Quicksilver Resources Inc KWK.N reported a loss for the fifth straight quarter due to weak prices for natural gas liquids, and said it would withdraw the $250 million initial public offering of a master limited partnership (MLP).
The MLP held proved reserves of 430.4 billion cubic feet of natural gas equivalent in the Barnett Shale in Texas.
Quicksilver said it was withdrawing the IPO due to the weak prices of natural gas liquids and as it had sold 25 percent of its Barnett Shale holdings to Tokyo Gas Co (9531.T).
Quicksilver unveiled IPO plans for the MLP last year, but held back due to weak market conditions.
Many energy companies have turned to tax-efficient corporate structures called MLPs, which rely on easy access to capital markets to fund growth. Such partnerships are typically made up of assets such as pipelines or long-lived oil and gas fields that generate steady cash flows.
Weak prices for natural gas have weighed on producers for well over a year, prompting them to search for liquids such as propane and crude oil.
However, the prices of oil and natural gas liquids have also dipped in the recent past.
Average realized prices for natural gas liquids, including hedging, fell 36 percent for Quicksilver in the first quarter.
The company's production fell 5 percent to 357.5 million cubic feet of natural gas equivalent per day (mmcfe/d), led by a sharp drop in its oil and natural gas liquids output. Natural gas production fell slightly.
The company expects second-quarter production to fall further to 282 - 288 mmcfe/d.
Quicksilver said first-quarter production from its operations in the Barnett Shale fell in comparison to the fourth quarter due to decreased capital activity.
Debt-heavy Quicksilver has been looking to rope in outside partners to fund drilling and improve its liquidity position. The oil and gas producer has been looking for other joint venture options in the Barnett Shale as well as in the Horn River basin in British Columbia.
The company said on Tuesday it had amended its credit agreements on April 30, resulting in "a decreased borrowing base, relaxed financial covenants and additional flexibility to support it efforts to reduce leverage."
The company had $1.6 billion in net debt as of April 30, more than three times its market capitalization of $462.2 million.
Adjusted loss for the first quarter was 4 cents per share. Analysts were expecting the company to post a loss of 1 cent per share, according to Thomson Reuters I/B/E/S.
Net loss was $59.7 million, or 35 cents per share. Net loss in the year-ago period was $212 million, or $1.24 per share. The company said it had restated its results for the year-ago quarter.
Revenue for the quarter fell more than 20 percent to $132.6 million, and missed analysts' expectations of $147.66 million.
Quicksilver shares, which have fallen 40 percent in the past one year, were down 1 percent on Tuesday at $2.64 on the New York Stock Exchange.
(Reporting by Swetha Gopinath and Thyagaraju Adinarayan in Bangalore; Editing by Saumyadeb Chakrabarty, Sreejiraj Eluvangal)