UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

Current Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
August 2, 2005

PETROQUEST ENERGY, INC.

(Exact name of registrant as specified in its charter)

DELAWARE
(State of Incorporation) 72-1440714
(I.R.S. Employer Identification No.)

400 E. Kaliste Saloom Rd., Suite 6000
Lafayette, Louisiana
(Address of Principal Executive Offices) 70508
(Zip Code)

Commission File Number: 0-019020

Registrant’s telephone number, including area code: (337) 232-7028

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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TABLE OF CONTENTS

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 2, 2005, PetroQuest Energy, Inc. (the “Company”) announced net income for the quarter ended June 30, 2005 of $3,865,000 or $0.08 per share, compared to second quarter 2004 net income of $4,237,000 or $0.09 per share. Net income for the second quarter includes the pre-tax write-off of $2,400,000 of deferred financing costs in conjunction with the repayment of amounts outstanding under its credit facilities. Net cash flow provided by operating activities before working capital changes for the second quarter of 2005 was $20,847,000, as compared to $16,363,000 for the comparable 2004 period. For the quarters ended June 30, 2005 and 2004, net cash flow provided by operating activities totaled $21,751,000 and $13,328,000, respectively. For the first six months of 2005, the Company reported net income of $8,052,000 or $0.17 per share. The Company reported net income of $7,409,000 or $0.16 per share for the first six months of 2004. For the first six months of 2005, net cash flow provided by operating activities before working capital changes was $36,359,000. Net cash flow provided by operating activities before working capital changes for the first six months of 2004 was $29,833,000. For the six-month periods ended June 30, 2005 and 2004, net cash flow provided by operating activities totaled $33,190,000 and $23,782,000, respectively. A reconciliation of net cash flow provided by operating activities to net cash flow provided by operating activities before working capital changes is attached in this release.

Oil and gas sales during the second quarter of 2005 increased 40% to $29,977,000 as compared to $21,436,000 in the second quarter of 2004. For the first six months of 2005, sales increased 31% to $51,649,000 from $39,568,000 in the first six months of 2004. Stated on an Mcfe basis, unit prices received during the second quarter and first six months of 2005 were 12% and 14% higher, respectively, than the prices received during the comparable 2004 periods .

Lease operating expenses for the second quarter of 2005 increased 42% to $1.09 per Mcfe from $0.77 per Mcfe in the second quarter of 2004. For the first six months of 2005, lease operating expenses increased 40% to $1.12 per Mcfe from $0.80 per Mcfe in the comparable period of 2004. The increase in lease operating expenses during the current year was the result of the significant increase in the number of producing wells and a general increase in field service costs. Depreciation, depletion and amortization for the second quarter of 2005 increased 4% to $2.60 per Mcfe from $2.51 per Mcfe in the second quarter of 2004. For the first six months of 2005, depreciation, depletion and amortization increased 2% to $2.54 per Mcfe from $2.49 per Mcfe for the comparable period of 2004.

Drilling Update
During the quarter, PetroQuest operated the drilling and completion of three more wells in its Southeast Carthage Field which brings the 2005 total to six wells drilled and completed in this field. Additionally, PetroQuest operated the drilling and completion of eight coal bed methane wells in the Arkoma Basin, and participated in five additional successful non-operated coal bed methane wells. During the first half of 2005, PetroQuest has participated in 19 wells in the Arkoma Basin. Since entering East Texas and the Arkoma Basin, PetroQuest has achieved a 100% success rate in both areas.

The Company’s Gumbo Prospect was drilled to a total depth of 12,900 feet encountering approximately 54 feet TVD of net productive sand in the primary objective. This well began producing in June at a gross rate of approximately 8,000 Mcfe per day. PetroQuest owns an approximate 27% NRI in the well.

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As previously announced, the Company is completing its Pebble Beach Prospect in the Gulf of Mexico. The well is expected to begin producing during September at a gross rate of approximately 15,000 Mcfe per day. PetroQuest owns an approximate 27% NRI in the well.

The Company’s Spanish Bay and Augusta Prospects have been drilled to their respective total depths and have been determined to be commercially non-productive.

Drilling continues in the Company’s 10 to 12 well 2005 program in Southeast Carthage Field and the 40+ well 2005 program in the Arkoma Basin. The Company plans to keep two operated rigs in the Arkoma Basin during the second half of the year and plans to participate in multiple outside operated wells. The Company is currently drilling its Oakbourne Prospect (20% working interest) and its Pelican Point Prospect (25% working interest) both of which are in South Louisiana. During the third quarter, the Company plans to spud its Chicory (38% working interest) and Cayenne (50% working interest) Prospects.

The following table sets forth certain information with respect to the oil and gas operations of the Company for the three- and six-month periods ended June 30, 2005 and 2004:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2005		2004		2005		2004
Production:
Oil (Bbls)		217,156		246,052		398,555		424,531
Gas (Mcf)		3,252,510		2,160,311		5,501,623		4,322,051
Total Production (Mcfe)		4,555,446		3,636,623		7,892,953		6,869,237
Sales:
Total oil sales	$	9,747,130	$	8,507,123	$	17,619,699	$	14,310,726
Total gas sales	$	20,229,581	$	12,928,781	$	34,028,518	$	25,257,755
Total oil and gas sales	$	29,976,711	$	21,435,904	$	51,648,217	$	39,568,481
Average sales prices:
(Including hedges)
Oil (per Bbl)	$	44.89	$	34.57	$	44.21	$	33.71
Gas (per Mcf)	$	6.22	$	5.98	$	6.19	$	5.84
Per Mcfe	$	6.58	$	5.89	$	6.54	$	5.76

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The following initiates guidance for the third quarter of 2005:

	Guidance for
Description	3rd Quarter 2005
Production volumes (MMcfe/d)	49 - 53
Percent gas	70%
Expenses:
Lease operating expenses (per Mcfe)	$1.20 - $1.30
Production taxes (per Mcfe)	$0.22 - $0.26
Depreciation, depletion and amortization (per Mcfe)	$2.50 - $2.60
General and administrative (in millions)	$2.0 - $2.2
Interest expense (in millions)	$3.3 - $3.7
Effective tax rate (all deferred)	35%

The following updates guidance for the year ended December 31, 2005:

	Guidance for
Description	Full year 2005
Production volumes (MMcfe/d)	50 - 55
Percent gas	70%
Expenses:
Lease operating expenses (per Mcfe)	$1.05 - $1.15
Production taxes (per Mcfe)	$0.18 - $0.22
Depreciation, depletion and amortization (per Mcfe)	$2.50 - $2.60
General and administrative (in millions)	$7 - $8
Interest expense (in millions)	$12 - $13 (1)
Effective tax rate (all deferred)	35%

(1) Includes a $2.4 million pre-tax charge related to the write-off of deferred financing costs in conjunction with the notes offering consummated during the second quarter.

Conference call
Company management will be hosting a conference call with investors that will be broadcast live over the Internet on August 2, 2005 at 9:30 a.m. Eastern time. To access this call, log on to the Company’s website at www.petroquest.com.

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 Gulf Coast Basin, Texas and Oklahoma. PetroQuest trades on the Nasdaq National Market under the ticker symbol “PQUE.”

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.

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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 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 and in projecting future rates of production, the timing of development expenditures and drilling of wells, 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.

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PETROQUEST ENERGY, INC.
Consolidated Statements of Income
(unaudited)
(Amounts in Thousands, Except Per Share Data)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005		2004			2005		2004
Revenues:
Oil and gas sales	$	29,977	$	21,436		$	51,649	$	39,568
Interest and other income		302		61			373		131
		30,279		21,497			52,022		39,699
Expenses:
Lease operating expenses		4,965		2,784			8,847		5,506
Production taxes		762		420			1,136		864
Depreciation, depletion and amortization		11,859		9,132			20,054		17,073
General and administrative		1,819		1,833			3,508		3,127
Accretion of asset retirement obligation		205		170			405		401
Interest expense		4,723		665			5,685		1,346
Derivative expense (benefit)		—		(9	)		—		—
		24,333		14,995			39,635		28,317
Income from operations		5,946		6,502			12,387		11,382
Income tax expense		2,081		2,265			4,335		3,973
Net income	$	3,865	$	4,237		$	8,052	$	7,409
Earnings per common share:
Basic	$	0.08	$	0.10		$	0.17	$	0.17
Diluted	$	0.08	$	0.09		$	0.17	$	0.16
Weighted average number of common shares:
Basic		46,969		44,588			46,158		44,573
Diluted		48,205		46,104			47,840		45,912

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PETROQUEST ENERGY, INC.
Consolidated Balance Sheets
(unaudited)
(Amounts in Thousands)

	June 30,			December 31,
	2005			2004
ASSETS
Current assets:
Cash and cash equivalents	$	78,604		$	1,529
Oil and gas revenue receivable		11,278			9,392
Joint interest billing receivable		5,307			3,655
Other current assets		1,924			1,017
Total current assets		97,113			15,593
Oil and gas properties:
Oil and gas properties, full cost method		440,375			363,756
Unevaluated oil and gas properties		22,650			16,380
Accumulated depreciation, depletion and amortization		(188,047	)		(168,453	)
Oil and gas properties, net		274,978			211,683
Other assets, net of accumulated depreciation and amortization of $9,756 and $5,967, respectively		9,975			4,341
Total assets	$	382,066		$	231,617
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable to vendors	$	20,458		$	24,176
Advances from co-owners		14,120			2,265
Hedging liability		11,824			4,536
Other accrued liabilities		14,425			9,045
Total current liabilities		60,827			40,022
Bank debt		—			38,500
10 3/8% Senior Notes		148,249			—
Asset retirement obligation		17,874			15,238
Deferred income taxes		18,095			14,606
Other accrued liabilities		4,634			1,974
Commitments and contingencies		—			—
Stockholders’ equity:
Common stock, $.001 par value; authorized 75,000 shares; issued and outstanding 47,137 and 44,685 shares, respectively		47			45
Paid-in capital		117,015			112,387
Accumulated other comprehensive loss		(5,803	)		(4,231	)
Retained earnings		21,128			13,076
Total stockholders’ equity		132,387			121,277
Total liabilities and stockholders’ equity	$	382,066		$	231,617

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PETROQUEST ENERGY, INC.
Consolidated Statements of Cash Flows
(unaudited)
(Amounts in Thousands)

	Six Months Ended
	June 30,
	2005			2004
Cash flows from operating activities:
Net income	$	8,052		$	7,409
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred tax expense		4,335			3,973
Depreciation, depletion and amortization		20,054			17,073
Accretion of asset retirement obligation		405			401
Amortization of debt issuance costs		841			820
Compensation expense		213			272
Write-off of debt issuance costs		2,439			—
Amortization of bond discount		20			—
Derivative mark to market		—			(115	)
Changes in working capital accounts:
Accounts receivable		(1,886	)		(3,294	)
Joint interest billing receivable		(1,652	)		(611	)
Other assets		(5,056	)		(143	)
Accounts payable and accrued liabilities		(6,430	)		(3,309	)
Advances from co-owners		11,855			1,306
Net cash provided by operating activities		33,190			23,782
Cash flows from investing activities:
Investment in oil and gas properties		(65,167	)		(24,151	)
Net cash used in investing activities		(65,167	)		(24,151	)
Cash flows from investing activities:
Proceeds from exercise of options		546			64
Proceeds from issuance of 10 3/8% senior notes		148,229			—
Proceeds from bank borrowings		34,500			11,000
Repayment of bank borrowings		(73,000	)		(10,000	)
Deferred financing costs		(5,274	)		(245	)
Issuance of common stock, net of expenses		4,051			—
Net cash provided by financing activities		109,052			819
Net increase in cash and cash equivalents		77,075			450
Cash and cash equivalents, beginning of period		1,529			779
Cash and cash equivalents, end of period	$	78,604		$	1,229
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest	$	1,561		$	817
Income taxes	$	—		$	—

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Non-GAAP Disclosure Reconciliation
(Amounts In Thousands)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005			2004		2005		2004
Net cash flow provided by operating activities	$	21,751		$	13,328	$	33,190	$	23,782
Changes in working capital accounts		(904	)		3,035		3,169		6,051
Net cash flow provided by operating activities before working capital changes	$	20,847		$	16,363	$	36,359	$	29,833

Note: Management believes that net cash flow provided by operating activities before working capital changes is relevant and useful information, which is commonly used by analysts, investors and other interested parties in the oil and gas industry as a financial indicator of an oil and gas company’s ability to generate cash used to internally fund exploration and development activities and to service debt. Net cash flow provided by operating activities before working capital changes is not a measure of financial performance prepared in accordance with generally accepted accounting principles (“GAAP”) and should not be considered in isolation or as an alternative to net cash flow provided by operating activities. In addition, since net cash flow provided by operating activities before working capital changes is not a term defined by GAAP, it might not be comparable to similarly titled measures used by other companies

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PETROQUEST ENERGY, INC.
Date: August 2, 2005	By:	/s/ Daniel G. Fournerat
		Daniel G. Fournerat
		Senior Vice President, General Counsel and Secretary

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