Summary of PETROQUEST ENERGY INC

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On November 3, 2009, PetroQuest Energy, Inc. (the "Company") announced net income available to common stockholders for the quarter ended September 30, 2009 of $4,453,000, or $0.07 per share, compared to third quarter 2008 net income available to common stockholders of $16,758,000, or $0.32 per share. For the first nine months of 2009, the Company reported net loss available to common stockholders of $54,758,000, or $1.03 per share, compared to net income available to common stockholders of $52,694,000, or $1.01 per share, for the first nine months of 2008. The net loss for the 2009 period was primarily the result of a non-cash ceiling test writedown of $103.6 million recorded during the first quarter of 2009.
Discretionary cash flow for the third quarter of 2009 was $33,762,000, as compared to $58,728,000 for the comparable 2008 period. For the first nine months of 2009, discretionary cash flow was $110,018,000. Discretionary cash flow for the first nine months of 2008 was $188,310,000. Cash flow provided by operating activities totaled $41,145,000 and $75,125,000 during the third quarters of 2009 and 2008, respectively. Cash flow provided by operating activities totaled $86,639,000 and $185,919,000 during the nine months ended September 30, 2009 and 2008, respectively. See the attached schedule for a reconciliation of net cash flow provided by operating activities to discretionary cash flow.
Production for the third quarter of 2009 and 2008 was 8.0 Bcfe. Production for the first nine months of 2009 was 26.6 Bcfe, which was 9% higher than production for the comparable period of 2008. Stated on an Mcfe basis, unit prices received during the third quarter and the first nine months of 2009 were 34% and 38% lower, respectively, than the comparable 2008 periods. Oil and gas sales during the third quarter of 2009 decreased 35% to $50,182,000 as compared to $76,987,000 in the third quarter of 2008. For the first nine months of 2009, oil and gas sales decreased 32% to $164,792,000 from $242,420,000 in the first nine months of 2008.
Lease operating expenses for the third quarter of 2009 decreased to $1.21 per Mcfe as compared to $1.46 per Mcfe in the third quarter of 2008. For the first nine months of 2009, lease operating expenses per Mcfe decreased 17% to $1.09 from $1.31 in the comparable period of 2008. The declines are primarily due to the Company's cost reduction efforts combined with lower services and materials costs.
Depreciation, depletion and amortization ("DD&A") on oil and gas properties for the third quarter of 2009 was $2.21 per Mcfe as compared to $4.16 per Mcfe in the third quarter of 2008. For the first nine months of 2009, DD&A decreased 34% to $2.52 per Mcfe from $3.84 per Mcfe for the comparable period of 2008. The declines in DD&A are primarily the result of the non-cash ceiling test write-downs of our proved oil and gas properties during 2008 and the first quarter of 2009.
General and administrative expenses decreased $1,578,000 and $4,872,000 for the third quarter and nine months ended September 30, 2009, as compared to the respective 2008 periods. The decreases during the 2009 periods are primarily due to lower employee related costs.

The following table sets forth certain information with respect to the oil and gas operations of the Company for the three-and nine-month periods ended September 30, 2009 and 2008:

                                Three Months Ended                  Nine Months Ended
                                   September 30,                      September 30,
                               2009             2008             2009              2008

 Production:
 Oil (Bbls)                     137,077          137,929           450,676           504,509
 Gas (Mcf)                    7,169,167        7,214,427        23,944,666        21,322,903
 Total Production (Mcfe)      7,991,629        8,042,001        26,648,722        24,349,957
 MMcfe/d                             87               87                98                89

 Sales:
 Total oil sales           $ 10,324,647     $ 15,695,498     $  29,028,227     $  53,362,415
 Total gas sales             39,857,782       61,291,924       135,764,007       189,057,801

 Total oil and gas sales     50,182,429       76,987,422       164,792,234       242,420,216

 Average sales prices:
 Oil (per Bbl)             $      75.32     $     113.79     $       64.41     $      105.77
 Gas (per Mcf)                     5.56             8.50              5.67              8.87
 Per Mcfe                          6.28             9.57              6.18              9.96

The above sales and average sales prices include additions (reductions) related to the settlement of gas hedges of $20,996,000 and ($3,925,000) and the settlement of oil hedges of $1,167,000 and ($1,567,000) for the three months ended September 30, 2009 and 2008, respectively. The above sales and average sales prices include additions (reductions) related to the settlement of gas hedges of $57,415,000 and ($11,538,000) and the settlement of oil hedges of $4,682,000 and ($4,504,000) for the nine months ended September 30, 2009 and 2008, respectively.
The following initiates guidance for the fourth quarter of 2009:

                                                              Guidance for
      Description                                           4th Quarter 2009

      Production volumes (MMcfe/d)                              83 - 88

      Percent gas                                                 88%

      Expenses:
      Lease operating expenses (per Mcfe)                    $1.25 - $1.35
      Production taxes (per Mcfe)                            $0.20 - $0.25
      Depreciation, depletion and amortization (per Mcfe)    $2.30 - $2.40
      General and administrative (in millions)                $4.5 - $5.0
      Interest expense (in millions)                          $2.8 - $3.1

      2009 Direct Capital Expenditures (in millions)           $65 - $75

Operations Update
As previously announced, the Company has resumed its Woodford operated drilling program and is currently drilling its 31st Woodford operated well. Once drilled, the Company will commence operations on the 32nd Woodford operated well. In addition, the Company expects to commence completion operations on two previously drilled Woodford operated wells (7,245 foot lateral & 4,392 foot lateral) during November.

The Company participated in six gross (0.65 net) non-operated wells in the Fayetteville shale during the third quarter of 2009. The Company currently has one non-operated rig working in the trend.
In the Gulf Coast, the Company's Whistling Straits prospect was drilled to total depth and has been determined to be commercially non-productive. The Company has a 24% working interest in this well and estimates its share of the cost to test this prospect was approximately $1.7 million. Liquidity Update
During October 2009, the Company repaid $51 million of bank debt. The Company currently has $49 million of borrowings outstanding under its credit facility and approximately $36 million of cash on hand. As previously disclosed, the Company's borrowing base is currently $100 million. Hedging Update
The Company initiated the following commodity hedging transaction during October 2009:

        Production Period       Type             Daily Volumes          Price

        Natural Gas:
        Jan - Dec 2010       Costless Collar      10,000 Mmbtu      $ 6.00 - $6.45

After executing the above transaction, the Company has approximately 11 Bcfe of production volumes hedged for 2010 with an average floor of $5.83 per Mcf. Management Statement
"After spending the majority of 2009 focusing on strengthening our balance sheet, we are now in position and are very excited to re-initiate our Woodford operated drilling program," said Charles T. Goodson, Chairman, Chief Executive Officer and President. "After analyzing the performance of our last seventeen Woodford operated wells, I am more confident than ever that we will be able to deliver top-tier results that will be competitive with any other shale play." About the Company
PetroQuest Energy, Inc. is an independent energy company engaged in the exploration, development, acquisition and production of oil and natural gas reserves in the Arkoma Basin, East Texas, South Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest trades on the New York Stock Exchange under the ticker PQ.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our ability to find oil and natural gas reserves that are economically recoverable, the volatility of oil and natural gas prices and the significant price decline since June 30, 2008, the uncertain economic conditions in the United States and globally, the decline in the values of our properties that have resulted in and may in the future result in additional ceiling test write-downs or reductions in the borrowing base under our bank credit facility, our ability to replace reserves and sustain production, our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in estimating quantities of proved oil and natural gas reserves, in prospect development and property acquisitions or dispositions and in projecting future rates of production or future reserves, the timing of development expenditures and drilling of wells, hurricanes and other natural disasters, and the operating hazards attendant to the oil and gas business. In particular, careful consideration should be given to cautionary statements made in the various reports PetroQuest has filed with the Securities and Exchange Commission. PetroQuest undertakes no duty to update or revise these forward-looking statements.