Quicksilver files for bankruptcy protection

OREANDA-NEWS. March 19, 2015. Quicksilver Resources has filed in Delaware for Chapter 11 bankruptcy protection, becoming the latest US independent to succumb to falling oil and natural gas prices.

The company, which is focused primarily on developing the gas-rich Barnett shale in north Texas, had sought to sell off assets, develop joint-venture partners or engage in other transactions to reduce its debt.

Last month, Quicksilver elected not to make an interest payment and warned that it may seek bankruptcy protection, if it was unsuccessful at improving liquidity or completing strategic transactions. US independents American Eagle Energy and Saratoga Resources have also missed debt payments, according to ratings agency Fitch.

US independents that borrowed heavily to finance the development of onshore oil and gas fields have been stung by the sharp downturn in oil and natural gas prices. Prompt-month natural gas prices peaked last year at more than \\$6/mmBtu but have dropped below \\$3/mmBtu amid rising domestic production. Oil prices have shed more than half their value since June and are plumbing six-year lows.

Quicksilver said yesterday it does not expect operations to be interrupted, and it asked the court for approval to continue paying employee wages and honoring royalty agreements. Quicksilver's Canadian subsidiaries were not included in the court filing.

Quicksilver's third quarter output was about 246mn cf/d (7mn m?/d) of natural gas equivalent, 85pc of which was gas, according to the most recent company data. About two-thirds of the total production during the quarter came from the Barnett shale.

Crestwood Midstream Partners, which gathers gas for Quicksilver in the Barnett, said yesterday that it plans to continue providing services to the company, but it expects to receive payment in a timely manner.

Independent exploration and production company Dune Energy earlier this month filed for Chapter 11 bankruptcy protection. In addition, oil field services firm Gasfrac Energy Services, Endeavour International and Cal Dive International have also filed for protection this year.