Questar Corp. (NYSE:STR) today reported encouraging initial results from its 2001 drilling program on the Pinedale Anticline in western Wyoming, including increased reserve and production potentials and expanded drilling.

Questar subsidiaries -- Questar Exploration and Production (QEP) and Wexpro – have an approximate 60% average working interest in 14,800 gross acres in the Mesa Area of the Pinedale Anticline, located 100 miles north of  Rock Springs. In 2001, the companies have drilled five new wells, resulting in one producing gas well and four awaiting completion. Five wells carried over from the 2000 drilling program also are being completed.

Gary L. Nordloh, QEP and Wexpro president and chief executive officer, said "Initial results from the 2001 drilling and completion operations are encouraging." He noted the following:

• The productive reserve potential of the average well on Questar's Pinedale acreage should exceed earlier estimates.
• Drilling and completion activity could be more than 50% higher than in 2000.
• Questar could book reserves associated with 40 additional proved developed and undeveloped well locations by year-end 2001 under 80-acre spacing.
• Questar is investigating the feasibility of 40-acre spacing with additional drilling during the year.
• Gross gas and condensate production at Pinedale could triple over levels at the end of 2000.

Questar estimates between 135 and 150 ultimate Lance formation locations based on current 80-acre spacing. Reducing well spacing to 40 acres could double potential well locations and reserve estimates.

The Pinedale Anticline is a tight-sands play, and each well is fracture-stimulated in several "intervals" or producing zones. Earlier wells were completed with an average of eight producing intervals and a reserve potential of 5 to 6 billion cubic feet equivalent (Bcfe). In 2001, Questar projects an average of 12 intervals per well, which may increase reserve potentials to 6 to 7 Bcfe per well.

Questar also anticipates that 17 wells – including the five currently under way – could be drilled and completed on its acreage in 2001, more than previously expected. Nordloh said the Bureau of Land Management (BLM) and Wyoming Fish and Game permitted the company to commence drilling activity a month earlier than in 2000. Site-specific analyses indicated that beginning drilling operations earlier would not have a negative impact on wildlife. Questar currently has three drilling rigs on the Pinedale site, with two more expected by July 1.

Questar has booked reserves associated with 14 proved developed producing (PDP) wells and 54 proven undeveloped (PUD) locations in the Pinedale area. Approximately 85% of Questar's Pinedale potential reserves and production belongs to QEP, with Wexpro owning

the remaining 15%. Nordloh said if all the planned wells in 2001 are successful, Questar could book reserves for 33 PDP wells and 75 PUD locations by year-end. QEP would have a working interest in 26 PDP wells and 75 PUD locations.

With the accelerated drilling program, Questar projects that oil and gas production  from the Pinedale project at year-end 2001 could triple over year-earlier levels, if completion rates and reserve additions continue at current rates. Gross daily production from 14 Questar-operated wells in the Pinedale area on Jan. 1, 2001, was approximately 24 million cubic feet of gas (MMcf) and 220 barrels of condensate. Assuming  planned 2001 wells are successful, gross daily production by Dec. 31, 2001, could be between 75 to 80 MMcf and 700 and 750 barrels of condensate.

 Questar Gas Management, a Questar affiliate, plans to construct additional gathering facilities to connect  Pinedale production to nearby processing facilities. The company is securing regulatory permits to expand its existing facilities south of the Pinedale acreage. In addition, new compression equipment will be installed to lower the gathering-line pressure and enhance well-production rates. Questar Gas Management has ordered pipe and compression equipment and projects a service date of Nov. 15 for the Pinedale area compression project.

Nordloh said gross finding costs for Pinedale could be approximately $.55 per thousand cubic feet equivalent, assuming continuation of successful completions and projected reserve additions. Increased interval stimulation and production are expected to offset higher drilling and completion costs. Future wells drilled to depths of approximately 13,000 feet will cost between $2.8 million and $3.6 million, depending on well-casing requirements and drilling techniques. Questar is using intermediate well-bore casing strings and higher drilling-mud

weights in certain wells to avoid complications in shallower zones. Drilling costs also have been impacted by significantly higher drilling-rig rates and fracture-stimulation charges.

The current status of wells carried over from 2000 or drilled or drilling to date is as follows:

– Mesa 7-8, SWNE of Sec. 8, T32N, R109W, was initially completed on Nov. 27, 2000,  with six fracture-stimulated intervals and an initial flow rate of 7.5 million cubic feet per day (MMcf/d). Eleven of 15 planned intervals (including the six completed in 2000) have been completed. The well – in which Questar has an approximate 63% working interest – is expected to begin production by mid-July.

– Mesa 15-6, SWSE of Sec. 6, T32N, R109W, was completed on Nov. 28 with two fracture-stimulated intervals and an initial flow rate of 2.6 MMcf/d. Six of 13 planned intervals (including two completed in 2000) have been completed. The well – in which Questar has an approximate 93% working interest before payout – should resume production by mid-July.

– Stewart Point 16-29, SESE of Sec. 29, T33N, R109W. No intervals were completed in 2000. Eight of 15 planned intervals have been completed. The well – in which Questar has an approximate 57% working interest – is expected to begin production by mid-July.

– Stewart Point 5-20, SWNW of Sec. 20, T33N, R109W. No completion operations were conducted in 2000, but should commence in June. Questar has a 100% working interest before payout.

– Mesa 7-7, SWNE of Sec. 7, T32N, R109W. No intervals were completed in 2000, but eight of 13 have been completed this year. The well – in which Questar has a 98% working interest before payout – is expected to begin production by mid-July.

– Mesa 11-16, NESW of Sec. 16, T32N, R109W, was drilled to a total depth of 13,276 feet. Thirteen intervals were completed and it began production on Mar. 28, 2001. The current producing rate is limited by the surface facility capacity. Initial potential flow rate for the well -- in which Questar has a 92% working interest – was 19.6 MMcf/d, with a flowing-casing pressure of 1,350 psi.

– Mesa 3-16d, NENW (BHL) of Sec. 16, T32N, R109W, was drilled to a total depth of 13, 566 feet and is waiting on completion. The well was drilled from the same pad as the Mesa 7-16d, and completion of both wells is imminent. Questar has an approximate 92% working interest.

– Mesa 7-16d, SWNE (BHL) of Sec. 16, T32N, R109W, was drilled to a total measured depth of 13,765 feet and is awaiting completion. Questar has an approximate 92% working interest.

– Mesa 11-20, NESW of Sec. 20, T32N, R109W, was drilled to a total depth of 13,300

feet and is waiting on completion. Questar has an approximate 63% working interest before payout.

-- Mesa 5-8, SWNW of Sec. 8, T32N, R109W, was drilled to a total depth of 13,170 feet and is awaiting completion. Questar has an approximate 90% working interest before payout.

– Mesa 3-7, NENW of Sec. 7, T32N, R109W, is currently drilling. Questar has an approximate 90% working interest before payout.

– Mesa 11-17, NESE of Sec. 17, T32N, R109W, is currently drilling. Questar has an approximate 63% working interest.

– Stewart Point 4-32, NWNW of Sec. 32, T33N, R109W, is currently drilling. Questar has a 100% working interest.

Questar's drilling activity in Sec. 16, T32N, R109W, is investigating the potential for downspacing Pinedale development from 80 acres to 40. The company also is working with the agencies to evaluate the feasibility of pad drilling and year-round operations that could be applied elsewhere. Questar is permitting locations for its 2002 Pinedale drilling program and plans to build several drilling locations this fall. Drilling operations – including up to three wells –  should commence on another pad location in Sec. 16, T32N, R109, toward year end. In addition, Questar is working with the BLM, Wyoming Fish and Game and environmental groups to gain approval for a pad location in T33N, R109W, from which drilling operations could continue during the winter. This pad location would be used to study any potential impact of drilling operations on wintering deer. Completion operations on the pad would be delayed until spring or summer 2002 to minimize impact on wildlife. 

Questar is a $2.5 billion diversified natural gas 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.

Forward-Looking Statements:

This release contains statements expressing expectations of future plans, objectives and performance that constitute forwardlooking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements based on future expectations rather than on historical facts are forwardlooking statements that are dependent on certain events, risks and uncertainties that could cause actual results to differ materially from those anticipated. A discussion of risks and uncertainties, which could affect future results of Questar and its subsidiaries, is included in the company's periodic reports filed with the Securities and Exchange Commission.

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