New York, September 26, 2012 -- Moody's Investors Service confirmed the Corporate Family Rating (CFR) at Quicksilver Resources, Inc. (Quicksilver) at B2, senior unsecured notes ratings at B3 and subordinated notes rating at Caa1. The outlook is negative. This action concludes the review for downgrade that was announced on July 27, 2012.

RATINGS RATIONALE

"Quicksilver's B2 CFR is supported by its large, proved developed (PD) reserve base that is comparable to Ba rated E&P peers," stated Michael Somogyi, Moody's Vice President -- Senior Analyst. "Quicksilver's large size and scale, however, are offset by its persistent high debt level relative to its highly concentrated natural gas production volumes, resulting in leverage on production and cash flow coverage metrics that are meaningfully weaker than E&P peers." The confirmation, in part, reflects the company's success in amending its Combined Credit Agreement. The amendment provides for a relaxed financial covenant as it continues to aggressively manage capital expenditures amid the extended low commodity price environment and accelerate strategic initiatives to reduce debt and fund new venture projects.

Quicksilver successfully secured an amendment to the interest coverage covenant in its credit facility and pulled forward its fall redetermination which reset the borrowing base to $850 million, down from $1,075 billion at quarter-end June 30, 2012. The amendment is inclusive of a downward revised interest coverage requirement to 1.5x from 2.5x prior, where it remains through March 2014 before stepping up to 2.0x coverage in June 2014 and back to the original 2.5x in September 2014. Quicksilver's bank group also added a senior secured leverage covenant of 2.5x which takes effect in the quarter ending September 2012. Other limitations, inclusive of restricted payments and limitations on the incurrence of certain new debt, are subject to fall-away provisions once the company's total debt / EBITDA is equal to or less than 4.0x. The facility will continue to be redetermined on a semi-annual basis, with the next scheduled review in April 2013. As of June 30, 2012, Quicksilver had approximately $455 million utilized under the revolver.

The expanded covenant headroom provides the company with additional time to manage through the extended low natural gas commodity price environment. In addition, reduced capital expenditures over the next 6 -- 18 months and the deferral of capital commitments in the Horn River Basin alleviate near-term liquidity concerns. Quicksilver incurred approximately $155 million of capital expenditures in 2Q2012, bringing total capital spending through the first six months of 2012 to $291 million. The company is projecting to scale back capital expenditures over the second half of 2012 as it reduces development concentrated in the Barnett Shale and delays new development activity. Quicksilver's full year 2012 capital spending forecast was revised down to $360 million, or $50 million less than its original $410 million budget.

The company also entered into a cross-assignment and cross-lease agreement with SWEPI LP, a subsidiary of Royal Dutch Shell PLC, to jointly develop acreage in the Niobrara play in the Sand Wash Basin of Northwest Colorado. Each party will own a 50% working interest in approximately 330,000 net acres and have right to 50% interest within the 850,000 acres defined under an Area of Mutual Interest (AMI). Quicksilver will receive an equalization payment for 50% of the acreage differential contributed in excess of SWEPI LP. This agreement provides a source of funds while significantly expanding the long-term development potential of this asset. In addition, Quicksilver remains focused on additional joint venture transactions with the objective of covering development cost exposure on new venture projects and continues to evaluate potential asset sales with proceeds to apply towards debt reduction.

Quicksilver's adjusted debt level of roughly $2.1 billion as of June 30, 2012 remains elevated stemming from prior acquisition activity and delayed MLP launch to apply proceeds toward debt reduction. The company's persistent high debt level relative to declining production volumes is expected to further weaken Quicksilver's operating profile and credit protection metrics with debt / average daily production expected to rise to over $35,000 per boe and retained cash flows / debt expected to fall to below 10% by year-end 2013, based on Moody's base case price assumptions.

The negative outlook is reflective of the challenging operational backdrop stemming from extended low natural gas prices and Quicksilver's concentrated asset base that is heavily weighted to natural gas production. A downgrade would be considered if Quicksilver's liquidity profile weakens should the company fail to execute on securing outside capital for new project developments or RCF to debt remains below 10% for a sustained period. Given the negative outlook, an upgrade is unlikely at this time. However, the outlook could be stabilized depending on the success of strategic initiatives to fund new venture projects and a proven resolve to reduce debt.

Quicksilver has $438 million senior notes due 2015, $591 million senior notes due 2016, and $298 million senior notes due 2019 that are unsecured. The company also has $350 million of senior subordinated notes due 2016. Under Moody's Loss Given Default (LGD) Methodology, the senior notes are rated B3 and the senior subordinated notes are rated Caa1. This notching beneath the B2 CFR reflects the relative size of the senior secured facility's potential priority claim and the debt instruments relative seniority in the capital structure.

The principal methodology used in rating QuickSilver was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

Quicksilver is a publicly-traded, independent exploration and production (E&P) company with primary operations in the Barnett Shale in Texas. The company was founded in 1997 and is headquartered in Fort Worth, Texas.

REGULATORY DISCLOSURES

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Michael Somogyi Vice President - Senior Analyst Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Steven Wood MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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