Barclays Capital CEO Energy-Power Conference September 4-5, 2012 New York, NY NYSE: KWK www.qrinc.com
Competitive Strengths ID large resource targets, early entry, maximum resource capture Low-cost operator by design Integration from wellhead to point-of-sale Efficient, dedicated and talented team Evaluate, develop and capture…
How we do it 1. Early entry acreage acquisition 2. Resource assessment 3. Validate size and commerciality 4. Build infrastructure to facilitate low-cost, efficient development 5. Develop (large-scale) resource and convert to value…
2012 YTD Accomplishments Completed 8-well Horn River pad First production in West Texas from Bone Springs well Secured credit facility amendment Deferral of capital spending and midstream commitments in Horn River Basin Advanced…
Remaining 2012 Goals Secure upstream joint ventures Validate new projects to Attack cost structure to maximize margins Monetize Barnett Shale assets via MLP or asset sale Generate free cash flow Reduce debt NYSE: KWK…
Asset Overview A proven record of success in unconventional reservoirs that provide a balance of predictable growth and exploratory opportunities. Horn River Basin Horseshoe Canyon CBM 130,000 net acres 330,000 net acres 99 Bcfe of…
BARNETT NYSE: KWK www.qrinc.com 8
Barnett Update 1H12 2H12 Averaged 1 rigs, drilling Scaling back activity mainly in southern high- Planning to drill 4 wells, BTU acreage complete 6 wells, and connect 8 wells to sales Drilled 18 wells and Expecting to cease…
High-BTU Production Enhances Margins Southern acreage averages 1250 BTU gas at wellhead; yields 121 barrels of NGLs per 1 MMcf; economics still strong at Mt. Belvieu 1.000 Mcf Wellhead production Nat. Gas NGLs Production by…
CANADA NYSE: KWK www.qrinc.com 11
Horn River Update d-050-A pad overview Completed an 8-well pad in July/August 2012 All wells are exceeding the top-end of expectations Pad is estimated to have the capacity to produce in excess of 150 MMcfd Production is being…
Horn River Update d-050-A pad results Individual wells have produced at a rate of between 23-34 MMcfd 50% improvement in peak gas rate New vs. existing wells exhibiting similar normalized production rate (Mcfd per foot) IP…
HRB Type Curves: First Four Wells NYSE: KWK www.qrinc.com 14
Horn River Update Commitments The 8-well pad has capacity to meet substantial portion of midstream commitments through 2013 NOVA Komie North pipeline extension pushed out more than one year to August 2015 Capital spending…
Fortune Creek Partnership (Horn River) 50/50 partnership formed with KKR in December 2011 Quicksilver contributed 20 pipeline and compression KKR paid Quicksilver 125 MM Agreed to build initial 150 MMcfd treating facility ( 120…
KWK Midstream Options to TCPL Current option for 3rd parties to AECO RGT to Ft. Nelson 0.31 Ft. Nelson treating 0.67 T-North receipt charge + TCPL 0.50 1.48 Fortune Creek option to AECO Treating 0.55 TCPL receipt charge 0.27…
Composite Type Curve 80 Vintage Wells c.1960-80 100 Forecast EUR Zerotime Average Qi = 60 193,837 bbl Dei = 25 Curve Fit b = 1.2 Demin = 3 Lat Length = n/a Oil (bbl/d) 10 1 0 60 120 180 240 300 360 420 480 540 600…
Colorado Update 1H12 2H12 Drilled 2 vertical wells; Drill one well and completed frac on one complete two wells well Build-out of gathering Newer vertical wells IP at infrastructure deferred 100 Boed into 2013 Recompleted two…
WEST TEXAS NYSE: KWK www.qrinc.com 22
West Texas Wolfpack 30K Acres 30K Acres 45K 105,000 net acres; Acres 78% NRI Additional 50,000 net acres in Presidio County (Marfa Basin) Seeking joint venture partner NYSE: KWK www.qrinc.com 23
West Texas Update 1H12 2H12 Drilled a vertical well in Complete Vande Ranch Pecos County; fracked first horizontal lateral stage of Wolfcamp Sands Price Ranch 1 on Drilled vertical Vande production Ranch well in Upton County…
West Texas Update Price Ranch 1 Well Results Re-entered vertical Price Ranch 1 well and completed 1,500 Hz lateral with six frac stages Targeted 3rd Bone Springs IP rate of 300 Boed; 10-day rate of 200 Boed 80% oil, 20% high-BTU…
FINANCIAL NYSE: KWK www.qrinc.com 26
Financially Sound Reducing capital spending across the asset base amid historically-low commodity prices 2012 capital spending reduced by 50 million Reduced future drilling requirements and letter-of-credit postings in Horn River…
Financially Sound (contd) Strong hedge position; hedge book valued at 350 MM June 30 Debt per reserve of .68/Mcfe at 12/31/11 Executable deleveraging strategy 440 MM unutilized of 850 MM credit facility as of 6/30/12 (includes…
Strong Hedge Position Underpins capital program through stabilization 300 7.00 and predictability of cash flow 6.00 250 Volume (MMcfed) 5.00 200 4.00 150 3.00 100 2.00 50 1.00 0 0.00 2012 2013 2014 2015 Volume…
Compelling Investment Opportunity High-quality resource base 69% proved developed 11 Tcfe of proven unbooked resource potential Solid hedge position Large-scale resource inventory, largest in company history High full-cycle…
Barclays Capital CEO Energy-Power Conference September 4-5, 2012 New York, NY NYSE: KWK www.qrinc.com
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