CapitalOne Southcoast Energy Conference Glenn Darden President and CEO December 7, 2011 NYSE: KWK www.qrinc.com
Compelling Investment Opportunity High-quality resource base 68% proved developed 12 Tcfe of proven unbooked resource potential High full-cycle margins Cost-free option on new developing oil plays Significant current market…
Market Valuation Gap High-Quality Reserves 2010 Developed Reserves 2010 Full-cycle Margin/Mcfe Produced* 100% 4 75% 2.78 68% 3 Percent /Mcfe 50% 2 25% 1 0% 0 Enterprise Value/Mcfe of Reserves** 7 October 31, 2011 6…
Valuation Comparison A Compelling Case 5 LGCY Enterprise Value per Mcfe Reserves 4.76 4 EVEP 3.67 VNR LINE 3.49 PSE 3 3.44 3.19 RRC 2.90 BBEP 2 FST 2.09 SD 1.55 1.84 1 KWK 1.19 Gas Oil NYSE: KWK…
Recent Asset Transactions Contradict KWK Low Valuation Barnett Proceeds Production Proceeds Imputed KWK Barnett Shale Transactions MM (Mmcfe/d) (Mcfe/d) KWK metric Barnett Value MM Range / Legend 877 113 7,761 350 2,725 Encana /…
2011 Goals Close the market value gap by: Growing production 20% Maintaining low full-cycle unit cost structure to maximize margins Commercializing Horn River natural gas resource development Pursuing potential upstream and…
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 316,000 net acres 10 Tcf…
Plan to live within cash inflows 2011 Estimated Capital Forecast 690 Cash Sources Potential Joint Ventures: HRB Upstream Operations 300 Niobrara HRB midstream 125 Montana Bakken BreitBurn Units West Texas Barnett Sold 145 Sold…
FWB Barnett Consistent, Repeatable Growth Still a premier, low-cost basin Alliance Lake Arlington Denton 10,000 net acres 5,000 net acres 72.5% WI; 11% avg. royalty 100% WI; 26% avg. royalty EUR of 4.0-4.5 Bcf EUR of 4.5-5.5 Bcf…
High-BTU Production Enhances Margins Southern acreage averages 1250 BTU gas at wellhead; yields 130 barrels of NGLs per 1 MMcf 1.000 Mcf Wellhead production Nat. Gas NGLs Production by product .759 Mcf .130 Bbl Price 4.00 /Mcf…
Gas Mining KWK Alliance Development vs. Competitors 2009/2010 2008/2009 2011/2012 2009/2010 NYSE: KWK www.qrinc.com
Gas Mining Results Alliance Gross Gas Volumes 350,000 300,000 250,000 Gross Gas (mcf/d) 200,000 150,000 100,000 50,000 0 Aug-08 Nov-08 Feb-09 May-09 Aug-09 Nov-09 Feb-10 May-10 Aug-10 Nov-10 Feb-11 May-11…
Horn River Basin NE British Columbia Quicksilvers shareholders have the greatest per share impact with continued success in the Horn River C-29-D flare, estimated at 11 MMcf/d while running casing in Muskwa lateral Winter…
Horn River Basin Quicksilvers Position 130,000 acres: Quicksilver 130k acres 20 licenses: 100% WI Expect to convert virtually Devon all licenses to 10-year 153k acres leases in 2012 Resource potential: 10 Tcf of natural gas…
KWKs Horn River Drilling Activity Yukon NW Territories Horn River 4 Muskwa/Klua wells drilled & completed British b-91-G drilled Columbia Alberta c-81-G drilled 4 additional Muskwa Calgary Winter freeze-ins wells drilled…
Cost of Production Cost = 2.20-2.70/mcf* + 1.10/mcf F&D *Includes LOE, Gathering, Treating and Transportation NYSE: KWK www.qrinc.com
KWKs HRB Multiple Take-away Options Commitment w/ TCPL Horn River Basin Multiple Markets ECA TCPL Horn River Cabin & Spectra Extension 2014 Low-cost Ft. Nelson Cabin Gas Plant transportation Gas Plant Aitken Creek…
KKR MOU 50/50 joint venture Quicksilver contributes 20 pipeline and compression (basis 95 M) KKR pays Quicksilver 125 M Partnership to build initial 150 MMcfd treating facility ( 120 M) 2014 start Quicksilver has option to be…
KWK Midstream Options to TCPL KWK option to AECO Treatment 0.50 TCPL receipt charge 0.26 0.76 Spectra option for 3rd parties to AECO RGT to Ft. Nelson 0.31 Ft. Nelson treatment 0.67 T-North receipt charge + TCPL 0.58 1.56 NYSE:…
Asian LNG Supply Shortfall WoodMac forecasts significant supply need between 2010 and 2017 NYSE: KWK www.qrinc.com
Colorado Summary 214,000 net acres Average NRI 81% 100 MM Bbls of oil resource potential 2011 activity: Drill one horizontal and six vertical resource assessment wells All seven wells expected to be online by the end of 2011…
Montana Southern Alberta Basin Secure acreage position allows the play to come to Quicksilver 175,000 net acres in basin Cut Bank oil Glacier Toole production holds 100% of 119,000 net acres 300,000- acre AMI Bakken formation…
West Texas Wolfpack 100,000 net acres; 78% NRI Additional 50,000 net acres in Presidio County Drilling and completion operations to commence in Q1 2012 NYSE: KWK www.qrinc.com
Production Forecast MMcfe/d Identified projects in Fort Worth Basin offer 600 low-risk, low-cost growth 500-510 500 415-420 130 MM 400 Maintenance 355 Capital 325 300 263 200 151 100 0 (1) 2007 2008 2009 2010 2011E 2012P (1)…
Financially Sound High full-cycle margins Strong hedge position in 2011 and expanding hedges for 2012 and beyond Reducing debt levels Debt per reserve of .65/Mcfe 12/31/10 1 billion of liquidity 54% of borrowing base available…
Reducing Leverage /Mcfe Debt to Proved Reserves Debt to Proved Developed Reserves NYSE: KWK www.qrinc.com
Compelling Investment Opportunity High-quality resource base 68% proved developed 12 Tcfe of proven unbooked resource potential High full-cycle margins Cost-free option on new developing oil plays Significant current market…
CapitalOne Southcoast Energy Conference Glenn Darden President and CEO December 7, 2011 NYSE: KWK www.qrinc.com
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