Boston, MA 05/06/2014 (wallstreetpr) – Quicksilver Resources Inc (NYSE:KWK) released its 1Q2014 results that showed mixed progress in the company. While some metrics revealed improvements, the results also showed softening metrics that have the potential of raising investment red flag.
Though 1Q was expected to suffer weather impact because of the harsh winter condition, the company failed to give strong reasons why production was not up to expectation. Moreover, higher costs and expenses also remained issues of concern even as the management sought to promise that the future looks brighter, and the balance of fiscal 2014 will be characterized by production, revenue and bottom-line improvements.
Nonetheless, 1Q was not all that horrible. The company managed to reduce its debt position and also gained revenue growth opportunities. As such, a shored up balance sheet and more growth opportunities are expected to support future performance starting with 2Q.
1Q in summary
Quicksilver Resources Inc (NYSE:KWK) generated revenue of $105 million in 1Q2014. That compared with revenue of $142 million in the corresponding quarter a year earlier. Though total revenue seemed to have declined in the latest quarter, production revenue was up $29 million above the quarter realized in the comparable quarter in 2013.
The increase in production revenue in the quarter was helped by improvement in natural gas and natural gas liquids prices.
The quarter saw a decline in production whereby the company observed cubic feet equivalent production of 22.1 billion. That compared unfavorably with cubic feet equivalent of 32.2 billion in the same period, in 2013.
The company reported a net loss of $59 million or 34 cents per diluted share in 1Q. That compared with a net loss of $60 million or 35 cents per diluted share in the comparable quarter a year earlier.
The quarter also saw the company incur $42 million in capital expenditure whereby $31 million of that amount went to drilling and related activities. The balance was spent on capital costs and leasehold at $4 million and $7 million respectively.
Asset divestment
As Quicksilver Resources Inc (NYSE:KWK) pursues growth to create shareholder value, the company can also be seen monetizing assets. The company gave up its Colorado-based Niobrara asset to Southwestern Energy Co. for a cash consideration of $93.5 million. The divestment of the assets allows the company to gain focus on its mainstay activities while also streamlining operations for better growth.
