By Lisa Kerner
Charlotte, N.C., July 6 - Quest Resource Corp., Quest Energy Partners, LP and Quest Midstream Partners, LP announced they agreed to recombine to form a new publicly traded corporation referred to now as NewGasCo.
The new corporation will be the result of a series of mergers and entity conversions and will be wholly owned by all three companies, according to a news release.
Under the companies' agreement:
• Each share of Quest Resource will be exchanged for 0.0575 shares of NewGasCo common stock;
• Each common unit of Quest Energy, other than those owned by Quest Resource, will be exchanged for 0.2859 shares of NewGasCo common stock; and
• Each common unit of Quest Midstream will be exchanged for 0.4033 shares of NewGasCo common stock.
NewGasCo will be owned approximately 44% by current Quest Midstream equity holders, approximately 33% by current Quest Energy equity holders and approximately 23% by current Quest Resource equity holders.
The transaction is expected to be completed by the end of the year.
According to the companies, NewGasCo's board of directors will be comprised of nine directors, including three existing independent directors from each of the general partners of Quest Energy and Quest Midstream.
Two existing independent directors of the board of Quest Resource and the chief executive officer of the Quest entities will also be on the NewGasCo board.
Gary M. Pittman, current chairman of the board of Quest Energy, is expected to be chairman of NewGasCo's board, the release said.
David C. Lawler, current president and CEO of each Quest entity, is expected to be president and CEO of NewGasCo and will also be a member of the NewGasCo board.
"While much work must still be completed, we believe the proposed recombination makes the Quest entities more competitive in today's market environment by allowing us to further reduce costs, increase operational efficiency, and simplify our organizational structure," Lawler said in a news release.
Quest Energy was formed by Quest Resource, an Oklahoma City-based energy company, to acquire, exploit and develop natural gas and oil properties and to acquire, own and operate related assets.
Quest Midstream, also formed by Quest Resource, acquires and develops transmission and gathering assets in the midstream natural gas and oil industry.
| Companies: | Quest Resource Corp., Quest Energy Partners, LP, Quest Midstream Partners, LP
|
| Announcement date: | July 6
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| Price per share: | 0.0575 to 0.4033 shares of NewGasCo
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| Expected closing: | End of 2009
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| Stock price of Quest Resource: | Nasdaq: QRCP: $0.34 on July 2
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| Unit price of Quest Energy: | Nasdaq: QELP: $1.46 on July 2
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