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.
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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.)
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.)
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