SOURCE: Energy Quest, Inc.

March 06, 2008 09:13 ET

Energy Quest Provides Update on Debenture Funding

Company Expects to Close on 0% Interest Convertible Debenture in the Principal Amount of $120,000,000 Before April 1, 2008

HENDERSON, NV--(Marketwire - March 6, 2008) - 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, today provided investors with an update on the previously announced private placement/debenture funding for the company.

The private placement agreement with Vasant Jain consists of a 0% interest convertible debenture in the principal amount of $120,000,000 maturing on September 4th, 2012. All approvals for transference of funds have been completed and the closing date is anticipated to be on or before April 1, 2008

The repayment and conversion terms are as follows: Outstanding principal on the debenture shall be fully due and payable in compliance with the terms set forth in it; at the Creditor's option, after September 4th, 2012 (the "Conversion Right Date") and until September 4th, 2017, the Creditor may choose to have all or any part of the outstanding principal owed to the creditor repaid in shares of common stock of the Company shares at a conversion rate of US $50.00 per share.

Mr. Vasant Jain, who has recently joined the company as its Chief Financial Officer and a member of the Board of Directors, stated, "I am pleased to have joined the company both as its Chief Financial Officer and as a Director. I am specifically pleased to be contributing to a company that will be providing much needed green alternative energy technologies to the world. We've already established several opportunities for the company in India and we're looking forward to getting started with executing our business plan."

"This represents the final hurdles required to close the financing," said Wilf Ouellette, President and CEO of Energy Quest, Inc. "We are very pleased that the conversion into equity is at the same price as the common shares in this financing. The proceeds of the offering will be used to provide general working capital to finance the expansion of the Company's business plan and complete acquisitions of several revenue-producing companies."

About Energy Quest

Energy Quest is a diversified energy company with interests in both conventional and renewable energy sources. The company's mission is to bring to market new technologies enhancing existing energy production as well as developing new energy sources. The company intends to secure energy projects using the PyStR and M2 gasifier and the acquisition of existing profitable alternative energy companies expected to provide significant positive cash flow to the company while being an ideal location for development, demonstration, and operation of many of the company's new technologies. This is the first of many new technologies Energy Quest plans to announce and deploy over the coming months that will demonstrate that it is possible for an energy company to be both environmentally friendly and highly profitable.

Energy Quest through its subsidiaries, Syngas International Corp. and Syngas Energy Corp., is an emerging leader in the development 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.

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.

Contact Information

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    Energy Quest, Inc.
    Investor Relations