Quicksilver Resources Inc., Fort Worth, Tex., filed for Chapter 11 bankruptcy protection in Delaware, becoming at least the third unconventional producer to seek reorganization during the ongoing oil-price downturn.
In early January, WBH Energy Partners filed for Chapter 11 bankruptcy in Austin, Tex. The privately held WBH has leases in the Barnett shale (UOGR, January/February 2015, p.3).
On Mar. 8, Dunn Energy Inc. of Houston filed for Chapter 11 bankruptcy, citing low oil prices as the reason. Dunn also has Barnett shale holdings.
Quicksilver has operations in the Barnett and Delaware basins. Its unconventional assets in Canada were excluded from the US bankruptcy filing.
On Mar. 20, Quicksilver said operations across its subsidiaries were expected to continue without interruption because a US Bankruptcy judge approved motions so Quicksilver could continue paying employees and providing employee benefits.
Royalty payments made
The judge also authorized Quicksilver to continue paying royalties, working interest obligations, and other expenses related to oil and gas leases.
Quicksilver named all of its US subsidiaries in the bankruptcy filing: 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," said Glenn Darden, Quicksilver chief executive officer. "We believe that Chapter 11 provides the flexibility to accomplish an effective restructuring of Quicksilver for its stakeholders."
At the end of the 2014 third quarter, Quicksilver announced plans to sell assets. The company's third-quarter 2014 production totaled 22.6 bcfe.
Among its activities last year, Quicksilver and partner Eni SPA of Italy advanced their exploratory joint venture targeting unconventional reservoirs in Pecos County, Tex. (OGJ Online, Aug. 28, 2014).
Quicksilver and Royal Dutch Shell PLC unit Swepi LP together sold 312,000 net acres in the Niobrara shale to Southwestern Energy Co. for $180 million (OGJ Online, Mar. 7, 2015).