Exhibit 10.1
                                                                    ------------



                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

                                     between

                              QUEST CHEROKEE, LLC,

                                   ("Company")


                          QUEST OIL & GAS CORPORATION,
                           QUEST ENERGY SERVICE, INC.,
                               STP CHEROKEE, INC.,
                      PONDEROSA GAS PIPELINE COMPANY, INC.,
                      PRODUCERS SERVICE, INCORPORATED, and
                           J-W GAS GATHERING, L.L.C.,

                    (collectively, the "Quest Subsidiaries")

                                       and

                          CHEROKEE ENERGY PARTNERS LLC,

                                  ("Investor")



                                December 22, 2003







<PAGE>




                     MEMBERSHIP INTEREST PURCHASE AGREEMENT

                                TABLE OF CONTENTS

ARTICLE I.   DEFINITIONS.......................................................2
      Section 1.01  Definitions................................................2
ARTICLE II.  CONTRIBUTION; ISSUANCE OF UNITS...................................6
      Section 2.01  Amendment of LLC Agreement; Admission of Investor..........6
      Section 2.02  Contribution by Investor; Note Purchase Agreement..........6
      Section 2.03  Issuance of Class A Units..................................7
ARTICLE III. CLOSING...........................................................7
      Section 3.01  Time and Place of Closing..................................7
      Section 3.02  Deliveries at Closing......................................7
ARTICLE IV.  REPRESENTATIONS AND WARRANTIES....................................9
      Section 4.01  Representations and Warranties with Respect
                    to the Company.............................................9
      Section 4.02  Representations, and Warranties of Investor...............11
      Section 4.03  General Representations and Warranties of the
                    Quest Subsidiaries........................................12
      Section 4.04  Representations and Warranties as to the Quest Assets.....13
      Section 4.05  Representations and Warranties with Respect to
                    Devon Transaction..... ...................................19
      Section 4.06  Full Disclosure...........................................19
ARTICLE V.  INDEMNIFICATION...................................................20
      Section 5.01  The Quest Subsidiaries' Indemnification of Investor.......20
      Section 5.02  Time Period for Assertion of Claims.......................20
      Section 5.03  Threshold; Cap............................................21
      Section 5.04  Negligence; Strict Liability..............................21
      Section 5.05  Indemnification Procedures................................22
ARTICLE VI.  MISCELLANEOUS....................................................23
      Section 6.01  Quest Assignments.........................................23
      Section 6.02  Further Assurances........................................23
      Section 6.03  Amendments; Waiver........................................23
      Section 6.04  Successors and Assigns; No Third Party Beneficiaries..... 24
      Section 6.05  Notices...................................................24
      Section 6.06  Descriptive Headings......................................25
      Section 6.07  Waiver of Consequential Damages...........................25
      Section 6.08  Governing Law.............................................25
      Section 6.09  Entire Agreement..........................................25
      Section 6.10  Severability..............................................25
      Section 6.11  Specific Performance......................................25
      Section 6.12  Survival..................................................26
      Section 6.13  Counterparts..............................................27


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<PAGE>


EXHIBITS

Exhibit A       Amended and Restated LLC Agreement
Exhibit B       Note Purchase Agreement
Exhibit C       Operating and Management Agreement
Exhibit D       Guaranty
Exhibit E       Pledge Agreement
Exhibit F       Non-Competition  Agreement
Exhibit G-1     Company Officer's Certificate
Exhibit G-2     Quest Subsidiaries' Officer's Certificate
Exhibit G-3     QRC Officer's Certificate
Exhibit H       QRC's Nevada Counsel's Opinion

SCHEDULES

Schedule 1.01(l)     Contracts
Schedule 1.01(t)     Excluded Assets
Schedule 1.01(u)     Fee Lands
Schedule 1.01(bb)    Leases
Schedule 1.01(bbb)   Wells
Schedule 4.01(b)     Capitalization
Schedule 4.04(c)     Environmental Audits and Reports
Schedule 4.04(f)     Contract Breaches
Schedule 4.04(h)     Plugging Operations
Schedule 4.04(j)     Existing Proceedings
Schedule 4.04(m)     Marketing
Schedule 4.04(o)     AFE's and Other Commitments
Schedule 4.04(p)     Payout Reports
Schedule 4.04(q)     Wellhead Imbalances
Schedule 4.04(r)     Plant, Pipeline and Marketing Imbalances
Schedule 4.04(t)     Suspense Accounts
Schedule 4.04(v)     Preferential Rights and Consents


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<PAGE>

                     MEMBERSHIP INTEREST PURCHASE AGREEMENT


     This MEMBERSHIP INTEREST PURCHASE AGREEMENT,  dated as of December 22, 2003
(this "Agreement"), is entered into by and among Quest Cherokee, LLC, a Delaware
limited  liability  company (the  "Company"),  Cherokee  Energy  Partners LLC, a
Delaware  limited   liability  company   ("Investor"),   and  Quest  Oil  &  Gas
Corporation,  a Kansas corporation ("QOG"), Quest Energy Service, Inc., a Kansas
corporation  ("QES"),  STP  Cherokee,  Inc., an Oklahoma  corporation  ("STPC"),
Ponderosa Gas Pipeline Company,  Inc., a Kansas corporation ("PGPC"),  Producers
Service,  Incorporated,  a Kansas  corporation  ("PSI"),  and J-W Gas Gathering,
L.L.C., a Kansas limited liability company ("JW") (each of QOG, QES, STPC, PGPC,
PSI, and JW being  individually  referred to herein as a "Quest  Subsidiary" and
collectively referred to herein as the "Quest Subsidiaries").

     WHEREAS,  QOG,  QES,  STPC,  PGPC,  PSI and JW are each  direct or indirect
subsidiaries of Quest Resource  Corporation,  a Nevada corporation  ("QRC") (QRC
and the Quest  Subsidiaries being sometimes  collectively  referred to herein as
"Quest"); and

     WHEREAS,   in  connection   with  the  Company's   issuance  to  the  Quest
Subsidiaries  of  membership  interests of the Company,  (i) QRC has  heretofore
assigned to the Company all of QRC's right,  title and interest in, to and under
that certain Purchase and Sale Agreement, dated December 10, 2003, between Devon
Energy Production Company, L.P. and Tall Grass Gas Services,  L.L.C., as Sellers
(collectively,  "Devon") and Quest  Resource  Corporation,  as Buyer (the "Devon
Purchase  and  Sale  Agreement"),  and  (ii)  each  of  the  Quest  Subsidiaries
contributed  to the  Company  all of  their  coal  bed  methane  properties  and
associated   gas  gathering   infrastructure   within  the  Cherokee   Basin  of
southeastern Kansas and northeastern Oklahoma, together with surface facilities,
equipment  and  related  assets  and  certain  other  properties,  all  of  such
properties being more fully described herein as the Quest Assets; and

     WHEREAS,  subject to the amendment and restatement of the Limited Liability
Company  Agreement of the Company (the "LLC Agreement") at Closing and the other
terms and conditions herein,  Investor desires to contribute cash to the Company
in exchange  for the  Company's  issuance  to Investor of all of the  authorized
Class A Units of the Company; and

     WHEREAS, subject to the terms and conditions of this Agreement, the Company
desires to accept Investor's contribution; and

     WHEREAS, each of the Quest Subsidiaries joins in this Agreement to evidence
its  agreement  to amend and  restate the LLC  Agreement  at Closing and to make
certain  representations  and  warranties  and covenants  with respect to assets
contributed to the Company by Quest.

     NOW,  THEREFORE,  in  consideration  of the premises,  mutual covenants and
agreements hereinafter contained and for other good and valuable  consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:




<PAGE>


                             ARTICLE I. DEFINITIONS

Section 1.01    Definitions.

     For the  purpose of this  Agreement,  the  following  terms  shall have the
following  meanings.  In  addition,  all terms of an  accounting  character  not
specifically  defined  herein  shall have the meanings  assigned  thereto by the
Financial   Accounting   Standards  Board  and  generally  accepted   accounting
principles.

     (a)  "Abandonment   Liabilities"  shall  mean  the  costs  and  liabilities
          associated  with plugging and  abandoning  the Wells and abandoning or
          decommissioning  pipelines,  gathering  systems  and other  facilities
          comprising,  attributable  to, located on, or appurtenant to the Quest
          Assets.

     (b)  "Adverse  Environmental  Condition"  shall mean (i) a condition of any
          Quest Asset that is not in compliance  with  applicable  Environmental
          Laws; or (ii) a physical or  environmental  condition  with respect to
          any Quest Asset which could give rise to on-site or off-site  remedial
          or other clean-up  obligations  imposed under  Environmental Laws, the
          Contracts or the Leases.

     (c)  "Agreement" has the meaning set forth in the preamble.

     (d)  "Amended  and  Restated  LLC  Agreement"  shall mean the  Amended  and
          Restated  Limited  Liability  Company  Agreement of the Company in the
          form attached as Exhibit A hereto.

     (e)  "Bluestem" means Bluestem Pipeline,  LLC, a Delaware limited liability
          company wholly owned by the Company.

     (f)  "Business  Day" shall mean any day which is not a Saturday,  Sunday or
          day on which  banks  are  authorized  by law to close in the  State of
          Texas or the State of New York.

     (g)  "Cash  Contribution"  shall  have the  meaning  set  forth in  Section
          2.02(a) hereof.

     (h)  "Class A Units"  shall have the  meaning  provided  in the Amended and
          Restated LLC Agreement.

     (i)  "Class B Units"  shall have the  meaning  provided  in the Amended and
          Restated LLC Agreement.

     (j)  "Closing" has the meaning provided in Section 3.01.

     (k)  "Company" has the meaning provided in the preamble.


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<PAGE>


     (l)  "Contracts"  shall mean the contracts and  agreements  relating to the
          Quest Assets described on Schedule 1.01(l) attached hereto.

     (m)  "Contributed  Assets" means the Devon  Purchase and Sale Agreement and
          the Quest Assets.

     (n)  "Customary Filings" shall mean rights to consent which require notices
          to,  filings  with,  or other  actions  by  Governmental  Entities  in
          connection  with  the  sale or  conveyance  of oil and gas  leases  or
          interests therein if they are customarily  obtained  subsequent to the
          sale or conveyance.

     (o)  "Devon" has the meaning provided in the recitals above.

     (p)  "Devon  Assets" shall mean the  "Properties,"  as defined in the Devon
          Purchase and Sale Agreement.

     (q)  "Devon  Purchase and Sale  Agreement" has the meaning  provided in the
          recitals above.

     (r)  "Environmental  Laws" shall mean any Law,  or other rule,  regulation,
          statute,   ordinance,   ruling,   decree,  order,  writ,  decision  or
          injunction  relating to the  protection  of the  environment,  natural
          resources  or  public  health  and  safety in effect as of the date of
          Closing or thereafter enacted.

     (s)  "Excluded  Assets"  shall mean the  properties  described  in Schedule
          1.01(t) attached hereto.

     (t)  "Existing  Proceedings"  means the Proceedings  identified on Schedule
          4.04(j) attached hereto.

     (u)  "Fee  Lands"  means  the fee  lands  contributed  by any of the  Quest
          Subsidiaries to the Company as described in Schedule  1.01(u) attached
          hereto.

     (v)  "Governmental  Authority"  shall mean any  local,  tribal,  state,  or
          federal  governmental  court,   tribunal,   regulatory  body,  agency,
          department,   commission,   board,   bureau  or  other   authority  or
          instrumentality.

     (w)  "Hazardous  Materials" shall mean all substances  defined as Hazardous
          Substances,  Oil,  Pollutants or  Contaminants in the National Oil and
          Hazardous Substances Pollution  Contingency Plan, 40 C.F.R. ss. 300.5,
          or defined as such by, or regulated as such under,  any  Environmental
          Law,  including without  limitation,  Hydrocarbons,  PCBs, mercury and
          NORM,  or which  otherwise  may be the basis for any Person to require
          cleanup, removal, treatment or remediation.

     (x)  "Hydrocarbons"  shall mean oil, gas, coal bed methane gas,  casinghead
          gas, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons
          and all products


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<PAGE>


          refined or extracted therefrom, together with all minerals produced in
          association with these substances.

     (y)  "Investor" has the meaning provided in the preamble.

     (z)  "JW" has the meaning provided in the preamble.

     (aa) "Law" shall mean any  applicable  constitutional  provision,  statute,
          act, code, law, regulation,  rule, ordinance,  order, decree,  ruling,
          judgment  or  decision  of  a  Governmental   Authority  having  valid
          jurisdiction.

     (bb) "Leases"  (and,  individually,  a  "Lease")  means  the  oil  and  gas
          leasehold interests, royalty interests,  overriding royalty interests,
          mineral  interests,  production  payments,  and net profits  interests
          described in Schedule 1.01(bb).

     (cc) "Liabilities" has the meaning provided in Section 5.01.

     (dd) "Lien"   shall  mean  any   mortgage,   pledge,   security   interest,
          encumbrance,  lien or charge of any kind  (including  any agreement to
          give  any of the  foregoing),  any  conditional  sale or  other  title
          retention  agreement,  any lease in the nature thereof, and the filing
          of or agreement  to give any  financing  statement or like  instrument
          under the laws of any jurisdiction.

     (ee) "LLC Agreement" has the meaning provided in the recitals above.

     (ff) "LLC  Certificate"  means the Certificate of Formation for the Company
          filed  with the  Office  of the  Secretary  of  State of the  State of
          Delaware.

     (gg) "Note  Purchase  Agreement"  shall  mean the Note  Purchase  Agreement
          between  Investor  and the  Company  in the form of Exhibit B attached
          hereto.

     (hh) "Operating  and  Management  Agreement"  shall mean the  Operating and
          Management  Agreement  between  the  Company  and QES,  in the form of
          Exhibit C attached hereto.

     (ii) "Other Quest  Properties"  shall mean  rolling  stock and field office
          equipment.

     (jj) "Permits" shall mean licenses, permits, variances, exemptions, orders,
          franchises, approvals and other authorizations of or from Governmental
          Authorities.

     (kk) "Person" shall mean any individual,  firm,  corporation,  partnership,
          limited  liability  company,   joint  venture,   association,   trust,
          unincorporated  organization,  Governmental  Authority  or  any  other
          entity.

     (ll) "PGPC" has the meaning provided in the preamble.


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<PAGE>


     (mm) "Proceedings" shall mean all proceedings,  actions, claims, suits, and
          notices of  investigations by or before any arbitrator or Governmental
          Authority.

     (nn) "PSI" has the meaning provided in the preamble.

     (oo) "QOG" has the meaning provided in the preamble.

     (pp) "QES" has the meaning provided in the preamble.

     (qq) "QRC" has the meaning provided in the recitals.

     (rr) "Quest" has the meaning provided in the recitals.

     (ss) "Quest Assets" shall mean the Quest Gathering System and the Quest Oil
          and Gas Properties.

     (tt) "Quest Assignments" shall mean the deeds, conveyances, assignments and
          bills of sale and other transfer  instruments  executed,  acknowledged
          and delivered by QRC and the Quest  Subsidiaries in order to transfer,
          assign and convey (i) the Devon  Purchase  and Sale  Agreement  to the
          Company, (ii) the Quest Gathering System to Bluestem;  (iii) the Quest
          Oil and Gas  Properties  to the  Company;  and  (iv) the  Other  Quest
          Properties to the Company.

     (uu) "Quest   Contribution   Agreement"   shall   mean  the   Contribution,
          Conveyance,  Assignment and Assumption  Agreement,  dated of even date
          herewith,  between the Company and each Quest  Subsidiary  pursuant to
          which the Quest Subsidiaries contributed the Contributed Assets to the
          Company.

     (vv) "Quest  Gathering   System"  shall  mean  the  gathering  systems  and
          pipelines   and   appurtenant   properties   conveyed   by  the  Quest
          Subsidiaries to Bluestem pursuant to the Quest Assignments.

     (ww) "Quest Oil and Gas  Properties"  shall mean the oil and gas properties
          and  related  assets  contributed  by the  Quest  Subsidiaries  to the
          Company  pursuant  to  the  Quest  Assignments,   including,   without
          limitation,  the Leases, Fee Lands, Wells, Contracts,  and appurtenant
          personal property, fixtures, and improvements.

     (xx) "Quest Subsidiary" and "Quest Subsidiaries" have the meanings provided
          in the preamble.

     (yy) "Related   Agreements"   shall  mean  the  Amended  and  Restated  LLC
          Agreement,   the  Quest  Contribution  Agreement,  the  Operating  and
          Management Agreement, the Note Purchase Agreement, the Non-Competition
          Agreement  and  any  other  agreement  contemplated  by the  foregoing
          agreements to which the Company and any of the Quest  Subsidiaries  or
          Investor or any  Affiliate of the Quest  Subsidiaries  or Investor are
          parties.


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<PAGE>


     (zz) "Release" shall mean any release, spill, emission, discharge, leaking,
          pumping,  injection,   deposit,  disposal,   dispersal,   leaching  or
          migration into the indoor or outdoor environment  (including,  without
          limitation,  ambient air, surface water, groundwater,  land surface or
          subsurface  strata)  or into  or out of any  property,  including  the
          movement  of  Hazardous  Materials  through or in air,  soil,  surface
          water, groundwater or property.

     (aaa) "STPC" has the meaning provided in the preamble.

     (bbb)"Wells"  means the oil and/or gas wells located on the Leases or lands
          pooled therewith,  including,  without limitation, the wells listed on
          Schedule 1.01(bbb) attached hereto.

                  ARTICLE II. CONTRIBUTION; ISSUANCE OF UNITS

Section 2.01    Amendment of LLC Agreement; Admission of Investor.

     At the Closing, the Quest Subsidiaries shall:

     (a)  amend and  restate  the LLC  Agreement  (and  execute  and deliver the
          Amended and Restated LLC Agreement) to, among other things:

          (i)  convert all of the issued and  outstanding  membership  interests
               held by the Quest  Subsidiaries  into an aggregate 10,000 Class B
               Units of the Company;

          (ii) authorize the Company to issue 10,000 Class A Units; and

          (iii) provide for the other matters set forth therein; and

     (b)  subject to the  contribution  by Investor  described  in Section  2.02
          below,  cause the  Company  to (i) admit  Investor  as a member of the
          Company  and  (ii)  issue  to  Investor  10,000  Class A Units  of the
          Company.

Section 2.02    Contribution by Investor; Note Purchase Agreement.

     (a)  Subject to the terms and conditions of this Agreement, at the Closing,
          Investor shall  contribute as a capital  contribution  to the Company,
          and the Company shall accept from Investor, a cash contribution in the
          amount  of  ONE  HUNDRED  AND  NO/100  DOLLARS  ($100.00)  (the  "Cash
          Contribution").

     (b)  It is also  acknowledged  that,  in  connection  with the admission of
          Investor as a member of the Company,  at Closing  Investor  intends to
          purchase  from the  Company  FIFTY  ONE  MILLION  AND  NO/100  DOLLARS
          ($51,000,000.00) of the Company's 15% Subordinated Notes,  pursuant to
          the terms of the Note Purchase Agreement.



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<PAGE>


Section 2.03    Issuance of Class A Units.

     In consideration of the Investor's  contribution  pursuant to Section 2.02,
at the  Closing,  subject to the terms and  conditions  of this  Agreement,  the
Company  will  issue to  Investor  100% of the  authorized  Class A Units of the
Company,  being 10,000 Class A Units of the Company. All Class A Units issued to
the  Investor  pursuant to, and in  accordance  with the  requirements  of, this
Section  2.03 shall be fully paid and  non-assessable  Class A Units,  except as
such non-assessability may be affected by Section 18-607 of the Delaware Limited
Liability Company Act.

                              ARTICLE III. CLOSING

Section 3.01    Time and Place of Closing.

     The issuance and delivery of the Class A Units to Investor shall take place
at a closing (the  "Closing") to be held at the offices of Vinson & Elkins,  LLP
in Dallas, Texas on the date hereof.

Section 3.02    Deliveries at Closing.

     At the Closing, the following shall occur:

     (a)  Cash  Contribution.  Investor shall pay the Cash  Contribution  to the
          Company.

     (b)  Certificate of Membership Interest. The Company will issue to Investor
          10,000 fully paid and non-assessable  Class A Units of the Company and
          shall  cause to be executed  and  delivered  to Investor a  membership
          interest certificate  reflecting Investor as the owner of such Class A
          Units.

     (c)  Amended  and  Restated  LLC  Agreement.  The  Quest  Subsidiaries  and
          Investor  shall  execute and deliver  the  Amended  and  Restated  LLC
          Agreement.

     (d)  Company Officer's  Certificate.  The Company shall deliver to Investor
          an Officer's  Certificate,  executed by an  authorized  officer of the
          Company and dated as of Closing,  in the form of Exhibit G-1  attached
          hereto, attaching the following:

          (i)  a true  and  complete  copy  of the  Company's  LLC  Certificate,
               together with all amendments thereto, as filed with the Secretary
               of State of the State of Delaware;

          (ii) a true and complete copy of the LLC Agreement;

          (iii)certificates of good standing from the  appropriate  officials of
               the States of Delaware, Kansas and Oklahoma; and


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<PAGE>


          (iv) true,correct  and  complete  copies  of  the  resolutions  of the
               Managers of the Company authorizing the execution and delivery of
               this Agreement and the issuance of the Class A Units.

     (e)  Quest  Subsidiaries'  Officers'  Certificates.  Each Quest  Subsidiary
          shall  deliver to Investor an  Officer's  Certificate,  executed by an
          authorized  officer of such Quest  Subsidiary and dated as of Closing,
          in the form of Exhibit G-2 attached  hereto,  (i) certifying  that the
          representations  and warranties made by the Quest Subsidiaries  herein
          are true and  correct in all  material  respects,  and (ii)  attaching
          true,  correct and complete  copies of the resolutions of the Managers
          or Board of  Directors,  as the case may be, of such Quest  Subsidiary
          authorizing the  contribution of the Quest Assets to the Company,  the
          execution and delivery of this  Agreement and the  performance of such
          Quest Subsidiary's  obligations hereunder,  and the other transactions
          and deliveries contemplated herein and in the Related Agreements.

     (f)  QRC Officer's  Certificate.  The Quest  Subsidiaries  shall deliver to
          Investor an Officer's  Certificate,  executed by an authorized officer
          of QRC and dated as of Closing,  in the form of Exhibit  G-3  attached
          hereto, attaching true, correct and complete copies of the resolutions
          of the Board of Directors of QRC authorizing  the  contribution of the
          Quest  Assets  to the  Company,  the  execution  and  delivery  of the
          Guaranty attached as Exhibit D hereto,  and the other transactions and
          deliveries contemplated herein and in the Related Agreements.

     (g)  Operating and Management Agreement.  The Company and QES shall execute
          and  deliver an  Operating  and  Management  Agreement  in the form of
          Exhibit C attached hereto.

     (h)  Guaranty.  QRC will  execute and deliver to Investor a Guaranty in the
          form of Exhibit D attached hereto.

     (i)  Pledge  Agreement.  Each  Quest  Subsidiary  will  execute  the Pledge
          Agreement,  in the form of Exhibit E  attached  hereto,  pledging  its
          interest  in the  Class B  Units  to  secure  the  performance  of its
          obligations hereunder.

     (j)  Non-Competition  Agreement.  Investor,  QRC  and  each  of  the  Quest
          Subsidiaries shall execute and deliver a Non-Competition  Agreement in
          the form of Exhibit F attached hereto.

     (k)  Quest  Releases.  The  Company  will  deliver  properly  executed  and
          acknowledged  releases in recordable form, in sufficient  counterparts
          to facilitate  recording,  releasing all Liens  encumbering  the Quest
          Assets, including,  without limitation,  Liens in favor of Wells Fargo
          Bank,  N.A.,  other  than Liens  securing  indebtedness  described  on
          Schedule  9.1 to the Credit  Agreement,  dated  December 22, 2003 (the
          "Senior  Revolving Credit  Agreement")  among Investor,  the financial
          institutions party thereto and Bank One, NA, as administrative  agent,
          and other


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<PAGE>


          Liens that would be Permitted  Encumbrances under the Senior Revolving
          Credit Agreement.

                   ARTICLE IV. REPRESENTATIONS AND WARRANTIES

     Section 4.01    Representations and Warranties with Respect to the Company.

     Each of the Quest  Subsidiaries,  jointly  and  severally,  represents  and
warrants to Investor that:

     (a)  Organization;  Qualification  and  Authority.  Each of the Company and
          Bluestem is a limited liability company duly formed, validly existing,
          and in good standing under the laws of the State of Delaware.  Each of
          the Company and Bluestem is duly  qualified to transact  business as a
          foreign limited  liability company and is in good standing in Oklahoma
          and Kansas,  and in each other  jurisdiction in which the character of
          its properties or the nature of its business makes such  qualification
          necessary,  other than those  jurisdictions  wherein the failure to so
          qualify would not have a material adverse effect. Subject to Customary
          Filings,  each of the Company and Bluestem has all power and authority
          to own,  lease and operate the properties  owned by it (including,  in
          the case of the  Company,  the  Devon  Assets,  the  Quest Oil and Gas
          Properties,  and  the  Other  Quest  Properties  and,  in the  case of
          Bluestem,  the Quest Gathering System),  and to carry on its business,
          as it is  now  being  conducted  and as it  will  be  conducted  after
          Closing.  The Company has all  requisite  power and authority to enter
          into  this  Agreement  and to  issue  the  Class A  Units  and has the
          requisite   power  and   authority  to  carry  out  the   transactions
          contemplated hereby to be performed by it, and the execution, delivery
          and  performance  hereof have been duly  authorized  by all  necessary
          action. This Agreement and each other agreement or instrument executed
          and delivered by the Company pursuant hereto or in connection herewith
          constitutes  the legal,  valid and binding  obligations of the Company
          and, except as may be affected by bankruptcy,  insolvency, moratorium,
          reorganization  and other laws and judicial  decisions  affecting  the
          rights of creditors  generally and general  principles of equity,  are
          enforceable  against the Company in accordance  with their  respective
          terms.  The Quest  Subsidiaries  have  delivered to Investor  true and
          correct  copies  of  the  LLC   Certificate,   LLC  Agreement,   Quest
          Contribution Agreement, and Quest Assignments.

     (b)  Capitalization of the Company. The outstanding membership interests of
          the Company  immediately  prior to Closing  consist of the  membership
          interests described on Schedule 4.01(b), each such membership interest
          being owned by the Person  indicated on Schedule  4.01(b).  Other than
          the membership  interests described on Schedule 4.01(b) and the rights
          of the members of the Company  expressed in the LLC  Agreement,  there
          are no  interests  of any kind  outstanding  that give any  Person the
          right to receive any benefit or right similar to the rights enjoyed or
          accruing to a holder of a membership interest in the Company or any


                                       9
<PAGE>


          rights to participate  in the  management  (other than pursuant to the
          Operating  and  Management  Agreement),  ownership  or earnings of the
          Company.  Upon  amendment  and  restatement  of the LLC  Agreement  at
          Closing,  the  membership  interests  of the Company  will  consist of
          10,000  Class B Units  issued to the  Persons  indicated  on  Schedule
          4.01(b),  and  10,000  Class A Units  authorized  and to be  issued to
          Investor at Closing. All Class A Units issued to the Investor pursuant
          to, and in accordance with the  requirements  of, this Agreement shall
          be  fully  paid  and  non-assessable  Class A  Units,  except  as such
          non-assessability  may be affected by section  18-607 of the  Delaware
          Limited Liability Company Act.

     (c)  Capitalization  of  Bluestem.  As of  Closing,  all of the  membership
          interests  of  Bluestem  are  owned  by the  Company.  Other  than the
          membership  interests owned by the Company,  there are no interests of
          any kind  outstanding  that give any Person  the right to receive  any
          benefit or right similar to the rights enjoyed or accruing to a holder
          of a membership  interest in Bluestem or any rights to  participate in
          the  management  (other than pursuant to the Operating and  Management
          Agreement), ownership or earnings of Bluestem.

     (d)  Defaults.  Neither  the  Company  nor  any  subsidiary  thereof  is in
          material  default under any indenture,  mortgage,  lease, or any other
          contract,   agreement  or  instrument  (provided,   however,  that  no
          representation  is made in this Section 4.01(d) as to the Contracts or
          Leases or the Devon Purchase and Sale Agreement, which are the subject
          of the Quest  Subsidiaries'  representations and warranties in Section
          4.04 and Section 4.05, respectively,  or the Devon Assets (as to which
          no representations or warranties are made herein)) or any order, writ,
          injunction  or  decree  of any  Governmental  Authority  to which  the
          Company or any subsidiary  thereof is a party or by which it or any of
          the Quest Assets are bound or affected, and there exists no condition,
          event or act which constitutes,  or which after notice, lapse of time,
          or both, would constitute, such a default under any of the foregoing.

     (e)  No  Violation.  The  execution  and delivery of this  Agreement by the
          Company  does  not,  and  the  consummation  by  the  Company  of  the
          agreements and  transactions  contemplated by this Agreement will not,
          (i) conflict with, or result in any violation of or default or loss of
          any benefit  under,  any provision of the LLC  Certificate  or the LLC
          Agreement,  as amended and  restated by the Amended and  Restated  LLC
          Agreement;  (ii) violate any Permit,  concession,  grant, law, rule or
          regulation,  or any judgment,  decree or order to which the Company or
          any  subsidiary  thereof  is a party or to which  the  Company  or any
          subsidiary  thereof or any of the Quest Assets are  subject;  or (iii)
          conflict  with,  or result in a breach or violation  of, or accelerate
          the  performance  required by, the terms of any  agreement,  contract,
          indenture or other  instrument  (excluding any of the Devon Assets) to
          which the Company or any subsidiary thereof is a party or to which any
          of the Quest  Assets are subject,  or  constitute a default or loss of
          any  right  thereunder  or an event  which,  with the lapse of time or
          notice or both,  is likely to result in a default or loss of any right
          thereunder or the creation of any Lien upon


                                       10
<PAGE>


          any of the Quest Assets,  excepting in the case of clause (iii) above,
          such conflicts, breaches, violations, accelerations,  defaults, losses
          or Liens as would not individually or in the aggregate have a material
          adverse effect.

     (f)  No Other Activities.  Except with respect to the Contributed Assets or
          as contemplated by this Agreement and the Related Agreements,  (i) the
          Company has not engaged in any business activity; and (ii) the Company
          has not incurred any material liabilities or obligations  (absolute or
          contingent).  The  Company  has no  assets  other  than  cash  and its
          equivalents,  100% of the  membership  interests of Bluestem,  and the
          Contributed Assets.

     (g)  Broker's  Fees.  The Company has incurred no liability for brokers' or
          finders'  fees  related  to  the  transactions  contemplated  by  this
          Agreement for which Investor shall be liable.  However, the Company is
          obligated to pay a fee to Energy Capital  Solutions in connection with
          this Agreement and the Related Agreements.

Section 4.02    Representations, and Warranties of Investor.

     Investor  represents and warrants to the Company and the Quest Subsidiaries
that:

     (a)  Organization;  Qualification  and  Authority.  Investor  is a  limited
          liability company duly formed,  validly existing, and in good standing
          under the laws of the State of Delaware. Investor is duly qualified to
          transact  business  and is in good  standing in each  jurisdiction  in
          which the  character of its  properties  or the nature of its business
          makes  such  qualification  necessary  and in which the  failure to so
          qualify would have a material  adverse effect.  Investor has the power
          to own its  properties and to carry on its business as it is now being
          conducted.  Investor has all  requisite  power and  authority to enter
          into this Agreement and has the requisite power and authority to carry
          out the  transactions  contemplated  hereby to be performed by it, and
          the  execution,   delivery  and  performance  hereof  have  been  duly
          authorized  by all  necessary  action.  No  approval of any members of
          Investor is required for consummation of the transactions contemplated
          by this Agreement or the Related  Agreements.  This Agreement and each
          other  agreement  or  instrument  executed  and  delivered by Investor
          pursuant hereto or in connection herewith constitutes the legal, valid
          and binding obligations of Investor, and, except as may be affected by
          bankruptcy, insolvency, moratorium,  reorganization and other laws and
          judicial  decisions  affecting  the rights of creditors  generally and
          general  principles of equity,  are  enforceable  against  Investor in
          accordance with their respective terms.

     (b)  No Conflicts.  The execution,  delivery and performance by Investor of
          this Agreement and the  consummation  by Investor of the  transactions
          contemplated  herein or in the Related Agreements will not (i) violate
          any provision of law,  statute,  rule, or regulation to which Investor
          is subject, (ii) violate any order,


                                       11
<PAGE>


          judgment, or decree applicable to Investor, or (iii) conflict with, or
          result in a breach or  default  under,  any term or  condition  of its
          certificate of limited  liability  company or other  organizational or
          governing  document  or any  agreement  or other  instrument  to which
          Investor is a party or by which Investor is bound.

     (c)  Investment Matters. Investor is an "accredited investor" as defined in
          Rule 501(a) under the  Securities  Act of 1933, as amended,  and it is
          acquiring  the Class A Units solely for its  beneficial  account,  for
          investment  purposes,  and  not  with a view  to,  or  for  resale  in
          connection   with,  any   distribution   in  violation  of  applicable
          securities laws.

     (d)  Broker's  Fees.  Investor has  incurred no  liability  for brokers' or
          finders'  fees  related  to  the  transactions  contemplated  by  this
          Agreement  for which the  Company or the Quest  Subsidiaries  shall be
          liable.

Section 4.03 General Representations and Warranties of the Quest Subsidiaries.

     Each Quest  Subsidiary,  jointly and severally,  represents and warrants to
Investor that:

     (a)  Organization;  Qualification and Authority. Each Quest Subsidiary is a
          corporation  or limited  liability  company,  as the case may be, duly
          formed,  validly existing,  and in good standing under the laws of the
          respective  state  of  formation  or  incorporation  indicated  in the
          preamble  above.  Each Quest  Subsidiary is duly qualified to transact
          business  as a foreign  corporation  and is in good  standing  in each
          jurisdiction in which the character of its properties or the nature of
          its  business  makes  such  qualification  necessary  and in which the
          failure to so qualify would have a material adverse effect. Each Quest
          Subsidiary  has the  power to own its  properties  and to carry on its
          business as it is now being  conducted.  Each Quest Subsidiary has all
          requisite power and authority to enter into this Agreement and has the
          requisite   power  and   authority  to  carry  out  the   transactions
          contemplated hereby to be performed by it, and the execution, delivery
          and  performance  hereof have been duly  authorized  by all  necessary
          action.  If the approval of any  stockholder  or  membership  interest
          owner of any Quest  Subsidiary or QRC is required in  connection  with
          the  contribution  of the  Contributed  Assets to the  Company  or the
          consummation of the transactions contemplated by this Agreement or the
          Related  Agreements,  such approval has been obtained.  This Agreement
          and each other  agreement or  instrument  executed and  delivered by a
          Quest Subsidiary pursuant hereto or in connection herewith constitutes
          the legal,  valid and  binding  obligations  of the  respective  Quest
          Subsidiary, and, except as may be affected by bankruptcy,  insolvency,
          moratorium,  reorganization  and  other  laws and  judicial  decisions
          affecting the rights of creditors  generally and general principles of
          equity,  are enforceable  against the respective  Quest  Subsidiary in
          accordance with their terms.


                                       12
<PAGE>


     (b)  No Conflicts.  The  execution,  delivery and  performance by the Quest
          Subsidiaries  of this  Agreement  and the  consummation  by the  Quest
          Subsidiaries of the transactions contemplated herein or in the Related
          Agreements  will  not,  without  the  giving of notice or the lapse of
          time,  or both,  (i) violate any provision of law,  statute,  rule, or
          regulation to which any Quest Subsidiary is subject,  (ii) violate any
          order,  judgment,  or decree  applicable to any Quest  Subsidiary,  or
          (iii) conflict with, or result in a breach or default under,  any term
          or condition of any of the Quest Subsidiaries' bylaws, certificates of
          incorporation,  or other  organizational  or governing  documents,  as
          applicable, or any material agreement or other instrument to which any
          Quest  Subsidiary  is a party or by which it is bound,  other than the
          failure to obtain  any  consent  to assign  required  under any of the
          Contracts or Leases.

     (c)  Broker's  Fees.  None  of the  Quest  Subsidiaries  has  incurred  any
          liability  for brokers' or finders'  fees related to the  transactions
          contemplated by this Agreement for which the Company or Investor shall
          be liable,  except for the fees owed by the Company to Energy  Capital
          Solutions.

Section 4.04    Representations and Warranties as to the Quest Assets.

     Each of the Quest  Subsidiaries,  jointly  and  severally,  represents  and
warrants to Investor the following with respect to the Quest Assets:

     (a)  Assignments  by  Quest  Subsidiaries.   The  Quest  Subsidiaries  have
          assigned, transferred and conveyed (i) to Bluestem the Quest Gathering
          System,  which, save and except for the Excluded Assets,  includes all
          of  Quest's  right,  title  and  interest  as of the date of the Quest
          Assignments  in and to  gathering  systems  and  pipelines  located in
          Allen, Chatauqua, Cowley, Elk, Greenwood, Labette, Montgomery, Neosho,
          Wilson, and Woodson Counties,  Kansas, and Craig, Nowata,  Rogers, and
          Washington   Counties,   Oklahoma,   together   with  all   contracts,
          rights-of-way,  easements, fixtures, equipment, improvements, Permits,
          records, and other real or personal property appertaining thereto; and
          (ii) to the Company the Quest Oil and Gas Properties,  which, save and
          except for the  Excluded  Assets and the assets  assigned to Bluestem,
          include all of Quest's right, title and interest as of the date of the
          Quest  Assignments  in and to oil and gas interests  located in Allen,
          Chatauqua,  Cowley,  Elk,  Greenwood,  Labette,  Montgomery,   Neosho,
          Wilson, and Woodson Counties,  Kansas, and Craig, Nowata,  Rogers, and
          Washington  Counties,  Oklahoma,  together with all wells,  contracts,
          rights-of-way,  easements, fixtures, equipment, improvements, Permits,
          records,  and other real or personal  property  appertaining  thereto.
          Subject  to the  Customary  Filings  and  the  rights  of  holders  of
          preferential rights and consents  identified in Schedule 4.04(v),  the
          Quest  Assignments  do not  conflict  with,  or  result in a breach or
          violation of, or accelerate the performance  required by, the terms of
          any  material  agreement  to which the Quest  Assets  are  subject  or
          constitute a material default  thereunder or an event which,  with the
          lapse of time


                                       13
<PAGE>


          or both, is likely to result in a material  default  thereunder or the
          creation  of any Lien  upon any of the  assets  or  properties  of the
          Company.

     (b)  Compliance  with Laws.  (i) The Quest Assets are in  compliance in all
          material respects with all applicable Laws relating to or bearing upon
          the ownership or operation of the Quest Assets; (ii) neither Quest nor
          the  Company  has  received  any  written  notice,  which has not been
          dismissed or otherwise  disposed of, that it has not so complied;  and
          (iii) with respect to the Quest Assets,  neither Quest nor the Company
          has been charged or threatened  with  Proceedings  with respect to any
          violation  of any  applicable  Law,  and to  the  Quest  Subsidiaries'
          knowledge,  none of Quest or the Company is under  investigation  with
          respect to any such violation.

     (c)  Environmental  Matters.  Neither  the present  condition  of the Quest
          Assets,  nor present or past  activities on the Quest Assets,  nor the
          manner of  operation  of the Quest  Assets  have  created  any present
          material violation of, or noncompliance with, an Environmental Law, or
          give rise to or create any material remediation or clean-up obligation
          or  liability  in  any  Person,  contingent  or  otherwise,  under  an
          Environmental Law. Without limiting the foregoing,  in connection with
          the use,  ownership or operation  of the Quest  Assets,  Quest has not
          directly or indirectly  caused a Release of any  Hazardous  Materials,
          except for Releases  that are not material or that have been  remedied
          in compliance with the Leases or applicable Environmental Laws (or are
          not  required  to  be   remediated)   and  which  have  no  continuing
          consequence to Company or the Quest Assets.  All internal and external
          environmental  audits,  studies and reports in the possession or under
          the  control of Quest  which are  relevant to the Company or the Quest
          Assets are  identified  on  Schedule  4.04(c).  Quest has  provided to
          Investor copies of each of such audits, studies and reports.

     (d)  Sufficiency of Contributed Assets. Except for the Excluded Assets that
          will be used by QES to operate the  Contributed  Properties  under the
          Operating  and  Management  Agreement and subject to obtaining all the
          consents  listed on Schedule  4.04(v),  Quest has  contributed  to the
          Company all of the equipment,  contracts,  Permits,  vehicles, plants,
          easements,  rights-of-way,  pipelines,  surface leases,  licenses, and
          other real or personal property necessary to own, operate and maintain
          the Quest Assets in accordance with Quest's past practices.

     (e)  Leases.  (i) The  Leases  are in full force and effect as to the lands
          described in Schedule  1.01(bb)  hereto;  (ii) neither  Company or its
          Quest  predecessor,  nor any other  party (to the Quest  Subsidiaries'
          knowledge),  is in breach  (or with  notice or the  passage of time or
          both may be in  breach) of any  obligation  under any of the Leases in
          any  material  respect  other  than due to the  failure  to obtain any
          consent listed on Schedule 4.04(v); and (iii) all royalties,  rentals,
          and other  payments  and  obligations  due under the Leases  have been
          timely paid or otherwise discharged in full on or before the due dates
          thereof.


                                       14
<PAGE>


     (f)  Contracts.  The  Contracts  constitute  all of the material  contracts
          (other  than Leases and  easements)  pertaining  to the Quest  Assets.
          True, correct and complete copies of the Contracts,  together with any
          amendments  thereto,  have been  provided to Investor.  Except for the
          failure  to obtain  any  consents  listed on  Schedule  4.04(v)  or as
          disclosed on Schedule 4.04(f), (i) the Contracts are in full force and
          effect and are the valid and legally binding obligations of Quest and,
          to Quest's knowledge, the other parties thereto and are enforceable in
          accordance with their respective terms, except to the extent that such
          enforcement  may be limited by applicable  bankruptcy,  insolvency and
          similar laws affecting  creditors'  rights  generally,  and by general
          equitable principles;  (ii) none of Company, its Quest predecessor, or
          Bluestem  is in breach  or  default  in any  material  respect  of any
          obligations  under any  Contract  and, to the  knowledge  of the Quest
          Subsidiaries,  no  situation  exists which with the passing of time or
          giving of notice or both would create a breach or  default);  (iii) to
          the knowledge of the Quest  Subsidiaries,  no breach or default by any
          third party (or situation  which with the passage of time or giving of
          notice or both would create a breach or default) exists; and (iv) none
          of Company, its Quest predecessor, or Bluestem, nor any other party to
          any Contact,  has given or  threatened to give notice of any action to
          terminate,  cancel,  rescind, or procure a judicial reformation of any
          Contract or any provision thereof.

     (g)  Wells. The wells have been drilled, completed, and operated within the
          boundaries of the Leases or within the limits  otherwise  permitted by
          contract, pooling, or unit agreement or applicable Law.

     (h)  Plugging  Operations.  Except as disclosed on Schedule 4.04(h), to the
          knowledge of the Quest Subsidiaries,  there are no Wells, pipelines or
          gathering  systems  included  in the Quest  Assets that the Company or
          Bluestem is currently  obligated  under  applicable  regulations or by
          order of any  Governmental  Authority  to remove  or plug and  abandon
          within twelve (12) months after Closing.  The Company has obtained and
          maintains all bonds required under  applicable Law to secure  plugging
          and abandonment obligations with respect to the Quest Assets.

     (i)  Permits.  With  respect to the Quest  Assets that QES will  operate on
          behalf of the  Company  and  Bluestem  after  Closing  pursuant to the
          Operating and Management  Agreement,  QES has all Permits necessary to
          operate  such assets in the manner in which they are  presently  being
          operated,  such  Permits are in full force and effect,  and there have
          not been any  material  violations  of any such  Permits.  Any and all
          Permits  necessary  for the Company and  Bluestem to own, and contract
          with QES for  operation  of, the Quest Assets after  Closing have been
          assigned to, or obtained by, the Company or Bluestem,  as  applicable,
          such Permits are in full force and effect, and there have not been any
          material violations of any such Permits. The execution and delivery of
          this Agreement and the consummation of the  transactions  contemplated
          hereby and the Related  Agreements  will not result in any  revocation
          cancellation, suspension or modification of any material Permit.


                                       15
<PAGE>


     (j)  Proceedings. Except as set forth on Schedule 4.04(j), no Proceeding is
          pending with respect to the Quest Assets or the  ownership,  operation
          or use of any thereof; nor to the Quest Subsidiaries' knowledge is any
          Proceeding  threatened (i) that might result in a material  impairment
          or loss or diminution of the Company's title to a Quest Asset; or (ii)
          that may otherwise  adversely affect the value or use of a Quest Asset
          in any material respect.

     (k)  Taxes. (i) All ad valorem, property, production, severance and similar
          taxes  and  assessments  based  on or  measured  by the  ownership  of
          property or the production or removal of  Hydrocarbons  or the receipt
          of proceeds  therefrom and relating to the Quest Assets, to the extent
          such taxes and  assessments  have  become due and  payable,  have been
          timely and properly  paid;  (ii) all tax returns  required to be filed
          with respect to such taxes have been filed;  and (iii)  neither  Quest
          nor the Company has received  any notice of any claims,  and the Quest
          Subsidiaries have no knowledge of any claims, by any applicable taxing
          authority pending against Quest, the Company,  or Bluestem  applicable
          to the Quest Assets.

     (l)  Insurance.  The  Company  and  Bluestem  maintain  insurance  on their
          respective  Quest Assets  covering such risks and with such deductible
          amounts as are consistent with sound business practice.

     (m)  Marketing. Except as disclosed in Schedule 4.04(m), the Company has no
          contracts or commitments,  and the Contracts do not include or provide
          any  commitment,  for  the  sale  of  Hydrocarbons  other  than  those
          terminable at the sole discretion of the Company upon not more than 30
          days' notice.

     (n)  Take  or  Pay  Obligations.  The  Quest  Assets  are  not  subject  to
          obligations under a take-or-pay or other arrangement,  and the Company
          is not  obligated  by  virtue of an  election  to  non-consent  or not
          participate  in a  past  or  current  operation  on the  Quest  Assets
          pursuant to applicable agreements,  to produce Hydrocarbons,  or allow
          Hydrocarbons  to be produced,  without  receiving  full payment at the
          time of  delivery  in an amount  that  corresponds  to the net revenue
          interest described in Schedule 1.01 (bb).

     (o)  AFE's and Other Commitments.  Except as disclosed on Schedule 4.04(o),
          there are no outstanding  authorities for  expenditures or any oral or
          written  commitments  or  proposals to conduct  operations  on or make
          capital expenditures with respect to any of the Quest Assets.

     (p)  Pay-out Reports. Schedule 4.04(p) contains a true and accurate list of
          the status of the "payout balance" as of the date hereof for each Well
          and Lease that is subject to a reversion or other  adjustment  at some
          level of cost recovery or payout.


                                       16
<PAGE>


     (q)  Wellhead  Imbalances.  Schedule  4.04(q)  is a complete  and  accurate
          description of all wellhead Hydrocarbon imbalances with respect to the
          Quest Oil and Gas Properties as of December 22, 2003.

     (r)  Plant,  Pipeline and Marketing  Imbalances.  With respect to the Quest
          Oil and Gas  Properties,  Schedule  4.04(r) is a complete and accurate
          description  of all plant,  pipeline,  and marketing  imbalances as of
          December 22, 2003 between the quantity of Hydrocarbons  required to be
          delivered by Company under any contract for the production, marketing,
          transportation  or  processing  of  Hydrocarbons  and the  quantity of
          Hydrocarbons actually delivered by Company pursuant to such contract.

     (s)  Production. Prior to assignment of the Quest Oil and Gas Properties to
          Company,  Quest was timely  receiving  its share of proceeds  from the
          sale of  Hydrocarbons  produced from or  attributable to the Quest Oil
          and Gas Properties  without suspense,  counterclaim or set-off.  There
          has been no  production  of  Hydrocarbons  from the  Quest Oil and Gas
          Properties in excess of the allowable production  established pursuant
          to  applicable  Law that would result in a  restriction  on production
          from the Quest Oil and Gas Properties subsequent to the Closing.

     (t)  Suspense Accounts.  Schedule 4.04(t) contains an accurate and complete
          list of amounts  held in suspense by the Company or Quest with respect
          to the Quest Oil and Gas Properties as of the date hereof.

     (u)  Disposition  of Assets.  The Company  has not agreed to sell,  convey,
          dispose of or  abandon  any of the Quest  Assets,  other than sales of
          Hydrocarbons in the ordinary course of business.

     (v)  Preferential  Rights  and  Consents.   Schedule  4.04(v)  contains  an
          accurate and complete  list of all (i)  preferential  purchase  rights
          affecting   the  Quest  Assets  and  (ii)   consents,   approvals  and
          authorizations  (other than Customary  Filings) required in connection
          with the Quest  Subsidiaries'  assignment  and conveyance of the Quest
          Assets to the Company or Bluestem, as the case may be, pursuant to the
          Quest Assignments.

     (w)  Records and Information.  All lease,  division order,  well or similar
          files  furnished  or made  available  to  Investor  by  Quest  are the
          complete files of Quest and, to the Quest Subsidiaries' knowledge, are
          accurate and were  maintained  by Quest in the course of its ownership
          and operation of the Quest Assets.

     (x)  PUHCA/NGA. Neither the Company nor Bluestem (i) is a "holding company"
          or a "subsidiary company" of a "holding company," or a "public-utility
          company"  within the meaning of the Public Utility Holding Company Act
          of  1935,  as  amended,  and  (b) is  subject  in any  respect  to the
          provisions  of said act. No consent is required  under the Natural Gas
          Policy Act of 1978, as amended, in


                                       17
<PAGE>


          connection  with the  contribution of the Quest Assets to the Company,
          the Company's  contribution of the Quest Gathering System to Bluestem,
          or  the   transactions   contemplated   herein.   None  of  the  Quest
          Subsidiaries,  the  Company  or  Bluestem  is an  interstate  pipeline
          company within the meaning of the Natural Gas Act of 1938.

     (y)  State Utility  Status.  None of the Quest Assets include  pipelines or
          other  assets that are, or by which the owner or operator  thereof is,
          subject to  regulation  as a "public  utility"  within the  meaning of
          Okla. Stat. tit. 17,ss.ss.  151-155 or the regulations thereunder,  or
          as a "domestic  public utility" within the meaning of Okla. Stat. tit.
          17,ss.ss. 191.1-191.12, or as a "common carrier" within the meaning of
          Okla.  Stat.  tit.  52,ss.  24, or as a "public  service  corporation"
          within the meaning of Oklahoma  Constitution  Article 9, ss. 34; there
          are not now on file and there are not now  required  to be filed  with
          the Oklahoma Corporation Commission any tariffs or rate schedules with
          respect to any services or  activities  provided by the  pipelines and
          related facilities  comprising the Quest Assets, and there are not now
          pending  nor have  there  been  filed  with the  Oklahoma  Corporation
          Commission any complaints or proceedings,  and there have been entered
          no orders to provide open access or other  service,  under the natural
          gas gathering statutes,  Okla. Stat. tit. 52,ss.ss. 24.4 - 24.5 or any
          predecessor  natural gas gathering statute pertaining to the pipelines
          or related  facilities  comprising the Quest Assets; and the ownership
          and operation of said pipelines and  facilities is in full  compliance
          with all rules and regulations of the Oklahoma Corporation Commission.

     (z)  None of the  Quest  Assets  include  transmission  pipelines  or local
          distribution  facilities  that are subject to regulation as a "natural
          gas public  utility"  under Kansas law,  there are not now on file and
          there are not now  required  to be filed  with the  State  Corporation
          Commission  of the  State  of  Kansas  ("KCC")  any  tariffs  or  rate
          schedules  with respect to any services or activities  provided by the
          pipelines and related  facilities  comprising  the Quest  Assets,  and
          there are not now  pending  nor have there been filed with the KCC any
          complaints  or  proceedings,  and there have been entered no orders to
          provide open access or other service,  under any natural gas gathering
          statute pertaining to the pipelines or related  facilities  comprising
          the Quest Assets;  and the  ownership and operation of said  pipelines
          and facilities is in full compliance with all rules and regulations of
          the KCC.

     (aa) Easements, Rights-of-Way. Bluestem owns all rights-of-way,  easements,
          surface  rights,  surface  leases,  or fee  lands  necessary  for  the
          ownership and operation of the Quest Gathering System in the manner in
          which  it  is  owned  and  operated  as  of  the  Closing;   all  such
          rights-of-way, easements, surface rights, and surface leases are valid
          and subsisting and in full force and effect and no conditions exist or
          events have occurred (with the giving of notice or the passage of time
          or otherwise) which may result in their termination or revocation; all
          of the pipelines,  gathering  systems,  plants,  buildings,  and other
          fixtures and


                                       18
<PAGE>


          improvements   comprising  the  Quest  Gathering  System  are  located
          entirely  within  lands  covered  by  such  rights-of-way,  easements,
          surface rights, surface leases, or fee lands owned by Bluestem.

Section 4.05 Representations and Warranties with Respect to Devon Transaction.

     Each Quest  Subsidiary,  jointly and severally,  represents and warrants to
Investor the following with respect to the Devon Purchase and Sale Agreement:

     (a)  The executed copy of the Devon Purchase and Sale Agreement  heretofore
          furnished by Quest to Investor is a true,  correct and  complete  copy
          thereof.

     (b)  The Devon  Purchase and Sale Agreement is in full force and effect and
          has  not  been  amended,  modified,  terminated  or  rescinded  in any
          respect.

     (c)  The Company is the holder as of the Closing of all of the right, title
          and  interest  of the  purchaser  under  the Devon  Purchase  and Sale
          Agreement.

     (d)  Neither the Company nor Quest has waived any material  right under the
          Devon Purchase and Sale  Agreement,  except to the extent provided for
          in the Holdback  Agreement,  of even date herewith,  between Devon and
          the Company ("Holdback Agreement").

     (e)  Neither  the   Company  nor  Quest  is  in  material   breach  of  the
          representations, warranties or covenants of purchaser contained in the
          Devon  Purchase and Sale  Agreement,  nor, to the Quest  Subsidiaries'
          knowledge,  is  Devon  in  material  breach  of  its  representations,
          warranties  or  covenants  in such  agreement,  except  to the  extent
          provided for in the Holdback Agreement.

Section 4.06    Full Disclosure.

     All information  heretofore  furnished by Quest to Investor for purposes of
or in connection with this Agreement,  the Devon Purchase and Sale Agreement and
the Related Agreements or any transaction contemplated hereby or thereby was, as
of the date it was  furnished,  true,  complete and  accurate in every  material
respect.  Quest has  disclosed  or has caused to be  disclosed  to  Investor  in
writing any and all facts (other than facts of general public  knowledge)  which
might  reasonably  be  expected to have a material  adverse  effect on the Quest
Assets.  No  representation  is made as to any financial  projections other than
that such  projections  are  based on  information  that  Quest  believed  to be
accurate and were calculated in a manner Quest believed to be accurate.


                                       19
<PAGE>


                           ARTICLE V. INDEMNIFICATION

Section 5.01    The Quest Subsidiaries' Indemnification of Investor.

     Subject  to the  limitations  set  forth  in this  Article  V,  each  Quest
Subsidiary,  jointly and severally, hereby agrees to indemnify and hold Investor
harmless from and against any liabilities,  claims,  losses,  damages, costs and
expenses of any kind  (including,  without  limitation,  the reasonable fees and
disbursements  of  Investor's  counsel  in  connection  with any  investigative,
administrative or judicial proceeding, whether or not the Investor is designated
as a party  thereto)  (collectively,  "Liabilities")  that  may be  incurred  by
Investor,  relating  to or  arising  out  of  (i)  any  breach  of  any  of  the
representations and warranties made by the Quest Subsidiaries in this Agreement,
(ii)  ownership  or  operation  of the Quest  Assets  prior to the date  hereof,
including,  without limitation,  Adverse Environmental Conditions existing prior
to  the  date  hereof;   provided  that  Investor   shall  not  be  entitled  to
indemnification  from Abandonment  Liabilities,  whether arising before or after
the date hereof (unless such Abandonment  Liabilities constitute a breach of the
representations  and warranties of the Quest  Subsidiaries in Section 4.04); and
(iii) the  failure of any Quest  Subsidiary  to perform any  covenant  contained
herein required to be performed by such Quest Subsidiary.

Section 5.02    Time Period for Assertion of Claims.

     Any claims by  Investor  for  indemnification  from the Quest  Subsidiaries
pursuant to this  Agreement  must be asserted  within  twelve (12) months  after
Closing or such claims shall be deemed waived, except as follows:

     (a)  Investor shall be indemnified with respect to the Existing Proceedings
          and  Liabilities  arising  from  or  related  thereto,  to the  extent
          relating  to  periods  prior  to  Closing,  without  limitation  as to
          duration;

     (b)  Claims for indemnification from Liabilities arising from or related to
          breaches of the Quest Subsidiaries'  representations and warranties in
          Sections 4.01(a) - (e), 4.03(a) - (b), 4.04(a),  4.04(p),  and 4.04(t)
          shall survive without limitation as to duration;

     (c)  Claims  for  indemnification  from  Liabilities  with  respect  to the
          payment of royalties,  overriding royalties,  production payments, net
          profits interests or other burdens on or measured by the production of
          Hydrocarbons  from the Quest  Assets  prior to Closing  shall  survive
          without limitation as to duration;

     (d)  Claims for  indemnification  from Liabilities for payment of operating
          expenses,  capital expenditures and amounts owing under the Contracts,
          in each case to the extent  attributable to the ownership or operation
          of the Quest Assets prior to Closing, shall survive without limitation
          as to duration  except for such  amounts  incurred in the past 90 days
          related to expenses incurred in connection with the


                                       20
<PAGE>


          drilling or completion of any well or the construction of any pipeline
          in an amount not to exceed $2 million in the aggregate;

     (e)  Claims for indemnification from Liabilities in connection with Adverse
          Environmental  Conditions,  whether on-site or off-site, to the extent
          arising  prior to Closing,  including,  without  limitation,  existing
          matters  identified  in  the  Limited  Due  Diligence  Review,   dated
          September  2002,  prepared for STP,  Inc., et al by O&G  Environmental
          Consulting,  LLC,  shall  survive  for a period of two (2) years after
          Closing,  but only to the extent that  remediation or other corrective
          action  is  required  under  Environmental  Laws,  the  Leases  or the
          Contracts, or fines and/or penalties are assessed against the Company;

     (f)  Claims for indemnification from Liabilities arising from or related to
          the breach of the Quest  Subsidiaries'  representations and warranties
          in Section 4.04(k) (Taxes) shall survive for a period of time equal to
          the  respective  statutes  of  limitations  applicable  to claims  for
          payment of such taxes, plus sixty (60) days; and

     (g)  Claims for indemnification  from Liabilities asserted by third parties
          with  respect to  personal  injury or  wrongful  death  relating to or
          arising  from the  ownership or operation of the Quest Assets prior to
          Closing  shall  survive  for a period of time equal to the  respective
          statutes of  limitations  applicable to such third party claims,  plus
          sixty (60) days.

Section 5.03    Threshold; Cap.

     (a)  Except  as  provided  in  Section   5.03(b)   below,   (i)  the  Quest
          Subsidiaries  shall have no  obligation  to  indemnify  Investor  with
          respect to breaches  of the Quest  Subsidiaries'  representations  and
          warranties hereunder unless the Liabilities relating to or arising out
          of  such  breaches,  in  the  aggregate,  exceed  $250,000,  it  being
          understood that such amount is a threshold, and not a deductible;  and
          (ii) the Quest Subsidiaries' indemnity obligation to Investor shall in
          no event exceed $30,000,000.

     (b)  The threshold and cap on the Quest Subsidiaries'  indemnity obligation
          provided in Section  5.03(a) shall not apply to claims by Investor for
          indemnification  from  Liabilities  relating  to  or  arising  out  of
          breaches of the Quest Subsidiaries'  representations and warranties in
          Section  4.04(d)  or to  claims  of the types  specified  in  Sections
          5.02(a)-(d) and 5.02(f) above.

Section 5.04    Negligence; Strict Liability.

     THE PARTIES HERETO INTEND THAT THE  INDEMNITIES SET FORTH IN THIS ARTICLE 5
BE  CONSTRUED  AND  APPLIED  AS  WRITTEN  ABOVE   NOTWITHSTANDING  ANY  RULE  OF
CONSTRUCTION TO THE CONTRARY.


                                       21
<PAGE>


WITHOUT LIMITING THE FOREGOING,  THE INDEMNITIES SHALL APPLY NOTWITHSTANDING ANY
STATE'S "EXPRESS NEGLIGENCE RULE" OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED
ON AN INDEMNITEE'S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE
OR GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL FAULT OR RESPONSIBILITY. IT
IS THE INTENT OF THE PARTIES THAT THE  INDEMNITIES  SET FORTH HEREIN SHALL APPLY
NOTWITHSTANDING  AN  INDEMNITEE'S  SOLE,  CONCURRENT OR  CONTRIBUTORY  ACTIVE OR
PASSIVE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY. THE PARTIES AGREE THAT
THIS PROVISION IS "CONSPICUOUS" FOR PURPOSES OF ALL STATE LAWS.

Section 5.05    Indemnification Procedures.

     (a)  Notice of Claims.  Investor shall give the Quest  Subsidiaries  prompt
          written notice of any claim for which  Investor seeks  indemnification
          hereunder,  setting forth the  particulars  associated  with the claim
          (including  a copy of the  written  claim,  if any) as then  known  by
          Investor.  The failure of Investor to give prompt notice of a claim as
          required by this section shall not relieve the Quest  Subsidiaries  of
          its obligations under this Agreement except to the extent such failure
          materially  prejudices  the  Quest  Subsidiaries'  ability  to  defend
          against the claim.

     (b)  Defense  of  Claims.   Within   thirty   (30)  days  after  the  Quest
          Subsidiaries   receive  a  claim  notice  from  Investor,   the  Quest
          Subsidiaries   shall  notify   Investor   whether  or  not  the  Quest
          Subsidiaries will assume responsibility for defense and payment of the
          claim.  Investor is  authorized,  prior to and during such thirty (30)
          day period, to file any motion, pleading or other answer that it deems
          necessary  or  appropriate  to  protect  its  interests  that  is  not
          prejudicial to the Quest Subsidiaries. If the Quest Subsidiaries elect
          not to assume  responsibility  for  defense  and payment of the claim,
          Investor may defend against, or enter into any settlement with respect
          to,  the claim as it deems  appropriate  without  relieving  the Quest
          Subsidiaries of any indemnification obligations the Quest Subsidiaries
          may have with respect to such claim. The Quest  Subsidiaries'  failure
          to respond in writing  to a claim  notice  within the thirty  (30) day
          period  shall be deemed an election by the Quest  Subsidiaries  not to
          assume  responsibility  for defense  and payment of the claim.  If the
          Quest  Subsidiaries  elect to assume  responsibility  for  defense and
          payment of the Claim: (a) the Quest Subsidiaries shall defend Investor
          against  the claim  with  counsel  of the Quest  Subsidiaries'  choice
          (reasonably acceptable to Investor), (b) Investor shall cooperate with
          the Quest Subsidiaries in all reasonable respects in such defense, (c)
          subject to the limitations in Section 5.03(a),  the Quest Subsidiaries
          shall pay any  judgment  entered or  settlement  with  respect to such
          claim,  and (d) the Quest  Subsidiaries  shall not consent to entry of
          any  judgment or enter into any  settlement  with respect to the claim
          that (i)  does not  include  a  provision  whereby  the  plaintiff  or
          claimant in the matter releases Investor from all


                                       22
<PAGE>


          liability  with respect to the claim or (ii)  contains  terms that may
          materially and adversely  affect  Investor  (other than as a result of
          money damages covered by the indemnity). In all instances Investor may
          employ  separate  counsel and  participate in defense of a claim,  but
          Investor  shall bear all fees and expenses of counsel  employed by the
          Investor.

ARTICLE VI.  MISCELLANEOUS

Section 6.01    Quest Assignments and Consents.

     (a)  Within two (2) Business Days after Closing,  the Company shall deliver
          to the appropriate  county clerks or other officers of the counties in
          which  the  Quest  Assets  are  located   counterparts  of  the  Quest
          Assignments  (together with applicable filing or recording fees) to be
          recorded  in the  appropriate  records of such  counties.  The Company
          shall furnish to Investor  copies of the recorded  counterparts of the
          Quest  Assignments.  In the event of errors or  omissions in the Quest
          Assignments,  the Company  and the Quest  Subsidiaries  will  execute,
          acknowledge  and deliver such  additional  assignments  or  correction
          instruments  and  take  such  further  action  as  may  be  reasonably
          necessary or desirable to correct such errors or omissions.

     (b)  After Closing, the Company and the Quest Subsidiaries shall diligently
          continue commercially reasonable efforts to obtain all of the consents
          and waivers of  preferential  rights  applicable  to the Quest  Assets
          which were not  obtained  prior to Closing.  The failure to obtain any
          such  consent  or  waiver  of  preferential  rights  shall be deemed a
          Defect,  as defined in the Amended and  Restated  LLC  Agreement,  and
          Investor shall be entitled to the remedies provided therein as to such
          Defect.

Section 6.02    Further Assurances.

     In case at any time after the date hereof any further  action is reasonably
necessary or desirable to carry out the purposes of this Agreement,  the parties
shall take all such necessary action.

Section 6.03    Amendments; Waiver.

     This Agreement may be amended, modified,  superseded, or cancelled, and any
of the terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument signed by all of the parties hereto, or, in
the case of a waiver or consent, by or on behalf of the party or parties waiving
compliance or giving such consent. The failure of any party at any time or times
to require  performance of any provision of this Agreement  shall not affect its
right at a later time to enforce such  provision.  No waiver by any party of any
condition,  or of any  breach  of any  covenant,  agreement,  representation  or
warranty  contained in this Agreement,  in any one or more  instances,  shall be
deemed to be or construed as a further or


                                       23
<PAGE>


continuing  waiver of such condition or breach or waiver of any other  condition
or of any breach of any other covenant, agreement, representation or warranty.

Section 6.04    Successors and Assigns; No Third Party Beneficiaries.

     All covenants and agreements in this Agreement contained by or on behalf of
the parties  hereto shall bind and inure to the benefit of the parties and their
respective  successors and assigns.  Subject to the  foregoing,  nothing in this
Agreement  shall confer upon any person or entity not a party to this Agreement,
or the legal representatives of such person or entity, any rights or remedies of
any nature or kind whatsoever under or by reason of this Agreement.

Section 6.05    Notices.

     All  communications  provided for hereunder shall be personally  delivered,
sent via overnight delivery service,  sent by facsimile or sent by registered or
certified  mail to the  respective  party at the  address  or  facsimile  number
specified  below or such  other  address or  facsimile  number as such party may
designate in writing from time to time:

      If to the Company:

      Quest Cherokee, LLC
      5901 North Western, Suite 200
      Oklahoma City, OK  73118
      Attn:  Jerry D. Cash
      Telephone:  405.840.9894
      Fax:  405.840.9897

      If to Investor:

      Cherokee Energy Partners LLC
      200 Clarendon Street, 55th Floor
      Boston, MA  02117
      Attn:  General Counsel
      Telephone:  617.531.6316
      Fax:  617.867.4698

      If to the Quest Subsidiaries:

      Quest Oil & Gas Corporation
      5901 North Western
      Suite 200
      Oklahoma City, OK  73118
      Attn:  Jerry D. Cash
      Telephone:  405.840.9894
      Fax:  405.840.9897


                                       24
<PAGE>


     Communications  personally delivered or sent via overnight delivery service
or facsimile shall be deemed received when delivered,  and communication sent by
registered or certified  mail shall be deemed to have been received on the fifth
Business Day after the date of such mailing.

Section 6.06    Descriptive Headings.

     The  descriptive  headings of the several  Sections of this  Agreement  are
inserted for convenience only and do not constitute a part of this Agreement.

Section 6.07    Waiver of Consequential Damages.

     IT IS EXPRESSLY  AGREED THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY SPECIAL,  PUNITIVE,  INDIRECT,  OR CONSEQUENTIAL  DAMAGES  RESULTING FROM OR
ARISING, DIRECTLY OR INDIRECTLY,  OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREIN.

Section 6.08    Governing Law.

     This Agreement shall be construed and enforced in accordance  with, and the
rights of the parties  shall be  governed  by, the law of the State of New York,
without  giving  effect to the  choice of law or  conflicts  principles  thereof
(except to the extent the law of another jurisdiction mandatorily applies).

Section 6.09    Entire Agreement.

     This  Agreement  and the other  writings  referred  to herein or  delivered
pursuant  hereto contain the entire  agreement among the parties with respect to
the  subject   matter  hereof  and  supersede  all  prior  and   contemporaneous
arrangements or understandings with respect thereto.

Section 6.10    Severability.

     Any provision of this Agreement that is prohibited or  unenforceable in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  hereof,  and  any  such  prohibition  or   unenforceability  in  any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

Section 6.11    Specific Performance.

     Without limiting any other remedies that may available at law or equity, in
the event of a breach of this Agreement,  the performing party shall be entitled
to specific performance from the non-performing party.


                                       25
<PAGE>


Section 6.12    Survival.

     The  representations  and warranties  contained  herein shall survive for a
period of twelve (12) months after Closing,  except for the  representations and
warranties contained in Sections 4.01(a) - (e), 4.03(a) - (b), 4.04(a), 4.04(k),
4.04(p),  and 4.04(t),  which shall  survive for the duration of the  respective
indemnities with respect to breaches of such  representations and warranties set
forth in Article V.


                                       26
<PAGE>


Section 6.12   Counterparts.

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which  together  shall  constitute  but a
single agreement.


                                       27
<PAGE>



     IN WITNESS WHEREOF, the parties hereto have each executed this Agreement as
of the date first set forth above.

                             "COMPANY"

                             QUEST CHEROKEE, LLC


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Manager


                             "INVESTOR"

                             CHEROKEE ENERGY PARTNERS LLC


                             By:    /s/ Christopher J. Picotte
                                -------------------------------------
                             Name:  Christopher J. Picotte
                             Title: Vice President


                             "QUEST SUBSIDIARIES"

                             QUEST OIL & GAS CORPORATION


                             By:    /s/ Jerry Cash
                                  -----------------------------------
                             Name:  Jerry D. Cash
                             Title: Co-Chief Executive Office and Secretary


                             QUEST ENERGY SERVICE, INC.


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Co-Chief Executive Office and Secretary



                                       28
<PAGE>


                             STP CHEROKEE, INC.


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Co-Chief Executive Office and Secretary


                             PONDEROSA GAS PIPELINE COMPANY, INC.


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Co-Chief Executive Office and Secretary


                             PRODUCERS SERVICE, INCORPORATED


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Co-Chief Executive Office and Secretary


                             J-W GAS GATHERING, L.L.C.


                             By:    /s/ Jerry Cash
                                -------------------------------------
                             Name:  Jerry D. Cash
                             Title: Manager


                                       29