Quest inks 63,000 acre Kentucky coalbed methane lease from Alcoa

Aug. 1, 2003
Quest Resource Corp, Oklahoma City, inked an agreement July 18 with Alcoa Inc. subsidiary Alcoa Fuels Inc. for a 1 year coalbed methane lease on more than 63,000 acres in Union, Crittendon, and Webster counties in western Kentucky. The lease will increase by 50% the total number of acres Quest has under lease.

By OGJ editors

HOUSTON, Aug. 1 -- Quest Resource Corp, Oklahoma City, inked an agreement July 18 with Alcoa Inc. subsidiary Alcoa Fuels Inc. for a 1 year coalbed methane lease on more than 63,000 acres in Union, Crittendon, and Webster counties in western Kentucky. The lease will increase by 50% the total number of acres Quest has under lease.

"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-CEO.

Quest will conduct a technical study during the initial year of the lease to determine the feasibility of developing the property, at which time it may extend the lease for an additional 4 years. Thereafter, Quest generally may continue leasing the property while it is continuously drilling at least 25 wells/year until the property is fully developed (about 400 wells on 160 acre spacing).

Quest may continue leasing any portion of the property that has been developed for so long as it is producing coalbed methane from the developed property in paying quantities.