Global Hunter Securities GHS 100 Energy Conference June 25, 2013 Chicago, IL
Quicksilver Resources Overview NYSE: KWK 3
Quicksilver Resources Overview Quicksilver is a Fort Worth, Texas-based oil and natural gas exploration and production company focused on long-lived properties located in onshore North America Total proved reserves of 2,023 Bcfe and…
Asset Overview High-quality, large scale resource base provides multi-year drilling inventory and is ideal for joint ventures Horseshoe Canyon CBM Horn River Basin 313,000 net acres 129,000 net acres 162 Bcf of SEC reserves YE12…
Asset Overview Net proved reserves as of 12/31/2012 at 2/28/2013 strip Oil Gas NGL Total PV-10 (MBbls) (Bcf) (MBbls) (Bcfe) (MM) Category Proved Developed 2,326 1,376 51,479 1,698 1,529 Proved Undeveloped 84 283 6,982 325 126 Total…
Pro Forma Asset Overview Breakdown of Quicksilver's reserves by region pro forma for Barnett JV Reserves by Region Reserves by Resource Mix Horseshoe 15% Oil 1% Barnett Gas 83% 77% NGL 16% Horn River 7% Other U.S. 1%…
Upside to Proved Reserves Small percentage of PUDs booked (relative to proved reserves) and large undeveloped acreage position 325 Bcfe of undeveloped reserves (16% of total proved reserves) based on 2/28/13 strip pricing 617,309 net…
Asset Values Market weighs full discount on growth assets Mkt. Value of Barnett is Cap 1.94B based on Barnett Possible upside from growth JV, which is 90% of EV = 2.1B assets, compared Quicksilvers EV at June to 0 valuation 2013 Net…
2013 Goals Closing the market value gap with these initiatives Monetize a portion of Barnett assets Completed 25% sale to Tokyo Gas closed on 4/30 Reduce debt and interest expense Restructure bank facility to provide covenant…
Key Credit Highlights Attractive asset base High quality, low risk asset base with long reserve life and predictable well production profiles with substantial Asset size and quality ideal for joint ventures upside potential Option on…
Debt Maturity Schedule ( in millions) Pre-refinance Debt Maturity Towers Weighted average 350 cost of debt = 7.8% 591 438 433 298 2014 2015 2016 ( 2017 2018 2019 2019 First Lien Senior Notes Senior Subordinated Notes 625 350…
Operations Update NYSE: KWK
Barnett Shale Alliance Lake Arlington Denton 12,000 net acres 6,000 net acres 72.5% WI; 11% avg. royalty 100% WI; 26% avg. royalty EUR of 5 - 8 Bcf on laterals EUR of 4 - 7 Bcf on laterals of 3,500 5,500 of 3,000 5,000 Tarrant…
High-BTU Production Enhances Margins Southern acreage averages 1,250 BTU gas at wellhead; yields 122 barrels of NGLs per 1 MMcf 1.000 Mcf Wellhead production Nat. Gas NGLs Production by product .702 Mcf .122 Bbl Price 4.00 /Mcf…
Barnett JV Deal On 4/30/13, Quicksilver closed the sale of 25% of its Barnett Assets to Tokyo Gas (TG) Quicksilver remains operator TG purchased an interest across the asset No hedges conveyed in the transaction No push to initially…
Partnership with Tokyo Gas TG will be an excellent partner in the Barnett Quicksilvers goal from the outset was to identify and secure a partner that recognizes the natural gas value chain TGs Challenge 2020 Vision of natural gas…
Barnett Update 2012 Activity Drilled 22 gross wells and connected 31 gross wells Inventory of 25 drilled but uncompleted wells at YE2012 Expecting to drill and…
Horn River Update 129,000 acreage position substantially de-risked Producing 87 MMcfd from 11 wells in early May 2013 Production is restricted given surface facilities and water disposal constraints Expecting minimal capital in 2H13…
Horn River Midstream Update Quicksilvers acreage is served by existing treating facilities and pipelines which today can accommodate in excess of 1bcf/day; discounted excess capacity is available Construction of Quicksilvers treating…
Sand Wash Agreement with Shell Quicksilver and Shell will jointly develop more than 320,000 net acres 50/50 sharing Shell will operate a majority of the acreage; Quicksilver retains operatorship on wells drilled (and surrounding…
Colorado Update 2012 activity Drilled 4 wells, completed 3 wells and refracked two wells with treated slickwater Recent verticals IP averaging 100 Boed on shallow declines Completed vertical well in 4Q12 400 Boed (60% oil) IP and…
Midland / Delaware Basin T E X A S COMSTOCK PIONEER CWI WHITING CONOCO -PHILLIPS EL PASO BHP BILLITON FOREST OIL EOG APPROACH CONCHO SANTA RITA RESOURCES BALMORHEA EXXON MOBILE/XTO LEON VALLEY 124,000 net…
Midland / Delaware Basin Update Producing oil from two wells Vande Ranch (Upton County): 2,400 lateral targeting the Wolfcamp formation drilled in 4Q12 still recovering load water Price Ranch 1 (Pecos County): 1,500 lateral drilled…
Key Credit Highlights Attractive asset base with substantial upside potential Financial flexibility Significant downside protection Strong and protected asset coverage High BTU enhanced margins Experienced management team NYSE:…
Appendix NYSE: KWK
Experienced Management Team Glenn Darden Over 32 years of oil and gas industry experience President and President since March 1999 and Chief Executive Officer since December Chief Executive Officer 1999 John C. Cirone Over 40 years of…
Second-quarter 2013 Guidance All amounts pro forma for the Barnett JV Average Daily Production: 282 288 MMcfed Includes the impact of a planned third-party plant outage in June 2013 in the Horn River Basin Lease Operating Expense:…
Cash Margin Supports Barnett Maintenance Capital Low cost structure combined with a strong hedge portfolio translates to solid profit margins Program designed to keep production relatively flat (excluding Barnett JV) in the range of…
Proposed 2013 Capital Plan 2013 capital program will be more in line with cash flow from operations As of 12/31/2012, 65% of Quicksilvers acreage was classified as held by production in its three core operating areas Provides…
Transition in Capex Focus In 2012 and 2013, Quicksilver focused capital expenditures on Horn River Basin infrastructure to address contractual obligations Beginning in 2014, expenditures will focus on Barnett development approximately…
Strong and Protected Asset Coverage Second lien Term Loan & Notes are secured by a majority of the Companys US oil and gas assets on a second lien basis behind the revolving credit facility Asset value beyond Schlumberger and LaRoche…
Strong Derivative Position Underpins capital program through stabilization and 250 predictability of cash flow 6.00 5.10 5.23 Hedge Volume (MMcfd) 5.08 200 5.00 4.00 (/Mcfe) 150 3.00 100 2.00 50 1.00 0 0.00 2013…
Horn River Treating Commitments Prior Commitments Existing Commitments 250 250 Commitment from 5/1/12 to 4/1/13 was 200 200 30 MMcfd before treating plant was commissioned 150 150 MMcfd MMcfd 100 100 50 50 0 0…
Proved Reserves Summary SEC Pricing Net proved reserves as of December 31, 2012 Oil Gas NGL Total PV-10 (MM) Category (MBbls) (Bcf) (MBbls) (Bcfe) SEC price Proved developed 2,416 992 47,294 1,290 625 Proved undeveloped 113 123 8,890…
Proved Reserves History SEC pricing A4 Paper Guide Line 2012 reserve decline reflective of lower natural gas price environment Reserves of 2,023 Bcfe when valued at 2/28/13 strip Reserves (Bcfe) 2,902 2,791 2,416 2,208…
Barnett Type Wells Supporting drilling inventory 10,000 Alliance 10,000 Cowtown Length Gas Price NGL Price Well Cost NPV-10 ROR Q-30d EUR Net Total Length Gas Price NGL Price Well Cost NPV-10 ROR Q-30d EUR Net Total (ft) (/mmbtu)…
HRB Type Curves 20,000 Type Curve (QRI) Avg D-050-A New Pad Wells Avg 4 Pre-2012 Wells Type Curve (2011) 15,000 Gas Rate (mcf/d) Quicksilver Type Curve Qi=20,180 mcf/d, di = 65.0% df = 9.5%, b = 1.1 Qmin = 100 mcf/d EUR =…
Quicksilver Resources 801 Cherry Street, Suite 3700, Unit 19 Fort Worth, TX 76102 Website: www.qrinc.com Investors: David Erdman Phone: 817-665-4023 Email: derdmanqrinc.com
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