QUESTAR'S E&P OPERATIONS ON TRACK FOR 2002

SALT LAKE CITY -- Questar Corp. (NYSE:STR) today provided a detailed update on the operating activities of its Questar Market Resources (QMR) subsidiaries, which conduct the corporation's natural gas and oil exploration and production activities.

"We're counting on increasing production from QMR to drive Questar's earnings growth for the next few years," said Keith Rattie, Questar president and CEO (effective May 1, 2002). "Our top investment priority this year and next is to drill up our substantial inventory of low-risk development wells in the Uinta Basin and on the Pinedale Anticline."

"We're on track with our 2002 plan," said Gary Nordloh, president and CEO of QMR. "We expect to increase production by 10-15% this year. We're also making good progress with our evaluation of ‘upside' potential at Pinedale and the Uinta Basin."

QMR's nonregulated production for the first quarter of 2002 was 24.5 billion cubic feet equivalent (bcfe), 31% higher than first-quarter 2001, but slightly lower than fourth-quarter 2001 volumes because of gathering-system constraints and winter-access restrictions at Pinedale, weather-related production curtailments, and property sales.

QMR's nonregulated proved reserves at the end of the first-quarter 2002 were approximately 1,195 bcfe, slightly higher than year-end 2001 reserves of 1,184 bcfe. In the first quarter of 2002, QMR replaced production and added to proved reserves, despite the fact that most of the new wells drilled were previously booked as proved-undeveloped locations. Sixty-nine percent of QMR's proved reserves are in the Rockies. The remaining 31% are in the Midcontinent and western Canada.

In eastern Utah's Uinta Basin, QMR has significantly increased both proved reserves and production since its mid-2001 acquisition of Shenandoah Energy (SEI) operations there.  QMR replaced production and increased proved reserves at the end of the first-quarter 2002 to 481 bcfe, up 12 bcfe from year-end 2001, and up 66 bcfe from the acquisition date. Since the acquisition, proved reserves have increased by 82.7 bcfe, or 20% after accounting for production of 16.7 bcfe. By the end of first-quarter 2002, QMR had increased daily gross gas production by 51% since the acquisition, from 47 million cubic feet per day (MMcfe/d) to 71 MMcfe/d at the end of the first quarter.

On the Pinedale Anticline, QMR replaced production and increased proved reserves slightly to 187.2 bcfe at the end of the first quarter. Gross production from the 33 Questar-operated Pinedale wells was approximately 74 MMcfe/d at the end of the first quarter. Drilling, completion and tie-in activities at Pinedale are severely curtailed during the winter due to restrictions imposed by various stakeholders, including the Bureau of Land Management (BLM) and Wyoming Game and Fish Department. If all planned 2002 wells are drilled and successful, Questar estimates that gross production from its Pinedale area wells could be between 95 MMcfe/d and 105 MMcfe/d by year-end 2002.

QMR also plans to further evaluate the Mesaverde Formation, which lies beneath the Lance Formation at depths greater than 14,000 feet. Following the success of the company's first Mesaverde well at the north end of the Pinedale Anticline, QMR is currently drilling a second Mesaverde well four miles to the south. "We know the Mesaverde is productive throughout the Rockies. Our first Mesaverde well added 3 bcfe reserves and initial production of 5MMcfe/d with the completion of just two intervals," said Nordloh. "This second well will add to our data base. However, I caution that we will need to drill more wells before we can determine the areal extent and production potential of the Mesaverde at Pinedale."  

At the end of the first-quarter 2002, QMR subsidiary Wexpro reported an investment base of approximately $163 million after depreciation, $1.6 million higher than at year-end 2001. Wexpro develops and manages gas-producing properties on behalf of Questar Gas, the corporation's gas-distribution affiliate. This low-cost gas supply, delivered at cost of service, typically makes up about half the utility's annual supply. Under the terms of an agreement with the states of Utah and Wyoming, Wexpro receives a return on its successful investment in development wells.

QMR subsidiaries also completed noncore property sales of approximately $6.6 million in fourth quarter 2001 and $5 million in first quarter 2002. An additional $4 million of property sales have closed or are under contract since the end of the first quarter, bringing the total to $15.6 million. Current plans call for an additional $25-$30 million of noncore QMR properties to be sold before year end with proceeds used to pay down debt.

Operating details:

Uinta Basin

QMR continues its Wasatch Formation natural gas development program in and around its Wonsits Valley Unit, maintaining, at minimum, utilization of the four company-owned drilling rigs. QMR drilled a total of 78 Wasatch wells in the fourth-quarter 2001 and first-quarter 2002. Seventy-six of these will be completed as producing wells. These wells typically produce at an initial rate of 1,000 Mcf/d with ultimate recoverable gross reserves of 1.0 to 1.2 bcf per well from the Wasatch Formation. QMR expects to drill approximately 72 additional Wasatch wells (58 net wells) in the remainder of 2002. This development will take place in known, productive areas of the field with additional step-outs in untested areas, particularly to the north of the Wonsits Valley Unit. At the end of first-quarter 2002, QMR had 334 proven undeveloped Wasatch locations on its acreage in the area.

QMR's crude-oil production from the shallower Green River Formation has remained relatively stable since the acquisition. The company enjoys a "free look" at the Green River Formation with the drilling of each Wasatch well, which helps identify additional low-risk Green River development opportunities. By year end, QMR anticipates drilling 10 additional Green River wells and re-completing existing Wasatch wells in the Green River to take advantage of identified opportunities. In addition, the company recently received regulatory approval to expand its waterflood developments in its Red Wash and Glen Bench units.

QMR continues to evaluate deeper potential in formations below its current Wasatch and Green River operations. These formations may include the Mesaverde, Castlegate, Frontier, Dakota, Morrison and Weber. As in other areas, QMR anticipates reducing its exploration risk in deeper horizons by leveraging its acreage position through an industry partner.

Pinedale Anticline

Questar subsidiaries Questar Exploration and Production Company (QEP) and Wexpro Company (Wexpro) continue to develop their leasehold in the Mesa Area of the Pinedale Anticline. Due to BLM-imposed seasonal restrictions on activity, only 12 of the 16 wells drilled in 2001 were fully completed. Three of the 16 wells were partially completed and one was not completed in 2001. Completion operations have recommenced on one well and should begin on the other three by mid-May when restrictions are lifted. Seven new wells have been drilled in 2002. Three are completed and producing into the sales line, two are completed and will be hooked up by mid-May, and two are waiting on completion. Questar currently has three drilling rigs active on the Mesa Area and anticipates adding a fourth by June.

In addition to completing the four wells carried over from the 2001 program, Questar anticipates 19 new wells will be drilled and completed on its acreage in 2002. The increase in the total number of wells planned for 2002 is due, in part, to the BLM's willingness to expand the drilling window and allow early start dates on several locations after site-specific analysis determined that drilling operations would not negatively impact wildlife.

The current status of wells carried over from 2001 or drilled/drilling to date in 2002 is as follows:

Mesa 2-16D Well, NWNE of Sec. 16, T32N, R109W, was directionally drilled to a measured depth (MD) of 13,730 feet from a two-well pad late in 2001. In early May, after drilling is completed at the second well on the pad, six Lance intervals in the 2-16D will be fracture stimulated. The well is expected to be producing into the sales line by mid-June. Questar has a 92% working interest.

Mesa 9-17D Well, NESE (BHL) of Sec. 17, T32N, R109W, was directionally drilled to 13,308 feet from a two-well pad and completed in ten intervals in March, with an initial potential (IP) of 12,457 Mcf/d. Questar has a 92% working interest.

Stewart Point 9-29D Well, NESE (BHL) of Sec. 29, T33N, R109W was directionally drilled to a measured depth of 13,885 feet. In October, two Mesaverde intervals were completed at an IP of 5,014 Mcf/d. In June, ten intervals in the Lance Formation will be added. Questar has an approximate 58% working interest.

Stewart Point 9-33 Well, NESE of Sec. 33, T33N, R109W was drilled to 13,177 feet and completed initially in two intervals in 2001. Completion operations in additional intervals are currently underway. Questar has 58% working interest.

Mesa 9-7 Well, NESE of Sec. 7, T32N, R109W. Six of ten intervals were completed in 2001 and the well produced to sales over the winter. Completion of the remaining four intervals is expected to begin soon. Questar has an approximate 90% working interest.

Mesa 4-16D Well, NWNW of Sec. 16, T32N, R109W was directionally drilled from the Mesa 2-16D pad to a measured depth of 13,705 feet and will be completed in 11 intervals in June. Questar has a 92% working interest.

Mesa 9-16 Well, NESE of Sec. 16, T32N, R109W was drilled to a total measured depth of 13,250 feet and was completed in 10 intervals with an IP of 7,765 Mcf/d in March. Questar has a 92% working interest.

Mesa 10-16 Well, NWSE of Sec. 16, T32N, R109W drilled to 13,268 feet and was completed in April in 11 Lance intervals with an IP of 9,060 Mcf/d. Questar has a 92% working interest.

Mesa 12-16 Well, NWSW of Sec. 16, T32N, R109W was drilled to a total depth of 13,160 feet  from the same pad as the Mesa 9-17D and was completed in nine intervals for an IP of 12,422 Mcf/d. Questar has a 92% working interest in this well.

Mesa 14-16 Well, SESW of Sec. 16, T32N, R109W was drilled to a total depth of 13,269 feet and is being completed in 11 intervals. Questar has a 92% working interest.

Mesa 15-16 Well, SWSE of Sec. 16, T32N, R109W was drilled to a total depth of 13,234 feet and was completed in February in 11 Lance intervals for an IP of 10,716 Mcf/d. Questar has a 92% working interest.

Mesa 16-16 Well, SESE of Sec. 16, T32N, R109W was drilled to 13,237 feet and was completed in ten intervals for an IP of 10,716 Mcf/d and is expected to be producing to sales in early May. Questar has about 93% working interest.

Questar's 2001/2002 drilling activity in Section 16, T32N, R109W established the feasibility of pad drilling and year-round operations that can be applied elsewhere on the Mesa, and confirmed the potential for development on 40-acre spacing in that area.

Drilling and completion results and production performance to date remain consistent with Questar's reserve estimates of 6 bcfe per well from the Lance Formation in the southern area of the field. Prior to 2001, southern-area reserves were estimated at 5 bcfe per well on average. Increasing the number of completion intervals per well combined with sustained production performance on existing wells supported a higher estimate of 6 bcfe per well. In the northern part of the field, reserves are currently estimated at 5 bcfe per well. Documented higher reservoir pressure in the north and continued successful development in that area are expected to support increased per-well reserve estimates in the future.

QEP and Wexpro have approximately a 60% average working interest in 14,800 gross acres in the Mesa Area of the Pinedale Anticline and anticipate that there are between 135 and 150 Lance-Formation locations on its acreage based on 80-acre spacing. The number could potentially double if field-wide downspacing to 40-acre spacing is determined to be appropriate.

Questar (QEP and Wexpro) currently has booked reserves associated with 33 proved-developed-producing (PDP) wells, 5 proved-developed-nonproducing (PDNP) wells, and 47 proven-undeveloped (PUD) locations based on 80-acre spacing. Numerous other locations exist, but have not been booked due to regional low gas prices late in 2001 and early 2002. The results of the 2002 drilling program and improvement in gas prices are expected to create additional high-quality locations that can be booked.

Questar is seeking permits for drilling locations for its 2003 Pinedale drilling program and plans to build several locations this fall for drilling next year. In addition, Questar is working with the BLM, Wyoming Game and Fish and environmental groups to gain approval for a pad location in T33N, R109W from which several wells could be drilled this winter. The drilling operations will be used to study the impact, if any, of E&P operations on wintering deer. Completion operations on this proposed pad would be delayed until mid-2003 to minimize impact on wildlife.

Rendezvous Gas Services has expanded existing gathering facilities south of the company's acreage and installed rental compression to lower gathering-line pressure and enhance the production rates of some wells. The pipe that will expand the gathering system and increase its capacity within the field has been ordered. Installation of permanent compression equipment is underway with an anticipated service date of July 2002. Questar Gas Management, a Questar subsidiary that provides gathering and processing services, is a 50% owner in the Rendezvous joint venture along with Western Gas Resources.

Questar is a $3.1 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 marketing; retail energy services; interstate gas transmission and storage; retail gas distribution; and information systems and technologies.

This release contains certain forward-looking statements within the meaning of the federal securities laws. Such statements are based on management's current expectation, 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 Securities and Exchange Commission, including its annual report on Form 10-K for the year ended Dec. 31, 2001. The company has no obligation to update the statements contained in this new release or take actions described herein or otherwise presently planned.