Fort Worth-based Quicksilver Resources' shares (ticker: KWK) were up more than 10 percent in early trading after the company released third-quarter earnings and announced a joint venture with Eni, an Italian oil company that already owns a stake in Quicksilver's Alliance area lease. The Eni deal affects 52,500 gross acres in Pecos County in West Texas' Delaware Basin, which the two companies will jointly explore and develop. Eni will pay Quicksilver up to $52 million in three phases for a 50 percent stake in the acreage; Eni will fund 100 percent of drilling and completion costs of up to three wells in the first phase, then all costs on two more wells in the second phase and then an option to fund all of a 3D seismic survey in the third phase. Quicksilver also booked $42 million in net proceeds on the sale of Montana assets sold in August.
Quicksilver said it earned $11 million, or 6 cents a share, in the third quarter. After adjustments it had an $8 million loss, or 5 cents a share. Wall Street analysts had expected an adjusted loss of 4 cents a share. The company's shares opened slightly higher and gained ground in heavy morning trading.
Third-quarter production averaged the equivalent of 274 million cubic feet of natural gas a day, down from 362 million cubic feet a year earlier. Production was reduced by the company's sale in April of 25 percent of its Barnett Shale production, which accounts for more than half its production, and to a lesser degree by the sale of the Montana assets.
-- Jim Fuquay