Quicksilver Resources Inc., Ft. Worth, and its US subsidiaries have filed for Chapter 11 bankruptcy protection in Delaware amid the industry-wide fallout from depressed crude oil prices. Operations across the company’s subsidiaries are expected to continue through the Chapter 11 process.
Quicksilver’s assets reside primarily in unconventional reservoirs including shales and coal beds in North America, namely the Barnett, West Texas, Horseshoe Canyon, and Horn River areas.
Among its activities last year, the company alongside partner Eni SPA of Italy advanced their exploratory joint venture targeting unconventional reservoirs in Pecos County, Tex. (OGJ Online, Aug. 28, 2014). The company’s overall third-quarter 2014 production totaled 22.6 bcfe.
While the company’s Canadian subsidiaries were not included in the filing, all of its US units were: Barnett Shale Operating LLC, Cowtown Drilling Inc., Cowtown Gas Processing LP, Cowtown Pipeline Funding Inc., Cowtown Pipeline LP, Cowtown Pipeline Management Inc., Makarios Resources International Holdings LLC, Makarios Resources International Inc., QPP Holdings LLC, QPP Parent LLC, Quicksilver Production Partners GP LLC, Quicksilver Production Partners LP, and Silver Stream Pipeline Co. LLC.
“Quicksilver’s strategic marketing process has not produced viable options for asset sales or other alternatives to fully address the company's liquidity and capital structure issues,” explained Glenn Darden, Quicksilver chief executive officer.
The company announced its intention to market its assets and maximize liquidity at the conclusion of last year’s third quarter.
Prior to the precipitous decline in oil prices in 2014, Quicksilver and Royal Dutch Shell PLC unit Swepi LP together sold 312,000 net acres targeting oil, natural gas liquids, and natural gas in the Niobrara shale to Southwestern Energy Co. for $180 million (OGJ Online, Mar. 7, 2015).
“We believe that chapter 11 provides the flexibility to accomplish an effective restructuring of Quicksilver for its stakeholders,” Darden said.
Quicksilver has filed a series of motions with the court to ensure the continuation of normal operations, including requesting court approval to continue paying employee wages and salaries and providing employee benefits without interruption.
The company has also asked for authority to continue honoring royalty obligations, working interest obligations, and other obligations related to oil and gas leases. The company expects the court will approve the requests.
During the chapter 11 process, suppliers will be paid in full for all goods and services provided after the filing date as required by the bankruptcy code, Quicksilver says.