Quicksilver Resources anticipates carrying on normal operations as it restructures
Quicksilver Resources Inc. (OTCQB:KWKA) – saddled with $1.35 billion of liabilities, 10 times its cash flow – announced Tuesday that it has filed for chapter 11 bankruptcy protection.
The company was unsuccessful at finding investment or a buyer for its assets, which includes unconventional shale reservoirs and coal beds in North America, according to a Quicksilver press release. The assets could be sold at steeply discounted values during the bankruptcy proceedings.
“Quicksilver’s strategic marketing process has not produced viable options for asset sales or other alternatives to fully address the company’s liquidity and capital structure issues,” said Glenn Darden, Quicksilver’s CEO. “We believe that chapter 11 provides the flexibility to accomplish an effective restructuring of Quicksilver for its stakeholders.”
Quicksilver’s Canadian subsidiaries, headquartered in Calgary, Alta. were not included in the chapter 11 filing and will not be subject to the requirements of the U.S. Bankruptcy Code. Quicksilver Resources Canada Inc. (“QRCI”) has reached an agreement with its first lien secured lenders regarding a forbearance for a period up to and including June 16, 2015 of any default under QRCI’s first lien credit agreement arising due to the chapter 11 filing.
The company does not anticipate that U.S. and Canadian operations will be interrupted as a result of the chapter 11 filing.
Quicksilver has filed a series of motions with the Court to ensure the continuation of normal operations, including requesting Court approval to continue paying employee wages and salaries and providing employee benefits without interruption. The Company has also asked for authority to continue honoring royalty obligations, working interest obligations, and other obligations related to oil and gas leases.
The Company expects that the Court will approve these requests. During the chapter 11 process, suppliers will be paid in full for all goods and services provided after the filing date as required by the Bankruptcy Code.
Fort Worth, Texas-based Quicksilver Resources is a publicly traded independent oil and gas company engaged in the exploration, development and acquisition of oil and gas, primarily from unconventional reservoirs including shales and coal beds in North America. Quicksilver’s Canadian subsidiary, Quicksilver Resources Canada Inc., is headquartered in Calgary, Alberta.
In addition to the parent company, Quicksilver U.S. subsidiaries that also filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware were Barnett Shale Operating LLC, Cowtown Drilling, Inc., Cowtown Gas Processing L.P., Cowtown Pipeline Funding, Inc., Cowtown Pipeline L.P., Cowtown Pipeline Management, Inc., Makarios Resources International Holdings LLC, Makarios Resources International Inc., QPP Holdings LLC, QPP Parent LLC, Quicksilver Production Partners GP LLC, Quicksilver Production Partners LP, and Silver Stream Pipeline Company LLC.