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May 10, 2010 at 07:30 AM EDT
Quicksilver Resources Reports First-Quarter 2010 Results; Reduces 2010 Capital Program

FORT WORTH, TX -- (Marketwire) -- 05/10/10 -- Quicksilver Resources Inc. (NYSE: KWK) today reported net income of $8.2 million ($.05 per diluted share) in the 2010 first quarter as compared to a net loss of $569.0 million (a loss of $3.37 per diluted share) in the prior-year period. First-quarter 2010 adjusted net income, a non-GAAP measure, was $33.8 million ($.20 per diluted share) up 27% from the 2009 period adjusted net income of $26.6 million ($.16 per diluted share). Details of adjusted net income are included on page 9 of this news release.

Quicksilver also announced that it has reduced its expected 2010 capital program to reflect reduced planned drilling and completion activities in the Fort Worth Basin. As a result, the company now expects its 2010 capital program to total approximately $510 million and its production to average in the range of 360-370 million cubic feet of natural gas equivalents (MMcfe) per day in 2010, an increase of approximately 11%-14% from the 2009 average daily volumes.

"Quicksilver has made the decision to reduce development drilling and bring less production online in the current environment," said Glenn Darden, Quicksilver president and chief executive officer. "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."

Production, Revenue and Costs

For the first quarter of 2010, average production was approximately 318 MMcfe per day compared to approximately 332 MMcfe per day for the same period in 2009. The 2009 period included approximately 17 MMcfe per day of production from the Alliance area that was divested to Eni (NYSE: E) in June 2009. Total production for the first quarter of 2010 was approximately 28.7 billion cubic feet of natural gas equivalents (Bcfe) compared to approximately 29.8 Bcfe for the first quarter of 2009. The 2010 production volumes were comprised of approximately 77% natural gas, approximately 21% natural gas liquids (NGL) and approximately 2% crude oil and condensate. Increased activities at the company's Lake Arlington and Alliance projects in the northern portion of its Fort Worth Basin acreage resulted in increased production of dry gas.

Sales of natural gas, NGLs and crude oil increased approximately 10% to $201.6 million in the first quarter of 2010 as compared to $183.6 million in the 2009 quarter. The increase was primarily due to increased realized product prices for natural gas, NGLs and crude oil, which resulted in the company's weighted-average price per thousand cubic feet of natural gas equivalents (Mcfe) in the 2010 first quarter of $7.03, an increase of 14% from the prior year.

Total production expense of $36.0 million for the 2010 first quarter was up 12% from the prior-year quarter, primarily due to higher Canadian costs related to the U.S./Canadian exchange rate and costs associated with operating new wells at the company's Horn River project.

Loss from Earnings of BreitBurn

Quicksilver reported a pre-tax loss of $16.0 million attributable to the company's approximate 40% interest in BreitBurn Energy Partners L.P.'s (NASDAQ: BBEP) fourth-quarter 2009 results, including $22.8 million of interest rate and commodity derivative losses. During the first quarter of 2010, Quicksilver did not receive any cash distributions associated with its ownership of the BBEP units. On February 8, 2010, BBEP announced that it had reached agreement with Quicksilver to settle all litigation between Quicksilver and BBEP and in April, Quicksilver received $18 million in settlement of the litigation. On April 28, BBEP announced a cash distribution of $0.375 per unit for the first quarter of 2010, from which Quicksilver expects to receive a total distribution of approximately $8.0 million in May.

Operational Update

In the Fort Worth Basin, the company drilled 28 (22.4 net) wells and connected 21 (16.9 net) wells to sales during the first quarter of 2010. The company has recently reduced its drilling activity in the basin and currently has three rigs working, including two rigs dedicated to the Alliance and Lake Arlington projects in the northern, dry gas portion of the basin and one rig in the southern portion of the basin, which has predominantly high-Btu gas. The company now expects to drill and complete a total of approximately 98 wells in the basin in 2010. The company also expects to complete approximately 25 additional wells this year from its existing inventory of drilled but uncompleted wells. Following this activity, the company expects to exit the year with approximately 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 drilling five (4.25 net) wells in the Horseshoe Canyon area of Alberta during the first quarter of 2010. Drilling, completion and pipeline operations are currently suspended for the seasonal break-up period in Canada. In addition, Quicksilver 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 at year-end. In early 2011, the company expects to re-enter 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 in the Horn River Basin.

During the first quarter of 2010, the company incurred capital costs of approximately $136 million, including approximately $26 million at the Horn River project and $18 million on additional leasehold in the Fort Worth Basin.

Second-Quarter 2010 Outlook

Second-quarter 2010 production volumes are expected to average in the range of 350 MMcfe to 360 MMcfe per day. Average unit expenses, on a Mcfe basis, are expected as follows:

-- Production                            $.55 -  $.60
-- Gathering and processing               .15 -   .20
-- Transportation                         .40 -   .45
-- Production taxes                       .25 -   .30
-- General and administrative             .65 -   .70
-- Depletion, depreciation & accretion   1.50 -  1.55

The company has derivatives in place to cover approximately 68% of expected production for the remainder of 2010. For natural gas, collars with a weighted-average floor price of $7.40 per thousand cubic feet are expected to cover approximately 65% of expected natural gas production for the remaining three quarters of 2010. For natural gas liquids (NGLs), the company has fixed-price swaps with a weighted-average price of $33.47 per barrel, which is anticipated to cover approximately 85% of NGL production for the remaining three quarters of 2010.

Conference Call

The company will host a conference call to discuss first-quarter 2010 operating and financial results and its outlook for the future at 11:00 a.m. eastern time today.

Quicksilver invites interested parties to participate in the call via the company's website at http://www.qrinc.com or by calling 1-877-313-7932, using the conference ID number 44053991, prior to 10:55 a.m. eastern time. A digital replay of the conference call will be available at 3:00 p.m. eastern time today, and will remain available for 30 days. The replay can be accessed at 1-800-642-1687 and enter the conference ID number 44053991. The replay will also be archived for 30 days on the company's website.

Use of 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. The accompanying schedule provides reconciliations of this non-GAAP financial measure to its most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Our non-GAAP financial measure should not be considered as an alternative to GAAP measures such as net income or operating income or any other GAAP measure of liquidity or financial performance.

About Quicksilver Resources

Fort Worth, Texas-based Quicksilver Resources is a natural gas and crude oil exploration and production company engaged in the development and acquisition of long-lived, unconventional natural gas reserves, including coalbed methane, shale gas, and tight sands gas in North America. The company has U.S. offices in Fort Worth, Texas; Glen Rose, Texas and Cut Bank, Montana. Quicksilver's Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta. For more information about Quicksilver Resources, visit www.qrinc.com.

Forward-Looking Statements

The statements in this news release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although these statements reflect the current views, assumptions and expectations of Quicksilver Resources' management, the matters addressed herein are subject to numerous risks and uncertainties, which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Factors that could result in such differences or otherwise materially affect Quicksilver Resources' financial condition, results of operations and cash flows include: changes in general economic conditions; fluctuations in natural gas, natural gas liquids and crude oil prices; failure or delays in achieving expected production from exploration and development projects; uncertainties inherent in estimates of natural gas, natural gas liquids and crude oil reserves and predicting natural gas, natural gas liquids and crude oil reservoir performance; effects of hedging natural gas, natural gas liquids and crude 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; 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; and the effects of existing or future litigation; as well as, other factors disclosed in Quicksilver Resources' filings with the Securities and Exchange Commission. The forward-looking statements included in this news release are made only as of the date of this news 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.

                        QUICKSILVER RESOURCES INC.
            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
            In thousands, except for per share data - Unaudited


                                              Three Months Ended March 31,
                                              ----------------------------
                                                  2010           2009
                                              -------------  -------------
Revenue
  Natural gas, NGL and crude oil              $     201,563  $     183,554
  Sales of purchased natural gas                     16,224              -
  Other                                               4,371          2,378
                                              -------------  -------------
    Total revenue                                   222,158        185,932
                                              -------------  -------------

Operating expense
  Oil and gas production expense                     35,989         32,171
  Production and ad valorem taxes                     8,483          4,366
  Costs of purchased natural gas                     33,307              -
  Other operating expense                             1,254          1,527
  Depletion, depreciation and accretion              46,757         59,696
  General and administrative expense                 20,523         17,381
                                              -------------  -------------
    Total expense                                   146,313        115,141
Impairment related to oil and gas properties              -       (896,483)
                                              -------------  -------------
Operating income (loss)                              75,845       (825,692)
Loss from earnings of BBEP - net                    (15,989)             -
Other income (expense) - net                            343            761
Interest expense                                    (44,517)       (40,201)
                                              -------------  -------------
Income (loss) before income taxes                    15,682       (865,132)
Income tax (expense) benefit                         (5,082)       297,823
                                              -------------  -------------
Net income (loss)                                    10,600       (567,309)
Net income attributable to noncontrolling
 interests                                           (2,412)        (1,670)
                                              -------------  -------------
Net income (loss) attributable to Quicksilver $       8,188  $    (568,979)
                                              =============  =============

Earnings (loss) per common share - basic      $        0.05  $       (3.37)

Earnings (loss) per common share - diluted    $        0.05  $       (3.37)

Basic weighted average shares outstanding           170,175        168,841

Diluted weighted average shares outstanding         171,040        168,841



                        QUICKSILVER RESOURCES INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                In thousands, except share data - Unaudited


                                        March 31, 2010   December 31, 2009
                                      -----------------  -----------------
                ASSETS
Current assets
  Cash and cash equivalents           $             601  $           1,785
  Accounts receivable - net of
   allowance for doubtful accounts               60,348             65,253
  Derivative assets at fair value               172,850             97,957
  Other current assets                           50,542             54,943
                                      -----------------  -----------------
    Total current assets                        284,341            219,938
Investment in BBEP                               96,774            112,763
Property, plant and equipment
  Oil and gas properties, full cost
   method (including unevaluated costs
   of $392,272 and $458,037,
   respectively)                              2,428,099          2,338,244
  Other property and equipment                  765,789            747,696
                                      -----------------  -----------------
Property, plant and equipment - net           3,193,888          3,085,940
Derivative assets at fair value                  54,304             14,427
Deferred income taxes                           118,203            133,051
Other assets                                     44,489             46,763
                                      -----------------  -----------------
                                      $       3,791,999  $       3,612,882
                                      =================  =================

         LIABILITIES AND EQUITY

Current liabilities
  Accounts payable                    $         150,532  $         157,986
  Accrued liabilities                           132,247            156,604
  Derivative liabilities at fair value              812                395
  Deferred income taxes                          71,756             51,675
                                      -----------------  -----------------
    Total current liabilities                   355,347            366,660
Long-term debt                                2,510,494          2,427,523
Asset retirement obligations                     61,822             59,268
Other liabilities                                20,692             20,691
Derivative liabilities at fair value                654                  -
Deferred income taxes                            49,095             41,918
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;
   175,439,552 and 174,469,836
   shares issued, respectively                    1,754              1,745
  Paid in capital in excess of par
   value                                        742,773            730,265
  Treasury stock of 5,022,244 and
   4,704,448 shares, respectively               (41,129)           (36,363)
  Accumulated other comprehensive
   income                                       200,633            121,336
  Retained deficit                             (172,797)          (180,985)
                                      -----------------  -----------------
    Quicksilver stockholders' equity            731,234            635,998
  Noncontrolling interests                       62,661             60,824
                                      -----------------  -----------------
Total equity                                    793,895            696,822
                                      -----------------  -----------------
                                      $       3,791,999  $       3,612,882
                                      =================  =================



                        QUICKSILVER RESOURCES INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         In thousands - Unaudited


                                              Three Months Ended March 31,
                                              ----------------------------
                                                  2010           2009
                                              -------------  -------------
Operating activities:
  Net income (loss)                           $      10,600  $    (567,309)
  Adjustments to reconcile net income (loss)
   to net cash provided by operating
   activities:
    Depletion, depreciation and accretion            46,757         59,696
    Impairment related to oil and gas
     properties                                           -        896,483
    Deferred income tax expense (benefit)             5,082       (304,639)
    Non-cash interest expense                         5,075          4,139
    Stock-based compensation                          5,680          5,790
    Non-cash loss from hedging and
     derivative activities                            1,421          1,128
    Loss from BBEP in excess of cash
     distributions, net of impairment                15,989         11,101
    Other                                              (323)            91
  Changes in assets and liabilities:
    Accounts receivable                               4,905         33,536
    Derivative assets at fair value                  14,260         54,896
    Prepaid expenses and other assets                 5,519          1,566
    Accounts payable                                (15,553)       (21,436)
    Accrued and other liabilities                   (33,640)       (25,692)
                                              -------------  -------------
Net cash provided by operating activities            65,772        149,350
                                              -------------  -------------

Investing activities:
  Purchases of property, plant and equipment       (129,331)      (255,984)
  Proceeds from sales of property, plant and
   equipment                                            718            416
                                              -------------  -------------
Net cash used for investing activities             (128,613)      (255,568)
                                              -------------  -------------

Financing activities:
  Issuance of debt                                  295,446        208,374
  Repayment of debt                                (227,639)      (101,188)
  Debt issuance costs paid                             (109)           (39)
  Gas Purchase Commitment repayments                 (7,317)             -
  Issuance of KGS common units - net of
   offering costs                                    11,050              -
  Distributions paid on KGS common units             (4,404)        (2,448)
  Proceeds from the exercise of stock
   options                                              760             11
  Taxes paid by KGS for equity-based
   compensation vesting                              (1,144)           (63)
  Purchase of treasury stock from
   stock-based compensation vesting                  (4,766)          (623)
                                              -------------  -------------
Net cash provided by (used for) financing
 activities                                          61,877        104,024
                                              -------------  -------------

Effect of exchange rate changes in cash                (220)          (224)
                                              -------------  -------------

Net decrease in cash                                 (1,184)        (2,418)

Cash and cash equivalents at beginning of
 period                                               1,785          2,848
                                              -------------  -------------

Cash and cash equivalents at end of period    $         601  $         430
                                              =============  =============





                        QUICKSILVER RESOURCES INC.
                   Unaudited Selected Operating Results


                                              Three Months Ended March 31,
                                            -------------------------------
                                                 2010            2009
                                            --------------- ---------------
Average Daily Production:
Natural Gas (Mcfd)                                  245,545         242,453
NGL (Bbld)                                           11,291          13,348
Oil (Bbld)                                              855           1,494
  Total (Mcfed)                                     318,424         331,550

Average Realized Prices:
Natural Gas (per Mcf)                       $          7.44 $          7.04
NGL (per Bbl)                               $         31.19 $         21.13
Oil (per Bbl)                               $         71.36 $         34.42
  Total (Mcfe)                              $          7.03 $          6.15

Expense per Mcfe:
O

KWK 10-06

Investor & Media Contact:
Rick Buterbaugh
(817) 665-4835

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