Fort Worth, TX-based Quicksilver Resources Inc. -- which makes a specialty of targeting unconventional reservoirs, including gas shales -- said more than half of its capital budget for 2011 of $455 million will be spent in Texas.
Production for 2011 is projected to average in the range of 425-435 MMcfe/d, an increase of more than 20% from the projected 2010 average. Average daily production volumes for 2011 are expected to consist of 80% natural gas and 20% NGLs and crude oil.
The budget includes about $280 million for drilling and completion, $85 million for gathering and processing, $50 million for leasehold and $40 million for other property and equipment. About $320 million is anticipated to be spent in Texas, $110 million in Canada and $25 million elsewhere in the United States.
"Quicksilver's 2011 capital program is anticipated to result in an increase of more than 20% in our average daily production volumes and will fund the ongoing evaluation of our high-potential exploratory acreage positions in the Horn River and Greater Green River basins," said CEO Glenn Darden. "Our attractive hedge position covers approximately 50% of our anticipated 2011 production with weighted-average floor prices of $6.06/Mcf of natural gas and $38.33/bbl of natural gas liquids [NGL] to underpin a substantial portion of our capital program."
In the Fort Worth Basin, the company expects to operate two rigs throughout the year resulting in the drilling and completion of about 40 gross (33 net) wells. The company also anticipates completing about 45 gross (43 net) additional wells from its inventory of drilled but uncompleted wells in the Fort Worth Basin.
Total capital expenditures include about $40 million for exploratory drilling and completion and $80 million for infrastructure and leasehold associated with the company's leasehold in the Horn River Basin of British Columbia and the Greater Green River Basin in northern Colorado.
Quicksilver has been in talks with an investor group, which includes Darden, about the possibility of a buyout that would take the company private (see Shale Daily, Oct. 26).