Kleine Perle mit fähigem Management, für alle die in USA handeln können - 500 Beiträge pro Seite

[lGasAnalyst]

http://www.qrcp.net

[lGasAnalyst]

[lGasAnalyst]

Hier eine kléine Gegenüberstellung verschiedener kleiner Öl&Gas Firmen, die in unterschiedlichen Ländern aktiv sind, oder vorgeben aktiv zu sein:

TETON PETROLEUM, CORP.




EUROGAS, INC.





HURRICANE HYDROCARBONS, LTD.





EPIC ENERGIE, INC.




QUEST RESOURCE, CORP.




WER BEFINDET SICH ÜBER DER 200 TAGE LINIE?

[lGasAnalyst]

[lGasAnalyst]

Ein sehr ordentlicher 10-q ! Der kann sich sehen lassen!



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB


(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended November 30, 2002.

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 (No fee required) for the transition period from ____________________ to
_____________________.

Commission file number: 0-17371

QUEST RESOURCE CORPORATION


(Name of Small Business Issuer in Its Charter)


Nevada 88-0182808
-------- ------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)




P. O. Box 100 701 East Main, Benedict, Kansas 66714


(Address of Principal Executive Offices)(Zip Code)

620-698-2250


(Issuer`s Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes [XX] No [ ]
The number of shares outstanding of Registrant`s common stock ($0.001 par value) as of January 13, 2003 was 12,799,984.


Transitional Small Business Disclosure Format: Yes [ ] No [XX]




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TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 3

Item 1. Financial Statements . . . . . . . . . . . . . . . . . 3

Consolidated Unaudited Financial Statements . . . . . . . F-1

Item 2. Management`s Discussion And Analysis Or
Plan Of Operation . . . . . . . . . . . . . . . . . . . 4

Forward-looking Information . . . . . . . . . . . . . . . . . . 4

Business Of Issuer . . . . . . . . . . . . . . . . . . . . . . 4

Significant Developments During Quarter Ended November 30, 2002. 4

Results Of Operations . . . . . . . . . . . . . . . . . . . . . 5

Capital Resources And Liquidity . . . . . . . . . . . . . . . . 6

Item 3. Controls and Procedures . . . . . . . . . . . . . . . . . 7




PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 8


Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 8


Item 2. Changes In Securities And Use Of Proceeds . . . . . . . . 8


Item 3. Default Upon Senior Securities . . . . . . . . . . . . . 9


Item 4. Submission Of Matters To Vote Of Security Holders . . . . 10


Item 5. Other Information . . . . . . . . . . . . . . . . . . . . 10


Item 6. Exhibits And Reports On Form 8-K . . . . . . . . . . . . 10

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Except as otherwise required by the context, references in this quarterly report to "we," "our," "us," "Quest" or "the Company" refer to Quest Resource Corporation and its wholly owned subsidiaries, Quest Oil & Gas Corporation, Ponderosa Gas Pipeline Company, Inc., Quest Energy Service, Inc., and STP Cherokee, Inc. Our operations are conducted through our subsidiaries.

Our unaudited interim financial statements including a balance sheet as of the fiscal quarter ended November 30, 2002, a statement of operations and a statement of cash flows for the interim period up to the date of such balance sheet and the comparable period of the preceding fiscal year are attached hereto as Pages F-1 through F-8 and are incorporated herein by this reference.

The financial statements included herein have been prepared internally, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. However, in our opinion, all adjustments (which include only normal recurring accruals) necessary to fairly present the financial position and results of operations have been made for the periods presented. These financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report on Form 10-KSB for the fiscal year ended May 31, 2002. Further reference should also be made to the two Forms 8-K filed on November 18, 2002 and November 27, 2002.


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QUEST RESOURCE CORPORATION
Consolidated Balance Sheet
(Unaudited)



--------------- ---------------
November 30 May 31
2002 2002
--------------- ---------------
A S S E T S
Current Assets
--------------
Cash $ 508,309 $ 76,545
Accounts Receivable 1,778,924 602,378
Futures Contracts 4,399 45,716
Parts & Supplies 122,028 91,168
--------------- ---------------

Total Current Assets $ 2,413,660 $ 815,807

Property & Equipment
--------------------
Property & Equipment 1,122,893 1,031,442
Less: Allowance for Depreciation (461,200) (376,290)
--------------- ---------------
661,693 655,152

Pipeline Assets, net 10,596,879 4,068,923

Oil & Gas Properties
--------------------
Properties being Amortized 12,778,184 3,920,672
Properties not being Amortized 2,151,231 665,439
Less: Accumulated depreciation,
depletion, and amortization (652,355) (455,418)
--------------- ---------------
14,277,060 4,130,693

Other Assets
------------
Goodwill 513,253 -
--------------- ---------------
513,253 -

Total Assets $ 28,462,545 $ 9,670,575
--------------- ---------------





L I A B I L I T I E S A N D S T O C K H O L D E R S` E Q U I T Y

Current Liabilities
-------------------
Accounts Payable $ 1,391,018 $ 166,475
Oil & Gas Payable 1,181,407 506,989
Accrued Expenses 139,618 30,660
Notes Payable, Current Portion 249,427 1,847,449
Deferred Income Tax Payable 467,804 340,499
--------------- ---------------

Total Current Liabilities 3,429,274 2,892,072

Non-Current Liabilities
-----------------------
Convertible Debentures 407,000 462,000
Note Payable 13,554,283 3,552,346
Less Portion Shown as Current (249,427) (1,847,449)
--------------- ---------------
13,711,856 2,166,897
--------------- ---------------
Total Liabilities 17,141,130 5,058,969

Commitments and contingencies - -

Stockholders` Equity
--------------------
Preferred stock, 50,000,000 Shares
Authorized $.001 par value, 10,000
shares issued and outstanding 10 10
Common Stock, 950,000,000 Shares
Authorized $.001 par value, 12,799,984
and 6,599,917 shares issued and
outstanding 12,800 6,600
Paid In Surplus 10,885,941 4,441,071
Retained Earnings 422,664 163,925
--------------- ---------------
11,321,415 4,611,606
--------------- ---------------

Total Liabilities and
Stockholders` Equity $ 28,462,545 $ 9,670,575
=============== ===============





F-1

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QUEST RESOURCE CORPORATION
Consolidated Statements of Operations
(Unaudited)

--------------------------- ---------------------------
For the Three Months Ended For the Six Months Ended

November 30 November 30
--------------------------- ---------------------------
2002 2001 2002 2001
------------- ------------- ------------- -------------
Revenue
-------
Oil & Gas Production Revenue $ 824,977 $ 245,997 $ 1,070,932 $ 521,875
Gas Pipeline Revenue 341,940 231,514 635,665 476,400
Oil & Gas Operations 346,458 60,794 645,781 182,920
Pipeline Operations 133,982 114,861 275,253 217,044
Pipeline and Property Development 226,857 778,672 518,685 1,079,836
Oil Trucking & Marketing 18,214 44,074 33,918 63,117
Futures Contract Income (Loss) (27,390) (38,140) (73,390) 266,260
Other Revenue 51,271 73,156 96,220 230,756
------------- ------------- ------------- -------------

Total Revenues 1,916,309 1,510,928 3,203,064 3,038,208

Cost of Revenues
----------------
Oil & Gas Production Costs 284,495 183,486 441,227 305,218
Pipeline Operating Costs 169,233 160,146 348,349 319,310
Purchases & Outside Services 229,058 319,172 500,718 625,287
Wages 251,330 205,329 426,265 362,039
Payroll Taxes 13,725 12,586 27,476 25,059
Depreciation, Depletion & Amortization 234,119 157,784 340,454 276,289
Other Cost of Revenues 48,856 20,328 93,466 60,684
------------- ------------- ------------- -------------
Total Cost of Revenues 1,230,816 1,058,831 2,177,955 1,973,886

Gross Profit $ 685,493 $ 452,097 $1,025,109 $1,064,322

General and Administrative Expenses
-----------------------------------
Interest $ 109,536 $ 59,686 $ 193,770 $ 113,870
Insurance 52,388 39,139 116,367 84,340
Repairs 23,936 61,298 55,827 89,328
Consulting 152,050 85,271 160,700 168,271
Other Expenses 71,155 44,708 149,553 145,516
------------- ------------- ------------- -------------

Total General and Administrative Expenses 409,065 290,102 676,217 601,325

Income (Loss) from continuing operations
before other income and expense and
income taxes 276,428 161,995 348,892 462,997

Other Income
------------
Interest Income 107 1,389 186 2,653
------------- ------------- ------------- -------------
Total Other Income 107 1,389 186 2,653

Net Income Before Income Taxes 276,535 163,384 349,078 465,650

Provision for Income Taxes (85,980) (62,086) (154,978) (176,947)

Net Income $ 190,555 $ 101,298 $ 194,100 $ 288,703
============= ============= ============= =============

Net Income per share $ 0.023 $ 0.016 $ 0.025 $ 0.046

Weighted Average Number of
Shares Outstanding 8,451,291 6,245,417 7,628,258 6,245,417






F-2

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QUEST RESOURCE CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)



-----------------------------
For the Six Months Ended
November 30
-----------------------------
2002 2001
------------- -----------
Cash Flows from Operating Activities:

Net Income (Loss) $ 258,739 288,703
Adjustments to Reconcile Excess
Contributions to cash provided from
operations:
Depreciation 143,744 109,708
Amortization 3,196 17,743
Depletion 223,310 148,838
Stock Issued for Services 130,000 -
Accounts Receivable (555,324) 39,568
Futures Contract 41,317 182,760
Parts & Supplies (30,860) (88,914)
Accounts Payable 1,224,543 157,348
Oil & Gas Payable 674,418 (172,630)
Deferred Income Tax Payable 127,305 150,494
Accrued Expenses 108,958 (124)
------------- -----------

Total Adjustments 2,090,607 944,791

Net Cash provided from Operating Activities 2,349,346 1,233,494

Cash flows from Investing Activities:
Sale of Leasehold Acreage 563,771 0
Fixed Assets (3,961,503) (2,402,146)
------------- -----------

Net Cash used in Investing Activities (3,397,732) (2,402,146)

Cash flows from Financing Activities
Change in Long-Term Debt 1,352,150 978,539
Convertible Debentures 122,000 240,000
Common Stock 6,000 0
------------- -----------

Net Cash provided from (used in)
Financing Activities 1,480,150 1,218,539

Net Increase (Decrease) in Cash (431,764) 49,887

Cash Balance, Beginning of Period 76,545 188,006

Cash Balance, End of Period $ 508,309 $ 138,119
============= ===========





F-3

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QUEST RESOURCE CORPORATION
Consolidated Statement of Stockholders Equity
(Unaudited)

Preferred Common Accumulate
Shares Shares Othe
Preferred Common Par Par Paid-In Comprehensive Retained
Shares Shares Value Value Capital Income (Loss) Earnings Total
---------------------------------------------------------------------------------------------------
Balance June 1, 2002 10,000 6,599,917 $ 10 $ 6,600 $ 4,441,071 $ - $ 163,925 $ 4,611,606

Stock Issued for Cash 47,858 48 60,952 $ 61,000

Stock Issued for Debt 215,871 215 219,785 $ 20,000

Stock Issued for Services 10,775 11 8,639 $ 8,650

Comprehensive Income:
Net Income 68,184 $ 68,184
Unrealized Loss of
Futures Contract (9,723) (9,723)
------------
Total Comprehensive Income 58,461
---------------------------------------------------------------------------------------------------
Balance August 31, 2002 10,000 6,874,421 $ 10 $ 6,874 $ 4,730,447 $ (9,723) $ 232,109 $ 4,959,717

Stock Issued for Merger 5,380,785 5,381 5,590,634 5,596,016

Stock Issued for Options 6,000 6 5,994 6,000

Stock Issued for Debt 77,778 78 79,922 80,000

Stock Issued for Oil &
Gas Lease 1,000 1 1,003 1,004

Stock Issued for Services 130,000 130 135,070 135,200

Stock Issued for Assets 330,000 330 342,870 343,200

Comprehensive Income:
Net Income 190,555 $ 190,555
Unrealized Loss of Futures
Contract 9,723 $ 9,723
------------
Total Comprehensive Income 200,278
---------------------------------------------------------------------------------------------------
Balance November 30, 2002 10,000 12,799,984 $ 10 $ 12,800 $10,885,941 $ - $ 422,664 $11,321,415
===================================================================================================





F-4

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Quest Resource Corporation



NOTES TO FINANCIAL STATEMENTS



November 30, 2002



(Unaudited)



NOTE 1 - BASIS OF PRESENTATION

The unaudited financial statements included herein have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended November 30, 2002 are not necessarily indicative of the results that may be expected for the fiscal year ended May 31, 2003. Shares of common stock issued by the Company for other than cash have been assigned amounts equivalent to the fair value of the service or assets received in exchange. For further information, the statements should be read in conjunction with the financial statements and notes thereto included in the Company`s Form 10-K for the fiscal year ended May 31, 2002.

PRINCIPLES OF CONSOLIDATION AND SUBSIDIARIES

Quest Energy Service, Inc. ("QES"), Quest Oil and Gas Corporation ("QOG"), Ponderosa Gas Pipeline Company, Inc., ("PGPC"), all being Kansas corporations, and STP Cherokee, Inc., an Oklahoma Corporation ("STP"), are wholly owned subsidiaries of Quest Resource Corporation, a Nevada corporation ("QRC" or the "Company"). Financial reporting by the subsidiaries is consolidated into one set of financial statements for QRC. QES provides service and construction activities required for the operation and development of the Company`s oil and gas properties and the gas pipelines. QES derives approximately 90% of its revenue from servicing QRC assets. PGPC`s primary assets are approximately one hundred and sixty miles of gas gathering pipelines throughout southeast Kansas.

The QOG subsidiary entity was acquired as Mogg Energy Services, Inc. on March 31, 2000 in exchange for common stock of the Company and the name was subsequently changed to Quest Oil & Gas Corporation. Assets gained in this acquisition included a majority of the gas wells that were producing into the PGPC pipeline system along with undeveloped gas reserves. This acquisition caused a substantial increase in Company-owned gas production and reserves.

Investments in which the Company does not have a majority voting or financial controlling interest are accounted for under the equity method of accounting unless its ownership constitutes less than a 20% interest in such entity for which such investment would then be included in the consolidated financial statements on the cost method. All significant inter-company transactions and balances have been eliminated in consolidation.


F-5

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Quest Resource Corporation



NOTES TO FINANCIAL STATEMENTS



November 30, 2002



(Unaudited)



PRINCIPLES OF CONSOLIDATION AND SUBSIDIARIES (con`t)

On November 7, 2002 an Agreement and Plan of Reorganization was consummated whereby the Company acquired STP Cherokee, Inc. ("STP") as reported on the Form 8-K filed November 18, 2002. Pursuant to the terms and conditions of the Reorganization Agreement, the Company issued to Mr. Jerry D. Cash, the sole stockholder of STP, 5,380,785 shares of Company common stock, representing approximately 42% of the common stock of the Company, in exchange for 100% of the outstanding common stock of STP.

Earnings per Common Share

The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share," which simplifies the computation of earnings per share requiring the restatement of all prior periods.

Basic earnings per share are computed on the basis of the weighted average number of common shares outstanding during each year.

Diluted earnings per share are computed on the basis of the weighted average number of common shares and dilutive securities outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share and are excluded from the calculation.

Common Stock

During the quarter ended November 30, 2002, the Company issued a total of 5,925,563 shares of its common stock in the following transactions:
1) On November 7, 2002, 5,380,785 shares were issued in connection with the merger.
2) In October and November 2002, the Company converted $80,000 in convertible debentures for a total of 77,778 shares of its common stock per the agreement in the initial debentures.
3) During the quarter the Company issued 130,000 shares of its common stock to related individuals for services for the Company.
4) In November of 2002, the Company issued 330,000 shares of its common stock for Assets valued at $343,200, and 1,000 shares of its common stock valued at $1,040 for an oil and gas lease.
5) Also, during the quarter ended November 30, 2002, the Company sold 6,000 shares of its common stock for $6,000.

NOTE 2 - SALE OF ACREAGE

The Company completed a transaction to sell 22,550 acres of oil and gas leases in July 2002. The Company received a total of $563,771 for these leases and had a total cost basis of $159,623 in these leases. The proceeds were recorded as a reduction to the cost of oil and gas properties in the balance sheet since the Company follows the full cost method of accounting for oil and gas properties.


F-6

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Quest Resource Corporation



NOTES TO FINANCIAL STATEMENTS



November 30, 2002



(Unaudited)



NOTE 3 - ACQUISITION

On November 7, 2002, the Company, STP Cherokee, Inc. ("STP") and Jerry D. Cash, the sole stockholder of STP, consummated an Agreement and Plan of Reorganization by and among the Corporation, STP and Mr. Cash, dated as of November 7, 2002 (the "Reorganization Agreement"). Pursuant to the terms and conditions of the Reorganization Agreement, the Corporation issued to Mr. Cash 5,380,785 shares of the common stock of the Corporation, representing approximately 42% of the common stock of the Corporation after giving effect to the transactions contemplated by the Reorganization Agreement, in exchange for 100% of the outstanding common stock of STP (the "Stock Exchange"). The transaction is being accounted for as a "purchase" following the procedures of SFAS 142, "Accounting for Business Combinations.

The following table summarizes the estimated fair value of the assets of the assets acquired and liabilities assumed at the date of acquisition:


Current Assets $ 1,134,100
Fixed Assets 13,773,412
Goodwill 513,253
Debt Assumed ( 9,631,419)
------------

Net Assets Acquired $ 5,789,346
============




Pro-forma Summary Data (Unaudited)

The following pro-forma summary data for the three and six months ended November 30, 2002 and 2001 presents the consolidated results of operations as if the acquisition of STP Cherokee, Inc. made on November 7, 2002 had occurred on June 1, 2001. These pro-forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisition been made as June 1, 2001 or of results that may occur in the future.

Three Months Ended November 30 Six Months Ended November 30

2002 2001 2002 2001
------------------------------------------------------------

Pro-forma Revenue $ 2,439,984 $ 1,720,141 $ 4,203,932 $ 3,588,679
Pro-forma Net Income 242,046 115,249 337,155 340,925

Pro-forma net income
per share $.03 $.018 $ .044 $ .054





F-7

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Quest Resource Corporation



NOTES TO FINANCIAL STATEMENTS



November 30, 2002



(Unaudited)



NOTE 4 - NOTES PAYABLE

On November 7, 2002, the Company, as borrower, Ponderosa Gas Pipeline Company, Inc., Quest Oil & Gas Corporation and STP Cherokee, Inc., as guarantors, entered into a $20 million credit agreement with Wells Fargo Bank Texas, N.A. and a $20 million credit agreement with Wells Fargo Energy Capital, Inc. ("WF Energy Capital"). The maximum amount that the Company may borrow under the two credit agreements is limited during six-month borrowing periods to an amount based on the value of the collateral securing the loans. The amount of the initial combined borrowing limitation is $15,000,000. At the execution of the credit agreements, the Company obtained an initial advance of $12,500,000. The balance of the two Wells Fargo loans as of November 30, 2002 was $13.0 million.

In connection with the WF Energy Capital credit agreement, the Company issued a warrant to WF Energy Capital to acquire up to 1.6 million shares of the Company`s common stock at a purchase price of $0.001 per share at any time on or before November 7, 2007. The warrant contains anti-dilution protection for WF Energy Capital in the event that the Company issues common stock or warrants or options to acquire common stock or securities convertible into common stock below certain specified prices. The agreement pursuant to which the warrant was issued contains restrictions on the Company entering into transactions with affiliates or paying dividends. In addition, WF Energy Capital has the right from and after the earlier to occur of November 7, 2005 and the date the amounts due under the WF Credit Agreement are paid in full, and before November 7, 2007, to require the Company to purchase the warrant at a price equal to $2.5 million; provided that if the purchase price for the warrant plus the total amount of interest received under the WFEC Credit Agreement would exceed the amount of interest that would have been paid on the WFEC Credit Agreement if it had borne interest at the rate of 18% per annum (the "Maximum Interest Amount"), then the purchase price for the warrant will be reduced to an amount such that the sum of the warrant purchase price plus the total amount of interest received under the WFEC Credit Agreement does not exceed the Maximum Interest Amount.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

Like other oil and gas producers and marketers, the Company`s operation are subject to extensive and rapidly changing federal and state environmental regulations governing air emissions, waste water discharges, and solid and hazardous waste management activities. Therefore it is extremely difficult to reasonably quantify future environmental related expenditures.

The Company, from time to time, may be subject to legal proceedings and claims that arise in the ordinary course of its business. QOG is currently involved in a lawsuit with Devon SFS Operating, Inc. (Case #01-C-58C, Neosho County, Kansas) regarding the validity of its oil and gas lease on a 160-acre parcel referred to as the Umbarger Lease.


F-8

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ITEM 2. MANAGEMENT`S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking Information

This quarterly report contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements relate to future events or to our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. There are a number of factors that could cause our actual results to differ materially from those indicated by such forward-looking statements. See our report on Form 10-KSB for the fiscal year ended May 31, 2002 for a listing of some of these factors.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, we do not assume responsibility for the accuracy and completeness of such forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this report to conform such statements to actual results.

Business Of Issuer

Our primary business is the production and transportation of natural gas in a 700 square mile region of southeast Kansas and northeast Oklahoma which is served by our gas pipeline network. Our main focus is upon the development of Company-owned coal bed methane gas reserves in our pipeline region and upon the continued enhancement of the pipeline system and supporting infrastructure.

Significant Developments During The Quarter Ended November 30, 2002

On November 7, 2002 an Agreement and Plan of Reorganization (the "Reorganization Agreement") was consummated whereby the Company acquired STP Cherokee, Inc. ("STP") as reported on the Form 8-K filed November 18, 2002. Pursuant to the terms and conditions of the Reorganization Agreement, the Company issued to Mr. Jerry D. Cash, the sole stockholder of STP, 5,380,785 restricted shares of Company common stock, representing approximately 42% of the common stock of the Company, in exchange for 100% of the outstanding common stock of STP.

The STP acquisition also required the Company to assume approximately $10,000,000 in debt. As reported on the Form 8-K filed with the SEC on November 27, 2002, this debt was re-financed with the establishment of a $20,000,000 credit facility with Wells Fargo Bank, N.A. and another $20,000,000 credit facility with Wells Fargo Energy Capital, Inc. See "Capital Resources and Liquidity" for additional information regarding these credit facilities. In connection with the Wells Fargo Energy Capital credit facility, the Company issued Wells Fargo Energy Capital a warrant to acquire up to 1.6 million shares of the Company`s common stock at a purchase price of $0.001 per share at any time on or before November 7, 2007. See "Changes in Securities and Use of Proceeds" for additional information regarding the warrant.

The assets of STP Cherokee, Inc. include 130 gross (128 net) gas wells, oil and gas leases covering 48,000 gross (44,250 net) acres, and approximately 180 miles of gas gathering pipelines. These assets are located in northeast Oklahoma and southeast Kansas and are near the Company`s existing assets. STP`s pipelines


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currently gather about 7,500 mcf of gas per day which includes approximately 6,000 mcf produced by STP.
In connection with the STP acquisition, the Company acquired the natural gas marketing business of Bonanza Energy Corporation of Kansas, which had previously acted as the sole marketer of the Company`s natural gas production, and certain gas and pipeline assets from Crown Properties LC. See "Changes in Securities and Use of Proceeds" for additional information regarding these acquisitions.

Management believes that this combination of companies provides the critical mass of property and production in the Cherokee Basin required for more aggressive development in today`s competitive environment. Quest now has increased its staff to 45 experienced oil and gas employees. The new Quest Board of Directors consists of two previous directors, Douglas L. Lamb and John C. Garrison, and two new directors, Jerry D. Cash and James B. Kite, Jr. Mr. Cash has been appointed Chairman of the Board, co-CEO and Chief Financial Officer. Mr. Lamb has been appointed President, co-CEO and Chief Operating Officer. In order to accommodate the above changes in directors, Richard M. Cornell resigned as a director of Quest on November 6, 2002. Mr. Cornell continues his valuable service to Quest as a key member of the management team of Quest Energy Service, Inc.

The acquisition of STP has dramatically increased the Company`s assets and gas production. We now have 266 gross (250.51 net) producing oil and gas wells, 340 miles of gas gathering pipelines, approximately 105,000 acres under lease, and a bank line of credit to expand our drilling program. Total gas volume gathered is about 11,000 mcf per day with nearly 9,000 mcf being produced by the Company. These gas volumes are more than three times greater than the gas volumes prior to the STP acquisition.

On September 1, 2002, the beginning of this quarter, the Quest Oil & Gas Corporation ("QOG") subsidiary had 18 gross (17.5 net) wells in the process of being completed. During the quarter, QOG completed and put into operation 2 gross (1.15 net) new gas wells, one of which was drilled in the previous fiscal year. QOG also drilled 4 gas wells and purchased 1 gas well for a total of 5 gross (3.82 net) new gas wells during this quarter, all of which are being completed into producing wells. At the end of the quarter, there remained 21 gross (20.17 net) gas well completions in progress.

On September 1, 2002, STP Cherokee, Inc. had 22 gross (22 net) wells in the process of being completed. During the three months ended November 30, 2002, STP completed and put into operation 2 gross (2 net) new gas wells. STP also drilled 4 gross (4 net) new gas wells during the three months ended November 30, 2002, all of which are being completed into producing wells. As of November 30, 2002, there remained 24 gross (24 net) gas well completions in progress.

Results Of Operations

The following discussion is based on the consolidated operations of all our subsidiaries and should be read in conjunction with the financial statements included in this report; and should further be read in conjunction with the audited financial statements and notes thereto included in our annual report on Form 10-KSB for the fiscal year ended May 31, 2002. Additional important reference documents include: the Form 10-QSB for the quarter ended August 31, 2002, and the two Forms 8-K filed in November, 2002. Comparisons made between reporting periods herein are for the three-month and six-month periods ended November 30, 2002 as compared to the same periods in 2001. The newly acquired STP assets provided revenue during this quarter only for the month of November. Summary pro-forma financial information, as if the STP assets were participating for the entire quarter, are available in the Notes To Financial Statements.


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Total Revenue for the quarter ended November 30, 2002 was $1,916,309, as compared to revenue in the year-earlier quarter of $1,510,928. Net Income Before Income Taxes from these comparable quarters was $276,535 for the recent quarter ending November 30, 2002 as compared to $163,384 for the year-earlier quarter. As for the six-month period ended November 30, 2002, Total Revenue and Net Income Before Income Taxes were $3,203,064 and $349,078 respectively, as compared to $3,038,208 and $465,650 respectively for Total Revenue and Net Income Before Income Taxes for the six month period ended November 30, 2001. Factors causing the increased revenue include: the additional revenue from the newly acquired STP assets for the month of November; an average gas price for the quarter that was $1.10 higher than the comparable year-earlier quarter; and, an increased number of producing wells. As a result of these factors, several revenue categories increased substantially as compared to the similar three and six month periods of the previous year. Gas Pipeline Revenue were 48% or $110,426 over the prior year`s comparable quarter and 33% or $159,265 over the previous comparable six month period. Oil and Gas Production Revenue increased 235% or $578,980 over the previous comparable quarter and $549,057 or 105% over the previous six month interval; and, Oil & Gas Operations receipts increased 470% or $285,664 for the quarter and 253% or $462,861 for the comparable six month period.
Pipeline and Property Development Revenue for the quarter was $551,815 less than the previous year quarter and, for the six month period ending November 30, 2002, was $561,151 less than the same six month period in the previous year. These declines were due to modest development activity during this quarter. Since we were in the process of negotiating the new Wells Fargo credit facilities during the quarter, we did not seek alternative sources of funding to increase the development program, because we believed that the alternative funding sources would have been on less favorable terms than the Wells Fargo credit facilities.

Due to reduced development activities, Purchases and Outside Services Expense was $90,114 less than the year earlier quarter and, for the six month period was $124,569 less than the same previous year period. Oil & Gas Production Costs increased by 55% or $101,009 for the comparable quarterly periods and by 44% or $136,009 for the comparable six month periods, which was due to the increasing number of new operating gas wells and the addition of the STP gas properties. Consulting Fees increased $66,779 for the comparable quarterly periods, but on a six month period Consulting Fees were $7,571 less than the previous year six month period. The increased Consulting Fees in the comparable quarterly periods were a result of finalizing certain outstanding consulting compensation issues prior to the STP acquisition.

With improved gas prices and the growing gas production volumes from both internal development and acquisitions, the Company`s Net Cash From Operating Activities are on the rise. Net Cash From Operating Activities for the six month period ended November 30, 2002 is $2,349,346 as compared to the same six month period in the previous fiscal year of $1,233,494.

During this second quarter our net wells, excluding the newly acquired STP wells, produced 150,090 mcf of gas as compared to gas production of 142,445 mcf during the previous quarter and 155,267 mcf during the year-earlier quarter ended November 30, 2001. Therefore, the modest amount of new development accomplished in the previous twelve months was more than offset by decline in gas production from existing wells. In addition to these gas volumes, another 126,416 mcf was produced just during the month of November by the newly acquired STP wells. Therefore, the additional STP gas production has more than tripled the previous Company-owned gas production rate. We anticipate that the Company`s development activity should significantly increase during the remainder of fiscal year 2003.

Capital Resources And Liquidity

The Company`s access to working capital has been greatly enhanced by the two $20,000,000 credit facilities


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now in place with Wells Fargo Bank Texas, N.A. and Wells Fargo Energy Capital, Inc. The total amount the Company may borrow under the two credit facilities is limited during six-month borrowing periods to an amount based on the value of the collateral securing the loans. The amount of the initial combined borrowing limitation is $15,000,000, which is expected to be revised early this year upon submission of updated gas reserve estimates. Our ability to fully implement our expanded drilling program is dependent upon being able to raise the borrowing limitation applied to the credit facilities. Although we believe that we will have adequate additional reserves to support an increase to the borrowing limitation, no assurance can be given that we will be able to obtain an increase sufficient to support all of our development plans. See the Company`s Form 8-K filed November 27, 2002 for additional information regarding the Wells Fargo credit facilities.
An important cash flow aspect of the new credit facilities is that only the payment of interest is required through November, 2005. In connection with the Wells Fargo Energy Capital credit facility, Quest issued a warrant to Wells Fargo Energy Capital to acquire up to 1,600,000 shares of Quest Common stock at a price of $0.001 per share. This refinancing of existing debt with interest-only payments through 2005 is expected to provide significant additional capital for development and potential acquisitions.

The subsidiary entity Quest Energy Service, Inc. ("QES") is not a party to the Wells Fargo credit agreements. Instead, QES has retained local banking relationships for its financing requirements.

The most significant aspect of our financing activities for the quarter was certainly the attainment of the Wells Fargo lines of credit. Only a limited amount of working capital was raised from non-bank financing during the quarter as follows: proceeds from the sale of two convertible debentures totaled $80,000; and, proceeds from the sale of common stock amounted to only $6,000. The Company also paid for certain expenses totaling $135,200 by the issuance of restricted common stock.

During the month of December, 2002, the Company established two fixed-price hedging positions for the future sale of natural gas. One transaction is for 5,000 MMBtu per day of natural gas during a 10 month period beginning January 1, 2003 and ending October 31, 2003 at a fixed price of $4.00 per MMBtu. The other transaction is for 2,000 MMBtu per day during a 12 month period beginning April 1, 2003 and ending March 31, 2004 at a fixed price of $4.24 per MMBtu.

The Company plans to invest over $4,000,000 to drill and complete at least 70 new wells in the 2003 calendar year, which represents an unprecedented level of new development. We believe such funding will be available from both internal cash flow and the Wells Fargo credit facilities. On-going improvements to our pipeline infrastructure are also underway with the construction of a new 10" delivery pipeline three miles in length to provide increased delivery capacity from our Edna Hollow gas field located south of Edna, Kansas where our gas production capability has exceeded the existing 6" delivery pipeline.

ITEM 3. CONTROLS AND PROCEDURES.

Within 30 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company`s management, including the Company`s co-Chief Executive Officers, and the Chief Financial Officer, of the effectiveness of the design and operation of the Company`s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the co-Chief Executive Officers, and the Chief Financial Officer, concluded that the Company`s disclosure controls and procedures are effective.

The acquisition of STP caused an expansion of the senior management team and the board of directors requiring further dissemination of the Company`s disclosure controls and procedures. These additional


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members of the Company`s management have been briefed on the specifics of the Company`s disclosure controls and procedures pursuant to Exchange Act rule 13a-14. During the quarter there were no significant changes in the Company`s internal controls. Other than the expansion of our senior management team, there were no other factors that could significantly affect these controls subsequent to the date of their evaluation.



PART II -OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

See Part I, Item 1, Note 3 to our consolidated financial statements entitled "Commitments and Contingencies", which is incorporated herein by reference.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On September 15, 2002, the Company made one sale of 6,000 restricted shares of its common stock to Mr. Jim Vin Zant, an accredited investor who is also an existing shareholder of the Company for $6,000. Mr. Vin Zant`s purchase price was partial compensation for services he provided to the Company in the year 2002. Proceeds of the transaction were used as working capital.

On October 4, 2002, a $30,000 debenture was converted at a price of $1.08 into 27,778 shares of restricted common stock in accordance with the terms and conditions of the debenture, which allows conversion into the number of shares determined by dividing the unpaid principal balance of the debenture and the accrued and unpaid interest thereon by 75% of the average trading price of the common stock for the previous thirty-day period.

On October 17, 2002, a $50,000 debenture was converted to 50,000 shares of restricted common stock in accordance with its terms and conditions.

On October 18, 2002, 1,000 shares of restricted common stock were authorized for issuance to Mr. William Matney as partial compensation for an oil and gas lease.

On November 2, 2002, 20,000 shares of restricted common stock were issued to each of the three directors of the Company as their entire compensation for the previous four years of service. Another 50,000 shares were issued to Mr. Richard M. Cornell as compensation for his various forms of service to the Company during his previous five-year tenure.

On November 2, 2002, 20,000 shares of restricted common stock were issued to Mr. Michael L. Ebers for geological consulting services.

On November 4, 2002 and as reported in the Schedule 13D filed with the SEC on November 18, 2002, the Company issued 300,000 shares of restricted common stock to Bonanza Energy Corporation of Kansas ("BECK") for the purchase of BECK`s gas marketing business and 30,000 shares of restricted common stock to Crown Properties, LC for the purchase of certain gas pipeline assets. BECK is owned jointly by Douglas L. Lamb and Marsha K. Lamb. Crown Properties, LC is owned solely by Mrs. Lamb. Mr. and Mrs. Lamb are husband and wife, citizens of the United States, and are both employed by the Company. Mr. Lamb is Co-Chief Executive Officer, President and Chief Operating Officer of the Company. They primarily work from the Company`s offices located at 701 East Main Street, Benedict, Kansas 66714. The number of shares issued in these acquisitions was determined by dividing the fair market value of the acquired assets/businesses (based


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on the profitability of each activity and the additional revenue that the Company is expected to receive from each) by the stock price of the Company `s Common Stock at the time the Company and STP agreed in principle to the reorganization. The valuations and the price per share were approved by all of the directors of the Company and Mr. Cash. The Company did not obtain any appraisals or fairness opinions in connection with such determinations.
On November 7, 2002 and as reported in the Schedule 13D filed with the SEC on November 18, 2002, the Company authorized the issuance of 5,380,785 shares of restricted common stock in conjunction with the acquisition by the Company of 100% of the outstanding common stock of STP. Mr. Cash was the sole stockholder of STP. The number of shares issued in the acquisition was determined by negotiations between the Board of Directors of the Company and Mr. Cash as to the relative valuations of the assets, properties, reserves and liabilities of STP and the Company which were based primarily upon independent engineering reserve studies for the properties owned by the Company and STP.

Three new convertible debentures were issued during the quarter, all having an interest rate of 8% and a term of three years. One debenture was issued for $25,000 during this quarter although it was effective on August 27, 2002. Another debenture was issued for $30,000 with an effective date of September 15, 2002. A final debenture was issued for $50,000 on October 17, 2002. All of the debenture proceeds were used for working capital primarily for development of new gas wells and pipeline infrastructure. All three of these debenture purchasers were accredited investors and Quest shareholders at the time of purchase, while two were also holders of previously issued debentures. The debentures are convertible into common stock at any time after the first anniversary of their issue date. The number of shares of common stock to be issued upon conversion will be determined by dividing the unpaid principal balance of the debenture and accrued and unpaid interest thereon by 75% of the average trading price of the common stock for the previous thirty-day period.

On November 7, 2002, the Company, as borrower, Ponderosa Gas Pipeline Company, Inc., Quest Oil & Gas Corporation and STP Cherokee, Inc., as guarantors, entered into a $20 million credit agreement with Wells Fargo Bank Texas, N.A. and a $20 million credit agreement with Wells Fargo Energy Capital, Inc. ("WF Energy Capital"). See "Management`s Discussion and Analysis or Plan of Operations--Capital Resources and Liquidity" for additional information regarding the WFEC Credit Agreement. In connection with the credit agreements, the Company issued a warrant to WF Energy Capital to acquire up to 1.6 million shares of the Company`s common stock at a purchase price of $0.001 per share at any time on or before November 7, 2007. The warrant contains anti-dilution protection for WF Energy Capital in the event that the Company issues common stock or warrants or options to acquire common stock or securities convertible into common stock below certain specified prices. The agreement pursuant to which the warrant was issued contains restrictions on the Company entering into transactions with affiliates or paying dividends. In addition, WF Energy Capital has the right from and after the earlier to occur of November 7, 2005 and the date the amounts due under the WF Credit Agreement are paid in full, and before November 7, 2007, to require the Company to purchase the warrant at a price equal to $2.5 million; provided that if the purchase price for the warrant plus the total amount of interest received under the WFEC Credit Agreement would exceed the amount of interest that would have been paid on the WFEC Credit Agreement if it had borne interest at the rate of 18% per annum (the "Maximum Interest Amount"), then the purchase price for the warrant will be reduced to an amount such that the sum of the warrant purchase price plus the total amount of interest received under the WFEC Credit Agreement does not exceed the Maximum Interest Amount.

All of the above transactions were exempt from registration pursuant to either
Section 4(2) of the Securities Act or Regulation D. These securities were sold without a general solicitation, and, except for the shares issued to Mr. Matney for an oil and gas lease, to existing shareholders or debenture holders of the Company that were either accredited investors or were employed by the Company. The securities were issued with a legend restricting resale.


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ITEM 3. DEFAULT UPON SENIOR SECURITIES
None

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

2.1 Agreement and Plan of Reorganization dated as of November 7, 2002, by and among Quest Resource Corporation, STP Cherokee, Inc. and Jerry D. Cash (incorporated by reference from Exhibit 2.1 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 19, 2002).
3.1 Amended and Restated Bylaws of Quest Resource Corporation (incorporated by reference from Exhibit 3.1 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 19, 2002).
4.1 Form of Credit Agreement by and among Quest Resource Corporation, Ponderosa Gas Pipeline Company, Inc., Quest Oil & Gas Corporation, STP Cherokee, Inc. and Wells Fargo Energy Capital, Inc., dated as of November 7, 2002 (incorporated by reference from Exhibit 4.1 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 27, 2002).
4.2 Form of Credit Agreement among Quest Resource Corporation, Ponderosa Gas Pipeline Company, Inc., Quest Oil & Gas Corporation, STP Cherokee, Inc., Wells Fargo Bank Texas, N.A. and the Other Financial Institutions as Party Thereto, dated as of November 7, 2002 (incorporated by reference from Exhibit 4.2 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 27, 2002).
4.3 Form of Subordination Agreement dated as of November 7, 2002 among Wells Fargo Energy Capital, Inc., Wells Fargo Bank Texas, N.A., Quest Resource Corporation, Ponderosa Gas Pipeline Company, Inc., Quest Oil & Gas Corporation, and STP Cherokee, Inc. (incorporated by reference from Exhibit 4.3 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 27, 2002).


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4.4 Form of Warrant to purchase 1,600,000 shares of Common Stock dated November 7, 2002 issued by Quest Resource Corporation to Wells Fargo Energy Capital, Inc. (incorporated by reference from Exhibit 4.4 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 27, 2002). 10.1 Voting Agreement for Shares of Stock of Quest Resource Corporation dated as of November 7, 2002, by and among Quest Resource Corporation, Douglas L. Lamb and Jerry D. Cash (incorporated by reference from Exhibit 10.1 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 19, 2002). 10.2 Consent of Transferee of Quest Shares dated November 7, 2002, executed by Boothbay Royalty Company (incorporated by reference from Exhibit 10.2 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 19, 2002). 10.3 Consent of Transferee of Quest Shares dated November 7, 2002, executed by Southwind Resources, Inc. (incorporated by reference from Exhibit 10.3 of Quest Resource Corporation`s Form 8-K filed with the Securities and Exchange Commission on November 19, 2002).
(b) Reports on form 8-K.

On October 15, 2002, the Company filed a Report on Form 8-K to report the filing of the certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 with respect to the Company`s Form 10-QSB for the fiscal quarter ended August 31, 2002.

On November 18, 2002, the Company filed a Report on Form 8-K to report the acquisition of STP Cherokee, Inc. via an Agreement and Plan of Reorganization by and among the Company, STP and Jerry D. Cash, the sole stockholder of STP.

On November 27, 2002, the Company filed a Report on Form 8-K to report the terms and conditions of the two $20,000,000 credit facilities established with Wells Fargo Bank Texas, N.A. and Wells Fargo Energy Capital, Inc.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized this 13th day of January, 2003.


Quest Resource Corporation


By: /s/ Jerry D. Cash
--------------------------
Jerry D. Cash
Co-Chief Executive Officer
Chief Financial Officer






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By: /s/ Douglas L. Lamb
----------------------------
Douglas L. Lamb
President
Co-Chief Executive Officer






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CERTIFICATIONS
I, Douglas L. Lamb, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Quest Resource Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant`s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant`s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant`s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant`s auditors and the audit committee of registrant`s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant`s ability to record, process, summarize and report financial data and have identified for the registrant`s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant`s internal controls; and

6. The registrant`s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: January 13, 2003



/s/ Douglas L. Lamb
----------------------------
Douglas L. Lamb
President and Co-Chief Executive Officer






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I, Jerry D. Cash, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Quest Resource Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial

[lGasAnalyst]

Sorry, hätt ich fast vergessen:



Quest Resource Corporation Completes 2nd Quarter of Fiscal Year 2003

BENEDICT, Kansas; January 21, 2003 – Quest Resource Corporation (OTCBB:QRCP) has filed its Form 10-QSB quarterly report containing financial and operating results for the quarter ending November 30, 2002.

The Acquisition Of STP Cherokee, Inc.
The large increases in asset value, liabilities and equity depicted below are due to the acquisition of STP Cherokee, Inc. (“STP”) on November 7, 2002. The combination of STP with Quest has doubled the employee force to 45 and the number of wells to 260, expanded the gas gathering pipelines to a 340 mile system, increased the inventory of acreage to over 100,000 acres, and elevated the gas volume being produced to 9,000 mcf per day. For more information about the combination of STP with Quest, see the Quest press release dated November 27, 2002, the Quest website at www.qrcp.net and the Form 10-QSB filed with the SEC on January 14, 2003, which is also available on the Quest website. Selected financial data is provided below in a comparative format for the second quarter of the current and prior fiscal year.


QUEST RESOURCE CORPORATION
SUMMARY OF OPERATIONS
(Unaudited)
Selected Income Data For The Quarter Ended Increase or (Decrease) %Change
11/30/2002 11/30/2001
Total Revenue $1,916,309 $1,510,928 $405,381 27%
Net Income Before Income Tax $276,535 $163,384 $113,151 69%
Net Income Per Share $0.023 $0.016 $0.007 44%
Cash Flow Earnings * 620,190 $380,854 $239,336 63%
Cash Flow Earnings Per Share * $0.073 $0.061 $0.012 20%
Weighted Average Shares Outstanding 8,451,291 6,245,417 2,205,874 35%

Selected Balance Sheet Data
Total Assets $28,462,545 $8,803,799 $19,658,746 223%
Total Liabilities $17,141,130 $4,267,153 $12,873,977 302%
Stockholder`s Equity $11,321,415 $4,536,646 $6,784,769 150%
Total Outstanding Shares 12,799,984 6,245,417 6,554,567 105%

Selected Operating Data
Net Gas Production (mcf) 276,506 155,267 121,239 78%

*Cash Flow Earnings is calculated by adding Net Income before Income Taxes plus Interest Expense and Depreciation, Depletion and Amortization expense. Cash Flow Earnings Per Share is calculated by dividing Cash Flow Earnings by Weighted Average Shares Outstanding.

The quarter ended November 30, 2002 includes additional revenue, expenses, and net gas production from STP for only the month of November due to the acquisition of STP on November 7, 2002. For complete financial information refer to the unaudited financial statements and accompanying notes in Quest’s SEC Form 10-QSB for the quarter ended November 30, 2002, which is available on the SEC’s website at www.sec.gov. and on the Quest website at www.qrcp.net.

Comments On Financial and Operating Data
Quest was successful in achieving net gas production of 276,506 mcf representing a 78% gain over the 155,267 mcf produced in the year-earlier quarter. Total revenues for this quarter were $1,916,309 as compared to $1,510,928 for the prior year resulting in a 27% increase. These revenue increases were due mainly to the additional revenue from the newly acquired STP assets as well as an average well-head gas price that was $1.10 higher than the previous year-earlier quarter and the increased number of producing wells. During the recent quarter, significant gains were made in several revenue categories; receipts from Oil and Gas Operations increased 470%, Oil and Gas Production Revenue increased 235%, and Gas Pipeline Revenue increased by 48%. Although most revenues showed increases, Pipeline and Property Development Revenue declined due to the reduced development activity during this quarter.

Partial Period For STP Gas Production
The additional STP gas production has increased the total Quest gas volume to more than triple the previous daily Quest gas production volume. The Gas Production Revenue for the quarter only included STP gas volumes for 1/3 of the quarter which was during the month of November. However, this additional 126,416 mcf of STP gas volume nearly matched the entire quarter’s volume of 150,090 mcf from all the other Quest wells, and comprised 46% of the entire Quest gas volume for the quarter. Therefore, we expect the STP gas production to have a more significant impact on revenue reported in the future.

Wells Fargo Financing
Another substantial benefit from the STP acquisition is the new financial relationship that Quest has gained with the Wells Fargo Bank. Quest now has two $20,000,000 credit facilities in place with Wells Fargo Bank Texas, N.A. and with Wells Fargo Energy Capital, Inc. Details of these two credit facilities are disclosed in the Form 10-QSB filed with the SEC on January 14, 2003 and in the Form 8-K filed with the SEC on November 27, 2002.

Future Development
With the funding for new development in place, Quest crews are busy completing new wells and building additional gas gathering pipelines. Our development plan calls for the completion of at least 70 new wells during calendar year 2003 which will also involve additional drilling of new wells. However, no assurances can be given that Quest will be able to complete that number of wells during 2003. Our ability to fund that level of activity will depend in part on our ability to increase our borrowing limit with the Wells Fargo credit facilities.

Quest’s primary activity is the exploration, production, and transportation of natural gas in a 700 square mile region of southeast Kansas and northeast Oklahoma that is served by its 340 mile gas pipeline network. For more information, contact Mr. Jim Vin Zant at 316-788-1545 or visit the Quest website at www.qrcp.net.

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 the Company 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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in the Company`s filings with the Securities and Exchange Commission.



Freuen wir uns auf die weiteren guten Ergebnisse und Meldungen dieser wirklichen Perle!

[lGasAnalyst]

370% Performance in einem Jahr Es wird weiter gehen. Gute Projekte sollten in naher Zukunft erste positive Ergebnisse hervorbringen!

[eurogekko]

Endlich was gutes,aber teton und die Abzocker Eurogas hellllo Gruss

[lGasAnalyst]

So, die 3 US$ sind genommen
und es sieht guuuut aus, sehr guuut!

[lGasAnalyst]

Hat ich vergessen



QUEST FOR ENERGY
A Kansas company is emerging as a leader in the hunt for methane in the Cherokee Basin
By Phyllis Jacobs Griekspoor


BENEDICT, Kan. February 16, 2003 - Quest Resources Corp. isn`t the biggest player in the emerging natural gas boom in southeast Kansas. But the modest company might well be the fastest-growing.

Quest, whose roots run three generations deep in the Kansas oil patch, has leases on more than 100,000 acres of land in the Cherokee Basin, where millions of cubic feet of natural gas lie trapped in the seams of nine layers of shale and coal formations 700 feet to 1,100 feet below the creeks, pastures and stands of timber.

The company will begin full-scale development this year, drilling 100 wells to tap into the methane in the coal beds.

The pace of drilling is double that of the past three years for Quest and equals that of the biggest player in the region, Devon, the nation`s fifth-largest oil and gas exploration company, which has leases on 300,000 acres of land in the basin.

As many as 30 other companies have leases in the Cherokee, which stretches more than 150 miles long and 50 miles to 60 miles wide in southeastern Kansas and northeastern Oklahoma. The basin promises to deliver clean, virtually pure methane gas to energy-hungry Americans for the next 15 to 20 years. It may also bring a new economic boon to a region long lagging behind the rest of the state in income.

"Coal-bed methane is already a big boom in southeast Kansas and it has the potential to become a boom for all of eastern Kansas," said Tim Carr, chief petroleum researcher with the Kansas Geological Survey.

"What we have seen so far is major development along the big pipelines that run to Kansas City and Chicago. Producers along those pipelines can get near-market prices for their gas."

Quest sells all of its natural gas to Oneok and pumps directly into the Williams pipeline that runs through Neosho County.

"This is a huge impact in the counties that have proven reserves: Wilson, Neosho, Montgomery and Labette," Carr said.

"In other areas, north in the Forest City Basin, it`s less certain because much less research has been done. If that area turns out to be as rich as southeast Kansas, this is huge."

Economic boon

Steve Stanfield, chief operations officer of Consolidated Oil Well Services in Chanute, a company that provides fracturing, piping and cementing services to the oil and gas industry, said leasing and drilling have already had a major economic impact.

"Already, there has been a big initial boost to income in this region from the land leases," Stanfield said.

"Now as we get into production, you have companies buying supplies and services and then the income from the wells as production increases," he said.

Quest spends about $50,000 to drill a well, most of which goes into the local economy.

Lamb said he has leases with about 200 landowners and would estimate that Devon has leases with at least 500. Each landowner has been paid $4 to $20 an acre, depending on the estimated potential from the area.

Landowners typically get a royalty, about one-eighth of the gas money the well produces. They also get some money for surface easements such as roads, wellhead sites and compressor stations.

Carr estimates that in a 10-year period, a well will provide about $70,000 to $80,000 in royalty income for a landowner.

Stanfield said there`s additional benefit to communities from local companies in the drilling business as well.

"All of our companies aren`t as big Quest," he said. "But there are a lot of them doing 10 or 20 wells a year and that adds up."

Consolidated`s parent company is a well-known name in the industry.

Infinity, based in Chanute, is a major player in coal-bed methane production in southeastern Wyoming.

Stanfield said the long period of slow activity over the past decade has enabled Consolidated to update equipment and get ready to take advantage of the upcoming boom.

"We are very excited about the potential. We think 2003 will be a real solid year for us. It`s a solid turnaround for our company," he said.

He said many other businesses in Chanute and the surrounding area stand to benefit as well.

"Chanute has long been the center of oil and gas in eastern Kansas. The potential for this development is huge. Everybody in the business is excited."

Modest, but growing

That certainly includes Quest, which has grown from modest beginnings and weathered the tough times in the oil industry by hanging onto a pipeline network and contracting to build pipelines for other companies.

Now, fresh from a merger with an Oklahoma company, STP Cherokee Inc., in November, Quest has a new $40 million line of credit from Wells Fargo that enables it to pick up the drilling pace, said Doug Lamb, co-chief executive of the company, which has about 45 full-time employees.

Lamb, who leads the company with Jerry Cash, who was chief executive of STP Cherokee before the merger, is the son and grandson of Kansas oilmen. He returned to the family business in southeast Kansas in 1977 to help out his dad "for a few days."

The soft-spoken, former fighter pilot says his move to the oil and gas business just sort of happened.

"The days turned to weeks and the weeks to months and the months to 26 years," Lamb said. "I had always sort of thought I`d pursue a career in aviation, but this is just the way it happened, and I have not one regret."

He and his family live in the home his father built in Benedict. A mobile home on the same property serves as an office. In a back room, field supervisor Dick Cornell pores over dozens of drilling logs from exploratory wells and old, abandoned oil wells in the region, locating coal seams.

"We have done a lot of homework and lot of research to know exactly where we will develop," Cornell said. "And we have solid evidence to tell us where the biggest beds of methane are."

Much of that evidence comes from the work of company geologist Mike Ebers who moved his research into a storefront in Chanute three weeks ago after working three years out of a back bedroom in his home.

"When my canisters started cluttering up the living room, my wife wanted my lab out of there," Ebers said.

Ebers is a practical geologist who checks the accuracy of his digital scale with a hand grenade and builds his own canisters to measure the "desorption rate" of samples of coal.

"I know that my grenade weighs exactly 550.6 grams," he said. "I don`t trust the digital scale to be exact, so I check it."

He expresses confidence about the future for Quest, which has already seen dramatic growth in the four years since the company went public in 1999.

In the past year, Quest stock, which is traded over the counter, has climbed from 80 cents a share to $2.80 a share.

Much of the company`s advantage now comes from the 340 miles of gathering pipeline that kept it alive through some tough times.

"We held on the worst of times because we were just to stubborn to quit," Lamb said. "Now, it turns out we have pipeline over 500 square miles in three of the four counties that are proven reserves of gas. It looks like maybe good times are finally here."


--------------------------------------------------------------------------------

Quest Resource Corporation is focused primarily on the production and transportation of natural gas in the 500-square-mile region of southeast Kansas that is served by its gas pipeline network. Note: News releases and other information on Quest Resource Corporation can be accessed at http://www.qrcp.net.

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 the Company 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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in the Company`s filings with the Securities and Exchange Commission.



Wenn der Krieg beginnen sollte, dann sind wir schnell bei 4,50 US$

[lGasAnalyst]

Weiter geht´s...

[lGasAnalyst]

Wichtiger qrcp Termin


April 15 - 20 Q3 Earnings Announcement

[lGasAnalyst]

STOCHASTICS: Overbought
RSI: Overbought
MACD: Bullish

[lGasAnalyst]

Hier der 10-QSB

Sehr gut wie ich finde!


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB


(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended February 28, 2003.

[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (No fee required) for the transition period from
____________________ to _____________________.

Commission file number: 0-17371

QUEST RESOURCE CORPORATION
----------------------
(Name of Small Business Issuer in Its Charter)


Nevada 88-0182808
------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

P. O. Box 100 701 East Main, Benedict, Kansas 66714
-------------------------------------------------------
(Address of Principal Executive Offices)(Zip Code)

620-698-2250
--------------
(Issuer`s Telephone Number, Including Area Code)

Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days.
Yes [XX] No [ ]

The number of shares outstanding of Registrant`s common stock ($0.001 par
value) as of April 14, 2003 was 12,817,970.


Transitional Small Business Disclosure Format: Yes [ ] No [XX]


-1-
<PAGE>

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . 3

Item 1. Financial Statements . . . . . . . . . . . . . . . . . .3

Consolidated Unaudited Financial Statements . . . . . .F-1

Item 2. Management`s Discussion And Analysis Or
Plan Of Operation . . . . . . . . . . . . . . . . . . .4

Forward-looking Information . . . . . . . . . . . . . . . . .4

Business Of Issuer . . . . . . . . . . . . . . . . . . . . . .4

Significant Developments During Quarter Ended November 30,
2002.. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Results Of Operations. . . . . . . . . . . . . . . . . . . . .5

Capital Resources And Liquidity. . . . . . . . . . . . . . . .6

Item 3. Controls and Procedures . . . . . . . . . . . . . . . . .8

PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . .8

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . .8

Item 2. Changes In Securities And Use Of Proceeds . . . . . . . .9

Item 3. Default Upon Senior Securities . . . . . . . . . . . . .9

Item 4. Submission Of Matters To Vote Of Security Holders . . . .9

Item 5. Other Information . . . . . . . . . . . . . . . . . . . .9

Item 6. Exhibits And Reports On Form 8-K . . . . . . . . . . . .9

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

CERTIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11


-2-
<PAGE>

PART I - FINANCIAL INFORMATION


Item 1. Financial Statements

Except as otherwise required by the context, references in this quarterly
report to "we," "our," "us," "Quest" or "the Company" refer to Quest Resource
Corporation and its wholly owned subsidiaries, Quest Oil & Gas Corporation,
Ponderosa Gas Pipeline Company, Inc., Quest Energy Service, Inc., and STP
Cherokee, Inc. Our operations are conducted through our subsidiaries.

Our unaudited interim financial statements including a balance sheet as of
the fiscal quarter ended February 28, 2003, a statement of operations, a
statement of cash flows, and a statement of stockholders equity for the
interim period up to the date of such balance sheet and the comparable period
of the preceding fiscal year are attached hereto as Pages F-1 through F-7 and
are incorporated herein by this reference.

The financial statements included herein have been prepared internally,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted. However, in our opinion,
all adjustments (which include only normal recurring accruals) necessary to
fairly present the financial position and results of operations have been
made for the periods presented. These financial statements should be read in
conjunction with the financial statements and notes thereto included in our
annual report on Form 10-KSB for the fiscal year ended May 31, 2002. Further
reference should also be made to the two Forms 8-K filed on November 18, 2002
and November 27, 2002, which include financial statements for STP Cherokee,
Inc. prior to its acquisition by Quest.


-3-
<PAGE>

QUEST RESOURCE CORPORATION
Consolidated Balance Sheet
(Unaudited)

------------ ------------
February 28 May 31
2003 2002
------------ ------------
A S S E T S
-----------
Current Assets
Cash $ 147,960 $ 76,545
Accounts Receivable 3,163,552 602,378
Futures Contracts 4,399 45,716
Parts & Supplies 158,922 91,168
------------ ------------
Total Current Assets $ 3,474,833 $ 815,807

Property & Equipment
Property & Equipment 1,556,603 1,031,442
Less: Allowance for Depreciation (495,380) (376,290)
------------- ------------
1,061,223 655,152

Pipeline Assets, net 10,729,947 4,068,923

Oil & Gas Properties
Properties being Amortized 14,535,272 3,920,672
Properties not being Amortized 2,285,000 665,439
Less: Accumulated depreciation,
depletion, and (1,033,788) (455,418)
amortization ------------ ------------
15,786,484 4,130,693
Other Assets
Goodwill 494,923 -
------------ ------------
494,923 -

Total Assets $ 31,547,410 9,670,575
============ ============

L I A B I L I T I E S A N D S T O C K H O L D E R S` E Q U I T Y
----------------------------------------------------------------------
Current Liabilities
Accounts Payable $ 872,382 $ 166,475
Oil & Gas Payable 1,395,375 506,989
Accrued Expenses 206,204 30,660
Notes Payable, Current Portion 268,798 1,847,449
Deferred Income Tax Payable 960,840 340,499
------------ ------------
Total Current Liabilities 3,703,599 2,892,072

Non-Current Liabilities
Convertible Debentures 312,000 462,000
Note Payable 15,842,906 3,552,346
Less Portion Shown as Current (268,798) (1,847,449)
------------ ------------
15,886,108 2,166,897
------------ ------------
Total Liabilities 19,589,707 5,058,969
Commitments and contingencies - -

Stockholders` Equity
Preferred stock, 50,000,000 Shares 10 10
Authorized
$.001 par value, 10,000 shares
issued and outstanding 12,844 6,600
Common Stock, 950,000,000 Shares
Authorized
$.001 par value, 12,844,114 and
6,599,917 Shares
Issued and outstanding
Paid In Surplus 10,950,897 4,441,071
Retained Earnings 993,952 163,925
------------- ------------
11,957,703 4,611,606
------------- ------------
Total Liabilities and
Stockholders` Equity $ 31,547,410 $ 9,670,575
============= ============


F-1
<PAGE>

QUEST RESOURCE CORPORATION
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>

For the Three Months For the Nine Months
Ended Ended
February February 28
<S> <C> <C> <C> <C>

2003 2002 2003 2002
Revenue
Oil & Gas Production Revenue $ 2,157,157 $ 257,811 $ 3,228,089 $ 779,686
Gas Pipeline Revenue 430,385 259,514 1,066,050 735,915
Oil & Gas Operations 580,379 163,032 1,226,160 345,953
Pipeline Operations 164,424 129,861 439,677 346,905
Pipeline & Property Development 505,673 343,810 1,024,358 1,408,574
Oil Trucking & Marketing 16,156 10,213 50,074 63,878
Futures Contract Income (Loss) (252,900) 32,000 (326,290) 298,260
Other Revenue 72,883 92,097 169,103 322,852
----------- ---------- ----------- -----------
Total Revenues 3,674,156 1,288,388 6,877,220 4,302,023


Cost of Revenues
Oil & Gas Production Costs 524,965 199,865 966,192 430,601
Pipeline Operating Costs 213,878 251,249 562,227 489,462
Purchases & Outside Services 339,801 162,984 840,519 943,850
Wages 268,105 170,763 694,370 532,802
Payroll Taxes 40,458 12,452 67,934 37,511
Depreciation, Depletion &
Amortization 435,863 148,826 776,317 425,666
Other Cost of Revenues 109,397 38,374 202,863 99,058

Total Cost of Revenues 1,932,466 984,513 4,110,421 2,958,950
----------- ---------- ----------- -----------
Gross Profit $ 1,741,690 $ 303,825 $ 2,766,799 $ 1,343,073

General and Administrative Expenses
Interest $ 331,545 $ 64,200 $ 525,315 $ 197,159
Insurance 66,779 37,864 183,146 122,203
Repairs 38,777 28,939 94,604 118,267
Employee Benefit Program - 63,000 - 63,000
Consulting 132,700 38,000 293,400 60,271
Other Expenses 135,264 67,413 284,817 248,982
----------- ---------- ----------- -----------
Total General and
Administrative Expenses 705,065 299,416 1,381,282 809,882

Income (Loss) from continuing
operations before 1,036,625 4,409 1,385,517 553,191
other income and expenses and
income taxes

Other Income
Interest Income 26 81 212 21,823

Total Other Income 26 81 212 21,823

Net Income Before Income Taxes 1,036,651 4,490 1,385,729 555,014

Provision for Income Taxes (465,363) (1,706) (620,341) (186,965)

Net Income $ 571,288 $ 2,784 $ 765,388 $ 368,049
=========== ========== =========== ===========
Net Income per share $ 0.045 $ 0.000 $ 0.072 $ 0.057

Weighted Average Number of
Shares Outstanding 12,799,984 6,425,417 10,679,561 6,425,417

</TABLE>


F-2
<PAGE>


QUEST RESOURCE CORPORATION
Consolidated Statement of Cash Flows
(Unaudited)

------------------------------
For the Nine Months Ended
February 28
------------------------------
2003 2002
------------- ------------
Cash Flows from Operating Activities:

Net Income (Loss) $ 765,388 368,049
Adjustments to Reconcile Excess
Contributions to cash
provided from operations:
Depreciation 305,763 22,662
Amortization 79,217 17,743
Depletion 418,535 385,261
Stock Issued for Services - 96,000
Accounts Receivable (2,561,174) 465,880
Futures Contract 41,317 141,284
Parts & Supplies (67,754) (81,587)
Accounts Payable 705,907 283,658
Oil & Gas Payable 856,908 (161,027)
Deferred Income Tax Payable 620,341 171,027
Accrued Expenses 175,544 9,146
------------- -------------
Total Adjustments 574,604 1,350,047

Net Cash provided from Operating Activities 1,339,992 1,718,096

Cash flows from Investing Activities:
Sale of Leasehold Acreage 563,771 0
Fixed Assets (13,644,670) (3,135,344)
------------- -------------

Net Cash used in Investing Activities (13,080,899) (3,135,344)

Cash flows from Financing Activities
Change in Long-Term Debt 11,735,691 1,123,569
Convertible Debentures 0 305,000
Common Stock 0 0
------------- -------------

Net Cash provided from (used in) Financing
Activities 11,735,691 1,428,569

Net Increase (Decrease) in Cash (5,216) 11,321

Cash Balance, Beginning of Period 76,545 188,006

Cash Balance, End of Period $ 147,960 $ 136,327
============= =============


F-3
<PAGE>







Quest Resource Corporation
Consolidated Statement of Stockholders Equity
(Unaudited)
<TABLE>
<CAPTION>


Preferred Common Accumulated
Shares Shares Other
Preferred Common Par Par Paid-In Comprehensive Retained
Shares Shares Value Value Capital Income Earnings Total
(Loss)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>

Balance June 1, 2002 10,000 6,599,917 $ 10 $ 6,600 $ 4,441,071 $ - $ 163,925 $4,611,606

Stock Issued for Cash 47,858 48 60,952 $ 61,000

Stock Issued for Debt 215,871 215 219,785 $ 220,000

Stock Issued for Services 10,775 11 8,639 $ 8,650

Comprehensive Income:
Net Income 68,184 $ 68,184
Unrealized Loss of Futures
Contract (9,723) (9,723)
----------
Total Comprehensive Income 58,461
------------------------------------------------------------------------------------------------------

Balance August 31, 2002 10,000 6,874,421 10 6,874 4,730,447 (9,723) 232,109 $ 4,959,717

Stock Issued for Merger 5,380,785 5,382 5,590,634 $ 5,596,016

Stock Issued for Options 6,000 6 5,994 $ 6,000

Stock Issued for Debt 77,778 78 79,922 $ 80,000

Stock Issued for Oil Lease 1,000 1 1,003 $ 1,004

Stock Issued for Services 130,000 130 135,070 $ 135,200

Stock Issued for Assets 330,000 330 342,870 $ 343,200

Comprehensive Income:
Net Income 190,555 $ 190,555
Unrealized Loss of Futures 9,723 9,723
-----------
Comprehensive Income $ 200,278
-----------------------------------------------------------------------------------------------------
Balance November 30, 2002 10,000 12,799,984 $ 10 $ 12,800 $10,885,941 - $422,664 $11,321,415
=====================================================================================================

Stock Issued for Debt 44,130 44 64,956 $ 65,000

Comprehensive Income:
Net Income 571,288 $ 571,288
Unrealized Loss of Futures Contract - -
-----------
Total Comprehensive Income
$ 571,288
------------------------------------------------------------------------------------------------------
Balance February 28, 2003 10,000 12,844,114 $ 10 $ 12,844 $10,950,897 - $993,952 $11,957,703
======================================================================================================


</TABLE>
F-4
<PAGE>


Quest Resource Corporation
--------------------------

NOTES TO FINANCIAL STATEMENTS


February 28, 2003
-----------------
(Unaudited)
-----------

NOTE 1 - BASIS OF PRESENTATION

The unaudited financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine months ended February 28, 2003 are not necessarily
indicative of the results that may be expected for the fiscal year ended May
31, 2003. For further information, the statements should be read in
conjunction with the financial statements and notes thereto included in the
Company`s Form 10-KSB for the fiscal year ended May 31, 2002.

Shares of common stock issued by the Company for other than cash have been
assigned amounts equivalent to the fair value of the service or assets
received in exchange.


PRINCIPLES OF CONSOLIDATION AND SUBSIDIARIES

Quest Energy Service, Inc. ("QES"), Quest Oil and Gas Corporation ("QOG"),
Ponderosa Gas Pipeline Company, Inc., ("PGPC"), all being Kansas
corporations, and STP Cherokee, Inc., an Oklahoma corporation ("STP"), are
wholly owned subsidiaries of Quest Resource Corporation, a Nevada corporation
("QRC" or the "Company"). Financial reporting by the subsidiaries is
consolidated into one set of financial statements for QRC. QES provides
service and construction activities required for the operation and
development of the Company`s oil and gas properties and the gas pipelines.
QES derives approximately 90% of its revenue from servicing QRC assets.
PGPC`s primary assets are approximately one hundred and sixty miles of gas
gathering pipelines throughout southeast Kansas.

The QOG subsidiary entity was acquired as Mogg Energy Services, Inc. on March
31, 2000 in exchange for common stock of the Company and the name was
subsequently changed to Quest Oil & Gas Corporation. Assets gained in this
acquisition included a majority of the gas wells that were producing into the
PGPC pipeline system along with undeveloped gas reserves. This acquisition
caused a substantial increase in Company-owned gas production and reserves.

On November 7, 2002 an Agreement and Plan of Reorganization was consummated
whereby the Company acquired STP Cherokee, Inc. ("STP") as reported on the
Form 8-K filed November 18, 2002. Pursuant to the terms and conditions of
the Reorganization Agreement, the Company issued to Mr. Jerry D. Cash, the
sole stockholder of STP, 5,380,785 shares of Company common stock,
representing approximately 42.0% of the common stock of the Company, in
exchange for 100% of the outstanding common stock of STP. See Note-2. STP is
in the methane gas business and is involved in developing and producing
methane gas from its

F-5
<PAGE>

properties in southeastern Kansas and northeastern Oklahoma, holding rights to
approximately 48,000 acres and operating approximately 130 wells that are
supported by approximately 180 miles of gas gathering pipelines.

Investments in which the Company does not have a majority voting or financial
controlling interest are accounted for under the equity method of accounting
unless its ownership constitutes less than a 20% interest in such entity for
which such investment would then be included in the consolidated financial
statements on the cost method. All significant inter-company transactions
and balances have been eliminated in consolidation.


Earnings per Common Share
-------------------------

The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.

Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.

Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive
securities having an anti-dilutive effect on diluted earnings per share are
excluded from the calculation.


Common Stock
------------

During the quarter ended November 30, 2002, the Company issued a total of
5,925,563 shares of its common stock in the following transactions:
1) On November 7, 2002, 5,380,785 shares were issued in connection with the
Reorganization Agreement.
2) In October and November 2002, the Company converted $80,000 in
convertible debentures for a total of 77,778 shares of its common stock
per the agreement in the initial debentures.
3) During the quarter the Company issued 130,000 shares of its common stock
to related individuals for services for the Company.
4) In November of 2002, the Company issued 330,000 shares of its common
stock for assets valued at $343,200, and 1,000 shares of its common
stock valued at $1,004 for an oil & gas lease.
5) Also, during the quarter ended November 30, 2002, the Company sold 6,000
shares of its common stock for $6,000.

On December 1, 2002, the Company issued a total of 44,130 shares of its
common stock in connection with the conversion of $65,000 of convertible
debentures, per the agreement in the initial debentures.

NOTE 2 - ACQUISITION

On November 7, 2002, the Company, STP and Jerry D. Cash, the sole stockholder
of STP, consummated an Agreement and Plan of Reorganization by and among the
Company, STP and Mr. Cash, dated as of November 7, 2002 (the "Reorganization
Agreement"). Pursuant to the terms and conditions of the Reorganization
Agreement, the Company issued to Mr. Cash 5,380,785 shares of the common
stock of the Company, representing approximately 42.0% of the common stock of
the Corporation after giving effect to the

F-6

<PAGE>

transactions contemplated by the Reorganization Agreement, in exchange for 100%
of the outstanding common stock of STP (the "Stock Exchange"). The trans-
action is being accounted for as a "purchase" following the procedures of
SFAS 142, "Accounting for Business Combinations".

The following table summarizes the estimated fair value of the assets of
the assets acquired and liabilities assumed at the date of acquisition:

Current Assets $ 1,134,100
Fixed Assets 13,773,412
Goodwill 513,253
Debt Assumed ( 9,631,419)
-------------
Net Assets Acquired $ 5,789,346
=============

Pro Forma Summary Data (Unaudited)

The following proforma summary data for the three and nine month periods
ending February 28, 2002 and 2003 presents the consolidated results of
operations as if the acquisition of STP made on November 7, 2002 had occurred
on June 1, 2001. These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what would have occurred
had the acquisition been made as June 1, 2001 or of results that may occur in
the future.
Three Months Ended Nine Months Ended
February 28 February 28
2003 2002 2003 2002
-------------------------------------------------------

Proforma Revenue $ 3,677,666 $ 1,332,747 $ 6,905,633 $ 3,824,557
Proforma Net Income 583,280 208,087 842,019 490,426

Proforma net income
per share $ .046 $ .032 $ .079 $ .076

On April 1, 2003, Ponderosa Gas Pipeline Company, Inc. and Quest entered into
a Stock Purchase Agreement with Perkins Oil Enterprises, Inc. and E. Wayne
Willhite Energy, L.L.C. pursuant to the terms of which Quest and Ponderosa
would acquire from Perkins Oil Enterprises and E. Wayne Willhite Energy all
of the capital stock of Producers Service, Incorporated in exchange for
500,000 shares of the common stock Quest. Producers Service, Incorporated
owns all of the issued and outstanding membership interests of J-W Gas
Gathering, L.L.C. and a 5 year contract right to operate a lease on a 78 mile
gas pipeline. J-W Gas Gathering, L.L.C. owns approximately 200 miles of gas
gathering lines in southeast Kansas. Also on April 1, 2003, QOG entered into
a Purchase and Sale Agreement with James R. Perkins Energy, L.L.C. and E.
Wayne Whillhite Energy, L.L.C. and J-W Gas Gathering L.L.C. ("Seller")
pursuant to the terms of which QOG would acquire 53 oil and gas leases and
related assets in Chautauqua, Elk, and Montgomery Counties, Kansas for
$2,000,000. The closing of these transactions is expected to be effective as
of May 31, 2003 and is subject to normal closing conditions for transactions
of this type. The Company intends to fund the cash portion of the purchase
price with borrowings under its two credit facilities with Wells Fargo Bank
Texas, N.A. and Wells Fargo Energy Capital, Inc.


NOTE 3 - NOTES PAYABLE

On November 7, 2002, the Company, as borrower, Ponderosa Gas Pipeline Company,
Inc., Quest Oil & Gas

F-7

<PAGE>

Corporation and STP Cherokee, Inc., as guarantors, entered into a $20 million
credit agreement with Wells Fargo Bank Texas, N.A. and a $20 million credit
agreement with Wells Fargo Energy Capital, Inc. ("WF Energy Capital"). The
maximum amount that the Company may borrow under the two credit agreements is
limited during six-month borrowing periods to an amount based on the value of
the collateral securing the loans. The amount of the initial combined borrowing
limitation is $15,000,000. At the execution of the credit agreements, the
Company obtained an initial advance of $12,500,000. The balance of the two
Wells Fargo loans as of February 28, 2003 was $15.0 million.

In connection with the WF Energy Capital credit agreement, the Company issued
a warrant to WF Energy Capital to acquire up to 1.6 million shares of the
Company`s common stock at a purchase price of $0.001 per share at any time on
or before November 7, 2007. The warrant contains anti-dilution protection
for WF Energy Capital in the event that the Company issues common stock or
warrants or options to acquire common stock or securities convertible into
common stock below certain specified prices. The agreement pursuant to which
the warrant was issued contains restrictions on the Company entering into
transactions with affiliates or paying dividends. In addition, WF Energy
Capital has the right from and after the earlier to occur of November 7, 2005
and the date the amounts due under the WF Credit Agreement are paid in full,
and before November 7, 2007, to require the Company to purchase the warrant
at a price equal to $2.5 million; provided that if the purchase price for the
warrant plus the total amount of interest received under the WFEC Credit
Agreement would exceed the amount of interest that would have been paid on
the WFEC Credit Agreement if it had borne interest at the rate of 18% per
annum (the "Maximum Interest Amount"), then the purchase price for the
warrant will be reduced to an amount such that the sum of the warrant
purchase price plus the total amount of interest received under the WFEC Credit
Agreement does not exceed the Maximum Interest Amount.


NOTE 4 - COMMITMENTS AND CONTINGENCIES

Like other oil and gas producers and marketers, the Company`s operations are
subject to extensive and rapidly changing federal and state environmental
regulations governing air emissions, waste water discharges, and solid and
hazardous waste management activities. Therefore it is extremely difficult to
reasonably quantify future environmental related expenditures.

QOG was currently involved in a lawsuit with Devon SFS Operating, Inc. (Case
#01-C-58C, Neosho County, Kansas) regarding the validity of its oil and gas
lease on a 160-acre parcel referred to as the Umbarger Lease. In April 2003,
the court granted Devon SFS Operating, Inc.`s Motion for Summary Judgment
ruling that QOG`s lease to the property was not valid. QOG has not drilled a
well on the property and the loss of the lease will not have a material
adverse effect on the Company`s results of operations or financial condition.

The Company and STP have been named Defendants in a lawsuit (Case
#CJ-2003-30) filed by Plaintiffs Eddie R. Hill et al on March 27, 2003 in the
District Court for Craig County, Oklahoma. Plaintiffs are royalty owners who
are alleging underpayment of royalties owed them by STP and the Company. The
plaintiffs also allege, among other things, that STP and the Company have
engaged in self-dealing, have breached their fiduciary duties to the
plaintiffs and have acted fraudulently towards the plaintiffs. The
plaintiffs are seeking unspecified actual and punitive damages as a result of
the alleged conduct by STP and the Company. Based on the information
available to date and our preliminary investigation, we believe that the
claims against us are without merit and intend to defend against them
vigorously.

The Company, from time to time, may be subject to legal proceedings and
claims that arise in the ordinary course of its business. Although no
assurance can be given, management believes, based on its experiences

F-8

<PAGE>

to date, that the ultimate resolution of such items will not have a material
adverse impact on the Company`s business, financial position or results of
operations.


F-9

<PAGE>

Item 2. Management`s Discussion And Analysis Or Plan Of Operation

Forward-looking Information

This quarterly report contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact
may be deemed to be forward-looking statements. These statements relate to
future events or to our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of such terms or other
comparable terminology. These statements are only predictions. Actual
events or results may differ materially. There are a number of factors that
could cause our actual results to differ materially from those indicated by
such forward-looking statements. See our report on Form 10-KSB for the
fiscal year ended May 31, 2002 for a listing of some of these factors.

Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, we do not assume
responsibility for the accuracy and completeness of such forward-looking
statements. We are under no duty to update any of the forward-looking
statements after the date of this report to conform such statements to actual
results.


Business Of Issuer

Our primary business is the production and transportation of natural gas in a
700 square mile region of southeast Kansas and northeast Oklahoma which is
served by our gas pipeline network. Our main focus is upon the development
of Company-owned coal bed methane gas reserves in our pipeline region and
upon the continued enhancement of the pipeline system and supporting
infrastructure.


Significant Developments During The Quarter Ended February 28, 2003

This is the first full quarter with "STP" combined into the Company. The
most significant activity of the quarter was the integration of the two
companies into one new organization. This has been accomplished with all
four of the Quest subsidiaries now comprising an effective new team.

The most significant new asset added was a 10" pipeline improvement to one of
our gas gathering systems in northeast Oklahoma. Employees from both the
Quest Energy Service, Inc. and STP subsidiaries worked together in the
construction of this 10" pipeline that is approximately three miles in
length. This new pipeline segment was needed to provide adequate delivery
capability for the increasing gas production achieved by STP in its Edna
Hollow gas field.

Our gas reserves have been updated as of January 1, 2003 by the petroleum
engineering firm Cawley, Gillespie & Associates, Inc. in Ft. Worth, Texas.
These reserve calculations estimate gross gas reserves at 37.3 bcf of which
28.2 bcf is net to Quest. Net oil reserves are 35,817 barrels. The present
value discounted at 10% of the future net cash flow from these net gas and
oil reserves is $44,952,940.

On December 1, 2002, the beginning of this quarter, the Quest Oil & Gas
Corporation ("QOG") subsidiary had 21 gross (20.17 net) wells yet to be
completed. During the quarter, QOG completed and put into operation

4

<PAGE>

4 gross (4 net) new gas wells, one of which was drilled in the previous fiscal
year. QOG also drilled 4 gas wells and purchased 2 gas wells for a total of 6
gross (6 net) new gas wells during this quarter, all of which are planned for
completion into producing wells. At the end of the quarter, there remained 22
gross (21.17 net) gas wells not yet completed, many of which are waiting on
pipeline construction.

On December 1, 2002, STP had 24 gross (24 net) wells in the process of being
completed. During the quarter ended February 28, 2003, STP completed and put
into operation 4 gross (4 net) new gas wells. STP also drilled 8 gross (8 net)
new gas wells during the quarter, all of which are being completed into
producing wells. As of the end of the quarter, there remained 28 gross (28 net)
gas wells yet to be completed.


Results Of Operations

The following discussion is based on the consolidated operations of all our
subsidiaries and should be read in conjunction with the financial statements
included in this report; and should further be read in conjunction with the
audited financial statements and notes thereto included in our annual report
on Form 10-KSB for the fiscal year ended May 31, 2002. Additional important
reference documents include: the two Form 10-QSB reports for the quarters
ended August 31, 2002 and November 30, 2002, and the two Form 8-K reports
filed in November, 2002. Comparisons made between reporting periods herein
are for the three-month and nine-month periods ended February 28, 2003 as
compared to the same periods in 2002.

This is the first Form 10-QSB filed with a full quarter of operations since
the combination of STP and Quest on November 7, 2002. Therefore, this is our
first opportunity to demonstrate the economic justification for the business
combination based upon the results of a quarterly reporting period. Total
Revenue for the quarter ended February 28, 2003 was $3,674,156 [$0.287 per
share], as compared to revenue in the year-earlier quarter of $1,288,338
[$0.20 per share]. Net Income Before Income Taxes from these comparable
quarters was $1,036,651 [$0.081 per share] for the recent quarter ending
February 28, 2003 as compared to $4,490 [$0.001 per share] for the
year-earlier quarter. As for the nine-month period ended February 28, 2003,
Total Revenue and Net Income Before Income Taxes were $6,877,220 and
$1,385,729, respectively, as compared to $4,302,023 and $555,014,
respectively, for Total Revenue and Net Income Before Income Taxes for the
nine month period ended February 28, 2002.

The large increases in revenue and net income are primarily due to the
additional revenue generated from the STP gas wells for a full quarter and to
favorable gas prices this winter. Futures contract income reflects a loss
due to the winter run-up in gas prices exceeding the gas market hedges that
were in place for January and February. For more information on the
remaining gas hedges in place, refer to Capital Resources and Liquidity.
Management believes that the combination of STP and Quest does not permit the
Company to make meaningful comparisons of specific account categories between
this quarter and the year-earlier quarter.

During this third quarter the net wells owned by QOG produced 144,452 mcf of
gas as compared to gas production of 158,225 mcf during the year-earlier
quarter ended February 28, 2002. For the comparable nine-month periods, QOG
produced 436,987 mcf during the nine months ended February 28, 2003 as
compared to 421,591 during the comparable year-earlier period ended February
28, 2002. During this third quarter the wells owned by the STP subsidiary
produced 376,401 mcf of net gas, to combine for a Company-wide total of
520,853 of net gas production for the quarter. Our drilling and completion
program was delayed somewhat after the merger, but is now going forward as
planned.

5


<PAGE>

The decline in production of the wells owned by QOG during the nine months
ended February 28, 2003 is due to a combination of the decline in the
production of existing wells as they mature and the lower level of new well
development that occurred during the period as a result the lack of new
funding for new wells that occurred during the period prior to the STP
acquisition when the Company was negotiating the Wells Fargo credit
facilities. Our drilling and completion program is now going forward as
planned. The higher rates of new development now underway are expected
achieve unprecedented levels of growth in our gas production. This is
demonstrated by our rate of new well development activity since March 1,
2003, the start of our 4th quarter for this fiscal year, in which we have
already drilled 12 new wells to date. Our plan is to drill and develop at
least 70 new wells during the remaining nine months of this 2003 calendar
year. However, no assurance can be given that we will be successful in obtain-
ing this level of activity.


Capital Resources And Liquidity

The Company`s access to working capital has been greatly enhanced by the two
$20.0 million credit facilities now in place with Wells Fargo Bank Texas,
N.A. and Wells Fargo Energy Capital, Inc. The total amount the Company may
borrow under the two credit facilities is limited during six-month borrowing
periods to an amount based on the value of the collateral securing the
loans. The amount of the initial combined borrowing limitation was $15.0
million, which has been increased by $2.5 million by Wells Fargo Bank Texas,
N.A. on April 1, 2003, based upon our updated gas reserve estimates. As of
February 28, 2003, we had $15.0 million outstanding under the two credit
facilities. Our ability to fully implement our expanded drilling program is
dependent upon access to additional amounts under the two Wells Fargo credit
facilities. Although we believe that we will have adequate additional
reserves to support additional increases to the borrowing limitations, no
assurance can be given that we will be able to obtain further increases
sufficient to support all of our development plans. See the Company`s Form
8-K filed November 27, 2002 for additional information regarding the Wells
Fargo credit facilities.

There were no funds raised from non-bank sources during the quarter. The
only non-bank financing activity during the quarter involved the conversion
of $65,000 of debentures into 44,130 shares of restricted common stock. For
more detail on these debenture conversions, refer to the section titled
Changes In Securities And Use Of Proceeds.

Our subsidiary Quest Energy Service, Inc. ("QES") is not a party to the Wells
Fargo credit agreements. Instead, QES has retained local banking
relationships for its financing requirements. The QES line of credit at the
Yates Center Branch Bank was increased to $440,000 during the quarter in
order to accommodate the purchase of additional pipeline construction
equipment.


6


<PAGE>


Management has established hedging positions for our natural gas production
which are depicted in the table below:


Calendar Year 2003 Calendar Year 2004
------------------------------------- ------------------------------------
MMBtu Price/ Type of MMBtu Price/ Type of
Month /day MMBtu Hedge Month /day MMBtu Hedge
----- ----- ------ ------- ----- ----- ------ -------
Apr 5,000 $4.00 Firm Jan 2,000 $4.24 Firm
2,000 $4.24 Price 2,000 $4.30-$5.55 Collar
3,000 $4.15-$5.50 Collar
May 5,000 $4.00 Firm Feb 2,000 $4.24 Firm
2,000 $4.24 Price 2,000 $4.30-$5.55 Collar
3,000 $4.15-$5.50 Collar
Jun 5,000 $4.00 Firm Mar 2,000 $4.24 Firm
2,000 $4.24 Price 2,000 $4.30-$5.55 Collar
3,000 $4.15-$5.50 Collar
Jul 5,000 $4.00 Firm Apr 3,000 $4.2425 Firm
2,000 $4.24 Price 2,000 $4.30-$5.55 Collar
3,000 $4.15-$5.50 Collar
Aug 5,000 $4.00 Firm May 3,000 $4.2425 Firm
2,000 $4.24 Price 1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar
Sep 5,000 $4.00 Firm Jun 3,000 $4.2425 Firm
2,000 $4.24 Price 1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar
Oct 5,000 $4.00 Firm Jul 3,000 $4.2425 Firm
2,000 $4.24 Price 1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar
Nov 2,000 $4.24 Firm Aug 3,000 $4.2425 Firm
2,000 $4.30-$5.55 Collar 1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar 3,000 $4.15-$5.50 Collar
Dec 2,000 $4.24 Firm Sep 3,000 $4.2425 Firm
2,000 $4.30-$5.55 Collar 1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar 3,000 $4.15-$5.50 Collar
Oct 3,000 $4.2425 Firm
1,000 $4.205 Firm
3,000 $4.15-$5.50 Collar

The two prices shown in the collar hedges reflect a floor price for the lower
number and a ceiling price for the higher number.

Our plan to drill and complete at least 70 additional new wells in the
remaining nine months of this 2003 calendar year will require a capital
investment of approximately $4.0 million. We remain confident that this
funding will be available from a combination of internal cash flow and the
Wells Fargo credit facilities.

7
<PAGE>

On April 1, 2003, Ponderosa Gas Pipeline Company, Inc. and Quest entered into
a Stock Purchase Agreement with Perkins Oil Enterprises, Inc. and E. Wayne
Willhite Energy, L.L.C. pursuant to the terms of which Quest and Ponderosa
would acquire from Perkins Oil Enterprises and E. Wayne Willhite Energy all
of the capital stock of Producers Service, Incorporated in exchange for
500,000 shares of the common stock Quest. Producers Service, Incorporated
owns all of the issued and outstanding membership interests of J-W Gas
Gathering, L.L.C. and a 5 year contract right to operate a lease on a 78
mile gas pipeline. J-W Gas Gathering, L.L.C. owns approximately 200 miles of
gas gathering lines in southeast Kansas. Also on April 1, 2003, QOG entered
into a Purchase and Sale Agreement with James R. Perkins Energy, L.L.C. and
E. Wayne Whillhite Energy, L.L.C. and J-W Gas Gathering L.L.C. ("Seller")
pursuant to the terms of which QOG would acquire 53 oil and gas leases and
related assets in Chautauqua, Elk, and Montgomery Counties, Kansas for
$2,000,000. The closing of these transactions is expected to be effective as
of May 31, 2003 and is subject to normal closing conditions for transactions
of this type. The Company intends to fund the cash portion of the purchase
price with borrowings under its two credit facilities with Wells Fargo Bank
Texas, N.A. and Wells Fargo Energy Capital, Inc.

Off-balance Sheet Arrangements
The Company does not have any "off-balance sheet arrangements" (as such term
is defined in Item 303 of Regulation S-B under the Securities Act of 1933).


Item 3. Controls and Procedures.

Within 30 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company`s
management, including the Company`s co-Chief Executive Officers, and the
Chief Financial Officer, of the effectiveness of the design and operation of
the Company`s disclosure controls and procedures pursuant to Exchange Act
Rule 13a-14. Based upon that evaluation, the co-Chief Executive Officers,
and the Chief Financial Officer, concluded that the Company`s disclosure
controls and procedures are effective.

The acquisition of STP caused an expansion of the senior management team and
the board of directors requiring further dissemination of the Company`s
disclosure controls and procedures. These additional members of the
Company`s management have been briefed on the specifics of the Company`s
disclosure controls and procedures pursuant to Exchange Act rule 13a-14.
During the quarter there were no significant changes in the Company`s
internal controls. Other than the recent expansion of our senior management
team, there were no other factors that could significantly affect these
controls subsequent to the date of their evaluation.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See Part I, Item 1, Note 3 to our consolidated financial statements entitled
"Commitments and Contingencies", which is incorporated herein by reference.

8
<PAGE>

Item 2. Changes in Securities and Use of Proceeds

On December 1, 2002, a $25,000 debenture was converted at a price of $1.39
into 17,986 shares of restricted common stock in accordance with the terms
and conditions of the debenture, which allows conversion into the number of
shares determined by dividing the unpaid principal balance of the debenture
and the accrued and unpaid interest thereon by 75% of the average trading
price of the common stock for the previous thirty-day period.

On December 1, 2002, a $40,000 debenture was converted at a price of $1.53
into 26,144 shares of restricted common stock in accordance with its terms
and conditions.


Item 3. Default Upon Senior Securities

None


Item 4. Submission of Matters to Vote of Security Holders

None



Item 5. Other Information

None


Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

2.1 Stock Purchase Agreement dated as of April 1, 2003 between Perkins Oil
Enterprises, inc. and E. Wayne Willhite Energy L.L.C. ("Sellers")
and Ponderosa Gas Pipeline Company, inc. and Quest Resource
Corporation ("Purchaser").

2.2 Purchase and Sale Agreement dated as of April 1, 2003 between James R.
Perkins Energy, L.L.C. and J-W Gas Gathering, L.L.C. ("Seller") and
Quest Oil & Gas Corporation ("Purchaser").

10.1 Consent of Transferee of Quest Shares dated as of April 1, 2003,
executed by Shiloh Oil Corporation.

99.1 Sarbanes-Oxley Section 906 Certification.


Reports on form 8-K.

On January 14, 2003, the Company filed a Report on Form 8-K to report
the filing of the certifications of the Chief Executive Officer and
Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 with respect to the Company`s Form 10-QSB for the fiscal
quarter ended November 30, 2002.

On January 23, 2003, the Company filed a Report on Form 8-K to (i) file
audited annual financial statements and unaudited interim financial
statements for STP, (ii) file the unaudited pro forma consolidated
condensed balance sheets and the unaudited pro forma consolidated
condensed statement of operations for the Company, giving effect to the
acquisition of STP and (iii) to correct certain information in the
January 14, 2003 Form 8-K.


9
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized this 14th day of April, 2003.


Quest Resource Corporation


By: /s/ Jerry D. Cash
-----------------------------
Jerry D. Cash
Co-Chief Executive Officer
Chief Financial Officer


By: /s/ Douglas L. Lamb
-----------------------------
Douglas L. Lamb
President
Co-Chief Executive Officer

10

<PAGE>

Certifications

I, Douglas L. Lamb, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Quest Resource
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant`s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;

b) evaluated the effectiveness of the registrant`s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant`s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant`s auditors and the audit
committee of registrant`s board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant`s ability to record,
process, summarize and report financial data and have identified for the
registrant`s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant`s internal controls;
and

6. The registrant`s other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date: April 14, 2003

/s/ Douglas L. Lamb
-------------------------
Douglas L. Lamb
President and Co-Chief Executive Officer


11


<PAGE>

I, Jerry D. Cash, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Quest Resource
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant`s other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;

b) evaluated the effectiveness of the registrant`s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant`s other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant`s auditors and the audit
committee of registrant`s board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant`s ability to record,
process, summarize and report financial data and have identified for the
registrant`s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant`s internal controls;
and

6. The registrant`s other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date: April 14, 2003

/s/ Jerry D. Cash
-----------------------------------
Jerry D. Cash
Co-Chief Executive Officer and Chief Financial Officer

12

[lGasAnalyst]

Hier die offizielle Mitteilung des guten Bericht


Press Release
Source: Quest Resource Corporation


Quest Resource Corporation Completes 3rd Quarter of Fiscal Year 2003
Thursday April 17, 4:15 pm ET

OKLAHOMA CITY--(BUSINESS WIRE)--April 17, 2003--Quest Resource Corporation (OTCBB:QRCP - News) has filed its Form 10-QSB quarterly report containing financial and operating results for the quarter ending February 28, 2003. The combination of Quest Resource Corporation and STP Cherokee, Inc. ("STP") occurred on November 7, 2002; therefore, this is the first quarterly report reflecting the combined earnings for a full quarter.
Total Revenue was $3,674,156, Net Income Before Income Taxes was $1,036,651 and Net Income per share was $0.045. EBITDA for the quarter was $1,804,059 or $0.14 per share. Selected financial data is provided below in a comparable format for the third quarter of the current and prior fiscal year.

QUEST RESOURCE CORPORATION
SUMMARY OF OPERATIONS
(Unaudited)
----------------------------------------------------------------------
For The Quarter Ended
--------------------- Increase or %
Selected Income Data 02/28/2003 02/28/2002 (Decrease) Change
----------------------------------------------------------------------
Total Revenue $3,674,156 $1,288,339 $2,385,817 185%
----------------------------------------------------------------------
Net Income Before Income
Tax $1,036,651 $4,490 $1,032,161 22,988%
----------------------------------------------------------------------
Net Income Per Share $0.045 $0.001 $0.044 4,400%
----------------------------------------------------------------------
EBITDA(a) $1,804,059 $217,516 $1,586,543 729%
----------------------------------------------------------------------
EBITDA Per Share(a) $0.141 $0.034 $0.107 315%
----------------------------------------------------------------------
Weighted Average Shares
Outstanding 12,799,984 6,425,417 6,374,567 99%
----------------------------------------------------------------------
----------------------------------------------------------------------
Selected Balance Sheet
Data
----------------------------------------------------------------------
Total Assets $31,547,410 $9,255,882 $22,291,528 241%
----------------------------------------------------------------------
Total Liabilities $19,589,707 $4,653,453 $14,936,254 321%
----------------------------------------------------------------------
Stockholder`s Equity $11,957,703 $4,602,430 $7,355,273 160%
----------------------------------------------------------------------
Total Outstanding Shares 12,844,114 6,425,417 6,418,697 100%
----------------------------------------------------------------------
----------------------------------------------------------------------
Selected Operating Data
----------------------------------------------------------------------
Net Gas Production (mcf) 520,853 158,225 362,628 229%
----------------------------------------------------------------------
(a)EBITDA is presented because it is used by us, 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. The following is a reconciliation of Net Income
Before Taxes to EBITDA:
Reconciliation of Net Income Before Taxes to EBITDA
----------------------------------------------------------------------
For the Quarter Ended
----------------------------------------------------------------------
2/28/03 2/28/02
----------------------------------------------------------------------
Net Income Before Income Taxes $1,036,651 $4,490
----------------------------------------------------------------------
Interest Expense $331,545 $64,200
----------------------------------------------------------------------
Depreciation, Depletion & Amortization Expense $435,863 $148,826
----------------------------------------------------------------------
EBITDA $1,804,059 $217,516
----------------------------------------------------------------------
Comments On Financial and Operating Data
Quest was successful in achieving net gas production of 520,853 Mcf representing a 229% gain over the 158,225 Mcf produced in the year-earlier quarter. Net Income per share increased significantly from $0.001 in the previous year-earlier quarter to $0.045 for the current quarter. During the recent quarter, EBITDA also experienced dramatic growth from $217,516 or $0.034 per share for the previous year quarter to $1,804,059 or $0.14 per share, representing a 315% gain on a per share basis. The significant increase in net income is due primarily to the increased natural gas production resulting from the combination of Quest and STP, and the higher natural gas prices for this quarter.
Proven Reserves & Wells Fargo Financing
A reserve report was completed as of January 1, 2003, by the petroleum engineering firm, Cawly, Gillispie and Associates, Inc of Ft. Worth, Texas. These reserve calculations estimate net gas reserves of 28.2 Bcf with a present value discounted at 10% of the future net cash flow of $44,952,940. Due to our increased reserves, Wells Fargo Bank Texas, N.A. has increased our available credit line from $15,000,000 to $17,500,000 of which $15,000,000 was borrowed as of the end of the quarter on February 28, 2003. This additional debt financing, along with future cash flow from operations, will be the primary means of funding on-going development activities for the remainder of this year.
New Developments
Quest pipeline crews recently completed a 3-mile 10" pipeline improvement to provide adequate delivery capability for the increasing gas volumes being produced from the Edna Hollow gas field in northeast Oklahoma. Our new well development activity is increasing as evidenced by 14 new wells being drilled on Quest-owned properties since March 1, 2003. Our goal is to drill and develop at least 70 new wells during the remaining nine months of the 2003 calendar year.
Quest`s primary activity is the exploration, production, and transportation of natural gas in a 700-square-mile region of southeast Kansas and northeast Oklahoma that is served by its 340-mile gas pipeline network. For more information, contact Mr. Jim Vin Zant at 316/788-1545 or visit the Quest website at www.qrcp.net.
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 the Company 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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in the Company`s filings with the Securities and Exchange Commission.

Contact:

Quest Resource Corporation
Jim Vin Zant, 316/788-1545

[lGasAnalyst]

Der intakte Aufwertstrend, oberhalb der 100 und 200 Tage Linie

[lGasAnalyst]

Quest, mit viel Luft nach oben!

[lGasAnalyst]

So, es muss ein bisschen nachgearbeitet werden, aber nun ist der Vertrag mit Alcoa endlich im Sack


A)Acquires Strategic Gas Pipelines and Production

via CDS


Jun 23, 2003 5:42:30 AM

Quest Resource Corporation (`Quest`) announces the acquisition of gas-producing properties, gas pipelines and a fleet of trucks and well

service equipment, all of which are located in the southeast Kansas portion of the geological region known as the Cherokee Basin.

The closing of the transactions for these acquisitions occurred on June 6, 2003, with an effective date of June 1, 2003. Approximately 15,000 acres of gas properties containing an estimated 3.8 Bcf of net gas reserves were acquired by the Quest subsidiary Quest Oil & Gas Corporation for approximately $2.0 million in cash which was paid to entities owned by James R. Perkins and E. Wayne Willhite. These gas properties consist of approximately 80 oil and gas leases in Chautauqua, Montgomery and Elk Counties of southeast Kansas.

In a related transaction, another Quest subsidiary, Ponderosa Gas Pipeline Company, Inc. (`PGPC`), acquired all of the stock of Producers Service, Inc. (`PSI`), which included PSI`s wholly owned subsidiary J-W Gas Gathering, L.L.C. (`J-W Gas`). PSI and J-W Gas own, or control the operational rights to, approximately 274 miles of gas gathering pipelines. J-W Gas also owns a fleet of trucks and well servicing equipment, and a shop building in Howard, Kansas. Consideration given by PGPC for the purchase of these entities was 500,000 shares of common stock issued by Quest Resource Corporation to entities owned by Perkins and Willhite.

`The acquisition of these two companies and the gas property assets greatly enhances our gas pipeline network and extends our core area for gas production into the western region of the Cherokee Basin.

We are very pleased to welcome into the Quest workforce the highly experienced staff and field personnel involved in this acquisition, and we look forward to their valuable contributions to our future growth and productivity,`stated Douglas L. Lamb, President of Quest.

These acquisitions have expanded Quest`s gas-gathering assets into a network of approximately 600 miles of pipelines. The region in southeast Kansas and northeast Oklahoma where Quest is active in the exploration, production, and transportation of natural gas has now grown to over 1,000 square miles. For more information about these acquisition transactions, see the Form 8-K dated June 6, 2003, filed with the Securities and Exchange Commission. For more information about Quest Resource Corporation, contact Mr. Jim Vin Zant at 316-788-1545 or visit the Quest website at www.qrcp.net.

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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in Quest`s filings with the Securities and Exchange Commission.




CONTACT: TEL: [phone] Jim Vin Zant, Quest Resource Corp.

WEBSITE: www.qrcp.net









B)Jul 10, 2003 3:16:00 PM

OKLAHOMA CITY, Jul 10, 2003 (BUSINESS WIRE) --

Quest Resource Corporation (`Quest`)(OTCBB:QRCP) announces that its annual stockholders meeting for 2003 has been tentatively scheduled for October 28, 2003. The exact date, place, time and record date for the meeting will be set forth in the proxy statement for the meeting.

Any stockholder nomination for director to be considered at the meeting or any proposal that a stockholder desires to have included in our proxy materials for the meeting must be received by Quest`s Secretary at 5901 N. Western, Suite 200, Oklahoma City, OK 73118 no later than August 14, 2003, in order to be considered for possible inclusion in the proxy materials. Any such proposal must comply with the applicable rules of the Securities and Exchange Commission.

For more information about Quest Resource Corporation, contact Mr. Jim Vin Zant at 316-788-1545 or visit the Quest website at www.qrcp.net.

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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in Quest`s filings with the Securities and Exchange Commission.

SOURCE: Quest Resource Corporation

Quest Resource Corporation Jim Vin Zant, 316-788-1545 www.qrcp.net

http://www.businesswire.com

Today`s News On The Net - Business Wire`s full file on the Internet with Hyperlinks to your home page.

Copyright (C) 2003 Business Wire. All rights reserved.


C)eLynx Establishes Monitoring With STP Cherokee [INLINE]

via CDS


Jul 24, 2003 8:38:30 AM

eLynx Technologies has recently become the monitoring provider for Oklahoma-based STP Cherokee, Inc. Using eLynx`s CompressorDOC, MeterDOC and AlarmDOC, the applications retrieve the company`s data in the field, then Web enable it so it can be monitored on the Internet. The three solutions use the digital overhead channel of the cellular network to provide real-time meter and compression data, as well as alarming notification. The production field and gathering systems are located north of Tulsa in Craig and Nowata Co. Okla and Labette Co. Ks.

`We have been very pleased with the results we have had from eLynx`s products,`said Richard Marlin, Operations Manager of STP Cherokee. `With the price of gas it is very important to the company to ensure that it maximizes its production and suffers as little downtime as possible. Alarming key components of our operations allows us to accomplish just that`

MeterDOC and CompressorDOC capture well and compressor information in the field and transmit it back to the eLynx Data Center in Tulsa. Both are capable of monitoring pressure, flow, volume, etc. for operational use. Along with AlarmDOC, MeterDOC and CompressorDOC also provide an additional alarming service. When a well drops below a specific set-point, personnel will be dispatched via e-mail, mobile phone or pager.

`eLynx`s ability to provide a customer with their current well and compressor data is imperative to the industry,`said Jeffery Perrin, director of sales for eLynx Technologies. `Companies need to know the present status of their data to reduce costs and man hours`

STP Cherokee`s parent company is Quest Resource Corporation (OTC Bulletin Board: QRCP). Quest is an oil and gas company whose core business is developing, producing and transporting natural gas in southeast Kansas and northeast Oklahoma. For more information about STP Cherokee or Quest Resource Corporation, visit their Web site at, http://www.qrcp.net .

eLynx Technologies was formed in August 2000 by its parent company, American Central Gas Technologies. eLynx provides real-time data collection, production reporting, trending, monitoring and control via the Internet for the oil and gas industry. The company headquarters in Tulsa, Oklahoma, at 6655 South Lewis, and has a regional office in Houston, located at 16800 Greenspoint Park Drive. For more information about eLynx Technologies, visit their Web site at http://www.elynxtech.com .

For more information, please contact Phyllis Shelton of eLynx Technologies at 918-496-8500.



D)Quest Resource Corporation Signs Coalbed Methane Lease with Alcoa for over 63,000 Acres in Western Kentucky

Business Wire via COMTEX


Jul 25, 2003 1:03:00 PM

OKLAHOMA CITY, Jul 25, 2003 (BUSINESS WIRE) --

Quest Resource Corporation (OTC:QRCP) announced today that on July 18, 2003, it entered into a Coalbed Methane Lease with Alcoa Fuels, Inc., a subsidiary of Alcoa Inc. (NYSE:AA), for more than 63,000 acres in western Kentucky.

The lease will result in an almost 50% increase in the total number of acres leased by Quest. `This is the first time that Alcoa has permitted an exploration and production company to drill for coalbed methane gas on its coal mining properties,`said Jerry Cash, Quest`s co-Chief Executive Officer. `We are extremely pleased that Quest has been selected by Alcoa to develop this property.`

The property is located in Union, Crittendon and Webster Counties in western Kentucky and represents a significant expansion in the geographic area in which Quest operates. Prior to the execution of this lease, Quest`s operations had been limited to a ten county region in the Cherokee Basin in southeastern Kansas and northeastern Oklahoma. Although the distance from the company`s current operations will represent a logistical challenge, Doug Lamb, co-Chief Executive Officer of Quest, said, `We believe our technical team`s experience and dedication will provide us with the necessary resources to successfully expand our operations.`

The lease has an initial term of one year. During the initial year of the lease, Quest will conduct a technical study to determine the feasibility of the development of the leased property. At the end of the first year, Quest may extend the lease for an additional four years upon payment of an agreed upon amount. Thereafter, Quest will generally be entitled to continue leasing the property for so long as Quest is continuously developing the leased premises at the rate of not less than 25 wells per year until the property is fully developed on 160 acre spacing (approximately 400 wells). If Quest ceases to continuously develop the property, it will be entitled to continue leasing the portion of the property that has been developed for so long as it is producing coalbed methane from the developed property in paying quantities.

For more information about Quest Resource Corporation, contact Mr. Jim Vin Zant at 316-788-1545 or visit the Quest website at www.qrcp.net.

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 oil and gas reserves, the sales price of such reserves, environmental issues, competition, general market conditions, and other risks detailed in Quest`s filings with the Securities and Exchange Commission.

SOURCE: Quest Resource Corporation

Quest Resource Corporation Jim Vin Zant, 316-788-1545 www.qrcp.net

http://www.businesswire.com

Today`s News On The Net - Business Wire`s full file on the Internet with Hyperlinks to your home page.

Copyright (C) 2003 Business Wire. All rights reserved.

[lGasAnalyst]

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