Quest Resource Corporation (QRCP)

[dragon man]

Quest rebounds from trying time: No. 8leadership change may bring new opportunities

Oct 18, 2008 (The Oklahoman - McClatchy-Tribune Information Services via COMTEX) -- The period since June 30 has been a tough one for many public companies, but few have had quite as messy a time as Quest Resource Corp.
Quest Resource finished 9th in the Oklahoma Inc. rankings, largely on the strength of its 67 percent revenue growth. The Oklahoma City energy company is the largest producer of natural gas in the Cherokee Basin, which is in eastern Kansas and northeastern Oklahoma.

But the company's chief executive officer, Jerry Cash, resigned in August as details emerged about his apparent misuse of $10 million in Quest Resource cash for personal purposes. The Oklahoma Securities Department has sued Cash.

Quest later fired Chief Financial Officer David Grose in connection with the misappropriated money. The company continues to work with state and federal authorities.

Cash's last big deal before his departure was acquiring property in Appalachia to expand the company's operations.

Focus on growth

The Oklahoma City energy company later disclosed that it was short of cash and credit, leaving it facing "liquidity issues that would adversely impact its future plans and results of operations."

David Lawler, who inherited the Quest Resource mantle on Cash's departure, has been left to deal with the situation. Lawler, 40, is focused on maintaining the company's record of growth.

"The past month or so has been tumultuous, but we are working hard to finish our internal investigation and return to a normal operating environment," Lawler said in a statement issued by the company. "I think everyone in our sector is feeling some impact from tighter credit markets, lower price of natural gas, and the uncertain economic outlook."

"The past month or so has been tumultuous, but we are working hard to finish our internal investigation and return to a normal operating environment."

David Lawler



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