Questar Net Income Up 49% in Second-Quarter 2006

SALT LAKE CITY, July 26 /PRNewswire-FirstCall/ -- Questar Corp. -- a natural gas-focused energy company -- grew net income 49% in the second quarter of 2006 to $90.4 million, or $1.03 per diluted share, compared to $60.7 million, or $0.70 per diluted share, for the second quarter of 2005. Net income growth was driven by higher natural gas production and higher realized prices for natural gas, oil and natural gas liquids (NGL) in the company's exploration and production businesses. Second-quarter 2006 results included a $3.5 million or $0.04 per diluted share after-tax charge for unrealized mark-to-market losses on natural gas basis hedges and a $1.1 million or $0.01 per diluted share after-tax charge related to the redemption of $200 million of Questar Market Resources 7% Notes.

For the first half of 2006, Questar net income was $227.5 million, or $2.60 per diluted share, compared to $155.9 million or $1.79 per diluted share for the 2005 period, a 46% increase.

NET INCOME (LOSS) BY LINE OF BUSINESS (in millions, except per share) 3 Months Ended 6 Months Ended June 30, % June 30, % 2006 2005 Change 2006 2005 Change Market Resources Questar E&P $56.1 $34.4 63% $126.6 $70.7 79% Wexpro 12.0 10.5 14 23.9 20.7 15 Gas Management 10.2 9.0 13 19.9 17.8 12 Energy Trading and other 1.0 0.9 11 3.5 2.2 59 Market Resources Total 79.3 54.8 45 173.9 111.4 56 Questar Pipeline 9.9 7.6 30 21.3 15.9 34 Questar Gas (0.7) (3.4) 79 28.7 25.3 13 Corporate and other operations 1.9 1.7 12 3.6 3.3 9 QUESTAR CORPORATION TOTAL $90.4 $60.7 49% $227.5 $155.9 46% Earnings per diluted share $1.03 $0.70 $2.60 $1.79 Average diluted shares 87.5 87.1 87.5 86.9

"All Questar operating units posted double-digit net income growth in the first half of 2006," said Keith O. Rattie, Questar chairman, president and CEO. "But Questar E&P stands out. Questar E&P has now delivered year-on-year production growth of 15% or higher for four-straight quarters. Our veteran E&P team is getting the job done with the drill bit".

SECOND-QUARTER HIGHLIGHTS - Questar E&P reported a 16% increase in natural gas, oil and NGL production volumes to 31.3 billion cubic feet of natural gas equivalent (Bcfe) compared to 26.9 Bcfe for the second quarter of 2005. Natural gas comprised 88% of reported volumes during the quarter. - Realized natural gas prices at Questar E&P rose 24% and realized crude oil and NGL prices rose 25%. Natural gas hedges increased reported revenues by $18.8 million while oil and NGL hedges reduced revenues by $6.7 million. - Unrealized mark-to-market losses on NYMEX/Rockies basis swaps reduced net income $3.5 million. - Wexpro's investment base grew 17% to $220.1 million at June 30, 2006, compared to $188.0 million a year earlier. Wexpro produced 9.9 Bcfe during the second quarter on behalf of affiliate Questar Gas. Wexpro net income also benefited from 31% higher realized oil and NGL prices. - Questar Gas Management gas-processing volumes on a Btu basis increased 72% in the second quarter of 2006 to 26.5 million MMBtu compared to 15.4 million MMBtu for the year-earlier quarter. Gross gas-processing margin increased 53% to $10.3 million. Gas-gathering volumes and total gathering margin both rose 6% compared to the second quarter of 2005. - Questar Pipeline net income grew 30%, driven by new transportation contracts on its southern system in central Utah and on Overthrust Pipeline. Questar Pipeline also benefited from higher NGL volumes and realized NGL prices. - Questar ROA (Return on Assets, defined as earnings before interest and income taxes divided by average total assets) for the trailing 12-month period ended June 30, 2006, increased to 17.5%. Market Resources ROA was 23.0%, Questar Pipeline ROA was 9.0%, and Questar Gas ROA was 9.1%.

QUESTAR RAISES PRODUCTION GUIDANCE AND ADJUSTS FULL-YEAR EPS ESTIMATES TO REFLECT LOWER NATURAL GAS PRICES

The company now expects Questar E&P 2006 production to range from 126 to 128 Bcfe, up 2 Bcfe over the previous range. The revised production guidance -- which excludes Wexpro -- represents 10 to 12% growth over 2005 production of 114.2 Bcfe. Questar also adjusted its 2006 EPS guidance to reflect a significant decline in forward natural gas prices compared to the price levels assumed in previous guidance. The company now estimates that 2006 EPS will range from $4.50 - $4.70 per diluted share compared to previous guidance of $4.50 - $4.80 per diluted share. 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:

EPS Guidance Assumptions Current Previous Earnings per share $4.50 - $4.70 $4.50 - $4.80 Average diluted shares (millions) 87.5 87.5 Questar E&P production - Bcfe 126 - 128 124 - 126 Pinedale wells completed in 2006 45 - 48 45 - 48 NYMEX gas price per MMBtu* $7.00 - $8.00 $8.00 - $9.00 NYMEX/Rockies basis differential per MMBtu* $2.25 $2.25 NYMEX/Midcontinent basis differential per MMBtu* $1.50 $1.50 NYMEX crude oil price per barrel* $65.00 - $75.00 $60.00 - $70.00 *On unhedged volumes for the remainder of 2006 - Questar E&P has hedged about 69% of its forecast second-half 2006 natural gas and oil-equivalent production with fixed-price swaps. The company has hedged an additional 13% or 8.3 Bcf of forecast remaining 2006 production with NYMEX/Rockies 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 2006 would result in about a $0.07 change in earnings per diluted share. - A $10.00 per barrel change in the average NYMEX price of oil for the remainder of 2006 would result in about a $0.02 change in earnings per diluted share.

Questar Market Resources Net Income Up 45% in Second Quarter, 56% for First-Half

Market Resources -- which conducts natural gas and oil exploration, development and production, gas gathering and processing, wholesale gas and oil marketing and gas storage -- reported net income of $79.3 million in the second quarter of 2006, up 45% from $54.8 million in the second quarter of 2005. For the first half of 2006, Market Resources net income increased 56% to $173.9 million.

Questar E&P Net Income Increases 63% in Second Quarter, 79% for First-Half

Market Resources subsidiary Questar E&P benefited from growing production and higher realized prices for the second quarter and first half of 2006. Questar E&P reported net income of $56.1 million in the second quarter, up 63% from $34.4 million in the 2005 period. Questar E&P production increased 16% to 31.3 Bcfe compared to 26.9 Bcfe in the 2005 quarter. Natural gas comprised about 88% of Questar E&P production in the 2006 period. For the first half of 2006, Questar E&P net income rose 79% to $126.6 million compared to $70.7 million a year earlier, driven by a 19% increase in production and higher realized natural gas, oil and NGL prices compared to the year-earlier period.

Questar E&P - Production by Region 3 Months Ended 6 Months Ended June 30, June 30, % % 2006* 2005 Change 2006** 2005 Change (Bcfe) (Bcfe) Pinedale Anticline 8.2 6.5 26% 17.9 14.1 27% Uinta Basin 6.2 6.9 (10) 12.4 12.6 (2) Rockies Legacy 4.9 4.1 20 10.0 8.1 23 Subtotal - Rocky Mountains 19.3 17.5 10 40.3 34.8 16 Midcontinent 12.0 9.4 28 23.3 18.5 26 Total Questar E&P 31.3 26.9 16% 63.6 53.3 19%

*Includes 0.3 Bcfe related to a working interest adjustment in Rockies Legacy. Without the one-time adjustment, total Questar E&P production grew 15%.

** Includes 0.7 Bcfe related to settlement of an imbalance and 0.3 Bcfe related to a working interest adjustment in Rockies Legacy. Without the one-time adjustments, total Questar E&P production grew 17%.

Average realized net-to-the-well natural gas prices at Questar E&P increased 24% in the second quarter of 2006 to $6.00 per thousand cubic feet (Mcf) compared to $4.82 per Mcf in the 2005 period. As summarized below, the increase was due to the positive impact of hedging in the current period. Questar E&P average realized oil and NGL price was $50.11 per barrel compared with $40.02 a year earlier, a 25% increase. Oil hedges decreased realized oil and NGL prices $10.80 per bbl in the second quarter of 2006. Unrealized mark-to-market losses on Rockies basis hedges reduced net income $3.5 million in the 2006 quarter.

Questar E&P - Realized Prices and Hedging Impact 3 Months Ended 6 Months Ended June 30, June 30, % % 2006 2005 Change 2006 2005 Change Realized natural gas price ($ per Mcf) $6.00 $4.82 24% $6.13 $4.79 28% Natural gas hedge impact ($ per Mcf) 0.69 (0.92) 0.05 (0.67) Realized oil and NGL price ($ per bbl) 50.11 40.02 25 50.27 39.38 28 Oil and NGL hedge impact ($ per bbl) (10.80) (8.50) (8.38) (7.68) Unrealized mark-to-market losses on basis hedges ($ millions - before tax) (5.6) 0.0 (5.6) 0.0

Questar may hedge sales prices on 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. During the second quarter of 2006, Questar E&P continued to take advantage of higher natural gas and oil prices to hedge additional future production. The company has and may continue to enter into basis-only hedges to protect cash flows and earnings from widening natural gas-price basis differentials that may result from capacity constraints on regional gas pipelines.

Questar E&P controllable production costs (the sum of depreciation, depletion and amortization expense, lease operating expense, general and administrative expense, and allocated interest expense) per unit of production increased 7% compared to the second quarter and the first half of 2005.

Questar E&P - Controllable Production Cost Structure 3 Months Ended 6 Months Ended June 30, June 30, & & 2006 2005 Change 2006 2005 Change (Per Mcfe) (Per Mcfe) Depreciation, depletion and amortization $1.38 $1.18 17% $1.33 $1.16 15% Lease operating expense 0.54 0.58 (7) 0.54 0.56 (4) General and administrative expense 0.27 0.31 (13) 0.31 0.33 (6) Allocated interest expense 0.26 0.21 24 0.23 0.21 10 Controllable production costs $2.45 $2.28 7% $2.41 $2.26 7% - Depreciation, depletion and amortization expense increased due to higher costs for drilling, completion and related services, increased cost of steel casing, other tubulars and wellhead equipment, and the ongoing depletion of older, lower-cost reserves. - Per-unit lease operating expense decreased slightly as increased costs of materials and consumables were offset by higher production volumes. - Per-unit general and administrative expense decreased in the second quarter due primarily to reversal of an accrual related to a potential legal expense and higher production volumes. Absent the reversal, G&A would have been essentially flat with the year-earlier quarter. - Interest expense per unit increased in the 2006 quarter due to refinancing activities and a $50 million net increase in long-term debt during the quarter. Questar E&P Updates Estimates of Probable, Possible Reserves

Questar E&P has recently completed an update of estimated probable and possible reserves associated with its Rocky Mountain and Midcontinent leaseholds. These estimates have been reviewed by the company's independent reservoir engineers, having been prepared in accordance with the methodology and definitions detailed in the company's March 8, 2005 news release, a copy of which can be obtained at: http://www.questar.com/news/2005_news/news_2005.html. Investors should note that these reserves are separate from and in addition to proved reserves included in our 2005 Annual Report and Form 10-K. The company cannot include information about unproved reserves in financial information filed with the Securities and Exchange Commission (SEC). In addition to Questar E&P year-end 2005 estimated proved reserves of 1,480 Bcfe, the company reported the following updated estimates of probable and possible reserves.

Questar E&P - Estimated Probable and Possible (Unproved) Reserves Estimated Probable Estimated Possible Reserves Reserves June 30, December 31, % June 30, December 31, % 2006 2004 Change 2006 2004 Change (Bcfe) (Bcfe) Pinedale Anticline 819 285 187% 715 364 96% Uinta Basin 450 249 81 955 410 133 Rockies Legacy 1,080 785 38 1,815 943 92 Midcontinent 151 49 208 24 8 200 Total Questar E&P 2,500 1,368 83% 3,509 1,725 103% - Pinedale Anticline estimates include 575 10-acre Lance Pool locations classified as probable plus 664 Lance Pool 5-acre locations on the flanks of the field classified as possible. - Uinta Basin probable reserve estimates include 145 40-acre shallow gas (Wasatch/Upper Mesaverde) locations and 170 deep gas (Lower Mesaverde/Mancos/Dakota) locations. Estimated possible reserves include 451 40-acre and 20-acre shallow gas (Wasatch/ Upper Mesaverde) locations, and 269 deep gas (Lower Mesaverde/Mancos/Dakota) locations. - Rockies Legacy reserves include 210 probable and 478 possible Baxter/Frontier/Dakota locations in the Vermillion Basin and 143 probable and 183 possible Almond Formation locations in the Wamsutter area. - Midcontinent reserves include 220 probable and 24 possible locations in the Elm Grove area of northwest Louisiana and 22 probable and 3 possible locations in the Granite Wash play of the Texas Panhandle. - Wexpro reserves are not included in these estimates. The company reported Wexpro reserves of 521 Bcfe at year-end 2005. Wexpro Net Income Up 14% in Second-Quarter, 15% in First-Half 2006

Wexpro -- a Market Resources subsidiary that develops and produces cost-of-service reserves for Questar Gas -- reported net income of $12.0 million in the current quarter, up 14% from the second quarter of 2005. 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's investment base at June 30, 2006, increased 17% to $220.1 million compared to $188.0 million a year earlier. Wexpro current-quarter net income also benefited from 31% higher realized oil and NGL prices. For the first half of 2006, Wexpro net income was $23.9 million compared to $20.7 million for the first half of 2005, a 15% increase. Wexpro first-half 2006 results benefited from 28% higher realized oil and NGL prices.

Gas Management Net Income Up 13% in Second-Quarter, 12% in First-Half 2006

Questar Gas Management (Gas Management) -- Market Resources gas-gathering and processing-services business -- grew net income 13% to $10.2 million in the second quarter of 2006. Gas Management results benefited from a 53% increase in gas-processing plant margin compared to the 2005 quarter. Gathering volumes were up 6% to 62.4 million MMBtu equivalent for the current quarter compared to 59.2 million MMBtu for the 2005 quarter driven by growing Questar E&P and third-party Pinedale production and new gathering and processing projects serving third parties in the Uinta Basin. For the first half of 2006, Gas Management net income increased 12% to $19.9 million compared to $17.8 million in the 2005 period, driven by higher volumes and improved margins in both gathering and processing.

Questar Pipeline Net Income Up 30% in Second-Quarter, 34% in First-Half 2006

Questar Pipeline -- a subsidiary that provides interstate natural gas-transportation and storage services -- reported net income of $9.9 million in the second quarter of 2006 compared to $7.6 million in the second quarter of 2005. Second-quarter results were driven by a $2.9 million increase in transportation revenues from recent system expansions and $1.7 million in higher NGL revenues. Questar Pipeline net income was $21.3 million in the first half of 2006 compared with $15.9 million a year ago. Net income rose 34%, driven by $6.4 million in higher transportation revenues from system expansions and $3.2 million higher NGL revenues. Operating, maintenance, general and administrative costs per decatherm transported decreased to $0.12 in the first half of 2006 from $0.14 in the first half of 2005.

Questar Gas Seasonal Net Loss Narrows in Second-Quarter, Net Income Up 13% in First-Half 2006

Questar Gas -- which provides natural gas distribution services in Utah, Wyoming and Idaho -- reported a seasonal loss of $0.7 million in the second quarter of 2006 compared with a loss of $3.4 million for the second quarter of 2005. Gross margin from natural gas sales increased $5.0 million over the prior year. The higher margin included an increase of $1.2 million from customer growth, $1.2 million from recovery of gas-processing costs, and $2.7 million from an adjustment to the estimate of unbilled revenues. In 2005, gas-processing costs of $1.2 million in the second quarter and $2.6 million in the first half were not recovered in rates until the fourth quarter pursuant to a Utah regulatory order. At June 30, 2006, Questar Gas served 836,000 customers, up 12,000 from the end of 2005. Temperature-adjusted usage per customer declined slightly from the year-earlier quarter. Questar Gas net income was $28.7 million in the first half of 2006 compared with $25.3 million during the same period of 2005, driven by customer growth and recovery of gas-processing costs.

Second-Quarter Teleconference

Questar management will discuss second quarter 2006 results and its outlook for the remainder of the year and beyond in a conference call with investors Thursday, July 27, beginning at 9:30 a.m. EDT. The call can be accessed on the company Internet site at http://www.questar.com/.

About Questar

Questar Corp. is a natural gas-focused energy company with an enterprise value of over $7 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, 2005. Subject to the requirements of otherwise applicable law, the company cannot be expected to update the statements contained in this news release or take actions described herein or otherwise currently planned.

For more information, visit Questar's Internet site at: http://www.questar.com/. Hedge Positions - July 26, 2006 Time Rocky Mid- Rocky Mid- Periods Mountains continent Total Mountains continent Total Estimated average price Gas (Bcf) Fixed-Price Swaps per Mcf, net to the well 2006 Second half 27.5 12.2 39.7 $5.93 $6.81 $6.20 2007 First half 19.8 13.6 33.4 $7.02 $7.90 $7.38 Second half 20.1 13.9 34.0 7.02 7.90 7.38 12 months 39.9 27.5 67.4 7.02 7.90 7.38 2008 First half 15.2 10.4 25.6 $7.26 $8.09 $7.59 Second half 15.4 10.5 25.9 7.26 8.09 7.59 12 months 30.6 20.9 51.5 7.26 8.09 7.59 2009 First half 1.7 1.7 3.4 $7.77 $7.98 $7.88 Second half 1.7 1.8 3.5 7.77 7.98 7.88 12 months 3.4 3.5 6.9 7.77 7.98 7.88 Estimated average basis Gas (Bcf)Basis-Only Swaps per Mcf vs. NYMEX 2006 Second half 8.3 8.3 $2.07 $2.07 2007 First half 8.4 8.4 $1.92 $1.92 Second half 8.6 8.6 1.92 1.92 12 months 17.0 17.0 1.92 1.92 2008 First half 13.6 13.6 $1.60 $1.60 Second half 13.7 13.7 1.60 1.60 12 months 27.3 27.3 1.60 1.60 2009 First half 1.7 1.7 $0.95 $0.95 Second half 1.7 1.7 0.95 0.95 12 months 3.4 3.4 0.95 0.95 Estimated average Oil (Mbbl)Fixed-Price Swaps price per bbl, net to the well 2006 Second half 626 202 828 $47.77 $59.89 $50.73 2007 First half 525 199 724 $56.85 $57.83 $57.12 Second half 534 202 736 56.85 57.83 57.12 12 months 1,059 401 1,460 56.85 57.83 57.12 2008 First half 109 73 182 $64.23 $65.30 $64.66 Second half 111 73 184 64.23 65.30 64.66 12 months 220 146 366 64.23 65.30 64.66 QUESTAR CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 3 Months Ended 6 Months Ended June 30, June 30, 2006 2005 2006 2005 (in thousands, except per share amounts) REVENUES Market Resources $384,110 $344,896 $799,187 $659,234 Questar Pipeline 24,912 19,087 50,354 36,999 Questar Gas 181,853 151,043 648,792 494,733 Corporate and other operations 5,355 5,183 9,270 9,567 TOTAL REVENUES 596,230 520,209 1,507,603 1,200,533 OPERATING EXPENSES Cost of natural gas and other products sold 220,854 225,577 683,634 564,382 Operating and maintenance 68,244 63,312 142,353 120,059 General and administrative 30,292 29,647 62,610 62,730 Production and other taxes 25,864 26,250 59,336 52,635 Depreciation, depletion and amortization 73,269 59,807 146,023 118,632 Exploration 10,101 5,476 13,400 6,849 Abandonment and impairment of gas, oil and other properties 1,843 1,493 3,542 2,898 TOTAL OPERATING EXPENSES 430,467 411,562 1,110,898 928,185 OPERATING INCOME 165,763 108,647 396,705 272,348 Interest and other income 3,710 2,922 6,157 5,573 Income from unconsolidated affiliates 1,701 1,675 3,532 3,221 Unrealized mark-to-market loss on basis swaps (5,614) (5,614) Loss from early extinguishment of debt (1,746) (1,746) Interest expense (19,762) (16,643) (37,192) (33,365) INCOME BEFORE INCOME TAXES 144,052 96,601 361,842 247,777 Income taxes 53,690 35,874 134,324 91,879 NET INCOME $90,362 $60,727 $227,518 $155,898 EARNINGS PER COMMON SHARE Basic $1.06 $0.71 $2.67 $1.84 Diluted 1.03 0.70 2.60 1.79 Weighted average common shares outstanding Used in basic calculation 85,352 84,679 85,301 84,546 Used in diluted calculation 87,492 87,051 87,475 86,888 Dividends per common share $0.235 $0.225 $0.46 $0.44 QUESTAR CORPORATION OPERATIONS BY LINE OF BUSINESS (Unaudited) 3 Months Ended 6 Months Ended June 30, June 30, 2006 2005 2006 2005 (in thousands) REVENUES FROM UNAFFILIATED CUSTOMERS Questar E&P $198,385 $137,350 $409,172 $269,847 Wexpro 3,669 3,425 9,972 8,551 Gas Management 40,485 33,148 81,733 62,182 Energy Trading and other 141,571 170,973 298,310 318,654 Market Resources total 384,110 344,896 799,187 659,234 Questar Pipeline 24,912 19,087 50,354 36,999 Questar Gas 181,853 151,043 648,792 494,733 Corporate and other operations 5,355 5,183 9,270 9,567 $596,230 $520,209 $1,507,603 $1,200,533 REVENUES FROM AFFILIATED CUSTOMERS Wexpro $36,517 $33,204 $75,243 $66,188 Gas Management 3,632 3,400 7,478 6,588 Energy Trading and other 158,948 131,541 409,178 273,755 Market Resources total 199,097 168,145 491,899 346,531 Questar Pipeline 19,827 21,517 40,393 43,942 Questar Gas 1,237 1,370 2,814 2,631 Corporate and other operations 408 473 836 1,075 $220,569 $191,505 $535,942 $394,179 OPERATING INCOME (LOSS) Questar E&P $104,206 $60,518 $222,893 $123,960 Wexpro 18,294 15,871 36,511 31,749 Gas Management 15,104 13,115 29,772 26,058 Energy Trading and other 784 1,559 4,095 4,014 Market Resources total 138,388 91,063 293,271 185,781 Questar Pipeline 21,729 17,346 45,659 35,703 Questar Gas 2,735 (2,122) 54,242 47,829 Corporate and other operations 2,911 2,360 3,533 3,035 $165,763 $108,647 $396,705 $272,348 NET INCOME (LOSS) Questar E&P $56,100 $34,426 $126,590 $70,677 Wexpro 11,957 10,495 23,942 20,677 Gas Management 10,186 8,962 19,924 17,770 Energy Trading and other 1,042 878 3,494 2,258 Market Resources total 79,285 54,761 173,950 111,382 Questar Pipeline 9,884 7,593 21,323 15,932 Questar Gas (693) (3,446) 28,671 25,266 Corporate and other operations 1,886 1,819 3,574 3,318 $90,362 $60,727 $227,518 $155,898 QUESTAR CORPORATION SELECTED OPERATING STATISTICS (Unaudited) 3 Months Ended 6 Months Ended June 30, June 30, 2006 2005 2006 2005 MARKET RESOURCES Questar E&P production volumes Natural gas (MMcf) 27,561 23,410 56,117 46,249 Oil and natural gas liquids (Mbbl) 620 586 1,243 1,169 Total production (Bcfe) 31.3 26.9 63.6 53.3 Average daily production (MMcfe) 344 296 351 294 Questar E&P average commodity price, net to the well Average realized price (including hedges) Natural gas (per Mcf) $6.00 $4.82 $6.13 $4.79 Oil and natural gas liquids (per bbl) $50.11 $40.02 $50.27 $39.38 Wexpro net investment base at June 30, (millions) $220.1 $188.0 Natural gas gathering volumes (in thousands of MMBtu) (1) For unaffiliated customers 35,784 33,539 68,434 66,074 For Questar Gas 9,679 11,226 20,242 22,482 For other affiliated customers 16,977 14,416 34,993 30,262 Total gathering 62,440 59,181 123,669 118,818 Gathering revenue (per MMBtu) $0.29 $0.25 $0.29 $0.25 Natural gas and oil marketing volumes (Mdthe) For unaffiliated customers 25,755 26,347 55,287 55,256 For affiliated customers 24,316 22,095 49,878 44,647 Total marketing 50,071 48,442 105,165 99,903 QUESTAR PIPELINE Natural gas transportation volumes (Mdth) For unaffiliated customers 78,159 61,393 140,876 116,995 For Questar Gas 27,281 26,212 68,138 69,951 For other affiliated customers 5,828 6,505 9,574 8,481 Total transportation 111,268 94,110 218,588 195,427 Transportation revenue (per dth) $0.27 $0.28 $0.27 $0.27 Firm-daily transportation demand (Mdth) 2,135 1,815 QUESTAR GAS Natural gas volumes (Mdth) Residential and commercial sales 16,692 16,843 58,957 56,762 Industrial sales 1,126 1,394 2,277 3,097 Transportation for industrial customers 7,384 7,068 15,869 15,723 Total deliveries 25,202 25,305 77,103 75,582 Natural gas revenue (per dth) Residential and commercial sales $9.73 $7.82 $10.24 $7.99 Industrial sales 7.44 6.24 7.91 6.17 Transportation for industrial customers $0.19 $0.18 $0.19 $0.18 Heating degree days colder (warmer) than normal (25%) 6% (7%) (3%) Temperature-adjusted usage per customer (dth) 18.1 18.2 68.5 68.1 Customers at June 30, 835,511 798,277 (1) one dth = one MMBtu QUESTAR CORPORATION PRELIMINARY CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, December 31, 2006 2005 (in thousands) ASSETS Current assets Cash and cash equivalents $73,760 $13,360 Accounts and notes receivable, net 240,019 458,395 Fair value of hedging contracts 4,482 1,972 Inventories 94,585 125,417 Deferred income taxes - current 36,901 86,734 Other current assets 24,076 69,962 Total current assets 473,823 755,840 Property, plant and equipment 5,822,528 5,527,997 Less accumulated depreciation, depletion and amortization 2,183,778 2,100,455 Net property, plant and equipment 3,638,750 3,427,542 Investment in unconsolidated affiliates 33,915 30,681 Goodwill 71,260 71,260 Other assets, net 72,273 71,750 $4,290,021 $4,357,073 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt $94,500 Accounts payable and accrued expenses $350,649 557,025 Fair value of hedging contracts 28,548 222,049 Total current liabilities 379,197 873,574 Long-term debt 1,032,374 983,200 Deferred income taxes 699,515 624,187 Fair value of hedging contracts 17,270 99,044 Other long-term liabilities 237,676 227,265 Common shareholders' equity 1,923,989 1,549,803 $4,290,021 $4,357,073 QUESTAR CORPORATION PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 6 Months Ended June 30, 2006 2005 (in thousands) Operating activities Net income $227,518 $155,898 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation, depletion and amortization 150,432 122,445 Deferred income taxes 17,813 20,555 Share-based compensation 4,444 2,026 Abandonment and impairment of gas, oil and other properties 3,542 2,898 Income from unconsolidated affiliates, net of cash distributions (709) (1,004) Net gain from asset sales (181) (3,594) Loss from early extinguishment of debt 1,746 Unrealized mark-to-market loss on basis swaps 5,614 Ineffective portion of fixed-price swaps (259) 328 Change in operating assets and liabilities 93,129 26,794 Net cash provided from operating activities 503,089 326,346 Investing activities Capital expenditures (362,451) (283,120) Proceeds from asset dispositions 2,771 16,380 Net cash used in investing activities (359,680) (266,740) Financing activities Common stock 1,394 5,664 Short-term debt (94,500) (31,000) Long-term debt 45,201 (5) Dividends paid (39,354) (37,289) Excess tax benefits from share-based compensation 4,250 Net cash used in financing activities (83,009) (62,630) Change in cash and cash equivalents 60,400 (3,024) Beginning cash and cash equivalents 13,360 3,681 Ending cash and cash equivalents $73,760 $657