Shares of Quicksilver Resources (NYSE:KWK) plummeted 22% Monday despite reporting a stronger-than-expected increase in second-quarter profit.
The Fort Worth, Texas-based natural gas explorer and producer posted net income of $108.6 million, or 63 cents a share, compared with $86.8 million, or 51 cents a share, in the same quarter last year.
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Analysts polled by Thomson Reuters were expecting on average earnings of 50 cents. Revenue for the three-month period was $248 million, up from $229 million a year ago, trumping the Streets view of $219 million.
The company attributed the performance to a record level of natural gas equivalents and increased sequential production from oil and natural gas liquids to 20% of Quicksilvers overall production stream
Continued strength from Quicksilver's Barnett Shale properties, combined with our Horn River Basin natural gas project, fueled record second quarter production results, said Quicksilver CEO Glenn Darden. The company's liquids production is one-fifth of our total production stream, which is having a disproportionately positive impact on returns and cash flow.
Production during the quarter averaged a record 417 million cubic feet of natural gas equivalent a day, up 19% from the year-earlier period, driven by higher volumes from the companys Fort Worth Basin.
Looking ahead, the company expects third-quarter production volumes to rise 3% to 425 million to 435 million cubic feet equivalent per day.