Questar Announces Agreement for Sale of Canadian E & P Subsidiary

SALT LAKE CITY — Questar Market Resources Inc. (QMR), a wholly owned subsidiary of Questar Corp. (NYSE: STR), announced today an agreement to sell 100% of the shares of its Canadian exploration and production subsidiary, Celsius Energy Resources Ltd. (CERL), and the retirement of associated debt for total consideration, prior to adjustments, of $Cdn160 million (approximately $US101 million). The purchaser is EnerMark Inc., a subsidiary of Calgary-based Enerplus Resources Fund (NYSE: ERF).

CERL has current net (after royalties) daily production of about 28 million cubic feet of gas equivalent and approximately 76 billion cubic feet of gas equivalent proved reserves located primarily in the provinces of Alberta and British Columbia. 

"The CERL divestiture is an important step in our plan to reduce debt through sale of nonstrategic assets," said Keith Rattie, Questar president and CEO. "CERL represents about 10% of QMR's current nonregulated production and about 8% of nonregulated reserves, and in the first half of this year generated $US 1.0 million of net income, so this transaction will have only a modest impact on QMR's ongoing operations and financial performance," he said. "QMR will focus on its inventory of low-risk development locations in its core properties to drive production and earnings growth in the future."

The transaction is effective as of July 31, 2002. Closure of the sale is subject to typical conditions including approval under Canada's Competition Act. The companies anticipate completing the transaction before year-end.

Questar is a diversified natural gas company headquartered in Salt Lake City with more than $3.1 billion in assets. Through subsidiaries, Questar engages in gas and oil development and production; gas gathering, processing and marketing; interstate gas transmission and storage; retail gas distribution; retail energy services; and information systems and technologies.

Forward-Looking Statements:

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. 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 presently planned.