RBC Capital Markets Global Energy & Power Conference June 5-6, 2012 New York, New York 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…
Asset Portfolio Life Cycle Horseshoe Barnett Canyon Shale Maturity Horn River Basin Niobrara W. Texas 1 2 3 4 5 6 7 8 9 10 11 12 Years NYSE: KWK www.qrinc.com 5
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…
2012 Goals Live within cash inflows Maintain low full-cycle unit cost structure to maximize margins Advance new projects to development stage Secure upstream joint ventures Launch MLP Reduce total debt NYSE: KWK www.qrinc.com 7
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 9
2012 Barnett Plan Utilize two rigs in the first quarter; scale down to one rig in second quarter through remainder of the year Drilling concentrated to high-margin, high- BTU southern acreage Expected to drill 25 wells (20 net)…
High-BTU Production Enhances Margins Southern acreage averages 1250 BTU gas at wellhead; yields 121 barrels of NGLs per 1 MMcf 1.000 Mcf Wellhead production Nat. Gas NGLs Production by product .718 Mcf .121 Bbl Price 3.00 /Mcf…
CANADA NYSE: KWK www.qrinc.com 12
2012 Horn River Plan Drill up to 8 wells, complete 7-8 Drilling plan meets commitments to third- party gatherers and partnership with KKR 2012 drilling program has converted all exploration licenses to 10-year leases Partnership…
KWK HRB Production Results NYSE: KWK www.qrinc.com 14
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. Cabin Gas Plant transportation Nelson Gas Plant Aitken Creek…
KKR Partnership 50/50 partnership Quicksilver contributes 20 pipeline and compression KKR paid Quicksilver 125 M Partnership to build initial 150 MMcfd treating facility ( 120 M) 2014 start Quicksilver has option to be carried…
KWK Midstream Options to TCPL Current option for 3rd parties to AECO RGT to Ft. Nelson 0.31 Ft. Nelson treatment 0.67 T-North receipt charge + TCPL 0.50 1.48 KWK KKR option to AECO Treatment 0.55 TCPL receipt charge 0.27 0.82…
Colorado Summary 210,000 net acres (oil) Average NRI 81% 500 MM Bbls of oil equivalent resource potential Sweet crude +/- 40 gravity First horizontal well production 5x vertical test Colorado NYSE: KWK www.qrinc.com…
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…
2012 Niobrara Plan Drill and complete up to 7 vertical and horizontal wells across acreage to confirm encouraging results from initial wells Install gathering infrastructure Advance project to development stage NYSE: KWK…
WEST TEXAS NYSE: KWK www.qrinc.com 23
West Texas Wolfpack 100,000 net acres; 78% NRI Additional 50,000 net acres in Presidio County Seeking joint venture partner NYSE: KWK www.qrinc.com 24
2012 West Texas Plan Currently drilling vertical Bone Springs and Wolfcamp wells in Pecos and Upton Counties Secure partner to leverage the early development of the play Advance project to development stage NYSE: KWK…
Financially Sound High full-cycle margins Strong hedge position in 2012 and beyond Debt per reserve of .68/Mcfe at 12/31/11 1.1 billion revolving credit facility 680 MM undrawn as of 3/31/12 No near-term debt maturities 475 M…
Strong Hedge Position Underpins capital program through stabilization 400 and predictability of cash flow 400 350 65% of 350 40% of 300 gas hedged gas hedged 300 avg. floor avg. floor 250 5.75 5.40 MMcfe/d MMcfe/d 250…
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…
RBC Capital Markets Global Energy & Power Conference June 5-6, 2012 New York, New York NYSE: KWK www.qrinc.com
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