Quest Announces Resignation of Jerry Cash; David Lawler Named President; Boards Form Joint Special Committee to Conduct Investig
25 August 2008 - 11:00PM
Marketwired
The boards of directors of Quest Resource Corporation (NASDAQ:
QRCP), Quest Energy Partners, L.P. (NASDAQ: QELP) and Quest
Midstream Partners, L.P. announced they have accepted the
resignation of Jerry Cash, as Chairman and CEO of all three
entities, effective immediately. The resignation followed the
discovery, in connection with an inquiry from the Oklahoma
Department of Securities, of questionable transfers of company
funds to an entity controlled by Mr. Cash. Initial indications are
that the amount in question appears to involve about $10 million.
Promptly following the discovery, members of the three boards
met in joint sessions on Friday and over the weekend. The boards
immediately formed a Joint Special Committee comprised of
representatives from each board, including the chairs of the audit
committees of Quest Resource Corporation and Quest Energy Partners,
to investigate the matter and consider the effects on the
companies' financial statements. The Joint Special Committee has
retained Spencer C. Barasch of Andrews Kurth LLP to lead the
investigation. Chief Financial Officer David Grose was placed on a
paid administrative leave of absence during the investigation.
Quest has reported this matter to, and intends to fully cooperate
with, the U.S. Securities and Exchange Commission and other
appropriate governmental and regulatory organizations.
The boards also announced they have unanimously elected David
Lawler as president of each entity and have appointed him as a
director of Quest Resource Corporation to fill the vacancy created
by Cash's resignation. Lawler has more than 17 years of oil and gas
industry experience in various senior management and engineering
positions and has served as the Chief Operating Officer of Quest
Resource Corporation since May 2007. Mr. Lawler has been a director
and Chief Operating Officer of Quest Energy Partners since its
initial public offering in November 2007. Prior to joining Quest,
Lawler served in roles of increasing responsibility for Shell
Exploration & Production, most recently as engineering and
operations manager for multiple assets along the U.S. Gulf Coast.
Prior to joining Shell, Lawler was employed by predecessor
companies of ConocoPhillips in various domestic engineering and
operations positions.
The company has retained Kroll Zolfo Cooper LLC to assist in the
accounting and finance functions during Mr. Grose's absence. Kevin
Golmont will be leading Kroll Zolfo Cooper?s efforts in this
capacity.
The boards have also formed a Joint Strategic Review Committee
comprised of one representative of each of the boards to assist
Lawler in undertaking a detailed review of each entity's
strategy.
"The boards have tremendous confidence in David's abilities,"
said Jay Rateau, lead director for Quest Resource Corporation.
"During his tenure as COO, David has displayed exceptional
leadership skills and demonstrated sound financial and technical
ability," Rateau added.
"I appreciate the board members' confidence in my ability to
lead the Quest entities. In my prior role of COO, I learned the
strength of our organization comes from our dedicated employees and
our assets. I will work with our employees and board members to
continue to execute our business plans as I conduct a strategic
review of each organization," said David Lawler.
About Quest Resource Corp., Quest Energy Partners, L.P., and
Quest Midstream Partners, L.P.
Quest Resource Corporation is a fully integrated E&P company
that owns: the right to develop approximately 130,000 net acres in
the Appalachian Basin of the northeastern United States, including
122,600 acres prospective for the Marcellus Shale; 100% of the
general partner and a 57% limited partner interest in Quest Energy
Partners, L.P.; and 85% of the general partner and a 36% limited
partner interest in Quest Midstream Partners, L.P. Quest Resource
operates and controls Quest Energy Partners and Quest Midstream
Partners through its ownership of their general partners. For more
information, visit the Quest Resource website at www.qrcp.net.
Quest Energy Partners, L.P. was formed by Quest Resource
Corporation to acquire, exploit and develop natural gas and oil
properties and to acquire, own, and operate related assets. The
partnership owns more than 2,300 wells and is the largest producer
of natural gas in the Cherokee Basin, which is located in southeast
Kansas and northeast Oklahoma and holds a drilling inventory of
nearly 2,100 locations in the Basin. The partnership also owns
natural gas and oil producing wells in the Appalachian Basin of the
northeastern United States and in Seminole County, Oklahoma. For
more information, visit the Quest Energy Partners website at
www.qelp.net.
Quest Midstream Partners, L.P. was formed by Quest Resource
Corporation to acquire and develop transmission and gathering
assets in the midstream natural gas and oil industry. The
partnership owns more than 2,000 miles of natural gas gathering
pipelines and over 1,100 miles of interstate natural gas
transmission pipelines in Oklahoma, Kansas, and Missouri. For more
information, visit the Quest Midstream Partners website at
www.qmlp.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. In particular, the forward
looking statements made in this release are based upon a number of
financial and operating assumptions that are subject to a number of
risks, including the results of the internal investigation
described in this press release, 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 anticipated level
of new well development and construction of related pipelines,
environmental issues, weather conditions, competition and general
market conditions. Actual results may differ materially due to a
variety of factors, some of which may not be foreseen by Quest.
These risks, and other risks are detailed in Quest Resource
Corporation's and Quest Energy Partners, L.P.'s filings with the
Securities and Exchange Commission, including risk factors listed
in their latest annual reports on Form 10-K and other filings with
the Securities and Exchange Commission. You can find Quest Resource
Corporation's filings with the Securities and Exchange Commission
at www.qrcp.net or at www.sec.gov and Quest Energy Partners, L.P.'s
filings with the Securities and Exchange Commission at www.qelp.net
or at 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.
Company Contact: Jack Collins Investor Relations Phone: (405)
702-7460 Websites: www.qrcp.net, www.qelp.net, &
www.qmlp.net
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