93,893)		-		(4,662)		93,893		(4,662)		2,516		-		2,146		-
Operating income		(995,655)		406		(120,610)		93,893		(1,021,966)		2,516		2,516		2,146		(1,014,788)
Fortune Creek Accretion		-		-		-		-		-		-		-		(9,571)		(9,571)
Interest expense and other		(76,615)		-		(3,474)		-		(80,089)		-		-		-		(80,089)
Income tax (expense) benefit		339,805		(142)		29,927		-		369,590		-		-		2,393		371,983
Net income	$	(732,465)	$	264	$	(94,157)	$	93,893	$	(732,465)	$	2,516	$	2,516	$	(5,032)	$	(732,465)
Other comprehensive income		23,589		-		18,082		(18,082)		23,589		-		-		-		23,589
Equity in OCI of subsidiaries		18,082		-		-		-		18,082		-		-		-		18,082
Comprehensive income (loss)	$	(690,794)	$	264	$	(76,075)	$	75,811	$	(690,794)	$	2,516	$	2,516	$	(5,032)	$	(690,794)

	For the Six Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non- Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	382,359	$	2,489	$	77,724	$	(1,939)	$	460,633
Operating expenses		279,559		2,804		102,326		(1,939)		382,750
Equity in net earnings of subsidiaries		(21,954)		-		-		21,954		-
Operating income (loss)		80,846		(315)		(24,602)		21,954		77,883
Loss from earnings of BBEP		(47,091)		-		-		-		(47,091)
Interest expense and other		33,815		-		(3,246)		-		30,569
Income tax (expense) benefit		(29,741)		109		6,100		-		(23,532)
Net income (loss)	$	37,829	$	(206)	$	(21,748)	$	21,954	$	37,829
Other comprehensive income		(24,975)		-		1,677		(1,677)		(24,975)
Equity in OCI of subsidiaries		1,677		-		-		-		1,677
Comprehensive income (loss)	$	14,531	$	(206)	$	(20,071)	$	20,277	$	14,531

Schedule Of Condensed Consolidated Statements Of Cash Flows

	For the Six Months Ended June 30, 2012
	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 (used) 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 Crestood 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		(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 (used) by 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

	For the Six Months Ended June 30, 2011
			Restricted		Restricted				Quicksilver
	Quicksilver		Guarantor		Non-Guarantor		Consolidating		Resources Inc.
	Resources Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(In thousands)
Net cash flow provided by operations	$	96,029	$	1,137	$	26,186	$	-	$	123,352
Capital expenditures		(275,753)		(1,137)		(119,266)		-		(396,156)
Proceeds from sale of BBEP units		134,423		-		-		-		134,423
Proceeds from sale of properties and equipment		1,925		-		1,198		-		3,123
Net cash flow used by investing activities		(139,405)		(1,137)		(118,068)		-		(258,610)
Issuance of debt		153,500		-		102,945		-		256,445
Repayments of debt		(160,880)		-		(9,292)		-		(170,172)
Proceeds from exercise of stock options		622		-		-		-		622
Purchase of treasury stock		(4,801)		-		-		-		(4,801)
Net cash flow provided (used) by financing activities		(11,559)		-		93,653		-		82,094
Effect of exchange rates on cash		-		-		(1,771)		-		(1,771)
Net decrease in cash and equivalents		(54,935)		-		-		-		(54,935)
Cash and equivalents at beginning of period		54,937		-		-		-		54,937
Cash and equivalents at end of period	$	2	$	-	$	-	$	-	$	2

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Accounting Policies And Disclosures

6 Months Ended

Jun. 30, 2012

Accounting Policies And Disclosures [Abstract]

Accounting Policies And Disclosures

1. 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, 2012 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 our management 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. Management believes its 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 2011 Annual Report on Form 10-K.

Immaterial Restatement

The consolidated financial statements as of and for the year ended December 31, 2010 were restated as disclosed within Item 8, Note 2 in the 2011 Annual Report on Form 10-K to increase the previously recognized gain related to the sale of our interests in KGS by $20.7 million and to provide additional deferred taxes on the increased gain. The previously reported gain excluded certain liabilities for intercompany transactions related to services performed by KGS for our U.S. exploration and production segment, which should have been included in the gain calculation. Additional depletion expense was recognized due to the inclusion of additional future development costs in the 2010 depletion calculation. The results of this restatement, which had no impact on our total cash flow from operations, investing and financing activities as reported, impacted the retained earnings and the total stockholder's equity as of June 30, 2011. Previously, retained earnings and total stockholder's equity were reported as $291.9 million and $1,080 million, respectively, in the Form 10-Q for the quarter ended June 30, 2011. These balances have been restated to $302.4 million and $1,091 million, respectively, within the Condensed Consolidated Statement of Equity as of June 30, 2011.

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.

In June 2011, the FASB issued an amendment to accounting guidance to update the presentation of comprehensive income in consolidated financial statements. Under the amended guidance, the presentation of total comprehensive income, the components of net income, and the components of other comprehensive income may be made either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance became effective for us beginning with the quarter ended March 31, 2012, and requires retrospective application to earlier periods presented. Our condensed consolidated statements of income (loss) and comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011 contain the required disclosures. The implementation of this accounting pronouncement also resulted in increased disclosure in Note 12.

In May 2011, the FASB issued an amendment to the accounting guidance for fair value measurement and disclosure. Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in stockholders' equity. This guidance became effective for us beginning with the quarter ended March 31, 2012. The adoption of this accounting pronouncement did not have an effect on the fair value measurement, but rather expanded upon existing disclosures.

In December 2011, the FASB issued an amendment to the accounting guidance for disclosure of arrangements that permit offsetting assets and liabilities. The amendment expands the disclosure requirements to require both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The amendment will be effective for us, beginning on January 1, 2013, and must be applied retrospectively. We do not expect the adoption of this accounting pronouncement to have a material impact on our financial statements when implemented.

No other pronouncements materially affecting our financial statements have been issued since the filing of our 2011 Annual Report on Form 10-K.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Operating Income And Property And Equipment Costs Incurred

	Exploration & Production										Quicksilver
	U.S.		Canada		Midstream		Corporate		Elimination		Consolidated
For the Three Months Ended June 30:		(In thousands)
2012
Revenue	$	149,333	$	18,847	$	4,280	$	-	$	(3,898)		168,562
DD&A		39,416		10,627		1,314		585		-		51,942
Impairment expense		898,715		93,206		-		-		-		991,921
Operating income (loss)		(856,498)		(100,671)		1,570		(18,990)		-		(974,589)
Property and equipment costs incurred		44,546		103,778		5,459		1,914		-		155,697
2011
Revenue	$	202,788	$	45,383	$	1,222	$	-	$	(947)	$	248,446
DD&A		41,580		12,087		466		571		-		54,704
Operating income (loss)		75,615		18,962		440		(16,341)		-		78,676
Property and equipment costs incurred		136,454		23,640		1,339		-		-		161,433
For the Six Months Ended June 30:
2012
Revenue	$	280,796	$	32,627	$	7,807	$	-	$	(7,198)		314,032
DD&A		81,239		21,442		2,515		1,185		-		106,381
Impairment expense		961,057		93,611		-		-		-		1,054,668
Operating income (loss)		(865,239)		(113,786)		2,922		(38,685)		-		(1,014,788)
Property and equipment costs incurred		116,977		157,401		11,439		5,447		-		291,264
2011
Revenue	$	382,359	$	77,724	$	2,489	$	-	$	(1,939)	$	460,633
DD&A		80,335		23,511		2,179		1,150		-		107,175
Impairment expense		-		49,063		-		-		-		49,063
Operating income (loss)		135,862		(22,352)		(316)		(35,311)		-		77,883
Property and equipment costs incurred		259,146		98,868		1,730		506		-		360,250
Property, plant and equipment-net
June 30, 2012	$	1,833,524	$	643,274	$	110,279	$	8,989	$	-	$	2,596,066
December 31, 2011		2,752,101		596,935		102,237		9,246		-		3,460,519

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Derivatives And Fair Value Measurements (Reduction Of Interest Expense Over The Life Of The Debt Instruments) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Derivatives And Fair Value Measurements [Abstract]
Remainder of 2012	$ 2,604
2013	5,539
2014	6,012
2015	4,669
2016	569
Reduction of interest expense over the life of the debt instruments, total	$ 19,393

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Fortune Creek (Details) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012 KKR [Member] USD ($)	Jun. 30, 2012 KKR [Member] CAD
Area of business, acres	30,000,000
Length of gathering line contributed to partnership, miles		20	20
Diameter of gathering line contributed to partnership, inches		20	20
Minimum capital expenditures		$ 300
Dedicated years for gas production		10	10
Payments to acquire interest in joint venture		125
Percentage of interest by parent in the partnership		50.00%	50.00%
Maximum construction project contributions			130

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Condensed Consolidated Statements Of Income (Loss) And Comprehensive Income (Loss) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue
Production	$ 150,503	$ 207,706	$ 322,323	$ 398,006
Sales of purchased natural gas	9,442	19,560	21,529	39,986
Other	8,617	21,180	(29,820)	22,641
Total revenue	168,562	248,446	314,032	460,633
Operating expense
Lease operating	21,599	24,484	50,290	45,693
Gathering, processing and transportation	42,624	46,726	85,701	91,088
Production and ad valorem taxes	7,189	8,506	13,952	16,087
Costs of purchased natural gas	9,337	19,557	21,274	39,300
Depletion, depreciation and accretion	51,942	54,704	106,381	107,175
Impairment	991,921		1,054,668	49,063
General and administrative	18,405	15,770	37,501	34,161
Other operating	134	23	150	183
Total expense	1,143,151	169,770	1,369,917	382,750
Crestwood earn-out			41,097
Operating income (loss)	(974,589)	78,676	(1,014,788)	77,883
Loss from earnings of BBEP		(26,207)		(47,091)
Other income - net	65	123,178	157	124,299
Fortune Creek accretion	(4,830)		(9,571)
Interest expense	(40,076)	(47,552)	(80,246)	(93,730)
Income (loss) before income taxes	(1,019,430)	128,095	(1,104,448)	61,361
Income tax (expense) benefit	346,889	(19,508)	371,983	(23,532)
Net income (loss)	(672,541)	108,587	(732,465)	37,829
Reclassification adjustments related to settlements of derivative contracts - net of income tax	(37,133)	(10,798)	(69,667)	(27,017)
Net change in derivative fair value - net of income tax	20,219	10,482	112,008	(6,713)
Foreign currency translation adjustment	(8,598)	(1,572)	(670)	10,432
Other comprehensive income (loss)	(25,512)	(1,888)	41,671	(23,298)
Comprehensive income (loss)	$ (698,053)	$ 106,699	$ (690,794)	$ 14,531
Earnings (loss) per common share - basic	$ (3.96)	$ 0.63	$ (4.31)	$ 0.22
Earnings (loss) per common share - diluted	$ (3.96)	$ 0.61	$ (4.31)	$ 0.22

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Investment In BBEP (Operations Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2011 BBEP [Member]		Mar. 31, 2011 BBEP [Member]
Business Acquisition [Line Items]
Revenue	$ 168,562	$ 248,446	$ 314,032	$ 460,633	$ (12,704)	[1]	$ 5,461	[1]
Operating expense	1,143,151	169,770	1,369,917	382,750	73,937		153,420
Operating income (loss)	(974,589)	78,676	(1,014,788)	77,883	(86,641)		(147,959)
Interest and other					9,074	[2]	19,063	[2]
Income tax (expense) benefit	346,889	(19,508)	371,983	(23,532)	(1,002)		(1,441)
Noncontrolling interests					34		69
Net income (loss) available to BBEP	$ (672,541)	$ 108,587	$ (732,465)	$ 37,829	$ (94,747)		$ (165,650)

[1] For the three months ended March 31, 2011, unrealized losses of $112.6 million on commodity derivatives were recognized. For the six months ended March 31, 2011, unrealized losses of $194.9 million on commodity derivatives were recognized.

[2] The three months ended March 31, 2011 included unrealized gains of $1.4 million from interest rate swaps.The six months ended March 31, 2011 included unrealized gains of $4.5 million from interest rate swaps.

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Condensed Consolidated Statements Of Equity (Parenthetical) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statements Of Equity [Abstract]
Income tax effect related to hedge derivative contract settlements reclassified into earnings from accumulated other comprehensive income	$ 35,711	$ 12,703
Income tax effect related to net change in derivative fair value	$ 54,270	$ 3,924

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Condensed Consolidating Financial Information (Schedule Of Condensed Consolidated Balance Sheets) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets	$ 304,896	$ 300,427
Property and equipment	2,596,066	3,460,519
Other assets	343,562	234,516
Total assets	3,244,524	3,995,462
Current liabilities	297,166	334,173
Long-term liabilities	2,368,565	2,399,370
Stockholders' equity	578,793	1,261,919
Total liabilities and stockholders' equity	3,244,524	3,995,462
Quicksilver Resources Inc. [Member]
Current assets	327,459	336,893
Property and equipment	1,824,415	2,743,379
Investment in subsidiaries (equity method)	166,008	241,680
Other assets	531,863	401,279
Total assets	2,849,745	3,723,231
Current liabilities	293,146	348,512
Long-term liabilities	1,977,806	2,112,800
Stockholders' equity	578,793	1,261,919
Total liabilities and stockholders' equity	2,849,745	3,723,231
Restricted Guarantor Subsidiaries [Member]
Current assets	89,675	87,767
Property and equipment	37,768	37,936
Total assets	127,443	125,703
Current liabilities	111,207	109,938
Long-term liabilities	21,969	21,903
Stockholders' equity	(5,733)	(6,138)
Total liabilities and stockholders' equity	127,443	125,703
Restricted Non-Guarantor Subsidiaries [Member]
Current assets	89,179	63,711
Property and equipment	644,780	598,443
Investment in subsidiaries (equity method)	(33,991)	(29,449)
Other assets	55,319	76,857
Total assets	755,287	709,562
Current liabilities	99,182	76,450
Long-term liabilities	484,364	385,294
Stockholders' equity	171,741	247,818
Total liabilities and stockholders' equity	755,287	709,562
Restricted Subsidiary Eliminations [Member]
Current assets	(203,093)	(200,727)
Investment in subsidiaries (equity method)	(166,008)	(241,680)
Other assets	(243,620)	(243,620)
Total assets	(612,721)	(686,027)
Current liabilities	(203,093)	(200,727)
Long-term liabilities	(243,620)	(243,620)
Stockholders' equity	(166,008)	(241,680)
Total liabilities and stockholders' equity	(612,721)	(686,027)
Quicksilver And Restricted Subsidiaries [Member]
Current assets	303,220	287,644
Property and equipment	2,506,963	3,379,758
Investment in subsidiaries (equity method)	(33,991)	(29,449)
Other assets	343,562	234,516
Total assets	3,119,754	3,872,469
Current liabilities	300,442	334,173
Long-term liabilities	2,240,519	2,276,377
Stockholders' equity	578,793	1,261,919
Total liabilities and stockholders' equity	3,119,754	3,872,469
Unrestricted Non-Guarantor Subsidiaries [Member]
Current assets	9,375
Property and equipment
Investment in subsidiaries (equity method)	(36,384)	(29,449)
Other assets
Total assets	(27,009)	(29,449)
Current liabilities	9,375
Long-term liabilities
Stockholders' equity	(36,384)	(29,449)
Total liabilities and stockholders' equity	(27,009)	(29,449)
Fortune Creek [Member]
Current assets	11,049	27,533
Property and equipment	89,103	80,761
Total assets	100,152	108,294
Current liabilities	6,097	14,750
Long-term liabilities	82	80
Stockholders' equity	93,973	93,464
Total liabilities and stockholders' equity	100,152	108,294
Consolidating Eliminations [Member]
Current assets	(18,748)	(14,750)
Property and equipment
Investment in subsidiaries (equity method)	70,375	58,898
Other assets
Total assets	51,627	44,148
Current liabilities	(18,748)	(14,750)
Long-term liabilities	127,964	122,913
Stockholders' equity	(57,589)	(64,015)
Total liabilities and stockholders' equity	$ 51,627	$ 44,148

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Crestwood Earn-Out (Details) (USD $)	6 Months Ended
	Jun. 30, 2012
Crestwood Earn-Out [Abstract]
Crestwood earn-out	$ 41,097,000
Future earn-out payments	$ 31,000,000

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Transactions With Related Parties (Details) (Darden Family [Member], USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Related Party Transaction [Line Items]
Percentage of ownership interest	30.00%
Use Of Airplane [Member]
Related Party Transaction [Line Items]
Payments to related parties	$ 0.3	$ 0.3
Rent On Buildings [Member]
Related Party Transaction [Line Items]
Payments to related parties		$ 0.1

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Transactions With Related Parties

6 Months Ended

Jun. 30, 2012

Transactions With Related Parties [Abstract]

Transactions With Related Parties

15. TRANSACTIONS WITH RELATED PARTIES

As of June 30, 2012, members of the Darden family and entities controlled by them beneficially own approximately 30% of our outstanding common stock. Thomas Darden, Glenn Darden and Anne Darden Self are officers and directors of Quicksilver.

During both the first six months of 2012 and 2011, we paid $0.3 million for use of an airplane owned by an entity controlled by members of the Darden family. Usage rates were determined based upon comparable rates charged by third parties.

Payments received from Mercury for sublease rentals, employee insurance coverage and administrative services were negligible for the first six months of 2012 and 2011.

We paid $0.1 million in the first six months of 2011 for rent on buildings owned by entities controlled by members of the Darden family. Rental rates were determined based on comparable rates charged by third parties. No similar payments were made in the first six months of 2012.

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Derivatives And Fair Value Measurements (Narrative) (Details) (USD $)	6 Months Ended		12 Months Ended	6 Months Ended		1 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2012 Maximum [Member]	Jun. 30, 2012 Minimum [Member]	Jul. 31, 2012 Energy Related Derivative [Member]
Natural gas hedges original tenure	10 years
Unobservable inputs included within the fair value calculation				5.44	3.59
Senior notes maturity			2015
Flow per day						10
Natural gas price						3.91
Cash received in settlement of hedge			$ 41,500,000
Interest previously accrued and earned			10,700,000
Deferred gain on settlement of senior notes	2,500,000	2,400,000	30,800,000
Remaining deferred gains on early settlements from interest rate swaps	19,393,000
Gains and losses from the effective portion of derivative assets and liabilities held in AOCI expected to be reclassified into earnings	91,200,000
Net gains resulting from derivative hedge ineffectiveness	$ 4,900,000	$ 800,000
Term of derivative instrument	10 years

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Derivatives And Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Derivatives And Fair Value Measurements [Abstract]

Estimated Fair Value Of Derivative Instruments Under Input Levels

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(in thousands)				(in thousands)
Level 2 inputs	$	296,842	$	195,838	$	-	$	4,028
Level 3 inputs		51,883		150,989		6,538		-
Total	$	348,725	$	346,827	$	6,538	$	4,028

Changes In Level 3 Fair Values

	For the Three Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	24,857	$	-
Total gains (losses) for the period:
Unrealized gain on commodity hedges		-		19,115
Gain from hedge ineffectiveness		4,319		-
Settlements in Production Revenue		(4,101)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		28,356		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	6,964	$	19,115

	For the Six Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	150,989	$	-
Total gains (losses) for the period:
Unrealized gain (loss) on commodity hedges		(21,670)		19,115
Realized loss on hedge restructure		(14,555)		-
Gain from hedge ineffectiveness		3,709		-
Transfers out of Level 3		(109,685)		-
Settlements in Production Revenue		(10,675)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		55,318		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	(15,316)	$	19,115

Price Collars And Swaps For Anticipated Natural Gas And NGL Production

Production Year	Daily Production Volume
	Gas	NGL
	MMcfd	MBbld
2012	230	7
2013	150	-
2014-2015	110	-
2016-2021	45	-

Reduction Of Interest Expense Over The Life Of The Debt Instruments

(In thousands)
Remainder of 2012	$	2,604
2013		5,539
2014		6,012
2015		4,669
2016		569
	$	19,393

Estimated Fair Value Of Derivative Instruments

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(In thousands)				(In thousands)
Derivatives designated as hedges:
Commodity contracts reported in:
Current derivative assets	$	189,536	$	165,484	$	-	$	2,639
Noncurrent derivative assets		159,189		183,982		-		-
Current derivative liabilities		-		-		-		4,028
Noncurrent derivative liabilities		-		-		6,538		-
Total derivatives designated as hedges	$	348,725	$	349,466	$	6,538	$	6,667
Derivatives not designated as hedges:	$	-	$	-	$	-	$	-
Total derivatives	$	348,725	$	349,466	$	6,538	$	6,667

Carrying Value Of Derivatives

	For the Three Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	373,467	$	96,203
Change in net amounts receivable and payable		(3,368)		(167)
Settlements in production revenue		(56,495)		(15,546)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		8,100		872
Unrealized gains reported in other revenue		-		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gains reported in OCI		42,857		15,872
Derivative fair value at end of period	$	342,187	$	116,349

	For the Six Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	342,799	$	146,762
Change in net amounts receivable and payable		(7,811)		(384)
Settlements in production revenue		(105,379)		(39,328)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		4,899		818
Realized losses reported in other revenue		(14,555)		-
Unrealized gains (losses) reported in other revenue		(21,670)		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gain (losses) reported in OCI		166,278		(10,634)
Derivative fair value at end of period	$	342,187	$	116,349

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Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income (loss)	$ (732,465)	$ 37,829
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and accretion	106,381	107,175
Impairment expense	1,054,668	49,063
Crestwood earn-out	(41,097)
Deferred income tax expense (benefit)	(372,741)	17,667
Non-cash (gain) loss from hedging and derivative activities	61,503	(19,933)
Stock-based compensation	10,021	10,386
Non-cash interest expense	3,469	7,872
Fortune Creek accretion	9,571
Gain on disposition of BBEP units		(123,752)
Loss from BBEP in excess of cash distributions		60,050
Other	328	1,111
Changes in assets and liabilities
Accounts receivable	30,600	(8,608)
Prepaid expenses and other assets	(5,031)	(4,426)
Accounts payable	(21,838)	(25,859)
Accrued and other liabilities	(3,853)	14,777
Net cash provided by operating activities	99,516	123,352
Investing activities:
Purchases of property, plant and equipment	(307,169)	(396,156)
Proceeds from Crestwood earn-out	41,097
Proceeds from sale of BBEP units		134,423
Proceeds from sale of properties and equipment	3,372	3,123
Net cash used by investing activities	(262,700)	(258,610)
Financing activities:
Issuance of debt	255,775	256,445
Repayments of debt	(88,115)	(170,172)
Debt issuance costs paid	(148)
Distribution of Fortune Creek Partnership funds	(1,845)
Proceeds from exercise of stock options	11	622
Purchase of treasury stock	(2,364)	(4,801)
Net cash provided by financing activities	163,314	82,094
Effect of exchange rate changes in cash	727	(1,771)
Net increase (decrease) in cash	857	(54,935)
Cash at beginning of period	13,146	54,937
Cash at end of period	$ 14,003	$ 2

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets
Cash	$ 14,003	$ 13,146
Accounts receivable - net of allowance for doubtful accounts	64,667	95,282
Derivative assets at fair value	189,536	162,845
Other current assets	36,690	29,154
Total current assets	304,896	300,427
Property, plant and equipment - net
Oil and gas properties, full cost method (including unevaluated costs of $481,735 and $433,341, respectively)	2,346,209	3,226,476
Other property and equipment	249,857	234,043
Property, plant and equipment - net	2,596,066	3,460,519
Derivative assets at fair value	159,189	183,982
Deferred income taxes	134,190
Other assets	50,183	50,534
Total assets	3,244,524	3,995,462
Current liabilities
Current portion of long-term debt		18
Accounts payable	111,941	142,672
Accrued liabilities	139,257	142,193
Derivative liabilities at fair value		4,028
Current deferred tax liability	45,968	45,262
Total current liabilities	297,166	334,173
Long-term debt	2,069,726	1,903,431
Partnership liability	130,357	122,913
Asset retirement obligations	94,872	85,568
Derivative liabilities at fair value	6,538
Other liabilities	28,461	28,461
Deferred income taxes	38,611	258,997
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 178,811,191 and 176,980,483 shares issued, respectively	1,788	1,770
Paid in capital in excess of par value	747,029	737,015
Treasury stock of 5,735,074 and 5,379,702 shares, respectively	(48,715)	(46,351)
Accumulated other comprehensive income	256,529	214,858
Retained earnings (deficit)	(377,838)	354,627
Total stockholders' equity	578,793	1,261,919
Total liabilities and stockholders' equity	$ 3,244,524	$ 3,995,462

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Quicksilver Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Quicksilver Stockholders' Equity [Abstract]

Quicksilver Stockholders' Equity

10. 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, 2012 and December 31, 2011, we had 173.1 million and 171.6 million shares of common stock outstanding, respectively.

Note 17 to the consolidated financial statements in our 2011 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 2012 with an estimated fair value of $8.5 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:

	2012	2011
Weighted avg grant date fair value	$4.21	$9.16
Weighted avg risk-free interest rate	1.14%	2.38%
Expected life (in years)	6.0	6.0
Wtd avg volatility	68.2%	66.8%
Expected dividends	-	-

The following table summarizes our stock option activity for the six months ended June 30, 2012:

	Shares		Wtd Avg Exercise Price		Wtd Avg Remaining Contractual Life		Aggregate Intrinsic Value
					(In years)		(In thousands)
Outstanding at January 1, 2012		3,760,696	$	12.01
Granted		2,020,685		6.90
Exercised		(1,572)		6.21
Forfeited		(469,976)		8.79
Expired		(84,349)		12.05
Outstanding at June 30, 2012		5,225,484	$	10.33		7.5	$	56
Exercisable at June 30, 2012		2,904,497	$	11.14		6.1	$	-

As of June 30, 2012, we estimate that a total of 5.2 million stock options will become vested including those options already exercisable. As of December 31, 2011, the unrecognized compensation cost related to outstanding unvested stock options was $7.5 million, which is expected to be recognized in expense through January 2014. Compensation expense related to stock options of $3.4 million and $3.5 million was recognized for each of the six months ended June 30, 2012 and 2011, respectively. Cash received from the exercise of stock options totaled less than $0.1 million for the six months ended June 30, 2012. The total intrinsic value of those options exercised was less than $0.1 million.

Restricted Stock

The following table summarizes our restricted stock and stock unit activity for the six months ended June 30, 2012:

	Payable in shares				Payable in cash
	Shares		Wtd Avg Grant Date Fair Value		Shares		Wtd Avg Grant Date Fair Value
Outstanding at January 1, 2012		2,460,300	$	12.29		369,846	$	13.12
Granted		2,975,885		6.43		653,195		6.19
Vested		(1,256,620)		10.71		(186,526)		11.22
Forfeited		(764,429)		8.97		(135,624)		9.68
Outstanding at June 30, 2012		3,415,136	$	8.51		700,891	$	7.83

As of December 31, 2011, the unrecognized compensation cost related to outstanding unvested restricted stock was $17.3 million, which is expected to be recognized in expense through March 2014. Grants of restricted stock and RSUs during the six months ended June 30, 2012 had an estimated grant date fair value of $23.2 million. The fair value of RSUs settled in cash was $3.8 million at June 30, 2012. For the six months ended June 30, 2012 and 2011, compensation expense of $7.3 million and $6.8 million, respectively, was recognized. The total fair value of shares vested during the six months ended June 30, 2012 was $9.6 million.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 31, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Entity Registrant Name	QUICKSILVER RESOURCES INC
Entity Central Index Key	0001060990
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		172,971,660

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

11. 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.

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
	(In thousands, except per share data)
Net income (loss) attributable to Quicksilver	$	(672,541)	$	108,587	$	(732,465)	$	37,829
Basic income allocable to participating securities (1)		-		(1,331)		-		(454)
Basic net income (loss) attributable to Quicksilver	$	(672,541)	$	107,256	$	(732,465)	$	37,375
Impact of assumed conversions – interest on 1.875% convertible debentures, net of income taxes		-		1,880		-		-
Income (loss) available to stockholders assuming conversion of convertible debentures	$	(672,541)	$	109,136	$	(732,465)	$	37,375
Weighted average common shares – basic		170,043		168,984		169,991		168,928
Effect of dilutive securities (2):
Share-based compensation awards		-		868		-		858
Contingently convertible debentures		-		9,816		-		-
Weighted average common shares – diluted		170,043		179,668		169,991		169,786
Earnings (loss) per common share – basic	$	(3.96)	$	0.63	$	(4.31)	$	0.22
Earnings (loss) per common share – diluted	$	(3.96)	$	0.61	$	(4.31)	$	0.22

⁽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.

⁽²⁾ For the six months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculation: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculations: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the six months ended June 30, 2011, we had the following antidilutive shares excluded from the dilution calculation: 9.8 million shares associated with our contingently convertible debt, 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2011, we had the following antidilutive shares excluded from the dilutive calculation: 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Unevaluated costs of oil and gas properties	$ 481,735	$ 433,341
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	178,811,191	176,980,483
Treasury stock, shares	5,735,074	5,379,702

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Property, Plant And Equipment

6 Months Ended

Jun. 30, 2012

Property, Plant And Equipment [Abstract]

Property, Plant And Equipment

5. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	June 30, 2012		December 31, 2011
	(In thousands)
Oil and gas properties
Subject to depletion	$	5,529,652	$	5,309,330
Unevaluated costs		481,735		433,341
Accumulated depletion		(3,665,178)		(2,516,195)
Net oil and gas properties		2,346,209		3,226,476
Other plant and equipment
Pipelines and processing facilities		360,596		340,242
General properties		75,418		71,297
Accumulated depreciation		(186,157)		(177,496)
Net other property and equipment		249,857		234,043
Property, plant and equipment, net of accumulated depletion and depreciation	$	2,596,066	$	3,460,519

Ceiling Test Analysis

We recorded impairment expense of $898.7 million and $93.2 million at June 30, 2012 and $62.3 million and $0.4 million at March 31, 2012 for our U.S. and Canadian oil and gas properties, respectively. For our U.S. oil and gas properties, we computed the June 30, 2012 and March 31, 2012 ceiling amounts using Henry Hub prices of $3.15 and $3.73 per MMBtu of natural gas, respectively, calculated as the unweighted average of the preceding 12 month first-day-of-the-month prices. The Henry Hub natural gas prices used to compute the ceiling amounts at June 30, 2012 and March 31, 2012 were 23.5% and 9.5% lower than the comparable price used at December 31, 2011. For our Canadian oil and gas properties, we computed the June 30, 2012 and March 31, 2012 ceiling amounts using AECO prices of $2.72 and $3.64 per MMBtu of natural gas, respectively, calculated as the unweighted average of the preceding 12-month first-day-of-the-month prices. The AECO natural gas prices used to compute the ceiling amount at June 30, 2012 and March 31, 2012 were 25.5% and 1% lower than the comparable price used at December 31, 2011. For our U.S. oil and gas properties, we computed the June 30, 2012 ceiling amounts using a Mont Belvieu, Texas price of $35.61 per Bbl of NGL, calculated as the unweighted average of the preceding 12-month first-day-of-the-month prices. The Mont Belvieu, Texas NGL price used to compute the ceiling amounts at June 30, 2012 was 24.5% lower than the comparable price used at December 31, 2011. These charges resulted in the recognition of a deferred tax asset at June 30, 2012.

As of June 30, 2012, our U.S. and Canadian ceiling tests included $337 million and $125 million, respectively, in value for our derivatives treated as hedges. Absent this recognition, after tax we would have recognized $337 million of additional impairment expense for our U.S. oil and gas properties and $125 million for our Canadian oil and gas properties. Because of the volatility of petroleum prices and prevailing prices subsequent to June 30, 2012, it is reasonably possible we may experience additional impairment in future periods.

Notes 2 and 8 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contain additional information regarding our property, plant and equipment and our quarterly ceiling test analysis.

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Investment In BBEP

6 Months Ended

Jun. 30, 2012

Investment In BBEP [Abstract]

Investment In BBEP

4. INVESTMENT IN BBEP

At June 30, 2011, we owned 8.6 million BBEP Units, or 15%, of BBEP, whose price closed at $19.46 per unit as of that date. During the six months ended June 30, 2011, gains of $123.8 million were recognized in Other Income from the sale of 7.1 million BBEP Units. During the fourth quarter of 2011, we sold all of our remaining BBEP Units.

Changes in the balance of our investment in BBEP were as follows:

(In thousands)
Balance at December 31, 2010	$	83,341
Equity loss in BBEP		(47,091)
Distributions from BBEP		(12,959)
BBEP Units sold		(10,671)
Balance at June 30, 2011	$	12,620

We accounted for our investment in BBEP Units using the equity method, utilizing a one-quarter lag from BBEP's publicly available information. Summarized estimated financial information for BBEP is as follows:

	For the Three Months Ended March 31,		For the Six Months Ended March 31,
	2011		2011
	(In thousands)		(In thousands)
Revenue (1)	$	(12,704)	$	5,461
Operating expense		73,937		153,420
Operating income (loss)		(86,641)		(147,959)
Interest and other (2)		9,074		19,063
Income tax expense (benefit)		(1,002)		(1,441)
Noncontrolling interests		34		69
Net income (loss) available to BBEP	$	(94,747)	$	(165,650)

⁽¹⁾  For the three months ended March 31, 2011, unrealized losses of $112.6 million on commodity derivatives were recognized. For the six months ended March 31, 2011, unrealized losses of $194.9 million on commodity derivatives were recognized.

⁽²⁾  The three months ended March 31, 2011 included unrealized gains of $1.4 million from interest rate swaps.The six months ended March 31, 2011 included unrealized gains of $4.5 million from interest rate swaps.

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Accounting Policies And Disclosures (Policy)

6 Months Ended

Jun. 30, 2012

Accounting Policies And Disclosures [Abstract]

Immaterial Restatement

Immaterial Restatement

The consolidated financial statements as of and for the year ended December 31, 2010 were restated as disclosed within Item 8, Note 2 in the 2011 Annual Report on Form 10-K to increase the previously recognized gain related to the sale of our interests in KGS by $20.7 million and to provide additional deferred taxes on the increased gain. The previously reported gain excluded certain liabilities for intercompany transactions related to services performed by KGS for our U.S. exploration and production segment, which should have been included in the gain calculation. Additional depletion expense was recognized due to the inclusion of additional future development costs in the 2010 depletion calculation. The results of this restatement, which had no impact on our total cash flow from operations, investing and financing activities as reported, impacted the retained earnings and the total stockholder's equity as of June 30, 2011. Previously, retained earnings and total stockholder's equity were reported as $291.9 million and $1,080 million, respectively, in the Form 10-Q for the quarter ended June 30, 2011. These balances have been restated to $302.4 million and $1,091 million, respectively, within the Condensed Consolidated Statement of Equity as of June 30, 2011.

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Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2012

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information

12. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Note 19 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains a more complete description of our guarantor, non-guarantor, restricted and unrestricted subsidiaries.

The following tables present financial information about Quicksilver and our restricted subsidiaries for the three-month periods covered by the consolidated financial statements. Under the indentures for our senior notes and senior subordinated notes, Fortune Creek is not considered to be a subsidiary and therefore it is presented separately from the other subsidiaries for these purposes.

Condensed Consolidating Balance Sheets

	June 30, 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	$	327,459	$	89,675	$	89,179	$	(203,093)	$	303,220	$	9,375	$	11,049	$	(18,748)	$	304,896
Property and equipment		1,824,415		37,768		644,780		-		2,506,963		-		89,103		-		2,596,066
Investment in subsidiaries (equity method)		166,008		-		(33,991)		(166,008)		(33,991)		(36,384)		-		70,375		-
Other assets		531,863		-		55,319		(243,620)		343,562		-		-		-		343,562
Total assets	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524
LIABILITIES AND EQUITY
Current liabilities	$	293,146	$	111,207	$	99,182	$	(203,093)	$	300,442	$	9,375	$	6,097	$	(18,748)	$	297,166
Long-term liabilities		1,977,806		21,969		484,364		(243,620)		2,240,519		-		82		127,964		2,368,565
Stockholders' equity		578,793		(5,733)		171,741		(166,008)		578,793		(36,384)		93,973		(57,589)		578,793
Total liabilities and equity	$	2,849,745	$	127,443	$	755,287	$	(612,721)	$	3,119,754	$	(27,009)	$	100,152	$	51,627	$	3,244,524

	December 31, 2011
	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	$	336,893	$	87,767	$	63,711	$	(200,727)	$	287,644	$	-	$	27,533	$	(14,750)	$	300,427
Property and equipment		2,743,379		37,936		598,443		-		3,379,758		-		80,761		-		3,460,519
Investment in subsidiaries (equity method)		241,680		-		(29,449)		(241,680)		(29,449)		(29,449)		-		58,898		-
Other assets		401,279		-		76,857		(243,620)		234,516		-		-		-		234,516
Total assets	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462
LIABILITIES AND EQUITY
Current liabilities	$	348,512	$	109,938	$	76,450	$	(200,727)	$	334,173	$	-	$	14,750	$	(14,750)	$	334,173
Long-term liabilities		2,112,800		21,903		385,294		(243,620)		2,276,377		-		80		122,913		2,399,370
Stockholders' equity		1,261,919		(6,138)		247,818		(241,680)		1,261,919		(29,449)		93,464		(64,015)		1,261,919
Total liabilities and equity	$	3,723,231	$	125,703	$	709,562	$	(686,027)	$	3,872,469	$	(29,449)	$	108,294	$	44,148	$	3,995,462

Condensed Consolidating Statements of Income

	For the Three Months Ended June 30, 2012
	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	$	149,333	$	1,078	$	18,846	$	(695)	$	168,562	$	-	$	3,202	$	(3,202)	$	168,562
Operating expenses		1,023,740		893		120,599		(695)		1,144,537		-		1,816		(3,202)		1,143,151
Equity in net earnings of subsidiaries		(78,560)		-		(1,051)		78,560		(1,051)		1,386		-		(335)		-
Operating income		(952,967)		185		(102,804)		78,560		(977,026)		1,386		1,386		(335)		(974,589)
Fortune Creek Accretion		-		-		-		-		-		-		-		(4,830)		(4,830)
Interest expense and other		(37,971)		-		(2,040)		-		(40,011)		-		-		-		(40,011)
Income tax (expense) benefit		318,397		(65)		26,164		-		344,496		-		-		2,393		346,889
Net income	$	(672,541)	$	120	$	(78,680)	$	78,560	$	(672,541)	$	1,386	$	1,386	$	(2,772)	$	(672,541)
Other comprehensive income		(15,218)		-		(10,294)		10,294		(15,218)		-		-		-		(15,218)
Equity in OCI of subsidiaries		(10,294)		-		-		-		(10,294)		-		-		-		(10,294)
Comprehensive income (loss)	$	(698,053)	$	120	$	(88,974)	$	88,854	$	(698,053)	$	1,386	$	1,386	$	(2,772)	$	(698,053)

	For the Three Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non-Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	202,788	$	1,222	$	45,383	$	(947)	$	248,446
Operating expenses		142,389		782		27,546		(947)		169,770
Equity in net earnings of subsidiaries		11,855		-		-		(11,855)		-
Operating income (loss)		72,254		440		17,837		(11,855)		78,676
Loss from earnings of BBEP		(26,207)		-		-		-		(26,207)
Interest expense and other		77,085		-		(1,459)		-		75,626
Income tax expense (benefit)		(14,545)		(154)		(4,809)		-		(19,508)
Net income	$	108,587	$	286	$	11,569	$	(11,855)	$	108,587
Other comprehensive income		3,270		-		(5,158)		5,158		3,270
Equity in OCI of subsidiaries		(5,158)		-		-		-		(5,158)
Comprehensive income (loss)	$	106,699	$	286	$	6,411	$	(6,697)	$	106,699

	For the Six Months Ended June 30, 2012
	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	$	280,796	$	2,208	$	32,626	$	(1,598)	$	314,032	$	-	$	5,599	$	(5,599)	$	314,032
Operating expenses		1,223,655		1,802		148,574		(1,598)		1,372,433		-		3,083		(5,599)		1,369,917
Crestwood earn-out		41,097		-		-		-		41,097		-		-		-		41,097
Equity in net earnings of subsidiaries		(93,893)		-		(4,662)		93,893		(4,662)		2,516		-		2,146		-
Operating income		(995,655)		406		(120,610)		93,893		(1,021,966)		2,516		2,516		2,146		(1,014,788)
Fortune Creek Accretion		-		-		-		-		-		-		-		(9,571)		(9,571)
Interest expense and other		(76,615)		-		(3,474)		-		(80,089)		-		-		-		(80,089)
Income tax (expense) benefit		339,805		(142)		29,927		-		369,590		-		-		2,393		371,983
Net income	$	(732,465)	$	264	$	(94,157)	$	93,893	$	(732,465)	$	2,516	$	2,516	$	(5,032)	$	(732,465)
Other comprehensive income		23,589		-		18,082		(18,082)		23,589		-		-		-		23,589
Equity in OCI of subsidiaries		18,082		-		-		-		18,082		-		-		-		18,082
Comprehensive income (loss)	$	(690,794)	$	264	$	(76,075)	$	75,811	$	(690,794)	$	2,516	$	2,516	$	(5,032)	$	(690,794)

	For the Six Months Ended June 30, 2011
	Quicksilver Resources Inc.		Restricted Guarantor Subsidiaries		Restricted Non- Guarantor Subsidiaries		Consolidating Eliminations		Quicksilver Resources Inc. Consolidated
	(In thousands)
Revenue	$	382,359	$	2,489	$	77,724	$	(1,939)	$	460,633
Operating expenses		279,559		2,804		102,326		(1,939)		382,750
Equity in net earnings of subsidiaries		(21,954)		-		-		21,954		-
Operating income (loss)		80,846		(315)		(24,602)		21,954		77,883
Loss from earnings of BBEP		(47,091)		-		-		-		(47,091)
Interest expense and other		33,815		-		(3,246)		-		30,569
Income tax (expense) benefit		(29,741)		109		6,100		-		(23,532)
Net income (loss)	$	37,829	$	(206)	$	(21,748)	$	21,954	$	37,829
Other comprehensive income		(24,975)		-		1,677		(1,677)		(24,975)
Equity in OCI of subsidiaries		1,677		-		-		-		1,677
Comprehensive income (loss)	$	14,531	$	(206)	$	(20,071)	$	20,277	$	14,531

Condensed Consolidating Statements of Cash Flows

	For the Six Months Ended June 30, 2012
	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 (used) 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 Crestood 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		(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 (used) by 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

	For the Six Months Ended June 30, 2011
			Restricted		Restricted				Quicksilver
	Quicksilver		Guarantor		Non-Guarantor		Consolidating		Resources Inc.
	Resources Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
	(In thousands)
Net cash flow provided by operations	$	96,029	$	1,137	$	26,186	$	-	$	123,352
Capital expenditures		(275,753)		(1,137)		(119,266)		-		(396,156)
Proceeds from sale of BBEP units		134,423		-		-		-		134,423
Proceeds from sale of properties and equipment		1,925		-		1,198		-		3,123
Net cash flow used by investing activities		(139,405)		(1,137)		(118,068)		-		(258,610)
Issuance of debt		153,500		-		102,945		-		256,445
Repayments of debt		(160,880)		-		(9,292)		-		(170,172)
Proceeds from exercise of stock options		622		-		-		-		622
Purchase of treasury stock		(4,801)		-		-		-		(4,801)
Net cash flow provided (used) by financing activities		(11,559)		-		93,653		-		82,094
Effect of exchange rates on cash		-		-		(1,771)		-		(1,771)
Net decrease in cash and equivalents		(54,935)		-		-		-		(54,935)
Cash and equivalents at beginning of period		54,937		-		-		-		54,937
Cash and equivalents at end of period	$	2	$	-	$	-	$	-	$	2

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

8. COMMITMENTS AND CONTINGENCIES

Contractual Obligations, Commitments and Contingencies

On July 26, 2011, we received a subpoena duces tecum from the SEC requesting certain documents. The SEC has informed us that their investigation arises out of press releases in 2011 questioning the projected decline curves and economics of shale gas wells.

On June 15, 2012, we received a subpoena duces tecum from the SEC requesting certain information regarding our assessment for impairment of unevaluated properties and plans for development of unevaluated properties.

In July 2012, we increased our letters of credit provided by C$35.6 million to a total of C$68.3 million in accordance with the agreement for construction of the NGTL Project. Subsequently, construction has been delayed for one year. This delay is the result of the in-service date having been moved to the summer of 2015. Accordingly, we anticipate the financial assurances will be reduced by approximately C$45 million and the schedule for increasing financial assurances will also be adjusted for the delay in construction with no additional letters of credit to be provided until 2014.

There have been no other significant changes to our contractual obligations and commitments as reported in our 2011 Annual Report on Form 10-K. Note 14 to the consolidated financial statements in our 2011 Annual Report on Form 10-K contains a more complete description of our contractual obligations, commitments and contingencies for which there are no other significant updates during the quarter ended June 30, 2012.

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Condensed Consolidating Financial Information (Schedule of Condensed Consolidated Statements Of Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue	$ 168,562	$ 248,446	$ 314,032	$ 460,633
Operating expenses	1,143,151	169,770	1,369,917	382,750
Crestwood earn-out			41,097
Equity in net earnings of subsidiaries
Operating income (loss)	(974,589)	78,676	(1,014,788)	77,883
Fortune Creek accretion	(4,830)		(9,571)
Income (loss) from earnings of BBEP		(26,207)		(47,091)
Interest expense and other	(40,011)	75,626	(80,089)	30,569
Income tax (expense) benefit	346,889	(19,508)	371,983	(23,532)
Net income (loss)	(672,541)	108,587	(732,465)	37,829
Other comprehensive income	(15,218)	3,270	23,589	(24,975)
Equity in OCI of subsidiaries	(10,294)	(5,158)	18,082	1,677
Comprehensive income (loss)	(698,053)	106,699	(690,794)	14,531
Quicksilver Resources Inc. [Member]
Revenue	149,333	202,788	280,796	382,359
Operating expenses	1,023,740	142,389	1,223,655	279,559
Crestwood earn-out			41,097
Equity in net earnings of subsidiaries	(78,560)	11,855	(93,893)	(21,954)
Operating income (loss)	(952,967)	72,254	(995,655)	80,846
Income (loss) from earnings of BBEP		(26,207)		(47,091)
Interest expense and other	(37,971)	77,085	(76,615)	33,815
Income tax (expense) benefit	318,397	(14,545)	339,805	(29,741)
Net income (loss)	(672,541)	108,587	(732,465)	37,829
Other comprehensive income	(15,218)	3,270	23,589	(24,975)
Equity in OCI of subsidiaries	(10,294)	(5,158)	18,082	1,677
Comprehensive income (loss)	(698,053)	106,699	(690,794)	14,531
Restricted Guarantor Subsidiaries [Member]
Revenue	1,078	1,222	2,208	2,489
Operating expenses	893	782	1,802	2,804
Operating income (loss)	185	440	406	(315)
Interest expense and other
Income tax (expense) benefit	(65)	(154)	(142)	109
Net income (loss)	120	286	264	(206)
Comprehensive income (loss)	120	286	264	(206)
Restricted Non-Guarantor Subsidiaries [Member]
Revenue	18,846	45,383	32,626	77,724
Operating expenses	120,599	27,546	148,574	102,326
Equity in net earnings of subsidiaries	(1,051)		(4,662)
Operating income (loss)	(102,804)	17,837	(120,610)	(24,602)
Interest expense and other	(2,040)	(1,459)	(3,474)	(3,246)
Income tax (expense) benefit	26,164	(4,809)	29,927	6,100
Net income (loss)	(78,680)	11,569	(94,157)	(21,748)
Other comprehensive income	(10,294)	(5,158)	18,082	1,677
Comprehensive income (loss)	(88,974)	6,411	(76,075)	(20,071)
Restricted Subsidiary Eliminations [Member]
Revenue	(695)		(1,598)
Operating expenses	(695)		(1,598)
Equity in net earnings of subsidiaries	78,560		93,893
Operating income (loss)	78,560		93,893
Interest expense and other
Income tax (expense) benefit
Net income (loss)	78,560		93,893
Other comprehensive income	10,294		(18,082)
Comprehensive income (loss)	88,854		75,811
Quicksilver And Restricted Subsidiaries [Member]
Revenue	168,562		314,032
Operating expenses	1,144,537		1,372,433
Crestwood earn-out			41,097
Equity in net earnings of subsidiaries	(1,051)		(4,662)
Operating income (loss)	(977,026)		(1,021,966)
Interest expense and other	(40,011)		(80,089)
Income tax (expense) benefit	344,496		369,590
Net income (loss)	(672,541)		(732,465)
Other comprehensive income	(15,218)		23,589
Equity in OCI of subsidiaries	(10,294)		18,082
Comprehensive income (loss)	(698,053)		(690,794)
Unrestricted Non-Guarantor Subsidiaries [Member]
Equity in net earnings of subsidiaries	1,386		2,516
Operating income (loss)	1,386		2,516
Net income (loss)	1,386		2,516
Comprehensive income (loss)	1,386		2,516
Fortune Creek [Member]
Revenue	3,202		5,599
Operating expenses	1,816		3,083
Operating income (loss)	1,386		2,516
Net income (loss)	1,386		2,516
Comprehensive income (loss)	1,386		2,516
Consolidating Eliminations [Member]
Revenue	(3,202)	(947)	(5,599)	(1,939)
Operating expenses	(3,202)	(947)	(5,599)	(1,939)
Equity in net earnings of subsidiaries	(335)	(11,855)	2,146	21,954
Operating income (loss)	(335)	(11,855)	2,146	21,954
Fortune Creek accretion	(4,830)		(9,571)
Interest expense and other
Income tax (expense) benefit	2,393		2,393
Net income (loss)	(2,772)	(11,855)	(5,032)	21,954
Other comprehensive income		5,158		(1,677)
Comprehensive income (loss)	$ (2,772)	$ (6,697)	$ (5,032)	$ 20,277

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Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Long-Term Debt

6. LONG-TERM DEBT

Long-term debt consisted of the following:

	June 30, 2012		December 31, 2011
Combined Credit Agreements	$	394,223	$	227,482
Senior notes due 2015, net of unamortized discount		435,436		435,020
Senior notes due 2016, net of unamortized discount		578,343		576,977
Senior notes due 2019, net of unamortized discount		292,332		292,055
Senior subordinated notes due 2016		350,000		350,000
Convertible debentures, net of unamortized discount		-		18
Total debt		2,050,334		1,881,552
Unamortized deferred gain-terminated interest rate swaps		19,392		21,897
Current portion of long-term debt		-		(18)
Long-term debt	$	2,069,726	$	1,903,431

Credit Facilities

The Combined Credit Agreements' global borrowing base remained at $1.075 billion as of June 30, 2012 and the global letter of credit capacity increased from $175 million to $200 million in June 2012 in accordance with the Combined Credit Agreements. At June 30, 2012, we had $619 million available under the facility.

In light of current prices for natural gas and NGLs, we amended our Combined Credit Agreements in August 2012 primarily to loosen the financial covenants contained therein through the second quarter of 2014. The next semi-annual redetermination of our global borrowing base was scheduled to be completed in October 2012. However, in conjunction with the amendments to our Combined Credit Agreements, our borrowing base was also redetermined. As a result of the amendment and the redetermination process, the following changes were made to the Combined Credit Agreements:

• Reduction of the currently applicable global borrowing base to $850 million from $1.075 billion

• Increase of the applicable margin by 0.50% for each type of loan and issued letters of credit, and setting of the commitment fee on unutilized availability to 0.50%

• Reduction of the minimum required interest coverage ratio from 2.5 to 1.5 for the quarter ending September 30, 2012 through the quarter ending March 31, 2014, then increasing to 2.0 for the quarter ending June 30, 2014, and reverting to 2.5 thereafter

• Addition of a maximum senior secured debt leverage ratio of 2.5 beginning in the quarter ending September 30, 2012

• Until the later of June 30, 2013, or such time as the total leverage ratio for the prior twelve month period is less than or equal to 4.0:

• Restrict the ability to issue certain additional types of debt;

• Limit the aggregate amount of restricted payments to $15 million;

• Restrict the ability to repay existing debt securities if global borrowing base utilization equals or exceeds 25%; and

• Require a dollar for dollar repayment of the Combined Credit Agreements together with any repayment of existing debt securities if the global borrowing base utilization is less than 25% until the Combined Credit Agreements are paid in full, at which time existing debt securities may be repaid in any amounts; and

• Restrict the ability to terminate certain oil and gas hedging arrangements through 2014.

Summary of All Outstanding Debt

As of June 30, 2012, the following subsidiaries are guarantors under our debt obligations: Cowtown Pipeline Management, Inc., Cowtown Pipeline Funding, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline L.P., Silver Stream Pipeline Company LLC, and Barnett Shale Operating LLC and, with respect to only our senior notes and senior subordinated notes, QPP Parent LLC and QPP Holdings LLC. The following table summarizes other significant aspects of our long-term debt outstanding at June 30, 2012:

	Priority on Collateral and Structural Seniority (1)
	Highest priority				Lowest priority
	Equal priority	Equal Priority
	Combined Credit Agreements	2015 Senior Notes	2016 Senior Notes	2019 Senior Notes	Senior Subordinated Notes
Principal amount	$1.075 billion (2)	$438 million	$591 million	$298 million	$350 million
Scheduled maturity date	September 6, 2016	August 1, 2015	January 1, 2016	August 15, 2019	April 1, 2016
Interest rate on outstanding borrowings at
June 30, 2012 (3)	2.42%	8.25%	11.75%	9.125%	7.125%
Base interest rate options	LIBOR, ABR, CDOR (4) (5)	N/A	N/A	N/A	N/A
Financial covenants (6)	- Minimum current ratio of 1.0 - Minimum EBITDA to cash interest expense ratio of 2.5	N/A	N/A	N/A	N/A
Significant restrictive covenants (6)	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions - Limitations on derivatives	- 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	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions
Optional redemption (6)	Any time	August 1, 2012: 103.875 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	April 1, 2012: 102.375 2013: 101.188 2014: par
Make-whole redemption (6)	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
Change of control (6)	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
Equity clawback (6)	N/A	N/A	N/A	Redeemable until August 15, 2012 at 109.125%, plus accrued interest for up to 35%	N/A
Estimated fair value (7)	$394.2 million	$409.5 million	$572.9 million	$271.2 million	$268.6 million

⁽¹⁾  Borrowings under the Amended and Restated U.S. Credit Facility are guaranteed by certain of Quicksilver's domestic subsidiaries and are secured 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, Quicksilver Production Partners Operating Ltd., QPP Parent LLC and QPP Holdings LLC (collectively, the "Domestic Pledged Equity"), 65% of the equity interests of Quicksilver Resources Canada Inc. ("QRCI") and certain oil and gas properties and related assets of Quicksilver. 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, 100% of the equity interests of QRCI and any of its Canadian subsidiaries, and certain oil and gas properties and related assets of Quicksilver and QRCI. 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, 2012.

⁽³⁾ Represents the weighted average borrowing rate payable to lenders.

⁽⁴⁾ 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 1.50% to 2.50%, (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 1.0%, plus, in each case under scenario (ii), an applicable margin between 0.50% to 1.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁵⁾ 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 1.50% and 2.50%, (ii) the Canadian Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50%, (iii) the U.S. Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50% and (iv) adjusted LIBOR (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.50% to 2.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁶⁾ 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.

⁽⁷⁾  The estimated fair value is determined using market quotations based on recent trade activity for fixed rate obligations ("Level 2" inputs). We consider debt with variable interest rates to have a fair value equal to its carrying value ("Level 1" input).

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Asset Retirement Obligations

6 Months Ended

Jun. 30, 2012

Asset Retirement Obligations [Abstract]

Asset Retirement Obligations

7. ASSET RETIREMENT OBLIGATIONS

The following table provides a reconciliation of the changes in the estimated asset retirement obligation for the six months ended June 30, 2012.

(In thousands)
Beginning asset retirement obligations	$	85,822
Additional liability incurred		2,125
Change in estimates		4,665
Accretion expense		1,969
Asset retirement costs incurred		(917)
Settlement of liability in excess of obligation recorded		1,544
Currency translation adjustment		(82)
Ending asset retirement obligations		95,126
Less current portion		(254)
Long-term asset retirement obligation	$	94,872

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Fortune Creek

6 Months Ended

Jun. 30, 2012

Fortune Creek [Abstract]

Fortune Creek

9. FORTUNE CREEK

In December 2011, we entered into an agreement with KKR to form Fortune Creek to construct and operate midstream assets for natural gas produced by us and others primarily in British Columbia. The partnership established an area of mutual interest for the midstream business covering approximately 30 million potential acres which includes transportation and processing infrastructure and agreements.

In forming Fortune Creek, our Canadian subsidiary contributed an existing 20-mile, 20-inch gathering line and its related compression facilities, committed to minimum expenditures of $300 million for drilling and completion activities in our Horn River Asset between 2012 and 2014, and committed gas production from our Horn River Asset for ten years beginning 2012, as more fully described below. KKR contributed $125 million cash in exchange for a 50% interest in Fortune Creek. Our Canadian subsidiary has responsibility for the day-to-day operations of Fortune Creek.

Our Canadian subsidiary entered into a firm gathering agreement with Fortune Creek which is guaranteed by us. At our election, KKR has the responsibility to fund up to C$130 million of the capital required for construction of a new gas treatment facility in exchange for preferential cash flow distributions. If our subsidiary does not meet its obligations under the gathering agreement, KKR has the right to liquidate the partnership and consequently we have recorded the funds contributed by KKR as a liability in our consolidated financial statements. We recognize accretion expense to reflect the rate of return earned by KKR via its investment. During May 2012, Fortune Creek made cash distributions to KKR, which is reported as cash used by financing activities.

Based on an analysis of the partners' equity at risk, we have determined the partnership to be a VIE. Further, based on our ability to direct the activities surrounding the production of natural gas and our direct management of the operations of the Fortune Creek facilities, we have determined we are the primary beneficiary and, therefore, we consolidate Fortune Creek.

Note 12 contains financial information for Fortune Creek in our condensed consolidating financial statements.

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Supplemental Cash Flow Information (Other Significant Noncash Transactions) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Information [Abstract]
Working capital related to capital expenditures	$ 98,692	$ 64,285

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Supplemental Cash Flow Information (Cash Paid Or Received For Interest And Income Taxes) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Supplemental Cash Flow Information [Abstract]
Interest, net of capitalized interest	$ 77,940	$ 86,198
Income taxes	$ (1,565)	$ 5,904

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Accounting Policies And Disclosures (Details) (USD $)											6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011		Dec. 31, 2010	Jun. 30, 2012 Retained Earnings [Member]	Dec. 31, 2011 Retained Earnings [Member]	Jun. 30, 2011 Retained Earnings [Member]		Dec. 31, 2010 Retained Earnings [Member]	Jun. 30, 2012 Restatement Adjustment [Member]	Jun. 30, 2011 Restatement Adjustment [Member]	Jun. 30, 2011 Restatement Adjustment [Member] Retained Earnings [Member]	Jun. 30, 2011 Scenario, Previously Reported [Member]	Jun. 30, 2011 Scenario, Previously Reported [Member] Retained Earnings [Member]
Significant Accounting Policies [Line Items]
Shareholders Equity	$ 578,793,000	$ 1,261,919,000	$ 1,090,643,000	[1]	$ 1,069,905,000	$ (377,838,000)	$ 354,627,000	$ 302,410,000	[1]	$ 264,581,000		$ 1,091,000,000	$ 302,400,000	$ 1,080,000,000	$ 291,900,000
Increase in previously recognized gain related to the sale of interests											$ 20,700,000

[1] Note 1 contains additional information.

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Asset Retirement Obligations (Estimated Asset Retirement Obligation Activity) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Asset Retirement Obligations [Abstract]
Beginning asset retirement obligations	$ 85,822
Additional liability incurred	2,125
Change in estimates	4,665
Accretion expense	1,969
Asset retirement costs incurred	(917)
Settlement of liability in excess of obligation recorded	1,544
Currency translation adjustment	(82)
Ending asset retirement obligations	95,126
Less current portion	(254)
Long-term asset retirement obligation	$ 94,872	$ 85,568

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2012

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

14. SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid (received) for interest and income taxes was as follows:

	For the Six Months Ended
	June 30,
	2012			2011
	(In thousands)
Interest, net of capitalized interest	$	77,940		$	86,198
Income taxes		(1,565	)		5,904

Other significant non-cash transactions were as follows:

	For the Six  Months Ended June 30,
	2012		2011
	(In thousands)
Working capital related to capital expenditures	$	98,692	$	64,285

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Property, Plant And Equipment (Tables)

6 Months Ended

Jun. 30, 2012

Property, Plant And Equipment [Abstract]

Schedule Of Property, Plant And Equipment

	June 30, 2012		December 31, 2011
	(In thousands)
Oil and gas properties
Subject to depletion	$	5,529,652	$	5,309,330
Unevaluated costs		481,735		433,341
Accumulated depletion		(3,665,178)		(2,516,195)
Net oil and gas properties		2,346,209		3,226,476
Other plant and equipment
Pipelines and processing facilities		360,596		340,242
General properties		75,418		71,297
Accumulated depreciation		(186,157)		(177,496)
Net other property and equipment		249,857		234,043
Property, plant and equipment, net of accumulated depletion and depreciation	$	2,596,066	$	3,460,519

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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, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Total debt	$ 2,050,334	$ 1,881,552
Unamortized deferred gain - terminated interest rate swaps	19,392	21,897
Current portion of long-term debt		(18)
Long-term debt	2,069,726	1,903,431
Combined Credit Agreements [Member]
Debt Instrument [Line Items]
Senior secured credit facility	394,223	227,482
Senior Notes Due 2015 [Member]
Debt Instrument [Line Items]
Senior notes	435,436	435,020
Senior notes maturity period	2015
Senior Notes Due 2016 [Member]
Debt Instrument [Line Items]
Senior notes	578,343	576,977
Senior notes maturity period	2016
Senior Notes Due 2019 [Member]
Debt Instrument [Line Items]
Senior notes	292,332	292,055
Senior notes maturity period	2019
Senior Subordinated Notes [Member]
Debt Instrument [Line Items]
Senior notes	350,000	350,000
Convertible Debentures [Member]
Debt Instrument [Line Items]
Convertible debentures, net of unamortized discount		$ 18

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Derivatives And Fair Value Measurements (Estimated Fair Value Of Derivative Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Current derivative assets	$ 189,536	$ 162,845
Noncurrent derivative assets	159,189	183,982
Current derivative liabilities		4,028
Noncurrent derivative liabilities	6,538
Asset Derivatives [Member]
Derivatives, Fair Value [Line Items]
Total derivative assets	348,725	349,466
Liability Derivatives [Member]
Derivatives, Fair Value [Line Items]
Total derivative liabilities	6,538	6,667
Designated As Hedging Instrument [Member] | Asset Derivatives [Member]
Derivatives, Fair Value [Line Items]
Current derivative assets	189,536	165,484
Noncurrent derivative assets	159,189	183,982
Total derivative assets	348,725	349,466
Designated As Hedging Instrument [Member] | Liability Derivatives [Member]
Derivatives, Fair Value [Line Items]
Current derivative assets		2,639
Current derivative liabilities		4,028
Noncurrent derivative liabilities	6,538
Total derivative liabilities	6,538	6,667
Not Designated as Hedging Instrument [Member] | Asset Derivatives [Member]
Derivatives, Fair Value [Line Items]
Total derivative assets
Not Designated as Hedging Instrument [Member] | Liability Derivatives [Member]
Derivatives, Fair Value [Line Items]
Total derivative liabilities

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Condensed Consolidated Statements Of Equity (USD $) In Thousands		Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income [Member]	Retained Earnings [Member]	Total
Balances at Dec. 31, 2010		$ 1,755	$ 714,869	$ (41,487)	$ 130,187	$ 264,581	$ 1,069,905
Net income						37,829	37,829
Hedge derivative contract settlements reclassified into earnings from AOCI, net of income tax					(27,017)		(27,017)
Net change in derivative fair value, net of income tax					(6,713)		(6,713)
Foreign currency translation adjustment					10,432		10,432
Issuance & vesting of stock compensation		11	10,376	(4,801)			5,586
Stock option exercises		1	620				621
Balances at Jun. 30, 2011	[1]	1,767	725,865	(46,288)	106,889	302,410	1,090,643
Balances at Dec. 31, 2011		1,770	737,015	(46,351)	214,858	354,627	1,261,919
Net income						(732,465)	(732,465)
Hedge derivative contract settlements reclassified into earnings from AOCI, net of income tax					(69,667)		(69,667)
Net change in derivative fair value, net of income tax					112,008		112,008
Foreign currency translation adjustment					(670)		(670)
Issuance & vesting of stock compensation		17	10,004	(2,364)			7,657
Stock option exercises		1	10				11
Balances at Jun. 30, 2012		$ 1,788	$ 747,029	$ (48,715)	$ 256,529	$ (377,838)	$ 578,793

[1] Note 1 contains additional information.

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Derivatives And Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Derivatives And Fair Value Measurements [Abstract]

Derivatives And Fair Value Measurements

3. DERIVATIVES AND FAIR VALUE MEASUREMENTS

The following table categorizes our commodity derivative instruments based upon the use of input levels:

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(in thousands)				(in thousands)
Level 2 inputs	$	296,842	$	195,838	$	-	$	4,028
Level 3 inputs		51,883		150,989		6,538		-
Total	$	348,725	$	346,827	$	6,538	$	4,028

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 "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 latter half of the 10-year term as there is not an active market for that period of time. These unobservable inputs included within the fair value calculation range from $3.59 to $5.44 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. Changes in the "Level 3" inputs are correlated to the changes in the quoted market prices for the period of time available. Estimates were determined by applying the differential between the prices in each derivative and market prices for future periods to the amounts stipulated in each contract to arrive at an estimated future value. This estimated future value was discounted on each contract at the credit adjusted risk-free rate.

The following table identifies the changes in "Level 3" net asset derivative fair values for the periods indicated:

	For the Three Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	24,857	$	-
Total gains (losses) for the period:
Unrealized gain on commodity hedges		-		19,115
Gain from hedge ineffectiveness		4,319		-
Settlements in Production Revenue		(4,101)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		28,356		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	6,964	$	19,115

	For the Six Months Ended June 30,
	2012		2011
	(In thousands)
Balance at beginning of period	$	150,989	$	-
Total gains (losses) for the period:
Unrealized gain (loss) on commodity hedges		(21,670)		19,115
Realized loss on hedge restructure		(14,555)		-
Gain from hedge ineffectiveness		3,709		-
Transfers out of Level 3		(109,685)		-
Settlements in Production Revenue		(10,675)		-
Settlements in Other Revenue		(10,731)		-
Changes included in Other Revenue		2,645		-
Unrealized gains reported in OCI		55,318		-
Balance at end of period	$	45,345	$	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	$	(15,316)	$	19,115

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.

Commodity Price Derivatives

As of June 30, 2012, we had price collars and swaps hedging our anticipated natural gas and NGL production as follows:

Production Year	Daily Production Volume
	Gas	NGL
	MMcfd	MBbld
2012	230	7
2013	150	-
2014-2015	110	-
2016-2021	45	-

In July 2012, we entered into a 10 MMcfd natural gas derivative covering January 2013 to December 2014 for $3.91 per Mcf.

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.

During the six months ended June 30, 2012 and 2011, we recognized $2.5 million and $2.4 million, respectively of those deferred gains as a reduction of interest expense. The remaining $19.4 million deferral of the 2010 early settlements from all interest rate swaps will continue to be recognized as a reduction of interest expense over the life of the associated underlying debt instruments currently scheduled as follows:

(In thousands)
Remainder of 2012	$	2,604
2013		5,539
2014		6,012
2015		4,669
2016		569
	$	19,393

Fair Value Disclosures

The estimated fair value of our derivative instruments at June 30, 2012 and December 31, 2011 were as follows:

	Asset Derivatives				Liability Derivatives
	June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
	(In thousands)				(In thousands)
Derivatives designated as hedges:
Commodity contracts reported in:
Current derivative assets	$	189,536	$	165,484	$	-	$	2,639
Noncurrent derivative assets		159,189		183,982		-		-
Current derivative liabilities		-		-		-		4,028
Noncurrent derivative liabilities		-		-		6,538		-
Total derivatives designated as hedges	$	348,725	$	349,466	$	6,538	$	6,667
Derivatives not designated as hedges:	$	-	$	-	$	-	$	-
Total derivatives	$	348,725	$	349,466	$	6,538	$	6,667

The change in carrying value of our commodity price derivatives since December 31, 2011 principally resulted from the overall decrease in market prices for natural gas relative to the prices in our open derivative instruments as well as additional derivative instruments entered into during the six months ended June 30, 2012, offset by settlements during the period.

The changes in the carrying value of our derivatives for the three and six months ended June 30, 2012 and 2011 are presented below:

	For the Three Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	373,467	$	96,203
Change in net amounts receivable and payable		(3,368)		(167)
Settlements in production revenue		(56,495)		(15,546)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		8,100		872
Unrealized gains reported in other revenue		-		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gains reported in OCI		42,857		15,872
Derivative fair value at end of period	$	342,187	$	116,349

	For the Six Months Ended June 30,
	2012		2011
	Cash Flow Derivatives		Cash Flow Derivatives
	(In thousands)
Derivative fair value at beginning of period	$	342,799	$	146,762
Change in net amounts receivable and payable		(7,811)		(384)
Settlements in production revenue		(105,379)		(39,328)
Settlements in other revenue		(19,744)		-
Ineffectiveness reported in other revenue		4,899		818
Realized losses reported in other revenue		(14,555)		-
Unrealized gains (losses) reported in other revenue		(21,670)		19,115
Other changes reported in other revenue		(2,630)		-
Unrealized gain (losses) reported in OCI		166,278		(10,634)
Derivative fair value at end of period	$	342,187	$	116,349

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 $91.2 million net of income taxes. Hedge derivative ineffectiveness resulted in gains of $4.9 million and $0.8 million for the six months ended June 30, 2012 and 2011, respectively. In January and February 2012, we terminated a number of our ten-year derivative instruments in exchange for derivative instruments with shorter durations at above market terms. The decrease in the fair value between the terminated ten-year instrument and the new shorter-term instrument was recognized in the current period as a realized loss. Unrealized losses recognized in 2012 is the difference between the estimated fair value at the inception date and transaction cost for ten-year derivative instruments entered into during the period.

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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
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income (loss) attributable to Quicksilver	$ (672,541)		$ 108,587		$ (732,465)		$ 37,829
Basic income allocable to participating securities		[1]	(1,331)	[1]		[1]	(454)	[1]
Basic net income(loss) attributable to Quicksilver	(672,541)		107,256		(732,465)		37,375
Impact of assumed conversions - interest on 1.875% convertible debentures, net of income taxes			1,880
Income (loss) available to stockholders assuming conversion of convetible debentures	$ (672,541)		$ 109,136		$ (732,465)		$ 37,375
Weighted average common shares - basic	170,043,000		168,984,000		169,991,000		168,928,000
Share-based compensation awards			868,000	[2]			858,000	[2]
Contingently convertible debentures		[2]	9,816,000	[2]		[2]		[2]
Weighted average common shares - diluted	170,043,000		179,668,000		169,991,000		169,786,000
Earnings (loss) per common share - basic	$ (3.96)		$ 0.63		$ (4.31)		$ 0.22
Earnings (loss) per common share - diluted	$ (3.96)		$ 0.61		$ (4.31)		$ 0.22
Convertible debt interest rate					1.875%
Convertible Debentures [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from the diluted share calculation							9,800,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from the diluted share calculation	5,200,000		1,900,000		5,200,000		1,900,000
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares excluded from the diluted share calculation	300,000		1,300,000		300,000		1,300,000

[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

[2] For the six months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculation: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2012, we had the following antidilutive shares excluded from the dilution calculations: 5.2 million shares associated with our stock options and 0.3 million shares associated with our unvested restricted stock units. For the six months ended June 30, 2011, we had the following antidilutive shares excluded from the dilution calculation: 9.8 million shares associated with our contingently convertible debt, 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units. For the three months ended June 30, 2011, we had the following antidilutive shares excluded from the dilutive calculation: 1.9 million shares associated with our stock options and 1.3 million shares associated with our unvested restricted stock units

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2012

Long-Term Debt [Abstract]

Schedule Of Long-Term Debt Instruments

	June 30, 2012		December 31, 2011
Combined Credit Agreements	$	394,223	$	227,482
Senior notes due 2015, net of unamortized discount		435,436		435,020
Senior notes due 2016, net of unamortized discount		578,343		576,977
Senior notes due 2019, net of unamortized discount		292,332		292,055
Senior subordinated notes due 2016		350,000		350,000
Convertible debentures, net of unamortized discount		-		18
Total debt		2,050,334		1,881,552
Unamortized deferred gain-terminated interest rate swaps		19,392		21,897
Current portion of long-term debt		-		(18)
Long-term debt	$	2,069,726	$	1,903,431

Schedule Of Outstanding Debt

	Priority on Collateral and Structural Seniority (1)
	Highest priority				Lowest priority
	Equal priority	Equal Priority
	Combined Credit Agreements	2015 Senior Notes	2016 Senior Notes	2019 Senior Notes	Senior Subordinated Notes
Principal amount	$1.075 billion (2)	$438 million	$591 million	$298 million	$350 million
Scheduled maturity date	September 6, 2016	August 1, 2015	January 1, 2016	August 15, 2019	April 1, 2016
Interest rate on outstanding borrowings at
June 30, 2012 (3)	2.42%	8.25%	11.75%	9.125%	7.125%
Base interest rate options	LIBOR, ABR, CDOR (4) (5)	N/A	N/A	N/A	N/A
Financial covenants (6)	- Minimum current ratio of 1.0 - Minimum EBITDA to cash interest expense ratio of 2.5	N/A	N/A	N/A	N/A
Significant restrictive covenants (6)	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions - Limitations on derivatives	- 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	- Incurrence of debt - Incurrence of liens - Payment of dividends - Equity purchases - Asset sales - Affiliate transactions
Optional redemption (6)	Any time	August 1, 2012: 103.875 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	April 1, 2012: 102.375 2013: 101.188 2014: par
Make-whole redemption (6)	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
Change of control (6)	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
Equity clawback (6)	N/A	N/A	N/A	Redeemable until August 15, 2012 at 109.125%, plus accrued interest for up to 35%	N/A
Estimated fair value (7)	$394.2 million	$409.5 million	$572.9 million	$271.2 million	$268.6 million

⁽¹⁾  Borrowings under the Amended and Restated U.S. Credit Facility are guaranteed by certain of Quicksilver's domestic subsidiaries and are secured 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, Quicksilver Production Partners Operating Ltd., QPP Parent LLC and QPP Holdings LLC (collectively, the "Domestic Pledged Equity"), 65% of the equity interests of Quicksilver Resources Canada Inc. ("QRCI") and certain oil and gas properties and related assets of Quicksilver. 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, 100% of the equity interests of QRCI and any of its Canadian subsidiaries, and certain oil and gas properties and related assets of Quicksilver and QRCI. 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, 2012.

⁽³⁾ Represents the weighted average borrowing rate payable to lenders.

⁽⁴⁾ 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 1.50% to 2.50%, (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 1.0%, plus, in each case under scenario (ii), an applicable margin between 0.50% to 1.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁵⁾ 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 1.50% and 2.50%, (ii) the Canadian Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50%, (iii) the U.S. Prime Rate (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 0.50% and 1.50% and (iv) adjusted LIBOR (as defined in the Amended and Restated Canadian Credit Facility) plus an applicable margin between 1.50% to 2.50%. 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 0.375% to 0.50%. In connection with the August 2012 amendment to Combined Credit Agreements, the commitment fee on the unused availability will be set at 50 basis points and all other above stated applicable margin percentages will increase by 50 basis points.

⁽⁶⁾ 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.

⁽⁷⁾  The estimated fair value is determined using market quotations based on recent trade activity for fixed rate obligations ("Level 2" inputs). We consider debt with variable interest rates to have a fair value equal to its carrying value ("Level 1" input).

XML

Derivatives And Fair Value Measurements (Changes In Level 3 Fair Values) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Balance at beginning of period	$ 24,857		$ 150,989
Unrealized gain (loss) on commodity hedges		19,115	(21,670)	19,115
Realized loss on hedge restructure			(14,555)
Gain from hedge ineffectiveness	4,319		3,709
Transfers out of Level 3			(109,685)
Changes included in Other Revenue	2,645		2,645
Unrealized gains reported in OCI	28,356		55,318
Balance at ending of period	45,345	19,115	45,345	19,115
The amount of total gains or losses for the period included in other revenue attributable to the change in unrealized gains or losses related to assets still held at the reporting date	6,964	19,115	(15,316)	19,115
Production Revenue [Member]
Settlements	(4,101)		(10,675)
Other Revenue [Member]
Settlements	$ (10,731)		$ (10,731)

XML

Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

13. SEGMENT INFORMATION

We operate in two geographic segments, the U.S. and Canada, where we are engaged in the exploration and production segment of the oil and gas industry. Additionally, we operate a significantly smaller midstream segment in the U.S. and Canada, where we provide natural gas gathering and processing services, primarily to our U.S. and Canadian exploration and production segments. Following the formation of our partnership with KKR, beginning in January 2012, we have additional midstream operations in Canada through Fortune Creek. Based on the immateriality of our midstream segment, we have combined U.S. and Canadian information. We evaluate performance based on operating income and property and equipment costs incurred.

	Exploration & Production										Quicksilver
	U.S.		Canada		Midstream		Corporate		Elimination		Consolidated
For the Three Months Ended June 30:		(In thousands)
2012
Revenue	$	149,333	$	18,847	$	4,280	$	-	$	(3,898)		168,562
DD&A		39,416		10,627		1,314		585		-		51,942
Impairment expense		898,715		93,206		-		-		-		991,921
Operating income (loss)		(856,498)		(100,671)		1,570		(18,990)		-		(974,589)
Property and equipment costs incurred		44,546		103,778		5,459		1,914		-		155,697
2011
Revenue	$	202,788	$	45,383	$	1,222	$	-	$	(947)	$	248,446
DD&A		41,580		12,087		466		571		-		54,704
Operating income (loss)		75,615		18,962		440		(16,341)		-		78,676
Property and equipment costs incurred		136,454		23,640		1,339		-		-		161,433
For the Six Months Ended June 30:
2012
Revenue	$	280,796	$	32,627	$	7,807	$	-	$	(7,198)		314,032
DD&A		81,239		21,442		2,515		1,185		-		106,381
Impairment expense		961,057		93,611		-		-		-		1,054,668
Operating income (loss)		(865,239)		(113,786)		2,922		(38,685)		-		(1,014,788)
Property and equipment costs incurred		116,977		157,401		11,439		5,447		-		291,264
2011
Revenue	$	382,359	$	77,724	$	2,489	$	-	$	(1,939)	$	460,633
DD&A		80,335		23,511		2,179		1,150		-		107,175
Impairment expense		-		49,063		-		-		-		49,063
Operating income (loss)		135,862		(22,352)		(316)		(35,311)		-		77,883
Property and equipment costs incurred		259,146		98,868		1,730		506		-		360,250
Property, plant and equipment-net
June 30, 2012	$	1,833,524	$	643,274	$	110,279	$	8,989	$	-	$	2,596,066
December 31, 2011		2,752,101		596,935		102,237		9,246		-		3,460,519