Narrower-than-Expected Loss at Quicksilver - Analyst Blog

Quicksilver Resources Inc. KWK posted an adjusted loss per share of 3 cents in the fourth quarter of 2013, narrower than the Zacks Consensus Estimate of a loss of 4 cents, but widely missed the year-ago earnings of 5 cents per share.

On a GAAP basis, loss was 18 cents per share considering the effect of a mark-to-market gain on commodity derivatives and strategic transaction costs.

For 2013, loss stood at 18 cents per share, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The loss, however, widened from the prior-year loss of 5 cents per share.

Total Revenue

Quicksilver Resources' total revenues were $114.2 million in the reported quarter, lagging the Zacks Consensus Estimate by 5.6%. On a year-over-year basis, quarterly revenues decreased nearly 49.0%. The revenue decline can be attributed to lower production and natural gas sales volumes.

Yearly revenues were reported at $561.6 million, beating the Zacks Consensus Estimate by 5.6%. Revenues however declined 20.8% year over year.

Operational Update

In fourth-quarter 2013, Quicksilver Resources achieved overall average daily production of 266.1 million cubic feet of natural gas equivalent (MMcfed), down 22.3% year over year due to a drop in production volumes of natural gas, natural gas liquids NGL and oil.

Total realized prices (excluding hedging) increased 0.5% year over year to $3.67 per thousand cubic feet (Mcfe) in the reported quarter due to increase in average realized price in NGL, natural gas and oil.

Total expenses dropped 85.7% year over year to $98.9 million due to a substantial decline in impairment charges, cost of purchase and general and administrative expenses.

Quicksilver Resources' operating income in the reported quarter was $13.6 million versus an operating loss of $468.2 million a year ago.

Financials

Quicksilver Resources' cash balance as of Dec 31, 2013 was $89.1 million versus $5.0 million as of Dec 31, 2012. The remarkable improvement in the cash position was primarily driven by higher net cash from investing activities.

Long-term debt as of Dec 31, 2013 was nearly $2.0 billion versus $2.1 billion as of Dec 31, 2012.

Net cash used in operating activities during the year was $51.7 million versus net cash provided by operating activities of $227.7 million in the year-ago comparable period.

Capital expenditure for the year was $101.3 million, which was lower than budgeted expenditure due to lower spending at West Texas Asset.

Guidance

Quicksilver Resources expects to invest $136 million in 2014. The breakdown of capital expenditure includes $98 million for drilling and completion activities, $15 million for leasehold and seismic and the remaining $23 million for overhead and interest expense.

Expectation for production volume in the first quarter lies in the range of 240–245 MMcfe per day. The company also provided full-year 2014 production volume guidance in the range of 245–255 MMcfe per day.

Other Company Releases

Anadarko Petroleum Corp. APC posted fourth-quarter 2013 adjusted earnings of 74 cents per share, missing the Zacks Consensus Estimate by 20.4%.

Noble Energy Inc. NBL reported fourth-quarter adjusted earnings of 50 cents per share for the fourth quarter of 2013, failing to meet the Zacks Consensus Estimate by 24.2%.

Apache Corp. APA reported fourth-quarter pro forma earnings per share of $1.57, well above the Zacks Consensus Estimate of $1.80.

Quicksilver Resources currently carries a Zacks Rank #3 (Hold).