Questar Net Income Up 19% in Third Quarter 2007

October 24, 2007

Questar Corp. (NYSE:STR) — a natural gas-focused energy company — grew net income 19% in the third quarter of 2007 to $113.3 million, or $0.64 per diluted share, compared to $95.0 million, or $0.54 per diluted share, for the third quarter of 2006. For the first nine months of 2007, Questar net income was $376.6 million, or $2.14 per diluted share, compared to $322.6 million or $1.84 per diluted share for the 2006 period, a 17% increase.

NET INCOME (LOSS) BY LINE OF BUSINESS

(in millions, except earnings per share)

3 Months EndedSeptember 30,

9 Months EndedSeptember 30,

2007

2006

Change

2007

2006

Change

Market Resources

Questar E&P

76.4

66.0

220.3

192.6

Wexpro

14.8

12.1

43.4

36.1

Gas Management

13.3

11.0

40.6

30.9

Energy Trading and other

4.2

2.9

16.0

6.4

150

Market Resources Total

108.7

92.0

320.3

266.0

Questar Pipeline

12.0

10.8

33.2

33.8

)

Questar Gas

(8.5

)

(9.2

)

19.5

Corporate

1.1

1.4

(21

)

3.6

3.3

QUESTAR CORPORATION TOTAL

113.3

95.0

376.6

322.6

Earnings per diluted share

0.64

0.54

2.14

1.84

Average diluted shares

175.9

175.4

175.8

175.1

“We now expect 2007 net income to range from $2.75 to $2.80 per diluted share, compared to prior guidance of $2.60 to $2.68 per diluted share,” said Keith O. Rattie, Questar Chairman, President and CEO. “We’re also providing initial 2008 net income and production guidance, mindful of the uncertain outlook for natural gas prices and public land access in the Rockies.”

Third Quarter Highlights

Questar E&P natural gas, oil and natural gas liquids (NGL) production totaled 33.9 billion cubic feet of natural gas equivalents (Bcfe), essentially equal to the 33.8 Bcfe produced in the corresponding 2006 period. The company shut in approximately 4.4 Bcfe (net) of unhedged third-quarter 2007 natural gas and associated liquid hydrocarbon production in response to low regional market prices for natural gas in the Rocky Mountain producing area. Natural gas comprised 86% of reported volumes.

Realized natural gas prices at Questar E&P increased $0.71 per thousand cubic feet (Mcf), or 12%, while realized crude oil and NGL prices increased $5.14 per barrel (bbl), or 10%. Natural gas hedges increased reported revenues by $84.0 million, while oil hedges reduced revenues by $5.4 million.

Net mark-to-market gains on natural gas basis-only swaps increased other pre-tax income $9.0 million in the 2007 quarter, compared to a $5.2 million reduction in the prior-year period.

Wexpro investment base grew 27% to $284.6 million at September 30, 2007, compared to $224.8 million a year earlier. Wexpro produced 6.6 Bcf of cost-of-service gas for delivery to affiliate Questar Gas in the current quarter.

A 26% increase in third-party gathering volumes helped boost Gas Management gathering revenues 11% to $22.6 million compared to $20.4 million a year earlier. Fee-based processing volumes increased 10% while net processing revenues increased 31% to $15.7 million due to increased frac spread.

Energy Trading net income was up 45% to $4.2 million, driven primarily by increased trading margins. Gross marketing margin totaled $6.5 million compared to $5.0 million in the year-ago period.

Questar Pipeline earned $12.0 million in the third quarter of 2007, up 11% from 2006, driven by increased demand revenues from new transportation contracts and higher liquids-processing revenues.

The seasonal loss at Questar Gas decreased 8% to $8.5 million from a year ago, primarily due to new customer growth and increased transportation services.

Questar earned a 16.7% return on assets (ROA — defined as earnings before interest and income taxes divided by average total assets) for the trailing 12-month period ended September 30, 2007. Market Resources ROA was 20.9%, Questar Pipeline ROA was 10.1%, and Questar Gas ROA was 8.3%.

Questar Raises 2007 EPS Estimate and Provides Initial 2008 Guidance

Questar expects full-year 2007 earnings to range from $2.75 to $2.80 per diluted share, compared to previous guidance of $2.60 to $2.68 per diluted share. The company expects that better-than-forecast performance from Wexpro, Gas Management, and Energy Trading will offset the impact of lower natural gas prices in the fourth quarter. The company expects Questar E&P 2007 production to range from 136 to 137 Bcfe, despite approximately 5.4 Bcfe of net production shut-in through the third quarter due to low natural gas prices in the Rockies. The guidance assumes additional shut-in gas volumes during the months of October and November and that the Rockies basis differential will average $3.35 per million Btu (MMBtu) for the remainder of 2007. Rockies basis differential is the difference between the NYMEX/Henry Hub price of natural gas and the price of natural gas produced and sold in the Rocky Mountain region. The lower end of the guidance range assumes an average NYMEX price of $7.00 per MMBtu for currently unhedged 2007 natural gas production for the rest of the year and an average prompt-month NYMEX oil price of $75.00 per bbl applied to unhedged volumes. The upper end assumes an average NYMEX gas price of $7.50 per MMBtu and an average prompt-month NYMEX oil price of $80.00 per bbl applied to unhedged 2007 production.

Questar also provided initial 2008 net income and production estimates. The company estimates that 2008 net income could range from $2.85 to $3.00 per diluted share. The lower end of the estimate assumes an average NYMEX price of $7.50 per MMBtu for currently unhedged 2008 natural gas production and an average prompt-month NYMEX oil price of $70.00 per bbl applied to unhedged volumes. The upper end of the range assumes an average NYMEX gas price of $8.50 per MMBtu and an average prompt-month NYMEX oil price of $75.00 per bbl applied to unhedged 2008 production.

The company’s guidance excludes one-time items, assumes hedges in place on the date of this release, and assumes natural gas and oil prices and basis differentials as summarized in the following table:

Earnings Guidance Assumptions

2007

2008

Current

Initial Outlook

Earnings per diluted share

2.75-$2.80

2.60-$2.68

2.85-$3.00

Average diluted shares (millions)

176.0

176.2

Questar E&P production — Bcfe

136-137

135-138

146-150

Pinedale well completions

53-55

48-52

55-60

NYMEX gas price per MMBtu(a)

7.00-$7.50

6.50-$7.50

7.50-$8.50

NYMEX/Rockies basis differential per MMBtu(a)

3.35

3.25

1.75-$1.50

NYMEX/Midcontinent basis differential per MMBtu(a)

0.90

1.00

1.25-$1.00

NYMEX crude oil price per bbl(a)

75.00-$80.00

70.00-$75.00

(a) On unhedged volumes

Questar E&P has hedged about 82% of forecast natural gas and oil-equivalent production for the fourth quarter of 2007 and 68% for the full-year 2008 with fixed-price swaps. Additionally, the company has hedged about 8% of forecast fourth quarter 2007 production and 9% of full-year 2008 production with natural gas basis-only swaps (see table at the end of this release).

The company estimates that a $1.00 per MMBtu change in the average NYMEX price of natural gas for the remainder of 2007 and full-year 2008 would result in less than a $0.01 and about an $0.08 change respectively in earnings per diluted share.

A $10.00 per bbl change in the average NYMEX price of oil for the remainder of 2007 and full-year 2008 would result in about a $0.01 and $0.06 change respectively in earnings per diluted share.

Questar E&P Net Income Increases 16% in Third Quarter, 14% for First Nine Months of 2007

Questar E&P — a Market Resources subsidiary that acquires, explores for, develops and produces natural gas and oil — reported production of 33.9 Bcfe in the current quarter compared to 33.8 Bcfe in the prior year period. During the third quarter of 2007, the company shut in approximately 4.4 Bcfe (net) of unhedged Rockies natural gas and associated liquid hydrocarbon production in response to low regional market prices for natural gas. Low regional market prices result from insufficient takeaway capacity on interstate pipelines that transport natural gas from Rockies producing basins to markets outside the region. Start up of the Rockies Express Pipeline-West Project, currently scheduled for January 1, 2008, may alleviate the current transportation bottleneck.

Higher realized natural gas, crude oil and NGL prices more than offset a 14% higher average production cost structure, resulting in a 16% increase in third-quarter 2007 net income to $76.4 million compared to $66.0 million a year-earlier. Natural gas basis-only swaps increased net income $5.6 million in the 2007 quarter and reduced net income $3.2 million in the 2006 period. In the prior year quarter, Questar E&P recognized $24.6 million of pretax gains on assets sales. Exploration expense in the current quarter totaled $1.6 million compared to $16.8 million in the prior period, which included $14.0 million of dry hole expense. For the first nine months of 2007, Questar E&P net income rose 14% to $220.3 million compared to $192.6 million a year earlier, driven by a 7% increase in production, higher realized natural gas, crude oil and NGL prices, a $15.6 million increase in after-tax net mark-to-market gains on natural gas basis-only swaps, and reduced exploration expense. Natural gas basis-only swaps increased net income $8.9 million through September 2007 and reduced net income $6.7 million in the 2006 period.

Questar E&P — Production by Division

3 Months Ended

9 Months Ended

September 30,

2007

2006

Change

2007

2006(b)

Change

(Bcfe)

Pinedale Anticline

11.4

10.9

35.0

28.8

22%

Uinta Basin

6.1

6.5

(6)

18.7

18.9

(1)

Rockies Legacy

3.8

4.5

(16)

13.2

14.5

(9)

Subtotal — Rocky Mountains

21.3

21.9

(3)

66.9

62.2

Midcontinent

12.6

11.9

37.4

35.2

Total Questar E&P

33.9

33.8

104.3

97.4

(b) Includes an increase of 0.7 Bcfe related to a gas-imbalance settlement in the Rockies Legacy division.

Questar E&P — Realized Prices and Hedging Impact

3 Months Ended

9 Months Ended

September 30,

2007

2006

Change

2007

2006

Change

Realized natural gas price ($ per Mcf)

6.44

5.73

6.42

5.99

Natural gas hedging impact ($ per Mcf)

2.87

0.62

1.91

0.24

Realized oil and NGL price ($ per bbl)

54.95

49.81

51.51

50.10

Oil and NGL hedging impact ($ per bbl)

(6.91

)

(9.20

)

(2.78

)

(8.68

)

Net mark-to-market gains (losses) on basis-only swaps ($ millions)

Pre-tax

9.0

($5.2

)

14.2

($10.8

)

After tax

5.6

($3.2

)

8.9

($6.7

)

Questar may hedge up to 100% of forecast production from proved reserves to lock in acceptable returns on invested capital and to protect returns, cash flow and net income from a decline in commodity prices. The company uses natural gas basis-only swaps to protect cash flows and net income from widening natural gas-price basis differentials that may result from capacity constraints on regional gas pipelines.

Questar E&P production costs (the sum of depreciation, depletion and amortization expense, lease operating expense, general and administrative expense, allocated interest expense, and production taxes) per unit of gas-equivalent production increased 14% in the third quarter 2007 compared to the 2006 period.

Questar E&P — Production Cost Structure

3 Months Ended

9 Months Ended

September 30,

(per Mcfe)

2007

2006

Change

2007

2006

Change

Depreciation, depletion and amortization

1.75

1.43

1.72

1.37

Lease operating expense

0.66

0.56

0.62

0.55

General and administrative expense

0.44

0.34

0.41

0.32

Allocated interest expense

0.18

0.19

)

0.18

0.21

(14

)

Production taxes

0.35

0.45

(22

)

0.41

0.45

)

Production costs

3.38

2.97

3.34

2.90

Production volume-weighted average depreciation, depletion and amortization rate increased in both periods due to higher costs for drilling, completion and related services, increased cost of steel casing, other tubulars and wellhead equipment, the ongoing depletion of older lower-cost reserves and the increasing component of Questar E&P production derived from higher-cost fields such as Elm Grove in the Midcontinent and Vermillion Basin in the Rockies.

Lease operating expense per Mcfe increased in both periods due to increased costs of materials and consumables, increased produced-water disposal costs and increased well-workover activity.

General and administrative expense per Mcfe increased due to higher labor and legal expenses in the 2007 periods.

Allocated interest expense per unit of production decreased in the 2007 periods due to reduced debt expense in both periods and increased current-year production for the nine-month period.

Production taxes were lower in the current quarter due to lower market prices for natural gas in the Rockies region. The company pays production taxes based on sales prices before the impact of hedges.

Wexpro Net Income Up 22% in Third Quarter, 20% for First Nine Months of 2007

Wexpro — a Market Resources subsidiary that develops and produces cost-of-service reserves for Questar Gas — reported net income of $14.8 million in the current quarter, up 22% from the third quarter of 2006. For the first nine months of 2007, Wexpro net income was $43.4 million compared to $36.1 million in the prior year period, a 20% increase. Wexpro 2007 results benefited from a higher average investment base compared to the prior-year periods. Under a long-standing agreement with the states of Utah and Wyoming, Wexpro recovers its costs and earns an unlevered after-tax return of about 19 to 20% on its investment base — the investment in commercial wells and related facilities, adjusted for working capital and reduced for deferred income taxes and accumulated depreciation. Wexpro investment base at September 30, 2007, was $284.6 million compared to $224.8 million a year ago.

Gas Management Net Income Up 21% in Third Quarter, 31% for First Nine Months of 2007

Questar Gas Management (Gas Management) — Market Resources’ gas-gathering and processing-services business — posted higher net income driven by higher gathering and processing margins in the third quarter and first nine months of 2007. Third party gas-gathering throughput grew 26% or 8.8 million MMBtu compared to the third quarter of 2006. Fee-based gas-processing volumes were 33.7 million MMBtu in the third quarter of 2007, a 10% increase compared to the 2006 period. Fee-based gas-processing revenues increased 13% or $0.5 million, while gross margin from keep-whole processing increased 44% or $3.4 million in the 2007 third quarter. Approximately 74% of Gas Management net operating revenue (total revenue less processing plant-shrink) was derived from fee-based contracts in the 2007 third quarter compared to 78% in the 2006 period. For the first nine months of 2007, Gas Management net income increased 31% to $40.6 million compared to $30.9 million in the 2006 period, driven by higher gathering and processing margins.

Questar Pipeline Net Income Up 11% in Third Quarter, Down 2% for First Nine Months of 2007

Questar Pipeline — a subsidiary that provides interstate natural gas transportation and storage services — reported higher third quarter 2007 net income primarily as a result of increased demand revenues from new transportation contracts and higher liquids-processing revenues. Operating, maintenance, general and administrative expenses increased 5% due to higher labor costs. Questar Pipeline net income was $33.2 million in the first nine months of 2007, down 2% from $33.8 million earned in the year-ago period. Increased transportation and liquids processing revenues were more than offset by decreased liquid-sales revenues and higher operating expenses in the nine-month period.

Questar Gas Seasonal Net Loss Decreases to $8.5 Million in Third Quarter, Net Income Even for First Nine Months of 2007

Questar Gas — which provides retail natural gas distribution services in Utah, Wyoming and Idaho — reported a $0.7 million decrease in its seasonal net loss in the quarter over the year-ago period. Higher third quarter 2007 operating expenses were more than offset by increased new-customer and transportation revenues. Operating, maintenance, general and administrative expenses totaled $32 per customer in the third quarters of 2007 and 2006. Questar Gas net income was $19.5 million in the first nine months of 2007, the same as the year-earlier period. At September 30, 2007, Questar Gas served 861,000 customers, up 26,000 or 3% from September 30, 2006.

Third Quarter 2007 Earnings Teleconference

Questar management will discuss third quarter 2007 results, the outlook for the remainder of 2007 and for 2008 in a conference call with investors Thursday, October 25, beginning at 9:30 a.m. EDT. The call can be accessed on the company Internet site at www.questar.com.

About Questar

Questar Corp. (NYSE:STR) is a natural gas-focused energy company with an enterprise value over $10 billion. Questar finds, develops, produces, gathers, processes, transports, stores and distributes natural gas.

Forward-Looking Statements

This release includes forward-looking statements within the meaning of Section 27(a) of the Securities Act of 1933, as amended, and Section 21(e) of the Securities Exchange Act of 1934, as amended. Such statements are based on management’s current expectations, estimates and projections, which are subject to a wide range of uncertainties and business risks. Factors that could cause actual results to differ from those anticipated are discussed in the company’s periodic filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2006. Questar undertakes no obligation to publicly correct or update the forward-looking statements in this news release, in other documents, or on the Web site to reflect future events or circumstances. All such statements are expressly qualified by this cautionary statement.

For more information, visit Questar’s Internet site at: www.questar.com.

Hedge Positions — October 24, 2007

Time Periods

Rocky

Mountains

Midcontinent

Total

Rocky

Mountains

Midcontinent

Total

Estimated

Gas (Bcf) Fixed-Price Swaps

Average Price Per Mcf, Net to the Well

2007

Fourth quarter

15.5

8.7

24.2

6.59

$7.76

7.01

2008

First half

30.5

17.3

47.8

7.00

$7.93

7.33

Second half

31.7

17.4

49.1

6.99

7.93

7.32

12 months

62.2

34.7

96.9

6.99

7.93

7.33

2009

First half

20.1

12.0

32.1

7.11

$7.66

7.31

Second half

20.5

12.2

32.7

7.11

7.66

7.31

12 months

40.6

24.2

64.8

7.11

7.66

7.31

2010

First half

3.3

6.9

10.2

6.95

$7.58

7.37

Second half

3.4

6.9

10.3

6.95

7.58

7.37

12 months

6.7

13.8

20.5

6.95

7.58

7.37

Estimated

Gas (Bcf) Basis-Only Swaps

Average Basis Per Mcf vs. NYMEX

2007

Fourth quarter

2.6

$2.40

2.40

2008

First half

6.8

$1.61

1.61

Second half

6.8

1.61

12 months

13.6

1.61

2009

First half

11.8

1.7

13.5

$1.21

$1.08

1.19

Second half

12.0

1.7

13.7

1.21

1.08

1.19

12 months

23.8

3.4

27.2

1.21

1.08

1.19

2010

First half

1.7

$0.94

0.94

Second half

1.7

0.94

12 months

3.4

0.94

Hedge Positions — October 24, 2007

Time Periods

Rocky

Mountains

Midcontinent

Total

Rocky

Mountains

Midcontinent

Total

Estimated

Oil (Mbbl) Fixed-Price Swaps

Average Price Per Bbl, Net to the Well

2007

Fourth quarter

267

101

368

$52.01

$57.91

$53.63

2008

First half

328

218

546

$64.77

$70.77

$67.17

Second half

331

221

552

64.77

70.77

67.17

12 months

659

439

1,098

64.77

70.77

67.17

2009

First half

217

145

362

$60.55

$66.55

$62.95

Second half

221

147

368

60.55

66.55

62.65

12 months

438

292

730

60.55

66.55

62.95

QUESTAR CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

3 Months EndedSeptember 30,

9 Months EndedSeptember 30,

2007

2006

2007

2006

(in millions, except per share amounts)

REVENUES

Market Resources

372.8

427.9

1,191.3

$1,227.1

Questar Pipeline

31.9

28.3

94.0

87.9

Questar Gas

92.7

99.0

640.9

747.8

Total Revenues

497.4

555.2

1,926.2

2,062.8

OPERATING EXPENSES

Cost of natural gas and other products sold

89.2

183.7

601.2

867.3

Operating and maintenance

71.5

69.5

221.9

211.9

General and administrative

39.6

34.1

118.9

96.7

Production and other taxes

21.2

27.9

78.2

87.3

Depreciation, depletion and amortization

89.7

78.8

273.4

224.8

Exploration

1.6

16.8

6.7

30.2

Abandonment and impairment

2.3

2.0

6.4

5.5

Total Operating Expenses

315.1

412.8

1,306.7

1,523.7

Net gain (loss) from asset sales

(0.2

)

25.3

0.3

25.5

OPERATING INCOME

182.1

167.7

619.8

564.6

Interest and other income

3.7

3.8

9.6

9.8

Income from unconsolidated affiliates

2.4

1.8

6.8

5.3

Net mark-to-market gain (loss) on basis-only swaps

9.0

(5.2

)

14.2

(10.8

)

Loss on early extinguishment of debt

(1.7

)

Interest expense

(17.3

)

(17.8

)

(53.0

)

(55.0

)

INCOME BEFORE INCOME TAXES

179.9

150.3

597.4

512.2

Income taxes

66.6

55.3

220.8

189.6

NET INCOME

113.3

95.0

376.6

$322.6

EARNINGS PER COMMON SHARE

Basic

0.66

0.56

2.19

$1.89

Diluted

0.64

0.54

2.14

1.84

Weighted average common shares outstanding

Used in basic calculation

172.2

171.1

171.9

170.8

Used in diluted calculation

175.9

175.4

175.8

175.1

Dividends per common share

0.1225

0.1175

0.3625

$0.3475

QUESTAR CORPORATION

OPERATIONS BY LINE OF BUSINESS

(Unaudited)

3 Months EndedSeptember 30,

9 Months EndedSeptember 30,

2007

2006

2007

2006

(in millions)

Revenues from Unaffiliated Customers

Questar E&P

233.2

206.0

702.0

615.2

Wexpro

6.0

6.1

17.4

16.1

Gas Management

44.4

41.5

137.8

123.2

Energy Trading and other

89.2

174.3

334.1

472.6

Market Resources total

372.8

427.9

1,191.3

1,227.1

Questar Pipeline

31.9

28.3

94.0

87.9

Questar Gas

92.7

99.0

640.9

747.8

497.4

555.2

1,926.2

2,062.8

Revenues from Affiliated Companies

Wexpro

35.6

36.4

118.4

111.6

Gas Management

3.7

3.9

12.1

11.4

Energy Trading and other

111.2

148.2

400.5

557.4

Market Resources total

150.5

188.5

531.0

680.4

Questar Pipeline

19.1

19.3

59.0

60.0

Questar Gas

1.2

1.7

4.4

4.5

170.8

209.5

594.4

744.9

Operating Income (Loss)

Questar E&P

120.0

117.1

357.0

340.1

Wexpro

22.4

18.7

66.3

55.2

Gas Management

20.2

16.7

61.8

46.7

Energy Trading and other

5.1

3.7

21.2

7.8

Market Resources total

167.7

156.2

506.3

449.8

Questar Pipeline

24.2

22.8

69.4

70.7

Questar Gas

(9.7

)

(11.2

)

43.1

42.7

Corporate

(0.1

)

(0.1

)

1.0

1.4

182.1

167.7

619.8

564.6

Net Income (Loss)

Questar E&P

76.4

66.0

220.3

192.6

Wexpro

14.8

12.1

43.4

36.1

Gas Management

13.3

11.0

40.6

30.9

Energy Trading and other

4.2

2.9

16.0

6.4

Market Resources total

108.7

92.0

320.3

266.0

Questar Pipeline

12.0

10.8

33.2

33.8

Questar Gas

(8.5

)

(9.2

)

19.5

Corporate

1.1

1.4

3.6

3.3

113.3

95.0

376.6

322.6

QUESTAR CORPORATION

SELECTED OPERATING STATISTICS

(Unaudited)

3 Months EndedSeptember 30,

9 Months EndedSeptember 30,

2007

2006

2007

2006

MARKET RESOURCES

Questar E&P production volumes

Natural gas (Bcf)

29.2

29.4

91.0

85.5

Oil and natural gas liquids (MMbbl)

0.8

2.2

2.0

Total production (Bcfe)

33.9

33.8

104.3

97.4

Average daily production (MMcfe)

368.6

367.4

382.2

356.7

Questar E&P average realized price, net to the well (including hedges)

Natural gas (per Mcf)

6.44

5.73

6.42

5.99

Oil and NGL (per bbl)

54.95

49.81

51.51

50.10

Wexpro investment base at Sept. 30, net of

depreciation and deferred income taxes (millions)

284.6

224.8

Natural gas processing volumes

NGL sales (MMgal)

16.5

20.8

54.5

65.3

NGL sales price (per gal)

1.00

0.89

0.94

0.89

Fee-based processing (millions of MMBtu) (1)

For unaffiliated customers

14.2

10.2

34.9

27.3

For affiliated customers

19.5

20.3

62.8

59.8

Total fee-based processing volumes

33.7

30.5

97.7

87.1

Fee-based processing (per MMBtu)

0.14

0.15

0.14

Natural gas gathering volumes (millions of MMBtu) (1)

For unaffiliated customers

43.1

34.3

127.0

88.0

For affiliated customers

28.3

37.8

97.2

107.8

Total gathering

71.4

72.1

224.2

195.8

Gathering revenue (per MMBtu) (1)

0.32

0.28

0.31

0.29

Natural gas and oil marketing volumes (MMdthe)

For unaffiliated customers

24.6

29.3

74.6

84.6

For affiliated customers

24.7

24.9

75.6

74.8

Total marketing

49.3

54.2

150.2

159.4

QUESTAR PIPELINE

Natural gas transportation volumes (MMdth)

For unaffiliated customers

90.8

88.1

251.7

229.0

For Questar Gas

14.2

15.0

81.7

83.1

For other affiliated customers

3.3

7.2

11.9

16.8

Total transportation

108.3

110.3

345.3

328.9

Transportation revenue (per dth)

0.29

0.27

Firm-daily transportation demand at Sept. 30, (MMdth)

2.2

Natural gas processing

NGL sales (MMgal)

2.2

6.1

6.7

NGL sales price (per gal)

1.22

1.34

1.11

1.26

QUESTAR GAS

Natural gas volumes (MMdth)

Residential and commercial

9.1

8.7

70.1

67.7

Industrial

0.3

0.4

1.1

2.7

Transportation for industrial customers

14.0

9.6

34.9

25.4

Total industrial

14.3

10.0

36.0

28.1

Total deliveries

23.4

18.7

106.1

95.8

Natural gas revenue (per dth)

Residential and commercial sales

8.83

9.88

8.57

10.20

Industrial

6.03

7.23

6.28

7.82

Transportation for industrial customers

0.17

0.16

0.20

0.18

Temperatures – colder (warmer) than normal

Normal

Temperature-adjusted usage per customer (dth)

7.8

7.9

73.2

76.4

Customers at Sept. 30, (thousands)

861.0

835.0

(1) one MMBtu = one dth

QUESTAR CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2007

2006

(Unaudited)

(in millions)

ASSETS

Current Assets

Cash and cash equivalents

24.6

Accounts receivable, net

238.1

410.8

Fair value of derivative contracts

133.4

155.5

Inventories

115.1

134.8

Other current assets

22.3

27.7

Total Current Assets

508.9

753.4

Property, Plant and Equipment

7,390.2

6,414.1

Accumulated depreciation, depletion and amortization

(2,552.4

)

(2,322.7

)

Net Property, Plant and Equipment

4,837.8

4,091.4

Investment in unconsolidated affiliates

45.9

37.5

Goodwill

70.7

Fair value of derivative contracts

41.4

49.0

Other noncurrent assets, net

63.4

62.7

Total Assets

5,568.1

5,064.7

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Checks outstanding in excess of cash

22.2

Short-term debt

190.5

40.0

Accounts payable and accrued expenses

431.9

551.4

Fair value of derivative contracts

0.8

8.2

Purchased-gas adjustment

46.6

34.3

Deferred income taxes – current

25.0

35.0

Current portion of long-term debt

53.0

10.0

Total Current Liabilities

770.0

678.9

Long-term debt, less current portion

979.5

1,022.4

Deferred income taxes

895.1

763.9

Fair value of derivative contracts

1.1

0.2

Other long-term liabilities

414.2

393.8

Common Shareholders’ Equity

2,508.2

2,205.5

Total Liabilities and Common Shareholders’ Equity

5,568.1

5,064.7

QUESTAR CORPORATION

PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

9 Months Ended September 30,

2007

2006

(in millions)

OPERATING ACTIVITIES

Net income

376.6

322.6

Adjustments to reconcile net income to net cash

provided from operating activities:

Depreciation, depletion and amortization

278.4

230.9

Deferred income taxes

138.2

65.2

Share-based compensation

9.5

6.9

Abandonment and impairment

6.4

5.5

Dry exploratory-well expenses

(0.2

)

24.0

Net (gain) from asset sales

(0.3

)

(25.5

)

Income from unconsolidated affiliates

(6.8

)

(5.3

)

Distributions from unconsolidated affiliates

7.3

4.9

Net mark-to-market (gain) loss on basis-only swaps

(14.2

)

10.8

Loss on early extinguishment of debt

1.7

Changes in operating assets and liabilities

55.5

116.2

NET CASH PROVIDED FROM OPERATING ACTIVITIES

850.4

757.9

INVESTING ACTIVITIES

Capital expenditures

(996.5

)

(628.0

)

Proceeds from disposition of assets

3.7

29.4

NET CASH USED IN INVESTING ACTIVITIES

(992.8

)

(598.6

)

FINANCING ACTIVITIES

Common stock

(2.4

)

3.8

Change in long-term debt

47.0

Early extinguishment of debt costs

(1.7

)

Change in short-term debt

150.5

(94.5

)

Checks outstanding in excess of cash

22.2

Dividends paid

(62.5

)

(59.5

)

Excess tax benefits from share-based compensation

10.0

9.9

NET CASH PROVIDED FROM (USED IN) FINANCING ACTIVITIES

117.8

(95.0

)

Change in cash and cash equivalents

(24.6

)

64.3

Beginning cash and cash equivalents

24.6

13.4

Ending cash and cash equivalents

–

77.7

Topics: Questar, Questar Corporation (STR), Energy, Net Incomes

Questar Net Income Up 19% in Third Quarter 2007

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Questar Net Income Up 19% in Third Quarter 2007

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