QUESTAR ANNOUNCES HIGHER FOURTH-QUARTER, 1999 EARNINGS

SALT LAKE CITY — Questar Corp. (NYSE:STR) reported net income of $98,830,000, or $1.20 per diluted share, in 1999 compared with $76,899,000, or $.93 per diluted share, a year earlier.

The integrated natural gas company reported significantly higher earnings from oil and gas exploration and related activities and sales of telecommunications securities in 1999. Corporate results were hampered by lower earnings from regulated businesses, including a $31.3 million after-tax write-down in the fourth quarter of a subsidiary's investment in an interstate pipeline asset. (The 1998 net income included a $20.3 million after-tax write-down of oil and gas properties.) Excluding the write-downs, Questar earned $130,130,000, or $1.58 per share, in 1999 versus $97,214,000, or $1.18 per share, in 1998.

Net income for Questar's Market Resources group — which conducts oil and gas exploration and production, development, and gas gathering, processing and trading — rose 35% (excluding a 1998 write-down). Primary factors were a 22% increase in gas production and higher commodity prices.

For the fourth quarter of 1999, Questar's net income was $17,294,000, or $.21 per share. Earnings were $11,586,000, or $.14 per share, for the comparable year-earlier quarter. Before the write-downs, the company's fourth-quarter net income was $48,594,000, $.59 per share, in 1999 and $31,901,000, $.39 per share, in 1998.

There was an average of 82.7 million diluted common shares outstanding in 1999 and 82.8 million in the prior year.

"Our nonregulated lines of business had a record year in 1999, with a 22% increase in natural gas production, complemented by stronger gas, oil and natural-gas liquids prices," said R.D. Cash, Questar chairman, president and chief executive officer. Combined gas and oil production for subsidiary Questar Exploration and Production Co. (QEP) increased 17% to an all-time-high 76.6 billion cubic feet of gas equivalent (Bcfe) in 1999. This represented the fourth consecutive year of record production and the ninth increase in the last 10 years. QEP replaced 131% of production in 1999 through reserve additions, revisions and acquisitions amounting to 134.1 Bcfe. Wexpro Co., a contract-management subsidiary, produced 3.3 Bcfe in 1999, comparable with a year earlier. QEP and Wexpro comprise Questar's nonutility energy operations.

"Our outstanding success with our telecommunication activities and investments helped to offset the earnings impact of the disappointing, but necessary, pipeline investment write-down. With the prospect of improving energy prices and increasing production and reserves, we are looking to markedly improve our earnings and overall performance in 2000," he said.

Fourth-Quarter Results

Market Resources earned $15.9 million in the fourth quarter of 1999 compared with $6.4 million a year earlier (before the $20.3 million after-tax write-down). Including the write-down, the group lost $13.9 million in the 1998 period.

Natural gas production for the quarter was 16% higher than a year earlier, while the average selling price increased 11% to $2.15 per thousand cubic feet (Mcf). Oil and natural-gas liquids sold for an average of $17.73 per barrel, a 52% improvement over year-earlier levels, while production declined 15% to 677,000 barrels. (All Questar sale prices were net to the wellhead.) In the fourth quarter of 1999, Questar sold oil-and gas-producing properties in New Mexico, west Texas and Kansas with combined daily production rates of 4.3 million cubic feet of gas and 1,100 barrels of oil.

Wexpro, which manages producing properties on behalf of Questar's retail gas- distribution subsidiary, earned $5.7 million during the fourth quarter of 1999 — a $700,000 year-to-year improvement. The company increased its investment in gas-drilling and development activities.

Market Resources' gas gathering, processing and energy-trading subsidiaries reported combined net income of $2.3 million for the fourth quarter of 1999 compared with a $1 million loss in the prior-year period. Gathering volumes increased by 15% to 35.8 million decatherms (dth) compared with the year-earlier quarter due to greater drilling and production activity in the Rocky Mountain region.

During the fourth quarter of 1999, Questar Regulated Services lost $19 million, including the $31.3 million after-tax pipeline partnership write-down. Net income during the comparable 1998 period was $24.4 million.

Questar Pipeline Co., an interstate transmission and storage company, lost $26.9 million during the quarter versus a year-earlier $8.3 million gain. A Questar Pipeline subsidiary is a 50% partner, along with a Kinder Morgan Inc. subsidiary, in the TransColorado Pipeline. TransColorado extends 292 miles from northwestern Colorado to a northern New Mexico pipeline hub. The pipeline cost approximately $310 million and began operation in April 1999.

With continuing low volumes due to unfavorable regional transportation economics, the company recorded an other-than-temporary decline in its partnership investment, resulting in the $31.3 million after-tax charge to net income. Questar has the contractual option to put its 50% ownership of the pipeline interest to its partner, beginning April 2001. Questar's share of TransColorado's operating losses in 1999 averaged $900,000 per month for its nine months of operation. Subsequent to the write-down, the partnership results are not expected to affect Questar Pipeline's earnings.

Excluding the write-down, Questar Pipeline's net income was $4.4 million, a $3.9 million decline from the 1998 quarter. The decline is attributable to operating losses and interest expense associated with TransColorado.

Questar Gas Co., a retail gas-distribution utility, had net income of $7.7 million in the current-year fourth quarter compared with $16.2 million in the 1998 period. A primary factor was the Utah Public Service Commission's denial of the company's request to recover approximately $3.6 million of gas-processing expenses incurred from June to December 1999. The commission ruled the company could not recover the costs as part of its semi-annual gas-cost rate filing. The company has filed a general rate case with the commission seeking recovery of the gas-processing costs and other revenue increases. The commission granted the utility approximately $7 million per year of interim rate relief, effective Jan. 1, 2000. The interim relief is subject to refund, pending the commission's final order that must be issued by Aug. 14. Questar Gas had requested the $7 million interim relief to offset the gas-processing charges during the hearing process.

Questar Gas' fourth-quarter earnings also were reduced by continuing lower usage per customer and higher costs related to rapid customer growth. The utility had 686,000 customers on Dec. 31, 1999, an annual increase of 23,000, or 3.5%, about twice the industry average.

Net income from Other Operations totaled $20.4 million in the fourth quarter of 1999 versus $1.1 million a year earlier. Questar sold 347,000 shares of Nextel Corp. common stock and realized an after-tax gain of $17.8 million. Questar InfoComm, an information technology affiliate, had $2.2 million in earnings. The quarterly results included a $3.5 million after-tax income from the sale of shares in Nextlink Communications and $1.8 million of after-tax expenses related to an early retirement program. In the comparable 1998 period, Questar InfoComm reported $800,000 of net income.

1999 PERFORMANCE

Questar's Market Resources group earned $45.9 million in net income for full-year 1999, an all-time high, compared with $13.7 million in 1998. Natural gas production increased 22% to a record 62.7 Bcf while prices were 4% higher. After falling in the first half, the average selling price of gas rebounded in later periods and averaged $2 per Mcf for the year. Oil and natural-gas liquid production declined 1% in part because of asset sales, while the average price per barrel was 14% higher at $14.49. (All Questar sale prices were net to the wellhead.)

Wexpro's net income increased by $2.2 million over the year-earlier total, and energy trading and gas gathering and processing results improved by $3.6 million.

Questar Regulated Services' net income declined from $54.8 million in 1998 to $11 million in 1999. The decline was due mainly to the pipeline investment write-down, increased costs of rapid customer growth coupled with lower customer usage, and the disallowed gas-processing costs.

Net income from Other Operations increased from $8.4 million in 1998 to $41.9 million, including $36.9 million after tax from sales of telecommunications common stock. Questar sold 1.15 million shares of Nextel and 165,000 shares of Nextlink during 1999. Net income from Nextel sales and other stock transactions amounted to $4.3 million in 1998.

Questar is a $2.2 billion integrated energy resources and services company headquartered in Salt Lake City. Through subsidiaries, it engages in energy development and production; gas gathering and processing; wholesale gas, electricity and liquids trading; retail energy services; interstate gas transmission and storage; retail gas distribution; and information systems and technologies.

This news release contains some forward-looking statements about the future operations and expectations of Questar Corp. and its subsidiaries. These statements were made in good faith, and the corporation believes they are reasonable representations of the company's expected performance at this time. Actual results may vary from stated expectations due to a variety of factors.