Quicksilver Resources Reports First Quarter 2005 Financial Results; Ea

FORT WORTH, Texas, May 3 /PRNewswire-FirstCall/ -- Quicksilver Resources Inc. today reported net income for first quarter 2005 of $10.8 million on revenues of $55.2 million, or $0.20 per diluted share. The company's comparative first quarter of 2004 net income was $5.9 million on revenues of $39.8 million, or $0.12 per diluted share. Net cash from operating activities for the first quarter of 2005 was $18.8 million compared to $15.1 million for the first quarter of 2004.

Production

Natural gas production for the first quarter of 2005 was 11.1 billion cubic feet (Bcf), or an average of 123 million cubic feet per day (MMcf/d), which is a 20 percent increase over production of 9.2 Bcf, or an average of 101 MMcf/d for the same period in 2004. The price realized for the company's natural gas production in the first quarter of 2005 averaged $4.31 per thousand cubic feet (Mcf), compared to the $3.58 per Mcf realized in the same period of 2004. Natural gas, including natural gas liquids (NGL), comprised 94 percent of the company's total production in the first quarter of 2005.

Crude oil production for the first quarter of 2005 was 128,000 barrels, or 1,427 barrels per day, as compared to 186,000 barrels of production in the first quarter of 2004. Crude prices realized for the first quarter of 2005 averaged $46.05 per barrel compared to $27.94 per barrel for the prior year first quarter.

Natural gas liquids production for the first quarter of 2005 was 32,000 barrels compared to 36,000 barrels in the first quarter of 2004. The price realized for natural gas liquids averaged $32.93 per barrel in the first quarter of 2005, compared to the average of $24.73 per barrel realized in the first quarter of 2004.

Operations Update

Quicksilver Resources' activity in the Barnett Shale, located in north central Texas, has continued to progress as planned. The company currently has two drilling rigs running and has drilled 16 operated wells to date in Hood and Johnson counties and one water disposal well. A third rig is scheduled to be added in June, and a fourth rig should be operational at year- end. For the last two weeks, production has averaged 10 MMcf/d gross (8 MMcf/d net) from 12 operated wells. Four wells are in various stages of completion. Quicksilver Resources' position in the Barnett Shale play is now approximately 222,000 net acres located in Hood, Johnson, Somervell, Bosque, and Hill counties.

The initial phase of Quicksilver's gathering system, the Cowtown Pipeline, is expected to be in service by mid-summer. Beginning in May, the company began processing a portion of the Barnett gas through a temporary NGL plant, with the main cryogenic plant scheduled to be operational during the 4th quarter of 2004.

The northern drilling and completion operations in both Canada and Michigan will resume shortly at the end of the seasonal break-up and frost law period. Some Canadian field operations such as fracturing and gathering system installation resumed in late April. Growth in Canada has been significant with MGV Energy Inc., Quicksilver Resources' Canadian subsidiary, more than doubling production for the first quarter of 2005 (3,545 MMcfe) compared to the first quarter of 2004 (1,698 MMcfe). With respect to drilling activity outside of Texas, Quicksilver has drilled four net wells in Michigan, 11 net wells in Indiana, and 64 net wells in Canada year to date.

President and CEO, Glenn Darden noted, "Our drilling projects are on schedule to raise production levels more than 20 percent this year. The Quicksilver team has made great progress in the Barnett Shale and the Canadian coal beds. The combination of the expiration of lower priced financial hedges at the end of last month and the addition of new gas production will result in significant increases to cash flow and earnings for the company."

Conference Call

The company's conference call to discuss operating and financial results is scheduled for Wednesday, May 4, 2005 at 10:00 a.m. central time. Quicksilver invites interested persons to participate in the conference call by dialing (877) 313-7932, ID number 3379906 between 9:50 and 9:55 a.m. central time. A digital replay of the conference call will be available at 1:00 p.m. central time the same day, and will remain available for one week. The replay can be dialed at (800) 642-1687 and reference should be made to the conference ID number 3379906. The call will also be broadcast live via Internet webcast on the company's website, http://www.qrinc.com/ , linking through the "Investor Relations" page and the "Presentations & Conference Calls" link.

About Quicksilver Resources

Fort Worth, Texas-based Quicksilver Resources is a natural gas and crude oil production company engaged in the development and acquisition of long- lived natural gas and crude oil properties. The company, widely recognized as a leader in the development and production of unconventional natural gas reserves, including coal bed methane, shale gas, and tight sands gas, is listed on the New York Stock Exchange (KWK). It has U.S. offices in Fort Worth, Texas; Granbury, Texas; Gaylord, Michigan; Corydon, Indiana and Cut Bank, Montana. Quicksilver also has a Canadian subsidiary, MGV Energy Inc., located in Calgary, Alberta. For more information about Quicksilver Resources, visit http://www.qrinc.com/ .

The statements in this press release regarding future events, occurrences, circumstances, activities, performance, outcomes and results are forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although these statements reflect the current views, assumptions and expectations of Quicksilver's management, the matters addressed herein are subject to numerous risks and uncertainties, which could cause actual activities, performance, outcomes and results to differ materially from those indicated. Factors that could result in such differences or otherwise materially affect Quicksilver's financial condition, results of operations and cash flows include: changes in general economic conditions; fluctuations in natural gas and crude oil prices; failure or delays in achieving expected production from natural gas and crude oil exploration and development projects; uncertainties inherent in estimates of natural gas and crude oil reserves and predicting natural gas and crude oil reservoir performance; competitive conditions in our industry; actions taken by third-party operators, processors and transporters; changes in the availability and cost of capital; operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; the effects of existing and future laws and governmental regulations; and the effects of existing or future litigation; as well as other factors disclosed in Quicksilver's filings with the Securities and Exchange Commission.

QUICKSILVER RESOURCES INC. Unaudited Selected Operating Results For the Three Months Ended March 31, 2005 2004 Production: Natural gas (MMcf) 11,098 9,223 Oil (MBbls) 128 186 NGL (MBbls) 32 36 Total (MMcfe) 12,061 10,556 United States (MMcfe) 8,516 8,858 Canada (MMcfe) 3,545 1,698 Total (MMcfe) 12,061 10,556 Average Daily Production: Natural gas (Mcf) 123,309 101,352 Oil (Bbl) 1,427 2,045 NGL (Bbl) 356 397 Total (Mcfe) 134,010 116,000 Average Sales Price Per Unit (excluding effects of hedging): Natural gas (per Mcf) $5.16 $4.62 Oil (per Bbl) $47.38 $29.54 NGL (per Bbl) $32.93 $24.73 Total (per Mcfe) $5.34 $4.64 Average Sales Price Per Unit (including effects of hedging): Natural gas (per Mcf) $4.31 $3.58 Oil (per Bbl) $46.05 $27.94 NGL (per Bbl) $32.93 $24.73 Total (per Mcfe) $4.55 $3.71 Expense per Mcfe: United States production cost $1.65 $1.33 Canada production cost $0.98 $1.09 Total production cost $1.45 $1.29 Production taxes $0.18 $0.23 General and administrative expenses $0.26 $0.25 Depletion, depreciation and accretion $1.03 $0.86

The results for interim periods are not necessarily indicative of annual results.

QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED BALANCE SHEETS In thousands, except for share data - Unaudited March 31, December 31, 2005 2004 ASSETS Current assets Cash and cash equivalents $7,359 $15,947 Accounts receivable 41,481 38,037 Current deferred income taxes 5,253 3,523 Inventories and other current assets 7,785 8,689 Total current assets 61,878 66,196 Investments in and advances to equity affiliates 8,290 8,254 Properties, plant and equipment - net ("full cost") 844,527 802,610 Other assets 9,323 11,274 $924,018 $888,334 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $356 $356 Accounts payable 25,901 28,407 Accrued derivative obligations 14,491 12,784 Accrued liabilities 40,498 41,904 Total current liabilities 81,246 83,451 Long-term debt 425,052 399,134 Deferred derivative obligations 737 --- Deferred asset retirement obligations 18,391 17,967 Deferred income taxes 82,229 83,506 Stockholders' equity Preferred stock, $0.01 par value, 10,000,000 shares authorized, 1 share issued and outstanding --- --- Common stock, $0.01 par value, 100,000,000 shares authorized, 53,091,604 and 52,690,971 shares issued, respectively 531 527 Paid in capital in excess of par value 208,675 200,941 Deferred compensation (1,666) --- Treasury stock of 2,568,611 shares (10,258) (10,258) Accumulated other comprehensive income 2,023 6,762 Retained earnings 117,058 106,304 Total stockholders' equity 316,363 304,276 $924,018 $888,334

The results for interim periods are not necessarily indicative of annual results.

QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME In thousands, except for per share data - Unaudited For the Three Months Ended March 31, 2005 2004 (A) Revenues Oil, gas and related product sales $54,840 $39,124 Other revenue 409 653 Total revenues 55,249 39,777 Expenses Oil and gas production costs 19,654 16,005 Other operating costs 391 290 Depletion, depreciation and accretion 12,372 9,105 General and administrative 3,113 2,656 Total expenses 35,530 28,056 Income from equity affiliates 224 291 Operating income 19,943 12,012 Other income - net (86) (70) Interest expense 4,657 3,412 Income before income taxes 15,372 8,670 Income tax expense 4,618 2,733 Net income $10,754 $5,937 Basic income per common share $0.21 $0.12 Diluted income per common share $0.20 $0.12 Basic weighted average shares outstanding 50,346 49,601 Diluted weighted average shares outstanding 54,694 50,508 (A) Share and per share amounts have been adjusted to reflect a two-for- one stock split effected in the form of a stock dividend in June 2004. The split did not affect treasury shares.

The results for interim periods are not necessarily indicative of annual results.

QUICKSILVER RESOURCES INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS In thousands - Unaudited For the Three Months Ended March 31, 2005 2004 Operating activities: Net income $10,754 $5,937 Charges and credits to net income not affecting cash Depletion, depreciation and accretion 12,372 9,105 Deferred income taxes 4,482 2,686 Income from equity affiliates (224) (291) Non-cash gain from hedging activities (212) (155) Non-cash compensation 80 --- Amortization of deferred loan costs 344 308 Other (13) --- Changes in assets and liabilities Accounts receivable (3,444) 7,658 Inventory, prepaid expenses and other (1,434) 716 Accounts payable (2,506) 757 Accrued liabilities (1,419) (11,588) Net cash from operating activities 18,780 15,133 Investing activities: Acquisition of properties and equipment (57,108) (39,917) Distributions and advances from equity affiliates - net 188 205 Proceeds from sale of properties & equipment 1,107 --- Net cash used for investing activities (55,813) (39,712) Financing activities: Issuance of debt 27,761 25,000 Repayments of debt (78) (75) Deferred financing costs (18) --- Proceeds from exercise of stock options 1,132 471 Net cash from financing activities 28,797 25,396 Effect of exchange rates on cash (352) 42 Net increase (decrease) in cash and equivalents (8,588) 859 Cash and cash equivalents at beginning of period 15,947 4,116 Cash and cash equivalents at end of period $7,359 $4,975

The results for interim periods are not necessarily indicative of annual results.