##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number: 001-14837
 QUICKSILVER RESOURCES
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

75-2756163(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   777 West Rosedale St., Fort Worth, Texas

76104(Address of principal executive
    offices)

(Zip Code)   817-665-5000
 (Registrants telephone
    number, including area code)
 (Former name, former address and
    former fiscal year, if changed since last report)
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value per share

New York Stock ExchangePreferred Share Purchase Rights,$0.01 par value per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
    Large accelerated filer
    þ

Accelerated
    filer
    o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller Reporting
    company o   Rule 12b-2 o þ
      Class

Outstanding at January 31, 2008Common Stock, $0.01 par value per share

158,496,046 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
  Document

Parts Into Which IncorporatedProxy Statement for the Registrants May 21,
    2008 Annual Meeting of Stockholders

Part III




---



##### 





INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
    For the Year Ended December 31, 2007
   
 PART IITEM 1.


Business


4ITEM 1A.


Risk Factors


17ITEM 1B.


Unresolved Staff Comments


26ITEM 2.


Properties


26ITEM 3.


Legal Proceedings


26ITEM 4.


Submission of Matters to a Vote of Security
    Holders


27PART IIITEM 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


27ITEM 6.


Selected Financial Data


29ITEM 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


29ITEM 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


47ITEM 8.


Financial Statements and Supplementary Data


48ITEM 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


92ITEM 9A.


Controls and Procedures


92ITEM 9B.


Other Information


94PART IIIITEM 10.


Directors and Executive Officers of the
    Registrant


94ITEM 11.


Executive Compensation


94ITEM 12.


Security Ownership of Certain Management and
    Beneficial Owners and Management and Related Stockholder
    Matters


94ITEM 13.


Certain Relationships and Related Transactions


94ITEM 14.


Principal Accountant Fees and Services


94PART IVITEM 15.


Exhibits and Financial Statement Schedules


95Signatures


98List of SubsidiariesConsent of Deloitte & Touche LLPConsent of Schlumberger Data and Consulting ServicesConsent of LaRoche Petroleum Consultants, Ltd.Certification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906       2




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##### Table of Contents



DEFINITIONS
                        Inside
    F.E.R.C.s Gas Market Report
                                COMMONLY
    USED TERMS
                   3




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##### Table of Contents



PART I  ITEM 1.
    Business  GENERAL
    817-665-5000).
  FORMATION
    AND DEVELOPMENT OF BUSINESS
    STRATEGIC
    REALIGNMENT
    BUSINESS
    STRATEGY
   4




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##### Table of Contents



Focus on core areas of repeatable, low-risk
    development:
  Pursue disciplined organic growth
    opportunities:
  Enhance profitability through control and marketing of our
    equity natural gas and crude oil:
  Maintain flexible financial profile:
  BUSINESS
    STRENGTHS
  High-quality asset base with long reserve
    life:
  Multi-year inventory of development and exploitation drilling
    projects:
 5




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##### Table of Contents



Proven record of organic growth in reserves and
    production:
  Midstream Strength:
  Experienced management and technical team:
  FINANCIAL
    INFORMATION ABOUT SEGMENT AND GEOGRAPHICAL AREAS
    PROPERTIES
    NATURAL
    GAS AND OIL INTERESTS
   6




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##### Table of Contents



Texas
    high-Btu
  high-Btu
  25-mile
       7




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##### Table of Contents



Rocky
    Mountain Region
    Canada
      Other
    Properties
    2008
    Capital Program
  .
  NATURAL
    GAS AND OIL RESERVES
  Regulation S-X Rule 4-10,
 8




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##### Table of Contents



Total Proved Reserves


Proved Developed ReservesFor the Years Ended December 31,


For the Years Ended December 31,2007


2006


2005


2007


2006


2005Natural gas (MMcf)United States


662,409



933,342



716,043



379,917



626,582



593,630Canada


328,381



308,335



304,910



260,029



217,759



199,859Total


990,790



1,241,677



1,020,953



639,946



844,341



793,489NGL (MBbl)United States


90,055



47,985



9,623



50,738



18,771



5,153Canada


10



16







10



16



Total


90,065



48,001



9,623



50,748



18,787



5,153Crude oil (MBbl)United States


3,074



6,315



5,915



2,763



5,236



4,986Canada






















Total


3,074



6,315



5,915



2,763



5,236



4,986Total (MMcfe)


1,549,624



1,567,573



1,114,181



961,012



988,477



854,326   9




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##### Table of Contents



Years Ended December 31,2007


2006


2005Representative natural gas and crude oil
    prices:(1)Natural gas  Henry Hub Spot

$
6.80


$
5.64


$
10.08Natural gas  AECO


6.35



5.39



8.41Crude oil  WTI Cushing


95.98



60.85



61.06Standardized measure of discounted future net cash
    flows(2),
    after income tax (in millions)

$
2,169.2


$
1,485.8


$
1,824.1     (1)
    
    The natural gas and crude oil prices as of each respective year
    end were based, respectively, on NYMEX Henry Hub prices per
    MMBtu and NYMEX prices per Bbl, as adjusted to reflect local
    differentials.(2)
    
    Determined based on year end unescalated prices and costs in
    accordance with the guidelines of the SEC, discounted at 10% per
    annum.  VOLUMES,
    SALES PRICES AND OIL AND GAS PRODUCTION EXPENSE
    DRILLING
    ACTIVITY
    Years Ended December 31,2007


2006


2005Gross


Net


Gross


Net


Gross


NetDevelopment:United StatesProductive


78.0



66.4



41.0



32.8



43.0



28.4Non-productive






















CanadaProductive


241.0



120.4



162.0



86.6



243.0



134.7Non-productive






















Total


319.0



186.8



203.0



119.4



286.0



163.1Exploratory:United StatesProductive


214.0



181.0



160.0



126.4



97.0



66.7Non-productive


2.0



1.3



8.0



8.0



5.0



5.0CanadaProductive


114.0



63.6



238.0



128.6



240.0



124.4Non-productive


1.0



0.1















Total


331.0



246.0



406.0



263.0



342.0



196.1Total:Productive


647.0



431.4



601.0



374.4



623.0



354.2Non-productive


3.0



1.4



8.0



8.0



5.0



5.0Total


650.0



432.8



609.0



382.4



628.0



359.2  10




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##### Table of Contents



ACQUISITION,
    EXPLORATION AND DEVELOPMENT CAPITAL EXPENDITURES
  United States


Canada


Consolidated(In thousands)2007Proved acreage

$



$



$
Unproved acreage


17,031



31,448



48,479Development costs


213,180



53,439



266,619Exploration costs


511,314



26,122



537,436Total

$
741,525


$
111,009


$
852,5342006Proved acreage

$



$



$
Unproved acreage


32,048



1,574



33,622Development costs


121,104



82,378



203,482Exploration costs


280,438



27,197



307,635Total

$
433,590


$
111,149


$
544,7392005Proved acreage

$
821


$
1,620


$
2,441Unproved acreage


48,419



3,784



52,203Development costs


24,007



82,388



106,395Exploration costs


109,148



9,829



118,977Total

$
182,395


$
97,621


$
280,016   PRODUCTIVE
    OIL AND GAS WELLS
    As of December 31, 2007Productive WellsNatural Gas


Crude OilGross


Net


Gross


NetUnited States


320.0



276.2



224.0



220.3Canada


2,276.0



1,105.0



2.0



0.1Total


2,596.0



1,381.2



226.0



220.4   OIL AND
    GAS ACREAGE
   11




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##### Table of Contents



As of December 31, 2007Developed Acreage


Undeveloped AcreageGross


Net


Gross


NetTexas


64,352



53,881



787,248



666,544Other


92,599



82,075



141,190



121,078United States


156,951



135,956



928,438



787,622Canada


362,210



224,102



310,665



226,017Total


519,161



360,058



1,239,103



1,013,639     2008 Expirations


2009 Expirations


2010 ExpirationsNet





Net Acres with





Net Acres with





Net Acres withUndeveloped





Options





Options





OptionsAcres


Net Acres


to Extend


Net Acres


to Extend


Net Acres


to ExtendTexas


666,544



128,023



35,954



86,843



17,795



379,422



23,292Other U.S.


121,078



4,590







10,290







5,362



Canada


226,017



99,919







32,811







31,685



Totals


1,013,639



232,532



35,954



129,944



17,795



416,469



23,292     MARKETING
    COMPETITION
    GOVERNMENTAL
    REGULATION
   12




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ENVIRONMENTAL
    MATTERS
    
    require the acquisition of a permit before drilling commences;
    restrict the types, quantities and concentrations of various
    substances that can be released into the environment in
    connection with drilling, production, processing and pipeline
    gathering activities;
    limit or prohibit drilling activities on certain lands lying
    within wilderness, wetlands, frontier and other protected areas;
    require remedial action to prevent pollution from former
    operations such as plugging abandoned wells; and
    impose substantial liabilities for pollution resulting from
    operations.  clean-up
     13




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clean-up
            AVAILABILITY
    OF REPORTS AND CORPORATE GOVERNANCE DOCUMENTS
  Form 10-K, Form 10-Q, Form 8-K
   14




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EMPLOYEES
    EXECUTIVE
    OFFICERS OF THE REGISTRANT
    Name

Age

Position(s)Thomas F. Darden*


54


Director, Chairman of the BoardGlenn Darden*


52


Director, President and Chief Executive OfficerAnne Darden Self*


50


Director, Vice President  Human ResourcesP. Jeff Cook*


51


Executive Vice President  OperationsPhilip Cook*


46


Senior Vice President  Chief Financial OfficerJohn C. Cirone*


58


Senior Vice President, General Counsel and SecretaryD. Wayne Blair


51


Vice President  FinanceC. Clay Blum


49


Vice President  LandWilliam S. Buckler


46


Vice President  Engineering TechnologyRichard C. Buterbaugh


53


Vice President  Investor Relations &
    Corporate PlanningMarLu Hiller


45


Vice President  TreasurerStan G. Page


50


Vice President  U.S. OperationsJohn C. Regan*


38


Vice President, Controller and Chief Accounting OfficerRobert N. Wagner*


44


Vice President  Reservoir Engineering     THOMAS F. DARDEN
  GLENN DARDEN
  ANNE DARDEN SELF
  P. JEFF COOK
 15




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##### Table of Contents



PHILIP W. COOK
  JOHN C. CIRONE
  D. WAYNE BLAIR
  C. CLAY BLUM
  WILLIAM S. BUCKLER
  RICHARD C. BUTERBAUGH
  MARLU HILLER
  STAN G. PAGE
 16




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##### Table of Contents



JOHN C. REGAN
  ROBERT N. WAGNER
  ITEM 1A.
    Risk
    Factors    Because
    we have a limited operating history in certain of our operating
    areas, our future operating results are difficult to forecast,
    and our failure to sustain profitability in the future could
    adversely affect the market price of our common
    stock.
    Natural
    gas and crude oil prices fluctuate widely, and low prices could
    have a material adverse impact on our business.
      
    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; 17




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
    domestic and foreign governmental regulations;
    impact of trade organizations, such as OPEC;
    political conditions in natural gas and oil producing
    regions; and
    worldwide economic conditions.    If
    natural gas or crude oil prices decrease or our exploration and
    development efforts are unsuccessful, we may be required to
    record impairments of our oil and gas properties.
  and/or
  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.
         18




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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.
        We may
    have difficulty financing our planned growth.
   19




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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
    cannot assure distributions on, or the recorded investment value
    for, our BBEP interests.
     20




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##### Table of Contents



We
    depend on KGS to gather, process and transport most of our
    Barnett Shale gas production, and we own more than 70% 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 our industry;
    actions taken by unaffiliated operators, processors and
    transporters;
    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
    budgeted costs or expenditures;
    the effects of existing and future laws and governmental
    regulations;
    the effects of future litigation; and
    other factors discussed in KGS Registration Statement on
    Form S-1
    (No. 333-140599)
    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.
   21




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##### Table of Contents



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.      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.
   22




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##### Table of Contents



Our
    activities are regulated by complex laws and regulations,
    including environmental regulations that can adversely affect
    the cost, manner or feasibility of doing business.
    
    discharge permits for drilling operations;
    drilling permits and bonds;
    reports concerning operations;
    spacing of wells;
    disposal wells;
    unitization and pooling of properties;
    environmental protection; and
    taxation.        The
    cost of servicing our debt could adversely affect our business;
    and such risk could increase if we incur more
    debt.
      
    make it more difficult for us to satisfy our obligations with
    respect to our debt; 23




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##### Table of Contents




    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 under our senior secured
    revolving credit facilities if the quantity of proved reserves
    attributable to our natural gas and crude oil properties are
    insufficient to support our level of borrowings under such
    credit facilities;
    limit our flexibility in planning for, or reacting to, changes
    in the natural gas and oil industry;
    place us at a competitive disadvantage compared to our
    competitors that have lower debt service obligations and
    significantly greater operating and financing flexibility than
    we do;
    limit our financial flexibility, including our ability to borrow
    additional funds;
    increase our interest expense if interest rates increase,
    because certain of our borrowings are at variable rates of
    interest;
    limit our ability to make capital expenditures to develop our
    properties;
    increase our vulnerability to exchange risk associated with
    Canadian dollar denominated indebtedness and international
    operations in Canada;
    increase our vulnerability to general adverse economic and
    industry conditions; and
    result in an event of default upon a failure to comply with
    financial covenants contained in our senior secured revolving
    credit facilities and the indenture governing our senior
    subordinated notes, which, if not cured or waived, could have a
    material adverse effect on our business, financial condition or
    results of operations.      
    reducing or delaying capital expenditures;
    seeking additional debt financing or equity capital;
    selling assets; or
    restructuring or refinancing debt.    Our
    senior secured revolving credit facilities and senior
    subordinated notes restrict our ability and the ability of some
    of our subsidiaries to engage in certain
    activities.
    
    incur additional debt;
    pay dividends on or redeem or repurchase capital stock;
    make certain investments;
    incur or permit to exist certain liens; 24




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##### Table of Contents




    enter into 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.      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 notes 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 doing
    well.
   25




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##### Table of Contents



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.    ITEM 1B.
    Unresolved
    Staff Comments    ITEM 2.
    Properties    ITEM 3.
    Legal
    Proceedings  10-year
   26




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##### Table of Contents



ITEM 4.
    Submission
    of Matters to a Vote of Security Holders   PART II.  ITEM 5.
    Market
    For Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchase of Equity Securities  Market
    Information
      HIGH(1)


LOW(1)2007Fourth Quarter

$
30.58


$
23.44Third Quarter


24.28



18.85Second Quarter


24.77



19.74First Quarter


20.42



16.482006(1)Fourth Quarter

$
21.62


$
14.34Third Quarter


19.91



14.52Second Quarter


23.09



14.63First Quarter


26.38



16.53     (1)
    
    Per share amounts have been adjusted to reflect a two-for-one
    stock split effected in the form of a stock dividend in January
    2008.     27




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##### Table of Contents



Performance
    Graph
    Comparison
    of Cumulative Five Year Total Return
  
  Issuer
    Purchases of Equity Securities
    Total Number of


Maximum Number ofShares Purchased as


Shares that May YetTotal Number of


Average Price Paid


Part of Publicly


Be Purchased UnderPeriod

Shares
    Purchased (1)(2)


per Share


Announced
    Plan(3)


the
    Plan(3)October 2007





$








November 2007


872


$
27.97







December 2007


662


$
26.96







Total


1,534


$
27.53







     (1)
    
    Per share amounts have been adjusted to reflect a two-for-one
    stock split effected in the form of a stock dividend in January
    2008.(2)
    
    Represents shares of common stock surrendered by employees to
    satisfy the Companys income tax withholding obligations
    arising upon the vesting of restricted stock issued under our
    stock plans.(3)
    
    We do not have a publicly announced plan for repurchasing our
    common stock. 28




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##### Table of Contents



ITEM 6.
    Selected
    Financial Data    Selected
    Financial Data
  Years Ended December 31,2007(2)


2006


2005


2004


2003(In thousands, except for per share data and ratios)Operating Results InformationTotal revenues

$
561,258


$
390,362


$
310,448


$
179,729


$
140,949Operating income


803,581



174,196



149,129



60,693



48,498Income before income taxes and minority interest


736,941



131,960



127,974



45,446



28,502Income from continuing operations


479,378



93,719



87,272



31,272



18,505Net income


479,378



93,719



87,434



31,272



16,208Diluted earnings per share from continuing
    operations(1)

$
2.86


$
0.58


$
0.54


$
0.21


$
0.14Diluted earnings per common
    share(1)


2.86



0.58



0.54



0.21


$
0.12Dividends paid per share


















Cash provided by operating activities

$
319,104


$
242,186


$
140,242


$
84,847


$
49,602Capital expenditures


1,020,684



619,061



331,805



215,106



137,895Financial Condition InformationProperty, plant and equipment  net


2,142,346



1,679,280



1,112,002



802,610



604,576Total assets


2,775,846



1,882,912



1,243,094



888,334



666,934Long-term debt


813,817



919,117



506,039



399,134



249,097Stockholders equity


1,068,355



575,666



383,615



304,276



241,816Debt to Proved Reserves ($/Mcfe)

$
0.53


$
0.59


$
0.52


$
0.41


$
0.28     (1)
    
    Per share amounts have been adjusted to reflect a two-for-one
    stock split effected in the form of a stock dividend in June
    2004, a three-for-two stock split effected in the form of a
    stock dividend in June 2005 and a two-for-one stock split
    effected in the form of a stock dividend in January 2008.(2)
    
    Operating income and net income for 2007 includes a gain of
    $628.7 million recognized from the divestiture of the
    Companys Northeast Operations and a charge of
    $63.5 million for a natural gas supply contract with a
    floor price of $2.49 per mcf for 25MMcfd for the remainder of
    the contract period (See Notes 4 and 5 to the Consolidated
    Financial Statements in Item 8, which are incorporated
    herein by reference).  ITEM 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
 29




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##### Table of Contents




    Overview a general description of our
    business; the value drivers of our business; measurements; and
    opportunities, challenges and risks.
    Financial Risk Management information about
    debt financing and financial risk management.
    Application of Critical Accounting Policies a
    discussion of critical accounting policies that represent
    choices between acceptable alternatives
    and/or
    require management judgments and estimates.
    Results of Operations an analysis of our
    consolidated results of operations for the three years presented
    in our financial statements.
    Liquidity, Capital Resources and Financial
    Position an analysis of our cash flows, sources
    and uses of cash, contractual obligations and commercial
    commitments.
    Forward-Looking Statements cautionary
    information about forward-looking statements and a description
    of certain risks and uncertainties that could cause our actual
    results to differ materially from our historical results or our
    current expectations or projections.  OVERVIEW
          
    reserve growth;
    production growth; and
    improving the Companys operating cash flows.   30




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##### Table of Contents



Years Ended December 31,2007


2006


2005Reserve
    growth(1)


59
%


46
%


20
%Production (Bcfe)


77.9



61.3



51.4Cash flow from operating activities (in millions)

$
319.1


$
242.2


$
140.2Diluted earnings per share

$
2.86


$
0.58


$
0.54     (1)
    
    This ratio is calculated by subtracting adjusted beginning of
    the year proved reserves from end of the year proved reserves
    and dividing by adjusted beginning of the year proved reserves.
    Adjusted beginning of the year reserves are calculated by
    deducting sold reserves and current year production from
    beginning of the year reserves.      FINANCIAL
    RISK MANAGEMENT
      Commodity
    Price Risk
   31




---



##### Table of Contents



Weighted Avg PriceProduct

Type

Contract Period


Volume


Per Mcf or Bbl


Fair Value(In thousands)Gas

Swap


Jan 2008-Dec 2008



25,000 Mcfd


$
8.13


$
2,893Gas

Swap


Jan 2008-Dec 2008



7,500 Mcfd



8.13



868Gas

Swap


Jan 2008-Dec 2008



5,000 Mcfd



8.14



597Gas

Swap


Jan 2008-Dec 2008



2,500 Mcfd



8.15



307Gas

Collar


Jan 2008-Mar 2008



5,000 Mcfd



7.50-  8.90



149Gas

Collar


Jan 2008-Mar 2008



15,000 Mcfd



7.50-  8.70



422Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



8.00-15.65



735Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



8.00-15.00



700Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



9.00-12.00



1,502Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



9.00-12.05



1,508Gas

Collar


Jan 2008-Dec 2008



20,000 Mcfd



7.50-  9.15



1,361Gas

Collar


Apr 2008-Mar 2009



20,000 Mcfd



7.50-  9.35



(31
)Gas

Collar


Apr 2008-Mar 2009



20,000 Mcfd



8.00-10.20



3,034Gas

Collar


Jan 2009-Dec 2009



20,000 Mcfd



7.50-  9.34



(1,594
)Gas

Collar


Jan 2009-Dec 2009



20,000 Mcfd



7.75-10.20



726Gas

Collar


Jan 2009-Dec 2009



10,000 Mcfd



7.75-10.26



354Gas

Basis


Jan 2008-Dec 2008



10,000 Mcfd







(612
)Gas

Basis


Jan 2008-Dec 2008



10,000 Mcfd







(612
)Gas

Sale


Jan 2008-Mar 2009
(1)


25,000 Mcfd



2.49



(63,520
)NGL

Swap


Jan 2008-Dec 2008



1,000 Bbld



39.58



(5,380
)NGL

Swap


Jan 2008-Dec 2008



2,000 Bbld



45.94



(5,914
)Oil

Collar


Jan 2008-Dec 2008



500 Bbld



65.00-73.90



(3,538
)Oil

Collar


Jan 2008-Dec 2008



500 Bbld



65.00-77.45



(2,980
)Total


$
(69,025
)     (1)
    
    Represents the Michigan Sales Contract   32




---



##### Table of Contents



Interest
    Rate Risk
      Credit
    Risk
  and/or
    Performance
    Risk
  and/or
  Foreign
    Currency Risk
      APPLICATION
    OF CRITICAL ACCOUNTING POLICIES
   33




---



##### Table of Contents



Use of
    Estimates
    Oil
    and Gas Properties
  country-by-country
  Ceiling
    Test
  Regulation S-X Rule 4-10. country-by-country
  Oil
    and Gas Reserves
  Regulation S-X Rule 4-10,
   34




---



##### Table of Contents



Derivative
    Instruments
      Asset
    Retirement Obligations
      Stock-based
    Compensation
  Accounting for
    Stock Issued to Employees
   35




---



##### Table of Contents



Income
    Taxes
    Off-Balance
    Sheet Arrangements
  Regulation S-K.
  RESULTS
    OF OPERATIONS
  Revenues
  Natural
    Gas, NGL and Crude Oil Sales
    Years Ended December 31,2007


2006


2005(In thousands)Texas

$
237,464


$
90,849


$
35,526Northeast Operations


123,927



164,060



199,116Other U.S.


11,226



10,846



9,978Corporate and hedging


20,224



4,780



(34,905
)Total U.S.


392,841



270,535



209,715Canada


152,248



116,005



96,489Total

$
545,089


$
386,540


$
306,204     Natural Gas


NGL


Oil and Condensate


Equivalent Total2007


2006


2005


2007


2006


2005


2007


2006


2005


2007


2006


2005(MMcfd)


(Bbld)


(Bbld)


(MMcfed)Texas


50.1



23.9



9.0



6,395



1,579



185



349



215



66



90.6



34.7



10.5Northeast Operations


56.1



71.7



78.3



331



419



386



799



930



972



62.9



79.8



86.5Other U.S.


0.3



0.3



0.2



29



31



32



452



463



478



3.2



3.3



3.3Total U.S.


106.5



95.9



87.5



6,755



2,029



603



1,600



1,608



1,516



156.7



117.8



100.3Canada


56.8



50.0



40.6



13



14



8















56.9



50.0



40.7Total


163.3



145.9



128.1



6,768



2,043



611



1,600



1,608



1,516



213.6



167.8



141.0Average Realized Prices:  36




---



##### Table of Contents



Natural Gas


NGL


Oil and Condensate


Equivalent Total2007


2006


2005


2007


2006


2005


2007


2006


2005


2007


2006


2005(MMcfd)


(Bbld)


(Bbld)


(MMcfed)Texas

$
6.65


$
7.22


$
9.54


$
45.70


$
39.56


$
43.65


$
72.37


$
63.62


$
57.29


$
7.18


$
7.18


$
9.30Northeast Operations


4.92



5.25



6.12



37.36



35.27



36.36



63.81



62.33



53.90



5.40



5.63



6.31Other U.S.


4.68



6.85



8.53



52.35



46.55



41.80



61.49



56.25



50.00



9.63



9.03



8.27Total U.S.


6.40



5.90



5.42



43.22



38.78



38.88



63.87



59.99



50.50



6.87



6.29



5.73Canada


7.33



6.35



6.50



48.02



49.03



53.91















7.33



6.35



6.50Total

$
6.73


$
6.05


$
5.76


$
43.23


$
38.85


$
39.08


$
63.87


$
59.99


$
50.50


$
6.99


$
6.31


$
5.95     NaturalGas


Oil


NGL


Total(In thousands)Revenue for 2005

$
269,547


$
27,947


$
8,710


$
306,204Volume changes


39,315



2,008



20,319



61,642Price changes


13,495



5,250



(51
)


18,694Revenue for 2006

$
322,357


$
35,205


$
28,978


$
386,540Volume changes


42,735



(171
)


74,546



117,110Price changes


35,897



2,279



3,263



41,439Revenue for 2007

$
400,989


$
37,313


$
106,787


$
545,089            37




---



##### Table of Contents



Other
    Revenues
      Operating
    Expenses
  Oil
    and Gas Production Expenses
  Years Ended December 31,2007


2006


2005(In thousands, except per unit amounts)Per mcfe





Per mcfe





Per mcfeTexas

$
54,065


$
1.64


$
24,797


$
1.96


$
6,661


$
1.74Northeast Operations


48,911



2.13



44,968



1.54



44,093



1.40Other U.S.


3,471



3.13



3,486



2.97



3,328



2.77Total U.S.


106,447



1.86



73,251



1.70



54,082



1.48Canada


30,384



1.46



21,925



1.20



15,306



1.03Total

$
136,831


$
1.76


$
95,176


$
1.55


$
69,388


$
1.35       Production
    and Ad Valorem Taxes
   38




---



##### Table of Contents



Depletion,
    Depreciation and Accretion
  Years Ended December 31,2007


2006


2005Per Mcfe





Per Mcfe





Per Mcfe(In thousands, except per unit amounts)DepletionU.S.

$
65,020


$
1.14


$
40,051


$
0.93


$
29,597


$
0.81Canada


34,666



1.67



25,618



1.40



17,018



1.15Total depletion


99,686



1.28



65,669



1.07



46,615



0.91Depreciation of other fixed assets:U.S.

$
15,389


$
0.27


$
8,715


$
0.20


$
5,858


$
0.16Canada


4,115



0.20



3,129



0.17



1,741



0.12Total depreciation


19,504



0.25



11,844



0.19



7,599



0.15Accretion


1,507



0.02



1,287



0.02



999



0.02Total depletion, depreciation and accretion

$
120,697


$
1.55


$
78,800


$
1.29


$
55,213


$
1.07       General
    and Administrative Expense
   39




---



##### Table of Contents



Other
    Components of Operating Income
    Interest
    Expense
      Income
    Taxes
  Years Ended December 31,2007

2006

2005Income tax (in thousands)

$
256,508


$
38,150


$
40,702Effective tax rate


34.9
%


28.9
%


31.8
%      40




---



##### Table of Contents



LIQUIDITY,
    CAPITAL RESOURCES AND FINANCIAL POSITION
  Cash Flow
    Activity
  Operating
    Cash Flows
  Years Ended December 31,2007

2006

2005(In thousands)Net cash provided by operating activities

$
319,104


$
242,186


$
140,242       Investing
    Cash Flows
  Years Ended December 31,2007


2006


2005(In thousands)Purchases of property, plant and equipment

$
(1,020,684
)

$
(619,061
)

$
(331,805
)Return of investment from equity affiliates


9,635



1,923



533Proceeds from sales of properties & equipment


741,297



5,113



9,693Net cash used for investing activities

$
(269,752
)

$
(612,025
)

$
(321,579
)     Property
    and Equipment Costs Incurred
  United States


Canada


Consolidated(In thousands)2007Proved acreage

$



$



$
Unproved acreage


17,031



31,448



48,479Development costs


213,180



53,439



266,619Exploration costs


511,314



26,122



537,436Gas processing and gathering


168,523



3,417



171,940Administrative


19,093



647



19,740Total

$
929,141


$
115,073


$
1,044,214 41




---



##### Table of Contents



United States


Canada


Consolidated(In thousands)2006Proved acreage

$



$



$
Unproved acreage


32,048



1,574



33,622Development costs


121,104



82,378



203,482Exploration costs


280,438



27,197



307,635Gas processing and gathering


90,947



6,294



97,241Administrative


3,162



585



3,747Total

$
527,699


$
118,028


$
645,7272005Proved acreage

$
821


$
1,620


$
2,441Unproved acreage


48,419



3,784



52,203Development costs


24,007



82,388



106,395Exploration costs


109,148



9,829



118,977Gas processing and gathering


49,107



20,390



69,497Administrative


10,787



669



11,456Total

$
242,289


$
118,680


$
360,969          42




---



##### Table of Contents



Financing
    Cash Flows
  Years Ended December 31,2007


2006


2005(In thousands)Cash flow provided by financing activities:Issuance of debt

$
817,821


$
694,682


$
183,469Repayments of debt


(968,557
)


(350,754
)


(13,079
)Debt issuance costs


(5,130
)


(9,213
)


(745
)Minority interest contributions


109,809



7,291



Minority interest distributions


(8,794
)






Proceeds from exercise of stock options


21,387



19,689



2,894Excess tax benefit on exercise of stock options


2,755







6,536Purchase of treasury stock


(1,567
)


(384
)


(95
)Payment for fractional shares










(18
)Net cash (used for) provided by financing activities

$
(32,276
)

$
361,311


$
178,962       Liquidity
    and Borrowing Capacity
     43




---



##### Table of Contents



Years Ended December 31,2007


2006


2005(In thousands)Long-term and short-term debt:Senior secured credit facility

$
310,710


$
421,123


$
357,788Senior subordinated notes


350,000



350,000



Convertible subordinated debentures


148,107



147,994



147,881Second lien mortgage notes










70,000KGS credit agreement


5,000







Various loans


34



400



746Other










117Total debt


813,851



919,517



576,532Stockholders equity


1,068,355



575,666



383,615Total capitalization

$
1,882,206


$
1,495,183


$
960,147       Financial
    Position
    
    Our current and deferred derivative assets decreased
    $53.3 million and $3.4 million, respectively, as our
    current and deferred derivative obligations increased
    $64.1 million and $16.3 million, respectively. Our
    current and deferred derivative obligations include the
    $63.5 million fair value loss for the remaining 44




---



##### Table of Contents



term of the Michigan Sales Contract for which in December 2007
    we determined we would no longer deliver a portion of our
    natural gas production under the contract. Additionally, our
    current deferred income tax liability decreased
    $21.4 million as a result overall lower valuations of our
    derivative valuations.  
    The $463.1 million increase in our net property, plant and
    equipment resulted primarily from $1,044 million in capital
    expenditures for development, exploitation and exploration of
    our oil and gas properties as well as expansion of our gas
    processing and gathering assets partially offset by the
    divestiture of our Northeast Operations which had an allocated
    carrying value of $538.8 million.
    Long-term debt decreased due to utilization of the cash proceeds
    from the November 2007 divestiture of our Northeast Operations
    and the August 2007 KGS IPO which offset the borrowings
    associated with the exploration and development efforts
    throughout the year.
    As a result of the KGS IPO, we recognized a deferred gain of
    $79.3 million that will not be recorded in our results of
    operations until the expiration of the subordination period.
    Also, as a result of the KGS IPO, we decreased our ownership in
    KGS and accordingly carry $30.3 million of minority
    interest for KGS outside ownership. See Note 3 to the
    financial statements included in Item 8 of this annual
    report, which is incorporated herein by reference, for
    additional information about the KGS IPO and the subordination
    period.  Contractual
    Obligations and Commercial Commitments
  Contractual Obligations.
  Payments Due by PeriodLess than


1-3


4-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 Years(In thousands)Long-term debt

$
815,744


$
34


$



$
315,710


$
500,000Scheduled interest obligations


281,526



28,448



83,250



55,500



114,328Transportation contracts


103,069



2,940



29,975



21,017



49,137Purchase obligations


65,517



42,017



23,500







Natural gas supply contract


63,520



49,310



14,210







Drilling rig contracts


60,932



29,109



31,823







Asset retirement obligations


21,849



645



183



122



20,899Financial derivative obligations


16,656



14,538



2,118







Unrecognized tax benefits


10,609







10,609







Operating lease obligations


9,476



4,190



5,282



4



Total obligations

$
1,448,898


$
171,231


$
200,950


$
392,353


$
684,364   
    Long-Term Debt.  As of December 31, 2007,
    we had $311 million outstanding under our senior secured
    credit facility, $150 million of contingently convertible
    debentures (before discount) and $350 million of senior
    subordinated notes and $5 million outstanding under the KGS
    credit facility. Based upon our debt outstanding and interest
    rates in effect at December 31, 2007, we anticipate
    interest payments, including our scheduled interest obligations
    of $28.4 million, to be approximately $46.7 million in
    2008. We expect to increase borrowings under our senior secured
    credit facility to partially fund our capital spending program
    throughout 2008. Based on interest rates in effect at
    December 31, 2007, for each additional $10 million in
    borrowings, annual interest payments will increase by
    approximately $0.6 million. If the borrowing base under our
    senior secured credit facility were to be fully utilized by
    year-end 2008 at interest rates in effect at December 31,
    2007, we estimate that interest payments would increase by
    approximately $13.2 million. If interest rates on our 45




---



##### Table of Contents



December 31, 2007 variable debt balance of
    $315.7 million increase or decrease by one percentage
    point, our annual pretax income will decrease or increase by
    $3.2 million.  
    Scheduled Interest Obligations.  As of
    December 31, 2007, we had scheduled interest payments of
    $2.8 million annually on our $150 million of
    contingently convertible debentures due November 1, 2024
    and $24.9 million annually on our $350 million of
    senior subordinated notes due March 31, 2016.
    Transportation Contracts.  Under contracts with
    various pipeline companies, we are obligated to transport
    minimum daily gas volumes, as calculated on a monthly basis, or
    pay for any deficiencies at a specified reservation fee rate.
    Our production committed to the pipelines is expected to meet,
    or exceed, the daily volumes provided in the contracts.
    Purchase Obligations.  At December 31,
    2007, we were under contract to purchase goods and services for
    completion of a gas processing plant in Texas. Total remaining
    obligations for construction and completion of the gas
    processing plant were $65.5 million, including
    $9.1 million recognized through December 31, 2007. We
    expect to place the new gas processing plant into service during
    the first quarter of 2009.
    Natural Gas Supply Contract.  We determined we
    would no longer deliver a portion of our natural gas production
    to supply the contractual volumes under the Michigan Sales
    Contract. We recorded a loss of $63.5 million for the fair
    value of the remaining contractual volumes at December 31,
    2007.  In January 2008, we entered into a fixed-price natural
    gas swap covering all remaining volumes for the remaining
    contract period.
    Drilling Rig Contracts.  We lease drilling rigs
    from third parties for use in our development and exploration
    programs.  The outstanding drilling rig contracts require
    payment of the specified day rate average of $21,500 for the
    entire lease term regardless of our utilization of the drilling
    rigs.
    Asset Retirement Obligations.  Our obligations
    result from the acquisition, construction or development and the
    normal operation of our long-lived assets.
    Financial Derivative Obligations.  We utilize
    financial derivatives to manage price risk associated with our
    production revenue. The recorded assets and liabilities
    associated with our derivative obligations were estimated based
    on published market prices of commodities for the periods
    covered by the contracts.  These amounts do not necessarily
    reflect the payments that will be made to settle these
    obligations.
    Unrecognized Tax Benefits.  We have recorded
    obligations that have resulted from tax benefit claims in our
    tax returns that do not meet the recognition standard of more
    likely than not to be sustained upon examination by tax
    authorities. The $10.0 million balance of unrecognized tax
    benefits includes $8.6 million of amounts that, if
    recognized, would reduce our effective tax rate. The balance
    also includes $0.6 million for interest and penalties.
    Operating Lease Obligations.  We lease office
    buildings and other property under operating leases. Our
    operating lease obligations include $3.1 million of future
    lease payments to an affiliate of Mercury, which is owned by
    members of the Darden family.  Commercial Commitments.
  Amounts of Commitments by Expiration PeriodLess than


1-3


4-5


More thanCommercial Commitments

Total


1 Year


Years


Years


5 Years(In thousands)Standby letters of credit

$
1,590


$
1,590


$



$



$
Surety bonds


13,231



13,231











Total

$
14,821


$
14,821


$



$



$
  46




---



##### Table of Contents




    Standby Letters of Credit.  Our letters of
    credit have been issued to fulfill contractual or regulatory
    requirements. All of these letters of credit were issued under
    our senior credit facility and have an annual renewal option.
    Surety Bonds.  Our surety bonds have been
    issued to fulfill contractual, legal or regulatory requirements.
    All of our surety bonds have an annual renewal option.  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;
    competitive conditions in our industry;
    actions taken by third parties including operators, processors
    and transporters;
    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 annual report.    RECENTLY
    ISSUED ACCOUNTING STANDARDS
    ITEM 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   47




---



##### 



ITEM 8.
    Financial
    Statements and Supplementary Data  QUICKSILVER
    RESOURCES INC.
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
   
 PageManagements Statement of
    Responsibilities


49Report of Independent Registered Public
    Accounting Firm


50Consolidated Balance Sheets as of
    December 31, 2007 and 2006


51Consolidated Statements of Income and
    Comprehensive Income for the Years Ended December 31, 2007,
    2006 and 2005


52Consolidated Statements of Stockholders
    Equity for the Years ended December 31, 2007, 2006 and
    2005


53Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2007, 2006 and 2005


54Notes to Consolidated Financial Statements for
    the Years Ended December 31, 2007, 2006 and 2005


55   48




---



##### Table of Contents



MANAGEMENTS
    STATEMENT OF RESPONSIBILITIES          /s/  Glenn
    Darden

/s/  Philip
    CookPresident and Chief Executive Officer

Senior Vice President  Chief Financial Officer     49




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Share-Based Payment.
  Internal Control 
    Integrated Framework
      50




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.
  CONSOLIDATED
    BALANCE SHEETS
 AS OF
    DECEMBER 31, 2007 AND 2006
  2007


2006In thousands, except for share dataASSETSCurrent assetsCash and cash equivalents

$
28,226


$
5,281Accounts receivable  net of allowance for doubtful
    accounts


90,244



76,521Derivative assets at fair value


10,797



64,086Current deferred income tax asset


18,946



Other current assets


42,188



25,076Total current assets


190,401



170,964Investments in and advances to equity affiliates


420,171



7,434Property, plant and equipment  netOil and gas properties, full cost method (including unevaluated
    costs of $215,228 and $191,665, respectively)


1,764,400



1,444,059Other property and equipment


377,946



235,221Property, plant and equipment  net


2,142,346



1,679,280Derivative assets at fair value


354



3,753Other assets


22,574



21,481$
2,775,846


$
1,882,912LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
34


$
400Accounts payable


192,855



109,914Income taxes payable


46,601



589Accrued liabilities


54,981



67,108Derivative liabilities at fair value


64,104



Current deferred tax liability






21,378Total current liabilities


358,575



199,389Long-term debt


813,817



919,117Asset retirement obligations


23,864



25,058Derivative liabilities at fair value


16,327



Other liabilities


10,609



Deferred income taxes


374,645



156,251Commitments and contingencies (Note 16)Deferred gain on sale of partnership interests


79,316



Minority interests in consolidated subsidiaries


30,338



7,431Stockholders equityPreferred stock, par value $0.01, 10,000,000 shares
    authorized, none outstanding






Common stock, $0.01 par value, 200,000,000 shares
    authorized; 160,633,270 and 157,783,515 shares issued,
    respectively


1,606



1,578Paid in capital in excess of par value


272,515



237,287Treasury stock of 2,616,726 and 2,579,671 shares,
    respectively


(12,304
)


(10,737
)Accumulated other comprehensive income


40,066



60,099Retained earnings


766,472



287,439Total stockholders equity


1,068,355



575,666$
2,775,846


$
1,882,912    51




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##### Table of Contents



QUICKSILVER
    RESOURCES INC.
  CONSOLIDATED
    STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 FOR
    THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  2007


2006


2005In thousands, except for per share dataRevenuesNatural gas, NGL and crude oil sales

$
545,089


$
386,540


$
306,204Other


16,169



3,822



4,244Total revenues


561,258



390,362



310,448Operating expensesOil and gas production expense


136,831



95,176



71,204Production and ad valorem taxes


16,142



15,619



15,068Other operating costs


2,792



1,461



1,661Depletion, depreciation and accretion


120,697



78,800



55,213General and administrative


47,060



25,636



19,087Total expenses


323,522



216,692



162,233Income from equity affiliates


661



526



914Gain on sale of oil and gas properties


628,709







Loss on natural gas sales contract


(63,525
)






Operating income


803,581



174,196



149,129Other income  net


(3,887
)


(1,825
)


(585
)Interest expense


70,527



44,061



21,740Income from continuing operations before income taxes and
    minority interest


736,941



131,960



127,974Income tax expense


256,508



38,150



40,702Minority interest expense, net of income tax


1,055



91



Income from continuing operations


479,378



93,719



87,272Discontinued operations  net of income tax of $86










162Net income

$
479,378


$
93,719


$
87,434Other comprehensive income  net of income taxReclassification adjustments related to settlements of
    derivative contracts


(34,648
)


(9,707
)


26,892Net change in derivative fair value


(14,794
)


83,410



(49,743
)Foreign currency translation adjustment


29,409



(1,222
)


3,707Comprehensive income

$
459,345


$
166,200


$
68,290Earnings per common share  basic:From continuing operations

$
3.08


$
0.61


$
0.58From discontinued operations










Net income

$
3.08


$
0.61


$
0.58Earnings per common share  diluted:From continuing operations

$
2.86


$
0.58


$
0.54From discontinued operations










Net income

$
2.86


$
0.58


$
0.54Basic weighted average shares outstanding


155,475



153,413



151,431Diluted weighted average shares outstanding


168,029



166,266



164,912    52




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##### Table of Contents



QUICKSILVER
    RESOURCES INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 FOR
    THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  2007


2006


2005In thousands, except for share dataPreferred stock, $0.01 par value, 10,000,000 shares
    authorized none issued

$



$



$
Common stock, $0.01 par value, 200,000,000, 200,000,000 and
    100,000,000 shares authorizedBalance at beginning of year


1,578



1,547



1,529Issuance of common stock  restricted stock


6



9



3Issuance of common stock  stock options


22



22



15Balance at end of year: 160,633,270, 157,783,515 and
    154,729,151 shares issued at December 31, 2007, 2006
    and 2005, respectively


1,606



1,578



1,547Paid in capital in excess of par valueBalance at beginning of year


237,287



211,083



199,938Stock options exercised


21,365



19,667



2,877Stock-based compensation expense recognized


11,108



6,537



1,732Tax benefit related to stock options exercised


2,755







6,536Balance at end of year


272,515



237,287



211,083Treasury stock, at costBalance at beginning of year


(10,737
)


(10,353
)


(10,258
)Acquisition of treasury stock


(1,567
)


(384
)


(95
)Balance at end of year: 2,616,726, 2,579,671 and
    2,571,069 shares at December 31, 2007, 2006, and 2005,
    respectively


(12,304
)


(10,737
)


(10,353
)Accumulated other comprehensive income (loss)Deferred gains (losses) on hedge derivativesBalance at beginning of year


45,194



(28,509
)


(5,658
)Reclassification adjustments related to settlements of
    derivative contracts


(34,648
)


(9,707
)


26,892Net change in derivative fair value


(14,794
)


83,410



(49,743
)Balance at end of year


(4,248
)


45,194



(28,509
)Deferred foreign exchange adjustmentBalance at beginning of year


14,905



16,127



12,420Foreign currency translation adjustment


29,409



(1,222
)


3,707Balance at end of year


44,314



14,905



16,127Total accumulated other comprehensive income (loss)


40,066



60,099



(12,382
)Retained earningsBalance at beginning of year


287,439



193,720



106,304Payment for fractional shares










(18
)Adoption of FIN 48


(345
)






Net income


479,378



93,719



87,434Balance at end of year


766,472



287,439



193,720Total stockholders equity

$
1,068,355


$
575,666


$
383,615    53




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 FOR
    THE YEARS END DECEMBER 31, 2007, 2006 AND 2005
  2007


2006


2005In thousandsOperating activities:Net income

$
479,378


$
93,719


$
87,434Adjustments to reconcile net income to net cash provided by
    operating activities:Depletion, depreciation and accretion


120,697



78,800



55,213Deferred income taxes


209,943



37,877



40,298(Gain) loss from sale of properties


(627,348
)


188



(35
)Non-cash loss (gain) from hedging and derivative activities


62,515







(462
)Stock-based compensation


11,243



6,546



1,732Amortization of deferred charges


2,189



226



192Amortization of deferred loan costs


2,050



2,070



1,429Minority interest expense


1,055



91



Income from equity affiliates


(661
)


(526
)


(914
)Provision for doubtful accounts


(349
)


701



108Divestiture expenses


2,015







Changes in assets and liabilitiesAccounts receivable


(14,423
)


(1,100
)


(38,192
)Prepaid expenses and other assets


(4,144
)


(4,495
)


391Accounts payable


18,939



15,193



1,963Accrued and other liabilities


56,005



12,896



(8,915
)Net cash provided by operating activities


319,104



242,186



140,242Investing activities:Purchases of property, plant and equipment


(1,020,684
)


(619,061
)


(331,805
)Return of investment from equity affiliates


9,635



1,923



533Proceeds from sales of properties and equipment


741,297



5,113



9,693Net cash used for investing activities


(269,752
)


(612,025
)


(321,579
)Financing activitiesIssuance of debt


817,821



694,682



183,469Repayments of debt


(968,557
)


(350,754
)


(13,079
)Debt issuance costs


(5,130
)


(9,213
)


(745
)Minority interest contributions


109,809



7,291



Minority interest distributions


(8,794
)






Proceeds from exercise of stock options


21,387



19,689



2,894Excess tax benefits on exercise of stock options


2,755







6,536Purchase of treasury stock


(1,567
)


(384
)


(95
)Payment for fractional shares










(18
)Net cash (used for) provided by financing activities


(32,276
)


361,311



178,962Effect of exchange rate changes in cash


5,869



(509
)


746Net increase (decrease) in cash


22,945



(9,037
)


(1,629
)Cash and cash equivalents at beginning of period


5,281



14,318



15,947Cash and cash equivalents at end of period

$
28,226


$
5,281


$
14,318    54




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 FOR
    THE YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005
  1.
    NATURE OF
    OPERATIONS      2.
    SIGNIFICANT
    ACCOUNTING POLICIES  Stock
    Split
    Basis
    of Presentation
    Use of
    Estimates
   55




---



##### Table of Contents



Reclassifications
    Cash
    and Cash Equivalents
    Accounts
    Receivable
  and/or 30-60 days.
  Hedging
    and Derivatives
  Accounting for Derivative
    Instruments and Hedging Activities Accounting for Certain Derivative
    Instruments and Certain Hedging Activities
       56




---



##### Table of Contents



Parts
    and Supplies
  first-in,
  Investments
    in Equity Affiliates
      Property,
    Plant, and Equipment
      year-end
    Revenue
    Recognition
   57




---



##### Table of Contents



Environmental
    Compliance and Remediation
    Income
    Taxes
    Disclosure
    of Fair Value of Financial Instruments
    Minority
    Interest in Consolidated Subsidiaries
    Foreign
    Currency Translation
    Earnings
    per Share
   58




---



##### Table of Contents



Years Ended December 31,2007


2006


2005(In thousands, except per share data)Income from continuing operations

$
479,378


$
93,719


$
87,272Income from discontinued operations, net of income taxes










162Net income


479,378



93,719



87,434Impact of assumed conversions  interest on 1.875%
    convertible debentures, net of income taxes


1,901



1,901



1,901Income available to stockholders assuming conversion of
    convertible debentures

$
481,279


$
95,620


$
89,335Weighted average common shares  basic


155,475



153,413



151,431Effect of dilutive securities:Employee stock options


1,326



2,220



3,438Employee stock awards


1,412



817



227Contingently convertible debentures


9,816



9,816



9,816Weighted average common shares  diluted


168,029



166,266



164,912Basic earnings per share:Continuing operations

$
3.08


$
0.61


$
0.58Discontinued operations, net of income taxes










Total

$
3.08


$
0.61


$
0.58Diluted earnings per share:Continuing operations

$
2.86


$
0.58


$
0.54Discontinued operations, net of income taxes










Total

$
2.86


$
0.58


$
0.54   Recently
    Issued Accounting Standards
   Pronouncements
    Implemented
  Adoption of SFAS No. 123 (revised
    2004)
   59




---



##### Table of Contents



For the
    Year Ended December 31, 2005 (In
    thousands, except per share data)
  Net income

$
87,434Deduct: Total stock-based compensation expense determined under
    fair value-based method for stock option awards, net of related
    income tax benefit


(11,359
)Pro forma net income


76,075Impact of assumed conversions  1.875% convertible
    debentures, net of income taxes


1,901Pro forma net income available to stockholders assuming
    conversion of convertible debentures

$
77,976As reportedBasic earnings per share

$
0.58Diluted earnings per share

$
0.54Pro formaBasic earnings per share

$
0.50Diluted earnings per share

$
0.47   Adoption of Interpretation No. 48
   Pronouncements
    Not Yet Implemented
  Fair Value Measurements,
  No. 39-1, Amendment of FASB Interpretation No. 39
 60




---



##### Table of Contents



Accounting for Derivative Instruments and Hedging
    Activities No. 39-1
  The
    Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement
    No. 115
  Business
    Combinations Business Combinations
  Noncontrolling Interests in
    Consolidated Financial Statements  an amendment of
    ARB No. 51
  3.
    QUICKSILVER GAS SERVICES LP
   61




---



##### Table of Contents



OwnershipQuicksilver


Non-Quicksilver


TotalGeneral partner interests


1.9
%






1.9
%Limited partner interests:Common interests


23.5
%


27.1
%


50.6
%Subordinated interests


47.5
%






47.5
%Total limited partner interests


71.0
%


27.1
%


98.1
%Total interests


72.9
%


27.1
%


100.0
%     1.
    KGS has earned and paid at least $0.30 per quarter on each
    outstanding common unit, subordinated unit and general partner
    unit for any three consecutive four-quarter periods ending on or
    after June 30, 2010; or2.
    KGS has earned and paid at least $0.45 per quarter on each
    outstanding common unit, subordinated unit and general partner
    unit for any consecutive four quarters.      4.
    DIVESTITURE OF NORTHEAST OPERATIONS
     62




---



##### Table of Contents



5.
    HEDGING AND DERIVATIVES
         63




---



##### Table of Contents



As of December 31,2007


2006(In thousands)Derivative assets:Fixed-price natural gas sales contracts

$



$
53Natural gas basis swaps






159Crude oil collars






689Natural gas fixed-price swaps


4,666



1,009Natural gas collars


10,491



65,982$
15,157


$
67,892Derivative liabilities:Natural gas basis swaps

$
1,224


$
Natural gas financial collars


1,625



159Floating price natural gas financial swaps






53Crude oil financial collars


6,517



NGL fixed-price swaps


11,294



Fixed-price natural gas sales
    contracts(1)


63,777



$
84,437


$
212    (1)
    
    Includes $63.5 million for the Michigan Sales Contract at
    December 31, 2007.    6.
    FINANCIAL INSTRUMENTS
      Commodity
    Price Risk
     64




---



##### Table of Contents



Weighted AvgPrice Per McfProduct

Type

Contract Period


Volume


or Bbl


Fair Value(In thousands)Gas

Swap


Jan 2008-Dec 2008



25,000 Mcfd


$
8.13


$
2,893Gas

Swap


Jan 2008-Dec 2008



7,500 Mcfd



8.13



868Gas

Swap


Jan 2008-Dec 2008



5,000 Mcfd



8.14



597Gas

Swap


Jan 2008-Dec 2008



2,500 Mcfd



8.15



307Gas

Collar


Jan 2008-Mar 2008



5,000 Mcfd



7.50- 8.90



149Gas

Collar


Jan 2008-Mar 2008



15,000 Mcfd



7.50- 8.70



422Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



8.00-15.65



735Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



8.00-15.00



700Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



9.00-12.00



1,502Gas

Collar


Jan 2008-Mar 2008



10,000 Mcfd



9.00-12.05



1,508Gas

Collar


Jan 2008-Dec 2008



20,000 Mcfd



7.50- 9.15



1,361Gas

Collar


Apr 2008-Mar 2009



20,000 Mcfd



7.50- 9.35



(31
)Gas

Collar


Apr 2008-Mar 2009



20,000 Mcfd



8.00-10.20



3,034Gas

Collar


Jan 2009-Dec 2009



20,000 Mcfd



7.50- 9.34



(1,594
)Gas

Collar


Jan 2009-Dec 2009



20,000 Mcfd



7.75-10.20



726Gas

Collar


Jan 2009-Dec 2009



10,000 Mcfd



7.75-10.26



354Gas

Basis


Jan 2008-Dec 2008



10,000 Mcfd







(612
)Gas

Basis


Jan 2008-Dec 2008



10,000 Mcfd







(612
)Gas

Sale


Jan 2008-Mar 2009
(1)


25,000 Mcfd



2.49



(63,520
)NGL

Swap


Jan 2008-Dec 2008



1,000 Bbld



39.58



(5,380
)NGL

Swap


Jan 2008-Dec 2008



2,000 Bbld



45.94



(5,914
)Oil

Collar


Jan 2008-Dec 2008



500 Bbld



65.00-73.90



(3,538
)Oil

Collar


Jan 2008-Dec 2008



500 Bbld



65.00-77.45



(2,980
)Total


$
(69,025
)     (1)
    
    Represents the Michigan Sales Contract 65




---



##### Table of Contents



Interest
    Rate Risk
    Credit
    Risk
      Performance
    Risk
    Foreign
    Currency Risk
   66




---



##### Table of Contents



7.
    ACCOUNTS RECEIVABLE
    As of December 31,2007


2006(In thousands)Accrued production receivables

$
51,429


$
47,036Joint interest receivables


26,026



29,155Accrued taxes receivable


9,804



Other receivables


3,089



1,443Allowance for doubtful accounts


(104
)


(1,113
)$
90,244


$
76,521   8. OTHER
    CURRENT ASSETS
    As of December 31,2007


2006(In thousands)Inventory and supplies

$
31,980


$
22,593Prepaid drilling rentals


4,457



1,000Deposits


2,134



Other prepaid expenses


3,618



1,483$
42,189


$
25,076   9.
    INVESTMENT IN BREITBURN ENERGY PARTNERS L.P.
        As ofSeptember 30, 2007(In thousands)Current assets

$
35,844Property, plant and equipment


414,063Other assets


41,594Current liabilities


42,909Long-term debt


73,691Other non-current liabilities


19,642Partners equity


355,259    67




---



##### Table of Contents



10.
    PROPERTY, PLANT AND EQUIPMENT
    
 As of December 31,2007


2006(In thousands)Oil and gas propertiesSubject to depletion

$
1,811,295


$
1,560,459Unevaluated costs


215,228



191,665Accumulated depletion


(262,123
)


(308,065
)Net oil and gas properties


1,764,400



1,444,059Other plant and equipmentPipelines and processing facilities


379,869



225,771General properties


32,966



17,183Construction in progress






31,613Accumulated depreciation


(34,889
)


(39,346
)Net other property and equipment


377,946



235,221Property, plant and equipment, net ofaccumulated depletion and depreciation

$
2,142,346


$
1,679,280   Unevaluated
    Natural Gas and Crude Oil Properties Excluded From
    Depletion
    December 31, 2007 Costs Incurred During


December 31, 2006 Costs Incurred During2007


2006


2005


Prior


Total


2006


2005


2004


Prior


Total(In thousands)


(In thousands)Acquisition costs

$
71,835


$
25,357


$
39,810


$
37,834


$
174,836


$
46,512


$
42,030


$
34,994


$
28,181


$
151,717Exploration costs


20,334



20,058











40,392



23,569



7,563



8,658



158



39,948Total

$
92,169


$
45,415


$
39,810


$
37,834


$
215,228


$
70,081


$
49,593


$
43,652


$
28,339


$
191,665       Capitalized
    Costs
   68




---



##### Table of Contents



11. OTHER
    ASSETS
    As of December 31,2007


2006(In thousands)Deferred financing costs

$
21,159


$
23,532Less accumulated amortization


(3,044
)


(7,946
)Net deferred financing costs


18,115



15,586Deferred compensation costs


1,003



3,003Deposits


2,312



577Other


1,144



2,315$
22,574


$
21,481     12.
    ACCRUED LIABILITIES
    As of December 31,2007


2006(In thousands)Accrued capital expenditures

$
11,417


$
33,959Accrued operating expenses


14,745



7,527Accrued product purchases


9,784



2,783Revenue payable


6,692



6,174Interest payable


7,402



7,494Accrued production and property taxes


3,301



1,630Prepayments from partners


732



6,642Environmental liabilities


262



749Other


646



150$
54,981


$
67,108  69




---



##### Table of Contents



13.
    LONG-TERM DEBT
      As of December 31,2007


2006(In thousands)Senior secured credit facility

$
310,710


$
421,123Senior subordinated notes


350,000



350,000Convertible debentures, net of unamortized discount of $1,893
    and $2,006


148,107



147,994KGS Credit Agreement


5,000



Other loans


34



400Total debt


813,851



919,517Less current maturities


(34
)


(400
)Long-term debt

$
813,817


$
919,117     2008

$
342009


2010


2011


2012


315,710Thereafter


500,000$
815,744      70




---



##### Table of Contents



14. ASSET
    RETIREMENT OBLIGATIONS
   71




---



##### Table of Contents



As of December 31,2007


2006(In thousands)Beginning asset retirement obligations

$
25,206


$
20,965Additional liability incurred


5,239



5,399Accretion expense


1,509



1,287Change in estimates


2,385



30Sale of properties


(11,564
)


(2,439
)Asset retirement costs incurred


(180
)


(174
)Loss on settlement of liability


4



158Currency translation adjustment


1,911



(20
)Ending asset retirement obligations


24,510



25,206Less current portion


646



148Long-term asset retirement obligation

$
23,864


$
25,058   15.
    INCOME TAXES
         72




---



##### Table of Contents



As of December 31,2007


2006(In thousands)CurrentDeferred tax assetDeferred tax benefit on derivative contract loss

$
17,258


$
Deferred tax benefit on cash flow hedge losses


1,688



Total current deferred tax assets

$
18,946


$
Deferred tax liabilitiesDeferred tax liability on cash flow hedge gains

$



$
21,378Non-currentDeferred tax assetsDeferred tax benefit on derivative contract loss

$
4,973


$
Deferred tax benefit on deferred compensation expense


1,506



2,224Minority interest


624



Deferred tax benefit on cash flow hedge losses


617



Net operating loss carry forwards






41,220Other


2,336



219Total deferred tax assets


10,056



43,663Deferred tax liabilitiesProperty, plant and equipment


375,427



192,921Deferred tax liability on cash flow hedge gains






1,243Deferred tax liability on convertible debenture interest


8,693



5,750Other


581



Total deferred tax liabilities


384,701



199,914Net deferred tax liabilities

$
374,645


$
156,251     2007


2006


2005(In thousands)Current state income tax expense

$
1,143


$
11


$
51Current U.S. federal income tax expense


45,394







(23
)Current non U.S. (Canadian) income tax expense


28



262



462Total current income tax expense


46,565



273



490Deferred state income tax expense


2,538



1,600



Deferred U.S. federal income tax expense


196,276



27,501



26,312Deferred non U.S. (Canadian) income tax expense


11,129



8,776



13,900Total deferred income tax expense


209,943



37,877



40,212Total income tax expense

$
256,508


$
38,150


$
40,702Deferred federal income tax expense on discontinued operations

$



$



$
86  73




---



##### Table of Contents



2007


2006


2005U.S. federal statutory tax rate


35.00
%


35.00
%


35.00
%Permanent differences


0.01
%


0.16
%


0.11
%State income taxes net of federal deduction


0.33
%


0.80
%


0.03
%FIN 48 recognition


1.17
%






Foreign income taxes


(1.69
%)


(6.29
%)


(3.36
%)Other


0.04
%


(0.74
%)


0.02
%Effective income tax rate


34.86
%


28.93
%


31.80
%         2007(In thousands)Unrecognized tax benefits at January 1, 2007

$
345Gross amounts of increases in unrecognized tax benefits as a
    result of tax positions taken during a prior period


1,396Amount of decreases in unrecognized tax benefits related to
    settlements with taxing authorities


(1,100
)Gross amounts of increases in unrecognized tax benefits as a
    result of tax positions taken during the current year


9,356Unrecognized tax benefits at December 31, 2007

$
9,997      74




---



##### Table of Contents



16.
    COMMITMENTS
    AND CONTINGENCIES    2008

$
4,1902009


3,7562010


1,1632011


3632012


4Thereafter


$
9,476         2008

$
29,1092009


29,0702010


2,753$
60,932     2008

$
2,9402009


8,9872010


10,4942011


10,4942012


10,523Thereafter


59,631$
103,069    75




---



##### Table of Contents



10-year
    17.
    MINORITY
    INTEREST  Impact
    of KGS IPO
    Transactions
    Impacting Minority Interest Prior to KGS IPO
   76




---



##### Table of Contents



18.
    EMPLOYEE
    BENEFITS        19.
    STOCKHOLDERS
    EQUITY  Common
    Stock, Preferred Stock and Treasury Stock
   77




---



##### Table of Contents



Common


TreasuryShares Issued


Shares HeldOpening balance at January 1, 2005


152,935,691



2,568,611Stock options exercised


1,495,976



Restricted stock activity


297,484



2,458Balance at December 31, 2005


154,729,151



2,571,069Stock options exercised


2,212,190



Restricted stock activity


842,174



8,602Balance at December 31, 2006


157,783,515



2,579,671Stock options exercised


2,257,840



Restricted stock activity


591,915



37,055Balance at December 31, 2007


160,633,270



2,616,726   Stockholder
    Rights Plan
          Employee
    Stock Plans
  1999 and
    2004 Plans
     78




---



##### Table of Contents



2006
    Equity Plan
    Stock
    Options Under All Plans
    2007

2006

2005Wtd avg grant date fair value

N/A

$12.50

$8.84Wtd avg grant date

N/A

Jan 3, 2006

Jan 14, 2005Wtd avg risk-free interest rate

N/A

4.35%

4.0%Expected life (in years)

N/A

10.0

7.0Wtd avg volatility

N/A

37.3%

38.2%Expected dividends

N/A



     Wtd Avg


Wtd AvgExercise


Remaining


AggregateShares


Price


Contractual Life


Intrinsic Value(In thousands)Outstanding at January 1, 2007


3,378,380


$
8.42Granted






Exercised


(2,257,840
)


9.47Cancelled


(98,628
)


5.51Outstanding at December 31, 2007


1,021,912


$
7.48



2.1


$
23,931Exercisable at December 31, 2007


611,716


$
6.96



2.2


$
13,997    79




---



##### Table of Contents



Restricted
    Stock Under All Plans
    Wtd AvgGrant DateShares


Fair ValueOutstanding at January 1, 2007


1,023,746


$
19.17Granted


858,462



18.17Exercised


(312,594
)


18.62Cancelled


(229,492
)


18.60Outstanding at December 31, 2007


1,340,122


$
18.76       KGS
    Restricted Phantom Units
    Payable in Cash


Payable in UnitsWtd Avg





Wtd AvgGrant Date





Grant DateShares


Fair Value


Shares


Fair ValueOutstanding at beginning of year





$







$
Vested














Issued


84,961



21.36



9,833



21.36Cancelled














Outstanding at end of year


84,961


$
21.36



9,833


$
21.36    80




---



##### Table of Contents



20.
    DISCONTINUED
    DRILLING OPERATIONS    21.
    CONDENSED
    CONSOLIDATING FINANCIAL INFORMATION      Condensed
    Consolidating Balance Sheets
  December 31, 2007QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets

$
213,288


$
596


$
243,086


$
(266,569
)

$
190,401Property and equipment


1,294,573



1,858



845,915







2,142,346Investment in subsidiaries (equity method)


819,119



160,825







(559,773
)


420,171Other assets


72,426



82,251



2,171



(133,920
)


22,928Total assets

$
2,399,406


$
245,530


$
1,091,172


$
(960,262
)

$
2,775,846LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities

$
470,690


$
77,529


$
76,925


$
(266,569
)

$
358,575Long-term liabilities


860,361







512,821



(133,920
)


1,239,262Deferred gain










79,316







79,316Minority interest










30,338







30,338Stockholders equity


1,068,355



168,001



391,772



(559,773
)


1,068,355Total liabilities and stockholders equity

$
2,399,406


$
245,530


$
1,091,172


$
(960,262
)

$
2,775,846   81




---



##### Table of Contents



December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)ASSETSCurrent assets

$
165,061


$
2,851


$
326,608


$
(323,556
)

$
170,964Property and equipment


1,043,037



688



635,555







1,679,280Investment in subsidiaries (equity method)


510,548



125,242



4,668



(633,024
)


7,434Other assets


22,397







2,837







25,234Total assets

$
1,741,043


$
128,781


$
969,668


$
(956,580
)

$
1,882,912LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities

$
368,073


$
189


$
154,683


$
(323,556
)

$
199,389Long-term liabilities


797,304



32



303,090







1,100,426Minority interest










7,431







7,431Stockholders equity


575,666



128,560



504,464



(633,024
)


575,666Total liabilities and stockholders equity

$
1,741,043


$
128,781


$
969,668


$
(956,580
)

$
1,882,912   Condensed
    Consolidating Statements of Income
  December 31, 2007QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Revenues

$
367,894


$



$
223,281


$
(29,917
)

$
561,258Operating expenses


241,174



601



111,664



(29,917
)


323,522Income from equity affiliates


14







647







661Gain on sale of properties


628,709















628,709Loss on natural gas supply contracts


(63,525
)














(63,525
)Operating income


691,918



(601
)


112,264







803,581Equity in net earnings of subsidiaries


76,060



7,407







(83,467
)


Interest expense and other


50,077



(2,418
)


20,036







67,695Income tax provision


238,523



636



17,349







256,508Net income

$
479,378


$
8,588


$
74,879


$
(83,467
)

$
479,378   82




---



##### Table of Contents



December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Revenues

$
233,757


$
3,046


$
157,491


$
(3,932
)

$
390,362Operating expenses


148,613



2,635



69,376



(3,932
)


216,692Income from equity affiliates


17







509







526Operating income


85,161



411



88,624







174,196Equity in net earnings of subsidiaries


58,543











(58,543
)


Interest expense and other


29,766







12,561







42,327Income tax provision


20,219



144



17,787







38,150Net income

$
93,719


$
267


$
58,276


$
(58,543
)

$
93,719   December 31, 2005QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Revenues

$
165,194


$
4,894


$
144,828


$
(4,468
)

$
310,448Operating expenses


111,552



2,900



52,249



(4,468
)


162,233Income from equity affiliates


62







852







914Operating income


53,704



1,994



93,431







149,129Equity in net earnings of subsidiaries


61,716











(61,716
)


Interest expense and other


14,174







6,981







21,155Income tax provision


13,974



698



26,030







40,702Income from continuing operations


87,272



1,296



60,420



(61,716
)


87,272Discontinued operations, net


162















162Net income

$
87,434


$
1,296


$
60,420


$
(61,716
)

$
87,434   Condensed
    Consolidating Statements of Cash Flows
  December 31, 2007QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Cash flow provided by operations

$
146,348


$
(354
)

$
173,110






$
319,104Cash flow used for investing activities


(18,471
)


47,047



(283,940
)


(14,388
)


(269,752
)Cash flow provided by financing activities


(101,541
)


(46,693
)


101,570



14,388



(32,276
)Effect of exchange rates on cash


591







5,278







5,869Net increase (decrease) in cash and equivalents


26,927







(3,982
)






22,945Cash and equivalents at beginning of period


83







5,198







5,281Cash and equivalents at end of period

$
27,010


$



$
1,216


$



$
28,226   83




---



##### Table of Contents



December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Cash flow provided by operations

$
207,097


$
(45,073
)

$
80,162


$



$
242,186Cash flow used for investing activities


(523,750
)


(81,534
)


(257,016
)


250,275



(612,025
)Cash flow provided by financing activities


307,746



126,607



177,233



(250,275
)


361,311Effect of exchange rates on cash










(509
)






(509
)Net increase (decrease) in cash and equivalents


(8,907
)






(130
)






(9,037
)Cash and equivalents at beginning of period


8,990







5,328







14,318Cash and equivalents at end of period

$
83


$



$
5,198


$



$
5,281   December 31, 2005QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(In thousands)Cash flow provided by operations

$
53,723


$
42,230


$
44,289


$



$
140,242Cash flow used for investing activities


(183,630
)


(43,310
)


(94,639
)






(321,579
)Cash flow provided by financing activities


128,469







50,493







178,962Effect of exchange rates on cash










746







746Net increase (decrease) in cash and equivalents


(1,438
)


(1,080
)


889







(1,629
)Cash and equivalents at beginning of period


10,428



1,080



4,439







15,947Cash and equivalents at end of period

$
8,990


$



$
5,328


$



$
14,318   22.
    SUPPLEMENTAL
    CASH FLOW INFORMATION    Years Ended December 31,2007

2006

2005(In thousands)Interest

$
69,038


$
37,627


$
21,446Income taxes






3



888     Years Ended December 31,2007


2006


2005(In thousands)Noncash changes in working capital related to acquisition of
    property, plant and equipment  net

$
(41,460
)

$
(48,238
)

$
(31,475
)Noncash interest in BreitBurn Energy Partners L.P.


429,618







Tax benefit recognized on employee stock option exercises


2,755







6,536   23.
    RELATED
    PARTY TRANSACTIONS   84




---



##### Table of Contents



24.
    SEGMENT
    INFORMATION    85




---



##### Table of Contents



Exploration & Production


Processing &








QuicksilverUnited States


Canada


Gathering


Corporate


Elimination


Consolidated(In thousands)2007Revenues

$
396,768


$
158,121


$
36,081


$



$
(29,712
)

$
561,258Depletion, depreciation and accretion


72,132



39,445



8,146



974







120,697Operating income


750,703



85,155



12,380



(44,657
)






803,581Property, plant and equipment  net


1,290,728



571,496



275,807



4,315







2,142,346Property and equipment costs incurred


758,601



115,073



168,523



2,017







1,044,2142006Revenues

$
272,377


$
116,726


$
13,907


$



$
(12,648
)

$
390,362Depletion, depreciation and accretion


45,810



29,225



2,998



767







78,800Operating income


133,521



63,906



3,173



(26,404
)






174,196Property, plant and equipment  net


1,126,351



417,199



132,457



3,273







1,679,280Property and equipment costs incurred


439,986



118,028



85,848



1,865







645,7272005Revenues

$
210,983


$
97,744


$
4,894


$



$
(3,173
)

$
310,448Depletion, depreciation and accretion


34,896



19,089



613



615







55,213Operating income


104,845



61,992



1,994



(19,702
)






149,129Property, plant and equipment  net


728,223



332,580



49,107



2,092







1,112,002Property and equipment costs incurred


197,537



118,680



43,708



1,044







360,969   25.
    SUPPLEMENTAL
    INFORMATION (UNAUDITED)       86




---



##### Table of Contents



Form 10-K
    NGL (MBbl)


Crude Oil (MBbl)Natural Gas (MMcf)


United








UnitedUnited States


Canada


Total


States


Canada


Total


States


Canada


TotalDecember 31, 2004


627,676



261,077



888,753



4,187







4,187



9,067







9,067Revisions


(7,898
)


(21,155
)


(29,053
)


(1,233
)


3



(1,230
)


(2,883
)






(2,883
)Extensions and discoveries


128,038



79,813



207,851



6,884







6,884



280







280Purchases in place


236







236



5







5



4







4Sales in place


(65
)






(65
)






















Production


(31,944
)


(14,825
)


(46,769
)


(220
)


(3
)


(223
)


(553
)






(553
)December 31, 2005


716,043



304,910



1,020,953



9,623







9,623



5,915







5,915Revisions


(80,484
)


(32,938
)


(113,422
)


4,593



7



4,600



667







667Extensions and discoveries


332,811



55,006



387,817



34,510



14



34,524



320







320Sales in place






(405
)


(405
)






















Production


(35,028
)


(18,238
)


(53,266
)


(741
)


(5
)


(746
)


(587
)






(587
)December 31, 2006


933,342



308,335



1,241,677



47,985



16



48,001



6,315







6,315Revisions


(30,494
)


17,761



(12,733
)


1,112



(1
)


1,111



633







633Extensions and discoveries


302,098



24,463



326,561



46,571







46,571



658







658Sales in place


(503,651
)


(1,446
)


(505,097
)


(3,147
)






(3,147
)


(3,947
)






(3,947
)Production


(38,887
)


(20,732
)


(59,619
)


(2,466
)


(5
)


(2,471
)


(584
)






(584
)December 31,
    2007(1)


662,408



328,381



990,789



90,055



10



90,065



3,075







3,075Proved developed reservesDecember 31, 2005


593,630



199,859



793,489



5,153







5,153



4,986







4,986December 31, 2006


626,582



217,759



844,341



18,771



16



18,787



5,236







5,236December 31, 2007


379,917



260,029



639,946



50,738



10



50,748



2,763







2,763     (1)
    
    Although the Company did not acquire its 32% limited partnership
    interest in BBEP until 2007, had the Company owned 32% of BBEP
    at December 31, 2006, proportionate ownership of BBEP would
    have included 1,341 MMcf of natural gas and 9,613 MBbl
    of crude oil, all within the United States. 87




---



##### Table of Contents



United States


Canada


Consolidated(In thousands)2007Proved properties

$
1,231,109


$
580,186


$
1,811,295Unevaluated properties


163,274



51,954



215,228Accumulated DD&A


(157,122
)


(105,001
)


(262,123
)Net capitalized
    costs(1)

$
1,237,261


$
527,139


$
1,764,4002006Proved properties

$
1,163,353


$
397,106


$
1,560,459Unevaluated properties


157,220



34,445



191,665Accumulated DD&A


(250,547
)


(57,518
)


(308,065
)Net capitalized costs

$
1,070,026


$
374,033


$
1,444,0592005Proved properties

$
779,661


$
300,001


$
1,079,662Unevaluated properties


102,206



29,884



132,090Accumulated DD&A


(210,495
)


(32,599
)


(243,094
)Net capitalized costs

$
671,372


$
297,286


$
968,658     (1)
    
    Although the Company did not acquire its 32% limited partnership
    interest in BBEP until 2007, had the Company owned 32% of BBEP
    at December 31, 2006, proportionate ownership of BBEP would
    have included $59.3 million of capitalized oil and gas
    costs, all within the United States.    United States


Canada


Consolidated(In thousands)2007Proved acreage

$



$



$
Unproved acreage


17,031



31,448



48,479Development costs


213,180



53,439



266,619Exploration costs


511,314



26,122



537,436Total(1)

$
741,525


$
111,009


$
852,5342006Proved acreage

$



$



$
Unproved acreage


32,048



1,574



33,622Development costs


121,104



82,378



203,482Exploration costs


280,438



27,197



307,635Total

$
433,590


$
111,149


$
544,7392005Proved acreage

$
821


$
1,620


$
2,441Unproved acreage


48,419



3,784



52,203Development costs


24,007



82,388



106,395Exploration costs


109,148



9,829



118,977Total

$
182,395


$
97,621


$
280,016  88




---



##### Table of Contents



(1)
    
    Although the Company did not acquire its 32% limited partnership
    interest in BBEP until 2007, had the Company owned 32% of BBEP
    at December 31, 2006, proportionate ownership of BBEP would
    have $12.2 million of capitalized expenditures for
    exploration and development, all within the United States.    United States


Canada


Consolidated(In thousands)2007Natural gas, NGL and crude oil sales

$
392,841


$
152,248


$
545,089Oil & gas production expense


119,452



33,521



152,973Depletion & amortization expense


65,701



35,330



101,031207,688



83,397



291,085Income tax expense


72,691



24,185



96,876Results from producing
    activities(1)

$
134,997


$
59,212


$
194,2092006Natural gas, NGL and crude oil sales

$
270,535


$
116,005


$
386,540Oil & gas production expense


87,199



23,596



110,795Depletion & amortization expense


40,760



26,094



66,854142,576



66,315



208,891Income tax expense


49,902



19,231



69,133Results from producing activities

$
92,674


$
47,084


$
139,7582005Natural gas, NGL and crude oil sales

$
209,715


$
96,489


$
306,204Oil & gas production expense


69,609



16,663



86,272Depletion & amortization expense


30,174



17,347



47,521109,932



62,479



172,411Income tax expense


38,476



21,005



59,481Results from producing activities

$
71,456


$
41,474


$
112,930     (1)
    
    Although the Company did not acquire its 32% limited partnership
    interest in BBEP until 2007, had the Company owned 32% of BBEP
    at December 31, 2006, proportionate ownership of BBEP would
    have included $25.0 million of producing activity results,
    all within the United States.     89




---



##### Table of Contents



At December 31,2007


2006


2005Natural gas  Henry Hub-Spot

$
6.80


$
5.64


$
10.08Natural gas  AECO


6.35



5.39



8.41Crude oil  WTI Cushing


95.98



60.85



61.06       United States


Canada


Total(In thousands)December 31, 2007Future revenues

$
9,566,791


$
2,037,478


$
11,604,269Future production costs


(3,286,618
)


(675,890
)


(3,962,508
)Future development costs


(651,802
)


(156,289
)


(808,091
)Future income taxes


(1,772,021
)


(228,883
)


(2,000,904
)Future net cash flows


3,856,350



976,416



4,832,76610% discount  calculated difference


(2,168,150
)


(495,413
)


(2,663,563
)Standardized measure of discounted future cash flows relating to
    proved
    reserves(1)

$
1,688,200


$
481,003


$
2,169,203December 31, 2006Future revenues

$
7,388,886


$
1,629,456


$
9,018,342Future production costs


(2,715,746
)


(550,148
)


(3,265,894
)Future development costs


(464,997
)


(148,850
)


(613,847
)Future income taxes


(1,268,907
)


(197,885
)


(1,466,792
)Future net cash flows


2,939,236



732,573



3,671,80910% discount  calculated difference


(1,813,746
)


(372,238
)


(2,185,984
)Standardized measure of discounted future cash flows relating to
    proved reserves

$
1,125,490


$
360,335


$
1,485,825December 31, 2005Future revenues

$
7,387,151


$
2,487,289


$
9,874,440Future production costs


(1,974,844
)


(494,056
)


(2,468,900
)Future development costs


(179,141
)


(145,303
)


(324,444
)Future income taxes


(1,719,136
)


(539,167
)


(2,258,303
)Future net cash flows


3,514,030



1,308,763



4,822,79310% discount  calculated difference


(2,283,052
)


(715,609
)


(2,998,661
)Standardized measure of discounted future cash flows relating to
    proved reserves

$
1,230,978


$
593,154


$
1,824,132  90




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##### Table of Contents



(1)
    
    Although the Company did not acquire its 32% limited partnership
    interest in BBEP until 2007, had the Company owned 32% of BBEP
    at December 31, 2006, proportionate ownership of BBEP would
    have included $100.0 million of discounted future cash
    flows, all within the United States.    Years Ended December 31,2007


2006


2005(In thousands)Net changes in price and production cost

$
711,962


$
(1,236,793
)

$
919,502Development costs incurred


170,686



78,063



44,399Revision of estimates


38,547



(94,080
)


(29,506
)Changes in estimated future development costs


33,326



42,015



43,939Purchase and sale of reserves, net


(1,008,566
)


(1,977
)


824Extensions and discoveries


1,329,445



661,033



515,810Net change in income taxes


(293,374
)


302,342



(405,724
)Sales of oil and gas net of production costs


(392,116
)


(275,745
)


(219,932
)Accretion of discount


196,275



260,340



134,428Timing and other differences


(102,807
)


(73,505
)


(150,339
)Net increase (decrease)

$
683,378


$
(338,307
)

$
853,401   26.
    SELECTED
    QUARTERLY DATA (UNAUDITED)  Quarter EndedMarch 31


June 30


September 30


December 31(In thousands, except per share data)2007Operating revenues

$
116,580


$
136,398


$
159,199


$
149,081Operating income


48,560



61,975



63,574



629,472Net income


22,851



31,731



28,719



396,077Basic net earnings per share

$
0.15


$
0.20


$
0.18


$
2.53Diluted net earnings per share


0.14



0.19



0.17



2.352006Operating revenues

$
99,650


$
89,465


$
99,213


$
102,034Operating income


49,925



39,242



43,841



41,188Net income


27,535



23,608



22,861



19,715Basic net earnings per share

$
0.18


$
0.15


$
0.15


$
0.13Diluted net earnings per share


0.17



0.14



0.14



0.12    91




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##### Table of Contents



ITEM 9.
    Changes
    in and Disagreements with Accountants or Accounting and
    Financial Disclosure    ITEM 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rule 13a-15(e)
  Form 10-K,
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f)
  Internal Control  Integrated
    Framework
    Changes
    in Internal Control Over Financial Reporting
   92




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
  Share Based
    Payments .
  /s/ DELOITTE & TOUCHE LLP
    93




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##### Table of Contents



ITEM 9B.
    Other
    Information   PART III  ITEM 10.
    Directors,
    Executive Officers and Corporate Governance        ITEM 11.
    Executive
    Compensation    ITEM 12.
    Security
    Ownership of Management and Certain Beneficial Owners and
    Management and Related Stockholder Matters    ITEM 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence      ITEM 14.
    Principal
    Accountant Fees and Services   94




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##### Table of Contents



PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules    Exhibit No.3
.1

Amended and Restated Certificate of Incorporation of Quicksilver
    Resources Inc. filed with the Secretary of State of the State of
    Delaware on May 23, 2006 (filed as Exhibit 3.1 to the
    Companys
    Form 10-Q
    filed August 4, 2006 and included herein by reference).3
.2

Amended and Restated Certificate of Designation of Series A
    Junior Participating Preferred Stock of Quicksilver Resources
    Inc. (filed as Exhibit 3.3 to the Companys
    Form 10-Q
    filed May 6, 2006 and included herein by reference).3
.3

Amended and Restated Bylaws of Quicksilver Resources Inc. (filed
    as Exhibit 3.1 to the Companys
    Form 8-K
    filed November 16, 2007 and included herein by reference).4
.1

Indenture Agreement for 1.875% Convertible Subordinated
    Debentures Due 2024, dated as of November 1, 2004, between
    Quicksilver Resources Inc., as Issuer, and The Bank of New York,
    as Trustee (as successor in interest to JPMorgan Chase Bank,
    National Association) (filed as Exhibit 4.1 to the
    Companys
    Form 8-K
    filed November 1, 2004 and included herein by reference).4
.2

Indenture, dated as of December 22, 2005, between
    Quicksilver Resources Inc. and The Bank of New York, as
    Trustee (as successor in interest to JPMorgan Chase Bank,
    National Association) (filed as Exhibit 4.7 to the
    Companys
    Form S-3,
    File
    No. 333-130597,
    filed December 22, 2005 and included herein by reference).4
.3

First Supplemental Indenture, dated as of March 16, 2006,
    among Quicksilver Resources Inc., the subsidiary guarantors
    named therein and The Bank of New York, as Trustee (as successor
    in interest to JPMorgan Chase Bank, National Association) (filed
    as Exhibit 4.1 to the Companys
    Form 8-K
    filed March 21, 2006 and included herein by reference).4
.4

Third Supplemental Indenture, dated as of September 26,
    2006, among Quicksilver Resources Inc., the subsidiary
    guarantors named therein and The Bank of New York, as Trustee
    (as successor in interest to JPMorgan Chase Bank, National
    Association) (filed as Exhibit 4.1 to the Companys
    Form 10-Q
    filed November 7, 2006 and included herein by reference).4
.5

Amended and Restated Rights Agreement, dated as of
    December 20, 2005, between Quicksilver Resources Inc.
    and Mellon Investor Services LLC, as Rights Agent (filed as
    Exhibit 4.1 to the Companys
    Form 8-A/A
    (Amendment No. 1) filed December 21, 2005 and
    included herein by reference).10
.1

Master Gas Purchase and Sale Agreement, dated March 1,
    1999, between Quicksilver Resources Inc. and Reliant Energy
    Services, Inc. (filed as Exhibit 10.10 to the
    Companys
    Form S-1,
    File No. 333-89229,
    filed November 1, 2004 and included herein by reference).10
.2

Wells Agreement dated as of December 15, 1970, between
    Union Oil Company of California and Montana Power Company (filed
    as Exhibit 10.5 to the Companys Predecessor, MSR
    Exploration Ltd.s
    Form S-4/A,
    File
    No. 333-29769,
    filed August 21, 1997 and included herein by reference).+ 10
.3

Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.3 to
    the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.4

Form of Incentive Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.2 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference).+ 10
.5

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.3 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference). 95




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##### Table of Contents



Exhibit No.+ 10
.6

Form of Retention Share Agreement pursuant to the Quicksilver
    Resources Inc. Amended and Restated 1999 Stock Option and
    Retention Stock Plan (filed as Exhibit 10.3 to the
    Companys
    Form 8-K
    filed April 19, 2005 and included herein by reference).+ 10
.7

Form of Restricted Stock Unit Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed April 19, 2005 and included herein by reference).+ 10
.8

Quicksilver Resources Inc. Amended and Restated 2004
    Non-Employee Director Equity Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.9

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 2004
    Non-Employee Director Equity Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference).+ 10
.10

Form of Restricted Share Agreement pursuant to the Quicksilver
    Resources Inc. Amended and Restated 2004 Non-Employee Director
    Equity Plan (filed as Exhibit 10.2 to the Companys
    Form 8-K
    filed May 18, 2005 and included herein by reference).+ 10
.11

Quicksilver Resources Inc. Amended and Restated 2006 Equity Plan
    (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.12

Form of Restricted Share Agreement pursuant to the Quicksilver
    Resources Inc. 2006 Equity Plan (filed as Exhibit 10.2 to
    the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.13

Form of Restricted Stock Unit Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.3 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.14

Form of Quicksilver Resources Canada Inc. Restricted Stock Unit
    Agreement pursuant to the Quicksilver Resources Inc. 2006 Equity
    Plan (filed as Exhibit 10.4 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.15

Form of Incentive Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.5 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.16

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.6 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.17

Form of Non-Employee Director Non-Qualified Stock Option
    Agreement pursuant to the Quicksilver Resources Inc. 2006
    Equity Plan (filed as Exhibit 10.8 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.18

Form of Non-Employee Director Restricted Share Agreement
    pursuant to the Quicksilver Resources Inc. 2006 Equity Plan
    (One-Year Vesting) (filed as Exhibit 10.7 to the
    Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.19

Form of Non-Employee Director Restricted Share Agreement
    pursuant to the Quicksilver Resources Inc. Amended and Restated
    2006 Equity Plan (Three-Year Vesting) (filed as
    Exhibit 10.2 to the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.20

Description of Non-Employee Director Compensation for
    Quicksilver Resources Inc. (filed as Exhibit 10.6 to the
    Companys
    Form 10-Q
    filed August 9, 2007 and included herein by reference).+ 10
.21

Quicksilver Resources Inc. 2007 Executive Bonus Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed April 16, 2007 and included herein by reference).+ 10
.22

Description of 2007 Cash Bonus (filed as Exhibit 10.3 to
    the Companys
    Form 10-Q
    filed May 9, 2007 and included herein by reference).+ 10
.23

Quicksilver Resources Inc. 2008 Executive Bonus Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed December 14, 2007 and included herein by reference).+ 10
.24

Quicksilver Resources Inc. Change in Control Retention Incentive
    Plan (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed August 30, 2004 and included herein by reference). 96




---



##### Table of Contents



Exhibit No.+ 10
.25

Quicksilver Resources Inc. Amended and Restated Key Employee
    Change in Control Retention Incentive Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed August 31, 2006 and included herein by reference).+ 10
.26

Quicksilver Resources Inc. Executive Change in Control Retention
    Incentive Plan (filed as Exhibit 10.3 to the Companys
    Form 8-K
    filed August 30, 2004 and included herein by reference).+ 10
.27

Form of Director and Officer Indemnification Agreement (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed August 26, 2005 and included herein by reference).10
.28

Amended and Restated Credit Agreement, dated as of
    February 9, 2007, among Quicksilver Resources Inc. and the
    lenders identified therein (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed February 12, 2007 and included herein by reference).10
.29

Amended and Restated Credit Agreement, dated as of
    February 9, 2007, among Quicksilver Resources Canada Inc.
    and the lenders and/or agents identified therein (filed as
    Exhibit 10.2 to the Companys
    Form 8-K
    filed February 12, 2007 and included herein by reference).10
.30

Registration Rights Agreement, dated as of November 1,
    2007, between Quicksilver Resources Inc. and BreitBurn Energy
    L.P. (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed November 7, 2007 and included herein by reference).10
.31

Contribution Agreement, dated September 11, 2007, between
    Quicksilver Resources Inc. and BreitBurn Operating L.P. (filed
    as Exhibit 10.2 to the Companys
    Form 8-K
    filed November 7, 2007 and included herein by reference.)+ 10
.32

2007 Equity Plan (filed as Exhibit 99.1 to Quicksilver Gas
    Services LPs
    Form S-8,
    File
    No. 333-145326,
    filed August 10, 2007 and included herein by reference).+ 10
.33

Form of Phantom Unit Award Agreement for
    Non-Directors
    (Cash) (filed as Exhibit 10.10 to Quicksilver Gas Services
    LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 17, 2007 and included herein by reference).+ 10
.34

Form of Phantom Unit Award Agreement for
    Non-Directors
    (Units) (filed as Exhibit 10.11 to Quicksilver Gas Services
    LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 25, 2007 and included herein by reference).+ 10
.35

Quicksilver Gas Services LP Annual Bonus Plan (filed as
    Exhibit 10.1 to Quicksilver Gas Services LPs
    Form 8-K,
    File No. 001-33631, filed December 13, 2007 and
    included herein by reference).+ 10
.36

Form of Indemnification Agreement by and between Quicksilver Gas
    Services GP LLC and its officers and directors (filed as
    Exhibit 10.7 to Quicksilver Gas Services LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 17, 2007 and included herein by reference).* 21
.1

List of subsidiaries of Quicksilver Resources Inc.* 23
.1

Consent of Deloitte & Touche LLP.* 23
.2

Consent of Schlumberger Data and Consulting Services.* 23
.3

Consent of LaRoche Petroleum Consultants, Ltd.* 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.+
    
    Identifies management contracts and compensatory plans or
    arrangements. 97




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##### Table of Contents



SIGNATURES    
  By:
    /s/  Glenn
    Darden         Signature

Title

Date/s/  Thomas
    F. DardenThomas
    F. Darden

Chairman of the Board; Director

February 27, 2008/s/  Glenn
    DardenGlenn
    Darden

President and Chief Executive Officer (Principal Executive
    Officer); Director

February 27, 2008/s/  Philip
    CookPhilip
    Cook

Senior Vice President  Chief Financial Officer
    (Principal Financial Officer)

February 27, 2008/s/  John
    C. ReganJohn
    C. Regan

Vice President, Controller and Chief Accounting Officer
    (Principal Accounting Officer)

February 27, 2008/s/  Anne
    Darden SelfAnne
    Darden Self

Director

February 27, 2008/s/  W.
    Byron DunnW.
    Byron Dunn

Director

February 27, 2008/s/  James
    A. HughesJames
    A. Hughes

Director

February 27, 2008/s/  Steven
    M. MorrisSteven
    M. Morris

Director

February 27, 2008/s/  W.
    Yandell Rogers, IIIW.
    Yandell Rogers, III

Director

February 27, 2008/s/  Mark
    J. WarnerMark
    J. Warner

Director

February 27, 2008  98




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.3
.1

Amended and Restated Certificate of Incorporation of Quicksilver
    Resources Inc. filed with the Secretary of State of the State of
    Delaware on May 23, 2006 (filed as Exhibit 3.1 to the
    Companys
    Form 10-Q
    filed August 4, 2006 and included herein by reference).3
.2

Amended and Restated Certificate of Designation of Series A
    Junior Participating Preferred Stock of Quicksilver Resources
    Inc. (filed as Exhibit 3.3 to the Companys
    Form 10-Q
    filed May 6, 2006 and included herein by reference).3
.3

Amended and Restated Bylaws of Quicksilver Resources Inc. (filed
    as Exhibit 3.1 to the Companys
    Form 8-K
    filed November 16, 2007 and included herein by reference).4
.1

Indenture Agreement for 1.875% Convertible Subordinated
    Debentures Due 2024, dated as of November 1, 2004, between
    Quicksilver Resources Inc., as Issuer, and The Bank of New York,
    as Trustee (as successor in interest to JPMorgan Chase Bank,
    National Association) (filed as Exhibit 4.1 to the
    Companys
    Form 8-K
    filed November 1, 2004 and included herein by reference).4
.2

Indenture, dated as of December 22, 2005, between
    Quicksilver Resources Inc. and The Bank of New York, as
    Trustee (as successor in interest to JPMorgan Chase Bank,
    National Association) (filed as Exhibit 4.7 to the
    Companys
    Form S-3,
    File
    No. 333-130597,
    filed December 22, 2005 and included herein by reference).4
.3

First Supplemental Indenture, dated as of March 16, 2006,
    among Quicksilver Resources Inc., the subsidiary guarantors
    named therein and The Bank of New York, as Trustee (as successor
    in interest to JPMorgan Chase Bank, National Association) (filed
    as Exhibit 4.1 to the Companys
    Form 8-K
    filed March 21, 2006 and included herein by reference).4
.4

Third Supplemental Indenture, dated as of September 26,
    2006, among Quicksilver Resources Inc., the subsidiary
    guarantors named therein and The Bank of New York, as Trustee
    (as successor in interest to JPMorgan Chase Bank, National
    Association) (filed as Exhibit 4.1 to the Companys
    Form 10-Q
    filed November 7, 2006 and included herein by reference).4
.5

Amended and Restated Rights Agreement, dated as of
    December 20, 2005, between Quicksilver Resources Inc. and
    Mellon Investor Services LLC, as Rights Agent (filed as
    Exhibit 4.1 to the Companys
    Form 8-A/A
    (Amendment No. 1) filed December 21, 2005 and
    included herein by reference).10
.1

Master Gas Purchase and Sale Agreement, dated March 1,
    1999, between Quicksilver Resources Inc. and Reliant Energy
    Services, Inc. (filed as Exhibit 10.10 to the
    Companys
    Form S-1,
    File No. 333-89229,
    filed November 1, 2004 and included herein by reference).10
.2

Wells Agreement dated as of December 15, 1970, between
    Union Oil Company of California and Montana Power Company (filed
    as Exhibit 10.5 to the Companys Predecessor, MSR
    Exploration Ltd.s
    Form S-4/A,
    File
    No. 333-29769,
    filed August 21, 1997 and included herein by reference).+ 10
.3

Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.3 to
    the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.4

Form of Incentive Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.2 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference).+ 10
.5

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.3 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference).+ 10
.6

Form of Retention Share Agreement pursuant to the Quicksilver
    Resources Inc. Amended and Restated 1999 Stock Option and
    Retention Stock Plan (filed as Exhibit 10.3 to the
    Companys
    Form 8-K
    filed April 19, 2005 and included herein by reference).+ 10
.7

Form of Restricted Stock Unit Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 1999 Stock
    Option and Retention Stock Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed April 19, 2005 and included herein by reference). 99




---



##### Table of Contents



Exhibit No.+ 10
.8

Quicksilver Resources Inc. Amended and Restated 2004
    Non-Employee Director Equity Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.9

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. Amended and Restated 2004
    Non-Employee Director Equity Plan (filed as Exhibit 10.4 to
    the Companys
    Form 8-K
    filed January 28, 2005 and included herein by reference).+ 10
.10

Form of Restricted Share Agreement pursuant to the Quicksilver
    Resources Inc. Amended and Restated 2004 Non-Employee Director
    Equity Plan (filed as Exhibit 10.2 to the Companys
    Form 8-K
    filed May 18, 2005 and included herein by reference).+ 10
.11

Quicksilver Resources Inc. Amended and Restated 2006 Equity Plan
    (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.12

Form of Restricted Share Agreement pursuant to the Quicksilver
    Resources Inc. 2006 Equity Plan (filed as Exhibit 10.2 to
    the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.13

Form of Restricted Stock Unit Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.3 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.14

Form of Quicksilver Resources Canada Inc. Restricted Stock Unit
    Agreement pursuant to the Quicksilver Resources Inc. 2006 Equity
    Plan (filed as Exhibit 10.4 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.15

Form of Incentive Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.5 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.16

Form of Non-Qualified Stock Option Agreement pursuant to the
    Quicksilver Resources Inc. 2006 Equity Plan (filed as
    Exhibit 10.6 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.17

Form of Non-Employee Director Non-Qualified Stock Option
    Agreement pursuant to the Quicksilver Resources Inc. 2006
    Equity Plan (filed as Exhibit 10.8 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.18

Form of Non-Employee Director Restricted Share Agreement
    pursuant to the Quicksilver Resources Inc. 2006 Equity Plan
    (One-Year Vesting) (filed as Exhibit 10.7 to the
    Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.19

Form of Non-Employee Director Restricted Share Agreement
    pursuant to the Quicksilver Resources Inc. Amended and Restated
    2006 Equity Plan (Three-Year Vesting) (filed as
    Exhibit 10.2 to the Companys
    Form 8-K
    filed May 25, 2007 and included herein by reference).+ 10
.20

Description of Non-Employee Director Compensation for
    Quicksilver Resources Inc. (filed as Exhibit 10.6 to the
    Companys
    Form 10-Q
    filed August 9, 2007 and included herein by reference).+ 10
.21

Quicksilver Resources Inc. 2007 Executive Bonus Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed April 16, 2007 and included herein by reference).+ 10
.22

Description of 2007 Cash Bonus (filed as Exhibit 10.3 to
    the Companys
    Form 10-Q
    filed May 9, 2007 and included herein by reference).+ 10
.23

Quicksilver Resources Inc. 2008 Executive Bonus Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed December 14, 2007 and included herein by reference).+ 10
.24

Quicksilver Resources Inc. Change in Control Retention Incentive
    Plan (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed August 30, 2004 and included herein by reference).+ 10
.25

Quicksilver Resources Inc. Amended and Restated Key Employee
    Change in Control Retention Incentive Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed August 31, 2006 and included herein by reference).+ 10
.26

Quicksilver Resources Inc. Executive Change in Control Retention
    Incentive Plan (filed as Exhibit 10.3 to the Companys
    Form 8-K
    filed August 30, 2004 and included herein by reference). 100




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##### Table of Contents



Exhibit No.+ 10
.27

Form of Director and Officer Indemnification Agreement (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed August 26, 2005 and included herein by reference).10
.28

Amended and Restated Credit Agreement, dated as of
    February 9, 2007, among Quicksilver Resources Inc. and the
    lenders identified therein (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed February 12, 2007 and included herein by reference).10
.29

Amended and Restated Credit Agreement, dated as of
    February 9, 2007, among Quicksilver Resources Canada Inc.
    and the lenders and/or agents identified therein (filed as
    Exhibit 10.2 to the Companys
    Form 8-K
    filed February 12, 2007 and included herein by reference).10
.30

Registration Rights Agreement, dated as of November 1,
    2007, between Quicksilver Resources Inc. and BreitBurn Energy
    L.P. (filed as Exhibit 10.1 to the Companys
    Form 8-K
    filed November 7, 2007 and included herein by reference).10
.31

Contribution Agreement, dated September 11, 2007, between
    Quicksilver Resources Inc. and BreitBurn Operating L.P. (filed
    as Exhibit 10.2 to the Companys
    Form 8-K
    filed November 7, 2007 and included herein by reference.)+ 10
.32

2007 Equity Plan (filed as Exhibit 99.1 to Quicksilver Gas
    Services LPs
    Form S-8,
    File
    No. 333-145326,
    filed August 10, 2007 and included herein by reference).+ 10
.33

Form of Phantom Unit Award Agreement for
    Non-Directors
    (Cash) (filed as Exhibit 10.10 to Quicksilver Gas
    Services LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 17, 2007 and included herein by reference).+ 10
.34

Form of Phantom Unit Award Agreement for
    Non-Directors
    (Units) (filed as Exhibit 10.11 to Quicksilver Gas
    Services LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 25, 2007 and included herein by reference).+ 10
.35

Quicksilver Gas Services LP Annual Bonus Plan (filed as
    Exhibit 10.1 to Quicksilver Gas Services LPs
    Form 8-K,
    File
    No. 001-33631,
    filed December 13, 2007 and included herein by reference).+ 10
.36

Form of Indemnification Agreement by and between Quicksilver Gas
    Services GP LLC and its officers and directors (filed as
    Exhibit 10.7 to Quicksilver Gas Services LPs
    Form S-1/A,
    File
    No. 333-140599,
    filed July 17, 2007 and included herein by reference).* 21
.1

List of subsidiaries of Quicksilver Resources Inc.* 23
.1

Consent of Deloitte & Touche LLP.* 23
.2

Consent of Schlumberger Data and Consulting Services.* 23
.3

Consent of LaRoche Petroleum Consultants, Ltd.* 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.+
    
    Identifies management contracts and compensatory plans or
    arrangements. 101