September 22, 2009 (FinancialWire) — Quest Resource Corp. (NASDAQ: QRCP) has entered into a Second Amended and Restated Credit Agreement (the “Credit Agreement), as the borrower, with Royal Bank of Canada (RBC), as administrative agent, collateral agent and lender.

The Credit Agreement was amended to, among other things, add a new $8 million revolving credit facility to provide QRCP the liquidity necessary to fund its Marcellus Shale development projects in Appalachia and pay overhead, working capital, and other corporate costs prior to the expected completion of its previously announced recombination with Quest Energy Partners, L.P. (NASDAQ: QELP) (QELP) and Quest Midstream Partners, L.P. (QMLP) into a new, yet to be named, publicly-traded corporation (which we refer to as “NewGasCo” in this press release). Additional information about the Credit Agreement is provided in a form 8-K that QRCP filed with the SEC TODAY.

NewGasCo’s strategy will be to create shareholder value through the efficient development of unconventional resource plays, including coalbed methane in the Cherokee Basin of southeast Kansas and northeast Oklahoma and the Marcellus Shale in the Appalachian Basin. NewGasCo will remain focused on reducing operating and overhead costs and anticipates significant first year overhead cost savings, primarily as the result of the simplified structure.

While QRCP continues to work towards completion of the recombination before year-end, it remains subject to the satisfaction of a number of conditions, including, among others, the arrangement of one or more satisfactory credit facilities for NewGasCo, the approval of the transaction by the stockholders of QRCP and the unitholders of QELP and QMLP, and consents from each entity’s existing lenders. There can be no assurance that these conditions will be met or that the recombination will occur.

Berenson & company is acting as the financial advisor to each Quest entity in restructuring their current debt obligations into a form satisfactory for NewGasCo.

NASDAQ Notice

QRCP also   has received a notice from the staff of The NASDAQ Stock Market, dated September 15, 2009, indicating that, because the company’s stock has not maintained a minimum bid price of $1 per share for the last 30 consecutive business days, a deficiency exists under NASDAQ Listing Rule 5450(a) (1). However, NASDAQ Listing Rule 5810(c) (3) (A) provides the company a 180 calendar day grace period to regain compliance. QRCP’s grace period will expire on March 15, 2010. QRCP will automatically regain compliance with NASDAQ rules if at any time during this grace period the bid price for its shares closes at $1 or more per share for a minimum of ten consecutive business days.

If QRCP has not regained compliance by the end of this grace period it will receive a written notification that its securities are subject to delisting, a determination it can choose to appeal to NASDAQ Hearing’s Panel. Alternatively, the company may be granted an additional grace period if it meets the initial listing standards of The NASDAQ Capital Market, with the exception of bid price. If the company uses this alternative, it will need to submit an application to transfer its securities to The NASDAQ Capital Market. In the event recombination occurs, and the stock of NewGasCo closes at $1 or more per share for a minimum of ten consecutive business days, the deficiency will be cured.

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