Tomahawk, WI 8/07/2013 (Basicsmedia) – Quicksilver Resources Inc, which is also known as KWK in NYSE, is a company which has established itself as an independent oil and gas company. It came into being in 1997 and has always used Fort Worth, Texas as the main headquarters. Some of the oil and natural gas plants it owns are located all over Texas, Wyoming, Colorado, Montana, in addition to Alberta and British Columbia, which are located in Canada. My interest in this company is based on its shares which have kept on jumping, especially after it released its latest financial results.

How Much Have KWK Shares Jumped?

Immediately the company announced its latest financial results, its shares jumped by more than 11%. It’s interesting to note that this positive development took place even after it emerged that the company’s revenue had fallen by 19% to settle at $121 million. Investors had no problem citing the fact that this was a result of KWK’s decision to sell a few of its assets. The company lost in terms of earnings per share by around $0.03, but yet the investors continued showing that they had great confidence in the firm to turn this around and post positive results in future.

One would need to appreciate that the company is posting these results despite facing a huge challenge brought about due to low natural gas prices. Investors are convinced that the balance sheet has improved and is much better than anything they were probably expecting to see. Energy prices can never stay down for long, and if KWK can survive until such a time, it will reap big time and report better earnings than the ones which were published recently. KWK would probably achieve its goals if it pushes debt maturities and sells more of its assets.

9kwk

This image shows the low natural gas prices which KWK has to contend with.

The image is courtesy of www.marketrealist.com

Should I Buy KWK Stock?

I believe that the company is stable, but it is difficult to tell if it can continue being so in future. The market is full of so many uncertainties thus making this one of the riskiest ventures for me. I cannot afford to invest in KWK shares until such a time when the market would be performing at a much better level than it has done thus far. It could be that the other investors are certain the company will perform better than it has done thus far, or than its competitors such as Chesapeake Energy Corporation, or Denbury Resources Inc, or Parallel Petroleum Corporation has posted.

If the price of natural gas was to improve, this could augur well for the independent oil and gas industry. But this remains a big if, considering that the price appears to be on a downward trend once again and may reach the lows it reported prior to July 2012, and in August 2012 as well. It would take a very optimistic person to disregard all this information and go ahead to invest in KWK stock. However, I wouldn’t begrudge anyone who feels that the time is ripe for him/her to dispose of the stock and try something which has a much better outlook than this one.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.