Kelly is Missing

To start this quest you must first speak to Abela and she will ask you to speak to Bodan Koren. He will insist that she's got nothing to do with the bandits. You then have to go to Owl's Nest to find Kelly.

You'll find Owl's Nest not far north of Kingsport. Just as you cross the bridge following the east coast, it's directly west between the river and mountain.

Kelly stands near Blackpond (from the Dagger Delivery quest). She will send you to talk to Boden Koren (back in Breamar). When you mention Kelly to him when you get there he will tell you to tell her that all is forgiven. You then run back to Kelly in Owl's Nest, tell her "Boden says you are forgiven". She then gives you the reward.

Reward is 7500 exp and a nice dagger named Kelly Hayward's Memories (worth 250 gold).