Quest Resource, Pinnacle Gas Announce Merger

Oklahoma-based Quest Resource Corporation and Pinnacle Gas Resources, Inc. announced today that their boards of directors have unanimously approved a stock-for-stock merger and that the companies have signed a definitive merger agreement.

Under the terms of the merger agreement, Pinnacle stockholders will receive 0.6584 shares of Quest common stock for each share of Pinnacle common stock they own.

Based on the closing market prices for the shares of both companies on October 15, the combined company would have an equity market capitalization of approximately $450 million and Pinnacle stockholders will receive Quest common stock worth approximately $207 million.

As a result of the merger, Pinnacle will survive as a wholly owned subsidiary of Quest. Quest will continue to be listed on the Nasdaq Stock Market.

Quest Resource is the largest producer of natural gas in the Cherokee Basin, which is located in southeast Kansas and northeast Oklahoma. Quest is a fully integrated E&P company, operating more than 1,800 producing wells which produce into its controlled 1,800-mile gathering pipeline system, and utilizes its own fleet of completion equipment to meet its drilling and completion program. Quest currently has more than 1,700 locations in its drilling inventory.

Pinnacle Gas Resources, Inc. is an independent energy company engaged in the acquisition, exploration and development of domestic onshore natural gas reserves. It focuses on the development of coalbed methane properties located in the Rocky Mountain region.



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