(Reuters) - Quicksilver Resources Inc KWK.N posted a quarterly loss on a big impairment charge as weak prices for natural gas and natural gas liquids forced the company to lower the value of its assets.
Second-quarter results were hurt by a $992 million non-cash impairment of oil and gas properties due to lower prices.
Natural gas prices have fallen to historic lows due to a glut in production from shale gas fields. Natural gas prices fell 46 percent in the April-June quarter from last year to average $2.4 per million British thermal unit.
Encana Corp (ECA.TO), Canada’s No. 1 natural gas producer, reported a second-quarter loss last month on a $1.7 billion charge stemming from low natural gas prices.
Weak gas prices have sent a number of oil and gas companies in search of natural gas liquids (NGLs). But excess production is eroding a profit edge the companies enjoyed for the last two years. NGL prices fell about 15 percent in the second quarter from the preceding quarter.
Quicksilver, 80 percent of whose quarterly production was natural gas, cut its full-year capital expenditure budget by $50 million to $360 million citing reduced drilling activity.
The company, which owns properties in Texas, Colorado, and Wyoming in the United States and Alberta and British Columbia in Canada, expects 2012 production volume to average between 365 million cubic feet equivalent per day (mmcfe/d) and 380 mmcfe/d, down from its prior outlook of about 412 mmcfe/d.
Current-quarter average daily production volume is expected to be 385-400 mmcfe/d, higher than second-quarter output of 359 mmcfe/d.
Quicksilver, which has been actively pursuing joint venture options to help fund drilling activities, said it was in advanced talks on two ventures.
Second-quarter net loss was $673 million, or $3.96 per diluted share, compared with net income of $109 million, or 61 cents per share, a year earlier.
Revenue fell 28 percent to $151 million.
Shares of the company were trading flat at $4.29 on Tuesday on the New York Stock Exchange.
Reporting by Swetha Gopinath in Bangalore; Editing by Supriya Kurane and Saumyadeb Chakrabarty