For the first quarter 2004, net cash from operating activities, as presented in the attached Condensed Consolidated Statement of Cash Flows, was $15.2 million as compared to net cash from operating activities of $3.1 million for the same period in 2003.
Natural gas production for the first quarter of 2004 was 9.2 billion cubic feet (Bcf), or 101 million cubic feet per day (Mmcf/d), versus production of 8.7 Bcf for the same period in 2003 with an average of 96 Mmcf/d. The price realized for the company's gas production in the first quarter of 2004 averaged $3.58 per which is the same price received during the first quarter of 2003. Natural gas, including natural gas liquids, comprised 89 percent of the company's total production in the first quarter of 2004.
Crude oil production for the 2004 first quarter was 186,000 barrels, or 2,045 barrels per day, as compared to 215,000 barrels of production in the first quarter of 2003. Oil prices realized for the first quarter of 2004 averaged $27.94 per barrel versus $25.16 per barrel for the prior year first quarter.
Natural gas liquids production for the first quarter 2004 was 36,000 barrels versus 35,000 barrels in the first quarter of 2003. The price realized for natural gas liquids averaged $24.73 per barrel in the first quarter of 2004, compared to the average of $20.52 per barrel realized in the first quarter of 2003.
Year-to-date Quicksilver has drilled 66 net wells of a planned 400 total for all of 2004. Forty-three of those wells were drilled in the company's coalbed methane project in Canada. Operations in Canada are escalating after the eight week breakup period which prohibits drilling and completion of wells during the spring thaw.
Canadian production for the first quarter was 1.7 Bcf which is a 20% increase over fourth quarter 2003 (1.4 Bcf). Through its Canadian subsidiary, MGV Energy Inc. (MGV), Quicksilver plans to drill 240 additional wells in 2004, utilizing five drilling rigs.
Quicksilver has drilled 21 wells in its fractured shale plays in Michigan and Indiana thus far in 2004 with a target of 109 wells by year end. Weather issues in both of these areas have impeded completion and well tie-in activity. Both projects will accelerate from now through the end of the year.
The company's operations are progressing in the Barnett Shale area southwest of Fort Worth. Initial production is on stream from non-operated wells, and the company is conducting seismic operations and pipeline plans are underway. The company has increased its land position in this area to 115,000 net acres. Quicksilver will commence drilling operations in June.
Glenn Darden, Quicksilver's president and chief executive officer, commented on the first quarter results.
"Our natural gas production continues to increase, and we look forward to accelerating our drilling and completion work for the rest of the year to exceed our production goals. We are very encouraged with the consistent results in Canada. Furthermore, recent production rates in our area of operations in the Barnett Shale have made our acreage position very attractive. The company will aggressively pursue these newer projects and continue with steady development drilling in Michigan and Indiana."
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