Oct. 12--Quicksilver Resources has enjoyed considerable buzz and a recent uptick in its stock price as a result of a new Canadian well with impressive initial daily production of 13 million cubic feet of natural gas.
But the Fort Worth-based company's bread and butter is still right in its back yard -- the natural gas-rich Barnett Shale of North Texas.
Already accounting for about four-fifths of the company's production and three-quarters of its revenue, the Barnett is the "foundation for the company's growth," Quicksilver says on its Web site ( www.qrinc.com).
The Canadian well is in the Horn River Basin, a fast-blossoming natural gas play in northeast British Columbia where Quicksilver has leased 127,000 net acres that could provide a major revenue stream.
But for now and some years to come, the Barnett is likely to remain the No. 1 cash cow for the 580-employee company, which had slightly more than $800 million in revenue in 2008. Quicksilver officials estimate that they have a 10-year drilling inventory remaining in the Barnett. While Quicksilver has drilled about 700 Barnett wells, it says more than 1,300 remain to be drilled.
Quicksilver's Barnett holdings can provide "double-digit production growth for the company for at least the next five years," said Rick Buterbaugh, vice president for investor relations and corporate planning. Quicksilver's second-quarter Barnett production equaled 263 million cubic feet of natural gas per day.
As a result of weak gas prices, Quicksilver has only five active drilling rigs in the Barnett, a level it expects to continue in 2010. Quicksilver expects to have at least 120 wells drilled but not completed by the end of this year, in part because the company is in no rush to bring new wells into production when prices are low.