Quicksilver said its $24 million net income for the third quarter was dramatically higher than the $11 million it earned during the same quarter last year. But its adjusted net loss, excluding certain non-operational charges, was $12 million, $4 million more than last year.
Equally significant for the leadership at the embattled Fort Worth-based energy company was that it had gained unanimous lender approval — with favorable covenant changes — for loans totaling $325 million, something they said will help the firm “sustain liquidity.”
“Quicksilver is moving on multiple fronts. Our commercial banks reaffirmed our $325 million borrowing base ... We are having success in the field, opening a new production area in West Texas that we believe will be a big addition to the company,” said Glenn Darden, president and chief executive officer, during a conference call. “This company is not slowing down.”
Quicksilver shares (ticker: KWK), which rallied Friday in anticipation of the earnings release, sank 25 cents, or 31 percent, to 55 cents a share.
Officials were pleased with strong results in its first two Permian Basin wells in West Texas, completed with joint venture partner Eni, an Italian energy giant. Together with its partners, Quicksilver is working on about 90,000 acres in Pecos, Crockett and Upton counties.
The company boosted its Barnett Shale holdings by adding another 8,000 acres. It said its production was comparable to the third quarter in 2013 due to 17 net wells brought online in the first nine months of this year. Along with partners Tokyo Gas and Eni, Quicksilver leases about 93,000 acres in the Fort Worth basin.
Quicksilver has been struggling with a large debt load taken on before natural gas prices slid as the financial markets collapsed in 2008. It recorded losses in the first two quarters and Darden told analysts this summer that the “company has more wood to chop.”
In September, Quicksilver hired a “strategic alternatives officer” to work with senior management to evaluate financial issues confronting the company. John Little, who works for Deloitte Transactions and Business Analytics, reports to Darden and the company’s board of directors.
The company also retained Houlihan Lokey Capital to lead a broad and more formalized process to market Quicksilver’s assets. Little said those assets will be sold individually or as a group to buyers around the world, including those based in Europe and Asia.
John C. Regan, senior vice president and chief financial officer, said the company’s efforts “won’t be doing a deal for a deal’s sake.”
Pressure has been mounting on Quicksilver to refinance $350 million in debt. Quicksilver, which operates in the U.S. and Canada, has to refinance or retire $250 million in bonds by January 2016 to avoid other costly financial triggers, Bloomberg has reported.