As energy policy quickly emerges as a hot topic of debate on the minds of voters in the 2008 presidential election, the oil and gas exploration industry has been thrust into the spotlight. For better or for worse, this theme will remain dominant for some time to come, and should put the spotlight on small-cap companies such as Oklahoma City-based Quest Resources (Nasdaq:QRCP).

At a market cap of $209 million, Quest is a fully integrated exploration and production company positioned in the Cherokee Basin of southeast Kansas and northeast Oklahoma. It was incorporated in 1982 and today has two distinct business segments: gas and oil production, and the gathering, processing, transporting and selling of natural gas.

The company conducts its gas and oil production segment through its Quest Energy Partners (Nasdaq:QELP) subsidiary. This subsidiary works to develop coal bed methane in a 15-county region in the Cherokee Basin, where it is one of the largest producers of natural gas with an average net daily production of over 50 million cubic feet equivalent (Mmcfe). At the end of 2007, this division had more than 2,200 gross gas wells in operation and was looking to drill and connect another 325 this year.

Quest currently operates its natural gas pipelines business segment through Quest Midstream Partners, a privately held subsidiary that could go public before the end of 2008. Midstream Partners owns approximately 2,000 miles of natural gas gathering pipelines and over 1,100 miles of natural gas pipelines in Oklahoma, Kansas and Missouri.

Despite a recent pullback in its share price, Quest Resources has put together a remarkable run this year for its shareholders. Year-to-date, Quest’s common stock has risen 25%. The company’s operating results have played an integral role . . .

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