Strong growth in its exploration and production business and midstream operations led to a 32% increase in Questar Corp.'s net income in 2004 to $229.3 million ($2.67/share). The company posted a 12% increase in natural gas and oil-equivalent production and realized a 15% increase in natural gas prices. Performance for the fourth quarter also was impressive with a 23% increase in net income to $73.7 million (85 cents/share) compared to the same period in 2003.
"Questar is one of the fastest growing natural gas producers in the U.S.," said CEO Keith O. Rattie. "In a year when most U.S. producers struggled to grow reserves and hold production flat, we bucked the industry trend -- we grew production by 12% and proved reserves by 24%. We grew production and reserves in the Rockies and the Midcontinent, and we did it with the drill bit. Bottom line, we did what we set out to do on the E&P side of our business in 2004. Execution will again be the key in 2005 and beyond."
Earnings from Questar Market Resources (QMR), its unregulated subsidiary that includes exploration and production, gas gathering and processing, cost-of- service gas development and other activities, increased 43% to $165.4 million, which was about 72% of Questar's 2004 net income. Net income for Questar E&P grew 54% to $108.2 million, while production grew 12% from 2003 levels to 103.5 Bcfe. Net income for the company's natural gas-gathering and processing business grew 58% to $21 million, and Questar Energy Trading earned $0.9 million in 2004 versus a loss of $0.4 million in 2003.
Earnings for Questar Pipeline fell from $30.2 million in 2003 to $27.6 million in 2004. Net income was reduced by $3 million after tax due to an adverse Federal Energy Regulatory Commission (FERC) order concerning proceeds from liquid sales at a processing plant.
Net income for Questar Gas, the company's retail natural gas distribution utility, increased by $11.3 million in 2004 to $31.5 million.
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