"We are pleased to have SWEPI as a partner in this important oil project. It is also a step toward improving Quicksilver's liquidity position," said Glenn Darden, Quicksilver's President and CEO. "The proceeds from the closing of the Agreement will be used to reduce the company's credit facility borrowings and to fund future project development."
The company also provided an update on additional transaction efforts, as well as an update on Horn River volumes and recently-completed wells in the Sand Wash Basin and in the Midland Basin in West Texas.
Quicksilver is engaged in confidential negotiations with a potential buyer to sell a non-operated minority working interest in its Barnett Shale Asset in North Texas.
The company continues to negotiate a potential joint venture in the Horn River Basin in Northeast British Columbia, with the downstream marketing of the gas a top priority. The company plans minimal capital spending in the basin until this joint venture is executed.
As previously announced, the company expected to close the Barnett and Horn River transactions by year end 2012. Negotiations continue on both transactions and further updates will be provided in the first quarter of 2013.
Horn River Basin
The company's Horn River Basin Asset began ramping-up production in mid-December 2012 to 100 million cubic feet per day (MMcfd) of raw natural gas, which is being sourced from nine wells. Four wells have been producing for over 18 months, and five wells are being brought online in stages since the d-50 pad was completed in the third quarter of 2012. Net sales volume after treating is expected to be approximately 80 MMcfd at gross production of 100 MMcfd.
Sand Wash Basin
In the Sand Wash Basin, Quicksilver completed its most recent vertical well with initial production of 400 barrels of oil equivalent per day (Boed), which was partially restricted due to surface facility limitations. The well averaged 210 Boed -- of which 70% is oil -- for the first 30 days of production. With this well, the company has now found oil-productive Niobrara across a distance of 35 miles in an east-to-west band on its leasehold in Moffat and Routt counties.
Quicksilver recently completed a second well in its West Texas Project in Upton County. The well is currently flowing back its load water from the 2,400-foot horizontal well bore which targeted the Wolfcamp formation, but has shown oil production while in flowback. The Price Ranch #1 well, Quicksilver's first short lateral well drilled in Pecos County, has averaged 120 Boed over its first 100 days of production from the Bone Springs formation.
About Quicksilver Resources
Fort Worth, Texas-based Quicksilver Resources is an independent oil and gas company engaged in the exploration, development and acquisition of oil and gas, primarily from unconventional reservoirs including gas from shales and coal beds in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas; Craig, Colorado; Steamboat Springs, Colorado and Cut Bank, Montana. Quicksilver's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. For more information about Quicksilver Resources, visit www.qrinc.com.
Certain statements contained in this press release 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; failure or delay in completing strategic transactions; the effects of existing or future litigation; failure to 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 assets; and additional factors described elsewhere in this press release.
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 press release are made only as of the date of this press release, 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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