Quicksilver Resources Inc. (KWK) reported an adjusted loss of 7 cents per share in the second quarter of 2014, in line with the Zacks Consensus Estimate. The company had posted a loss of 6 cents per share a year ago.
On a GAAP basis, quarterly loss was 21 cents per share as against earnings of $1.37 per share in the prior-year quarter. The variance between GAAP and adjusted loss was primarily due to the combined impact of an unrealized gain on commodity derivatives, expenses for debt issuance and retirement, strategic transaction costs and income tax adjustments.
Total Revenue
In the second quarter, Quicksilver Resources' total revenues were $118 million, similar to the Zacks Consensus Estimate. On a year-over-year basis, quarterly revenues decreased 32.8% from $175.5 million a year ago primarily due to a decline in production volume.
Shares of Quicksilver Resources tanked 15.7% on Aug 5 following unfavorable second-quarter results.
Operational Update
In the quarter under review, Quicksilver Resources’ overall average production volume was 255 million cubic feet of natural gas equivalent per day (MMcfed), down 11.1% from 287 MMcfed a year ago. This was primarily due to lower contribution from its Canadian operations as a result of minimum capital outlay.
Total realized prices in the reported quarter increased 2% year over year to $4.59 per thousand cubic feet equivalent (Mcfe) due to higher average realized prices of natural gas liquids (NGL), natural gas and oil.
Total operating expenses fell 8.2% year over year to $104.5 million, primarily due to lower lease operating as well as general and administrative expenses.
In the second quarter, the company’s operating income was $13.5 million compared with $394.9 million a year ago.
Quicksilver Resources incurred $41.2 million as interest expense, down 67.6% year over year primarily due to lower long-term debt.
Financials
As of Jun 30, 2014, Quicksilver Resources had cash and cash equivalents of $22.3 million compared with $89.1 million as of Dec 31, 2013.
Long-term debt as of Jun 30, 2014, was $1,795.6 million versus $1,988.9 million as of Dec 31, 2013.
Net cash used in operating activities during the first half of 2014 was $0.8 million compared with $78.1 million in the year-ago period.
In the first six months of 2014, the company invested $88 million as capital expenditure, higher than the year-ago figure of $55.8 million.
Guidance
Quicksilver Resources expects third-quarter 2014 daily average production volume in the range of 245−250 MMcfed, based on a planned, nonconsecutive, two-week outage at a third-party treating facility in the Horn River Basin.
The company reiterated its 2014 production volume guidance in the range of 245–255 MMcfed.
Quicksilver Resources provided its capital investment guidance in the range of $130–$135 million for 2014.
Other Company Releases
Anadarko Petroleum Corporation (APC) reported second-quarter 2014 adjusted earnings of $1.32 per share, missing the Zacks Consensus Estimate of $1.34 by 1.5%.
Clayton Williams Energy, Inc. (CWEI) reported adjusted earnings of 77 cents per share in second-quarter 2014, missing the Zacks Consensus Estimate by 44.2%.
Encana Corporation’s (ECA) second-quarter 2014 adjusted earnings were 23 cents per share, lagging the Zacks Consensus Estimate of 28 cents by 17.9%.
Zacks Rank
Quicksilver Resources currently carries a Zacks Rank #3 (Hold).
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