QRCP Quest Resource (MM)

OKLAHOMA CITY, May 11 /PRNewswire-FirstCall/ -- Quest Resource Corporation (NASDAQ:QRCP), the largest operating company in the Cherokee Basin, provided today an update on its financial results for the quarter ended March 31, 2007. The Company provided selected financial and operating data below in a comparative format for the quarters ended March 31, 2007 and 2006. SELECT FINANCIAL AND OPERATING DATA For The Quarters Ended March 31, 2007 and 2006 (Dollars in thousands, except per share data) Quarters Ended March 31 2007 2006 (unaudited) Total Revenue $ 27,078 $ 12,120 Net Income (Loss) Before Minority Interest (2,877) 8,717 Minority Interest (434) -- Net Income (Loss) (3,311) 8,717 Net Income (Loss) Per Share Basic (0.15) 0.39 Net Income (Loss) Per Share Diluted (0.15) 0.39 Operating Income (Loss) 4,416 (2,098) Operating Income (Loss) Per Share Diluted 0.20 (0.09) EBITDA(1) 12,279 3,801 EBITDA Per Share Diluted(1) $0.55 $0.17 Weighted Average Shares Outstanding Basic 22,206,014 22,072,383 Weighted Average Shares Outstanding Diluted 22,206,014 22,140,654 Net Sales Volumes (MMcfe) 3,715 2,498 Average Price Received per Mcfe (including hedges) $6.85 $4.20 Wells Drilled 124 183 Wells Recompleted 9 39 Wells Connected 113 151 Pipeline Miles Constructed 67 121 Well Completion % 99% 98% Total Expenditures(2) $32,413 $49,888 1 -- A reconciliation of Net Income to EBITDA follows this news release. 2 -- Capital expenditures represent cash transactions Management Comments David Grose, Chief Financial Officer of Quest Resource said, "We are continuing with our development drilling and re-completing of wells and connection of those wells through Quest Midstream in the first quarter, as indicated by our results. Our net sales volumes for the first quarter of 2007 increased 48.7% to 3,715 MMcfe as compared to 2,498 MMcfe for the first quarter of 2006. This is an average of 41.3 MMcfe per day for the first quarter of 2007 as compared to 27.8 MMcfe per day for the first quarter of 2006. We are continuing this momentum into the second quarter and our net sales volumes for the first 36 days of the second quarter have averaged 44.6 MMcfe per day. We expect to continue our active drilling and completion program for the remainder of the year and we believe the combination of projected production growth and anticipated higher realized prices will yield improved financial results in the coming quarters." Conference Call Quest will host a conference call to discuss 2007 first quarter operating and financial results on Friday, May 11, 2007 at 3:00 p.m. Eastern time. There will be a question and answer period following the presentation. Call: 866-322-9730 (US/Canada) and 706-679-6054 (International) Passcode 1678107 Internet: Live and rebroadcast over the Internet: simply log on to http://www.qrcp.net/ Replay: Available through May 13, 2007 at 800-642-1687 (US/Canada) and 706-645-9291 (International) using passcode 1678107 and at http://www.qrcp.net/ About Quest Resource Corporation Quest Resource is the largest producer of natural gas in the Cherokee Basin, which is located in southeast Kansas and northeast Oklahoma. The Company is a fully integrated E&P company, operating more than 1,700 producing wells which produce into its controlled 1,700+ mile gathering pipeline system, and utilizes its own fleet of completion equipment to meet its drilling and completion program. Quest currently has more than 1,700 locations in its drilling inventory. For more information, visit the Quest Resource website at http://www.qrcp.net/. Forward-Looking Statements Opinions, forecasts, projections or statements other than statements of historical fact, are forward-looking statements that involve risks and uncertainties. Forward-looking statements in this announcement are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Quest believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Actual results may differ materially due to a variety of factors, including without limitation: the uncertainty involved in exploring for and developing new natural gas reserves, the sale prices of natural gas and oil, labor and raw material costs, the availability of sufficient capital resources to carry out the Company's anticipated level of new well development and construction of related pipelines, environmental issues, weather conditions, competition, general market conditions, and other risks detailed in Quest's filings with the Securities and Exchange Commission. You can find Quest's filings with the Securities and Exchange Commission at http://www.qrcp.net/ or at http://www.sec.gov/. By making these forward-looking statements, Quest undertakes no obligation to update these statements for revisions or changes after the date of this release. Reconciliation of Net Income to EBITDA EBITDA, which is Earnings before interest, income taxes and depreciation, depletion and amortization expense, is presented because it is used by us for, among other things, determining compliance with certain bank covenants, and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of GAAP results, to compare the performance of companies. EBITDA is not a measurement of financial performance under generally accepted accounting principles and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with generally accepted accounting principles. Reconciliation of Net Income to EBITDA For the Quarters Ended March 31, 2007 and 2006 (in thousands) Quarters Ended March 31, 2007 2006 (unaudited) Net Income (Loss) $(3,311) $8,717 Minority Interest 434 -- Interest Expense, Net 6,829 3,666 Income Tax Expense -- -- Depreciation, Depletion & Amortization Expense 7,863 5,899 Change in Derivative Fair Value 464 (14,481) EBITDA 12,279 3,801 DATASOURCE: Quest Resource Corporation CONTACT: Jerry D. Cash, Chairman and Chief Executive Officer, or David E. Grose, Chief Financial Officer, both of Quest Resource Corporation, +1-405-488-1304 Web site: http://www.qrcp.net/

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