Quicksilver Resources Inc. set a new record for average daily production in a quarter, producing an average of more than 362 MMcfe/d in the third quarter, up 16.4% compared to about 311 MMcfe/d for the same period in 2009, the company said.
Total production for the third quarter was about 33.3 Bcfe compared to 28.6 Bcfe for the third quarter of 2009. Increased production of dry gas from the company's Lake Arlington and Alliance projects in the northern portion of its Fort Worth Basin acreage primarily drove the increase, Fort Worth, TX-based Quicksilver said.
Production in the third quarter was about 78% natural gas, 21% natural gas liquids (NGL) and 1% crude oil and condensate. The company's weighted-average realized commodity price in the third quarter was $6.55/Mcfe, down about 5.5% from the prior-year quarter.
In the Fort Worth Basin Quicksilver drilled 22 gross (19.0 net) wells and connected 28 gross (23.9 net) wells to sales during the third quarter. It has three rigs working in the basin and said it expects to remain at this level through the remainder of the year. Quicksilver has four hydraulic fracturing crews working in the basin and expects to reduce its inventory of drilled-but-uncompleted wells in the Fort Worth Basin to about 90 by year-end.
In the Horseshoe Canyon area of Alberta, drilling, completion and pipeline activities resumed in the third quarter as ground conditions allowed. The company drilled six gross (5.1 net) operated wells during the third quarter and at this time does not plan to drill any more wells for the remainder of the year. This will result in a total of 11 gross (9.3 net) wells drilled in the area during 2010. The company expects to complete or recomplete 13 gross (8.5 net) wells and tie in 11 gross (8.5 net) wells during the fourth quarter of the year in the Horseshoe Canyon area.
In the Horn River Basin of northeast British Columbia, Quicksilver's C-29-D well has averaged more than 12 MMcf/d during the first 22 days of production. This is the company's third completion in the basin and the most productive to date. Quicksilver's three producible wells in the Horn River are capable of producing more than 15 MMcf/d, the company said. Completion work on a fourth well is expected to begin soon.
Quicksilver has added about 145,000 gross (77,000 net) acres to its existing acreage holdings in the Greater Green River Basin of northern Colorado and southern Wyoming. The company now has about 140,000 net acres in the basin, which it said it believes to be prospective for both oil and natural gas in the Niobrara formation. Quicksilver said it anticipates drilling two exploratory wells on this acreage in 2011.
Fourth quarter 2010 production volumes are expected to be in the range of 385-397 MMcfe/d.
The company has derivatives in place to cover about 66% of expected production for the fourth quarter. A total of 200 MMcf/d of natural gas is covered by collars with a weighted average floor price of $7.40/Mcf and 10,000 b/d of NGLs are covered by fixed-price swaps with a weighted-average price of $33.47/bbl for the fourth quarter.
In 2011, the company has a total of 150 MMcf/d of gas production covered by collars and fixed-price swaps with a weighted-average floor price of $6.20/Mcf and 8,000 b/d of NGLs are covered by fixed-price swaps with a weighted average price of $38.33/bbl.
During a conference call with financial analysts Monday, executives said they would not be discussing the recently received buyout offer from Quicksilver CEO Glenn Darden, Chairman Thomas Darden and the Darden family-controlled Quicksilver Energy LP (see Daily GPI, Oct. 26).
Quicksilver's sale of its interests in midstream unit Quicksilver Gas Services closed Oct. 1 (see Daily GPI, July 26).
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