QUESTAR NET INCOME RISES 20% IN SECOND-QUARTER 2002
NONREGULATED PRODUCTION INCREASES 28%

SALT LAKE CITY — Questar Corp. (NYSE:STR) reported second-quarter 2002 net income of $29.4 million, or $.36 per diluted share, compared with $24.5 million, or $.30 per share, in the year-earlier quarter.

Questar, an integrated natural gas company, said nonregulated natural gas, oil and natural gas-liquids (NGL) production rose 28% to 24.3 billion cubic feet equivalent (Bcfe) during the 2002 quarter versus a year earlier. Higher production resulted primarily from the acquisition of eastern Utah producing properties in the third quarter of 2001 and continued success with drilling programs at two major Rocky Mountain development plays.

For the first six months of 2002, Questar earned $64.2 million, or $.78 per diluted share, versus $93.8 million, or $1.15 per share, in the comparable year-earlier period. The year-to-date results included a one-time $15.3 million, or $.19 per share, write-down of goodwill in the first quarter following adoption of a new accounting standard. Excluding the non-cash writedown, Questar's net income for the first six months of 2002 was $79.5 million, or $.97 per share.

There was an average of 82.3 million diluted common shares outstanding for the six months ended June 30, 2002, versus an average of 81.6 million shares for the year-earlier period.

Keith O. Rattie, Questar president and chief executive officer, said "Questar is holding its own in a very difficult market. We're getting the job done with the drill bit. We remain on track to grow our nonregulated gas and oil production by 10% to 15% this year. Our regulated businesses and our Wexpro subsidiary continue to contribute stable earnings and cash flow, providing liquidity and support for our strong credit ratings," Rattie said.

Rattie noted that while the company is delivering on its plan to grow production from its two major Rockies projects – the Pinedale Anticline and the Uinta Basin – realized prices for Rockies production have fallen steeply since April 2002. "We're more hedged than in the past, but poor prices on the unhedged volumes are taking a toll," Rattie said.

Rattie noted that Questar generally sells its equity gas production at first-of-the-month price indexes. The Inside FERC first-of-the-month Rockies index plunged from $2.85 per MMBtu in April 2002 to $1.60 in June and $1.25 in July. The company also sells small portions of its production at spot prices. Rockies spot prices fell below $1 per MMBtu in the second quarter. The company's realized prices are lower than index prices by $.15 to $.50 per Mcf, depending on location and gathering costs.

 "We expect Rockies prices to remain depressed until winter arrives," Rattie said.  "Therefore, we are lowering our earnings guidance for 2002 to $1.70$1.80 per share. This forecast is based on forward price curves at the close of business yesterday. It assumes no new hedges and excludes the goodwill write-down in the first quarter and potential gains from asset sales in the second half of this year," Rattie explained.

SECOND-QUARTER 2002 RESULTS

Market Resources
Questar Market Resources (QMR) – a subsidiary that conducts nonregulated gas-and-oil exploration and production, gas gathering and processing, and energy marketing – earned $22.8 million in second-quarter 2002 versus $20.6 million a year earlier. Wexpro, a QMR subsidiary, improved its net income by $1.4 million over the yearearlier period to $7.9 million.  Wexpro develops reserves owned by Questar's gas-distribution subsidiary and receives a specified return on its investment in successful wells and facilities. QMR's 2002 quarterly results included a $2.8 million after-tax gain from a lawsuit settlement.

Nonregulated natural gas, oil and NGL production totaled 24.3 Bcfe in second-quarter 2002, 5.3 Bcfe higher than during the year-earlier period. QMR purchased producing properties in eastern Utah in July 2001, which accounted for a significant portion of the year-to-year production growth. QMR also continued successful development-drilling programs on the Pinedale Anticline near Pinedale, Wyoming, and its Uinta Basin properties in eastern Utah. This allowed the company to maintain strong production growth despite shutting-in approximately 1.5 Bcf of Rockies production during the quarter due to poor regional pricing.

The average realized price for nonregulated gas production was $2.55 per Mcf in second-quarter 2002, 23% below year-earlier levels. The company hedged, or pre-sold, approximately 11.1 Bcf of its natural gas production at an average price of $3.08 per Mcf, net to the wellhead, during the 2002 period.

QMR's gas-management and energy-marketing operations earned a combined $1 million during the 2002 period, a 15% yeartoyear improvement.

Regulated Services
Questar Regulated Services – comprising Questar's interstate gas-transmission and storage and retail gas-distribution subsidiaries – earned $4.5 million during second-quarter 2002, unchanged from a year earlier. Questar Pipeline's earnings increased to $7.9 million in the second quarter of this year, $1 million over the prior-year quarter. Transportation volumes increased 12% to 82.5 million decatherms (dth). The company's Main Line 104 pipeline began service in mid-November 2001, and remains fully subscribed at 272 million dth per day.

The pipeline's 2002 second-quarter earnings included $1.3 million net income from a subsidiary's 50% ownership of the TransColorado Pipeline in western Colorado. Questar Pipeline recorded a $1 million after-tax loss from its investment in TransColorado in the 2001 period.

Questar Gas – which provides retail natural gas service in Utah and portions of Wyoming and Idaho – reported a seasonal loss of $3.5 million in second-quarter 2002 compared with a $2.5 million loss in the 2001 quarter. Continued strong customer growth – approximately 4% in the 12 months ended June 30 – was offset by declining usage per customer. Questar Gas has filed a $23 million general rate case with the Utah Public Service Commission to address the continuing customer-usage decline and return-on-investment requirements.

Corporate and Other Operations
Corporate and Other Operations had net income of $2 million in the second quarter of 2002 compared with a $600,000 loss in the 2001 quarter. The improvement resulted primarily from reduced losses in Consonus, a data-center hosting subsidiary. Consonus reduced its after-tax losses from $2 million in second-quarter 2001 to $240,000 in the current-year period. The 2001 quarter included a $1.3 million before-tax restructuring charge and $500,000 of goodwill amortization.

SIX-MONTH RESULTS

Market Resources
Market Resources reported net income of $40.4 million for first six months of 2002 compared with $59.0 million in the year-earlier period. While nonregulated gas, oil and NGL production grew 29% to 48.8 Bcfe, the average realized natural gas selling price was 33% lower at $2.49 per Mcf. The average selling price for nonregulated oil and NGL production was 6% lower at $19.72 per barrel.

Net income for Wexpro increased from $13.1 million in the first half of 2001 to $15.5 million in the current year, reflecting higher investment in successful gas-development drilling. Gas-management and marketing activities produced combined earnings of $2.3 million in the first half of 2002 versus $4.6 million for the prior-year period.

Regulated Services
Regulated Services' net income of $36.3 million for firsthalf 2002 was virtually even with earnings for the comparable year-earlier period, reflecting improved earnings from pipeline operations.

Corporate and Other Operations
Losses from Questar's ownership in the Consonus data-center hosting affiliate, before the effect of an accounting change, declined from $3.7 million in the first half of 2001 to $800,000 in the current-year period.

Questar is a $3.1 billion diversified natural gas company headquartered in Salt Lake City. Through subsidiaries, it 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.

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