UPDATE 2-Quicksilver Q2 adjusted profit tops market

* Q2 adj EPS $0.24 vs estimate $0.18

* Sees Q3 production volume to average 310-320 mmcfe

* Sees Q3 total operating expense between $1.05-$1.18/mcfe

* Sees Q4 production between 320 and 330 mmcfe per day (Recast, adds comments from conference call, background)

Aug 10 (Reuters) - Oil and gas producer Quicksilver Resources Inc (KWK.N) posted a better-than-expected quarterly profit, helped by higher production and lower output costs, and said fourth-quarter production will be higher compared with the prior quarter.

The company, in a conference call with analysts, said it expects fourth-quarter production to increase to the range of 320 million to 330 million cubic feet of natural gas equivalent per day (mmcfe).

For the third-quarter, the company expects production volumes to average in the range of 310 to 320 mmcfe per day.

Quicksilver expects 2009 production to average about 325 mmcfe per day, an increase of about 24 percent from 2008.

However, for 2010 the company expects production to be flat with 2009.

"It won't be as significant as it was in 2009 because we were spending a lot more capital in 2008," the company's chief financial officer Philip Cook said.

Many exploration and production companies have been benifiting from lower drilling costs that has been amply reflected in their results this quarter.

Quicksilver posted a net loss of $21.8 million, or 13 cents per share, compared with earnings of $51.3 million, or 31 cents a share, a year earlier, mainly due to charges and increased operating expenses.

Excluding items, the company earned 24 cents a share.

Revenue rose about 4 percent to $206 million.

Analysts, on average, had expected earnings of 18 cents a share, excluding special items, on revenue of $196.6 million, according to Reuters Estimates.

Average daily production during the quarter rose about 40 percent to 331 million cubic feet of natural gas equivalent (mmcfe) per day.