Quicksilver Resources Inc. was founded in 1997 as an oil and gas company with headquarters in Fort Worth, Texas. Since its beginning, it made a number of acquisitions and brokered several huge deals which kept it in business. Quicksilver Resources mainly engaged in the acquisition, production, exploration and the sale of natural gas and oil. The company’s radius of operation did not extend beyond the continent of North America. At the height of its existence, the company had acquired a substantial wealth in the form of funds, oil fields and various assets. It mainly focused on fractured shale’s as well as coal beds.
Generally, the company has a keen interest in unconventional reservoirs, which explains why none of its reservoirs is conventional in nature. Most of its oil and natural assets are situated in British Columbia and Alberta in Canada, and Texas in the US. The Barnett Shale which spans around 89,000 net acres is among the major properties that are registered under the company. Others worth mentioning are Horn River Basin and Horseshoe Canyon spanning 126,000 and 343,000 net acres respectively.
“The Declaration Of Bankruptcy”
The Declaration Of Bankruptcy
It was shockingly declared bankrupt on the 31st of August in 2016. This followed the company’s filing of the Chapter 11 liquidation under bankruptcy. According to the company’s representatives, the move comes as the firm failed to contain the ever-depreciating oil prices. In the previous five years leading up to the year 2016, the oil and natural gas sector had been hit with various crises ranging from crippled sales to depreciating oil prices and a labour force which was increasingly becoming more difficult to maintain. Retrenchments had characterised the human resource related news. But, it was not enough to keep the company in the business. The oil prices had depreciated to levels which the company could not contain thus forcing it into bankruptcy.
“Natural Gas Industry”
The Texas Oil And Natural Gas Industry
The declaration of Quicksilver Resources’ bankruptcy actually meant a lot of things to the Texas oil and natural gas sector. First of all, it meant that the state’s total crude oil output was going to drop. Quicksilver Resources was one of the major producers of the commodities and also contributed greatly to the expansion of the size of oil fields owing to its numerous exploration projects. Most of its exploration projects were aimed at increasing the production of the commodities oil and gas.
“The Demand for Oil and Gas”
Another notable impact of the company’s closure on the Texas oil and gas sector is that demand for oil and gas had somewhat risen in the wake of the company’s bankruptcy. This is mainly because of the reduced supply of both oil and natural gas. Following a rise in the demand, the price of natural gas and oil had also risen, although only sparsely. Other suppliers groped at the opportunity to become the next leaders in the production and distribution of oil and natural gas. This created a short-lived rise in demand, which was later cancelled out by an almost equal increase in the supply. Today, the supply has returned to normal since enough time has elapsed to enable the market to stabilise. Actually, it has been more than a year since the company declared its state of bankruptcy.
“Competition in the Industry
Was Extremely Stiff”
The closure of Quicksilver Resources also paved way for other companies in the sector to thrive. This is mainly because competition in the industry was extremely stiff especially in the five years leading up to the company’s closure. The oil and natural gas sectors in the US have been limping for many years especially after the onset of the global economic crunch. Since 2008, it has never managed to recover fully. But, some emerging companies still managed to ward off blows from the sector’s harsh business environment. These had quickly emerged as the company’s successors at the time of its closure.
In general, the bankruptcy has also given a chance to investors who have better plans for the company’s assets. Recently, it was announced that the US assets of the firm are available for purchase at a value of $245 million. Bluestone Natural Resources II is already in possession of the US assets of the firm. There is every possibility that the firm will put Quicksilver’s assets to good use.