questar 2 2010 final

8/8/2019 Questar 2 2010 Final

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A Natural Gas-Focused Energy Company

Credit Suisse Energy Summit 2010

Vail, Colorado February 3-4, 2010


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62%

11%

9%

10%

8%

2

Questar Exploration &Production

Wexpro

(Exploration & Production)

Questar Gas Management(Gathering and Processing)

Questar Pipeline

(Interstate Gas Transmission)

Questar Gas(Distribution)

EBITDA contributionTTM September 2009

$9.8 Billion Enterprise Value

Market

Resources82%

TTM 9/09 EBITDA $1.65B


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Questar E&P 2009 estimated production growth 7-9%,despite voluntary curtailments and deferred completions

Increased Haynesville acreage 39% to 43,000 net acres incore of the play

Continued success in Haynesville development drilling

Over 95 new producing wells at Pinedale in 2009

New growth opportunities in Woodford Shale, Granite Wash,

and Bakken Visible 12-15% production growth potential for 2010 and

beyond

3


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0

400

800

1,200

1,600

2,000

2,400

1998 00 02 04 06 08 2010

50

70

90

110

130

150

170

190

210

230

4

Proved YE reserves (Bcfe)*10-year (1999-2008) CAGR: 14%

Production (Bcfe)*10-year (1999-2008) CAGR: 10%

*excludes Wexpro reserves and production

2009E183-186

2010E210-215


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Questar E&P EBITDA($ millions)

317.1

452.3

638.9749.8

1,107.11,010.1

2004 2005 2006 2007 2008 TTM 9/09

5


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$0.00

$2.00

$4.00

$6.00

$8.00

3Q09 production cash cost structureversus 40 E&P peers

(LOE + production taxes + G&A + interest)

6

Source: Company data and Credit-Suisse E&P Stat Sort, December 8, 2009

Average$2.99/Mcfe

Questar E&P$1.67/Mcfe


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2009 CAPEX Forecast$1.50 Billion

2010 CAPEX Forecast$1.58 Billion

7

Questar E&P*$1,088

Wexpro$100

Updated October 28, 2009

Wexpro$120

Gas Management$90

Questar E&P*$895

QuestarGas$84

Pipeline$114

Gas Management$290

Pipeline

$161

QuestarGas$129

*Includes exploration expense.


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Growth driven by two world-class assets

- Pinedale and Haynesville

Additional growth from emerging resource plays

- Bakken, Granite Wash, Woodford / Cana

2010 production guidance 210-215 Bcfe

- Over 70% hedged and up 15% vs. 2009

2010 EBITDA guidance $1.48-$1.58 billion

Five-year Questar E&P production growth rate 12-15%

High-quality, repeatable resource plays

8


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10

6 MilesUpdated October 20, 2009

TX LA

Reported initialproduction (IP) ratesfor Haynesville wells

(MMcfd)

Questar E&Pdrilling / completing

Questar E&P leasehold(Haynesville or deeper)

5

>5-10

>10-15>15-20

>20

7 Questar E&P-operated rigs in 2010


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11

Reported initialproduction (IP) ratesfor Haynesville wells

(MMcfd)

Questar E&Pdrilling / completing

5 >15-20

>5-10 >20

>10-15

Questar E&P leasehold(Haynesville or deeper)

6 Miles

Only operated locations are shown for WOC and drilling wells


Initial Production Rates (MMcfd)

1. 24.8 14. WOC 27. Drilling

2. 17.7 15. 24.4 28. Drilling

3. 18 16. 22.1 29. Drilling

4. 12.2 17. 22.6 30. 11

5. WOC 18. 23.7 31. 13.96. 15.9 19. 21.7 32. 16.8

7. 20.1 20. 20.9

8. Drilling 21. WOC

9. 25.2 22. Drilling

10. 23.9 23. Drilling

11. 21.5 24. Completing

12. 25.1 25. Drilling

13. WOC 26. Drilling

23

12

3

4

5

6

7

8

9

10

11

17

12

13

15 16

21

18 19 2022

2425

26

27

28

29

3031

32

14


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Concentrated asset

Questar operated

Proven play

Low F&D and LOE

Downspacing potential

Developed infrastructure

Gathering and processing

QMR leasehold17,872 gross acres

PinedaleField


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* As of December 31, 2008

Questar E&P net proved reserves: 1.16 Tcfe *

Additional net probable reserves: 2.1 Tcfe

Up to 1,400 remaining well locations oncombination of 5- and 10-acre density

10-acre density wells likely recover< 50% of OGIP

417 producing wells at 11/3/09

400 Questar E&P PUDs booked oncombination of 5-,10- and 20-acre density *

Anticipate 95-100 new well completions in2009

6 Questar-operated rigs in 2010

CurrentEconomic

Limit


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IPs MMcfd/bcd

1. IP: 21/570

2. IP: 25/1,900

3. IP: 21/1,230

4. IP: 21/0

5. IP: 20/0 *

6. Drilling *(QEP 1st

operated HZ well)

7. IP: 14/1,375 *

8. IP: 12/280 *

1

23

45*

0

10

20

30

40

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Questar E&P Net production fromGranite Wash/Atoka

MMcfed

Currently drilling first Questar E&Poperated horizontal well

$4.8 to $8.0 MM well cost

EUR 3.5 to 6.0 Bcfe / well

49,401 gross / 21,634 net acres

2 Questar E&P-operated rigs in 2010

6*

7*

* Questar E&Pworking interest

8*

6 Miles

Questar E&P leasehold


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Recent Questar E&P Operated WellsInitial Production Rates:

1. Leck 4-28H, IP: 4,900 Mcfd, 3 bcd

2. Austin 1-23-H, IP: 7,615 Mcfd, 42 bcd

3. White 1-24H, Drilling


Woodford wells completed

Woodford wells drilling & WOC

6 Miles

Questar E&P non-operated leasehold(Woodford or deeper)

Questar E&P-operated leasehold(Woodford or deeper)

Approx. 22,000 net acres in200 sections

Over 700 horizontal locations

17.35% avg. Questar E&Pworking interest (WI)

11 WI wells drilling or WOC

(1 QEP-operated rig) 45 WI wells completed (6 QEP-

operated)

Gross cost: $7 to $8 MM per well

Est. gross avg. EUR 5 Bcfe / well

1 Questar E&P-operated rig in 2010

1

2

3

15


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Questar E&P leases or minerals

Drilling wells other operators

Lake Sakakawea

USGS Eastern Expulsion Trend

6 Miles

80,000 net acres

5,000+ horizontal laterals

$5.5 to $6.5 MM well cost

IPs from 500-3,000+ bod

0.35 to 0.75 MMboe/well

3rd Questar E&P-operated well

currently drilling

1 Questar E&P-operated rig in 2010

0-500

501-1000

1001-2000

Reported initial production (IP)rates for Bakken wells (BOED):

2001-3000

3001-5000

Questar E&PMHA 1-18H

IP: 960 boed(4100 ft lateral)

Questar E&PMHA 1-08H

IP: 841 boed(4500 ft lateral)

Parshall/Sanish FieldIPs: 750-3,000 bod

EURs: 400-1,000 Mbo

Bailey Field AreaIPs: 500-1,000 bod

Questar E&P

MHA 13-14HDrilling

(9300 ft lateral)


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CO

UT

WY

Pinedale340 locations*

Moxa Arch/Labarge Platform450 locations

Vermillion/Powder Wash264 locations

Uinta Basin148 locations

Over 1,300 identified unrisked locations

Over $1.4 B identified risked net CAPEX

Successful-well costs added to investmentbase, dry holes excluded

Investment base depreciated on units-of-

production basis

19-20% after-tax return on investmentbase

Operating costs fully reimbursed

Future development provides competitivecost-of-service gas supply for Questar Gas

* based on 5 and 10-acre development

QMR leasehold

Gas fields

Oil fields


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Net Income($ millions)

35.3

43.750.0

59.2

73.977.7

2004 2005 2006 2007 2008 TTM9/09

Investment Base($ millions)

182.8206.3

260.6

300.4

410.6 419.5

2004 2005 2006 2007 2008 9/09

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21.0

35.742.6

55.3

81.5

64.2

2004 2005 2006 2007 2008 TTM9/09

Questar Gas ManagementNet Income ($ millions)

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COUT

WY

W. Green River Basin HubCurrent processing/blending: 580 MMcfd

QGM gathering: 650 milesRendezvous gathering: 325 milesRendezvous transmission: 20 milesQGM Operating income share: 64%Interstate pipeline connections: 6

2010 projects include the addition of a 350MMcfd cryogenic processing plant

Vermillion BasinCurrent processing/blending: 80 MMcfdGathering: 600 milesQGM Operating income share: 10%Interstate pipeline connections: 1

Uinta Basin HubCurrent processing/blending: 380 MMcfdQGM gathering: 900 milesUBFS gathering: 80 milesThree Rivers gathering: 50 milesQGM Operating income share: 26%Interstate pipeline connections: 4

2010 projects include the addition of a 150

MMcfd cryogenic processing plant


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2004 2005 2006 2007 2008 2009E 2010E

Actual and Forecast EBITDA$ Billions

$0.66

$1.76

$1.25

$1.09

$0.86

$1.58-$1.63

$1.48-$1.58

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2010 guidance effective 10/28/09

EBITDA $1.48B-$1.58B

>75% of estimated productionhedged

Assumptions for unhedgedproduction:

- Gas: $5.50-$6.50/MMBtu NYMEX

- Oil: $75-$85/bbl NYMEX

- Rockies basis: $1.25-$0.50/MMBtu

- Midcontinent basis: $0.75-$0.30/MMBtu

210-215 Bcfe production


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$2,441 $2,628

$3,273

$3,961

$5,800 $5,582

2004 2005 2006 2007 2008 9/09

Capitalization including short-term debt($ millions)

Equity % Total Debt %

23

41%

59%

41%

59%

33%

67%

35%

65%

41%

59%

39%

61%


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This presentation contains forward-looking statements within the meaning of the federal

securities laws. 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, 2008. Questar undertakes no obligation to publicly

correct or update the forward-looking statements in this presentation to reflect future events or

circumstances. All such statements are expressly qualified by this cautionary statement.

Management defines EBITDA as Net Income before mark-to-market gains and losses on basis-only swaps,gains and losses on asset sales, interest and other income, interest expense, DD&A, abandonments,

impairments, exploration expense and income taxes.


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Gas and oil hedges as of 10/22/09(Volumes and net-to-well prices)

2010

2011

2012

4 Bcfe oil collars$47.60-$105.15 / bbl5 Bcfe oil

$60.66 / bbl

102 Bcf gas$4.91 / Mcf

37 Bcf gas

$5.92 / Mcf4 Bcfe oil collars$47.60-$96.10 / bbl

151Bcf gas$5.26 / Mcf

21 Bcf gas collars$4.22-$6.51 / Mcf

7 Bcf gas collars$4.65-$6.51 / Mcf

Hedged Gas Hedged Oil Unhedged

Gas Collar Oil Collar


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Hedge discipline added $465 MM pre-tax income YTD 9/30/2009

from cash settlements

Focused CAPEX on higher-margin Pinedale and Haynesville plays

De-risking Granite Wash, Bakken, Woodford/Cana

Questar E&P forecast 2009 production growth 7-9%

Businesses excluding Questar E&P likely generate $240 MM net

income, $630 MM EBITDA in 2009

Strong balance sheet & liquidity / demonstrated access to capital

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Total system: 2,533 miles

Total daily capacity: 4,155 Mdth

Storage capacity: 53.1 Bcf

Rate base (1/1/09): $866 MM

27.634.8*

45.4 45.0

58.0 57.8

2004 2005 2006 2007 2008 TTM9/09

* before $10.4 MM Southern Trails writedown

Net Income ($ millions)2008 growth due to expansion

projectsOverthrust Pipeline


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Opal

Roberson Creek

Blacks Fork

Kanda

Rock SpringsCompression

Point of RocksCompression

WamsutterRoberson

Compression

Cabin 31

Ruby

REX

REX

WIC

Overthrust Loop

ExpansionFacilities: 44 miles 36 pipeCapacity: 600 Mdth/dInvestment: $100 millionIn-service: 3/1/2011

Overthrust Compression

ExpansionFacilities: 32,000 hpCapacity: 300 Mdth/dInvestment: $42 millionIn-service: 2/15/2010


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31.5

36.0 37.037.4

40.242.1

2004 2005 2006 2007 2008 TTM9/09

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Cities served: 277

Customers (+ 1.7%): 888,000

2008 deliveries: 176 MMdth

Rate base (1/1/09): $845 MM

Net Income ($ millions)

Questar Gas

Major cities served

Questar Pipeline


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Return on capital

Efficiency

Overall ratesCustomer growth

Revenue decoupling

Test year

Weather normalization

Market penetrationGas cost pass-through

Bad debt expense

Earned allowed return past 4 years

Ranks 3rd of 73 in O&M / customer

Among lowest in U.S.Above U.S. average

Pilot program in effect

Future test year now allowed

In place since 1995

> 95%Covered in rates

Gas cost portion covered in rates

Key Metrics


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$0.35 $0.36$0.39

$0.43 $0.45$0.47 $0.49

$0.49 $0.51

2001 2002 2003 2004 2005 2006 2007 2008 2009

Quarterly dividend$0.13 per share

36 increases in 37 years

$0.52 annualized dividend

1.2% yield on ~$43.00stock price *

Dividends / payout ratio / yield

PAYOUT RATIO 36% 39% 37% 31% 23% 18% 17% 13% 21%

YIELD 2.9% 2.7% 2.3% 1.7% 1.2% 1.1% 0.9% 1.5% 1.2%

* As of January 28 2010

questar 2 2010 final

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