EMPLOYMENT AGREEMENT
                              --------------------


     This Agreement (the  "Agreement") is made and entered into on this 17th day
of October, 2005 (the "Effective Date"), between QUEST RESOURCE CORPORATION (the
"Company), and JERRY D. CASH ("Employee").

     1.   Agreement to Employ; Duties.
          ---------------------------

                a     Agreement to  Employ.  The Company hereby employs Employee
and Employee hereby accepts employment upon the terms and conditions hereinafter
set forth.  Employee will serve as Chief Executive  Officer and President of the
Company. In consideration of the mutual promises set forth below, the employment
agreement  entered into between  Employee and the Company dated November 7, 2002
(the "2002  Agreement")  is  terminated,  and this  Agreement  replaces the 2002
Agreement in its entirety.

                b     Duties.  Employee  agrees that so long as he is   employed
pursuant to this  Agreement,  he will: (i) to the  satisfaction  of the Company,
devote his best  efforts and his entire  business  time to further  properly the
interests  of the  Company;  (ii) at all times be subject to the  direction  and
control of the Board of Directors of the Company with respect to his  activities
on behalf of the Company; (iii) comply with all rules, orders and regulations of
the  Company  and all  statutes,  regulations,  interpretive  rulings  and other
enactments  to which the  Company is subject;  (iv)  truthfully  and  accurately
maintain  and  preserve  such  records  and make all  reports as the Company may
require;  and (v) fully  account  for all monies  which he may from time to time
have  custody  over and  deliver the same to the  Company  whenever  and however
directed to do so.

        2.    Compensation.
              ------------

                a     Base Salary.  For all services to be rendered by Employee,
the Company  shall pay  Employee a salary at the rate of Four  Hundred  Thousand
($400,000.00) and No/100 Dollars per year, in installments of equal frequency to
the Company's  standard payroll  practices.  Salary payments shall be subject to
withholding and other  applicable  taxes (e.g.,  federal and state  withholding,
FICA, earnings tax, etc).

                b     Incentive Bonus Compensation/Stock Options. Employee shall
be entitled to  participate  in an incentive  bonus plan or program and/or stock
option plan as may be  established by the Company's  Compensation  Committee for
senior executives of the Company.

     3.   Term. This Agreement shall be effective on October 17, 2005, and shall
continue


<PAGE>

thereafter  until  terminated  by either  party as  provided  in  Section 5 or 6
hereof.

     4.   Employee Benefits. Employee  shall be entitled,  during his employment
hereunder,  to receive and participate in employee benefits  available to senior
executives  of the  Company  as the  Board  of  Directors  (or the  Compensation
Committee) of the Company determines, in its sole discretion, from time to time.

     Employee  acknowledges  that the  benefits  described  above are subject to
change  in the  discretion  of the  Board  of  Directors  (or  the  Compensation
Committee) of the Company,  and that Employee is only entitled to participate in
these  benefits to the extent they are made  available  by the Company to senior
executives from time to time.

     5.   Termination of Employment  by  the  Employee.  Employee shall have the
right to terminate  his  employment at any time by providing no less than thirty
(30) days prior written Notice of Termination  to the Company.  Employee  hereby
agrees to assist in the training of his replacement, if requested.

      6.  Termination of Employment by the Company.
          ----------------------------------------

                a       Without Cause.  The  Company  may  terminate  Employee's
employment  under this Agreement at any time without cause.  In such event,  the
Company  shall  continue to pay  Employee  Base  Salary as required  pursuant to
Section 2a hereof as severance pay for a period equal to twelve (12) months from
the date of the Company's giving of Notice of Termination to Employee; provided,
however,  that  Employee  shall only be paid such  severance  pay if he signs an
agreement  containing  a  release  of  claims  against  the  Company,  in a form
substantially  similar  to that  included  in  Exhibit  A,  attached  hereto and
incorporated  herein.  Such severance pay will be paid in equal  installments on
the Company's  regular  payroll dates.  Employee will cease to be an employee of
the  Company  as of the date  Notice of  Termination  is given,  and he will not
receive  or  accrue  any  benefits  of  employment  after  such  termination  of
employment  (e.g.,  life  insurance,  health  insurance,  disability  insurance,
vacation  accrual or other  benefits  provided  pursuant  to this  Agreement  or
otherwise in conjunction with Employee's employment). Severance pay shall not be
paid to the Employee if Employee owns, manages, operates, joins, contracts with,
or is  employed  by or  connected  in any manner  with  (whether  as  principal,
partner, shareholder,  member, director, officer, employee, agent or otherwise),
any business which may be  competitive in any manner to the business  engaged in
by the Company.

                b       With Cause  The Company may terminate Employee's employ-
ment under  this  Agreement  at any time for cause  effective  immediately  upon
Notice of  Termination.  In the event the Company  terminates this Agreement for
cause on the part of Employee, Employee shall receive Base Salary for the period
to the date of his  termination.  Employee  shall  not be  entitled  to  receive
severance pay from the Company if his  employment is terminated  for cause.  For
purposes of this  Agreement,  "cause"  shall be defined to  include,  but not be
limited to, the following:  (i) any act or omission by Employee that constitutes
gross negligence or willful misconduct;  (ii) theft, dishonest acts or breach of
fiduciary  duty that  materially  enrich the Employee or  materially  damage the
Company or conviction of

                                       2
<PAGE>

a felony,  (iii) any conflict of interest,  except those consented to in writing
by the Company;  (iv) any material  failure by Employee to observe  Company work
rules,  policies  or  procedures  that is not  cured by  Employee  after 10 days
written  notice;  (v) bad faith  refusal  by  Employee  to carry out  reasonable
instruction that is not cured by Employee after 10 days written notice;  or (vi)
any material breach of this Agreement by Employee.

     7. Notice of Termination.  Any termination of Employee's  employment by the
Company  pursuant  to Section 6 or by  Employee  pursuant  to Section 5 shall be
communicated  by written Notice of  Termination to the other party hereto.  Said
Notice shall be deemed to have been duly given when  delivered  personally or by
overnight  delivery,  sent via facsimile,  or mailed by United States  certified
mail, return receipt requested, postage prepaid, addressed as follows:

           If to the Company:

                Quest Resource Corporation
                9520 North May Avenue
                Oklahoma City, Oklahoma  73120
                Attention: David Grose (or then current Chief Financial Officer)
                Facsimile: (405) 488-1156

           If to Employee:

                Jerry D. Cash
                9520 North May Avenue
                Oklahoma City, Oklahoma  73120
                Facsimile: (405) 840-9897

or at such other address as either party may designate in writing to the other.

     8. Company  Property.  Upon  termination  of this  Agreement for any reason
whatsoever,  Employee  shall  immediately  deliver  to the  Company  any and all
Company property,  including,  without limitation, all Confidential Information,
as such  Confidential  Information  is  defined in  Section  15.  From and after
termination  of this  Agreement,  Employee  shall not represent  that he has any
further authority to act as a representative of the Company, in any capacity.

     9. Intellectual  Property.  Any interest in patents,  patent  applications,
inventions, copyrights, developments and processes ("Inventions") which Employee
now or hereafter  during the period  Employee is employed by the Company may own
or develop relating to the fields in which the Company may then be engaged shall
belong to the Company; and forthwith upon request of the Company, Employee shall
execute all  assignments  and other  documents and take all such other action as
the  Company  may  reasonably  request in order to vest in the  Company  all his
right,  title and interest in and to the Inventions free and clear of all liens,
charges and encumbrances.

                                       3
<PAGE>

     10. No  Conflicts.  Employee  represents  and  warrants to the Company that
neither the execution nor delivery of this  Agreement,  nor the  performance  of
Employee's obligations hereunder,  will conflict with, or result in a breach of,
any term,  condition,  or  provision  of, or  constitute  a default  under,  any
obligation,  contract,  agreement, covenant or instrument to which Employee is a
party or under which the Employee is bound, including,  without limitation,  the
breach by Employee of a fiduciary duty to any former employers.

     11. Personnel  Policies.  The general personnel policies of the Company (as
said  policies may exist from time to time) will apply to Employee with the same
force and effect as to any other  employee of the Company,  except to the extent
such general  personnel  policies are inconsistent with the terms and provisions
of this  Agreement,  in which event the terms and  provisions of this  Agreement
shall control.

     12.  Compensation  Review.  The Company  will conduct  periodic  reviews of
Employee and his performance no less frequently than annually. While the Company
currently  anticipates  that  during  such  reviews,  it may  consider  possible
increases to Base Salary,  both  Employee and the Company  hereby agree that the
Company shall have no obligation to alter or adjust any compensation or benefits
due to Employee pursuant to the terms of this Agreement.

     13. Expense Reimbursement.  Employee shall be reimbursed by the Company for
the  reasonable  and  necessary  business  expenses  incurred by Employee in the
discharge  of  his  duties,  subject  to the  Company's  standard  policies  and
procedures related to expense reimbursement and approval thereof.

     14. Conflict of Interest. Employee shall devote his full time and attention
to the business of the Company and the diligent discharge of the duties assigned
to Employee  throughout the term of this Agreement.  Unless  consented to by the
Company, Employee will not, directly or indirectly,  have any business interests
or investments (whether as principal, partner,  shareholder,  director, officer,
employee, agent or otherwise) that: (i) are other than passive investments which
do not require Employee's direct personal time, attention,  or services; or (ii)
create any conflict of interest with the Company or with  Employee's  employment
by the Company.  For  purposes of the  foregoing,  a conflict of interest  shall
include,  but not be limited to, any direct or indirect interest in any business
or  enterprise  that is  competitive  with the  Company  or any  corporation  or
business enterprise directly or indirectly  controlling,  controlled by or under
common control with the Company.

     Notwithstanding  the foregoing,  during the period  Employee is employed by
the Company,  Employee may own up to 1% of the outstanding  equity securities of
stock in any  corporation  which is listed  upon a national  stock  exchange  or
traded in the over-the-counter market.

     15. Confidentiality;  Restrictive Covenants. Employee acknowledges that his
employment  with the Company will afford Employee an opportunity to identify the
Company's business  strategies and know-how,  enable him to establish  favorable
relations  with the Company's  customers,  business  prospects and suppliers and
provide  him with  access to other  confidential,  trade  secret or  proprietary

                                       4
<PAGE>

information  of  the  Company  (collectively,  the  "Confidential  Information")
including, without limitation,  business and marketing plans, customer files and
lists, business prospects,  sales techniques,  billing files,  software,  source
code, financial  information,  reports,  summaries,  spreadsheets,  evaluations,
drawings,  specifications,  seismic data,  reserve reports,  prospect  analyses,
geological  and  geophysical  data,  maps,  models,  interpretations,  and other
confidential  or  proprietary  information  of the  Company  whether in written,
graphic,  electronic or any other format. Employee further acknowledges that the
Company will expend considerable  amounts of time, money and other assets in the
development of this Confidential Information which is essential to its business,
and Employee  acknowledges  that his employment by the Company is conditioned on
his  promise  not  to  use  any  Confidential  Information  or  to  divulge  any
Confidential  Information  to any person or entity not  employed  by the Company
without the Company's prior written approval. Employee, therefore, agrees not to
use, disclose or in any manner reveal to any person, firm, company,  corporation
or  other  entity  any of the  Confidential  Information  conveyed  to him or in
connection  with his  employment  by the  Company  prior or  subsequent  to this
Agreement  other than for Employee to carry out his duties under this Agreement.
Anything  herein  to the  contrary  notwithstanding,  this  Agreement  shall  be
inoperative as to such portions of the Confidential Information which (i) are or
become generally  available to the public other than as a result of a disclosure
by Employee; (ii) become available to Employee on a nonconfidential basis from a
source, other than the Company or its representatives,  which has represented to
Employee (and which Employee has no reason to disbelieve after due inquiry) that
such source is  entitled  to  disclose  it, or (iii) were known to Employee on a
nonconfidential  basis  prior to  disclosure  to  Employee by the Company or its
representatives.

     Employee  further agrees that while he remains in the employ of the Company
and for a period of twelve (12) months following  termination of such employment
by  Employee  or by the  Company  for  cause,  Employee  will  not  directly  or
indirectly  (whether  through any person,  firm,  company,  corporation or other
entity,  other than the Company),  do any of the following  anywhere  within the
geographical area in which the Company does business:

          a. For his own account, for any person, firm, company,  corporation or
     other  entity,  other than the Company,  or for any other  reason,  solicit
     business or cause agents of any person, firm, company, corporation or other
     entity to  solicit  business  of a type  similar to that  solicited  by the
     Company from or for any person, firm, company,  corporation or other entity
     who was, at the effective date of the  termination  of his employment  with
     the Company,  or within a one (1) year period prior to such termination,  a
     customer of the Company,  as disclosed by the Company's  books and records,
     or solicit business from any prospective  customer of the Company with whom
     the Company has had  contact  within the one (1) year period  prior to such
     termination as disclosed by the Company's books and records;

          b. In any way, directly or indirectly,  whether  personally or through
     agents,  other  persons  or  otherwise,  divert or take away or  attempt to
     divert or take away any of such customers or  prospective  customers or any
     of the Company's  suppliers or business  prospects,  or otherwise interfere
     with or attempt to interfere with the Company's  relations with any of such
     customers, prospective customers, business prospects or suppliers; or

                                       5
<PAGE>

          c. In any other  way,  whether  personally  or through  agents,  other
     persons or otherwise, induce or attempt to induce any director, employee or
     agent of the Company to terminate his employment with the Company.

     16. Severability of Restrictive Covenants. It is understood and agreed that
the restrictions  imposed by the provisions of the foregoing Section 15 and each
subsection  thereof  are  separate  and  severable,  and it is the intent of the
parties hereto that in the event the restrictions imposed by said Section or any
subsection  should be  determined by any court of competent  jurisdiction  to be
void for any reason whatsoever,  the remaining  provisions of this Agreement and
the  restrictions  imposed by the remainder of said Section or subsection  shall
remain valid and binding upon the parties. It is also agreed and understood that
in the event any restriction contained in Section 15 should be considered by any
court of competent  jurisdiction to be unenforceable because unreasonable either
in length of time or area to which said restriction applies, it is the intent of
both parties hereto that said court reduce and reform the provisions  thereof so
as to apply to limits considered enforceable by said court.

     17. Equitable Remedies.  Recognizing that irreparable damage will result to
the  Company  in the  event of  breach  of any of the  foregoing  covenants  and
assurances  of Section 15 by  Employee,  the  Company  shall be  entitled  to an
injunction  to be issued by any court of competent  jurisdiction  enjoining  and
restraining  Employee and each and every person,  firm, company,  corporation or
other  entity  acting  in  concert  or  participating  with  Employee  from  the
continuation of such breach, and in addition thereto,  Employee shall pay to the
Company all  ascertainable  damages,  including costs and reasonable  attorneys'
fees and  expenses,  sustained  by the  Company  by reason of the breach of said
covenants and assurances.

     18. Survival of Representations. The covenants, agreements, representations
and warranties contained in or made by Employee pursuant to this Agreement shall
survive Employee's termination of employment,  irrespective of any investigation
made by or on behalf of any party.

     19. Waiver. Failure of either party to demand strict compliance with any of
the terms,  covenants or conditions  hereof shall not be deemed a waiver of such
term,  covenant or condition,  nor shall any waiver or  relinquishment by either
party of any right or power  hereunder at any one time or more times be deemed a
waiver or relinquishment of such right or power at any other time or times.

     20.  Severability.  The invalidity or  unenforceability of any provision or
provisions of this Agreement shall not affect the validity or  enforceability of
any other  provision  of this  Agreement,  which shall  remain in full force and
effect.

     21. Governing Law; Binding Effect.  This Agreement shall be governed by and
construed  in  accordance  with the laws of the State of  Oklahoma  and shall be
binding  upon  the  parties  hereto,  their  heirs,  executors,  administrators,
successors and assigns.

     22. Entire and Final Agreement.  This Agreement shall supersede any and all
agreements

                                       6
<PAGE>

of  employment,  oral or  written  (including  correspondence,  memoranda,  term
sheets,  etc.),  heretofore  existing and  contains the entire  agreement of the
parties with respect to the subject  matter  hereof.  This  Agreement may not be
modified  orally,  but only by an  agreement  in  writing,  signed  by the party
against whom the enforcement of any waiver, change,  modification,  extension or
discharge is sought.

     23. Assignment.  Neither this Agreement nor any of the rights,  obligations
or interests  arising  hereunder  may be assigned by Employee  without the prior
written  consent of the Company.  Neither this  Agreement nor any of the rights,
obligations  or  interests  arising  hereunder  may be assigned by the  Company,
without the prior written  consent of the Employee,  to a person other than: (1)
an affiliate of the Company;  or (2) any party with which the Company  merges or
consolidates,  or to whomever the Company may sell all or  substantially  of its
assets; provided,  however, that any such affiliate or successor shall expressly
assume all of the Company's  obligations  and liabilities to Employee under this
Agreement.

     24. Section Headings.  The section headings contained in this Agreement are
inserted  for purposes of  convenience  only and shall not affect the meaning or
interpretation of this Agreement.

     25. Signature Blocks.
         ----------------

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf and  Employee  has hereunto set his hand the day and year first above
written.

"Employee"                                  "Company"

                                            QUEST RESOURCE CORPORATION
/s/ Jerry D. Cash
------------------------
Jerry D. Cash                               By:  /s/ David E. Grose
                                                 ------------------------------
                                                 David E. Grose


                                            Title: Chief Financial Officer



                                       7
<PAGE>

                                    EXHIBIT A


                                RELEASE AGREEMENT
                                -----------------

     THIS  RELEASE  AGREEMENT  ("Release")  is entered into  effective  the date
signed  below,  by and between  JERRY D. CASH  ("Employee")  and QUEST  RESOURCE
CORPORATION ("Company").

     WHEREAS,  the Company has determined  that  Employee's  employment with the
Company should end effective ________________________ ("Termination Date"); and

     WHEREAS,  the Company and Employee  desire to fully and finally resolve all
issues which might relate to Employee's employment with the Company.

     NOW THEREFORE,  in consideration of the mutual promises set forth below, it
is hereby agreed by and between Employee and Company as follows:

     A.   Payment to  Employee.  The Company  agrees to pay  Employee the sum of
          $________  (the  "Payment")  as  severance  pay,  less all  applicable
          withholdings  for state,  federal and FICA taxes. The Payment shall be
          paid  in  [insert  number  of  installments]   equal  installments  of
          $_________  on  each  regular  payroll  date  of  the  Company.   Such
          installments shall commence on the first payroll date that follows the
          expiration of the seven-day revocation period set forth in paragraph G
          below.

     B.   Employee's  Release of  Liability.  Employee  agrees to the  following
          general release:

          (a)  Employee  hereby  releases,  acquits and forever  discharges  the
          Company, its subsidiaries,  divisions, affiliates, agents, independent
          contractors, shareholders, employees, directors, and officers, and all
          of its predecessors and successors  (collectively  referred to in this
          Release  as  "Released  Parties")  of and from any and all  causes  of
          action, suits,  proceedings,  claims,  demands,  rights,  obligations,
          losses,  injury, costs,  expenses,  compensation and all other damages
          and  liabilities  of any kind or nature  whatsoever,  whether known or
          unknown,   suspected   or   unsuspected,    asserted   or   assertable
          (collectively  "Claims")  which Employee now owns or holds,  or at any
          time has owned or held, against the Released Parties arising out of or
          related to contract (express and/or implied),  tort, payment of wages,
          Title VII of the Civil  Rights  Act of 1964,  the Civil  Rights Act of
          1991, the Civil Rights Acts of 1866 and 1871,  the Age  Discrimination
          in Employment Act, as amended,  the Family Medical Leave Act, the Fair
          Labor  Standards Act, the Employee  Retirement  Income Security Act of
          1974, the Americans With  Disabilities  Act of 1991, the Equal Pay Act
          of 1963,  the  Rehabilitation  Act of 1973,  and/or any other federal,
          state or local statute,  law, ordinance,  order or principle of common
          law,  or any Claim in  relation  to  Employee's  ownership  or sale of
          Company stock or  participation  in any  compensation or

                                      A-1
<PAGE>

          stock  plan  or  any  Claim  relating  to any  other  law,  common  or
          statutory,  resulting  from any act or omission  committed  or omitted
          prior to the date this Release is signed,  and specifically  including
          Claims arising out of or in consequence of the employment relationship
          between Employee and Company, or the termination thereof.

          (b) Employee hereby represents,  warrants and agrees that Employee has
          not initiated,  nor will he initiate, any legal proceedings,  charges,
          complaints  or other  actions  in any court or  administrative  agency
          regarding the Claims  released  herein and that none of the Claims has
          been assigned,  encumbered or otherwise transferred.  Employee further
          waives any right he may have to any benefit or other  relief the Equal
          Employment Opportunity  Commission,  or similar state or local agency,
          might  seek on his  behalf,  and he agrees to  direct  such  agency to
          withdraw or dismiss any such action.

     C.   Confidentiality  of this Release.  Employee  agrees to keep the terms,
          amount  and  fact of this  Release  confidential.  Employee  will  not
          disclose any information  concerning this Release to anyone other than
          his immediate family,  tax advisor and attorney,  each of whom will be
          informed  and  bound  by  this  confidentiality  provision.   Employee
          acknowledges that revealing any information regarding the terms of his
          separation from employment or discussing the terms of this Release may
          cause the Company  injury and damage and will  constitute  a breach of
          his  obligations  under the Release and will cause a forfeiture of his
          rights hereunder.

     D.   Employee   Agreement.   The  parties   acknowledge   that   Employee's
          obligations  in  Sections  15 through 17 of the  Employment  Agreement
          entered into between  Company and Employee dated October 17, 2005 (the
          "Employment  Agreement") remain in full force and effect. This Release
          and Sections 15 through 17 of the Employment  Agreement constitute the
          entire agreement  between  Employee and the Company.  This Release may
          not be modified orally, but only by an agreement in writing, signed by
          the  party  against  whom  the  enforcement  of  any  waiver,  change,
          modification, extension or discharge is sought.

     E.   Time to  Review.  Employee  acknowledges  that he has been  given  the
          opportunity  to consider  and review this  Release with counsel of his
          choice for a reasonable  period of time, up to  twenty-one  (21) days,
          and that he understands his respective rights and obligations pursuant
          to this Release. Employee further declares he enters into this Release
          freely,  voluntarily  and  without any  pressure or coercion  from any
          person or entity, including, but not limited to, the Company or any of
          its representatives.

     F.   Time to Revoke.  Employee  understands that he has the right to revoke
          this Release  within a period of seven (7) days  following his signing
          this  Release  and that this  Release  shall not become  effective  or
          enforceable,  nor shall he receive the  Payment,  until the  seven-day
          revocation period has ended.

     G.   Governing Law;  Binding Effect.  This Release is made and entered into
          in the  State of  Oklahoma  and  shall be  interpreted,  enforced  and
          governed  by the laws of the State of  Oklahoma,  and shall be binding
          upon the  parties  hereto,  their  heirs,  executors,  administrators,
          successors and assigns.

                                      A-2
<PAGE>

     H.   Non-Admission of Liability.  Employee  understands and agrees that the
          Company  denies that he has  cognizable  claims against it. He further
          understands  and agrees that neither this Release nor any action taken
          hereunder  is to be  construed  as an  admission  by  the  Company  of
          violation  of any local,  state,  federal or common law. In fact,  the
          Employee  understands  that  the  Company  expressly  denies  any such
          violation.

     I.   Severability.  The invalidity or  unenforceability of any provision or
          provisions   of  this  Release   shall  not  affect  the  validity  or
          enforceability  of any other  provision of this  Release,  which shall
          remain in full force and effect.

     IN WITNESS  WHEREOF,  the Company has caused this Release to be executed on
its behalf to be effective the date signed below.


                                            QUEST RESOURCE CORPORATION


                                            By:
                                                --------------------------------

                                            Name:
                                                   -----------------------------

                                            Title:
                                                     ---------------------------






I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE TERMS OF THIS RELEASE,  INCLUDING
THE RELEASE OF CLAIMS  HEREIN,  AND HAVE HAD  SUFFICIENT  OPPORTUNITY TO CONSULT
WITH LEGAL COUNSEL  PRIOR TO EXECUTING  THIS RELEASE TO THE EXTENT I DEEMED SUCH
CONSULTATION  NECESSARY AND I VOLUNTARILY  ACCEPT AND AGREE TO THE TERMS OF THIS
RELEASE, INCLUDING THE RELEASE OF CLAIMS HEREIN.


                                    EMPLOYEE


Dated: _________________
                                    --------------------------------------------
                                           Jerry D. Cash



                             Current Address:
                                                     ---------------------------

                                                     ---------------------------
                             Current Telephone No.
                                                     ---------------------------

                                      A-3