Quicksilver's Shale-Well Data Was Subpoenaed By SEC
August 09 2011 - 1:51PM
Dow Jones News
Quicksilver Resources Inc. (KWK) has received a subpoena from
the Securities and Exchange Commission seeking documents pertaining
to shale-well production, the producer of oil and natural gas said
Tuesday in a securities filing.
Quicksilver is the second U.S. producer to disclose such a
subpoena after Exco Resources Inc. (XCO) said last week that the
SEC has asked it for similar documents.
The SEC regulates how companies report their oil and gas
inventories, or reserves.
In recent years, U.S. independent producers have unleashed vast
stores of oil and natural gas from deeply buried rock formations,
including shale. Such rocks have long been known to contain oil and
gas, but it wasn't until the last decade that producers figured out
how to economically tap those reserves using a combination of
horizontal drilling and a rock-cracking process called hydraulic
fracturing.
Though the natural gas that has flowed from shale wells has
pushed U.S. production to price-depressing highs, some have raised
doubts about the long-term potential of those wells. A recent New
York Times article questioned whether some producers were
overestimating how much gas their shale wells will yield.
"The SEC has informed us that their investigation arises out of
recent press reports questioning the projected decline curves and
economics of shale-gas wells," Quicksilver said in a quarterly
securities filing. "We understand from the SEC that a number of
other shale-gas producers received similar subpoenas."
While Exco said it was asked for documents dating back to the
start of 2008, Quicksilver didn't specify a date range for the data
requested by the SEC. A Quicksilver spokesman declined to comment
beyond saying that the Fort Worth, Texas company would comply with
the SEC's request.
Several top U.S. natural-gas producers contacted by Dow Jones
Newswires on Friday--including Exxon Mobil Corp. (XOM), the
country's largest gas producer, and Anadarko Petroleum Corp.
(APC)--said that they hadn't received any subpoenas.
Others--including Chesapeake Energy Corp. (CHK), the second largest
U.S. producer--declined to comment, citing company policy not to
comment on communications with regulators.
Analysts with Tudor, Pickering, Holt & Co., an
energy-focused investment bank in Houston, told clients Tuesday not
to single out Exco and Quicksilver because many producers filed the
quarterly reports in which such disclosures are made prior to the
SEC sending out the subpoenas.
Quicksilver shares recently traded 0.6% higher at $9.15 after
falling more than 26% Monday on mixed second-quarter earnings and a
broad decline in stocks.
-By Ryan Dezember, Dow Jones Newswires; 713-547-9208;
ryan.dezember@dowjones.com
--Isabel Ordonez contributed to this article.
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