Quicksilver Resources Inc (OTCMKTS:KWKA), a Texas oil-and-gas company, confirmed that it failed to get a buyer who would have helped the company to improve its finances. As a result, it filed for bankruptcy protection amid declining oil prices.
Glenn Darden, the Chief Executive, said that company’s strategic marketing plans have not resulted in viable measures for asset sales or other options to address existing liquidity and capital restructuring problems. The Chapter 11 filing stated Quicksilver has assets of $1.2 billion and $2.35 billion in debt.
The dismal performance
Quicksilver was not in best of health even before the oil and gas prices begin to decline last year. The company abandoned a 2011 bid to make it private and from last some years commenced selling its assets. Quicksilver sold its stake in a Texas shale gas project, in order to mitigate its debt. However, the condition deteriorated when crude oil prices plunged, and buyers for gas and oil assets failed to materialize.
After the oil decline, Moody’s Investors Service reduced Quicksilver’s debt rating to junk in September. It stated that the company had been unsuccessful at its measures to liquidate assets to assist it refinance and lessen outstanding debt.
In February 2015, Quicksilver announced it will not pay an interest payment to bondholders. Also, it intends to file for bankruptcy due to plummeting oil prices. The benchmark oil prices in the U.S. made a six-year low of $43.46 per barrel. At the same time, it said it intended to skip a payment of $13.6 million to senior unsecured bondholders.
Quicksilver Resources Inc (OTCMKTS:KWKA) recorded $163.5 million in total revenue and $23.8 million in income for the three months ended September 30. Also, it reported debt of $623 million in unsecured bonds and 200 million in secured bond. As per the filing, the debt in senior subordinated stood at $350 million.