Quest Resource Proposes New Unit for Midstream Assets
Quest Resource Corporation, the largest operating company in the Cherokee Basin, is pursuing through a private transaction the formation of a limited partnership for its midstream assets.
The company currently anticipates raising between $65 million to $75 million of proceeds from a direct investment in the limited partnership by institutional investors, which is expected to represent approximately 35% to 40% of the partnership interests, without taking into account the incentive distribution rights of the general partner. It is anticipated that certain investors may receive a portion of the general partner's incentive distribution rights. The proceeds would be used initially to reduce borrowings under the company's revolving credit facilities and to provide additional capital for the company's ongoing new well development program. The transaction is expected to be completed by year end and is subject to a number of contingencies, including the completion of due diligence by the potential investors, the negotiation and execution of definitive documentation for the transaction and obtaining the consent of the company's lenders.
Quest Resource, based in Oklahoma City, 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 1,500 coal bed methane wells which produce into the Cherokee System, and uses its own fleet of completion equipment to support its aggressive drilling program. Quest currently has more than 1,700 locations in its drilling inventory.
- Quest Names New Member to Board of Directors (Dec 30)
- Quest Completes the Purchase of PetroEdge Resources (Jul 14)
- Quest, Pinnacle Amend Merger Agreement (Feb 07)