Questar Reports Third Quarter 2011 Net Income of $36.1 Million

Questar Corporation (NYSE:STR) reported an increase in third-quarter net
income to $36.1 million or $0.20 per diluted share compared to
third-quarter 2010 net income of $27.7 million or $0.15 per diluted
share. Excluding separation costs, third-quarter 2011 net income
increased 23% compared to third-quarter 2010 income from continuing
operations of $29.4 million or $0.16 per diluted share. Earnings before
interest, taxes, depreciation and amortization (EBITDA) for the quarter
increased 13% to $108.4 million compared to $96.3 million in the
year-ago period. Return on average equity (ROE) was 20.3% for the 12
months ended September 30, 2011, compared to 18.0% for the same period
last year.

'I am pleased to report that all three Questar business units improved
net income in the third quarter of 2011 compared to 2010,? said Ronald
W. Jibson, president and CEO of Questar. 'Wexpro and Questar Pipeline
each grew net income by 15%. Our utility, Questar Gas, posted a lower
seasonal loss for the period than a year ago. This strong performance
gives us confidence to raise our 2011 net income guidance to between
$1.11 and $1.14 per diluted share. Also, due to increased drilling
efficiencies, we have increased Wexpro′s 2011 capital investment budget
by $17 million to $125 million,? Jibson said.

Other highlights include:

• 
  Wexpro earned a 20.0% after-tax return on an average investment base
  that was 3.7% higher for the 12 months ended September 30, 2011,
  compared to the same period in 2010;
  
• 
  Questar Pipeline generated higher transportation revenues, which more
  than offset lower NGL volumes and revenues in the third quarter of
  2011. Interest expense was $1.5 million lower than the same period in
  2010 as the company benefited from the use of short-term debt to
  redeem maturing long-term notes;
  
• 
  Questar Gas recognized $0.8 million of increased margin primarily from
  customer growth and feeder-line replacement cost recovery in the third
  quarter of 2011;
  
• 
  Questar′s cost-containment efforts in the quarter resulted in a $4.5
  million, or 7% reduction in consolidated operating and maintenance
  (O&M) and general and administrative (G&A) costs;
  
• 
  Questar′s net cash flow from operating activities before working
  capital changes increased 18% to $364.4 million in the first 9 months
  of 2011 compared to the same period of 2010, aided by deferred taxes
  from 100% bonus depreciation.
  

Wexpro

Wexpro grew third-quarter 2011 net income to $25.6 million, an increase
of 15% from the third quarter of 2010, and generated $56.0 million of
EBITDA in the quarter, driven by a higher average investment base.
Wexpro earned a 20.7% return on average equity for the 12 months ended
September 30, 2011. Wexpro′s average investment base for the 12 months
ended September 30, 2011, was $449.9 million, 3.7% higher than the 2010
period. Wexpro continues to provide about half of Questar Gas Company′s
annual gas-supply needs and produced 12.6 Bcf of cost-of-service gas
during the third quarter of 2011 compared to 12.4 Bcf in the 2010
period. Under a long-standing agreement with the states of Utah and
Wyoming, Wexpro recovers its costs and earns an unlevered after-tax
return of approximately 20% on its investment base ? the investment in
commercial wells and related facilities, reduced for deferred income
taxes and accumulated depreciation, depletion and amortization.
Investment base is expected to increase during the remainder of 2011,
despite higher deferred taxes due to 100% bonus depreciation allowed for
income tax purposes. Bonus depreciation slows the growth of Wexpro′s
investment base, but it helps lower the price of cost-of-service gas
provided to Questar Gas customers. A summary of changes in Wexpro′s
investment base is provided below:

Wexpro now estimates that it will invest approximately $125 million of
new capital during 2011, compared to the prior estimate of $108 million.
Wexpro′s drilling performance continues to exceed expectations due to
its continuing pursuit of drilling efficiencies and lower finding costs.
For example, in the Vermillion Basin, drilling times of five to six days
were achieved during the third quarter of 2011. Shorter drilling times
reduce well costs and increase the number of wells that can be drilled
during any given period. Lower well costs and reserve estimates of 2.5
Bcfe to 3.5 Bcfe per well have resulted in average finding costs under
$1.00 per Mcfe for recent Wexpro-operated wells completed in this area.
To date, Wexpro′s 2011 overall finding costs have averaged approximately
$1.10 per Mcfe compared to $1.35 per Mcfe for all of 2010. Lower finding
costs improve the competitiveness of cost-of-service gas with
market-priced gas in the current low-price environment.

Questar Pipeline

Questar Pipeline earned net income of $18.8 million in the third quarter
of 2011, up 15% from $16.3 million in the third quarter of 2010, and
generated $47.7 million of EBITDA in the 2011 quarter. Questar Pipeline
earned an 11.8% return on average equity for the 12 months ended
September 30, 2011. The net income increase was driven by $2.1 million
of higher transportation revenues from the Overthrust Loop Expansion
Project that was placed in service in early 2011. In addition, Questar
Pipeline reduced O&M and G&A costs by $2.4 million. Interest expense was
also lower by $1.5 million due to the redemption of long-term notes
using short-term debt. A summary of Questar Pipeline revenues is
provided below:

Questar Pipeline held net firm-transportation contracts totaling 4,983
thousand decatherms (Mdth) per day at September 30, 2011, compared to
4,666 Mdth per day at September 30, 2010, a 7% increase. The increase in
transportation revenues, previously noted, was from additional long-term
firm-transportation contracts of 325 Mdth per day.

Increased transportation revenue was partially offset by decreased NGL
sales in the third quarter of 2011. This decrease was anticipated and
due to the early 2011 activation of a third-party processing plant
upstream of Questar Pipeline′s processing facilities in Price, Utah. NGL
sales revenues decreased 27% due to 53% lower volumes in the third
quarter of 2011 versus the 2010 period. Average NGL prices rose 50% from
the prior-year quarter to about $74 per barrel.

O&M and G&A expenses for the quarter ended September 30, 2011, totaled
$0.10 per decatherm transported, about $0.01 lower than the 2010 period.
As evidenced by the higher EBITDA for the current quarter, Questar
Pipeline′s continued strong cash flows will support corporate-wide
capital projects, dividend growth and the share repurchase program.

Questar Gas

Questar Gas reported a seasonal net loss of $7.9 million in the third
quarter of 2011, compared to a $9.1 million net loss in the third
quarter of 2010. The utility generated $4.6 million of EBITDA in the
2011 quarter compared to $2.2 million in the year-ago quarter. Questar
Gas earned an 11.7% return on average equity for the 12 months ended
September 30, 2011. Changes in Questar Gas′s margin (revenues less cost
of gas sold) are summarized in the following table:

As of September 30, 2011, Questar Gas served 912,698 customers, up 1.2%
from 902,283 customers at the same time last year. Changes in margin
from demand-side-management (DSM) cost-recovery revenues are offset by
equivalent changes in the program′s expenses. O&M and G&A expenses,
excluding DSM costs, were down $2.7 million in the current quarter
versus the prior-year quarter. On a trailing 12-month basis, O&M and G&A
expenses, excluding DSM costs, were $137 per customer as of September
30, 2011, compared to $139 per customer in the prior-year period.

Questar Gas has maintained a continuous focus on safety for many years,
as demonstrated by its multi-year feeder line and infrastructure
replacement and upgrade program. In recent years, the emphasis has been
on replacing aging high-pressure large-diameter steel pipe in
high-consequence areas. Beginning in 2010, Utah regulators approved an
infrastructure-cost-tracking mechanism for this program. Once the new
facilities are in service, the associated investment is added to rate
base, allowing the company to earn its allowed return on those
expenditures without having to file a general rate case.

Questar increases 2011 EPS guidance and provides initial 2012 EPS and
capital investment guidance

Questar now expects 2011 EPS to range from $1.11 to $1.14 per diluted
share, compared to prior guidance of $1.07 to $1.11 per diluted share.
Consolidated capital investment for 2011 is estimated to be
approximately $355 million, including the increase of $17 million for
Wexpro. For 2012, the company estimates that EPS may range from $1.15 to
$1.19 per diluted share. Questar has also established an initial 2012
capital investment forecast of about $355 million, allocated to its
lines of business as follows:

'Our updated guidance is based on continued strong performance of our
business units despite the challenging economic environment and is a
testament to the performance and dedication of our employees,? Jibson
said. 'Even with the impact of bonus depreciation, Wexpro′s investment
base and earnings continue to grow. Questar Gas expects to grow its rate
base and returns with its multi-year pipeline-replacement program and
positive, though modest, customer growth. Questar Pipeline expects
higher transportation revenues to offset lower NGL revenues, but higher
interest costs will be incurred as its pending long-term debt issuance
replaces short-term debt. Finally, Questar Pipeline′s continued strong
cash flow generation will help support Questar′s capital requirements,
dividend growth and the $100 million share repurchase program announced
last quarter,? Jibson added.

2011 Earnings Teleconference

Questar management will discuss third-quarter 2011 results and the
outlook for the remainder of 2011 and 2012 in a conference call with
investors Wednesday, October 26, beginning at 9:30 a.m. ET. The call and
related presentation slides can be accessed at www.questar.com.

About Questar Corporation

Questar is a Rockies-based integrated natural gas company with an
enterprise value of about $4.5 billion, operating through three
principal subsidiaries:

• Wexpro develops and produces natural gas on behalf of Questar
  Gas;
  
• Questar Pipeline operates interstate natural gas pipelines and
  storage facilities in the western U.S. and provides other energy
  services; and
  
• Questar Gas provides retail natural gas distribution in Utah,
  Wyoming and Idaho.
  

Forward-Looking Statements

This document may contain or incorporate by reference information that
includes or is based upon '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.
Forward-looking statements give expectations or forecasts of future
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'anticipate,' 'estimate,' 'expect,' 'project,' 'intend,' 'plan,'
'believe,' and other words and terms of similar meaning in connection
with a discussion of future operating or financial performance. Any or
all forward-looking statements may turn out to be wrong. These
statements are based on current expectations and the current economic
environment. They involve a number of risks and uncertainties that are
difficult to predict. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Factors that
could cause actual results to differ materially include, but are not
limited to the following:

• 
  general economic conditions, including the performance of financial
  markets and interest rates;
  
• 
  changes in industry trends;
  
• 
  changes in laws or regulations; and
  
• 
  other factors, most of which are beyond Questar′s control.
  

Questar undertakes no obligation to publicly correct or update the
forward-looking statements in this document, in other documents, or on
the website to reflect future events or circumstances. All such
statements are expressly qualified by this cautionary statement.

For more information, visit Questar′s website at www.questar.com.