SOURCE: Energy Quest, Inc.

January 12, 2010 12:01 ET

Energy Quest, Inc. CEO Issues Letter to Shareholders

HENDERSON, NV--(Marketwire - January 12, 2010) - Energy Quest, Inc. ("EQI") (OTCBB: EQST), an emerging leader in alternative energy and the development and production of hydrogen-enriched alternative fuels in an environmentally responsible manner, announced today that the Chief Executive Officer has released the following letter to its shareholders:

Dear Fellow Shareholders:

It has been a while since we last communicated with you on the progress your company has made. The purpose of this letter is to provide you with an update on our business, the developments / achievements, some background along with an update on each of our business units for the past fiscal year 2009 and year-to-come 2010.

Company Overview

I would like to restate our mission statement which is to become one of North America's leading gasification company producing green alternative fuel and power through the use of new technologies and devices combined with the company present technologies and equipment.

The fiscal year 2009 has been a year where we have strengthened our position in all business units and continued to position ourselves strategically in the lucrative but often complex world wide market place. During the last 12 months we have built on our existing opportunities and have secured additional opportunities that are complimentary to our current business which we anticipate will lead to greater wealth for all shareholders in 2010.

Our registered office is in the United States (Henderson, Nevada) and our principal operation is in North America with offices in Edmonton, Alberta, Parma, Ohio and Leesburg, Georgia. Soon to open offices in Piedmont, Alabama to construct a wood waste green power generation and bio-fuel plant.

Energy Quest, Inc. is active in the research, development and commercialization of "alternative energy" technologies. The term alternative encompasses green and/or renewable energies. Once considered "alternative" these technologies are fast becoming the future of energy as traditional sources become increasingly more expensive and scarce.

The Energy Quest, Inc. (EQI) technology represents the culmination of years of persistent research to provide an environmentally sound alternative to current energy generation programs. EQI believes that caring for the environment must be one of its core values. "Our focus is on providing shareholders with above average returns, our customers with superior products all the while respecting the environment in which we live."

Energy Quest, Inc. believes that our obligation to the environment arises not only from an ethical responsibility to our fellow stakeholders on the planet, but also from our responsibility to safeguard the trust of our shareholders and employees. We believe that investors will choose to support companies that have demonstrated their ability to minimize their impact on the environment, and the wisdom to preserve the implacable Energy Quest Environmental Commitment.

The Company's Domestic and International Markets

Gasification is a mature, moderate growth business, with generally reasonable margins. But within this large and complex industry there are a few areas of high growth and attractive profitability, most notably the production and distribution of low-cost cookie cutter 1/2 to 10 megawatt waste to electrical power units or small liquid fuel (bio-diesel) systems. EQI's focus is to concentrate its business on these more attractive niches of the industry.

In order to build an entrenched, defensible position against new and existing competitors, EQI has differentiated itself -- in ways that buyers will value -- in order to stand out from the crowd. EQI believes that its ability to move quickly and selectively in choosing projects and partners should help the Company to build a unique, recognizable image.

Worldwide Economic Forecast - Gasification, 2010 and Beyond

The Industry believes that sustained high-energy prices resulting from growing global demand and constrained supply have spurred governments, developers, technology providers and financial institutions -- worldwide to back the development of alternative energy sources, especially the gasification of coal, petroleum coke and biomass. This trend combined with global warming concerns has accelerated the acceptance and commercialization of gasification technology that will incorporate the capture and sequestration of carbon dioxide.

The need to increase supplies of synthetic gas from clean sources to generate electricity and produce clean transportation fuels, hydrogen, petrochemicals, fertilizers, and substitute natural gas has never been greater. The development of these coal-based plants are moving ahead now with incentives from the Energy Policy Act of 2005.

The Company's board and management are focused in 5 specific sectors:

--  Gasification to power generation
--  Algae to bio-diesel
--  Heavy crude oil upgrading
--  Cavitation Coal Water Fuel (CCWF)
--  Coal Conversion to Methane Gas Using PyStR Hydrogen and CO2

Major Projects / Acquisitions / Investments

The Company has been busy on a number of initiatives and projects. Listed below are some of the projects that the Company is currently working on that we anticipate will be further advanced in the remainder of 2010:

Summary of Piedmont Project

--  Energy Quest, Inc. is in the final planning stages of building a
    biomass (Wood Waste) to Power/Algae energy plant producing 26.8 megawatt
    (24 net) and approximately 20 million gallon annually of bio-diesel plant
    consisting of four 6.7 megawatt (6.0 net) modular power plant systems at
    the specified site. The plant at full capacity will require 33.5 tons per
    hour of wood waste feedstock for the gasification process.  Estimated cost
    of the turn key project is $80.92 million USD.  A rudimentary pay out time
    (POT) calculation based on present condition producing gross revenues of
    $71,239,554 with net revenues after tax of $34,279,830 million annually. It
    is felt that the project is economically more attractive than this figure
    may initially indicate as various government grants, recyclables and
    incentives (not taken in consideration in the POT calculations) are
    available for projects of this nature. We have commitments on most of the
    required agreements. The company has financing arranged for this plant.
    Energy Quest will provide construction and operation for this owned

Heavy Crude Oil Upgrader Project

--  Energy Quest, (EQI) is a company committed to bringing revolutionary
    technologies to bear within both the conventional and alternative
    energy markets. The Company has an agreement in place for one of the
    first technologies it plans to deploy is a new system for upgrading
    heavy oil. Upgrading is a term used for the conversion of heavy, thick
    oil to light, thin, easily transportable and refinable oil. The
    technology employs a revolutionary method by which to achieve the same
    results as inefficient capital intensive technologies currently in use.
    For more info

    The thickness (viscosity) of oil is determined by the ratio of carbon
    to hydrogen within the hydrocarbon molecules of the oil -- the higher
    the C to H ratio, the thicker the oil. Traditional upgraders reduce
    this ratio by stripping hydrogen from natural gas and then adding this
    hydrogen to the oil. While it is counterintuitive to use one energy
    source, natural gas, to improve heavy oil, that is indeed how it is
    currently done. EQI has a better way. The EQI technology employs
    cavitations technology with ultrasonic waves to break the long
    hydrocarbon chains and simultaneously adds hydrogen generated from
    purified water to the molecules. It achieves the same results at much
    lower capital and operating costs, does not expend valuable natural
    gas in the process, and is environmentally benign and requires no

--  Energy Quest is negotiating several opportunities for gasification
    projects in Italy, Romania, Chile, and India.

Closing Remarks

The management team and our Board of Directors are committed to building a strong brand and we believe the investments and steps we have made will help build greater wealth for all shareholders in the years ahead. As can be seen by the opportunities above there is a significant amount of potential and we are committed to delivering positive results to our shareholders.

In the coming year, based on the level of resources at our disposal, we will continue to focus on building our business operations, increasing our sales efforts and increase our profile within the investment community.

Much progress has been made in our Company the last quarter of 2009 with a bright future for the coming year and as always we would like to thank our employees for their commitment and our investors for their continued support.

Wilf Ouellette, CEO

"Our primary goal in 2010 is to ensure that Energy Quest, Inc. continues to grow and increase shareholder value. We are confident that the steps we took throughout 2009 to ensure sustainable growth for Energy Quest, Inc. will continue throughout 2010. Energy Quest, Inc. has the technologies, marketing, services, personnel, infrastructure and processes in place to meet the opportunity ahead of us, while growing the top and bottom lines, prudently managing costs and increasing overall shareholder value."

About Energy Quest

Energy Quest, Inc. a Nevada Corporation, is an emerging leader in the development, construction and marketing of low-cost alternate fuels worldwide. Through superior technology, the Company is focused on becoming a GreenPowerhouse ™. Record energy prices, combined with the global focus moving rapidly towards addressing pollution, has heightened the need for sustainable, zero emission energy. Energy Quest's technology is based on clean, renewable energy, positioning it to benefit from global trends. Web-site

Forward-Looking Statements

From time to time, the company may issue forward-looking statements, which involve risks and uncertainties. This statement may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as actual results could differ and any forward-looking statements should be considered accordingly. The Company's filings may be accessed at the SEC's Edgar system at Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place reliance on such statements. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such a statement.

Contact Information

  • Contact:
    Energy Quest, Inc.
    Investor Relations
    877-661-2112/888-619-2221 or 404-478-9845