Quest Energy Partners suspends distributions on units

By Angela McDaniels

Tacoma, Wash., Jan. 28 - Quest Energy Partners LP said distributions on its common units will be suspended, beginning with the distribution for the fourth quarter of 2008 that was scheduled to be paid in mid-February.

The board of directors of the company's general partner made the decision to suspend the distributions, according to a company news release.

Quest Energy Partners said the decision was based on management's recommendation and a desire to ensure that the company has sufficient liquidity to properly conduct operations, maintain strategic options and comply with the terms of its debt instruments in light of the recent declines in natural gas prices and the maturity of its second-lien loan at the end of September 2009.

The board also suspended distributions on the subordinated units owned by Quest Resource Corp. starting with the third-quarter distribution paid in November.

Under the terms of its partnership agreement, Quest Energy Partners' common units will carry an arrearage for the fourth quarter's minimum quarterly distribution of $0.40 per unit that must be paid before distributions can be made to the subordinated units.

The board will set future distribution rates based on the amount of cash available after taking into account the company's expected liquidity requirements, the release stated.

Quest Energy Partners is based in Oklahoma City and was formed by Quest Resource to develop natural gas and oil properties.

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