Quicksilver Resources (KWK) Soars After Q3 Earnings

Michael Teague |

The Fort Worth, Texas-based Quicksilver Resources (KWK) barely qualifies as a small-cap, operating in the independent oil and gas space with a market cap of $366.7 million. But the small company saw shares jump in early Tuesday trading after the release of its third-quarter earnings report ahead of the opening bell.

Net income for the recently-ended period was $11 million, or $0.06 per diluted share on revenue of $113 million, compared to the prior-year’s disastrous Q3 that saw a net loss of $791 million, or  $4.65 per diluted share on revenue of $124.85 million. On an adjusted basis, Quicksilver was right in line with expectations for a loss of $8 million, or $0.05 per share compared to the prior year’s $5 million, or $0.03 per share.

Aside from Canada, where output from operations in the Horn River Basin was up 8 percent from the prior year the prior year to 9.7 billion cubic feet of gas equivalent, production figures were generally lower during Q3 2013. The market reaction to Quicksilver’s earnings have much more to do with the company’s turnaround efforts, which have resulted in substantial decreases in operating expenses, which in some several instances have squeezed production.

Expenses for operations in the Barnett Shale were $10 million lower during the period, as a result of the company selling about 25 percent of its stake in the area. Furthermore, August saw the the saw of all of the company’s assets in Montana to Synergy Offshore LLC (SYRG) , which netted $42 million.

At the same time, expansion of existing operations in the Barnett Shale as well as the Sand Wash Basin are expected to bolster production figures in 2014, particularly with the addition of partnerships with majors such as Royal Dutch Shell ($RDS.A) and Eni SpA (ENI) .

Quicksilver is also part of Equities.com’s Turnaround Stock Portfolio, the ongoing progress of which can be tracked by readers here. Shares were up 14 percent heading toward the closing bell to $2.44 a piece.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
SYRG Synergy Resources Corporation 9.71 0.18 1.89 2,679,477
ENI Enersis Americas SA ADR (Sponsored) n/a n/a n/a n/a
BIZZ Bizzingo Inc n/a n/a n/a 0
RDSA Royal Dutch Shell Plc ADR Sponsored Repstg A Shs n/a n/a n/a 0

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