Questar E&P operates in two core areas - the Rocky Mountain region of Wyoming, Utah and Colorado and the Midcontinent region of Oklahoma, Texas and Louisiana. Division exploration offices are located in Denver, Colorado, Tulsa, Oklahoma and Oklahoma City, Oklahoma.

The company has a large inventory of identified development-drilling locations primarily at properties near Pinedale, Wyoming, in the Uinta Basin of Utah, in the Elm Grove field of northwest Louisiana and in the Texas Panhandle Granite Wash play. Most of the Company's current drilling activity is development or step-out in nature; however the Company does conduct exploratory drilling to determine commerciality of its inventory of undeveloped leaseholds in prospects located primarily in the Rocky Mountain region, including assessment of deeper reservoirs beneath currently producing horizons. The Company has operated continuously in many of its core Rockies areas since the 1920's, including in the Vermillion Basin on the border of southwestern Wyoming and northwestern Colorado where the Company has drilled twenty-one new wells and recompleted two older wells to evaluate the potential of deeper tight-sands and shale formations from 10,000' to 13,500' (Baxter, Frontier and Dakota formations). Questar E&P has drilled three horizontal wells in the Baxter formation, two of which are currently completing. Horizontal wells should increase the chance of intersecting natural fractures which are believed to be key to obtaining economic rates from the Baxter Shale in the Vermillion Basin.

The company has also been exploring the potential of the Mancos Shale, Blackhawk and Dakota formations on its extensive leasehold in the Uinta Basin of eastern Utah. The Mancos Shale is age equivalent to the Baxter Shale in the Vermillion Basin. Questar E&P has completed seventeen wells ranging in depth from 13,000' to over 17,000' to test the productive capability of these formations. With the ability to commingle the wells from these deeper targets and the shallower Wasatch and Mesaverde formations, the company believes the program is repeatable and economic and intends to drill approximately 30 deep wells in the Uinta Basin in 2008. In addition, the company plans to acquire 280 square miles of 3D seismic covering its 120,000 net acres in its core area.

Questar is a major operator on the Pinedale Anticline in southwest Wyoming, one of the most significant gas development projects in North America. In August 2005 the Wyoming Oil and Gas Conservation Commission approved 10-acre density drilling for the Lance Pool formation under Questar’s prospective acreage. As of December 31, 2007, Questar had drilled and completed 250 of the approximate 932 potential 10-acre density Lance Pool locations on its acreage. Questar E&P has an average Lance Pool working interest of 59.4% in 873 of the 932 locations, Wexpro Company has an average Lance Pool working interest of 51.3% in 215 of the 932 locations - resulting in a combined average Lance Pool working interest for Questar E&P and Wexpro Company of 67.5% in the 932 locations. In exchange for significant mitigation measures, the Bureau of Land Management (BLM) in November 2004 granted Questar E&P a 9-year waiver of the winter-drilling restrictions, allowing Questar E&P to operate 6 drilling rigs from 3 pads each winter (beginning in the winter of 2005-2006) on its Pinedale acreage. Questar completed 55 new Lance Pool wells during 2007. The BLM has published the Revised Draft Supplemental Environmental Impact Statement for the Pinedale Anticline Project Area (SEIS). Under the operators' proposal, winter drilling would be expanded and winter completions would be allowed in concentrated development areas in exchange for operator funded mitigation including directional drilling and habitat enhancement. A Record of Decision for the SEIS is expected during the second quarter of 2008.

Questar E&P seeks to maintain geographical and geological diversity with its two core regions. In the Midcontinent, Questar E&P has several active development projects, including an ongoing Granite Wash formation-development project in the eastern Texas Panhandle and a Cotton Valley/Hosston formation tight-sands gas-development project in northwest Louisiana.

The company has a history of making successful acquisitions and continues to pursue acquisitions of producing properties (assets or corporate entities) to expand its presence in its core areas or create a new core area.

Questar E&P's primary focus is natural gas. At year-end 2006, Questar E&P had proved reserves of 1,631.4 Bcfe. Approximately 61% of year-end 2006 total proved reserves were classified as proved developed producing. The largest concentration of proved undeveloped reserves is at the Pinedale development project, where at year-end 2006 approximately 585 Bcfe were classified as proved undeveloped. Questar E&P's net production totaled 129.6 Bcfe in 2006, an increase of 13% over 2005 production volumes. In 2006, Questar E&P participated in the drilling of 572 gross wells with a 95% net success rate.