##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 001-14837
 Quicksilver Resources Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)777 West Rosedale, Fort Worth, Texas
(Address of principal executive offices)
    
    75-2756163
(I.R.S. Employer Identification No.)76104
(Zip Code)
 (817) 665-5000
 None
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer   o(Do not check if a smaller reporting
company)
    
    Smaller reporting company o
 o þ
  Title of Class
    
    Outstanding as of July 23, 2009Common Stock, $0.01 par value
    
    169,203,000




---



##### 



QUICKSILVER RESOURCES INC.
INDEX TO FORM 10-Q
For the Period Ending June 30, 2009
 PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Statements of Income (Loss) and Comprehensive Loss
    
    
    5Condensed Consolidated Balance Sheets
    
    
    6Condensed Consolidated Statements of Stockholders Equity
    
    
    7Condensed Consolidated Statements of Cash Flows
    
    
    8Notes to Condensed Consolidated Interim Financial Statements
    
    
    9Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    29Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43Item 4. Controls and Procedures
    
    
    45PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    46Item 1A. Risk Factors
    
    
    46Item 2. Unregistered Sales of Equity Securities
    
    
    53Item 3. Defaults Upon Senior Securities
    
    
    53Item 4. Submission of Matters to a Vote of Security Holders
    
    
    54Item 5. Other Information
    
    
    54Item 6. Exhibits
    
    
    55Signatures
    
    
    56EX-4.2EX-31.1EX-31.2EX-32.1
   2




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##### Table of Contents



DEFINITIONS
  Bbl Bbls
 Bbld
 Bcf
 Bcfd
 Bcfe
 Btu
 Canada
 CBM
 DD&A
 LIBOR
 MBbl MBbls
 MBbld
 MMBbls
 MMBtu
 MMBtud
 Mcf
 Mcfe
 MMcf
 MMcfd
 MMcfe
 MMcfed
 NGL NGLs
 NYMEX
 Oil
 Tcf
 Tcfe
 COMMONLY USED TERMS
  ABR
 AOCI
 Alliance Acquisition
 Alliance Leasehold
 BBEP
 BreitBurn Transaction
 CMS Litigation
 Eni
 Eni Production
 Eni Transaction
 Gas Purchase Commitment
 FASB
 GAAP
 3




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##### Table of Contents



KGS
 Mercury
 Michigan Sales Contract
 Northeast Operations
 OCI
 PCAOB
 RSU
 SEC
 Senior Secured Credit Facility
 SFAS
 Forward-Looking Information
  
    
    changes in general economic conditions;
    
    fluctuations in natural gas, NGL and crude oil prices;
    
    failure or delays in achieving expected production from exploration and development
projects;
    
    uncertainties inherent in estimates of natural gas, NGL and crude oil reserves and
predicting natural gas, NGL and crude oil reservoir performance;
    
    effects of hedging natural gas, NGL and crude oil prices;
    
    fluctuations in the value of certain of our assets and liabilities;
    
    competitive conditions in our industry;
    
    actions taken or non-performance by third parties, including suppliers, contractors,
operators, processors, transporters, customers and counterparties;
    
    changes in the availability and cost of capital;
    
    delays in obtaining oilfield equipment and increases in drilling and other service
costs;
    
    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;
    
    the effects of existing or future litigation; and
    
    certain factors discussed elsewhere in this quarterly report.
   4




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements (Unaudited)
 QUICKSILVER RESOURCES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE LOSS
 In thousands, except for per share data  Unaudited
 For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008RevenueNatural gas, NGL and crude oil
    
    $
    199,315
    
    
    $
    198,147
    
    
    $
    382,869
    
    
    $
    356,503Sales of purchased natural gas
    
    
    5,217
    
    
    
    
    
    
    
    5,217
    
    
    
    Other
    
    
    1,509
    
    
    
    (246
    )
    
    
    3,887
    
    
    
    (985
    )Total revenue
    
    
    206,041
    
    
    
    197,901
    
    
    
    391,973
    
    
    
    355,518Operating expensesOil and gas production expense
    
    
    31,703
    
    
    
    33,019
    
    
    
    63,874
    
    
    
    65,375Production and ad valorem taxes
    
    
    7,441
    
    
    
    3,081
    
    
    
    11,807
    
    
    
    5,740Costs of purchased natural gas
    
    
    8,582
    
    
    
    
    
    
    
    8,582
    
    
    
    Other operating costs
    
    
    1,744
    
    
    
    396
    
    
    
    3,271
    
    
    
    1,801Depletion, depreciation and accretion
    
    
    50,966
    
    
    
    38,920
    
    
    
    110,662
    
    
    
    73,979General and administrative
    
    
    24,389
    
    
    
    15,382
    
    
    
    41,770
    
    
    
    30,797Total expenses
    
    
    124,825
    
    
    
    90,798
    
    
    
    239,966
    
    
    
    177,692Impairment related to oil and gas properties
    
    
    (70,643
    )
    
    
    
    
    
    
    (967,126
    )
    
    
    Operating income (loss)
    
    
    10,573
    
    
    
    107,103
    
    
    
    (815,119
    )
    
    
    177,826Income (loss) from earnings of BBEP  net
    
    
    19,016
    
    
    
    (10,269
    )
    
    
    19,016
    
    
    
    (4,050
    )Other income (expense)  net
    
    
    (855
    )
    
    
    (428
    )
    
    
    (94
    )
    
    
    1,058Interest expense
    
    
    (68,081
    )
    
    
    (16,098
    )
    
    
    (108,282
    )
    
    
    (29,533
    )Income (loss) before income taxes
    
    
    (39,347
    )
    
    
    80,308
    
    
    
    (904,479
    )
    
    
    145,301Income tax (expense) benefit
    
    
    18,897
    
    
    
    (27,985
    )
    
    
    316,720
    
    
    
    (51,336
    )Net income (loss)
    
    
    (20,450
    )
    
    
    52,323
    
    
    
    (587,759
    )
    
    
    93,965Net income attributable to noncontrolling interests
    
    
    (1,312
    )
    
    
    (988
    )
    
    
    (2,982
    )
    
    
    (1,496
    )Net income (loss) attributable to Quicksilver
    
    $
    (21,762
    )
    
    $
    51,335
    
    
    $
    (590,741
    )
    
    $
    92,469Other comprehensive income (loss)  net of income taxReclassification adjustments related to
settlements of derivative contracts
    
    
    (60,073
    )
    
    
    20,914
    
    
    
    (96,987
    )
    
    
    22,896Net change in derivative fair value
    
    
    3,701
    
    
    
    (181,030
    )
    
    
    112,304
    
    
    
    (261,249
    )Foreign currency translation adjustment
    
    
    14,007
    
    
    
    1,829
    
    
    
    6,782
    
    
    
    (6,814
    )Comprehensive loss
    
    $
    (64,127
    )
    
    $
    (106,952
    )
    
    $
    (568,642
    )
    
    $
    (152,698
    )Earnings (loss) per common share  basic
    
    $
    (0.13
    )
    
    $
    0.32
    
    
    $
    (3.50
    )
    
    $
    0.58Earnings (loss) per common share  diluted
    
    $
    (0.13
    )
    
    $
    0.31
    
    
    $
    (3.50
    )
    
    $
    0.57Basic weighted average shares outstanding
    
    
    169,009
    
    
    
    158,290
    
    
    
    168,894
    
    
    
    158,209Diluted weighted average shares outstanding
    
    
    169,009
    
    
    
    169,185
    
    
    
    168,894
    
    
    
    169,094
  5




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##### Table of Contents



QUICKSILVER RESOURCES INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 In thousands, except for share data  Unaudited
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assetsCash and cash equivalents
    
    $
    657
    
    
    $
    2,848Accounts receivable  net of allowance for doubtful accounts
    
    
    53,450
    
    
    
    143,315Derivative assets at fair value
    
    
    202,332
    
    
    
    171,740Other current assets
    
    
    70,516
    
    
    
    75,433Total current assets
    
    
    326,955
    
    
    
    393,336Investment in BreitBurn Energy Partners
    
    
    158,418
    
    
    
    150,503Property, plant and equipmentOil and gas properties, full cost method (including unevaluated costs of
$512,568 and $543,533, respectively)
    
    
    2,150,528
    
    
    
    3,142,608Other property and equipment
    
    
    697,264
    
    
    
    655,107Property, plant and equipment  net
    
    
    2,847,792
    
    
    
    3,797,715Derivative assets at fair value
    
    
    55,729
    
    
    
    116,006Deferred income taxes
    
    
    138,759
    
    
    
    Other assets
    
    
    41,525
    
    
    
    40,648$
    3,569,178
    
    
    $
    4,498,208LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    
    
    
    $
    6,579Accounts payable
    
    
    138,016
    
    
    
    282,636Income taxes payable
    
    
    7,767
    
    
    
    40Accrued liabilities
    
    
    96,043
    
    
    
    66,923Derivative liabilities at fair value
    
    
    276
    
    
    
    9,928Deferred income taxes
    
    
    76,639
    
    
    
    52,393Total current liabilities
    
    
    318,741
    
    
    
    418,499Long-term debt
    
    
    2,497,693
    
    
    
    2,586,046Asset retirement obligations
    
    
    41,476
    
    
    
    34,753Derivative liabilities at fair value
    
    
    503
    
    
    
    Other liabilities
    
    
    31,768
    
    
    
    12,962Deferred income taxes
    
    
    27,314
    
    
    
    234,385Commitments and contingencies (Note 10)
    
    
    
    
    
    
    Stockholders equityPreferred stock, par value $0.01, 10,000,000 shares authorized, none outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value, 400,000,000 shares authorized; 173,895,897
and 171,742,699 shares issued, respectively
    
    
    1,739
    
    
    
    1,717Paid in capital in excess of par value
    
    
    667,427
    
    
    
    656,958Treasury stock of 4,674,212 and 4,572,795 shares, respectively
    
    
    (36,068
    )
    
    
    (35,441
    )Accumulated other comprehensive income
    
    
    207,203
    
    
    
    185,104Retained earnings (deficit)
    
    
    (214,253
    )
    
    
    376,488Quicksilver stockholders equity
    
    
    626,048
    
    
    
    1,184,826Noncontrolling interests
    
    
    25,635
    
    
    
    26,737Total equity
    
    
    651,683
    
    
    
    1,211,563$
    3,569,178
    
    
    $
    4,498,208
  6




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##### Table of Contents



QUICKSILVER RESOURCES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS STOCKHOLDERS EQUITY
 In thousands  Unaudited
 Quicksilver Resources Inc. StockholdersAccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    RetainedCommon
    
    
    Paid-in
    
    
    Treasury
    
    
    Comprehensive
    
    
    Earnings
    
    
    NoncontrollingStock
    
    
    Capital
    
    
    Stock
    
    
    Income
    
    
    (Deficit)
    
    
    Interests
    
    
    TotalBalances at December 31, 2007
    
    $
    1,606
    
    
    $
    378,622
    
    
    $
    (12,304
    )
    
    $
    40,066
    
    
    $
    754,764
    
    
    $
    29,714
    
    
    $
    1,192,468Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,469
    
    
    
    1,496
    
    
    
    93,965Hedge derivative contract settlements
reclassified into earnings from accumulated
other comprehensive income, net of
income tax of $11,657
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,896
    
    
    
    
    
    
    
    
    
    
    
    22,896Net change in derivative fair value, net
of income tax benefit of $130,188
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (261,249
    )
    
    
    
    
    
    
    
    
    
    
    (261,249
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,814
    )
    
    
    
    
    
    
    
    
    
    
    (6,814
    )Issuance and vesting of stock compensation
    
    
    5
    
    
    
    7,135
    
    
    
    (2,354
    )
    
    
    
    
    
    
    
    
    
    
    501
    
    
    
    5,287Stock option exercises
    
    
    2
    
    
    
    1,080
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,082Distributions paid on KGS common units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,042
    )
    
    
    (4,042
    )Balances at June 30, 2008
    
    $
    1,613
    
    
    $
    386,837
    
    
    $
    (14,658
    )
    
    $
    (205,101
    )
    
    $
    847,233
    
    
    $
    27,669
    
    
    $
    1,043,593Balances at December 31, 2008
    
    $
    1,717
    
    
    $
    656,958
    
    
    $
    (35,441
    )
    
    $
    185,104
    
    
    $
    376,488
    
    
    $
    26,737
    
    
    $
    1,211,563Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (590,741
    )
    
    
    2,982
    
    
    
    (587,759
    )Hedge derivative contract settlements
reclassified into earnings from accumulated
other comprehensive income, net of
income tax benefit of $45,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (96,987
    )
    
    
    
    
    
    
    
    
    
    
    (96,987
    )Net change in derivative fair value, net
of income tax of $53,212
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112,304
    
    
    
    
    
    
    
    
    
    
    
    112,304Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,782
    
    
    
    
    
    
    
    
    
    
    
    6,782Issuance and vesting of stock compensation
    
    
    22
    
    
    
    10,389
    
    
    
    (627
    )
    
    
    
    
    
    
    
    
    
    
    812
    
    
    
    10,596Stock option exercises
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80Distributions paid on KGS common units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,896
    )
    
    
    (4,896
    )Balances at June 30, 2009
    
    $
    1,739
    
    
    $
    667,427
    
    
    $
    (36,068
    )
    
    $
    207,203
    
    
    $
    (214,253
    )
    
    $
    25,635
    
    
    $
    651,683
  7




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##### Table of Contents



QUICKSILVER RESOURCES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 In thousands  Unaudited
 For the Six Months EndedJune 30,2009
    
    
    2008Operating activities:Net income (loss)
    
    $
    (587,759
    )
    
    $
    93,965Adjustments to reconcile net income (loss) to
net cash provided by operating activities:Depletion, depreciation and accretion
    
    
    110,662
    
    
    
    73,979Impairment related to oil and gas properties
    
    
    967,126
    
    
    
    Deferred income tax expense (benefit)
    
    
    (331,321
    )
    
    
    50,243Stock-based compensation
    
    
    11,223
    
    
    
    7,641Non-cash loss from hedging and derivative activities
    
    
    5,544
    
    
    
    11,069Non-cash interest expense
    
    
    35,848
    
    
    
    4,532(Income) loss from BBEP in excess of cash distributions, net of impairment
    
    
    (7,915
    )
    
    
    4,050Other
    
    
    420
    
    
    
    1,067Changes in assets and liabilitiesAccounts receivable
    
    
    89,580
    
    
    
    (26,057
    )Derivative assets at fair value
    
    
    54,896
    
    
    
    Other assets
    
    
    (4,266
    )
    
    
    (9,213
    )Accounts payable
    
    
    (25,864
    )
    
    
    (8,566
    )Income taxes payable
    
    
    7,726
    
    
    
    (46,497
    )Accrued and other liabilities
    
    
    (15,622
    )
    
    
    (19,602
    )Net cash provided by operating activities
    
    
    310,278
    
    
    
    136,611Investing activities:Purchases of property, plant and equipment
    
    
    (441,184
    )
    
    
    (650,458
    )Proceeds from sales of property, plant and equipment
    
    
    233,488
    
    
    
    598Return of investment from BBEP
    
    
    
    
    
    
    20,334Net cash used for investing activities
    
    
    (207,696
    )
    
    
    (629,526
    )Financing activities:Issuance of debt
    
    
    1,020,750
    
    
    
    1,030,288Repayment of debt
    
    
    (1,144,031
    )
    
    
    (547,566
    )Debt issuance costs
    
    
    (22,802
    )
    
    
    (10,837
    )Gas Purchase Commitment assumed
    
    
    46,628
    
    
    
    Noncontrolling interest distributions
    
    
    (4,896
    )
    
    
    (4,042
    )Proceeds from exercise of stock options
    
    
    80
    
    
    
    1,082Purchase of treasury stock
    
    
    (627
    )
    
    
    (2,354
    )Net cash provided by (used for) financing activities
    
    
    (104,898
    )
    
    
    466,571Effect of exchange rate changes in cash
    
    
    125
    
    
    
    447Net decrease in cash
    
    
    (2,191
    )
    
    
    (25,897
    )Cash and cash equivalents at beginning of period
    
    
    2,848
    
    
    
    28,226Cash and cash equivalents at end of period
    
    $
    657
    
    
    $
    2,329
  8




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##### Table of Contents



QUICKSILVER RESOURCES INC.
 
 NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 Unaudited
 1. ACCOUNTING POLICIES AND DISCLOSURES
    Earnings per Share
 Recently Issued Accounting Standards
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except per share 
data)
    
    
    (In thousands, except per share 
data)Net income (loss) attributable to Quicksilver
    
    $
    (21,762
    )
    
    $
    51,335
    
    
    $
    (590,741
    )
    
    $
    92,469Impact of assumed conversions  interest on 1.875%
convertible debentures, net of income taxes
    
    
    
    
    
    
    1,578
    
    
    
    
    
    
    
    3,137Income (loss) available to stockholders assuming
conversion of convertible debentures
    
    $
    (21,762
    )
    
    $
    52,913
    
    
    $
    (590,741
    )
    
    $
    95,606Weighted average common shares  basic
    
    
    169,009
    
    
    
    158,290
    
    
    
    168,894
    
    
    
    158,209Effect of dilutive securities:Employee stock options
    
    
    
    
    
    
    762
    
    
    
    
    
    
    
    742Employee stock unit awards
    
    
    
    
    
    
    317
    
    
    
    
    
    
    
    327Contingently convertible debentures
    
    
    
    
    
    
    9,816
    
    
    
    
    
    
    
    9,816Weighted average common shares  diluted
    
    
    169,009
    
    
    
    169,185
    
    
    
    168,894
    
    
    
    169,094Earnings (loss) per common share  basic
    
    $
    (0.13
    )
    
    $
    0.32
    
    
    $
    (3.50
    )
    
    $
    0.58Earnings (loss) per common share  diluted
    
    $
    (0.13
    )
    
    $
    0.31
    
    
    $
    (3.50
    )
    
    $
    0.57
 9




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##### Table of Contents



Recently Issued Accounting Standards
  Pronouncements Impacting Quicksilver That Have Been Implemented
 Business Combinations Business Combinations
 Noncontrolling Interests in Consolidated Financial Statements  an amendment
of ARB No 51
 Effective Date of FASB Statement No. 157
 Disclosures about Derivative Instruments and Hedging
Activities
 Accounting for Convertible Debt Instruments That
May Be Settled in Cash upon Conversion (Including Partial Cash Settlement Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants
 Determining Whether Instruments Granted in
Share-Based Payments Transactions Are Participating Securities
 10




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##### Table of Contents



For the Three Months Ended June 30, 2008
    
    
    For the Six Months Ended June 30, 2008As Originally
    
    
    
    
    
    
    Effect of
    
    
    As Originally
    
    
    
    
    
    
    Effect ofReported
    
    
    As Adjusted
    
    
    Change
    
    
    Reported
    
    
    As Adjusted
    
    
    Change(In thousands, except for per share data)
    
    
    (In thousands, except for per share data)Operating income
    
    $
    107,103
    
    
    $
    107,103
    
    
    $
    
    
    
    $
    177,826
    
    
    $
    177,826
    
    
    $
    Loss from earnings of BBEP
    
    
    (10,269
    )
    
    
    (10,269
    )
    
    
    
    
    
    
    (4,050
    )
    
    
    (4,050
    )
    
    
    Interest expense and other
    
    
    (14,894
    )
    
    
    (16,526
    )
    
    
    (1,632
    )
    
    
    (25,240
    )
    
    
    (28,475
    )
    
    
    (3,235
    )Income before income tax
    
    
    81,940
    
    
    
    80,308
    
    
    
    (1,632
    )
    
    
    148,536
    
    
    
    145,301
    
    
    
    (3,235
    )Income tax (expense) benefit
    
    
    (28,556
    )
    
    
    (27,985
    )
    
    
    571
    
    
    
    (52,468
    )
    
    
    (51,336
    )
    
    
    1,132Minority interest expense
    
    
    (988
    )
    
    
    
    
    
    
    (988
    )
    
    
    (1,496
    )
    
    
    
    
    
    
    (1,496
    )Net income attributable to noncontrolling
interests
    
    
    
    
    
    
    (988
    )
    
    
    988
    
    
    
    
    
    
    
    (1,496
    )
    
    
    1,496Net income attributable to Quicksilver
    
    $
    52,396
    
    
    $
    51,335
    
    
    $
    (1,061
    )
    
    $
    94,572
    
    
    $
    92,469
    
    
    $
    (2,103
    )Earnings per share  basic
    
    $
    0.33
    
    
    $
    0.32
    
    
    $
    (0.01
    )
    
    $
    0.60
    
    
    $
    0.58
    
    
    $
    (0.02
    )Earnings per share  diluted
    
    $
    0.31
    
    
    $
    0.31
    
    
    $
    
    
    
    $
    0.56
    
    
    $
    0.57
    
    
    $
    0.01Basic weighted average shares outstanding
    
    
    157,889
    
    
    
    158,290
    
    
    
    401
    
    
    
    157,807
    
    
    
    158,209
    
    
    
    402Diluted weighted average shares outstanding
    
    
    169,855
    
    
    
    169,185
    
    
    
    (670
    )
    
    
    169,764
    
    
    
    169,094
    
    
    
    (670
    )
 Interim Disclosures about Fair
Value of Financial Instruments. Disclosures about Fair Value of
Financial Instruments Interim Financial Reporting
 Recognition and Presentation of Other-Than-Temporary
Impairments
 Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly
 Subsequent Events
  Pronouncements Not Yet Implemented
  11




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##### Table of Contents



The FASB Accounting Standards Codification and the Hierarchy
of Generally Accepted Accounting Principles
 2. ENI TRANSACTION
     Total AggregateYear
    
    Linear Feet2009
    
    
    28,2152010
    
    
    58,4482011
    
    
    44,0802012
    
    
    26,9742013
    
    
    34,102
  12




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##### Table of Contents



3. ALLIANCE ACQUISITION
  (In thousands)Purchase Price:Cash paid
    
    $
    1,000,000Cash received from post-closing settlement
    
    
    (9,020
    )Cash paid for acquisition-related expenses
    
    
    1,368Total cash
    
    
    992,348Issuance of 10,400,468 common shares
    
    
    262,092$
    1,254,440
  (In thousands)Allocation of Purchase Price:Oil and gas properties  proved
    
    $
    788,456Oil and gas properties  unproved
    
    
    440,439Midstream assets
    
    
    27,652Liabilities assumed
    
    
    (1,035
    )Asset retirement obligations
    
    
    (1,072
    )$
    1,254,440
  Pro Forma Information
  For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30, 2008
    
    
    June 30, 2008(In thousands, except for per share data)Revenues
    
    $
    235,144
    
    
    $
    417,806Net income attributable to Quicksilver
    
    $
    50,291
    
    
    $
    85,656Earnings per share  basic
    
    $
    0.30
    
    
    $
    0.51Earnings per share  diluted
    
    $
    0.29
    
    
    $
    0.49
 13




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##### Table of Contents



4. DERIVATIVES AND FAIR VALUE MEASUREMENTS
   Commodity Price Derivatives
  Interest Rate Derivatives
  14




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##### Table of Contents



Asset Derivatives
    
    
    
    Liability DerivativesJune 30,
    
    
    December 31,
    
    
    
    June 30,
    
    
    December 31,2009
    
    
    2008
    
    
    
    2009
    
    
    2008(in thousands)
    
    
    
    (in thousands)Derivatives designated as hedging
instruments under SFAS 133Commodity contracts reported in:Current derivative assets
    
    $
    202,373
    
    
    $
    179,079
    
    
    
    $
    94
    
    
    $
    2,500Noncurrent derivative assets
    
    
    55,457
    
    
    
    116,006
    
    
    
    
    
    
    
    
    Current derivative liabilities
    
    
    
    
    
    
    
    
    
    
    
    188
    
    
    
    1,865Interest rate contracts reported in:Current derivative assets
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    Noncurrent derivative assets
    
    
    272Current derivative liabilities
    
    
    
    
    
    
    
    
    
    
    
    88Noncurrent derivative liabilities
    
    
    
    
    
    
    
    
    
    
    
    503
    
    
    
    Total derivatives designated as
hedging instruments under SFAS 133
    
    $
    258,155
    
    
    $
    295,085
    
    
    
    $
    873
    
    
    $
    4,365Derivatives not designated as hedging
instruments under SFAS 133Gas Purchase Commitment
(1) reported
in:Accrued liabilities
    
    $
    
    
    
    $
    
    
    
    
    $
    2,495
    
    
    $
    Other liabilities
    
    
    
    
    
    
    
    
    
    
    
    1,323
    
    
    
    Michigan Sales Contract natural gas
purchase derivatives (2) reported
in current derivative assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,839Michigan Sales Contract (2) reported
in current derivative liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,063Total derivatives not designated as
hedging instruments under
SFAS 133
    
    $
    
    
    
    $
    
    
    
    
    $
    3,818
    
    
    $
    12,902Total derivatives
    
    $
    258,155
    
    
    $
    295,085
    
    
    
    $
    4,691
    
    
    $
    17,267
 
 (1)
    
    Note 2 contains additional description of the Gas Purchase Commitment(2)
    
    During 2009, our net cash payments were $16.5 million, including derivative
settlements, to complete our obligations under the Michigan Sales Contract.  Fair Value Measurements as of June 30, 2009(1)Balance SheetLevel 2
    
    
    Other(2)
    
    
    TotalDerivative assets
    
    $
    258,155
    
    
    $
    (94
    )
    
    $
    258,061Derivative liabilities
    
    $
    4,691
    
    
    $
    (94
    )
    
    $
    4,597
 15




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##### Table of Contents



Fair
Value Measurements as of December 31, 2008 (1)Balance SheetLevel 2
    
    
    Other(2)
    
    
    TotalDerivative assets
    
    $
    295,085
    
    
    $
    (7,339
    )
    
    $
    287,746Derivative liabilities
    
    $
    17,267
    
    
    $
    (7,339
    )
    
    $
    9,928
 
 (1)
    
    No Level 1 or Level 3 measurements.(2)
    
    Represents amounts netted under master netting arrangements with counterparties.  Michigan
    
    
    Gas Purchase
    
    
    Cash Flow
    
    
    Fair ValueContract
    
    
    Commitment
    
    
    Derivatives
    
    
    Derivatives
    
    
    Total(in thousands)Derivative fair value at December 31, 2008
    
    $
    (12,901
    )
    
    $
    
    
    
    $
    290,719
    
    
    $
    
    
    
    $
    277,818Change in amounts due from Quicksilver
    
    
    (3,518
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,518
    )Net cash paid in settlement
    
    
    16,479
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,479Net cash received in settlement and reported in
revenue
    
    
    
    
    
    
    
    
    
    
    (53,864
    )
    
    
    
    
    
    
    (53,864
    )Ineffectiveness reported in other revenue
    
    
    (60
    )
    
    
    
    
    
    
    (1,068
    )
    
    
    
    
    
    
    (1,128
    )Cash received and reported in OCI
    
    
    
    
    
    
    
    
    
    
    (54,896
    )
    
    
    
    
    
    
    (54,896
    )Unrealized gains (losses) reported in OCI
    
    
    
    
    
    
    
    
    
    
    161,433
    
    
    
    
    
    
    
    161,433Derivative fair value at March 31, 2009
    
    $
    
    
    
    $
    
    
    
    $
    342,324
    
    
    $
    
    
    
    $
    342,324Change in fair value of effective interest swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (266
    )
    
    
    (266
    )Net cash received in settlement and reported in
revenue
    
    
    
    
    
    
    
    
    
    
    (88,261
    )
    
    
    
    
    
    
    (88,261
    )Change in fair value of Gas Purchase Commitment reported in costs of purchased gas
    
    
    
    
    
    
    (3,818
    )
    
    
    
    
    
    
    
    
    
    
    (3,818
    )Ineffectiveness reported in other revenue
    
    
    
    
    
    
    
    
    
    
    (598
    )
    
    
    
    
    
    
    (598
    )Unrealized gains (losses) reported in OCI
    
    
    
    
    
    
    
    
    
    
    4,083
    
    
    
    
    
    
    
    4,083Derivative fair value at June 30, 2009
    
    $
    
    
    
    $
    (3,818
    )
    
    $
    257,548
    
    
    $
    (266
    )
    
    $
    253,464
 Michigan
    
    
    Gas Purchase
    
    
    Cash Flow
    
    
    Fair ValueContract
    
    
    Commitment
    
    
    Derivatives
    
    
    Derivatives
    
    
    Total(in thousands)Derivative fair value at December 31, 2007
    
    $
    (63,777
    )
    
    $
    
    
    
    $
    (5,503
    )
    
    $
    
    
    
    $
    (69,280
    )Change in amounts due from Quicksilver
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )Net cash paid in settlement
    
    
    7,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,153Net cash paid in settlement and reported in revenue
    
    
    
    
    
    
    
    
    
    
    3,009
    
    
    
    
    
    
    
    3,009Ineffectiveness reported in other revenue
    
    
    337
    
    
    
    
    
    
    
    (5,860
    )
    
    
    
    
    
    
    (5,523
    )Unrealized gains (losses) reported in OCI
    
    
    
    
    
    
    
    
    
    
    (119,646
    )
    
    
    
    
    
    
    (119,646
    )Derivative fair value at March 31, 2008
    
    $
    (56,294
    )
    
    $
    
    
    
    $
    (128,000
    )
    
    $
    
    
    
    $
    (184,294
    )Change in amounts due to (from) Quicksilver
    
    
    
    
    
    
    
    
    
    
    (1,051
    )
    
    
    
    
    
    
    (1,051
    )Net cash paid in settlement
    
    
    10,973
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,973Net cash paid in settlement and reported in revenue
    
    
    
    
    
    
    
    
    
    
    31,544
    
    
    
    
    
    
    
    31,544Ineffectiveness reported in other revenue
    
    
    (817
    )
    
    
    
    
    
    
    (3,544
    )
    
    
    
    
    
    
    (4,361
    )Unrealized gains (losses) reported in OCI
    
    
    
    
    
    
    
    
    
    
    (271,791
    )
    
    
    
    
    
    
    (271,791
    )Derivative fair value at June 30, 2008
    
    $
    (46,138
    )
    
    $
    
    
    
    $
    (372,842
    )
    
    $
    
    
    
    $
    (418,980
    )
 16




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##### Table of Contents



5. INVESTMENT IN BREITBURN ENERGY PARTNERS L.P.
    For the
    
    
    For theFor the Three Months Ended
    
    
    Six Months
    
    
    Five MonthsMarch 31,
    
    
    Ended
    
    
    Ended2009
    
    
    2008
    
    
    March 31, 2009
    
    
    March 31, 2008(In thousands)
    
    
    (In thousands)Revenues (1)
    
    $
    127,939
    
    
    $
    33,337
    
    
    $
    571,186
    
    
    $
    94,502Operating expenses (2)
    
    
    74,243
    
    
    
    67,792
    
    
    
    240,039
    
    
    
    112,157Operating income
    
    
    53,696
    
    
    
    (34,455
    )
    
    
    331,147
    
    
    
    (17,655
    )Interest and other (3)
    
    
    6,871
    
    
    
    6,877
    
    
    
    32,470
    
    
    
    11,280Income tax (benefit) expense
    
    
    468
    
    
    
    (246
    )
    
    
    1,145
    
    
    
    (915
    )Noncontrolling interests
    
    
    7
    
    
    
    54
    
    
    
    20
    
    
    
    85Net income available to BBEP
    
    $
    46,350
    
    
    $
    (41,140
    )
    
    $
    297,512
    
    
    $
    (28,105
    )Net income available to
common unitholders
    
    $
    46,350
    
    
    $
    (40,867
    )
    
    $
    297,512
    
    
    $
    (28,300
    )
 
 (1)
    
    Unrealized losses on commodity derivatives of $4.1 million and $69.9 million are
included for the three months ended March 31, 2009 and 2008, respectively. Unrealized gains
of $342.3 million and unrealized losses of $72.3 million on commodity derivatives are included
for the six months ended March 31, 2009 and the five months ended March 31, 2008,
respectively.(2)
    
    Includes $86.4 million for impairment charges of its oil and gas properties for the
six months ended March 31, 2009.(3)
    
    The three months and six months ended March 31, 2009 include $2.1 million and $18.2
million for unrealized losses on interest rate swaps, respectively. 17




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##### Table of Contents



As of
    
    As ofMarch 31, 2009
    
    December 31, 2008(In thousands)Current assets
    
    $
    157,568
    
    
    $
    140,566Property, plant and equipment
    
    
    1,822,144
    
    
    
    1,840,341Other assets
    
    
    212,427
    
    
    
    235,927Current liabilities
    
    
    56,063
    
    
    
    79,990Long-term debt
    
    
    706,941
    
    
    
    736,000Other non-current liabilities
    
    
    54,215
    
    
    
    47,413Partners equity
    
    
    1,374,920
    
    
    
    1,353,431
   (In thousands)Balance at December 31, 2008
    
    $
    150,503Equity income in BBEP
    
    
    121,100Distributions from BBEP
    
    
    (11,101
    )Non-cash impairment of BBEP
    
    
    (102,084
    )Balance at June 30, 2009
    
    $
    158,418
 6. PROPERTY, PLANT AND EQUIPMENT
  June 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Oil and gas propertiesSubject to depletion
    
    $
    3,591,138
    
    
    $
    3,621,831Unevaluated costs
    
    
    512,568
    
    
    
    543,533Accumulated depletion
    
    
    (1,953,178
    )
    
    
    (1,022,756
    )Net oil and gas properties
    
    
    2,150,528
    
    
    
    3,142,608Other plant and equipmentPipelines and processing facilities
    
    
    705,973
    
    
    
    529,555General properties
    
    
    63,780
    
    
    
    57,941Construction in progress
    
    
    12,354
    
    
    
    134,557Accumulated depreciation
    
    
    (84,843
    )
    
    
    (66,946
    )Net other property and equipment
    
    
    697,264
    
    
    
    655,107Property, plant and equipment, net of
accumulated depletion and depreciation
    
    $
    2,847,792
    
    
    $
    3,797,715
 Ceiling Test Analysis
  18




---



##### Table of Contents



First Quarter 2009
 Net
    
    
    
    
    
    
    Pre-taxCapitalized
    
    
    Ceiling
    
    
    Charge forCosts (1)
    
    

Limitation (2)
    
    
    Impairment(In thousands)United States
    
    $
    2,727,130
    
    
    $
    1,940,263
    
    
    $
    786,867Canada
    
    
    458,135
    
    
    
    348,519
    
    
    
    109,616Total
    
    $
    3,185,265
    
    
    $
    2,288,782
    
    
    $
    896,483
 Second Quarter 2009
 Net
    
    
    
    
    
    
    Pre-taxCapitalized
    
    
    Ceiling
    
    
    Charge forCosts (1)
    
    

Limitation (2)
    
    
    Impairment(In thousands)Canada
    
    $
    400,696
    
    
    $
    330,053
    
    
    $
    70,643
 
 (1)
    
    Net capitalized costs before impairment includes all costs associated with
development, exploration and acquisition of oil and gas properties net of accumulated
depletion and impairment, reduced by the related deferred income tax liability and asset
retirement obligations.(2)
    
    The ceiling limitation is the sum of (i) estimated future net cash flows, discounted
at 10% per annum, from proved reserves, based on unescalated period-end prices and costs,
adjusted for asset retirement obligations and financial derivatives that qualify as cash flow
hedges of our oil and gas revenue, (ii) the costs of properties not being amortized, (iii) the
lower of cost or market value of unproved properties not included in the costs being
amortized, less (iv) income tax effects related to differences between book and tax bases of
the oil and gas properties. 19




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##### Table of Contents



7. LONG-TERM DEBT
  June 30,
    
    
    December 31,2009
    
    
    2008(In thousands)Senior secured credit facility
    
    $
    769,623
    
    
    $
    827,868Senior secured second lien facility, net of unamortized discount
    
    
    
    
    
    
    641,555Senior notes due 2015, net of unamortized discount
    
    
    469,838
    
    
    
    469,062Senior notes due 2016, net of unamortized discount
    
    
    580,302
    
    
    
    Senior subordinated notes due 2016
    
    
    349,409
    
    
    
    350,000Convertible debentures, net of unamortized discount
    
    
    132,621
    
    
    
    129,240KGS credit agreement
    
    
    195,900
    
    
    
    174,900Total debt
    
    
    2,497,693
    
    
    
    2,592,625Less current maturities
    
    
    
    
    
    
    (6,579
    )Long-term debt
    
    $
    2,497,693
    
    
    $
    2,586,046
 Senior Secured Credit Facility
  Senior Secured Second Lien Credit Facility and Senior Notes Due 2016
  Convertible Debentures
    20




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##### Table of Contents



KGS Credit Agreement
  Summary of All Outstanding Debt
 Long-Term Debt
 Priority on Collateral and Structural Seniority(6)
        
    Recourse only toHighest priority
    
    Equal priority
    
    
    
    Lowest priority
    
    KGS assetsSenior Secured
    
    2015
    
    2016
    
    Senior
    
    Convertible
    
    KGS CreditCredit Facility(5)
    
    Senior Notes
    
    Senior Notes
    
    Subordinated Notes
    
    Debentures
    
    AgreementMaturity date
    
    February 9, 2012
    
    June 27, 2015
    
    January 1, 2016
    
    March 16, 2016
    
    November 1, 2024
    
    August 10, 2012Interest rate at
June 30, 2009 (1)
    
    3.44%
    
    8.25%
    
    11.75%
    
    7.125%
    
    1.875%
    
    1.82%Base
interest rate options (4)
    
    LIBOR, ABR or specified (5)
    
    N/A
    
    N/A
    
    N/A
    
    N/A
    
    LIBOR, ABR orspecifiedFinancial covenants for 2009 (3)

    
    - Minimum current ratio of 1.0
    
    N/A
    
    N/A
    
    N/A
    
    N/A
    
    - Maximum debt to EBITDA ratio of 4.5- Minimum EBITDA to interest
    
    
    
    
    
    
    
    
    
    - Minimum EBITDA to
interest expenseexpense ratio of 2.5
    
    
    
    
    
    
    
    
    
    ratio of 2.5Significant non-financial
    
    - Incurrence of debt
    
    - Incurrence of debt
    
    - Incurrence of debt
    
    - Incurrence of debt
    
    N/A
    
    - Incurrence of debtcovenants (3)
    
    - Incurrence of liens
    
    - Incurrence of liens
    
    - Incurrence of liens
    
    - Incurrence of liens
    
    
    
    - Incurrence of liens- Payment of dividends
    
    - Payment of dividends
    
    - Payment of dividends
    
    - Payment of dividends
    
    
    
    - Equity purchases- Equity purchases
    
    - Equity purchases
    
    - Equity purchases
    
    - Equity purchases
    
    
    
    - Asset sales- Asset sales
    
    - Asset sales
    
    - Asset sales
    
    - Asset sales
    
    
    
    - Limitations on- Affiliate transactions
    
    - Affiliate transactions
    
    - Affiliate transactions
    
    - Affiliate transactions
    
    
    
    derivatives- Limitations on derivativesEstimated fair
    
    $769.6 million
    
    $420.4 million
    
    $615.0 million
    
    $271.2 million
    
    $140.2 million
    
    $195.9 millionvalue(2)
 
 (1)
    
    Represents the weighted average borrowing rate payable to lenders and excludes
interest rate derivatives(2)
    
    The estimated fair value is determined based on market quotations on the balance
sheet date for fixed rate obligations. We consider debt with market-based interest rates to
have a fair value equal to its carrying value.(3)
    
    The covenant information presented in this table is qualified in all respects by
reference to the full text of the covenants and related definitions contained in the documents
governing the various components of our debt(4)
    
    Interest rate options include a base rate plus a spread(5)
    
    The Senior Secured Credit Facility was amended to add a floor to ABR of one-month
LIBOR plus 1%, increase the ABR margin to a range of 1.375% to 2.375% and increase the
Eurodollar and specified rate margins to a range of 2.25% to 3.25% after the redetermination
in April 2009(6)
    
    Only the Senior Secured Credit Facility features collateralization of assets. Other
debt is presented based upon structural seniority. 21




---



##### Table of Contents



8. ASSET RETIREMENT OBLIGATIONS
  (In thousands)Beginning asset retirement obligations
    
    $
    35,193Incremental liability incurred
    
    
    4,852Accretion expense
    
    
    1,138Change in estimates
    
    
    157Sale of properties
    
    
    (380
    )Asset retirement costs incurred
    
    
    (141
    )Gain on settlement of liability
    
    
    208Currency translation adjustment
    
    
    889Ending asset retirement obligations
    
    
    41,916Less current portion
    
    
    (440
    )Long-term asset retirement obligations
    
    $
    41,476
 9. INCOME TAXES
   10. COMMITMENTS AND CONTINGENCIES
 Commitments
and Contingencies
  Commitments
   11. STOCK-BASED COMPENSATION
 Stockholders Equity
 Quicksilver Stock Options
  22




---



##### Table of Contents



StockOptionsIssuedWtd avg grant date fair value
    
    $
    6.21Wtd avg grant date
    
    Jan 2, 2009Wtd avg risk-free interest rate
    
    
    1.90
    %Expected life (in years)
    
    
    6.0Wtd avg volatility
    
    
    56.8
    %Expected dividends
    
    
    
  Wtd Avg
    
    
    Wtd AvgExercise
    
    
    Remaining
    
    
    AggregateShares
    
    
    Price
    
    
    Contractual Life
    
    
    Intrinsic Value(In years)
    
    
    (In thousands)Outstanding at December 31, 2008
    
    
    1,103,336
    
    
    $
    14.20Granted
    
    
    2,605,699
    
    
    
    6.21Exercised
    
    
    (14,583
    )
    
    
    5.51Cancelled
    
    
    (58,766
    )
    
    
    9.14Outstanding at June 30, 2009
    
    
    3,635,686
    
    
    $
    8.59
    
    
    
    7.6
    
    
    $
    10,114Exercisable at June 30, 2009
    
    
    917,279
    
    
    $
    9.71
    
    
    
    2.2
    
    
    $
    2,419Vested at June 30, 2009 or expected to vest in the future
    
    
    3,417,569
    
    
    $
    7.18
  Quicksilver Restricted Stock and Restricted Stock Units
  Payable in stock
    
    
    Payable in cashWtd Avg
    
    
    
    
    
    
    Wtd AvgGrant Date
    
    
    
    
    
    
    Grant DateShares
    
    
    Fair Value
    
    
    Stock Units
    
    
    Fair ValueOutstanding at December 31, 2008
    
    
    1,336,111
    
    
    $
    24.01
    
    
    
    
    
    
    $
    Granted
    
    
    2,264,679
    
    
    
    6.23
    
    
    
    339,835
    
    
    
    6.22Vested
    
    
    (616,667
    )
    
    
    23.13
    
    
    
    
    
    
    
    Cancelled
    
    
    (126,064
    )
    
    
    14.99
    
    
    
    (5,120
    )
    
    
    6.21Outstanding at June 30, 2009
    
    
    2,858,059
    
    
    $
    10.51
    
    
    
    334,715
    
    
    $
    6.22
  23




---



##### Table of Contents



KGS Phantom Units
  Payable in units
    
    
    Payable in cashWtd Avg `
    
    
    
    
    
    
    Wtd AvgGrant Date
    
    
    
    
    
    
    Grant DateUnits
    
    
    Fair Value
    
    
    Units
    
    
    Fair ValueOutstanding at December 31, 2008
    
    
    139,918
    
    
    $
    25.15
    
    
    
    60,319
    
    
    $
    21.63Granted
    
    
    405,428
    
    
    
    10.06
    
    
    
    920
    
    
    
    13.40Vested
    
    
    (49,789
    )
    
    
    25.25
    
    
    
    (1,150
    )
    
    
    13.76Cancelled
    
    
    (8,284
    )
    
    
    17.03
    
    
    
    (5,973
    )
    
    
    21.36Outstanding at June 30, 2009
    
    
    487,273
    
    
    $
    12.72
    
    
    
    54,116
    
    
    $
    21.68
  12. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
   June 30, 2009Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)ASSETSCurrent assets
    
    $
    391,373
    
    
    $
    353
    
    
    $
    79,189
    
    
    $
    (130,227
    )
    
    $
    340,688
    
    
    $
    3,058
    
    
    $
    (16,791
    )
    
    $
    326,955Property and equipment
    
    
    1,859,137
    
    
    
    53,116
    
    
    
    428,077
    
    
    
    
    
    
    
    2,340,330
    
    
    
    507,462
    
    
    
    
    
    
    
    2,847,792Investment in subsidiaries (equity method)
    
    
    479,094
    
    
    
    79,556
    
    
    
    
    
    
    
    (320,676
    )
    
    
    237,974
    
    
    
    
    
    
    
    (79,556
    )
    
    
    158,418Other assets
    
    
    285,281
    
    
    
    133,443
    
    
    
    1,818
    
    
    
    
    
    
    
    420,542
    
    
    
    1,731
    
    
    
    (186,260
    )
    
    
    236,013Total assets
    
    $
    3,014,885
    
    
    $
    266,468
    
    
    $
    509,084
    
    
    $
    (450,903
    )
    
    $
    3,339,534
    
    
    $
    512,251
    
    
    $
    (282,607
    )
    
    $
    3,569,178LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities
    
    $
    293,214
    
    
    $
    129,887
    
    
    $
    27,236
    
    
    $
    (130,227
    )
    
    $
    320,110
    
    
    $
    15,422
    
    
    $
    (16,791
    )
    
    $
    318,741Long-term liabilities
    
    
    2,095,623
    
    
    
    3,704
    
    
    
    294,049
    
    
    
    
    
    
    
    2,393,376
    
    
    
    391,638
    
    
    
    (186,260
    )
    
    
    2,598,754Stockholders equity
    
    
    626,048
    
    
    
    132,877
    
    
    
    187,799
    
    
    
    (320,676
    )
    
    
    626,048
    
    
    
    79,556
    
    
    
    (79,556
    )
    
    
    626,048Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,635
    
    
    
    
    
    
    
    25,635Total liabilities and stockholders equity
    
    $
    3,014,885
    
    
    $
    266,468
    
    
    $
    509,084
    
    
    $
    (450,903
    )
    
    $
    3,339,534
    
    
    $
    512,251
    
    
    $
    (282,607
    )
    
    $
    3,569,178
 24




---



##### Table of Contents



December 31, 2008Restricted
    
    
    Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)ASSETSCurrent assets
    
    $
    424,862
    
    
    $
    163
    
    
    $
    102,384
    
    
    $
    (123,071
    )
    
    $
    404,338
    
    
    $
    2,613
    
    
    $
    (13,615
    )
    
    $
    393,336Property and equipment
    
    
    2,756,915
    
    
    
    1,774
    
    
    
    550,906
    
    
    
    
    
    
    
    3,309,595
    
    
    
    488,120
    
    
    
    
    
    
    
    3,797,715Investment in subsidiaries (equity method)
    
    
    513,706
    
    
    
    79,316
    
    
    
    
    
    
    
    (363,203
    )
    
    
    229,819
    
    
    
    
    
    
    
    (79,316
    )
    
    
    150,503Other assets
    
    
    206,099
    
    
    
    123,298
    
    
    
    910
    
    
    
    
    
    
    
    330,307
    
    
    
    1,916
    
    
    
    (175,569
    )
    
    
    156,654Total assets
    
    $
    3,901,582
    
    
    $
    204,551
    
    
    $
    654,200
    
    
    $
    (486,274
    )
    
    $
    4,274,059
    
    
    $
    492,649
    
    
    $
    (268,500
    )
    
    $
    4,498,208LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities
    
    $
    357,077
    
    
    $
    122,677
    
    
    $
    44,907
    
    
    $
    (123,071
    )
    
    $
    401,590
    
    
    $
    30,524
    
    
    $
    (13,615
    )
    
    $
    418,499Long-term liabilities
    
    
    2,359,679
    
    
    
    
    
    
    
    327,964
    
    
    
    
    
    
    
    2,687,643
    
    
    
    356,072
    
    
    
    (175,569
    )
    
    
    2,868,146Stockholders equity
    
    
    1,184,826
    
    
    
    81,874
    
    
    
    281,329
    
    
    
    (363,203
    )
    
    
    1,184,826
    
    
    
    79,316
    
    
    
    (79,316
    )
    
    
    1,184,826Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,737
    
    
    
    
    
    
    
    26,737Total liabilities and stockholders equity
    
    $
    3,901,582
    
    
    $
    204,551
    
    
    $
    654,200
    
    
    $
    (486,274
    )
    
    $
    4,274,059
    
    
    $
    492,649
    
    
    $
    (268,500
    )
    
    $
    4,498,208
 For the Three Months Ended June 30, 2009Restricted
    
    
    Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues
    
    $
    157,137
    
    
    $
    668
    
    
    $
    47,324
    
    
    $
    (561
    )
    
    $
    204,568
    
    
    $
    23,981
    
    
    $
    (22,508
    )
    
    $
    206,041Operating expenses
    
    
    112,009
    
    
    
    2,073
    
    
    
    90,946
    
    
    
    (561
    )
    
    
    204,467
    
    
    
    13,509
    
    
    
    (22,508
    )
    
    
    195,468Equity in net earnings of subsidiaries
    
    
    (31,183
    )
    
    
    6,099
    
    
    
    
    
    
    
    31,183
    
    
    
    6,099
    
    
    
    
    
    
    
    (6,099
    )
    
    
    Operating income (loss)
    
    
    13,945
    
    
    
    4,694
    
    
    
    (43,622
    )
    
    
    31,183
    
    
    
    6,200
    
    
    
    10,472
    
    
    
    (6,099
    )
    
    
    10,573Income from earnings of BBEP
    
    
    19,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,016
    
    
    
    
    
    
    
    
    
    
    
    19,016Interest expense and other
    
    
    (64,606
    )
    
    
    1,192
    
    
    
    (2,709
    )
    
    
    
    
    
    
    (66,123
    )
    
    
    (2,813
    )
    
    
    
    
    
    
    (68,936
    )Income tax (expense) benefit
    
    
    9,883
    
    
    
    (2,060
    )
    
    
    11,322
    
    
    
    
    
    
    
    19,145
    
    
    
    (248
    )
    
    
    
    
    
    
    18,897Net income (loss)
    
    $
    (21,762
    )
    
    $
    3,826
    
    
    $
    (35,009
    )
    
    $
    31,183
    
    
    $
    (21,762
    )
    
    $
    7,411
    
    
    $
    (6,099
    )
    
    $
    (20,450
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,312
    )
    
    
    
    
    
    
    (1,312
    )Net income (loss) attributable
to Quicksilver
    
    $
    (21,762
    )
    
    $
    3,826
    
    
    $
    (35,009
    )
    
    $
    31,183
    
    
    $
    (21,762
    )
    
    $
    6,099
    
    
    $
    (6,099
    )
    
    $
    (21,762
    )
 For the Three Months Ended June 30, 2008Restricted
    
    
    Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues
    
    $
    148,984
    
    
    $
    
    
    
    $
    45,503
    
    
    $
    
    
    
    $
    194,487
    
    
    $
    18,205
    
    
    $
    (14,791
    )
    
    $
    197,901Operating expenses
    
    
    72,827
    
    
    
    514
    
    
    
    22,107
    
    
    
    
    
    
    
    95,448
    
    
    
    10,141
    
    
    
    (14,791
    )
    
    
    90,798Equity in net earnings of subsidiaries
    
    
    18,555
    
    
    
    4,618
    
    
    
    
    
    
    
    (18,555
    )
    
    
    4,618
    
    
    
    
    
    
    
    (4,618
    )
    
    
    Operating income
    
    
    94,712
    
    
    
    4,104
    
    
    
    23,396
    
    
    
    (18,555
    )
    
    
    103,657
    
    
    
    8,064
    
    
    
    (4,618
    )
    
    
    107,103Loss from earnings of BBEP
    
    
    (10,269
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,269
    )
    
    
    
    
    
    
    
    
    
    
    (10,269
    )Interest expense and other
    
    
    (11,604
    )
    
    
    1,494
    
    
    
    (3,996
    )
    
    
    
    
    
    
    (14,106
    )
    
    
    (2,420
    )
    
    
    
    
    
    
    (16,526
    )Income tax (expense) benefit
    
    
    (21,504
    )
    
    
    (1,959
    )
    
    
    (4,484
    )
    
    
    
    
    
    
    (27,947
    )
    
    
    (38
    )
    
    
    
    
    
    
    (27,985
    )Net income
    
    $
    51,335
    
    
    $
    3,639
    
    
    $
    14,916
    
    
    $
    (18,555
    )
    
    $
    51,335
    
    
    $
    5,606
    
    
    $
    (4,618
    )
    
    $
    52,323Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (988
    )
    
    
    
    
    
    
    (988
    )Net income attributable to Quicksilver
    
    $
    51,335
    
    
    $
    3,639
    
    
    $
    14,916
    
    
    $
    (18,555
    )
    
    $
    51,335
    
    
    $
    4,618
    
    
    $
    (4,618
    )
    
    $
    51,335
 25




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##### Table of Contents



For the Six Months Ended June 30, 2009Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues
    
    $
    294,996
    
    
    $
    700
    
    
    $
    93,138
    
    
    $
    (485
    )
    
    $
    388,349
    
    
    $
    48,695
    
    
    $
    (45,071
    )
    
    $
    391,973Operating expenses
    
    
    1,004,499
    
    
    
    2,357
    
    
    
    219,839
    
    
    
    (485
    )
    
    
    1,226,210
    
    
    
    25,953
    
    
    
    (45,071
    )
    
    
    1,207,092Equity in net earnings of subsidiaries
    
    
    (88,798
    )
    
    
    13,864
    
    
    
    
    
    
    
    88,798
    
    
    
    13,864
    
    
    
    
    
    
    
    (13,864
    )
    
    
    Operating income (loss)
    
    
    (798,301
    )
    
    
    12,207
    
    
    
    (126,701
    )
    
    
    88,798
    
    
    
    (823,997
    )
    
    
    22,742
    
    
    
    (13,864
    )
    
    
    (815,119
    )Income from earnings of BBEP
    
    
    19,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,016
    
    
    
    
    
    
    
    
    
    
    
    19,016Interest expense and other
    
    
    (101,157
    )
    
    
    2,575
    
    
    
    (4,109
    )
    
    
    
    
    
    
    (102,691
    )
    
    
    (5,685
    )
    
    
    
    
    
    
    (108,376
    )Income tax (expense) benefit
    
    
    289,701
    
    
    
    (5,174
    )
    
    
    32,404
    
    
    
    
    
    
    
    316,931
    
    
    
    (211
    )
    
    
    
    
    
    
    316,720Net income (loss)
    
    $
    (590,741
    )
    
    $
    9,608
    
    
    $
    (98,406
    )
    
    $
    88,798
    
    
    $
    (590,741
    )
    
    $
    16,846
    
    
    $
    (13,864
    )
    
    $
    (587,759
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,982
    )
    
    
    
    
    
    
    (2,982
    )Net income (loss) attributable
to Quicksilver
    
    $
    (590,741
    )
    
    $
    9,608
    
    
    $
    (98,406
    )
    
    $
    88,798
    
    
    $
    (590,741
    )
    
    $
    13,864
    
    
    $
    (13,864
    )
    
    $
    (590,741
    )
 For the Six Months Ended June 30, 2008Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Revenues
    
    $
    265,873
    
    
    $
    
    
    
    $
    83,971
    
    
    $
    
    
    
    $
    349,844
    
    
    $
    33,390
    
    
    $
    (27,716
    )
    
    $
    355,518Operating expenses
    
    
    139,786
    
    
    
    1,013
    
    
    
    44,545
    
    
    
    
    
    
    
    185,344
    
    
    
    20,064
    
    
    
    (27,716
    )
    
    
    177,692Equity in net earnings of subsidiaries
    
    
    29,618
    
    
    
    6,994
    
    
    
    
    
    
    
    (29,618
    )
    
    
    6,994
    
    
    
    
    
    
    
    (6,994
    )
    
    
    Operating income
    
    
    155,705
    
    
    
    5,981
    
    
    
    39,426
    
    
    
    (29,618
    )
    
    
    171,494
    
    
    
    13,326
    
    
    
    (6,994
    )
    
    
    177,826Loss from earnings of BBEP
    
    
    (4,050
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,050
    )
    
    
    
    
    
    
    
    
    
    
    (4,050
    )Interest expense and other
    
    
    (18,653
    )
    
    
    2,927
    
    
    
    (7,916
    )
    
    
    
    
    
    
    (23,642
    )
    
    
    (4,833
    )
    
    
    
    
    
    
    (28,475
    )Income tax (expense) benefit
    
    
    (40,533
    )
    
    
    (3,118
    )
    
    
    (7,682
    )
    
    
    
    
    
    
    (51,333
    )
    
    
    (3
    )
    
    
    
    
    
    
    (51,336
    )Net income
    
    $
    92,469
    
    
    $
    5,790
    
    
    $
    23,828
    
    
    $
    (29,618
    )
    
    $
    92,469
    
    
    $
    8,490
    
    
    $
    (6,994
    )
    
    $
    93,965Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,496
    )
    
    
    
    
    
    
    (1,496
    )Net income attributable to Quicksilver
    
    $
    92,469
    
    
    $
    5,790
    
    
    $
    23,828
    
    
    $
    (29,618
    )
    
    $
    92,469
    
    
    $
    6,994
    
    
    $
    (6,994
    )
    
    $
    92,469
 For the Six Months Ended June 30, 2009Restricted
    
    
    Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Net cash flow provided by operating activities
    
    $
    184,456
    
    
    $
    20,495
    
    
    $
    85,310
    
    
    $
    
    
    
    $
    290,261
    
    
    $
    33,286
    
    
    $
    (13,269
    )
    
    $
    310,278Purchases of property, plant and equipment
    
    
    (316,015
    )
    
    
    (20,495
    )
    
    
    (68,894
    )
    
    
    
    
    
    
    (405,404
    )
    
    
    (35,780
    )
    
    
    
    
    
    
    (441,184
    )Return of investment from BBEP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Proceeds from sales of properties, plant and
equipment
    
    
    232,720
    
    
    
    
    
    
    
    768
    
    
    
    
    
    
    
    233,488
    
    
    
    
    
    
    
    
    
    
    
    233,488Net cash flow used for investing activities
    
    
    (83,295
    )
    
    
    (20,495
    )
    
    
    (68,126
    )
    
    
    
    
    
    
    (171,916
    )
    
    
    (35,780
    )
    
    
    
    
    
    
    (207,696
    )Issuance of debt
    
    
    946,302
    
    
    
    
    
    
    
    42,948
    
    
    
    
    
    
    
    989,250
    
    
    
    31,500
    
    
    
    
    
    
    
    1,020,750Repayments of debt
    
    
    (1,073,605
    )
    
    
    
    
    
    
    (59,926
    )
    
    
    
    
    
    
    (1,133,531
    )
    
    
    (10,500
    )
    
    
    
    
    
    
    (1,144,031
    )Debt issuance costs
    
    
    (21,677
    )
    
    
    
    
    
    
    (1,125
    )
    
    
    
    
    
    
    (22,802
    )
    
    
    
    
    
    
    
    
    
    
    (22,802
    )Gas Purchase Commitment assumed
    
    
    46,628
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46,628
    
    
    
    
    
    
    
    
    
    
    
    46,628Distributions to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,269
    )
    
    
    13,269
    
    
    
    Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,896
    )
    
    
    
    
    
    
    (4,896
    )Proceeds from exercise of stock options
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    
    
    
    
    80Purchase of treasury stock
    
    
    (627
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (627
    )
    
    
    
    
    
    
    
    
    
    
    (627
    )Other
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    (63
    )
    
    
    
    
    
    
    Net cash flow provided by (used for)
financing activities
    
    
    (102,836
    )
    
    
    
    
    
    
    (18,103
    )
    
    
    
    
    
    
    (120,939
    )
    
    
    2,772
    
    
    
    13,269
    
    
    
    (104,898
    )Effect of exchange rates on cash
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    
    
    
    
    125Net decrease in cash and equivalents
    
    
    (1,675
    )
    
    
    
    
    
    
    (794
    )
    
    
    
    
    
    
    (2,469
    )
    
    
    278
    
    
    
    
    
    
    
    (2,191
    )Cash and equivalents at beginning of period
    
    
    1,679
    
    
    
    
    
    
    
    866
    
    
    
    
    
    
    
    2,545
    
    
    
    303
    
    
    
    
    
    
    
    2,848Cash and equivalents at end of period
    
    $
    4
    
    
    $
    
    
    
    $
    72
    
    
    $
    
    
    
    $
    76
    
    
    $
    581
    
    
    $
    
    
    
    $
    657
 26




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##### Table of Contents



For the Six Months Ended June 30, 2008Restricted
    
    
    Restricted
    
    
    Restricted
    
    
    Quicksilver
    
    
    Unrestricted
    
    
    
    
    
    
    QuicksilverQuicksilver
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Subsidiary
    
    
    and Restricted
    
    
    Non-Guarantor
    
    
    
    
    
    
    Resources Inc.Resources Inc.
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(In thousands)Net cash flow provided by operations
    
    $
    (14,468
    )
    
    $
    2,282
    
    
    $
    135,589
    
    
    $
    
    
    
    $
    123,403
    
    
    $
    24,080
    
    
    $
    (10,872
    )
    
    $
    136,611Purchases of property, plant and
equipment
    
    
    (489,605
    )
    
    
    (2,282
    )
    
    
    (99,137
    )
    
    
    
    
    
    
    (591,024
    )
    
    
    (59,434
    )
    
    
    
    
    
    
    (650,458
    )Return of investment from BBEP
    
    
    20,334
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,334
    
    
    
    
    
    
    
    
    
    
    
    20,334Proceeds from sales of properties, plant and
equipment
    
    
    550
    
    
    
    
    
    
    
    598
    
    
    
    
    
    
    
    1,148
    
    
    
    
    
    
    
    (550
    )
    
    
    598Net cash flow used for investing activities
    
    
    (468,721
    )
    
    
    (2,282
    )
    
    
    (98,539
    )
    
    
    
    
    
    
    (569,542
    )
    
    
    (59,434
    )
    
    
    (550
    )
    
    
    (629,526
    )Issuance of debt
    
    
    876,611
    
    
    
    
    
    
    
    103,377
    
    
    
    
    
    
    
    979,988
    
    
    
    50,300
    
    
    
    
    
    
    
    1,030,288Repayments of debt
    
    
    (408,032
    )
    
    
    
    
    
    
    (139,534
    )
    
    
    
    
    
    
    (547,566
    )
    
    
    
    
    
    
    
    
    
    
    (547,566
    )Debt issuance costs
    
    
    (10,837
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,837
    )
    
    
    
    
    
    
    
    
    
    
    (10,837
    )Payments to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (550
    )
    
    
    550
    
    
    
    Distributions to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,872
    )
    
    
    10,872
    
    
    
    Distributions to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,042
    )
    
    
    
    
    
    
    (4,042
    )Proceeds from exercise of stock options
    
    
    1,082
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,082
    
    
    
    
    
    
    
    
    
    
    
    1,082Purchase of treasury stock
    
    
    (2,354
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,354
    )
    
    
    
    
    
    
    
    
    
    
    (2,354
    )Net cash flow provided by (used for)
financing activities
    
    
    456,470
    
    
    
    
    
    
    
    (36,157
    )
    
    
    
    
    
    
    420,313
    
    
    
    34,836
    
    
    
    11,422
    
    
    
    466,571Effect of exchange rates on cash
    
    
    (70
    )
    
    
    
    
    
    
    517
    
    
    
    
    
    
    
    447
    
    
    
    
    
    
    
    
    
    
    
    447Net decrease in cash and equivalents
    
    
    (26,789
    )
    
    
    
    
    
    
    1,410
    
    
    
    
    
    
    
    (25,379
    )
    
    
    (518
    )
    
    
    
    
    
    
    (25,897
    )Cash and equivalents at beginning of period
    
    
    27,012
    
    
    
    
    
    
    
    89
    
    
    
    
    
    
    
    27,101
    
    
    
    1,125
    
    
    
    
    
    
    
    28,226Cash and equivalents at end of period
    
    $
    223
    
    
    $
    
    
    
    $
    1,499
    
    
    $
    
    
    
    $
    1,722
    
    
    $
    607
    
    
    $
    
    
    
    $
    2,329
 13. SUPPLEMENTAL CASH FLOW INFORMATION
  Six Months EndedJune 30,2009
    
    
    2008(In thousands)Interest
    
    $
    85,772
    
    
    $
    28,084Income taxes
    
    
    (41,265
    )
    
    
    48,546
  Six Months EndedJune 30,2009
    
    
    2008(In thousands)Working
capital related to acquisition of property, plant and equipment
    
    $
    111,868
    
    
    $
    173,928
 14. RELATED-PARTY TRANSACTIONS
    27




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##### Table of Contents



15. SEGMENT INFORMATION
  Exploration & Production
    
    
    Processing &
    
    
    Corporate
    
    
    
    
    
    
    QuicksilverUnited States
    
    
    Canada
    
    
    Gathering
    
    
    and Other
    
    
    Elimination
    
    
    Consolidated(in thousands)For the Three Months Ended June 30, :2009Revenues
    
    $
    152,051
    
    
    $
    47,209
    
    
    $
    24,386
    
    
    $
    5,217
    
    
    $
    (22,822
    )
    
    $
    206,041Depletion, depreciation and accretion
    
    
    34,490
    
    
    
    9,671
    
    
    
    6,323
    
    
    
    482
    
    
    
    
    
    
    
    50,966Operating income
    
    
    70,725
    
    
    
    (42,765
    )
    
    
    11,084
    
    
    
    (28,471
    )
    
    
    
    
    
    
    10,573Property and equipment costs incurred
    
    
    90,422
    
    
    
    13,738
    
    
    
    30,383
    
    
    
    1,130
    
    
    
    
    
    
    
    135,6732008Revenues
    
    $
    148,775
    
    
    $
    45,714
    
    
    $
    18,204
    
    
    $
    
    
    
    $
    (14,792
    )
    
    $
    197,901Depletion, depreciation and accretion
    
    
    23,010
    
    
    
    11,584
    
    
    
    3,609
    
    
    
    717
    
    
    
    
    
    
    
    38,920Operating income
    
    
    90,166
    
    
    
    24,105
    
    
    
    7,508
    
    
    
    (14,676
    )
    
    
    
    
    
    
    107,103Property and equipment costs incurred
    
    
    242,581
    
    
    
    10,831
    
    
    
    52,375
    
    
    
    193
    
    
    
    
    
    
    
    305,980
 Exploration & Production
    
    
    Processing &
    
    
    Corporate
    
    
    
    
    
    
    QuicksilverUnited States
    
    
    Canada
    
    
    Gathering
    
    
    and Other
    
    
    Elimination
    
    
    Consolidated(in thousands)For the Six Months Ended June 30, :2009Revenues
    
    $
    289,779
    
    
    $
    93,138
    
    
    $
    49,394
    
    
    $
    5,217
    
    
    $
    (45,555
    )
    
    $
    391,973Depletion, depreciation and accretion
    
    
    78,381
    
    
    
    19,964
    
    
    
    11,509
    
    
    
    808
    
    
    
    
    
    
    
    110,662Operating income
    
    
    (669,154
    )
    
    
    (124,841
    )
    
    
    24,819
    
    
    
    (45,943
    )
    
    
    
    
    
    
    (815,119
    )Property and equipment costs incurred
    
    
    228,053
    
    
    
    56,516
    
    
    
    48,280
    
    
    
    1,656
    
    
    
    
    
    
    
    334,5052008Revenues
    
    $
    265,506
    
    
    $
    84,340
    
    
    $
    33,389
    
    
    $
    
    
    
    $
    (27,717
    )
    
    $
    355,518Depletion, depreciation and accretion
    
    
    43,099
    
    
    
    23,015
    
    
    
    6,884
    
    
    
    981
    
    
    
    
    
    
    
    73,979Operating income
    
    
    153,117
    
    
    
    40,935
    
    
    
    12,313
    
    
    
    (28,539
    )
    
    
    
    
    
    
    177,826Property and equipment costs incurred
    
    
    454,587
    
    
    
    87,274
    
    
    
    106,805
    
    
    
    554
    
    
    
    
    
    
    
    649,220Property, Plant and Equipment-netJune 30, 2009
    
    $
    1,847,188
    
    
    $
    428,077
    
    
    $
    560,578
    
    
    $
    11,949
    
    
    $
    
    
    
    $
    2,847,792December 31, 2008
    
    
    2,723,103
    
    
    
    550,413
    
    
    
    519,447
    
    
    
    4,752
    
    
    
    
    
    
    
    3,797,715
 28




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##### Table of Contents



ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  EXECUTIVE OVERVIEW
  2009 HIGHLIGHTS
 Eni Transaction
  Long-Term Debt
   Increase in Production
 Results of
Operations
 Update on Horn River Basin
  29




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##### Table of Contents



BBEP Update
  OUTLOOK FOR REMAINDER OF 2009
   RESULTS OF OPERATIONS  Three Months Ended June 30, 2009 and 2008
  Natural Gas, NGL and Crude Oil Revenue
  Natural Gas
    
    
    NGL
    
    
    Oil and Condensate
    
    
    Total2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(In millions)Texas
    
    $
    52.1
    
    
    $
    96.7
    
    
    $
    32.7
    
    
    $
    61.5
    
    
    $
    3.9
    
    
    $
    10.3
    
    
    $
    88.7
    
    
    $
    168.5Other U.S.
    
    
    0.1
    
    
    
    0.1
    
    
    
    
    
    
    
    0.3
    
    
    
    2.0
    
    
    
    4.7
    
    
    
    2.1
    
    
    
    5.1Hedging
    
    
    61.2
    
    
    
    (16.1
    )
    
    
    
    
    
    
    (4.9
    )
    
    
    
    
    
    
    (3.8
    )
    
    
    61.2
    
    
    
    (24.8
    )Total U.S.
    
    
    113.4
    
    
    
    80.7
    
    
    
    32.7
    
    
    
    56.9
    
    
    
    5.9
    
    
    
    11.2
    
    
    
    152.0
    
    
    
    148.8Canada
    
    
    20.3
    
    
    
    56.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.3
    
    
    
    56.1Hedging
    
    
    27.0
    
    
    
    (6.8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27.0
    
    
    
    (6.8
    )Total Canada
    
    
    47.3
    
    
    
    49.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47.3
    
    
    
    49.3Total Company
    
    $
    160.7
    
    
    $
    130.0
    
    
    $
    32.7
    
    
    $
    56.9
    
    
    $
    5.9
    
    
    $
    11.2
    
    
    $
    199.3
    
    
    $
    198.1
 30




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##### Table of Contents



Natural Gas
    
    
    NGL
    
    
    Oil and Condensate
    
    
    Equivalent Total2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(MMcfd)
    
    
    (Bbld)
    
    
    (Bbld)
    
    
    (MMcfed)Texas
    
    
    169.0
    
    
    
    95.8
    
    
    
    14,818
    
    
    
    11,449
    
    
    
    805
    
    
    
    950
    
    
    
    262.7
    
    
    
    170.2Other U.S.
    
    
    0.3
    
    
    
    0.2
    
    
    
    15
    
    
    
    35
    
    
    
    428
    
    
    
    443
    
    
    
    3.0
    
    
    
    3.1Total U.S.
    
    
    169.3
    
    
    
    96.0
    
    
    
    14,833
    
    
    
    11,484
    
    
    
    1,233
    
    
    
    1,393
    
    
    
    265.7
    
    
    
    173.3Canada
    
    
    65.5
    
    
    
    62.5
    
    
    
    4
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    65.6
    
    
    
    62.5Total Company
    
    
    234.8
    
    
    
    158.5
    
    
    
    14,837
    
    
    
    11,484
    
    
    
    1,238
    
    
    
    1,393
    
    
    
    331.3
    
    
    
    235.8
  Natural Gas
    
    
    NGL
    
    
    Oil and Condensate
    
    
    Equivalent Total2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(per Mcf)
    
    
    (per Bbl)
    
    
    (per Bbl)
    
    
    (per Mcfe)Texas
    
    $
    3.39
    
    
    $
    11.10
    
    
    $
    24.20
    
    
    $
    59.02
    
    
    $
    53.45
    
    
    $
    119.36
    
    
    $
    3.71
    
    
    $
    10.88Other U.S.
    
    
    3.00
    
    
    
    5.29
    
    
    
    34.49
    
    
    
    85.95
    
    
    
    50.68
    
    
    
    115.48
    
    
    
    7.83
    
    
    
    18.09Hedging  U.S.
    
    
    3.97
    
    
    
    (1.84
    )
    
    
    
    
    
    
    (4.65
    )
    
    
    
    
    
    
    (29.88
    )
    
    
    2.53
    
    
    
    (1.57
    )Total U.S.
    
    
    7.36
    
    
    
    9.24
    
    
    
    24.22
    
    
    
    54.45
    
    
    
    52.48
    
    
    
    88.25
    
    
    
    6.29
    
    
    
    9.44Canada
    
    
    3.40
    
    
    
    9.87
    
    
    
    52.00
    
    
    
    
    
    
    
    45.01
    
    
    
    
    
    
    
    3.40
    
    
    
    9.87Hedging  Canada
    
    
    4.53
    
    
    
    (1.21
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.53
    
    
    
    (1.21
    )Total Canada
    
    
    7.93
    
    
    
    8.66
    
    
    
    52.00
    
    
    
    
    
    
    
    45.01
    
    
    
    
    
    
    
    7.93
    
    
    
    8.66Total Company
    
    $
    7.52
    
    
    $
    9.02
    
    
    $
    24.22
    
    
    $
    54.45
    
    
    $
    52.48
    
    
    $
    88.25
    
    
    $
    6.61
    
    
    $
    9.23
  NaturalGas
    
    
    NGL
    
    
    Oil
    
    
    Total(In thousands)Revenue for the quarter ended June 30, 2008
    
    $
    130,061
    
    
    $
    56,899
    
    
    $
    11,187
    
    
    $
    198,147Volume changes
    
    
    62,557
    
    
    
    16,615
    
    
    
    (1,244
    )
    
    
    77,928Price changes
    
    
    (31,917
    )
    
    
    (40,813
    )
    
    
    (4,030
    )
    
    
    (76,760
    )Revenue for the quarter ended June 30, 2009
    
    $
    160,701
    
    
    $
    32,701
    
    
    $
    5,913
    
    
    $
    199,315
     31




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##### Table of Contents



Other Revenue
  Sales of Purchased Natural Gas and Costs of Purchased Natural Gas
 Three Months Ended June 30,2009
    
    
    2008(In thousands)Sales of purchased natural gas
    
    $
    5,217
    
    
    $
    Costs of purchased natural gas sold
    
    
    (4,764
    )
    
    
    Loss on valuation of gas purchase commitment
    
    
    (3,818
    )
    
    
    Costs of purchased natural gas
    
    
    (8,582
    )
    
    
    Net sales and purchases of natural gas
    
    $
    (3,365
    )
    
    $
    
  Oil and Gas Production Expense
 Three Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeTexasCash expense
    
    $
    20,747
    
    
    $
    0.87
    
    
    $
    21,823
    
    
    
    $1.41Equity compensation
    
    
    212
    
    
    
    0.01
    
    
    
    310
    
    
    
    0.02$
    20,959
    
    
    $
    0.88
    
    
    $
    22,133
    
    
    
    $1.43Other U.S.Cash expense
    
    $
    1,449
    
    
    $
    5.38
    
    
    $
    1,747
    
    
    
    $6.16Equity compensation
    
    
    46
    
    
    
    0.17
    
    
    
    42
    
    
    
    0.15$
    1,495
    
    
    $
    5.55
    
    
    $
    1,789
    
    
    
    $6.31Total U.S.Cash expense
    
    $
    22,196
    
    
    $
    0.92
    
    
    $
    23,570
    
    
    
    $1.50Equity compensation
    
    
    258
    
    
    
    0.01
    
    
    
    352
    
    
    
    0.02$
    22,454
    
    
    $
    0.93
    
    
    $
    23,922
    
    
    
    $1.52CanadaCash expense
    
    $
    8,729
    
    
    $
    1.46
    
    
    $
    8,840
    
    
    
    $1.55Equity compensation
    
    
    520
    
    
    
    0.09
    
    
    
    257
    
    
    
    0.05$
    9,249
    
    
    $
    1.55
    
    
    $
    9,097
    
    
    
    $1.60Total CompanyCash expense
    
    $
    30,925
    
    
    $
    1.02
    
    
    $
    32,410
    
    
    
    $1.51Equity compensation
    
    
    778
    
    
    
    0.03
    
    
    
    609
    
    
    
    0.03$
    31,703
    
    
    $
    1.05
    
    
    $
    33,019
    
    
    
    $1.54
  32




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##### Table of Contents



Production and Ad Valorem Taxes
 Three Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeProduction and ad valorem taxesU.S.
    
    $
    7,029
    
    
    $
    0.29
    
    
    $
    2,153
    
    
    $
    0.14Canada
    
    
    412
    
    
    
    0.07
    
    
    
    928
    
    
    
    0.16Total production and ad valorem taxes
    
    $
    7,441
    
    
    $
    0.25
    
    
    $
    3,081
    
    
    $
    0.14
  Other Operating Costs
  Depletion, Depreciation and Accretion
 Three Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeDepletionU.S.
    
    $
    32,809
    
    
    $
    1.36
    
    
    $
    22,239
    
    
    $
    1.41Canada
    
    
    8,406
    
    
    
    1.41
    
    
    
    10,341
    
    
    
    1.82Total depletion
    
    
    41,215
    
    
    
    1.37
    
    
    
    32,580
    
    
    
    1.52Depreciation of other fixed assetsU.S.
    
    $
    8,208
    
    
    $
    0.34
    
    
    $
    4,943
    
    
    $
    0.31Canada
    
    
    994
    
    
    
    0.17
    
    
    
    1,027
    
    
    
    0.18Total depreciation
    
    
    9,202
    
    
    
    0.31
    
    
    
    5,970
    
    
    
    0.27Accretion
    
    
    549
    
    
    
    0.02
    
    
    
    370
    
    
    
    0.02Total depletion, depreciation and accretion
    
    $
    50,966
    
    
    $
    1.69
    
    
    $
    38,920
    
    
    $
    1.81
  33




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##### Table of Contents



Impairment of Oil and Gas Properties
  General and Administrative Expense
 Three Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeGeneral and administrative expenseLitigation settlement
    
    $
    5,000
    
    
    $
    0.17
    
    
    $
    
    
    
    $
    Other cash expense
    
    
    14,849
    
    
    
    0.49
    
    
    
    12,204
    
    
    
    0.57Equity compensation
    
    
    4,540
    
    
    
    0.15
    
    
    
    3,178
    
    
    
    0.15Total general and administrative expense
    
    $
    24,389
    
    
    $
    0.81
    
    
    $
    15,382
    
    
    $
    0.72
  BBEP-Related Income
   Interest Expense
 Three Months Ended June 30,2009
    
    
    2008(in thousands)Interest costs
    
    $
    37,924
    
    
    $
    15,694Add:Non-cash interest (1)
    
    
    4,587
    
    
    
    2,312Loss on early debt extinguishment
    
    
    27,122
    
    
    
    Less: Interest capitalized
    
    
    (1,552
    )
    
    
    (1,908
    )Interest expense
    
    $
    68,081
    
    
    $
    16,098
 
 (1)
    
    Amortization of deferred financing costs and original issue discount 34




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##### Table of Contents



Income Tax Expense
 Three Months Ended June 30,2009
    
    2008Income tax (benefit) expense (in thousands)
    
    $
    (18,897
    )
    
    $
    27,985Effective tax rate
    
    
    48.0
    %
    
    
    34.8
    %
  RESULTS OF OPERATIONS  Six Months Ended June 30, 2009 and 2008
  Natural Gas, NGL and Crude Oil Revenue
  Natural Gas
    
    
    NGL
    
    
    Oil and Condensate
    
    
    Total2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(In millions)Texas
    
    $
    124.8
    
    
    $
    155.4
    
    
    $
    58.0
    
    
    $
    109.9
    
    
    $
    7.2
    
    
    $
    16.8
    
    
    $
    190.0
    
    
    $
    282.1Other U.S.
    
    
    0.2
    
    
    
    0.2
    
    
    
    
    
    
    
    0.7
    
    
    
    3.3
    
    
    
    8.5
    
    
    
    3.5
    
    
    
    9.4Hedging
    
    
    96.1
    
    
    
    (13.4
    )
    
    
    
    
    
    
    (8.6
    )
    
    
    
    
    
    
    (5.3
    )
    
    
    96.1
    
    
    
    (27.3
    )Total U.S.
    
    
    221.1
    
    
    
    142.2
    
    
    
    58.0
    
    
    
    102.0
    
    
    
    10.5
    
    
    
    20.0
    
    
    
    289.6
    
    
    
    264.2Canada
    
    
    47.1
    
    
    
    99.6
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47.2
    
    
    
    99.6Hedging
    
    
    46.1
    
    
    
    (7.3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46.1
    
    
    
    (7.3
    )Total Canada
    
    
    93.2
    
    
    
    92.3
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93.3
    
    
    
    92.3Total Company
    
    $
    314.2
    
    
    $
    234.5
    
    
    $
    58.1
    
    
    $
    102.0
    
    
    $
    10.5
    
    
    $
    20.0
    
    
    $
    382.9
    
    
    $
    356.5
  Natural Gas
    
    
    NGL
    
    
    Oil and Condensate
    
    
    Equivalent Total2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(MMcfd)
    
    
    (Bbld)
    
    
    (Bbld)
    
    
    (MMcfed)Texas
    
    
    173.1
    
    
    
    88.1
    
    
    
    14,072
    
    
    
    10,719
    
    
    
    911
    
    
    
    864
    
    
    
    263.0
    
    
    
    157.6Other U.S.
    
    
    0.3
    
    
    
    0.4
    
    
    
    23
    
    
    
    38
    
    
    
    451
    
    
    
    458
    
    
    
    3.1
    
    
    
    3.4Total U.S.
    
    
    173.4
    
    
    
    88.5
    
    
    
    14,095
    
    
    
    10,757
    
    
    
    1,362
    
    
    
    1,322
    
    
    
    266.1
    
    
    
    161.0Canada
    
    
    65.2
    
    
    
    62.5
    
    
    
    5
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    65.3
    
    
    
    62.5Total Company
    
    
    238.6
    
    
    
    151.0
    
    
    
    14,100
    
    
    
    10,757
    
    
    
    1,366
    
    
    
    1,322
    
    
    
    331.4
    
    
    
    223.5
 35




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##### Table of Contents



Natural Gas
    
    NGL
    
    Oil and Condensate
    
    Equivalent Total2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008(per Mcf)
    
    (per Bbl)
    
    (per Bbl)
    
    (per Mcfe)Texas
    
    $
    3.98
    
    
    $
    9.69
    
    
    $
    22.78
    
    
    $
    56.35
    
    
    $
    43.88
    
    
    $
    106.87
    
    
    $
    3.99
    
    
    $
    9.83Other U.S.
    
    
    0.57
    
    
    
    4.66
    
    
    
    14.11
    
    
    
    85.06
    
    
    
    40.18
    
    
    
    101.61
    
    
    
    6.18
    
    
    
    15.82Hedging  U.S.
    
    
    3.06
    
    
    
    (0.75
    )
    
    
    
    
    
    
    (4.37
    )
    
    
    
    
    
    
    (21.90
    )
    
    
    1.99
    
    
    
    (0.93
    )Total U.S.
    
    
    7.04
    
    
    
    8.83
    
    
    
    22.75
    
    
    
    52.07
    
    
    
    42.64
    
    
    
    83.15
    
    
    
    6.01
    
    
    
    9.02Canada
    
    
    3.99
    
    
    
    8.75
    
    
    
    58.49
    
    
    
    
    
    
    
    47.25
    
    
    
    
    
    
    
    3.99
    
    
    
    8.75Hedging  Canada
    
    
    3.90
    
    
    
    (0.64
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.90
    
    
    
    (0.64
    )Total Canada
    
    
    7.89
    
    
    
    8.11
    
    
    
    58.49
    
    
    
    
    
    
    
    47.25
    
    
    
    
    
    
    
    7.89
    
    
    
    8.11Total Company
    
    $
    7.28
    
    
    $
    8.53
    
    
    $
    22.77
    
    
    $
    52.07
    
    
    $
    42.65
    
    
    $
    83.15
    
    
    $
    6.38
    
    
    $
    8.77
  NaturalGas
    
    
    NGL
    
    
    Oil
    
    
    Total(In thousands)Revenue for the six months ended June 30, 2008
    
    $
    234,547
    
    
    $
    101,953
    
    
    $
    20,003
    
    
    $
    356,503Volume changes
    
    
    134,033
    
    
    
    30,943
    
    
    
    558
    
    
    
    165,534Price changes
    
    
    (54,355
    )
    
    
    (74,799
    )
    
    
    (10,014
    )
    
    
    (139,168
    )Revenue for the six months ended June 30, 2009
    
    $
    314,225
    
    
    $
    58,097
    
    
    $
    10,547
    
    
    $
    382,869
    Other Revenue
  36




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##### Table of Contents



Sales of Purchased Natural Gas and Costs of Purchased Natural Gas
 Six Months Ended June 30,2009
    
    
    2008(In thousands)Sales of purchased natural gas
    
    $
    5,217
    
    
    $
    Costs of purchased natural gas sold
    
    
    (4,764
    )
    
    
    Loss on valuation of gas purchase commitment
    
    
    (3,818
    )
    
    
    Costs of purchased natural gas
    
    
    (8,582
    )
    
    
    Net on sales and purchases of natural gas
    
    $
    (3,365
    )
    
    $
    
  Oil and Gas Production Expense
 Six Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeTexasCash expense
    
    $
    43,062
    
    
    $
    0.91
    
    
    $
    43,485
    
    
    $
    1.52Equity compensation
    
    
    515
    
    
    
    0.01
    
    
    
    624
    
    
    
    0.02$
    43,577
    
    
    $
    0.92
    
    
    $
    44,109
    
    
    $
    1.54Other U.S.Cash expense
    
    $
    3,280
    
    
    $
    5.79
    
    
    $
    2,636
    
    
    $
    4.31Equity compensation
    
    
    97
    
    
    
    0.17
    
    
    
    90
    
    
    
    0.15$
    3,377
    
    
    $
    5.96
    
    
    $
    2,726
    
    
    $
    4.46Total U.S.Cash expense
    
    $
    46,342
    
    
    $
    0.96
    
    
    $
    46,121
    
    
    $
    1.58Equity compensation
    
    
    612
    
    
    
    0.01
    
    
    
    714
    
    
    
    0.02$
    46,954
    
    
    $
    0.97
    
    
    $
    46,835
    
    
    $
    1.60CanadaCash expense
    
    $
    15,804
    
    
    $
    1.34
    
    
    $
    17,602
    
    
    $
    1.55Equity compensation
    
    
    1,116
    
    
    
    0.09
    
    
    
    938
    
    
    
    0.08$
    16,920
    
    
    $
    1.43
    
    
    $
    18,540
    
    
    $
    1.63Total CompanyCash expense
    
    $
    62,146
    
    
    $
    1.03
    
    
    $
    63,723
    
    
    $
    1.57Equity compensation
    
    
    1,728
    
    
    
    0.03
    
    
    
    1,652
    
    
    
    0.04$
    63,874
    
    
    $
    1.06
    
    
    $
    65,375
    
    
    $
    1.61
   37




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##### Table of Contents



Production and Ad Valorem Taxes
 Six Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeProduction and ad valorem taxesU.S.
    
    $
    10,971
    
    
    $
    0.23
    
    
    $
    3,891
    
    
    $
    0.13Canada
    
    
    836
    
    
    
    0.07
    
    
    
    1,849
    
    
    
    0.16Total production and ad valorem taxes
    
    $
    11,807
    
    
    $
    0.20
    
    
    $
    5,740
    
    
    $
    0.14
  Other Operating Costs
  Depletion, Depreciation and Accretion
 Six Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeDepletionU.S.
    
    $
    74,681
    
    
    $
    1.55
    
    
    $
    41,301
    
    
    $
    1.41Canada
    
    
    17,509
    
    
    
    1.48
    
    
    
    20,847
    
    
    
    1.83Total depletion
    
    
    92,190
    
    
    
    1.54
    
    
    
    62,148
    
    
    
    1.53Depreciation of other fixed assets:U.S.
    
    $
    15,516
    
    
    $
    0.32
    
    
    $
    9,365
    
    
    $
    0.32Canada
    
    
    1,818
    
    
    
    0.15
    
    
    
    1,745
    
    
    
    0.15Total depreciation
    
    
    17,334
    
    
    
    0.29
    
    
    
    11,110
    
    
    
    0.27Accretion
    
    
    1,138
    
    
    
    0.02
    
    
    
    721
    
    
    
    0.02Total depletion, depreciation and accretion
    
    $
    110,662
    
    
    $
    1.84
    
    
    $
    73,979
    
    
    $
    1.82
  Impairment of Oil and Gas Properties
  38




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##### Table of Contents



General and Administrative Expense
 Six Months Ended June 30,2009
    
    
    2008(In thousands, except per unit amounts)Per
    
    
    
    
    
    
    PerMcfe
    
    
    
    
    
    
    McfeGeneral and administrative expenseLitigation settlement
    
    $
    5,000
    
    
    $
    0.08
    
    
    $
    
    
    
    $
    Other cash expense
    
    
    27,514
    
    
    $
    0.47
    
    
    
    24,501
    
    
    $
    0.60Equity compensation
    
    
    9,256
    
    
    
    0.15
    
    
    
    6,296
    
    
    
    0.16Total general and administrative expense
    
    $
    41,770
    
    
    $
    0.70
    
    
    $
    30,797
    
    
    $
    0.76
  BBEP-Related Income and Expense
   39




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##### Table of Contents



Interest Expense
 Six Months Ended June 30,2009
    
    
    2008(in thousands)Interest costs
    
    $
    75,297
    
    
    $
    28,627Add:Non-cash interest (1)
    
    
    8,726
    
    
    
    4,532Loss on early debt extinguishment
    
    
    27,122
    
    
    
    Less: Interest capitalized
    
    
    (2,863
    )
    
    
    (3,626
    )Interest expense
    
    $
    108,282
    
    
    $
    29,533
 
 (1)
    
    Amortization of deferred financing costs and original issue discount  Income Tax Expense
 Six Months Ended June 30,2009
    
    2008Income tax (benefit) expense (in thousands)
    
    $
    (316,720
    )
    
    $
    51,336Effective tax rate
    
    
    35.0
    %
    
    
    35.3
    %
  Quicksilver Resources Inc. and its Restricted Subsidiaries
   40




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##### Table of Contents



LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
 Cash Flow Activity
    Six Months Ended June 30,2009
    
    2008(In thousands)Net cash provided by operating activities
    
    $
    310,278
    
    
    $
    136,611Net cash used for investing activities
    
    
    (207,696
    )
    
    
    (629,526
    )Net cash provided by financing activities
    
    
    (104,898
    )
    
    
    466,571Effect of exchange rate changes in cash
    
    
    125
    
    
    
    447
 Operating Cash Flows
   41




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##### Table of Contents



Investing Cash Flows
  Six Months EndedJune 30, 2009(In thousands)Exploration and development:Texas
    
    $
    209,208Other U.S.
    
    
    18,723Total U.S.
    
    
    227,931Canada
    
    
    56,188Total exploration and development
    
    
    284,119Midstream  Texas
    
    
    48,280Corporate and field office
    
    
    2,106Total plant and equipment costs incurred
    
    $
    334,505
  Financing Cash Flows
     Financial Position
  
    
    Our current derivative assets increased $30.6 million while our noncurrent derivative
assets decreased $60.3 million as a result of higher derivative valuations for our commodity
derivatives partially offset by monthly settlements of $142.1 million and the $54.9 million
received for early settlement of a derivative hedging a portion of our 2010 production. The
Michigan Sales Contract was completed in March 2009, which decreased our current derivative
liabilities $8.1 million. Our current deferred
 42




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##### Table of Contents



income tax liability increased $24.2 million
as a result of an overall increase in the valuations of our hedge derivatives reported as
current assets and liabilities.
 
    
    Our net property, plant and equipment balance decreased $950 million over the six-month
period ended June 30, 2009. During 2009, we recorded charges for impairment of our oil gas
properties of $967.1 million and 2009 DD&A expense of $110.7 million. Our property, plant
and equipment balances were also decreased by $232.3 million for the Eni Transaction. These
decreases were partially offset by $334.5 million of costs incurred for property, plant and
equipment.
    
    Our deferred income tax liability decreased $207.1 million and a deferred tax asset of
$138.8 million was reclassified in connection with the impairment of both our investment in
BBEP and our oil and gas properties.
 Contractual Obligations and Commercial Commitments
  Critical Accounting Estimates
   *
    
    full cost ceiling calculation*
    
    derivative instruments*
    
    stock-based compensation
 *
    
    oil and gas reserves*
    
    asset retirement obligations*
    
    income taxes
    Off-Balance Sheet Arrangements
  Recently Issued Accounting Standards
  
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
   Commodity Price Risk
  43




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##### Table of Contents



Weighted Avg PriceProduct
    
    Type
    
    Remaining Contract Period
    
    Volume
    
    Per Mcf
    
    Fair Value(In thousands)Gas
    
    Swap
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    $
    8.45
    
    
    $
    7,467Gas
    
    Swap
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    8.45
    
    
    
    7,467Gas
    
    Swap
    
    Jul 2009-Dec 2009
    
    20 MMcfd
    
    
    8.46
    
    
    
    14,953Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    20 MMcfd
    
    
    7.50-  9.34
    
    
    
    11,635Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    20 MMcfd
    
    
    7.75-10.20
    
    
    
    12,510Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    7.75-10.26
    
    
    
    6,272Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    20 MMcfd
    
    
    8.25-  9.60
    
    
    
    14,306Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    8.25-10.45
    
    
    
    7,152Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    8.25-10.45
    
    
    
    7,152Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    8.25-10.45
    
    
    
    7,152Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    8.50-13.15
    
    
    
    7,633Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    30 MMcfd
    
    
    11.00-13.50
    
    
    
    36,750Gas
    
    Collar
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    11.50-14.48
    
    
    
    13,089Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    20 MMcfd
    
    
    8.00-11.00
    
    
    
    16,109Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    20 MMcfd
    
    
    8.00-11.00
    
    
    
    16,109Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    20 MMcfd
    
    
    8.00-12.20
    
    
    
    16,366Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    20 MMcfd
    
    
    8.00-12.20
    
    
    
    16,366Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    10 MMcfd
    
    
    8.50-12.05
    
    
    
    9,747Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    20 MMcfd
    
    
    8.50-12.05
    
    
    
    19,494Gas
    
    Collar
    
    Jan 2010-Dec 2010
    
    10 MMcfd
    
    
    8.50-12.08
    
    
    
    9,762Gas
    
    Basis
    
    Jul 2009-Dec 2009
    
    20 MMcfd
    
    
    (1
    )
    
    
    (188
    )Gas
    
    Basis
    
    Jul 2009-Dec 2009
    
    10 MMcfd
    
    
    (1
    )
    
    
    (94
    )Gas
    
    Basis
    
    Jul 2009-Dec 2009
    
    15 MMcfd
    
    
    (1
    )
    
    
    176Gas
    
    Basis
    
    Jul 2009-Dec 2009
    
    15 MMcfd
    
    
    (1
    )
    
    
    163Total
    
    $
    257,548
 
 (1)
    
    Basis swaps for 60 MMcfd hedge the AECO basis adjustment at a weighted average
deduction of $0.84 per Mcf from NYMEX for the remainder of 2009.    44




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##### Table of Contents



Interest Rate Risk
  
 ITEM 4. Controls and Procedures
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
    
    Preparation and review of combined financial information within our condensed
consolidating financial information. The condensed consolidating information previously
reported contained errors that resulted from inadequate review of the combined financial
information. These errors did not affect the amounts previously reported in our
consolidated financial statements.
    
    Monitoring the Companys financial reporting requirements. The review associated
with the completeness of the required information failed to highlight omitted information
related to the Company and its restricted subsidiaries.
   45




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##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
   
 Item 1A. Risk Factors
  Natural gas, NGL and crude oil prices fluctuate widely, and low prices could have a material
adverse impact on our business, financial condition, results of operations and cash flows.
   
    
    domestic and foreign demand for natural gas and crude oil;
    
    the level of domestic and foreign natural gas and crude oil supplies;
    
    the price and availability of alternative fuels;
    
    weather conditions;
    
    domestic and foreign governmental regulations;
    
    impact of trade organizations, such as OPEC;
    
    political conditions in oil and natural gas producing regions; and
    
    worldwide economic conditions.
  If natural gas, NGL or crude oil prices decrease, our exploration and development efforts are
unsuccessful or our costs increase substantially, we may be required to recognize impairment of our
oil and gas properties, which could have a material adverse effect on our financial condition, our
results of operations and our ability to borrow under and comply with our debt agreements.
  46




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##### Table of Contents



Reserve estimates depend on many assumptions that may turn out to be inaccurate and any material
inaccuracies in these reserve estimates or underlying assumptions may materially affect the
quantities and present value of our reserves.
      Our production is concentrated in a small number of geographic areas.
  Our Canadian operations present unique risks and uncertainties, different from or in addition to
those we face in our domestic operations.
  47




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##### Table of Contents



We may have difficulty financing our planned growth.
  We are vulnerable to operational hazards, transportation dependencies, regulatory risks and other
uninsured risks associated with our activities.
    The failure to replace our reserves could adversely affect our production and cash flows.
  We have risk through our investment in BBEP.
   48




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##### Table of Contents



We have risk through our ownership of KGS.
  
    
    changes in general economic conditions;
    
    fluctuations in natural gas prices;
    
    failure or delays in us and third parties achieving expected production from natural gas
projects;
    
    competitive conditions in the midstream industry;
    
    actions taken on non-performance by third parties, including suppliers, contractors,
operators, processors, transporters and customers;
    
    changes in the availability and cost of capital;
    
    operating hazards, natural disasters, weather-related delays, casualty losses and other
matters beyond our control;
    
    construction costs or capital expenditures exceeding estimated or budgeted amounts;
    
    the effects of existing and future laws and governmental regulations;
    
    the effects of future litigation; and
    
    other factors discussed in KGS Annual Report on Form 10-K and as are or may be detailed
from time to time in KGS public announcements and other filings with the SEC.
 We cannot control the operations of gas processing and transportation facilities we do not own or
operate.
  The loss of key personnel could adversely affect our ability to operate.
  Competition in our industry is intense, and we are smaller and have a more limited operating
history than many of our competitors.
  Hedging our production may result in losses or limit our ability to benefit from price increases.
  
    
    our production could be materially less than expected; or
    
    the other parties to the hedging contracts could fail to perform their contractual
obligations.
  49




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##### Table of Contents



Delays in obtaining oil field equipment and increases in drilling and other service costs could
adversely affect our ability to pursue our drilling program and our results of operations.
  Our activities are regulated by complex laws and regulations, including those relating to
environmental matters, that can adversely affect the cost, manner or feasibility of doing business.
  
    
    discharge permits for drilling operations;
    
    water obtained for drilling purposes;
    
    drilling permits and bonds;
    
    reports concerning operations;
    
    spacing of wells;
    
    disposal wells;
    
    unitization and pooling of properties;
    
    environmental protection; and
    
    taxation.
     The risks associated with our debt could adversely affect our business, financial condition and
results of operations and the value of our securities.
  50




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##### Table of Contents




    
    make it more difficult for us to satisfy our obligations with respect to our debt;
    
    require us to dedicate a substantial portion of our cash flow from operations to payments
on our debt, thereby reducing the amount of our cash flow available for working capital,
capital expenditures, acquisitions and other general corporate purposes;
    
    require us to make principal payments if the quantity and value of our proved reserves
are insufficient to support our level of borrowings;
    
    limit our flexibility in planning for, or reacting to, changes in the oil and natural gas
industry;
    
    place us at a competitive disadvantage compared to our competitors who may have lower
debt service obligations and greater financing flexibility than we do;
    
    limit our financial flexibility, including our ability to borrow additional funds;
    
    increase our interest expense on our variable rate borrowings if interest rates increase;
    
    limit our ability to make capital expenditures to develop our properties;
    
    increase our vulnerability to exchange risk associated with Canadian dollar denominated
indebtedness;
    
    increase our vulnerability to general adverse economic and industry conditions; and
    
    result in a default or event of default under our debt agreements, which, if not cured or
waived, could adversely affect our financial condition, results of operations and cash
flows.
  
    
    reducing or delaying capital expenditures;
    
    seeking additional debt financing or equity capital;
    
    selling assets;
    
    restructuring or refinancing debt; or
    
    reorganizing our capital structure.
  Our debt agreements restrict our ability to engage in certain activities.
  
    
    incur additional debt;
    
    pay dividends on or redeem or repurchase capital stock;
    
    make certain investments;
    
    incur or permit certain liens to exist;
    
    enter into certain types of transactions with affiliates;
    
    merge, consolidate or amalgamate with another company;
    
    transfer or otherwise dispose of assets, including capital stock of subsidiaries; and
    
    redeem subordinated debt.
  51




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##### Table of Contents



Parties with whom we do business may become unable or unwilling to timely perform their obligations
to us.
  A small number of existing stockholders exercise significant control over our company, which could
limit your ability to influence the outcome of stockholder votes.
  A large number of our outstanding shares and shares to be issued upon conversion of our outstanding
convertible debentures or exercise of our outstanding options may be sold into the market in the
future, which could cause the market price of our common stock to drop significantly, even if our
business is performing well.
   Our amended and restated certificate of incorporation, restated bylaws and stockholder rights plan
contain provisions that could discourage an acquisition or change of control without our board of
directors approval.
  
    
    our board of directors is authorized to issue preferred stock without stockholder
approval;
    
    our board of directors is classified; and
    
    advance notice is required for director nominations by stockholders and actions to be
taken at annual meetings at the request of stockholders.
  52




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##### Table of Contents



We have identified material weaknesses in our internal controls that, if not properly
corrected, could result in material misstatements in our financial statements.
     
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities
  Total Number of
    
    
    Maximum Number ofTotal Number
    
    
    
    
    
    
    Shares Purchased as
    
    
    Shares that May Yetof Shares
    
    
    Average Price
    
    
    Part of Publicly
    
    
    Be Purchased UnderPeriod
    

Purchased (1)
    
    

Paid per Share
    
    

Announced Plan (2)
    
    

the Plan (2)April 2009
    
    
    264
    
    
    $
    7.83
    
    
    
    
    
    
    
    May 2009
    
    
    218
    
    
    $
    8.52
    
    
    
    
    
    
    
    June 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    Total
    
    
    482
    
    
    $
    8.14
    
    
    
    
    
    
    
    
 
 (1)
    
    Represents shares of common stock surrendered by employees to satisfy our
income tax withholding obligations arising upon the vesting of restricted stock
issued under our Amended and Restated 1999 Stock Option and Retention Stock Plan or
Amended and Restated 2006 Equity Plan.(2)
    
    We do not currently have in place any publicly announced, specific plans
or programs to purchase equity securities. 
 ITEM 3. Defaults Upon Senior Securities
  53




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##### Table of Contents



ITEM 4. Submission of Matters to a Vote of Security Holders
  Election of Directors
  Total Vote for
    
    Total Vote 
Withheld forName
    
    Each Director
    
    Each DirectorGlenn Darden
    
    
    125,042,707
    
    
    
    7,517,437W. Yandell Rogers, III
    
    
    103,275,268
    
    
    
    29,284,876
  Approval of Amendment to Quicksilvers Second Amended and Restated 2006 Equity Plan
  For
    
    
    82,522,998Against
    
    
    30,064,017Abstentions
    
    
    281,881
 
 ITEM 5. Other Information
  54




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##### Table of Contents



ITEM 6. Exhibits:
 Exhibit No.
    
    Description4.1
    
    Seventh Supplemental Indenture, dated as of June 25, 2009, among Quicksilver Resources Inc., the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Companys
Form 8-K filed June 26, 2009 and included herein by reference).* 4.2
    
    First Supplemental Indenture, dated July 31, 2009, between Quicksilver Resources Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee.10.1
    
    Asset Purchase Agreement, dated as of May 15, 2009, among Quicksilver Resources Inc., as Seller, and ENI US Operating
Co. Inc. and ENI Petroleum US LLC, as Buyers (filed as Exhibit 10.1 to the Companys Form 8-K filed May 19, 2009 and
included herein by reference).10.2
    
    Quicksilver Resources Inc. Third Amended and Restated 2006 Equity Plan (filed as Exhibit 10.1 to the Companys Form
8-K filed May 22, 2009 and included herein by reference).10.3
    
    Letter Agreement, dated as of June 15, 2009, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and
the agents and combined lenders identified therein (filed as Exhibit 10.1 to the Companys Form 8-K filed June 17,
2009 and included herein by reference).10.4
    
    Eighth Amendment to Combined Credit Agreements, dated as of May 28, 2009, among Quicksilver Resources Inc.,
Quicksilver Resources Canada Inc. and the agents and combined lenders indentified therein (filed as Exhibit 10.1 to
the Companys Form 8-K filed June 17, 2009 and included herein by reference).10.5
    
    Amendment No. 1 to Credit Agreement, dated as of June 3, 2009, among Quicksilver Resources Inc., the lenders party
thereto and Credit Suisse, Cayman Islands Branch, as administrative agent (filed as Exhibit 10.2 to the Companys Form
8-K filed June 17, 2009 and included herein by reference).* 31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 55




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##### Table of Contents



SIGNATURES
   Quicksilver Resources Inc.By:
    /s/ Philip CookPhilip CookSenior Vice President - Chief Financial Officer 
 56




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description4.1
    
    Seventh Supplemental Indenture, dated as of June 25, 2009, among Quicksilver Resources Inc., the subsidiary guarantors
named therein and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Companys
Form 8-K filed June 26, 2009 and included herein by reference).*
4.2
    
    First Supplemental Indenture, dated July 31, 2009, between Quicksilver Resources Inc. and The Bank of New York Mellon
Trust Company, N.A., as trustee.10.1
    
    Asset Purchase Agreement, dated as of May 15, 2009, among Quicksilver Resources Inc., as Seller, and ENI US Operating
Co. Inc. and ENI Petroleum US LLC, as Buyers (filed as Exhibit 10.1 to the Companys Form 8-K filed May 19, 2009 and
included herein by reference).10.2
    
    Quicksilver Resources Inc. Third Amended and Restated 2006 Equity Plan (filed as Exhibit 10.1 to the Companys Form
8-K filed May 22, 2009 and included herein by reference).10.3
    
    Letter Agreement, dated as of June 15, 2009, among Quicksilver Resources Inc., Quicksilver Resources Canada Inc. and
the agents and combined lenders identified therein (filed as Exhibit 10.1 to the Companys Form 8-K filed June 17,
2009 and included herein by reference).10.4
    
    Eighth Amendment to Combined Credit Agreements, dated as of May 28, 2009, among Quicksilver Resources Inc.,
Quicksilver Resources Canada Inc. and the agents and combined lenders identified therein (filed as Exhibit 10.1 to
the Companys Form 8-K filed June 17, 2009 and included herein by reference).10.5
    
    Amendment No. 1 to Credit Agreement, dated as of June 3, 2009, among Quicksilver Resources Inc., the lenders party
thereto and Credit Suisse, Cayman Islands Branch, as administrative agent (filed as Exhibit 10.2 to the Companys Form
8-K filed June 17, 2009 and included herein by reference).* 31.1
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 57