Quest Resource Corporation and Pinnacle Gas Resources, Inc. Announce Amendment to Merger Agreement

Quest Resource Corporation (NASDAQ: QRCP) and Pinnacle Gas Resources, Inc. (NASDAQ: PINN) announced today that their boards of directors have unanimously approved an amendment to their previously announced stock-for-stock merger and that the companies have signed an amended and restated merger agreement.

Under the terms of the amended and restated merger agreement, Pinnacle stockholders will receive 0.5278 shares of Quest common stock for each share of Pinnacle common stock they own. It is anticipated that Quest's current stockholders will own approximately 60.5 percent of Quest following the merger and Pinnacle's current stockholders will own the remaining approximately 39.5 percent. Under the previous exchange ratio, the Pinnacle stockholders would have received 0.6584 shares of Quest common stock for each share of Pinnacle common stock they own, resulting in Pinnacle's current stockholders owning approximately 45 percent of the combined company.

In addition, the amended and restated merger agreement reduced the size of the board of directors of the combined company from seven to six, with four designated by Quest and two designated by Pinnacle. All of the Quest directors, who hold approximately 12.8% of the outstanding shares of Quest, have executed a support agreement with Pinnacle in which they have agreed to vote their Quest shares of common stock in favor of issuance of Quest shares of common stock in connection with the merger.

Quest initiated discussions on reducing the previously agreed upon exchange ratio after reviewing updated Pinnacle financial forecasts, including sensitivity analyses, requested by Quest. The Pinnacle board of directors agreed to the reduction based on its view an adjustment would enhance Quest shareholder support for the merger while remaining attractive and in the best interests of Pinnacle's stockholders. With the downward revision, Quest agreed to other changes in the merger agreement that enhance Pinnacle's deal protections. Peter G. Schoonmaker, Pinnacle's President and Chief Executive Officer, said "We remain committed to this strategic combination and the benefits of a combined company's broader geographic diversification of assets and deeper technical expertise."

"Quest continues to be excited by the opportunity to combine our operations with Pinnacle. All of the reasons that originally caused us to enter into the merger agreement with Pinnacle remain in place. The combination will create a geographically diversified, CBM-focused company with significant reserve potential. In addition, Pinnacle will provide the combined company with significant unconventional resource opportunities that can be developed to support the growth of Quest Energy Partners, L.P.," said Jerry D. Cash, Quest's Chairman, President and Chief Executive Officer.

Quest will file a preliminary joint proxy statement/prospectus for the merger with the Securities and Exchange Commission on February 6, 2008. The document contains additional information about the changes to the merger agreement and the reasons Quest and Pinnacle agreed to revise the terms of the merger agreement.

Additional Information about the Merger

As a result of the merger, Pinnacle will survive as a wholly owned subsidiary of Quest. Quest will continue to be listed on the Nasdaq Stock Market. The merger is subject to various conditions, including approval of the stockholders of both Quest and Pinnacle and other customary conditions. It is anticipated that the closing of the merger will occur in the first or second quarter of 2008.

About Quest Resource Corporation

Quest Resource Corporation is a fully integrated E&P company that owns 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, L.P. and 85% of the general partner and a 36% limited partner interest in Quest Midstream Partners, L.P. Quest Resource operates and controls Quest Energy Partners and Quest Midstream Partners through its ownership of their general partners. For more information, visit the Quest Resource website at www.qrcp.net .

Quest Energy Partners, L.P. was formed by Quest Resource Corp. to acquire, exploit and develop natural gas and oil properties and to acquire, own, and operate related assets. The Partnership owns more than 2,000 wells and is the largest producer of natural gas in the Cherokee Basin, which is located in southeast Kansas and northeast Oklahoma and holds a drilling inventory of nearly 2,300 locations. For more information, visit the Quest Energy Partners website at www.qelp.net .

Quest Midstream Partners, L.P. was formed by Quest Resource Corp. to acquire and develop transmission and gathering assets in the midstream natural gas and oil industry. The partnership owns more than 1,800 miles of natural gas gathering pipelines and over 1,100 miles of interstate natural gas transmission pipelines in Oklahoma, Kansas, and Missouri. For more information, visit the Quest Midstream Partners website at www.qmlp.net .

About Pinnacle Gas Resources, Inc.