Quicksilver Resources Reports Preliminary 2013 Fourth-Quarter and Full-Year Results

Quicksilver Resources Reports Preliminary 2013 Fourth-Quarter and Full-Year Results  FORT WORTH, Texas, March 14, 2014 (GLOBE NEWSWIRE) -- Quicksilver Resources Inc. (NYSE:KWK) today announced preliminary 2013 fourth-quarter and full-year results.  2013 and Q1 2014 Highlights:  -- Raised proceeds and announced sales for total of $596 million    *Sold 25% interest in Barnett Asset to TGBR, a subsidiary of Tokyo Gas Co.,     Ltd., for net proceeds of $464 million   *Sold Montana Asset to Synergy Offshore LLC for net proceeds of $42 million   *Announced sale of Niobrara Asset along with SWEPI LP to Southwestern     Energy Co., which is expected to generate cash proceeds of $90 million  -- Refinanced $1.1 billion in debt, extended maturities and reduced weighted average interest rates  -- Increased pro forma proved reserves by 20%  -- Secured partners on the West Texas Asset and narrowed focus on core Wolfcamp to Pecos County  -- Added to the 2014 derivative position; approximately 75% of expected 2014 equivalent production covered with commodity swaps at a weighted average price of $5.08/Mcfe  -- Resumed Barnett drilling activity in thethird quarter with the goal to rebuild volumes  -- Secured amendment to lower gathering rate and defer capital spending requirements in the Horn River Basin  -- Secured site for potential LNG exports from Canada  "Over the last year, Quicksilver has reduced debt, enhanced liquidity, and advanced projects," said Glenn Darden, Quicksilver's Chief Executive Officer. "We have more work to do, but with the improvements made, and what we believe will be more to come, 2014 is shaping up to be a significant year for this company."  Financial Results  Fourth-quarter 2013  Reported net loss for the fourth quarter 2013 was $32 million, or $0.18 per diluted share, compared to a reported net loss of $548 million, or $3.22 per diluted share, in the 2012 quarter.  Adjusted net loss for the fourth quarter 2013, a non-GAAP financial measure, was $5 million, or $0.03 per diluted share, compared to adjusted net income of $9 million, or $0.05 per diluted share, in the 2012 quarter. Fourth-quarter 2013 adjusted net loss excludes a $13 million mark-to-market gain on commodity derivatives and $4 million charge related to strategic transaction costs, among other miscellaneous items. Details of adjusted net income are included in the tables accompanying this earnings release.  Full-year 2013  Reported net income for full-year 2013 was $162 million, or $0.92 per diluted share, compared to a reported net loss of $2.4 billion, or $13.83 per diluted share, for full-year 2012. The reported net loss in 2012 was mainly impacted by non-cash impairments of $2.6 billion.  Full-year 2013 adjusted net loss, a non-GAAP financial measure, was $32 million, or $0.18 per diluted share, compared to an adjusted net loss of $8 million, or $0.05 per diluted share, for full-year 2012.  Production  Fourth-quarter 2013 production was 24.5 Bcfe, or an average of 266 million cubic feet of natural gas equivalent per day (MMcfed) compared to 31.5 Bcfe, or an average of 342 MMcfed in the 2012 quarter. Full-year 2013 production was 108 Bcfe, or an average of 296 MMcfed.  Pro forma for asset sales, 2013 production was approximately 101 Bcfe, or an average of 276 MMcfed, compared to pro forma production of approximately 105 Bcfe, or an average of 288 Bcfe in 2012. The decline in pro forma production is mainly attributable to the impact of curtailed capital spending across the company's asset base.  Inclement weather in North Texas and Canada negatively impacted fourth quarter 2013 production by approximately 2.4 MMcfed.  Revenue  Production revenue and realized cash derivative gain/loss for the fourth quarter of 2013 was $112 million compared to $166 million in the 2012 quarter, which excludes approximately $3 million and $6 million, respectively, of cash proceeds from certain derivatives that will not be recognized until future periods to match their original settlement dates.  The average realized price for the fourth quarter of 2013 and full-year 2013 was $4.59 and $4.49, respectively, which excludes approximately $0.12 and $0.20 per Mcfe, respectively, of cash proceeds from derivatives described above.  Production revenue and realized cash derivative gain/loss in the fourth quarter of 2013 and full-year 2013 was 33% and 28% lower than the 2012 quarter and full-year 2012, respectively, due mainly to lower production volumes as described above and the expiration at the end of 2012 of approximately 100 MMcfe per day of commodity swaps at an average floor price of $6.91/Mcfe.  Expenses  Consolidated lease operating expense for the fourth quarter of 2013 was $19 million, or $0.76 per Mcfe, compared to $23 million, or $0.73 per Mcfe in the 2012 quarter. The absolute decline is mainly attributable to asset sales, cost containment efforts and lower production volumes. The increase in the rate per Mcfe is the effect of the fixed portion of lease operating expenses amid declining volume.  Consolidated gathering, processing and transportation ("GPT") expense for the fourth quarter of 2013 was $37 million, or $1.49 per Mcfe compared to $39 million, or $1.25 per Mcfe in the 2012 quarter. The absolute decline is attributable to asset sales and lower production volumes, offset by higher unused committed capacity charges in the Horn River Basin.  Production and ad valorem taxes for the fourth quarter of 2013 was $2 million compared to $5 million in the 2012 quarter. The decline is attributable to asset sales and reductions to expected tax expenses recognized in the fourth quarter of 2013 which were related to reduced appraisal values for properties within the Barnett Asset.  General & Administrative expense for the fourth quarter of 2013 was $12 million, or $0.48 per Mcfe compared to $21 million, or $0.66 per Mcfe in the 2012 quarter. Excluding the impact of strategic transaction costs in each period, G&A would have been $8 million, or $0.31 per Mcfe, in the fourth quarter of 2013 compared to $13 million, or $0.42 per Mcfe, in the 2012 quarter. The reduction is related to the company's continued aggressive focus on cost containment and lower executive incentive compensation in 2013.  Cash Flow, Debt and Liquidity  Operating cash flow for the fourth quarter was $29 million. Investing cash flow was a net outflow of $18 million before purchases and maturities of marketable securities.  As of December 31, 2013, the company had approximately $252 million utilized under its Combined Credit Agreements, which includes $41 million of outstanding letters of credit. Long-term debt was $2 billion consisting of the Combined Credit Agreements and long-term notes, all with an average weighted maturity of approximately 5 years.  Total liquidity at December 31, 2013 is approximately $353 million in the form of $255 million of cash and marketable securities, and $98 million of availability under the Combined Credit Agreements.  2013 Capital Spending  The company incurred approximately $26 million of capital expenditures in the fourth quarter of 2013, of which $18 million was for drilling and completion activities, $3 million for leasehold and midstream, and $5 million for capitalized costs ($4 million for capitalized G&A and $1 million for capitalized interest).  Capital incurred for the full-year 2013 was $99 million, which is $21 million below the capital budget due to lower than anticipated spending in the West Texas Asset and lower capitalized overhead.  2014 Capital Budget and Outlook  The company intends to invest a total of $136 million in 2014, which includes $98 million for drilling and completion activities, primarily in the Fort Worth Basin and the Horseshoe Canyon, $15 million for leasehold and seismic, and approximately $23 million for overhead and interest expense that is expected to be capitalized in the ordinary course of business.  The capital budget does not factor in proceeds from potential strategic partnerships and assumes the completion of the Niobrara Asset sale. It also does not include any acquisition spending which may occur during the year.  Full-year production volume is expected to be 245 - 255 MMcfe per day. First-quarter 2014 average daily production volume is expected to be 240 - 245 MMcfe per day. Average daily production volumes are expected to consist of 85% natural gas and 15% natural gas liquids and crude oil.  For the first quarter of 2014, expected costs, on an absolute and Mcfe basis, are as follows:                                           Dollar Amount    Per Mcfe -- Lease operating expense                $18.5 - $19.2MM  $0.84 - $0.88 -- Gathering, processing & transportation $31.3 - $31.8MM  $1.43 - $1.45 -- Production and ad-valorem taxes        $3.5 - $4.0MM    $0.16 - $0.18 -- General & administrative               $12.0 - $13.0MM  $0.55 - $0.59 -- Depletion, depreciation & accretion    $13.0 - $13.7MM  $0.59 - $0.63  Hedging  The company's derivative portfolio is as follows: Natural gas swaps of 170 MMcfd for 2014 at a weighted average price of $5.08 per Mcf, 150 MMcfd for 2015 at $5.23 per Mcf, and 40 MMcfd for 2016-2021 at $4.48 per Mcf, and NGL swaps of 4,000 BBld at a weighted average price of $30.52 for January 2014 - September 2014.  The company estimates that approximately 75% of its expected 2014 equivalent production is covered by fixed price swaps. Expected sales at the AECO hub in 2014 are covered approximately 70% at a weighted average discount of $0.46 per Mcf to NYMEX.  Reserves  The Securities and Exchange Commission (SEC) requires proved reserve volumes to be calculated using an average of the spot prices for sales of gas and crude oil, respectively, on the first calendar day of each month during the reporting year. On this basis, the prices for gas and crude oil for 2013 reserves reporting purposes were $3.67 per million British thermal units (MMbtu) at NYMEX and $97.18 per barrel at WTI.  Quicksilver's preliminary year-end 2013 SEC proved reserves based on SEC pricing total approximately 1,330 billion cubic feet of natural gas equivalents (Bcfe), as outlined below.  In Bcfe                              United States Canada Consolidated Proved Reserves @ 12/31/12           1,200         267    1,467 Barnett 25% sale                     (337)         —    (337) Montana sale                         (15)          —    (15) Other                                (5)           —    (5) Pro forma Proved Reserves @ 12/31/12 843           267    1,110 Production                           (70)          (39)   (109) Revisions                            240           28     268 Extensions                           51            10     61 Proved Reserves @ 12/31/13           1,064         266    1,330 Proved Developed                     910           260    1,170 Proved Undeveloped                   154           6      160  Year-end 2013 proved reserves are 20% higher compared to pro forma 2012 reserves as a result of 221 Bcfe of price revisions, 47 Bcfe of technical revisions, and 61 Bcfe of additions resulting from the Barnett and Horseshoe Canyon capital programs. Reserves by product are 82% natural gas and 18% NGLs and oil.  Operational Update  United States - Barnett Shale  Production from the Barnett Shale in the fourth quarter of 2013 was an average of 166.7 MMcfe per day. The company invested approximately $6 million in the fourth quarter to drill 11 gross (4 net) wells in the Barnett including 6 gross (3 net) wells in its Alliance leasehold. These wells are expected to be completed in the first quarter of 2014.  For full-year 2014, the company expects to drill up to 30 gross (16 net) wells and complete up to 47 gross (26 net) wells.  Along with partners Tokyo Gas and Eni, Quicksilver leases approximately 135,000 gross acres in the Fort Worth Basin which is prospective of the Barnett Shale.  United States - West Texas  Quicksilver, with its partners, are focused on evaluating and developing approximately 52,500 gross acres in Pecos County, Texas which is believed to be prospective of the Wolfcamp and Bone Springs formations. The joint venture with Eni calls for Eni to spend up to $52 million to fund 100% of the drilling and completion of up to three wells, the first of which is expected to be spud by June 2014.  United States - Niobrara Asset  The company announced the sale of its interest in the Niobrara Asset along with SWEPI LP's interest to Southwestern Energy Co. for gross proceeds of $180 million, expected to be split equally between Quicksilver and SWEPI. The transaction is expected to close May 1, 2014.  Fourth-quarter 2013 average net production from the Niobrara Asset was approximately 32 Bbld. Proved reserves at year-end 2013 was approximately 70 MMBbl.  Canada - Horn River Basin  Production from the Horn River Basin in the fourth quarter of 2013 was an average of 50 MMcfe per day.  In March 2014, the company executed an agreement with KKR, its partner in Fortune Creek, to reduce the rate assessed on Horn River gathered volumes and to amend the ending date of the remaining $120 million capital spending requirement. As part the amendment, Quicksilver pays C$28 million to Fortune Creek to apply against the gathering agreement requirement, thus lowering the Fortune Creek gathering rate by $0.13 per Mcf until at least 2016. The amendment also provides that the remaining capital spending requirement be deferred to the later of June 30, 2016 or 12 months following consummation of a transaction involving a material portion of the Horn River Asset. The agreement also broadens the eligibility of allowable spending to meet the capital spending requirement to include acquisitions of properties that utilize partnership assets.Additionally, as a result of the amendment, KKR no longer is required to fund the capital required for construction of a proposed gas treatment facility, but at their option can provide funding for any facility to be constructed by the Partnership, including the proposed gas treatment facility. The amendment provides the company with immediate cash flow relief by the reduction to the gathering fee paid to Fortune Creek, and provides additional time and flexibility to complete a transaction involving the company's Horn River Asset.  The company has acquired a site for potential LNG exports off the British Columbia coast and is working toward completing a transaction with one or more potential partners for its integrated Horn River project. The company anticipates minimal capital spending in the Horn River until it completes this process.  Quicksilver leases approximately 130,000 net acres in the Horn River Basin in British Columbia which is believed to hold 14Tcf of natural gas resource potential.  Canada - Horseshoe Canyon  Production from the Horseshoe Canyon in the fourth quarter of 2013 was an average of 49 MMcfe per day.  The company expects to invest approximately $20 million in 2014 to drill and complete up to 100 gross (50 net) wells.  Quicksilver leases approximately 353,000 net acres in its Horseshoe Canyon Asset in Alberta.  Conference Call Information  The company will host a conference call at 10:00 a.m. Central time today to discuss preliminary fourth-quarter financial results.  In order to access the conference call through a phone line, participants must first register at http://emsp.intellor.com?p=414755&do=register&t=8. Upon successful registration, a unique telephone user ID will be created, and dial-in information will be provided via an email message. This user ID will be required to access the conference. The company highly recommends the registration process be completed at least 60 minutes prior to the scheduled start of the call.  To listen to the conference through a webcast, visit the Events & Presentations page on the company's website at http://investors.qrinc.com.  A digital replay of the conference call will be available at 2:00 p.m. Central time the same day, and will remain available for 30 days. The replay can be accessed by dialing 1-888-876-2113, using the conference PIN number 840431.  Non-GAAP Financial Measure  This news release and the accompanying schedule include the non-generally accepted accounting principles ("non-GAAP") financial measure of adjusted net income. Adjusted net income is presented for all periods presented in the press release to exclude the effect on net income of certain revenue, expense, gain and loss associated with items not typically included in published estimates, in order to enhance the user's overall understanding of current financial performance. As part of the press release, the company has provided a reconciliation of adjusted net income to net income, which is the most comparable financial measure determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Management believes this non-GAAP measure provides useful information to both management and investors by excluding certain revenues and expenses that may not be indicative of our core operating results, and will enhance the ability of management and investors to compare our results of operations from period to period.  About Quicksilver Resources  Fort Worth, Texas-based Quicksilver Resources is a publicly traded independent oil and gas company engaged in the exploration, development and acquisition of oil and gas, primarily from unconventional reservoirs including shales and coal beds in North America. Quicksilver's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta.Quicksilver's common stock is traded on the New York Stock Exchange under the symbol "KWK." For more information about Quicksilver Resources, visit www.qrinc.com.  Forward-Looking Statements  Certain statements contained in this press release and other materials we file with the SEC, or in other written or oral statements made or to be made by us, other than statements of historical fact, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our current expectations or forecasts of future events. Words such as "may," "assume," "forecast," "position," "predict," "strategy," "expect," "intend," "plan," "contemplate," "estimate," "anticipate," "believe," "project," "budget," "potential," or "continue," and similar expressions are used to identify forward-looking statements. They can be affected by assumptions used or by known or unknown risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. Actual results may vary materially. You are cautioned not to place undue reliance on any forward-looking statements. You should also understand that it is not possible to predict or identify all such factors and should not consider the following list to be a complete statement of all potential risks and uncertainties. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include: changes in general economic conditions; failure to satisfy our short or long-term liquidity needs, including the ability to access necessary capital resources; fluctuations in natural gas, NGL and oil prices; failure or delays in achieving expected production from exploration and development projects; our ability to achieve anticipated cost savings and other spending reductions and operational efficiencies; failure to comply with covenants under our Combined Credit Agreements and other indebtedness and the resulting acceleration of debt thereunder and inability to make necessary repayments or to make borrowings; uncertainties inherent in estimates of natural gas, NGL and oil reserves and predicting natural gas, NGL and oil production and reservoir performance; effects of hedging natural gas, NGL and oil prices; fluctuations in the value of certain of our assets and liabilities; competitive conditions in our industry; actions taken or non-performance by third parties, including suppliers, contractors, operators, processors, transporters, customers and counterparties; changes in the availability and cost of capital; delays in obtaining oilfield equipment and increases in drilling and other service costs; delays in construction of transportation pipelines and gathering, processing and treating facilities; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; the effects of existing and future laws and governmental regulations, including environmental and climate change requirements; failure or delay in completing strategic transactions, particularly in closing the proposed Southwestern Transaction or in contracting for a transaction involving our Horn River Asset; failure to make the necessary expenditures under or related to our contractual commitments, including our spending requirement pursuant to Fortune Creek; the effects of existing or future litigation; and additional factors described elsewhere in this press release.  This list of factors is not exhaustive, and new factors may emerge or changes to these factors may occur that would impact our business. Additional information regarding these and other factors may be contained in our filings with the SEC, especially on Forms 10-K, 10-Q and 8-K. All such risk factors are difficult to predict, and are subject to material uncertainties that may affect actual results and may be beyond our control. The forward-looking statements included in this press release are made only as of the date of this press release, and we undertake no obligation to update any of these forward-looking statements to reflect subsequent events or circumstances except to the extent required by applicable law.  All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements.  KWK 14-03  QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME In thousands, except for per share data - Unaudited                                                                                      For the Three Months Ended For the Year Ended                           December 31,               December 31,                         2013         2012          2013       2012                                                              Revenue                                                       Production                $105,211   $157,895    $463,491 $630,947 Sales of purchased        14,540      19,564       64,913    62,405 natural gas Net derivative gains      (6,273)     45,345       29,928    11,444 (losses) Other                     768         1,162        3,230     4,242 Total revenue             114,246     223,966      561,562   709,038 Operating expense                                             Lease operating           18,565      22,927       82,265    95,333 Gathering, processing and 36,504      39,277       148,569   166,316 transportation Production and ad valorem 1,604       4,562        17,066    25,395 taxes Costs of purchased        14,529      19,513       64,840    62,041 natural gas Depletion, depreciation   14,700      27,156       62,612    163,624 and accretion Impairment                1,863       557,141      1,863     2,625,928 General and               11,797      20,861       55,306    75,697 administrative Other operating           (710)       742          3,725     1,562 Total expense             98,852      692,179      436,246   3,215,896 Gain on Tokyo Gas         (1,819)     —            339,328   — Transaction Crestwood earn-out        —           —            —         41,097 Operating income (loss)   13,575      (468,213)    464,644   (2,465,761) Other income (expense)    (2,796)     1,345        (17,384)  1,108 Fortune Creek accretion   (4,755)     (4,923)      (19,245)  (19,472) Interest expense          (41,312)    (41,703)     (251,847) (164,051) Income (loss) before      (35,288)    (513,494)    176,168   (2,648,176) income taxes Income tax (expense)      3,513       (35,005)     (14,550)  295,570 benefit Net income (loss)         $(31,775)  $(548,499)  $161,618 $(2,352,606)                                                              Earnings (loss) per       $(0.18)    $(3.22)     $0.92    $(13.83) common share - basic Earnings (loss) per       $(0.18)    $(3.22)     $0.92    $(13.83) common share - diluted                                                               QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED BALANCE SHEETS In thousands, except share data - Unaudited                                                                                                                      December 31, December 31,                                                      2013         2012 ASSETS                                                            Current assets                                                    Cash and cash equivalents                            $89,103    $4,951 Marketable securities                                166,343     — Total cash, cash equivalents and marketable          255,446     4,951 securities Accounts receivable - net of allowance for doubtful  58,645      64,149 accounts Derivative assets at fair value                      57,523      113,367 Other current assets                                 22,346      25,046 Total current assets                                 393,960     207,513 Property, plant and equipment - net                               Oil and gas properties, full cost method (including unevaluated costs of $221,605 and $307,267,          640,443     780,960 respectively) Other property and equipment                         220,362     248,098 Property, plant and equipment - net                  860,805     1,029,058 Derivative assets at fair value                      73,357      105,270 Other assets                                         41,604      39,947                                                     $1,369,726 $1,381,788 LIABILITIES AND EQUITY                                            Current liabilities                                               Accounts payable                                     $28,822    $37,131 Accrued liabilities                                  102,850     130,660 Derivative liabilities at fair value                 3,125       — Total current liabilities                            134,797     167,791 Long-term debt                                       1,988,946   2,063,206 Partnership liability                                126,132     130,912 Asset retirement obligations                         106,256     115,949 Derivative liabilities at fair value                 323         17,485 Other liabilities                                    19,242      19,242 Stockholders' equity                                              Preferred stock, par value $0.01, 10,000,000 shares  —           — authorized, none outstanding Common stock, $0.01 par value, 400,000,000 shares authorized, and 183,994,879 and 179,015,118 shares   1,840       1,790 issued, respectively Additional paid in capital                           770,092     751,394 Treasury stock of 6,698,640 and 5,921,102 shares,    (51,422)    (49,495) respectively Accumulated other comprehensive income               109,881     161,493 Retained deficit                                     (1,836,361) (1,997,979) Total stockholders' equity                           (1,005,970) (1,132,797)                                                     $1,369,726 $1,381,788                                                                   QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands - Unaudited                                                                                                                 For the Year Ended                                                    December 31,                                                  2013         2012 Operating activities:                                           Net income (loss)                                  $161,618   $ (2,352,606) Adjustments to reconcile net income (loss) to net               cash provided by (used in) operating activities: Depletion, depreciation and accretion              62,612      163,624 Impairment expense                                 1,863       2,625,928 Write-off of MLP related fees and expenses         —           7,505 Gain on Tokyo Gas Transaction                      (339,328)   — Crestwood earn-out                                 —           (41,097) Deferred income tax expense (benefit)              21,581      (289,981) Non-cash (gain) loss from hedging and derivative   3,904       57,826 activities Stock-based compensation                           17,979      22,246 Non-cash interest expense                          26,920      9,854 Fortune Creek accretion                            19,245      19,472 Other                                              6,783       1,037 Changes in assets and liabilities                               Accounts receivable                                (3,994)     30,950 Prepaid expenses and other assets                  322         (4,435) Accounts payable                                   (7,133)     (8,895) Income taxes payable                               7,828       1,183 Accrued and other liabilities                      (31,900)    (14,884) Net cash provided by (used in) operating           (51,700)    227,727 activities Investing activities:                                           Capital expenditures                               (101,288)   (485,479) Proceeds from Tokyo Gas Transaction                463,999     — Proceeds from Synergy Transaction                  42,297      — Proceeds from Crestwood earn-out                   —           41,097 Proceeds from sale of properties and equipment     7,171       72,725 Purchases of marketable securities                 (213,738)   — Maturities and sales of marketable securities      47,603      — Net cash provided by (used in) investing           246,044     (371,657) activities Financing activities:                                           Issuance of debt                                   1,237,352   467,959 Repayments of debt                                 (1,308,382) (310,430) Debt issuance costs paid                           (26,296)    (3,022) Distribution of Fortune Creek Partnership funds    (14,965)    (14,285) Proceeds from exercise of stock options            —           11 Purchase of treasury stock                         (1,927)     (3,144) Net cash provided by (used in) financing           (114,218)   137,089 activities Effect of exchange rate changes in cash            4,026       (1,354) Net change in cash                                 84,152      (8,195) Cash and cash equivalents at beginning of period   4,951       13,146 Cash and cash equivalents at end of period         $89,103    $4,951                                                                 QUICKSILVER RESOURCES INC. UNAUDITED SELECTED OPERATING RESULTS                                                                                                              Quarter ended     Year ended                                            December 31,      December 31,                                           2013     2012     2013     2012 Average Daily Production:                                           Natural Gas (MMcfd)                        220.6   274.9   246.5   288.5 NGL (Bbld)                                 7,363   10,525  7,747   11,121 Oil (Bbld)                                 233     725     475     784 Total (MMcfed)                             266.1   342.4   295.8   360.0                                                                    Average Realized Prices, including                                  hedging: Natural Gas (per Mcf)                      $4.46  $4.87  $4.33  $4.62 NGL (per Bbl)                              $29.17 $ 38.50 $28.12 $ 39.69 Oil (per Bbl)                              $92.31 $ 78.55 $89.53 $ 85.98 Total (Mcfe)                               $4.59  $5.26  $4.49  $5.11                                                                    Average Realized Prices, excluding                                  hedging: Natural Gas (per Mcf)                      $3.30  $3.20  $3.32  $2.59 NGL (per Bbl)                              $30.94 $ 29.84 $28.60 $ 33.92 Oil (per Bbl)                              $92.31 $ 78.55 $89.53 $ 86.00 Total (Mcfe)                               $3.67  $3.65  $3.66  $3.31                                                                    Expense per Mcfe:                                                   Lease operating expense:                                            Expense                                    $0.74  $0.72  $0.75  $0.71 Equity compensation                        0.02    0.01    0.01    0.01 Total lease operating expense:             $0.76  $0.73  $0.76  $0.76                                                                    Gathering, processing and transportation   $1.49  $1.25  $1.38  $1.26 expense                                                                    Production and ad valorem taxes            $0.07  $0.14  $0.16  $0.19                                                                    Depletion, depreciation and accretion      $0.60  $0.86  $0.58  $1.24                                                                    General and administrative expense:                                 Expense                                    $0.14  $0.24  $0.28  $0.31 Audit and accounting fees                  0.02    0.03    0.02    0.05 Strategic transaction costs                0.17    0.23    0.06    0.06 Equity compensation                        0.15    0.16    0.15    0.16 Total general and administrative expense   $0.48  $0.66  $0.51  $0.58                                                                    Cash expense on debt outstanding           1.63    1.39    1.53    1.31 Add:                                                                Fees paid on letters of credit outstanding —       0.01    —       — Net premium paid on senior notes purchased —       —       0.62    — Non-cash interest                          0.13    0.05    0.25    0.07 Capitalized interest                       (0.07)  (0.13)  (0.07)  (0.14) Total interest expense                     1.69    1.32    2.33    1.24                                                                     QUICKSILVER RESOURCES INC. PRODUCTION, ON A MILLION CUBIC FEET OF NATURAL GAS EQUIVALENT (MMcfe) per day basis, by operating area                                                                         Quarter ended December 31,  Year ended December 31,                  2013           2012         2013        2012 Barnett Shale     166.7         247.1       187.3      274.8 Other U.S.        0.2           3.3         1.9        3.5 Total U.S.        166.9         250.4       189.2      278.3 Horseshoe Canyon  49.3          53.7        49.7       54.6 Horn River        49.9          38.3        56.9       27.1 Total Canada      99.2          92.0        106.6      81.7 Total Company     266.1         342.4       295.8      360.0                                                         QUICKSILVER RESOURCES INC. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (LOSS) In thousands, except per share data - Unaudited                                                                                         Quarter Ended            Year ended                             December 31,             December 31,                            2013        2012         2013       2012 Net income (loss)           $(31,775) $ (548,499) $161,618 $ (2,352,606)                                                              Adjustments                                                   Gain on sale of assets      1,818      —           (339,328) — Unrealized (gain)/loss on   13,372     (38,326)    (8,700)   31,354 commodity derivatives Termination of NGTL PEA     —          —           12,817    — Debt issuance and           —          —           85,943    2,789 retirement related expenses Foreign exchange loss on    —          —           2,456     — debt paydown Impairment of assets        2,266      557,141     6,722     2,625,928 Acceleration of stock       —          900         2,228     4,137 compensation expense Audit and accounting fees   —          —           —         3,479 Strategic transaction costs 4,192      7,505       6,885     8,503 Crestwood earn-out          —          —           —         (41,097) Other                       5,493      —           6,319     1,130 Total adjustments before    27,141     527,220     (224,658) 2,636,223 income tax expense Income tax expense for      (662)      30,201      31,522    (291,387) above adjustments Total adjustments after tax 26,479     557,421     (193,136) 2,344,836 Adjusted net income (loss)  (5,296)    8,922       (31,518)  (7,770) Adjusted net income (loss)  $(0.03)   $0.05      $(0.18)  $(0.05) per common share - diluted Diluted weighted average    171,860    170,260     171,659   170,106 common shares outstanding                                                               CONTACT: Investor & Media Contact:          David Erdman          (817) 665-4023  company logo