872248--2/27/2009--PETROQUEST_ENERGY

related topics

{gas, price, oil}

{stock, price, share}

{debt, indebtedness, cash}

{loss, insurance, financial}

{acquisition, growth, future}

{operation, natural, condition}

{cost, regulation, environmental}

{interest, director, officer}

{personnel, key, retain}

{stock, price, operating}

We have a substantial amount of indebtedness, which may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants and make payments on our debt. To service our indebtedness, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt obligations could harm our business, financial condition and results of operations. We may not be able to obtain adequate financing to execute our long-term operating strategy when the need arises. We may not be able to fund our planned capital expenditures. Restrictive debt covenants could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. Our future success depends upon our ability to find, develop, produce and acquire additional oil and natural gas reserves that are economically recoverable. Approximately half of our production is exposed to the additional risk of tropical weather disturbances. Losses and liabilities from uninsured or underinsured drilling and operating activities could have a material adverse effect on our financial condition and operations. Lower oil and natural gas prices may cause us to record ceiling test write-downs. Factors beyond our control affect our ability to market oil and natural gas. We face strong competition from larger oil and natural gas companies that may negatively affect our ability to carry on operations. You should not place undue reliance on reserve information because reserve information represents estimates. We may be unable to successfully identify, execute or effectively integrate future acquisitions, which may negatively affect our results of operations. Hedging production may limit potential gains from increases in commodity prices or result in losses. The loss of key management or technical personnel could adversely affect our ability to operate. Operating hazards may adversely affect our ability to conduct business. Environmental compliance costs and environmental liabilities could have a material adverse effect on our financial condition and operations. Ownership of working interests and overriding royalty interests in certain of our properties by certain of our officers and directors potentially creates conflicts of interest. Risks Relating to Our Outstanding Common Stock Our stock price could be volatile, which could cause you to lose part or all of your investment. Issuance of shares in connection with financing transactions or under stock incentive plans will dilute current stockholders. The number of shares of our common stock eligible for future sale could adversely affect the market price of our stock.

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872248--2/27/2009--PETROQUEST_ENERGY_INC