Quicksilver Resources Inc., whose natural gas portfolio is spread across North America, said Monday it would reduce its 2010 capital program “to reflect reduced planned drilling and completion activities” in the Barnett Shale.
Quicksilver’s 2010 capital program now is expected to total around $510 million. Production is forecast to average 360-370 MMcfe/d, which is 11-14% higher than 2009 average daily volumes.
“Quicksilver has made the decision to reduce development drilling and bring less production online in the current environment,” said CEO Glenn Darden. “We have shifted approximately $30 million of capital to add to our acreage positions in both the Fort Worth and the Horn River basins and will save drilling locations for the future.”
The Fort Worth, TX-based producer also reported that it reversed its year-ago losses in 1Q2010, with net income of $8.2 million (5 cents/share), compared with a net loss of $569.0 million (minus $3.37). Adjusted net income in the first three months of this year was $33.8 million (20 cents/share), up 27% from $26.6 million (16 cents) in 1Q2009.
In 1Q2010 average production was about 318 MMcfe/d, down from 332 MMcfe/d in the year-ago period. The first three months of 2009 included about 17 MMcfe/d of output from the Alliance area, which was divested to Eni, Quicksilver noted. Total production in 1Q2010 was around 28.7 Bcfe, down slightly from 29.8 Bcfe a year earlier.
Quicksilver’s production volumes in the first three months of the year were 77% weighted to natural gas, 21% to natural gas liquids (NGL) and 2% to crude oil and condensate. Increased activities at the Lake Arlington and Alliance projects in the northern portion of the Fort Worth Basin acreage resulted in increased production of dry gas, the producer said.
Sales of natural gas, NGLs and crude oil increased about 10% from a year earlier to $201.6 million from $183.6 million.
In the Fort Worth Basin Quicksilver drilled 28 (22.4 net) wells and connected 21 (16.9 net) wells to sales in 1Q2010. It now has three rigs working and it expects to drill and complete about 98 wells in the basin in 2010. The company also expects to complete another 25 new wells this year from its existing inventory of drilled but uncompleted wells. Once it completes the drilling plan, Quicksilver said it would exit 2010 with around 120 drilled but uncompleted Fort Worth Basin wells in inventory, “which provide ongoing opportunities to add production at reduced capital levels.”
In Canada, the company participated in five (4.25 net) wells in the Horseshoe Canyon area of Alberta in 1Q2010. Quicksilver also finished exploratory drilling activities on two additional horizontal wells into the Muskwa formation in the Horn River Basin of northeast British Columbia. Completion activities on the first of these new wells are expected to begin in late summer, following the current break-up period, and completion of the second well is anticipated by year end.
Early next year the company plans to reenter an existing well in the Horn River Basin to drill a horizontal test of the Exshaw oil formation, which the company has encountered in each of its four wells drilled to date there.
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