Quicksilver Resources (NYSE:KWK) continued to drive production growth in the first quarter of 2011 on the back of the company's development of its core Barnett Shale properties in the Fort Worth Basin.

TUTORIAL: The Oil Services Industry

Production Growth
Quicksilver Resources reported production of 392.3 million cubic feet of natural gas equivalents per day in the first quarter of 2011, up 28% from the first quarter of 2010. This production was 81% natural gas and 18% natural gas liquids. (For more, see Unearth Profits In Oil Exploration And Production.)

Barnett Shale
KWK achieved this production growth through the aggressive development of assets in Texas that have exposure to the Barnett Shale. The company operated two rigs during the quarter, drilled 15 net wells and put another 45.2 net wells onto sales.

Quicksilver Resources produced 318.6 million cubic feet of natural gas equivalents per day from its Barnett Shale properties in the first quarter of 2011. This was 31% year-over-year production growth for the company and this basin now represents 82% of the company's total production.

The company has a large backlog of drilled wells that are either awaiting completion or pipeline connections. This inventory totaled 90 wells at the end of the first quarter of 2011, and the company expects to reduce this to 45 by the end of 2011.

Other companies that have operations in the Barnett Shale include Devon Energy (NYSE:DVN), which reported production of 1.2 billion cubic feet of natural gas equivalents per day from here in the first quarter of 2011.

EOG Resources (NYSE:EOG) is also developing the Barnett Shale and is focused on the northern part of the play, where wells produce liquids as well as natural gas. The company has 185,000 net acres under lease in Montague and Cooke counties. (For more, see Oil And Gas Industry Primer.)

Horn River Basin
Also active in the Horn River Basin in Canada, Quicksilver has drilled a total of eight wells here into two different formations. The leases here are structured so that the company only has to drill two more wells to convert all of its 130,000 net acres into 10-year development leases.

Quicksilver Resources reported production of 11.1 million cubic feet of natural gas equivalents per day from the Horn River Basin in the first quarter of 2011. This was 50% higher than the same quarter in 2010.

The company recently finished drilling a well into the Exshaw formation and expects to complete this well during the summer of 2011. The Exshaw is an oil bearing formation and success here would open a new play for the company. Other companies that are developing the Horn River Shale include Apache Corporation (NYSE:APA), which is involved in a joint venture that plans to complete 28 wells here in 2011.

The Bottom Line
Reporting strong production growth in the first quarter of 2011, the company exploited the large inventory of drilling locations on its Barnett Shale properties. (Oil and gas investments can provide unmatched deduction potential. For more, see Oil: A Big Investment With Big Tax Breaks.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing Basics

    Why do Debt to Equity Ratios Vary From Industry to Industry?

    Obtain a better understanding of the debt/equity ratio, and learn why this fundamental financial metric varies significantly between industries.
  2. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Morningstar Small-Cap Value

    Find out about the Shares Morningstar Small-Cap Value ETF, and learn detailed information about this exchange-traded fund that focuses on small-cap equities.
  5. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  6. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  7. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  8. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  9. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  10. Mutual Funds & ETFs

    ETF Analysis: WisdomTree SmallCap Earnings

    Discover the WisdomTree Small Cap Earnings ETF, a fund with a special focus on small-cap and micro-cap stocks with positive earnings.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
RELATED FAQS
  1. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  4. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  5. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>
  6. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!