We’re weathering the storm, said Keith O. Rattie, Questar chairman, president and chief executive officer. We’ve lowered EPS guidance to account for higher Questar E&P depreciation due to price-related negative reserve revisions. But we’re maintaining 2009 production guidance, despite some provision for price-related production curtailments. Questar E&P grew production 19% in the first quarter- driven by a 44% increase in the Midcontinent. We’ve hedged about 73% of Questar E&P’s remaining 2009 production at attractive prices, and Questar’s five other businesses all generate earnings and cash flow that are relatively insensitive to energy prices. Equally important, our balance sheet is strong, we have adequate liquidity, and we remain focused on returns – we’ve shifted capital to projects that deliver acceptable returns even in today’s distressed market, Rattie added.

First Quarter 2009 Highlights

Questar E&P grew natural gas, oil and natural gas liquids (NGL) production 19% to 46.9 billion cubic feet of natural gas equivalent (Bcfe) compared to 39.5 Bcfe for the 2008 quarter. Natural gas comprised 88% of reported production volumes.

Average realized natural gas prices at Questar E&P decreased $0.26 per thousand cubic feet (Mcf), or 4%, and average realized crude oil and NGL prices decreased $40.09 per barrel (bbl), or 54%. Natural gas hedges increased reported revenues by $136.4 million and oil hedges increased revenues by $4.6 million.

Net mark-to-market losses on natural gas basis-only swaps decreased net income $84.7 million in the 2009 quarter compared to a gain of $8.6 million in the year-earlier period.

Wexpro investment base grew 27% to $400.1 million at March 31, 2009. Wexpro produced 13.2 Bcf of cost-of-service gas for delivery to affiliate Questar Gas, up 20% from 11.0 Bcf in the 2008 quarter.

Gas Management net income fell 38%, due to lower processing margins and increased depreciation expense. Net processing revenues decreased 41% to $11.9 million due to a 72% decrease in keep-whole processing margin (frac spread). Depreciation expense grew $4.6 million or 73% as the result of investment additions in 2008.

Questar Pipeline net income fell to $14.7 million in the first quarter of 2009, an 8% decrease from the year-ago period, due to lower NGL sales.

Questar Gas earned $31.8 million, 4% higher than a year ago, driven by an increase in Utah general rates effective August 2008 and customer growth.

Questar earned a 13.0% return on assets (ROA – defined as earnings before interest and income taxes divided by average total assets) for the trailing 12-month period ended March 31, 2009. Market Resources ROA was 14.5%; Questar Pipeline ROA was 10.2%; and Questar Gas ROA was 7.9%.

Questar Updates 2009 EPS and Production Guidance

Questar now expects full-year 2009 net income to range from $2.30 to $2.45 per diluted share compared to previous guidance of $2.50 to $2.70 per diluted share. This revised guidance assumes a higher Questar E&P average depreciation, depletion and amortization rate per Mcfe as the result of first quarter price-related reserve revisions. The company estimates that Questar E&P 2009 production will range from 180 to 186 Bcfe, unchanged from prior guidance and up about 5 to 9% from 2008.