Quicksilver reported “stellar result” from its first multi-well pad in the Horn River
CALGARY— (from the Montréal Gazette) Recent apparent setbacks are actually helping Quicksilver Resources Inc. negotiate a joint venture deal with potential partners on its northeastern British Columbia shale gas play, it said Monday.
On a conference call with analysts, Glenn Darden, president and chief executive of the Fort Worth, Texas-based gas producer, said a slowed pace of development has aided the company as it talks to potential partners on its Horn River Basin play.
“It’s stimulated the talks and actually pushed them to negotiations,” he said on the call.
“One of the hurdles we’ve had is having to develop on faster time lines than our potential partners wanted to move. They are looking at downstream solutions that are kind of 2018 and beyond time frame. So bringing on earlier higher volumes was a negative in those negotiations.”
Investors, however, bid the stock down 13 per cent or 26 cents US to $1.74 on the New York Stock Exchange.
Although trillions of cubic feet of gas have been ascribed to the HornRiver, the area is underserved by processing and gathering facilities. A major market is expected to be West Coast liquefied natural gas export terminals but larger projects aren’t expected to come on stream until later in the decade.
On Monday, the federal government awarded the third LNG export licence to a consortium of Shell Canada, Korea Gas Corp., Mitsubishi Corp., and PetroChina International. At least five export terminals have been proposed.
Quicksilver reported “stellar results” on Monday from its first multi-well pad in the Horn River, noting initial production rates of between 23 million and 34 million cubic feet per day per well at high flowing pressures.
But it reported financial losses and plans to invest just $120 million in 2013, a reduction of $270 million from 2012, which it concedes will likely result in an overall production decline of five per cent.
No new Horn River wells are to be drilled until 2014 because of delays in third-party processing facilities, it said.
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