Quicksilver Resources, fighting off challenges from lower natural gas prices and mounting debts, on Thursday laid off 10 percent of it workforce in the United States and Canada.
The oil and gas exploration company has about 350 employees at its corporate offices in Fort Worth and Calgary, as well as in its field offices across the country. About 150 employees work in the Burnett Plaza building downtown, a company official estimated.
David Erdman, director of media and investor relations, said he couldn’t give an exact number of how many employees lost their jobs, or what category they worked in. But a source told the Star-Telegram that the workforce reduction included individuals in the management team.
“In response to the challenging oil and gas price environment, today we implemented a reduction in our workforce of approximately 10 percent,” Erdman said. “The decision to reduce the staff was difficult, though it now aligns with our expected activity levels.”
Sign Up and Save
Get six months of free digital access to the Star-Telegram
The last six to eight months have been difficult for Quicksilver, which saw its fortunes fall so low that in January it was kicked off the New York Stock Exchange when the average price of its stock fell below $1 for more than 30 days. When it was delisted, it was selling for 15 cents a share.
Quicksilver, which gambled on the Barnett Shale gas field in a big way and, as recently as November celebrated adding another 8,000 acres to its holdings, has been struggling to stay afloat.
But the company has been vexed by lower natural gas prices. In early January, prices for natural gas hit a two-year low and were down 35 percent since November, the Wall Street Journal reported. The U.S. Energy Information Administration also reported this week that inventories were 24 percent higher than at the same time last year. Natural gas closed Thursday at $2.71 per 1,000 cubic feet.
This has made the pressure on Quicksilver to refinance its debt even higher. Company officials said during a May 2014 conference call that its debt was at $1.99 billion after selling 25 percent of its Barnett Shale holdings to Tokyo Gas in 2013 to raise $485 million in cash. It also sold about a quarter of its leasehold in the Alliance area to the Italian oil giant Eni.
In September, Quicksilver hired John Little, who works for Deloitte Transactions and Business Analytics, to work as a “strategic alternatives officer” to work with senior management to market other parts of the company’s assets and to identify joint-venture partners.
Three months ago the company’s bondholders, led by Ares Management L.P., hired a company to advise it in restructuring talks, Bloomberg News reported. At the time, Ares owned $100 million of Quicksilver’s $350 million in subordinated notes that are due in April 2016.
Many expect Quicksilver, which is founded by the prominent Fort Worth Darden family and is led by Glenn Darden, to file for bankruptcy soon.
Erdman would not speculate on the future and did not link the layoffs to the “strategic efforts we started months ago.” Instead, he linked it directly to lower commodity prices and the need to have a workforce that matched production levels.
This story contains material from the Star-Telegram archives.
Max B. Baker, 817-390-7714