Quicksilver Resources Inc. (KWK) posted third quarter 2009 earnings of 25 cents per share, slightly above the Zacks Consensus Estimate of 21 cents. However, results dropped versus last year’s earnings of 40 cents.

Total revenues in the quarter declined 13% year over year to $206.7 million, with net natural gas, natural gas liquids (NGL) and oil sales of $198.3 million (down 9%). Revenues were impacted by decline in the average realized prices for all commodities, offset by increase in production volumes. Total realized prices during the quarter declined 19% to $6.93 per thousand cubic feet of natural gas equivalent (Mcfe). The average realized oil, NGL and natural gas prices in the quarter were $60.55 per barrel, $28.15 per barrel, and $7.69 per thousand cubic feet (Mcf), respectively, down 29%, 48%, and 6% from a year ago.

Total production surged 12% averaging 28.6 billion cubic feet of natural gas equivalent (Bcfe) or 311 million cubic feet of natural gas equivalent (MMcfe) per day, comprising of 71% natural gas, 27% NGLs and 2% crude oil and condensate. The increased production of gas was driven by increased activities at the company’s Lake Arlington and Alliance projects in the northern portion of its Fort Worth Basin acreage. Oil, NGL and natural gas production averaged 981 barrels per day (Bbls/d) (down 26%), 14.0 thousand Bbls/d (up 22%), and 221.2 Mcf per day (up 11%), respectively.

Quicksilver continued to reduce and control costs during the quarter remaining positioned as one of the low-cost operators in North America. It reduced production expenses by 12% to $29.1 million. Unit production expense Incorporatedluding production, gathering and processing and transportation expense, decreased 22% to $1.02 per Mcfe during the quarter.

During the quarter, Quicksilver issued $300 million of senior notes due 2019 and used the proceeds to repay a portion of its senior credit facility. In October, the company’s bank group affirmed the borrowing base under its senior secured credit facility at $1 billion. The company currently has approximately $514 million drawn on this facility. At quarter-end, it had $1.6 million of cash and total debt of $2.5 billion.

Quicksilver guided 2009 production volumes to average 330 MMcfe to 340 MMcfe per day. It has hedged about 190 million Btu (MMBtu) per day of natural gas at a weighted-average floor price of $8.75 per MMBtu for the fourth quarter.

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