PetroQuest Energy Announces Third Quarter Results Thursday November 2, 2006 LAFAYETTE, LA – November 2, 2006 - PetroQuest Energy, Inc. (NYSE: PQ) announced today net income for the quarter ended September 30, 2006 of $6,544,000 or $0.13 per share, compared to third quarter 2005 net income of $5,045,000 or $0.10 per share.  Net cash flow provided by operating activities before working capital changes for the third quarter of 2006 was $37,448,000, as compared to $19,115,000 for the comparable 2005 period.  For the first nine months of 2006, the Company reported net income of $23,675,000 or $0.49 per share.  The Company reported net income of $13,097,000 or $0.27 per share for the first nine months of 2005.  For the first nine months of 2006, net cash flow provided by operating activities before working capital changes was $106,210,000.  Net cash flow provided by operating activities before working capital changes for the first nine months of 2005 was $55,474,000.  See the attached schedule for a reconciliation of net cash flow provided by operating activities to net cash flow provided by operating activities before working capital changes. Oil and gas sales during the third quarter of 2006 increased 73% to $53,310,000 as compared to $30,859,000 in the third quarter of 2005.  Production for the third quarter of 2006 was 80% higher than production for the comparable period of 2005.  The increase in production in the third quarter of 2006 as compared to the third quarter of 2005 was the result of the restoration of production at our Main Pass 74 Field in January 2006, the impact of acquisitions of producing properties made during 2005, and production attributable to the 91% and 93% drilling success rates we achieved during 2005 and during the first nine months of 2006, respectively.  Stated on an Mcfe basis, unit prices received during the third quarter of 2006 were 4% lower than the prices received during the comparable 2005 period.  For the first nine months of 2006, oil and gas sales increased 82% to $150,194,000 from $82,508,000 in the first nine months of 2005.  Production for the first nine months of 2006 was 64% higher than production for the comparable period of 2005.  Stated on an Mcfe basis, unit prices received during the first nine months of 2006 were 11% higher than the prices received during the comparable 2005 period. Lease operating expenses for the third quarter of 2006 decreased 25% to $1.28 per Mcfe as compared to $1.70 per Mcfe in the third quarter of 2005.  For the first nine months of 2006, lease operating expenses decreased 2% to $1.28 per Mcfe from $1.31 per Mcfe in the comparable period of 2005.  In addition, depreciation, depletion and amortization (“DD&A”) on oil and gas properties for the third quarter of 2006 increased 28% to $3.32 per Mcfe as compared to $2.59 per Mcfe in the third quarter of 2005.  For the first nine months of 2006, depreciation, depletion and amortization increased 25% to $3.15 per Mcfe from $2.53 per Mcfe for the comparable period of 2005. General and administrative expenses increased $2,990,000 and $4,981,000 for the third quarter and nine months ended September 30, 2006, as compared to the respective 2005 periods.  These increases included approximately $2,122,000 and $3,169,000, respectively, of non-cash stock compensation expense recognized in conjunction with the adoption of SFAS 123R on January 1, 2006 and current year equity grants. 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, 2006 and 2005: The above sales and average sales prices include additions (reductions) related to gas hedges of $2,765,000 and ($1,563,000) and oil hedges of ($804,000) and ($1,688,000) for the three months ended September 30, 2006 and 2005, respectively. The above sales and average sales prices include additions (reductions) related to gas hedges of $6,132,000 and ($2,641,000) and oil hedges of ($2,289,000) and ($4,029,000) for the nine months ended September 30, 2006 and 2005, respectively. Operations Update During late September 2006, we shut-in the majority of production at our Ship Shoal Block 72 Field in order to repair a main field pipeline. This project was necessitated by the associated production from the first four successful wells drilled in our ongoing drilling program. Production from Ship Shoal 72 accounted for approximately 24% of our total third quarter 2006 production. We expect to have production fully restored in November 2006. As a result of the shut-in at our Ship Shoal 72 Field and the expected sale of certain Gulf of Mexico producing properties, we expect a decline in our production during the fourth quarter of 2006, as compared to the third quarter of 2006. Guidance The following initiates guidance for the fourth quarter of 2006: The following updates guidance for the full year of 2006: 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 symbol “PQ.” Forward-Looking Statements This press 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, declines in the values of our properties resulting in ceiling test write-downs, our ability to replace reserves and sustain production, our ability to restore production in our Ship Shoal Block 72 Field in a timely manner, 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, 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.     Source: PetroQuest Energy, Inc.

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