Barnett Shale to Remain the Primary Contributor in the Quciksilver’s Production

Monday 13 February 2012, Amsterdam

Barnett Shale to Remain the Primary Contributor in the Quciksilver’s Production Profile in the Future

Quicksilver is predominantly acquiring its major production from the Barnett shale in Forth Worth Basin. It holds more than 155,000 net acres in its Barnett Shale Asset. Production from the company’s Barnett Shale during 2010 was about 17.2 million barrels of oil equivalent (MMboe), contributing almost 71.7% of total production during the year. Barnett shale contributed an average of around 68.2% of the company’s total production from the last four years. However, production from the shale increased at a Compound Annual Growth Rate (CAGR) of 21.6% during 2007–2010. Quicksilver expects a major proportion of the company’s future production to come from the shale. The shale also represented almost 439.4 MMboe, or 84.7% of the company’s total proved reserves of 518.7 MMboe during 2010. The company’s large reserve base confirms Quicksilver’s use of shale as a major source of production, which will be used to provide stable production growth for the company in the future.

Quicksilver allocated $557.4m towards all US assets in 2010, primarily towards the Barnett shale,
accounting for almost 85.8% of its total capex of $649.5m. The company is looking to increase its
acreage position in the Barnett shale as the company’s core area of operations. In line with this objective, Quicksilver acquired an additional 25% working interest and related assets in its Lake Arlington project in the Barnett Shale in May 2010, increasing its stake to 100%. Through this purchase, the company added 20 billion cubic feet (Bcf) of potential resources, 102.5 billion cubic feet equivalent (Bcfe) of proved developed reserves, and an average production of 10MMcfe/d. Thus, the company’s accelerated development plans for the Fort Worth Basin, coupled with its huge reserve base, is expected to support the company’s projected growth trajectory. GlobalData expects total production from the area to increase to around 42.7 MMboe to represent 74% of the company’s total production in 2015.

See figure: Quicksilver Resources Inc, Production from the Barnett Shale and Rest of the Assets,
MMboe, 2008–2015