##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, 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, 2006ORo

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(State or other
    jurisdiction of
    incorporation or organization)

75-2756163(I.R.S. Employer
    Identification No.)777 West Rosedale St.,
    Suite 300,
    Fort Worth, Texas(Address of principal
    executive offices)

76104(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
    Preferred Share Purchase Rights,
    $0.01 par value per share

New York Stock Exchange
    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
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      Class

Outstanding at February 15, 2007Common Stock, $0.01 par value
    per share

78,040,684 shares   DOCUMENTS
    INCORPORATED BY REFERENCE
  Document

Parts Into Which IncorporatedProxy Statement for the Annual
    Meeting of
    Stockholders to be held May 23, 2007

Part III




---



##### 



INDEX TO
    ANNUAL REPORT ON
    FORM 10-K
    For the Year Ended December 31, 2006
  PART IITEM 1.


Business


4ITEM 1A.


Risk
    Factors


13ITEM 1B.


Unresolved Staff
    Comments


22ITEM 2.


Properties


22ITEM 3.


Legal
    Proceedings


28ITEM 4.


Submission of
    Matters to a Vote of Security Holders


29PART IIITEM 5.


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


29ITEM 6.


Selected Financial
    Data


31ITEM 7.


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


32ITEM 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


52ITEM 8.


Financial
    Statements and Supplementary Data


53ITEM 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


99ITEM 9A.


Controls and
    Procedures


99ITEM 9B.


Other
    Information


101PART IIIITEM 10.


Directors and
    Executive Officers of the Registrant


101ITEM 11.


Executive
    Compensation


101ITEM 12.


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


101ITEM 13.


Certain
    Relationships and Related Transactions


101ITEM 14.


Principal
    Accountant Fees and Services


101PART IVITEM 15.


Exhibits and
    Financial Statement Schedules


102Signatures


106Description of Non-Employee Director CompensationList 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



three-for-two
   3




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##### Table of Contents



PART I  ITEM 1.
    Business          2006Proved Reserves


% Natural Gas and


% Proved


ProductionAreas of Operations

(Bcfe)


NGLs


Developed


(MMcfed)Texas


703.9



100
%


37
%


34.7Michigan


521.4



96
%


91
%


75.1Alberta, Canada


308.4



100
%


71
%


50.1Other


33.9



57
%


89
%


7.9Total


1,567.6



98
%


63
%


167.8  4




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22-mile right-of-way state-of-the-art
          BUSINESS
    STRENGTHS
  High quality asset base with long reserve
    life.
 5




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Significant development and exploitation drilling
    inventory.
  Proven track record of organic reserve and production
    growth.
  Experienced management and technical
    teams.
  BUSINESS
    STRATEGY
    Focus on core areas of operation.
  Pursue disciplined organic growth
    strategy.
  Enhance profitability through control and marketing of our
    equity natural gas and crude oil.
 6




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Maintain conservative financial profile.
  PROPERTIES
    Texas
    north-to-south west-to-east
  state-of-the-art
  22-mile right-of-way
   7




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Michigan
    2006Proved Reserves





% Proved


ProductionProducing Formation

(Bcfe)


% Gas


Developed


(MMcfed)Antrim Shale


451.5



100
%


93
%


55.6Non-Antrim


69.9



55
%


84
%


19.5All Formations


521.4



96
%


91
%


75.1       and/or
      Canada
   8




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Indiana/Kentucky
  eight-mile 12-inch
  Rocky
    Mountain Region
    MARKETING
    COMPETITION
    GOVERNMENTAL
    REGULATION
    ENVIRONMENTAL
    MATTERS
   9




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
    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
    clean-up
   10




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INTERNET
    WEBSITE
  www.sec.gov www.qrinc.com. 1-800-SEC-0330 Form 10-K, Form 10-Q, Form 8-K,
    EMPLOYEES
   11




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EXECUTIVE
    OFFICERS
    Name

Age

Position(s)Thomas F. Darden


53


Director and Chairman of the BoardGlenn Darden


51


Director, President and Chief
    Executive OfficerAnne Darden Self


49


Director and Vice
    President  Human ResourcesJeff Cook


50


Executive Vice
    President  OperationsJohn C. Cirone


57


Senior Vice President, General
    Counsel and SecretaryPhilip Cook


45


Senior Vice President 
    Chief Financial OfficerD. Wayne Blair


50


Vice President, Controller and
    Chief Accounting OfficerWilliam S. Buckler


45


Vice President 
    U.S. OperationsRobert N. Wagner


43


Vice President 
    Reservoir EngineeringMarLu Hiller


44


Vice President 
    Treasurer     THOMAS F. DARDEN
  GLENN DARDEN
  ANNE DARDEN SELF
  JEFF COOK
  JOHN C. CIRONE
 12




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##### Table of Contents



PHILIP COOK
  D. WAYNE BLAIR
  WILLIAM S. BUCKLER
  ROBERT N. WAGNER
  MARLU HILLER
  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.
   13




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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;
    domestic and foreign governmental regulations;
    political conditions in oil and gas 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 take
    writedowns.
  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.
   14




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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.
   15




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We may
    have difficulty financing our planned growth.
    We are
    vulnerable to operational hazards, transportation dependencies,
    regulatory risks and other uninsured risks associated with our
    activities.
        We may
    be unable to make additional acquisitions of producing
    properties or successfully integrate them into our
    operations.
   16




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The
    failure to replace our reserves could adversely affect our
    production and cash flows.
    We
    cannot control the activities on properties that we do not
    operate.
    
    timing and amount of capital expenditures;
    the operators expertise and financial resources;
    approval of other participants in drilling wells; and
    selection of technology.  We
    cannot control the operations of gas processing and
    transportation facilities we do not own or
    operate.
   17




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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 most of our
    competitors.
    Several
    companies have entered into purchase contracts with us for a
    significant portion of our production and, if they default on
    these contracts, we could be materially and adversely
    affected.
    Hedging
    our production may result in losses.
    
    our production could be materially less than expected; or
    the other parties to the hedging contracts could fail to perform
    their contractual obligations.     18




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Delays
    in obtaining oil field equipment and increases in drilling and
    other service costs could adversely affect our ability to pursue
    our drilling program and our results of
    operations.
    Our
    activities are regulated by complex laws and regulations,
    including 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;
    unitization and pooling of properties;
    environmental protection; and
    taxation.        We
    have a substantial amount of debt and the cost of servicing that
    debt could adversely affect our business; and such risk could
    increase if we incur more debt.
   19




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##### Table of Contents




    make it more difficult for us to satisfy our obligations with
    respect to our debt;
    require us to dedicate a substantial portion of our cash flow
    from operations to payments on our debt, thereby reducing the
    amount of our cash flow available for working capital, capital
    expenditures, acquisitions and other general corporate purposes;
    require us to make principal payments 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 oil and gas 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;
    increase our vulnerability to foreign 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: 20




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##### Table of Contents




    pay dividends on or redeem or repurchase capital stock;
    make certain investments;
    incur or permit to exist certain liens;
    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 control 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 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.
   21




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##### Table of Contents




    Options to purchase 26,501 shares at $5.67 per share;
    Options to purchase 45,654 shares at $7.36 per share;
    Options to purchase 36,378 shares at $8.03 per share;
    Options to purchase 560,029 shares at $11.01 per share;
    Options to purchase 17,307 shares at $15.83 per share;
    Options to purchase 921,059 shares at $20.85 per share;
    Options to purchase 10,233 shares at $23.42 per share;
    Options to purchase 67,172 shares at $23.83 per share;
    Options to purchase 2,456 shares at $33.09 per
    share; and
    Options to purchase 2,401 shares at $44.39 per share.    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   22




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OIL AND
    GAS RESERVES
  Regulation S-X Rule 4-10(a)
          Total Proved Reserves


Proved Developed ReservesFor the Years Ended December 31,


For the Years Ended December 31,2006


2005


2004


2006


2005


2004Natural gas (MMcf)United States


933,342



716,043



627,676



626,582



593,630



556,999Canada


308,335



304,910



261,077



217,759



199,859



149,453Total


1,241,677



1,020,953



888,753



844,341



793,489



706,452Crude oil (MBbl)United States


6,315



5,915



9,067



5,236



4,986



4,587Canada






















Total


6,315



5,915



9,067



5,236



4,986



4,587NGL (MBbl)United States


47,985



9,623



4,187



18,771



5,153



2,464Canada


16











16







Total


48,001



9,623



4,187



18,787



5,153



2,464Total (MMcfe)


1,567,573



1,114,181



968,276



988,477



854,326



748,762  23




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##### Table of Contents



Years Ended December 31,2006


2005


2004Representative natural gas and
    crude oil prices:(1)Natural gas  Henry Hub
    Spot

$
5.64


$
10.08


$
6.18Natural gas  AECO


5.39



8.41



5.18Crude oil  WTI Cushing


60.85



61.06



43.36Present values (in thousands):(2)Standardized measure of discounted
    future net cash flows, after income tax

$
1,485,825


$
1,824,132


$
970,731     (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. 24




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##### Table of Contents



VOLUMES,
    SALES PRICES AND OIL AND GAS PRODUCTION EXPENSE
    Years Ended December 31,2006


2005


2004Production:Natural gas (MMcf)United States


35,028



31,944



30,644Canada


18,237



14,825



8,707Total natural gas


53,265



46,769



39,351Crude oil and condensate (MBbl)United States


587



553



689Canada










Total crude oil


587



553



689NGL (MBbl)United States


741



220



128Canada


5



3



1Total NGL


746



223



129Total production (MMcfe)


61,262



51,427



44,257Average Prices (including impact
    of hedges):Natural gas  per McfUnited States

$
5.90


$
5.42


$
3.52Canada


6.35



6.50



4.92Consolidated


6.05



5.76



3.83Crude oil and
    condensate  per BblUnited States

$
59.99


$
50.50


$
33.07Canada










Consolidated


59.99



50.50



33.07NGL  per BblUnited States

$
38.78


$
38.88


$
28.55Canada


49.03



53.91



22.18Consolidated


38.85



39.08



28.52Average Prices (excluding impact
    of hedges):Natural gas  per McfUnited States

$
5.72


$
6.44


$
4.86Canada


5.82



7.05



4.98Consolidated


5.75



6.63



4.89Crude oil and
    condensate  per BblUnited States

$
60.75


$
52.76


$
36.53Canada










Consolidated


60.75



52.76



36.53NGL  per BblUnited States

$
38.78


$
38.88


$
28.55Canada


49.03



53.91



22.18Consolidated


38.85



39.08



28.52Production cost (per Mcfe)(1)United States

$
2.03


$
1.90


$
1.56Canada


1.29



1.12



1.19Consolidated


1.81



1.68



1.48     (1)
    
    Includes production and ad valorem taxes. 25




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##### Table of Contents



DRILLING
    ACTIVITY
    Years Ended December 31,2006


2005


2004Gross


Net


Gross


Net


Gross


NetDevelopment:United StatesProductive


41.0



32.8



43.0



28.4



73.0



55.5Non-productive






















CanadaProductive


162.0



86.6



243.0



134.7



356.0



110.1Non-productive






















Total


203.0



119.4



286.0



163.1



429.0



165.6Exploratory:United StatesProductive


161.0



127.4



97.0



66.7



38.0



34.2Non-productive


7.0



7.0



5.0



5.0



1.0



1.0CanadaProductive


238.0



128.6



240.0



124.4



274.0



209.7Non-productive


















10.0



9.8Total


406.0



263.0



342.0



196.1



323.0



254.7Total:Productive


602.0



375.4



623.0



354.2



741.0



409.5Non-productive


7.0



7.0



5.0



5.0



11.0



10.8Total


609.0



382.4



628.0



359.2



752.0



420.3  26




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##### Table of Contents



ACQUISITION,
    EXPLORATION AND DEVELOPMENT CAPITAL EXPENDITURES
  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



307,635Total

$
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


$
280,0162004Proved acreage

$
11,907


$
2,942


$
14,849Unproved acreage


31,857



7,144



39,001Development costs


45,213



71,094



116,307Exploration costs


25,673



22,631



48,304Total

$
114,650


$
103,811


$
218,461   PRODUCTIVE
    OIL AND GAS WELLS
    As of December 31, 2006Productive WellsNatural Gas


Crude OilGross


Net


Gross


NetUnited States


5,163



1,857.4



390



352.0Canada


1,922



925.2



2



0.1Total


7,085



2,782.6



392



352.1  27




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##### Table of Contents



OIL AND
    GAS ACREAGE
    As of December 31, 2006Developed Acreage


Undeveloped AcreageGross


Net


Gross


NetMichigan


508,717



216,303



138,763



76,597Indiana/Kentucky


34,835



34,823



186,306



183,225Texas


20,847



17,348



826,269



701,307Rockies & other


86,204



81,790



131,313



95,880United States


650,603



350,264



1,282,651



1,057,009Canada


285,523



176,358



328,164



234,282Total


936,126



526,622



1,610,815



1,291,291     2007 Expirations


2008 Expirations


2009 ExpirationsNet





Net Acres with





Net Acres with





Net Acres withUndeveloped Acres


Net Acres


Ext. Opt.


Net Acres


Ext. Opt.


Net Acres


Ext. Opt.Michigan


76,597



17,356



14,140



5,444



3,248



5,354



1,507Indiana/ Kentucky


183,225



52,494



2,956



80,651



74,695



17,317



15,636Texas


701,307



72,626



34,028



84,047



36,390



57,618



15,315Other U.S.


95,880



10,010







4,710







10,012



Canada


234,282



80,295







78,567







26,453



Totals


1,291,291



232,781



51,124



253,419



114,333



116,754



32,458     ITEM 3.
    Legal
    Proceedings   28




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##### Table of Contents



nd
  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


LOW2006Fourth Quarter

$
43.24


$
28.67Third Quarter


39.82



29.04Second Quarter


46.17



29.25First Quarter


52.75



33.062005(1)Fourth Quarter

$
50.20


$
32.94Third Quarter


48.51



38.23Second Quarter


43.89



31.45First Quarter


34.53



22.29     (1)
    
    Stock prices been have adjusted to reflect a
    three-for-two
    stock split effected in the form of a stock dividend in June
    2005.     29




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##### Table of Contents



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


Minimum NumberPart of Publicly


of Shares that MayTotal Number of





Announced


Yet Be PurchasedShares


Average Price Paid


Plans or


Under the Plans orPeriod

Purchased(1)


per Share


Programs(2)


Programs(2)October 1 to October 31, 2006


80


$
34.00







November 1 to November 30,
    2006














December 1 to December 31,
    2006


150


$
38.48







Total


230


$
36.92







     (1)
    
    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
    Amended and Restated 1999 Stock Option and Retention Plan.(2)
    
    The Company does not currently have in place any publicly
    announced, specific plans or programs to purchase equity
    securities. 30




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##### Table of Contents



ITEM 6.
    Selected
    Financial Data    Selected
    Financial Data
  Years Ended December 31,2006


2005


2004


2003


2002(In thousands, except for per share data)Consolidated Statements of
    Income Data:Total revenues

$
390,362


$
310,448


$
179,729


$
140,949


$
121,979Income before income taxes and
    minority interest


131,960



127,974



45,446



28,502



21,333Income from continuing operations


93,719



87,272



31,272



18,505



13,835Income before cumulative effect of
    change in accounting principle


93,719



87,434



31,272



18,505



13,835Net income


93,719



87,434



31,272



16,208



13,835Net income from continuing
    operations  per share(1)Basic

$
1.22


$
1.15


$
0.42


$
0.28


$
0.23Diluted


1.15



1.08



0.41



0.27



0.23Net income before accounting
    change  per share(1)Basic

$
1.22


$
1.15


$
0.42


$
0.28


$
0.23Diluted


1.15



1.08



0.41



0.27



0.23Net income  per
    share(1)Basic

$
1.22


$
1.15


$
0.42


$
0.24


$
0.23Diluted


1.15



1.08



0.41



0.24



0.23Consolidated Statements of Cash
    Flows Data:Net cash provided by (used in):Operating activities

$
220,615


$
144,468


$
84,847


$
49,602


$
41,650Investing activities


(590,454
)


(319,269
)


(205,898
)


(137,744
)


(81,111
)Financing activities


361,311



172,426



134,389



79,369



40,050Capital expenditures

$
597,490


$
329,495


$
215,106


$
137,895


$
86,417Consolidated Balance Sheets
    Data:Working capital (deficit)(2)

$
(28,425
)

$
(98,606
)

$
(17,255
)

$
(30,803
)

$
(23,678
)Properties  net


1,679,280



1,112,002



802,610



604,576



470,078Total assets


1,882,912



1,243,094



888,334



666,934



529,538Long-term debt


919,117



506,039



399,134



249,097



248,493Stockholders equity


575,666



383,615



304,276



241,816



128,905     (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 and a
    three-for-two
    stock split effected in the form of a stock dividend in June
    2005.(2)
    
    Working capital consists of current assets and current
    liabilities, which include derivative contracts at estimated
    fair value and the related deferred income taxes. 31




---



##### Table of Contents



ITEM 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K,
  
    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 accounting policies that represent choices between
    acceptable alternatives
    and/or
    require critical judgments and estimates.
    Results of Operations  an analysis of our
    consolidated results of operations for the three years presented
    in our financial statements. We continue to operate in the
    business of development, exploitation, exploration and
    production of natural gas, NGLs and crude oil. Except to the
    extent that differences between our geographic operating
    segments are material to an understanding of our business as a
    whole, we present this MD&A on a consolidated basis.
    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; 32




---



##### Table of Contents




    production growth; and
    improving the Companys cash flows.        Years Ended December 31,2006


2005


2004Reserve growth(1)


46
%


20
%


17
%Production (MMcfe)


61,262



51,427



44,257Cash flow from operating
    activities (in thousands)

$
220,615


$
144,468


$
84,847Diluted earnings per share

$
1.15


$
1.08


$
0.41     (1)
    
    This ratio is calculated by subtracting adjusted beginning of
    the year proved reserves (December 31, 2005 proved reserves
    less 2006 production) from end of the year proved reserves and
    dividing by beginning of the year proved reserves.      Form S-1
 33




---



##### Table of Contents



FINANCIAL
    RISK MANAGEMENT
      Commodity
    Price Risk
     34




---



##### Table of Contents



Remaining





Price perProduct


Type


Contract Period


Volume


Mcf or Bbl


Fair Value(In thousands)Gas



Swap



Jan 2008-Dec 2008



25,000 Mcfd


$
8.13


$
609Gas



Swap



Jan 2008-Dec 2008



7,500 Mcfd



8.13



183Gas



Swap



Jan 2008-Dec 2008



5,000 Mcfd



8.14



139Gas



Swap



Jan 2008-Dec 2008



2,500 Mcfd



8.15



78Gas



Collar



Jan 2007-Apr 2007



10,000 Mcfd



7.50 - 11.00



1,641Gas



Collar



Jan 2007-Apr 2007



10,000 Mcfd



7.50 - 11.15



1,644Gas



Collar



Jan 2007-Mar 2007



10,000 Mcfd



7.50 - 9.65



1,257Gas



Collar



Jan 2007-Mar 2007



10,000 Mcfd



8.00 - 14.72



1,593Gas



Collar



Jan 2007-Mar 2007



10,000 Mcfd



8.50 - 11.35



2,095Gas



Collar



Jan 2007-Mar 2007



10,000 Mcfd



8.50 - 11.50



2,101Gas



Collar



Jan 2007-Mar 2007



20,000 Mcfd



8.00 - 15.00



3,370Gas



Collar



Jan 2007-Dec 2007



10,000 Mcfd



9.00 - 12.10



8,258Gas



Collar



Jan 2007-Dec 2007



20,000 Mcfd



9.00 - 12.10



16,515Gas



Collar



Apr 2007-Oct 2007



10,000 Mcfd



7.50 - 11.50



2,455Gas



Collar



Apr 2007-Oct 2007



10,000 Mcfd



7.50 - 11.75



2,488Gas



Collar



Apr 2007-Oct 2007



5,000 Mcfd



7.50 - 11.78



1,249Gas



Collar



Apr 2007-Oct 2007



5,000 Mcfd



7.50 - 11.80



1,259Gas



Collar



May 2007-Dec 2007



10,000 Mcfd



7.00 - 9.15



1,724Gas



Collar



May 2007-Dec 2007



10,000 Mcfd



8.00 - 11.20



3,011Gas



Collar



Apr 2007-Mar 2008



10,000 Mcfd



9.00 - 12.00



6,477Gas



Collar



Apr 2007-Mar 2008



10,000 Mcfd



9.00 - 12.05



6,504Gas



Collar



Nov 2007-Mar 2008



10,000 Mcfd



8.00 - 15.00



1,120Gas



Collar



Nov 2007-Mar 2008



10,000 Mcfd



8.00 - 15.65



1,222Oil



Collar



Oct 2006-Jun 2007



1,000 Bbld



50.00 - 85.85



23Oil



Collar



Oct 2006-Jun 2007



1,000 Bbld



50.00 - 85.85



23Oil



Collar



Jul 2007-Dec 2007



500 Bbld



70.00 - 91.10



643Gas



Basis



Jan 2007



1,935 Mcfd







144Gas



Basis



Jan 2007-May 2007



3,973 Mcfd







14Total


$
67,839      35




---



##### Table of Contents



Weighted AvgContract Period

Volume


Price per Mcf


Fair Value(In thousands)Natural Gas Sales ContractsJan 2007-Mar 2007


30,000 Mcf


$
8.05


$
53Natural Gas Financial DerivativesJan 2007-Mar 2007


30,000 Mcf



Floating Price



(53
)Total-net









$
         Interest
    Rate Risk
        Credit
    Risk
  and/or
   36




---



##### Table of Contents



Performance
    Risk
  and/or
  Foreign
    Currency Risk
  U.S.-$ Canadian-to-US
    APPLICATION
    OF CRITICAL ACCOUNTING POLICIES
    Use of
    Estimates
    Oil
    and Gas Properties
  country-by-country unit-of-production
  Ceiling
    Test
  Regulation S-X Rule 4-10,
 37




---



##### Table of Contents



country-by-country
    Oil
    and Gas Reserves
  Regulation S-X Rule 4-10(a)
    Derivative
    Instruments
  Accounting for Derivative Instruments and Hedging Activities.
   38




---



##### Table of Contents



Asset
    Retirement Obligations
  Accounting for
    Asset Retirement Obligations
    Stock-based
    Compensation
  Accounting for
    Stock Issued to Employees
     39




---



##### Table of Contents



Income
    Taxes
      Off-Balance
    Sheet Arrangements
  Regulation S-K.
  RESULTS
    OF OPERATIONS
  Summary
    Financial Data
    Years Ended December 31, 2006, 2005 and 2004
  Years Ended December 31,2006


2005


2004(In thousands)Total operating revenues

$
390,362


$
310,448


$
179,729Total operating expenses


216,692



162,233



120,214Operating income


174,196



149,129



60,693Income from continuing operations


93,719



87,272



31,272Net income


93,719



87,434



31,272     Operating
    Revenues
      Gas, Oil
    and NGL Sales
    40




---



##### Table of Contents



Years Ended December 31,2006


2005


2004Average daily sales volumeNatural gas  McfdUnited States


95,967



87,518



83,727Canada


49,966



40,617



23,789Total


145,933



128,135



107,516Crude oil and
    condensate  BbldUnited States


1,608



1,516



1,882Canada










Total


1,608



1,516



1,882NGL  BbldUnited States


2,029



603



351Canada


14



8



1Total


2,043



611



352Total sales  McfedUnited States


117,783



100,223



97,120Canada


50,057



40,672



23,802Total


167,840



140,895



120,922Natural gas, oil and NGL revenue
    (in thousands)United States

$
270,535


$
209,715


$
134,268Canada


116,005



96,489



42,905Total natural gas, oil and NGL
    revenue

$
386,540


$
306,204


$
177,173Product revenue (in thousands)Natural gas sales

$
322,357


$
269,547


$
150,716Crude oil and condensate sales


35,205



27,947



22,782NGL sales


28,978



8,710



3,675Total product sale revenue

$
386,540


$
306,204


$
177,173Unit prices  including
    impact of hedgesNatural gas  per McfUnited States

$
5.90


$
5.42


$
3.52Canada


6.35



6.50



4.92Consolidated


5.76



5.76



3.83Crude oil and
    condensate  per BblUnited States

$
59.99


$
50.50


$
33.07Canada










Consolidated


59.99



50.50



33.07NGL  per BblUnited States

$
38.78


$
38.88


$
28.55Canada


49.03



53.91



22.18Consolidated


38.85



39.08



28.52    41




---



##### Table of Contents



Other
    Revenues
    Operating
    Expenses
     42




---



##### Table of Contents



Oil and
    Gas Production Expense
  Years Ended December 31,2006


2005


2004(In thousands, except per unit amounts)Production expensesUnited States

$
73,251


$
55,898


$
43,600Canada


21,925



15,306



9,029$
95,176


$
71,204


$
52,629Production expenses 
    per McfeUnited States

$
1.70


$
1.53


$
1.23Canada


1.20



1.03



1.04Consolidated


1.55



1.39



1.19     Start-up clean-up
   43




---



##### Table of Contents



$0.01/Mcfe.
  Production
    and Ad Valorem Taxes
      Depletion,
    Depreciation and Accretion
  Years Ended December 31,2006


2005


2004(In thousands, except per unit amounts)Depletion

$
65,669


$
46,615


$
34,530Depreciation of other fixed assets


11,844



7,599



5,179Accretion


1,287



999



982Total depletion, depreciation and
    accretion

$
78,800


$
55,213


$
40,691Average depletion cost per Mcfe

$
1.07


$
0.91


$
0.78       General
    and Administrative Expense
   44




---



##### Table of Contents



Interest
    Expense
      Income
    Taxes
  Years Ended December 31,2006


2005


2004Income tax provision (in thousands)

$
38,150


$
40,702


$
14,174Effective tax rate


28.9
%


31.8
%


31.2
%      45




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##### Table of Contents



LIQUIDITY,
    CAPITAL RESOURCES AND FINANCIAL POSITION
    Years Ended December 31,2006


2005


2004(In thousands)Net cash flow provided by
    operating activities

$
220,615


$
144,468


$
84,847       Years Ended December 31,2006


2005


2004(In thousands)Cash flow used in investing
    activities:Purchases of property, plant and
    equipment

$
(597,490
)

$
(329,495
)

$
(215,106
)Return of investment from equity
    affiliates


1,923



533



48Proceeds from sale of properties


5,113



9,693



9,160Net cash used for investing
    activities:

$
(590,454
)

$
(319,269
)

$
(205,898
)Net working capital changes
    related to acquisition of property and equipment

$
(48,238
)

$
(31,475
)

$
(16,651
)    46




---



##### Table of Contents



Property
    and Equipment Costs Incurred
  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, gathering and
    administrative


94,109



6,879



100,988Total

$
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, gathering and
    administrative


59,894



21,059



80,953Total

$
242,289


$
118,680


$
360,9692004Proved acreage

$
11,907


$
2,942


$
14,849Unproved acreage


31,857



7,144



39,001Development costs


45,213



71,094



116,307Exploration costs


25,673



22,631



48,304Gas processing, gathering and
    administrative


12,527



769



13,296Total

$
127,177


$
104,580


$
231,757        47




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##### Table of Contents



Years Ended December 31,2006


2005


2004(In thousands)Cash flow provided by financing
    activities:Issuance of debt

$
694,682


$
183,469


$
511,091Repayments of debt


(350,754
)


(13,079
)


(371,178
)Debt issuance costs


(9,213
)


(745
)


(8,023
)Proceeds from the exercise of
    stock options


19,689



2,894



2,499Purchase of treasury stock


(384
)


(95
)


Payment for fractional shares






(18
)


Minority interest contributions


7,291







Net cash provided by financing
    activities:

$
361,311


$
172,426


$
134,389          48




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##### Table of Contents



Years Ended December 31,2006


2005


2004(In thousands)Long-term and short-term debt:Senior secured credit facility

$
421,123


$
357,788


$
180,422Senior subordinated notes


350,000







Convertible subordinated debentures


147,994



147,881



147,769Second lien mortgage notes payable






70,000



70,000Various loans


400



746



1,073Deferred gain  fair
    value interest hedge






117



226Total debt


919,517



576,532



399,490Stockholders equity


575,666



383,615



304,276Total capitalization

$
1,495,183


$
960,147


$
703,766   Form S-1
    Financial
    Position
    
    A $343.0 million increase in our debt used to finance the
    development, exploitation and exploration of our oil and gas
    properties in 2006. In March 2006, we issued our
    $350 million in principal amount Senior Subordinated Notes.
    A $644.8 million increase in our net property, plant and
    equipment balances before 2006 depletion and depreciation
    resulting from capital expenditures for development,
    exploitation and exploration of our oil and gas properties. 49




---



##### Table of Contents




    Our current portion of long-term debt has decreased by
    approximately $70.1 million. Our $70 million in
    principal amount of second lien mortgage notes were repaid in
    March 2006 using a portion of the proceeds from the issuance of
    our senior subordinated notes.
    A $63.5 million and $3.8 million increase in our
    current and deferred derivative assets, respectively, as well as
    a $40.6 million and $4.6 million decrease in our
    current and deferred derivative obligations, respectively,
    reflecting the relatively favorable pricing of our price collars
    as compared to the market price at year-end. Additionally, our
    current deferred income tax asset decreased by
    $14.6 million and our current deferred income tax liability
    increased $21.4 million as a result of changes in our
    derivative valuations.  Contractual
    Obligations and Commercial Commitments
    Payments Due by PeriodLess than


1-3


4-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 Years(In thousands)Long-Term Debt

$
921,523


$
400


$
421,123


$



$
500,000Scheduled Interest Obligations


281,619



28,541



83,250



55,500



114,328Drilling Rig Contracts


112,345



51,128



61,217







Transportation Contracts


105,040



732



24,392



21,017



58,899Purchase Obligations


5,923



5,923











Asset Retirement Obligations


25,206



149



178



119



24,760Operating Lease Obligations


12,446



4,270



8,172



4



Total Obligations

$
1,464,102


$
91,143


$
598,332


$
76,640


$
697,987   
    Long-Term Debt.  As of December 31, 2006,
    we had $421.1 million outstanding under our senior secured
    credit facility, $150 million of contingently convertible
    debentures (before discount), $350 million of senior
    subordinated notes and $0.4 million of other debt. Based
    upon our debt outstanding and interest rates in effect at
    December 31, 2006, we anticipate interest payments to be
    approximately $54.4 million in 2007. We expect to increase
    borrowings under our senior secured credit facility to fund our
    capital spending program throughout 2006. For each additional
    $10 million in borrowings, annual interest payments will
    increase by approximately $0.7 million. If the borrowing
    base under our senior secured credit facility were to be fully
    utilized by year-end 2007 at interest rates in effect at
    December 31, 2006, we estimate that interest payments would
    increase by approximately $6.2 million. If interest rates
    on our December 31, 2006 variable debt balance of
    $421.1 million increase or decrease by one percentage
    point, our annual pretax income will decrease or increase by
    $4.2 million.
    Scheduled Interest Obligations.  As of
    December 31, 2006, we had scheduled interest payments in
    place for $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.
    Drilling Contracts.  We lease drilling rigs
    from third parties for use in our development and exploration
    programs. Each of the contracts requires payment of the
    specified day rate for the entire lease term regardless of our
    utilization of the drilling rigs.
    Transportation Contracts.  We entered into firm
    transportation contracts with pipelines during 2006. Under the
    contracts, 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,
    2006, we were under contract to purchase goods and services for
    completion of our gas processing plant units in Texas. Total
    remaining obligations for construction and 50




---



##### Table of Contents



completion of the gas processing units were $5.9 million
    including liabilities of $0.5 million recorded at
    December 31, 2006 for goods received and work performed.  
    Asset Retirement Obligations.  Our liabilities
    include the fair value, $25.1 million, of asset retirement
    obligations that result from the acquisition, construction or
    development and the normal operation of our long-lived assets.
    Operating Leases.  We lease office buildings
    and other property under operating leases. Our operating lease
    obligations include $4.6 million of future lease payments
    to an affiliate of Mercury, which is owned by members of the
    Darden family.    Amounts of Commitments Expiration per PeriodTotal


Less than


1-3


4-5


More thanCommercial Commitments

Committed


1 Year


Years


Years


5 Years(In thousands)Standby letters of credit

$
559


$
559


$



$



$
   
    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. All letters have an annual renewal
    option.  Forward-Looking
    Information
    
    changes in general economic conditions;
    fluctuations in natural gas and crude oil prices;
    failure or delays in achieving expected production from natural
    gas and crude oil exploration and development projects;
    uncertainties inherent in estimates of natural gas and crude oil
    reserves and predicting natural gas and crude oil reservoir
    performance;
    effects of hedging natural gas and crude oil prices;
    competitive conditions in our industry;
    actions taken by third-party operators, processors and
    transporters;
    changes in the availability and cost of capital;
    delays in obtaining oil field 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; 51




---



##### Table of Contents




    the effects of existing or future litigation; and
    certain factors discussed elsewhere in this annual report.    RECENTLY
    ISSUED ACCOUNTING STANDARDS
  Accounting for Certain Hybrid
    Financial Instruments  an amendment of FASB
    Statements No. 133 and 140
  Fair Value Measurements
  Accounting for Uncertainty in
    Income Taxes an interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
  The Fair Value Option for Financial
    Assets and Financial Liabilities  Including an
    amendment of FASB Statement No. 115.
    ITEM 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   52




---



##### Table of Contents



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


54Report of
    Independent Registered Public Accounting Firm


55Consolidated
    Balance Sheets as of December 31, 2006 and 2005


56Consolidated
    Statements of Income and Comprehensive Income for the Years
    Ended December 31, 2006, 2005 and 2004


57Consolidated
    Statements of Stockholders Equity for the Years ended
    December 31, 2006, 2005 and 2004


58Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004


59Notes to
    Consolidated Financial Statements for the Years Ended
    December 31, 2006, 2005 and 2004


60  53




---



##### Table of Contents



MANAGEMENTS
    STATEMENT OF RESPONSIBILITIES  
              /s/  Glenn
    DardenPresident
    and Chief Executive Officer

/s/  Philip
    CookSenior
    Vice President  Chief Financial Officer     54




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Share-Based Payment.
  Internal Control 
    Integrated Framework
  Deloitte &
    Touche LLP
    55




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.CONSOLIDATED BALANCE SHEETSAs of December 31, 2006 and 2005
    In thousands, except for share data
  2006


2005ASSETSCurrent assetsCash and cash equivalents

$
5,281


$
14,318Accounts receivable, net of
    allowance of $1,113 and $425


76,521



76,121Current derivative assets


64,086



603Current deferred income taxes






14,614Other current assets


25,076



7,928Total current assets


170,964



113,584Investments in and advances to
    equity affiliates


7,434



8,353Property, plant and equipmentOil and gas properties, full-cost
    methodSubject to depletion


1,560,459



1,079,662Unevaluated costs


191,665



132,090Pipelines and processing facilities


225,771



139,554Construction in progress


31,613



17,842General property and equipment


17,183



14,086Accumulated depletion and
    depreciation


(347,411
)


(271,232
)Property, plant and
    equipment  net


1,679,280



1,112,002Non-current derivative assets


3,753



Other assets


21,481



9,155$
1,882,912


$
1,243,094LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt

$
400


$
70,493Accounts payable


109,914



48,409Accrued liabilities


67,697



52,656Derivative obligations






40,632Current deferred income taxes


21,378



Total current liabilities


199,389



212,190Long-term liabilitiesLong-term debt


919,117



506,039Non-current derivative obligations






4,631Asset retirement obligations


25,058



20,891Deferred income taxes


156,251



115,728Commitments and contingencies
    (Note 13)






Total long-term liabilities


1,100,426



647,289Minority interest


7,431



Stockholders equityPreferred stock, $0.01 par
    value, 10,000,000 shares authorized, 0 and 1 share
    issued as of December 31, 2006 and 2005, respectively






Common stock, $0.01 par value,
    200,000,000 and 100,000,000 shares authorized, and
    80,181,593 and 78,650,110 shares issued as of
    December 31, 2006 and 2005, respectively


802



787Paid in capital in excess of par
    value


238,063



211,843Treasury stock of 2,579,671 and
    2,571,069 shares as of December 31, 2006 and 2005,
    respectively


(10,737
)


(10,353
)Accumulated other comprehensive
    income (loss)


60,099



(12,382
)Retained earnings


287,439



193,720Total stockholders equity


575,666



383,615$
1,882,912


$
1,243,094    56




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.CONSOLIDATED STATEMENTS OF INCOME AND
    COMPREHENSIVE INCOMEFor the Years Ended December 31, 2006, 2005 and 2004
    In thousands, except for per share data
  2006


2005


2004RevenuesNatural gas, NGL and crude oil
    sales

$
386,540


$
306,204


$
177,173Other revenue


3,822



4,244



2,556Total revenues


390,362



310,448



179,729ExpensesOil and gas production costs


95,176



71,204



52,629Production and ad valorem taxes


15,619



15,068



12,557Other operating costs


1,461



1,661



1,250Depletion, depreciation and
    accretion


78,800



55,213



40,691Provision for doubtful accounts


700



108



153General and administrative


24,936



18,979



12,934Total expenses


216,692



162,233



120,214Income from equity affiliates


526



914



1,178Operating income


174,196



149,129



60,693Other
    income-net


(1,825
)


(585
)


(415
)Interest expense


44,061



21,740



15,662Income from continuing operations
    before income taxes and minority interest


131,960



127,974



45,446Income tax expense


38,150



40,702



14,174Minority interest expense, net of
    income tax


91







Income from continuing operations


93,719



87,272



31,272Discontinued
    operations  gain from discontinued drilling
    operations net of income tax of $86






162



Net income

$
93,719


$
87,434


$
31,272Other comprehensive
    income  net of taxesNet derivative settlements


(9,707
)


26,892



26,875Net change in derivative fair value


83,410



(49,743
)


(5,174
)Foreign currency translation
    adjustment


(1,222
)


3,707



2,744Comprehensive income

$
166,200


$
68,290


$
55,717Basic net income per common share:Income from continuing operations

$
1.22


$
1.15


$
0.42Discontinued operations










Net income

$
1.22


$
1.15


$
0.42Diluted net income per common
    share:Income from continuing operations

$
1.15


$
1.08


$
0.41Discontinued operations










Net income

$
1.15


$
1.08


$
0.41Basic weighted average shares
    outstanding


76,707



75,716



74,654Diluted weighted average shares
    outstanding


83,133



82,455



77,015    57




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITYFor the Years Ended December 31, 2006, 2005 and 2004
    In thousands, except for share data
  2006


2005


2004Preferred stock, $0.01 par
    value, 10,000,000 shares authorizedBalance at end of year: 0, 1 and
    1 share issued at December 31, 2006, 2005 and 2004,
    respectively

$



$



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


787



778



768Issuance of common
    stock  restricted stock


4



1



Issuance of common
    stock  stock options


11



8



10Balance at end of year: 80,181,593,
    78,650,110 and 77,752,151 shares issued at
    December 31, 2006, 2005 and 2004, respectively


802



787



778Paid in capital in excess of par
    valueBalance at beginning of year


211,843



200,690



193,998Treasury stock reissued










147Stock options exercised


19,678



2,885



2,302Stock-based compensation expense
    recognized


6,542



1,732



Tax benefit related to stock
    options exercised






6,536



4,243Balance at end of year


238,063



211,843



200,690Treasury stock, at costBalance at beginning of year


(10,353
)


(10,258
)


(10,299
)(Acquisition) reissuance of
    treasury stock, net


(384
)


(95
)


41Balance at end of year: 2,579,671,
    2,571,069 and 2,568,611 shares at December 31, 2006,
    2005, and 2004, respectively


(10,737
)


(10,353
)


(10,258
)Accumulated other comprehensive lossDeferred losses on hedge derivativesBalance at beginning of year


(28,509
)


(5,658
)


(27,359
)Net derivative settlements


(9,707
)


26,892



26,875Net change in derivative fair value


83,410



(49,743
)


(5,174
)Balance at end of year


45,194



(28,509
)


(5,658
)Deferred foreign exchange adjustmentBalance at beginning of year


16,127



12,420



9,676Foreign currency translation
    adjustment


(1,222
)


3,707



2,744Balance at end of year


14,905



16,127



12,420Total accumulated other
    comprehensive income (loss)


60,099



(12,382
)


6,762Retained earningsBalance at beginning of year


193,720



106,304



75,032Payment for fractional shares






(18
)


Net income


93,719



87,434



31,272Balance at end of year


287,439



193,720



106,304Total stockholders equity

$
575,666


$
383,615


$
304,276    58




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    For the Years End December 31, 2006, 2005 and 2004
    In thousands  2006


2005


2004Operating activities:Net income

$
93,719


$
87,434


$
31,272Charges and credits to net income
    not affecting cashDepletion, depreciation and
    amortization


78,800



55,213



40,691Deferred income taxes


37,877



40,298



12,989Non-cash compensation


6,546



1,732



Amortization of deferred loan costs


2,070



1,429



1,249Income from equity affiliates


(526
)


(914
)


(1,178
)Minority interest expense


91







Non-cash (gain) loss from hedging
    activities


1



(462
)


(786
)Provision for doubtful accounts


700



108



153Other


414



157



91Changes in assets and liabilitiesAccounts receivable


(1,100
)


(38,192
)


(11,715
)Inventory, prepaid expenses and
    other assets


(26,066
)


(1,919
)


4,413Accounts payable


15,193



1,963



2,220Accrued and other liabilities


12,896



(2,379
)


5,448Net cash provided by operating
    activities


220,615



144,468



84,847Investing activities:Purchases of property, plant and
    equipment


(597,490
)


(329,495
)


(215,106
)Return of investment from equity
    affiliates


1,923



533



48Proceeds from sale of properties


5,113



9,693



9,160Net cash used for investing
    activities


(590,454
)


(319,269
)


(205,898
)Financing activities:Issuance of debt


694,682



183,469



511,091Repayments of debt


(350,754
)


(13,079
)


(371,178
)Debt issuance costs


(9,213
)


(745
)


(8,023
)Proceeds from exercise of stock
    options


19,689



2,894



2,499Purchase of treasury stock


(384
)


(95
)


Payment for fractional shares






(18
)


Minority interest contributions


7,291







Net cash provided by financing
    activities


361,311



172,426



134,389Effect of exchange rates on cash


(509
)


746



(1,507
)Net (decrease) increase in cash
    and equivalents


(9,037
)


(1,629
)


11,831Cash and equivalents at beginning
    of period


14,318



15,947



4,116Cash and equivalents at end of
    period

$
5,281


$
14,318


$
15,947    59




---



##### Table of Contents



QUICKSILVER
    RESOURCES INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS



QUICKSILVER
    RESOURCES INC.



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)

For The Years Ended December 31, 2006, 2005 and
    2004 1.
    NATURE OF
    OPERATIONS      2.
    SIGNIFICANT
    ACCOUNTING POLICIES  Basis
    of Presentation
    Use of
    Estimates
    Cash
    and Cash Equivalents
   60




---



##### Table of Contents



Accounts
    Receivable
  and/or 30-60 days.
  Hedging
  Accounting for Derivative Instruments and
    Hedging Activities Accounting for Certain Derivative Instruments and Certain
    Hedging Activities
      Parts
    and supplies
  first-in,
  Investments
    in Equity Affiliates
    Property,
    Plant, and Equipment
    unit-of-production
 61




---



##### Table of Contents



Revenue
    Recognition
    Environmental
    Compliance and Remediation
    Income
    Taxes
    Disclosure
    of Fair Value of Financial Instruments
    Minority
    Interest
   62




---



##### Table of Contents



Foreign
    Currency Translation
    Earnings
    per Share
   63




---



##### Table of Contents



Years Ended December 31,2006


2005


2004(In thousands, except per share data)Income from continuing operations

$
93,719


$
87,272


$
31,272Income from discontinued
    operations, net of income taxes






162



Net income


93,719



87,434



31,272Impact of assumed
    conversions  interest on 1.875% contingently
    convertible debentures, net of income taxes


1,901



1,901



317Income available to stockholders
    assuming conversion of contingently convertible debentures

$
95,620


$
89,335


$
31,589Weighted average common
    shares  basic


76,707



75,716



74,654Effect of dilutive securities:Employee stock options


1,110



1,718



1,544Employee stock awards


408



113



Contingently convertible debentures


4,908



4,908



817Weighted average common
    shares  diluted


83,133



82,455



77,015Basic:Income from continuing operations

$
1.22


$
1.15


$
0.42Income from discontinued
    operations, net of income taxes










Net income

$
1.22


$
1.15


$
0.42Diluted:Income from continuing operations

$
1.15


$
1.08


$
0.41Income from discontinued
    operations, net of income taxes










Net income

$
1.15


$
1.08


$
0.41   Adoption
    of SFAS No. 123 (revised 2004)
  Share-Based Payment Accounting for
    Stock Issued to Employees
   64




---



##### Table of Contents



Accounting for Stock-based Compensation
  Years Ended December 31,2005


2004(In thousands, except per share data)Net income

$
87,434


$
31,272Deduct: Total stock-based
    compensation expense determined under fair value-based method
    for stock option awards, net of related income tax effect


(11,359
)


(4,524
)Pro forma net income


76,075



26,748Impact of assumed
    conversions  1.875% contingently convertible
    debentures, net of income taxes


1,901



317Pro forma net income available to
    stockholders assuming conversion of contingently convertible
    debentures

$
77,976


$
27,065As reportedBasic net income per common share

$
1.15


$
0.42Diluted net income per common share

$
1.08


$
0.41Pro formaBasic net income per common share

$
1.00


$
0.36Diluted net income per common share

$
0.95


$
0.35    65




---



##### Table of Contents



Recently
    Issued Accounting Standards
  Accounting for Certain Hybrid
    Financial Instruments  an amendment of FASB
    Statements No. 133 and 140
  Fair Value Measurements
  Accounting for Uncertainty in
    Income Taxes an interpretation of FASB Statement
    No. 109 Accounting for Income Taxes.
  The Fair Value Option for Financial
    Assets and Financial Liabilities  Including an
    amendment of FASB Statement No. 115.
    3.
    HEDGING   66




---



##### Table of Contents



As of December 31,2006


2005(In thousands)Derivative assets:Fixed price sale commitments

$
53


$
638Natural gas basis swaps


159



Crude oil financial collars


689



Natural gas financial swaps


1,009



Natural gas financial collars


65,982



$
67,892


$
638Derivative liabilities:Natural gas financial collars

$



$
44,480Floating price natural gas
    financial swaps


53



463Crude oil financial collars






320Fixed price sale commitments






35$
53


$
45,298    67




---



##### Table of Contents



4.
    FINANCIAL
    INSTRUMENTS      Commodity
    Price Risk
     68




---



##### Table of Contents



Weighted AvgPrice perProduct

Type

Contract Period

Volume


Mcf or Bbl


Fair Value(In thousands)Gas

Swap

Jan 2008-Dec 2008


25,000 Mcfd


$
8.13


$
609Gas

Swap

Jan 2008-Dec 2008


7,500 Mcfd



8.13



183Gas

Swap

Jan 2008-Dec 2008


5,000 Mcfd



8.14



139Gas

Swap

Jan 2008-Dec 2008


2,500 Mcfd



8.15



78Gas

Collar

Jan 2007-Apr 2007


10,000 Mcfd



7.50 - 11.00



1,641Gas

Collar

Jan 2007-Apr 2007


10,000 Mcfd



7.50 - 11.15



1,644Gas

Collar

Jan 2007-Mar 2007


10,000 Mcfd



7.50 - 9.65



1,257Gas

Collar

Jan 2007-Mar 2007


10,000 Mcfd



8.00 - 14.72



1,593Gas

Collar

Jan 2007-Mar 2007


10,000 Mcfd



8.50 - 11.35



2,095Gas

Collar

Jan 2007-Mar 2007


10,000 Mcfd



8.50 - 11.50



2,101Gas

Collar

Jan 2007-Mar 2007


20,000 Mcfd



8.00 - 15.00



3,370Gas

Collar

Jan 2007-Dec 2007


10,000 Mcfd



9.00 - 12.10



8,258Gas

Collar

Jan 2007-Dec 2007


20,000 Mcfd



9.00 - 12.10



16,515Gas

Collar

Apr 2007-Oct 2007


10,000 Mcfd



7.50 - 11.50



2,455Gas

Collar

Apr 2007-Oct 2007


10,000 Mcfd



7.50 - 11.75



2,488Gas

Collar

Apr 2007-Oct 2007


5,000 Mcfd



7.50 - 11.78



1,248Gas

Collar

Apr 2007-Oct 2007


5,000 Mcfd



7.50 - 11.80



1,259Gas

Collar

May 2007-Dec 2007


10,000 Mcfd



7.00 - 9.15



1,724Gas

Collar

May 2007-Dec 2007


10,000 Mcfd



8.00 - 11.20



3,011Gas

Collar

Apr 2007-Mar 2008


10,000 Mcfd



9.00 - 12.00



6,477Gas

Collar

Apr 2007-Mar 2008


10,000 Mcfd



9.00 - 12.05



6,504Gas

Collar

Nov 2007-Mar 2008


10,000 Mcfd



8.00 - 15.00



1,120Gas

Collar

Nov 2007-Mar 2008


10,000 Mcfd



8.00 - 15.65



1,222Oil

Collar

Oct 2006-Jun 2007


1,000 Bbld



50.00 - 85.85



23Oil

Collar

Oct 2006-Jun 2007


1,000 Bbld



50.00 - 85.85



23Oil

Collar

Jul 2007-Dec 2007


500 Bbld



70.00 - 91.10



643Gas

Basis

Jan 2007


1,935 Mcfd







145Gas

Basis

Jan 2007-May 2007


3,973 Mcfd







14Total


$
67,839      69




---



##### Table of Contents



Weighted AvgContract Period

Volume


Price per Mcf

Fair Value(In thousands)Natural Gas Sales ContractsJan 2007  Mar 2007


30,000 Mcf


$8.05

$
53Natural Gas Financial DerivativesJan 2007  Mar 2007


30,000 Mcf


Floating Price


(53
)Total-net







$
         Interest
    Rate Risk
      Credit
    Risk
   70




---



##### Table of Contents



and/or
    Performance
    Risk
  and/or
  Foreign
    Currency Risk
  U.S.-$ Canadian-to-US
  5.
    ACCOUNTS
    RECEIVABLE    As of December 31,2006


2005(In thousands)Accrued production receivables

$
47,036


$
48,392Joint interest receivables


29,155



26,430Other receivables


1,443



1,724Allowance for bad debts


(1,113
)


(425
)$
76,521


$
76,121   6.
    OTHER
    CURRENT ASSETS    As of December 31,2006


2005(In thousands)Parts and supplies

$
22,593


$
6,137Prepaid expenses and deposits


2,483



1,791$
25,076


$
7,928  71




---



##### Table of Contents



7.
    PROPERTY,
    PLANT AND EQUIPMENT    As of December 31,2006


2005(In thousands)Oil and gas propertiesSubject to depletion

$
1,560,459


$
1,079,662Unevaluated costs


191,665



132,090Accumulated depletion


(308,065
)


(243,094
)Net oil and gas properties


1,444,059



968,658Other equipmentPipelines and processing facilities


225,771



139,554General properties


17,183



14,086Construction in progress


31,613



17,842Accumulated depreciation


(39,346
)


(28,138
)Net other property and equipment


235,221



143,344Property and equipment, net of
    accumulated depreciation and depletion

$
1,679,280


$
1,112,002   Unevaluated
    Natural Gas and Crude Oil Properties Excluded From
    Depletion
    December 31, 2006 Costs Incurred During


December 31, 2005 Costs Incurred During2006


2005


2004


Prior


Total


2005


2004


2003


Prior


Total(In thousands)


(In thousands)Acquisition costs

$
46,512


$
42,030


$
34,994


$
28,181


$
151,717


$
44,069


$
39,711


$
27,168


$
4,641


$
115,589Exploration costs


23,569



7,563



8,658



158



39,948



7,559



8,658



284







16,501Total

$
70,081


$
49,593


$
43,652


$
28,339


$
191,665


$
51,628


$
48,369


$
27,452


$
4,641


$
132,090     Capitalized
    Costs
     72




---



##### Table of Contents



8.
    OTHER
    ASSETS    As of December 31,2006


2005(In thousands)Deferred financing costs

$
23,532


$
15,763Less accumulated amortization


(7,946
)


(7,320
)Net deferred financing costs


15,586



8,443Other


5,895



712$
21,481


$
9,155     9.
    ACCRUED
    LIABILITIES    As of December 31,2006


2005(In thousands)Accrued capital expenditures

$
33,959


$
32,033Prepayments from partners


6,642



2,110Accrued operating expenses


7,527



8,143Revenue payable


6,174



5,288Accrued production and property
    taxes


1,630



877Accrued product purchases


2,783



1,192Interest payable


7,494



1,355Environmental liabilities


749



1,301Other


739



357$
67,697


$
52,656  73




---



##### Table of Contents



10.
    NOTES PAYABLE
    AND LONG-TERM DEBT    As of December 31,2006


2005(In thousands)Senior secured credit facility

$
421,123


$
357,788Senior subordinated notes


350,000



Contingently convertible
    debentures, net of unamortized discount of $2,006 and $2,119


147,994



147,881Second lien mortgage notes payable






70,000Other loans


400



746Deferred gain  fair
    value interest hedge






117919,517



576,532Less current maturities


(400
)


(70,493
)$
919,117


$
506,039     2007

$
4002008


2009


421,1232010


2011


Thereafter


500,000$
921,523      74




---



##### Table of Contents



11.
    ASSET
    RETIREMENT OBLIGATIONS   75




---



##### Table of Contents



2006


2005(In thousands)Beginning asset retirement
    obligations

$
20,965


$
18,471Additional liability incurred


5,399



2,123Accretion expense


1,287



999Change in estimates


30



(581
)Sale of properties


(2,439
)


(109
)Asset retirement costs incurred


(174
)


(125
)Loss on settlement of liability


158



39Currency translation adjustment


(20
)


148Ending asset retirement obligations

$
25,206


$
20,965     12.
    INCOME
    TAXES  Accounting for Income Taxes Accounting for Income Taxes 
    Special Areas
   76




---



##### Table of Contents



Accounting for Income Taxes
        2006


2005(In thousands)CurrentDeferred tax assetDeferred tax benefit on cash flow
    hedge losses

$



$
14,614Deferred tax liabilitiesDeferred tax liability on cash
    flow hedge gains

$
21,378


$
Non-currentDeferred tax assetsDeferred tax benefit on deferred
    compensation expense

$
2,224


$
Deferred tax benefit on cash flow
    hedge losses






1,677Net operating loss carry forwards


41,220



30,176Other


219



130Total deferred tax assets


43,663



31,983Deferred tax liabilitiesProperty, plant, and equipment


192,921



144,628Deferred tax liability on cash
    flow hedge gains


1,243



Deferred tax liability on
    convertible debenture interest


5,750



2,997Deferred tax liability on
    discontinued operations






86Total deferred tax liabilities


199,914



147,711Net deferred tax liabilities

$
156,251


$
115,728  77




---



##### Table of Contents



2006


2005


2004(In thousands)Current state income tax expense

$
11


$
51


$
70Current federal income tax expense






(23
)


814Current foreign income tax expense


262



462



301Total current income tax expense


273



490



1,185Deferred state income tax expense


1,600







Deferred federal income tax expense


27,501



26,312



8,756Deferred foreign income tax expense


8,776



13,900



4,233Total deferred income tax expense


37,877



40,212



12,989Total

$
38,150


$
40,702


$
14,174Deferred federal income tax
    expense on discontinued operations

$



$
86


$
     2006


2005


2004U.S. federal statutory tax
    rate


35.00
%


35.00
%


35.00
%Dividend income from Canadian
    subsidiary










1.79
%Permanent differences


.16
%


.11
%


.12
%State income taxes net of federal
    deduction


.80
%


.03
%


.10
%Foreign income taxes


(6.29
)%


(3.36
)%


(5.77
)%Other


(.74
)%


.02
%


(.05
)%Effective income tax rate


28.93
%


31.80
%


31.19
%     2005


2004(In thousands)Income tax benefit recognized on
    employee stock option exercises

$
6,536


$
4,243      78




---



##### Table of Contents



13.
    COMMITMENTS
    AND CONTINGENCIES    2007

$
4,2702008


3,9882009


3,5862010


598Thereafter


4Total lease commitments

$
12,446           2007

$
51,1282008


29,3772009


29,6272010


2,213$
112,345    79




---



##### Table of Contents



2007

$
7322008


4,3922009


9,5062010


10,4942011


10,494Thereafter


69,422$
105,040     14.
    MINORITY
    INTEREST      15.
    EMPLOYEE
    BENEFITS   80




---



##### Table of Contents



16.
    STOCKHOLDERS
    EQUITY  Common
    Stock, Preferred Stock and Treasury Stock
      Common


TreasuryShares Issued


Shares HeldOpening balance January 1,
    2004


76,779,137



2,578,904Stock options exercised


973,014



(10,293
)Balance at December 31, 2004


77,752,151



2,568,611Stock options exercised


747,988



Restricted stock activity


149,971



2,458Balance at December 31, 2005


78,650,110



2,571,069Stock options exercised


1,106,095



Restricted stock activity


425,388



8,602Balance at December 31, 2006


80,181,593



2,579,671   Stockholder
    Rights Plan
       81




---



##### Table of Contents



Employee
    Stock Plans
  1999 and
    2004 Plans
        2006
    Equity Plan
   82




---



##### Table of Contents



Stock
    Options
    2006


2005


2004Wtd Avg





Wtd Avg





Wtd AvgExercise





Exercise





ExerciseShares


Price


Shares


Price


Shares


PriceOutstanding at beginning of year


2,840,695


$
17.13



3,653,755


$
14.34



1,888,068


$
2.97Granted


2,401



44.39



16,100



24.90



2,766,744



17.99Exercised


(1,106,095
)


17.80



(747,988
)


3.87



(983,307
)


2.31Cancelled


(47,811
)


12.77



(81,172
)


12.64



(17,750
)


11.01Outstanding at the end of year


1,689,190


$
16.84



2,840,695


$
17.13



3,653,755


$
14.34Exercisable at end of year


1,271,768


$
18.51



2,190,679


$
18.65



874,745


$
3.30Vested or expected to vest at the
    end of the year


1,656,776


$
16.76Weighted average fair value of
    options granted





$
24.99






$
17.67






$
6.62       2006

2005

2004Wtd avg grant date

Jan 3, 2006

Jan 14, 2005

Jul 6, 2004Risk-free interest rate

4.35%

4.0%

2.7%Expected life (in years)

10.0

7.0

4.1Expected volatility

37.3%

38.2%

45.4%Dividend yield





     Options Outstanding


Options ExercisableWtd Avg


Wtd Avg





Wtd AvgRemaining


Exercise





ExerciseRange of Exercisable Prices

Shares


Contractual Life


Price


Shares


Price$    0
    -  6.00


26,501



0.1


$
5.67



26,501


$
5.676.01 - 12.00


642,061



2.8



10.58



247,924



9.9012.01 - 18.00


17,307



7.4



15.83



17,307



15.8318.01 - 24.00


998,464



2.1



21.07



975,579



21.0124.01 - 45.00


4,857



8.6



38.68



4,457



38.171,689,190



2.4


$
16.84



1,271,768


$
18.51    83




---



##### Table of Contents



Restricted
    Stock
    2006


2005Wtd Avg Grant Date





Wtd Avg ExerciseShares


Fair Value


Shares


PriceOutstanding at beginning of year


133,858


$
33.73






$
Granted


467,215



39.10



162,217



33.64Vested


(47,673
)


33.84



(16,242
)


33.23Canceled


(41,527
)


37.11



(12,117
)


33.15Outstanding at the end of year


511,873


$
38.35



133,858


$
33.73     17.
    OTHER
    REVENUE    For the Years Ended December 31,2006


2005


2004(In thousands)Tax credits

$
572


$
1,229


$
221Marketing


318



(137
)


928Ineffective cash flow hedges


23







Processing and gathering


2,909



3,152



1,407$
3,822


$
4,244


$
2,556     18.
    DISCONTINUED
    DRILLING OPERATIONS    19.
    CONDENSED
    CONSOLIDATING FINANCIAL INFORMATION   84




---



##### Table of Contents



Condensed
    Consolidating Balance Sheets
  December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)ASSETSCurrent assets

$
165,061


$
250,928


$
78,531


$
(323,556
)

$
170,964Property and equipment, net


1,043,037



87,025



549,218







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


510,548



131,750







(634,864
)


7,434Other assets


22,397







2,837







25,234Total assets

$
1,741,043


$
469,703


$
630,586


$
(958,420
)

$
1,882,912LIABILITIESCurrent liabilities

$
368,073


$
91,414


$
63,458


$
(323,556
)

$
199,389Long-term liabilities


797,304



24,577



278,545







1,100,426Minority interest










7,431







7,431Stockholders equity


575,666



353,712



281,152



(634,864
)


575,666Total liabilities and
    stockholders equity

$
1,741,043


$
469,703


$
630,586


$
(958,420
)

$
1,882,912   December 31, 2005QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)ASSETSCurrent assets

$
101,587


$
201,458


$
62,105


$
(251,566
)

$
113,584Property and equipment, net


638,355



141,193



332,454







1,112,002Investments in subsidiaries (equity
    method)


290,951



8,932







(291,530
)


8,353Other assets


8,000







1,155







9,155Total assets

$
1,038,893


$
351,583


$
395,714


$
(543,096
)

$
1,243,094LIABILITIESCurrent liabilities

$
247,065


$
124,780


$
91,911


$
(251,566
)

$
212,190Long-term liabilities


408,213



24,542



214,534







647,289Stockholders equity


383,615



202,261



89,269



(291,530
)


383,615Total liabilities and
    stockholders equity

$
1,038,893


$
351,583


$
395,714


$
(543,096
)

$
1,243,094  85




---



##### Table of Contents



Condensed
    Consolidating Statement of Income
  Year Ended December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Revenues

$
233,757


$
43,559


$
116,978


$
(3,932
)

$
390,362Operating expenses


148,613



18,210



53,801



(3,932
)


216,692Income from equity affiliates


17



509











526Income from operations


85,161



25,858



63,177







174,196Equity in net earnings of
    subsidiaries


58,543











(58,543
)


Interest expense and other


29,766



(2
)


12,563







42,327Income tax provision


20,219



9,051



8,880







38,150Net income

$
93,719


$
16,809


$
41,734


$
(58,543
)

$
93,719   Year Ended December 31, 2005QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Revenues

$
165,194


$
52,678


$
97,044


$
(4,468
)

$
310,448Operating expenses


111,552



18,243



36,906



(4,468
)


162,233Income from equity affiliates


62



852











914Income from operations


53,704



35,287



60,138







149,129Equity in net earnings of
    subsidiaries


61,716











(61,716
)


Interest expense and other


14,174



(43
)


7,024







21,155Income tax provision


13,974



12,366



14,362







40,702Net income from continuing
    operations


87,272



22,964



38,752



(61,716
)


87,272Gain from discontinued operations,
    net


162















162Net income

$
87,434



22,964



38,752



(61,716
)

$
87,434   86




---



##### Table of Contents



Year Ended December 31, 2004QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Revenues

$
100,126


$
38,099


$
42,925


$
(1,421
)

$
179,729Operating expenses


87,179



13,641



20,815



(1,421
)


120,214Income from equity affiliates


75



1,103











1,178Income from operations


13,022



25,561



22,110







60,693Equity in net earnings of
    subsidiaries


32,539











(32,539
)


Interest expense and other


13,600



(14
)


1,661







15,247Income tax provision


689



8,951



4,534







14,174Net income

$
31,272


$
16,624


$
15,915


$
(32,539
)

$
31,272   Condensed
    Consolidating Statements of Cash Flows
  Year Ended December 31, 2006QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Cash flow provided by operations

$
187,391


$
(37,522
)

$
70,746


$



$
220,615Cash flow used for investing
    activities


(504,044
)


(84,675
)


(252,010
)


250,275



(590,454
)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 & equivalents


(8,907
)


4,410



(4,540
)






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


8,990



(4,410
)


9,738







14,318Cash & equivalents at end
    of period

$
83


$



$
5,198


$



$
5,281   Year Ended December 31, 2005QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Cash flow provided by operations

$
58,243


$
40,201


$
46,024


$



$
144,468Cash flow used for investing
    activities


(181,614
)


(45,691
)


(91,964
)






(319,269
)Cash flow provided by financing
    activities


121,933







50,493







172,426Effect of exchange rates on cash










746







746Net increase (decrease) in
    cash & equivalents


(1,438
)


(5,490
)


5,299







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


10,428



1,080



4,439







15,947Cash & equivalents at end
    of period

$
8,990


$
(4,410
)

$
9,738


$



$
14,318  87




---



##### Table of Contents



Year Ended December 31, 2004QuicksilverQuicksilver


Guarantor


Non-Guarantor





Resources Inc.Resources Inc.


Subsidiaries


Subsidiaries


Eliminations


Consolidated(Amounts in thousands)Cash flow provided by operations

$
48,415


$
9,749


$
26,683


$



$
84,847Cash flow used for investing
    activities


(103,201
)


(9,071
)


(93,626
)






(205,898
)Cash flow provided by financing
    activities


62,549







71,840







134,389Effect of exchange rates on cash










(1,507
)






(1,507
)Net increase (decrease) in
    cash & equivalents


7,763



678



3,390







11,831Cash & equivalents at
    beginning of period


2,665



402



1,049







4,116Cash & equivalents at end
    of period

$
10,428


$
1,080


$
4,439


$



$
15,947   20.
    SUPPLEMENTAL
    CASH FLOW INFORMATION    For the Years Ended December 31,2006


2005


2004(In thousands)Interest

$
37,627


$
21,466


$
14,742Income taxes


3



888



72     For the Years Ended December 31,2006


2005


2004(In thousands)Noncash changes in working capital
    related to acquisition of property and equipment  net

$
(48,238
)

$
(31,475
)

$
(16,651
)Tax benefit recognized on employee
    stock option exercises






6,536



4,243Treasury stock (acquired) reissued:10,293 shares for
    non-employee director stock option exercise










189   21.
    RELATED
    PARTY TRANSACTIONS     88




---



##### Table of Contents



22.
    SEGMENT
    INFORMATION    89




---



##### Table of Contents



United States


Canada


Corporate


Consolidated2006Revenues

$
273,636


$
116,726


$



$
390,362Depletion, depreciation and
    accretion


48,808



29,225



767



78,800Operating income (loss)


136,694



63,906



(26,404
)


174,196Property, plant and
    equipment  net


1,258,807



417,199



3,274



1,679,280Property and equipment costs
    incurred


525,833



118,028



1,866



645,7272005Revenues

$
212,704


$
97,744


$



$
310,448Depletion, depreciation and
    accretion


35,509



19,089



615



55,213Operating income (loss)


106,730



61,992



(19,702
)


149,129Property, plant and
    equipment  net


777,330



332,580



2,092



1,112,002Property and equipment costs
    incurred


241,245



118,680



1,044



360,9692004Revenues

$
136,580


$
43,149


$



$
179,729Depletion, depreciation and
    accretion


30,808



9,282



601



40,691Operating income (loss)


50,763



23,465



(13,688
)


60,693Property, plant and
    equipment  net


581,575



219,369



1,666



802,610Property and equipment costs
    incurred


126,512



104,580



665



231,757   23.
    SUPPLEMENTAL
    INFORMATION (UNAUDITED)     90




---



##### Table of Contents



Natural Gas (MMcf)


Crude Oil (MBbl)


NGL (MBbl)United








United








UnitedStates


Canada


Total


States


Canada


Total


States


Canada


TotalDecember 31, 2003


643,520



146,632



790,152



13,173







13,173



1,918







1,918Revisions


(18,350
)


(12,105
)


(30,455
)


(43
)






(43
)


(44
)


1



(43
)Extensions and discoveries


28,752



131,796



160,548



3







3



2,447







2,447Purchases in place


5,000



3,461



8,461























Sales in place


(602
)






(602
)


(3,377
)






(3,377
)


(6
)






(6
)Production


(30,644
)


(8,707
)


(39,351
)


(689
)






(689
)


(128
)


(1
)


(129
)December 31, 2004


627,676



261,077



888,753



9,067







9,067



4,187







4,187Revisions


(7,898
)


(21,155
)


(29,053
)


(2,883
)






(2,883
)


(1,233
)


3



(1,230
)Extensions and discoveries


128,038



79,813



207,851



280







280



6,884







6,884Purchases in place


236







236



4







4



5







5Sales in place


(65
)






(65
)






















Production


(31,944
)


(14,825
)


(46,769
)


(553
)






(553
)


(220
)


(3
)


(223
)December 31, 2005


716,043



304,910



1,020,953



5,915







5,915



9,623







9,623Revisions


(80,484
)


(32,938
)


(113,422
)


667







667



4,593



7



4,600Extensions and discoveries


332,811



55,006



387,817



320







320



34,510



14



34,524Purchases in place


































Sales in place






(405
)


(405
)






















Production


(35,028
)


(18,238
)


(53,266
)


(587
)






(587
)


(741
)


(5
)


(746
)December 31, 2006


933,342



308,335



1,241,677



6,315







6,315



47,985



16



48,001Proved developed
    reservesDecember 31, 2004


556,999



149,453



706,452



4,587







4,587



2,464







2,464December 31, 2005


593,630



199,859



793,489



4,986







4,986



5,153







5,153December 31, 2006


626,582



217,759



844,341



5,236







5,236



18,771



16



18,787  91




---



##### Table of Contents



UnitedStates


Canada


Consolidated(In thousands)2006Proved 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


$
968,6582004Proved properties

$
644,527


$
193,607


$
838,134Unevaluated properties


57,929



39,239



97,168Accumulated DD&A


(180,975
)


(14,440
)


(195,415
)Net capitalized costs

$
521,481


$
218,406


$
739,887  92




---



##### 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



307,635Total

$
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


$
280,0162004Proved acreage

$
11,907


$
2,942


$
14,849Unproved acreage


31,857



7,144



39,001Development costs


45,213



71,094



116,307Exploration costs


25,673



22,631



48,304Total

$
114,650


$
103,811


$
218,461  93




---



##### Table of Contents



United States


Canada


Consolidated(In thousands)2006Natural gas, crude oil &
    NGL sales

$
270,535


$
116,015


$
386,540Oil & gas production
    expense


87,199



23,596



110,795Depletion 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, crude oil &
    NGL sales

$
209,715


$
96,489


$
306,204Oil & gas production
    expense


69,609



16,663



86,272Depletion 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


$
112,9302004Natural gas, crude oil &
    NGL sales

$
134,268


$
42,905


$
177,173Oil & gas production
    expense


55,224



10,402



65,626Depletion expense


26,444



8,980



35,42452,600



23,523



76,123Income tax expense


18,410



7,908



26,318Results from producing activities

$
34,190


$
15,615


$
49,805    94




---



##### Table of Contents



At December 31,2006


2005


2004Natural gas  Henry
    Hub-Spot

$
5.64


$
10.08


$
6.18Natural gas  AECO


5.39



8.41



5.18Crude oil  WTI Cushing


60.85



61.06



43.36    95




---



##### Table of Contents



United States


Canada


Consolidated(In thousands)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 net cash flows relating to proved reserves

$
1,125,490


$
360,335


$
1,485,8252005Future 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 net cash flows relating to proved reserves

$
1,230,978


$
593,154


$
1,824,1322004Future revenues

$
4,241,385


$
1,306,819


$
5,548,204Future production costs


(1,456,005
)


(295,443
)


(1,751,448
)Future development costs


(116,559
)


(145,297
)


(261,856
)Future income taxes


(836,557
)


(238,141
)


(1,074,698
)Future net cash flows


1,832,264



627,938



2,460,20210% discount 
    calculated difference


(1,133,990
)


(355,481
)


(1,489,471
)Standardized measure of discounted
    future net cash flows relating to proved reserves

$
698,274


$
272,457


$
970,731  96




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##### Table of Contents



As of December 31,2006


2005


2004(In thousands)Net changes in price and
    production costs

$
(1,332,216
)

$
734,930


$
(82,974
)Development costs incurred


78,063



44,399



61,069Revision of estimates


(94,080
)


(29,506
)


(30,509
)Changes in estimated future
    development costs


42,015



43,939



3,183Purchase and sale of reserves, net


(1,977
)


824



(23,367
)Extensions and discoveries


661,033



515,810



219,656Net change in income taxes


302,342



(405,724
)


(21,638
)Sales of oil and gas net of
    production costs


(275,745
)


(219,932
)


(111,987
)Accretion of discount


260,340



134,428



120,065Other


21,918



34,233



(11,508
)Net increase (decrease)

$
(338,307
)

$
853,401


$
121,990   24.
    SELECTED
    QUARTERLY DATA (UNAUDITED)  Mar 31


Jun 30


Sep 30


Dec 31(In thousands, except per share data)2006Operating 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 income per share

$
0.36


$
0.31


$
0.30


$
0.26Diluted net income per share


0.34



0.29



0.28



0.242005Operating revenues

$
55,249


$
68,540


$
83,773


$
102,886Operating income


19,943



30,026



41,228



57,932Net income from continuing
    operations


10,754



17,185



24,693



34,640Net income


10,754



17,185



24,755



34,740Basic net income per share from
    continuing operations

$
0.14


$
0.23


$
0.33


$
0.46Basic net income per share


0.14



0.23



0.33



0.46Diluted net income per share from
    continuing operations


0.14



0.21



0.31



0.43Diluted net income per share


0.14



0.21



0.31



0.43  97




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##### Table of Contents



25.
    QUICKSILVER
    GAS SERVICES LP  Form S-1
   98




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##### Table of Contents



ITEM 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    ITEM 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rule 13a-15.
  Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f). Internal Control  Integrated
    Framework.
  Changes
    in Internal Control Over Financial Reporting
   99




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
         Internal Control  Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
  Share-Based
    Payments.
  Deloitte
    & Touche LLP
    100




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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   101




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##### Table of Contents



PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules  We will furnish you, without charge, a copy of any exhibit to
    this Annual Report on Form 10-K upon written request.
    Written requests to obtain an exhibit should be sent to the
    Investor Relations Department at 777 West Rosedale Street,
    Suite 300, Fort Worth, Texas 76104.
      Form 10-K.
                    Exhibit No.

Sequential Description3
.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

Bylaws of Quicksilver Resources
    Inc. (filed as Exhibit 4.2 to the Companys
    Form S-4,
    File
    No. 333-66709,
    filed November 3, 1998 and included herein by reference).3
.4

Amendment to the Bylaws of
    Quicksilver Resources Inc., adopted November 30, 1999
    (filed as Exhibit 3.4 to the Companys
    Form 10-K
    filed March 27, 2001 and included herein by reference).3
.5

Amendment to the Bylaws of
    Quicksilver Resources Inc., adopted June 5, 2001 (filed as
    Exhibit 3.2 to the Companys
    Form 10-Q
    filed August 14, 2001 and included herein by reference).3
.6

Amendment to the Bylaws of
    Quicksilver Resources Inc., adopted March 11, 2003 (filed
    as Exhibit 3.8 to the Companys
    Form 10-K
    filed March 26, 2003 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). 102




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##### Table of Contents



Exhibit No.

Sequential Description4
.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
    Registration Statement on
    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 10.2 to the Companys
    Form 8-K
    filed April 19, 2005 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).+ 10
.8

Quicksilver Resources Inc. Amended
    and Restated 2004 Non-Employee Director Equity Plan (filed as
    Exhibit 10.1 to the Companys
    Form 8-K
    filed February 22, 2006 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

Description of Non-Employee
    Director Compensation for Quicksilver Resources Inc.+ 10
.12

Quicksilver Resources Inc. 2006
    Executive Bonus Program (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed April 5, 2006 and included herein by reference).+10
.13

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
.14

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
.15

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
.16

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). 103




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##### Table of Contents



Exhibit No.

Sequential Description+ 10
.17

Quicksilver Resources Inc. 2006
    Equity Plan (filed as Appendix C to Quicksilver Resources
    Inc. Proxy Statement filed April 7, 2006 and included
    herein by reference).+ 10
.18

Form of Restricted Share Agreement
    pursuant to the 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
.19

Form of Restricted Stock Unit
    Agreement pursuant to the 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
.20

Form of Quicksilver Resources
    Canada Inc. Restricted Stock Unit Agreement pursuant to the 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
.21

Form of Incentive Stock Option
    Agreement pursuant to the 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
.22

Form of Non-Qualified Stock Option
    Agreement pursuant to the 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
.23

Form of Non-Employee Director
    Restricted Share Agreement pursuant to the 2006 Equity Plan
    (filed as Exhibit 10.7 to the Companys
    Form 8-K
    filed May 25, 2006 and included herein by reference).+ 10
.24

Form of Non-Employee Director
    Non-Qualified Stock Option Agreement pursuant to the 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
.25

Credit Agreement, dated as of
    July 28, 2004, among Quicksilver Resources Inc., as
    Borrower, Bank One, NA, Global Administrative Agent, and the
    other agents and financial institutions listed therein (filed as
    Exhibit 10.1 to the Companys
    Form 10-Q
    filed August 6, 2004 and included herein by reference).10
.26

Credit Agreement, dated as of
    July 28, 2004, among MGV Energy, Inc., as Borrower, Bank
    One, NA, Canada Branch, Canadian Administrative Agent, Bank One,
    NA, Global Administrative Agent, and the financial institutions
    listed therein (filed as Exhibit 10.2 to the Companys
    Form 10-Q
    filed August 6, 2004 and included herein by reference).10
.27

First Amendment to Combined Credit
    Agreements, dated as of September 24, 2004, among
    Quicksilver Resources Inc., MGV Energy and the agents and
    combined lenders identified therein (filed as Exhibit 10.2
    to the Companys
    Form 8-K
    filed October 12, 2004 and included herein by reference).10
.28

Second Amendment to Combined
    Credit Agreements, dated as of January 11, 2005, among
    Quicksilver Resources Inc., MGV Energy Inc. and the agents and
    combined lenders identified therein (filed as Exhibit 10.17
    to the Companys
    Form 10-K
    filed March 16, 2005 and included herein by reference).10
.29

Third Amendment to Combined Credit
    Agreements, dated as of June 17, 2005, among Quicksilver
    Resources Inc., MGV Energy Inc. and the agents and combined
    lenders identified therein (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed June 28, 2005 and included herein by reference).10
.30

Fourth Amendment to Combined
    Credit Agreements, dated as of November 30, 2005, among
    Quicksilver Resources Inc., MGV Energy Inc. and the agents and
    combined lenders identified therein (filed as Exhibit 10.2
    to the Companys
    Form 8-K,
    filed December 1, 2005 and included herein by reference).10
.31

Fifth Amendment to Combined Credit
    Agreement, dated as of January 13, 2006, among Quicksilver
    Resources Inc., MGV Energy Inc. and the agents and combined
    lenders identified therein (filed as Exhibit 10.1 to the
    Companys
    Form 8-K
    filed January 19, 2006 and included herein by reference).10
.32

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
.33

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 on Exhibit 10.2 to the Companys
    Form 8-K, filed February 12, 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. 104




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##### Table of Contents



Exhibit No.

Sequential Description* 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. 105




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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

March 1, 2007/s/  Glenn
    DardenGlenn
    Darden

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

March 1, 2007/s/  Philip
    CookPhilip
    Cook

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

March 1, 2007/s/  D.
    Wayne BlairD.
    Wayne Blair

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

March 1, 2007/s/  Anne
    Darden SelfAnne
    Darden Self

Director

March 1, 2007/s/  James
    HughesJames
    Hughes

Director

March 1, 2007/s/  Steven
    M. MorrisSteven
    M. Morris

Director

March 1, 2007/s/  W.
    Yandell
    Rogers, IIIW.
    Yandell Rogers, III

Director

March 1, 2007/s/  Mark
    J. WarnerMark
    J. Warner

Director

March 1, 2007  106