Fort Worth, TX-based Quicksilver Resources Inc. has added depth to its North American lineup of oil and gas prospects with two large-scale commercial projects — one in search of a partner — which altogether would give it a large presence in seven North American basins, officials said Thursday.

CEO Glenn Darden and Chairman Toby Darden, his brother, shared a microphone to discuss the company’s strategy, as well as to detail their search for a partner to share upstream costs in the Horn River Basin (see Shale Daily, Jan. 6). As big as the Horn River development is expected to be, the Darden brothers were just as keen to talk about an emerging project in the Niobrara formation in Colorado, as well as a set of fields in West Texas.

In the Niobrara, Quicksilver has accumulated more than 210,000 net acres, with an average net revenue interest of 81%, Toby Darden said. “That falls back on our strategy of getting in early. We have low cost in this acreage and we have a very consolidated position,” which covers 936 square miles.

The reason why Quicksilver made a move into the Niobrara was simple: the Niobrara/Lower Mancos shale is “oil-charged,” but until now it’s only been tapped using vertical wells. Using horizontal drilling and hydraulic fracturing (fracking) stimulation, “we think there’s an oil reserve target to Quicksilver’s acreage of around 500 million bbl of oil if we’re able to exploit it effectively.”

As far as the estimated drill depths, “that’s another attractive part of this play” because they’re shallow, said Toby Darden. “They’re between 4,500 feet to 9,000 feet vertical depth. The crude is sweet…And what we are seeing and what we believed going into the play is that modern frack technology and horizontals could open a trend to areas of poor natural fracture development.

“The encouraging part of that is we’ve now drilled wells across our acreage and our first horizontal well in kind of the middle of that is showing five times the vertical results at rates of over 500 b/d…It should be noted that that’s a 3,000-foot lateral. And ultimately, as…in other plays, we expect the lateral length to grow quite a bit, probably double.”

Vintage vertical wells, mostly drilled between 1960 and 1980, have recovered more than 12 million bbl of oil and 5 Bcf of gas, he said.

“From the 80 vintage wells we can access good production data on, we developed a composite-type curve of those wells. The interesting feature of these and the reason we think they’re inadequately stimulated is they have very, very flat declines, like 2-3% tail declines and ultimate recoveries of nearly 200,000 bbl per well across an 80-well sample, which is representative of the acreage block. That’s what gave us confidence in the beginning to take this acreage, and it’s being borne out in our vertical tests and, currently, our new horizontal tests.”

One horizontal test well is now producing more than 500 b/d, said the chairman. “This horizontal well had good oil shows throughout, and we had to wait up because it kept flowing oil on us while drilling.”

Also high on the prospect list is Quicksilver’s Wolfpack prospect in West Texas, which includes the Santa Rita, Leon Valley and Balmorhea fields in the Wolfcamp and Bone Spring sections.

“We have taken an acreage position in four core areas totaling 155,000 net acres,” said Toby Darden. “We’re surrounded by active leasing and drilling programs. This is probably the hottest — certainly one of the hottest — plays in North America and one of the two hottest plays in Texas,” he said, referring to the Eagle Ford Shale in South Texas.

“We estimate that ultimately we’ll develop over 1,000 wells on acreage we currently hold. We have plenty of term on this acreage, and we have reserve potential greater than 300 million boe.”

According to the chairman, Quicksilver currently is the sixth largest acreage holder in the play and it has three blocks in “close proximity” to leases operated by BHP Ltd., ExxonMobil Corp., ConocoPhillips, Concho Resources, EOG Resources Inc. and Approach.

“This is a heck of a play,” said Toby Darden. “And what’s interesting about it is that most of the development that you see now is going horizontal. In the horizontal aspects of the play, as you can see from a very thick section of rock, you have multiple targets within that thick section to go after. So we’re really not sure what the ultimate development looks like, but it’s going to be many, many wells, stacked, probably. And from the early results from our competitors, it looks like it’s going to be high deliveries from the Wolfcamp and Bone Springs section.”

The West Texas acreage is well suited for a partner, which Quicksilver will be pursuing, said the chairman. “And so we’re going to bring in a partner early on that project to possibly expand the play and also to help us with the early development from a capital side. We think that will protect the capital budget for continuing to take the Horn River down the path and the Barnett down the path and, more importantly, our new Niobrara down the path and continue to grow West Texas. So we have instituted a formal process on West Texas to bring in a partner there.”

Glenn Darden told callers that the management team realizes that with the company’s debt position “selling assets is important to reduce overall debt in order to free up more cash flow for growth.” It was a main reason the company chose to monetize its Barnett Shale leasehold, which it announced last fall (see Shale Daily, Oct. 21, 2011).

“We are entering our ninth year of activity in the Barnett, and while still some distance from the full maturity, the Barnett is of a size that can meaningfully reduce this debt,” said the CEO. By using a master limited partnership, “we believe the company will…receive a better price for the assets, and we’ll still have ownership in the growth of the Barnett unbooked resource of over 1 Tcfe and also participate in the gas price recovery over time by forming a master limited partnership.”

In November Quicksilver had set a target of filing for the MLP by the end of 2011. However, timing has “lagged by about 30 days, but we should be filed relatively soon,” said Glenn Darden.

Quicksilver will be finalizing its 2012 capital budget “shortly. And similar to the previous two years, if capital expenditures exceed cash flow, we will bring in outside dollars to fund individual projects.”