Quest Resource Corporation is a fully integrated E&P company that currently conducts substantially all of its natural gas and oil production operations through Quest Energy Partners, L.P. (NASDAQ: QELP) and its natural gas transportation and processing operations through Quest Midstream Partners, L.P.. Quest Resource owns 100% of the general partner and a 57% limited partner interest in Quest Energy and 85% of the general partner and a 36% limited partner interest in Quest Midstream. Quest Resource operates and controls Quest Energy and Quest Midstream through its ownership of their general partners.
Quest is the largest producer of natural gas and controls approximately 560,000 net acres in the Cherokee Basin of southeast Kansas and northeast Oklahoma. The Cherokee Basin produces coalbed natural gas from blanket coal seams found at depths of 400 feet to 1,300 feet. The primary productive zones are the Mulky-Summit trend, the Weir-Pittsburgh trend and the Riverton trend, in addition to numerous minor coal seams. Quest estimates the Cherokee Basin has the potential to hold more than 1.2 trillion cubic feet of natural gas resource under Quest’s existing and targeted acreage.
Quest operates more than 2,300 wells that producing more than 55 MMcfe net per day. The company’s average working interest is 99%. As of December 31, 2007 Quest reported total proved reserves of 211 Bcf. Quest’s reserves are long-lived, with an average proved reserve-to-production ratio of 12.3 years (8.2 years for our proved developed properties) as of December 31, 2007. Quest’s typical Cherokee Basin coalbed methane (CBM) well has a predictable production profile and a standard economic life of approximately 15 years.
All of Quest Energy's natural gas is connected into Quest Midstream's 2,000+ -mile gathering and transportation pipeline system. For 2008, Quest has a total capital budget of $114 million.
Quest maintains a competitive advantage through control of the entire natural gas production chain, from leasing, drilling operations and production to gathering, marketing, and interstate transmission. Quest’s completion unit fleet gives the company uninterrupted access to equipment to meet the company’s completion program. After drilling and completing 575 wells in 2007, Quest plans to drill 325 wells in 2008 from its inventory of approximately 2,100 locations.