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BLM Ruling Allows Questar to Boost Pinedale Production 8 Bcf Next Year

Questar Corp. said Tuesday a ruling by the Bureau of Land Management (BLM) will allow it to produce an additional 8 Bcf of gas next year from its Pinedale Anticline leasehold in western Wyoming. That's enough gas to heat about 96,000 average American homes for one year.

Under the terms of an order released on Nov. 10, Questar and Wexpro will be allowed to supplement their previously approved Pinedale winter-drilling program and conduct limited completion operations during the winter of 2005-2006. The current winter-drilling program allows Questar to drill with six rigs from three pads starting this winter and continuing through the winter of 2013-2014. Under the new proposal, in exchange for additional environmental mitigation measures, the company will add another drilling rig to one of the previously approved winter pads, for a total of seven rigs. It also will be allowed to complete and turn to production three wells that otherwise could not be completed until May 2006.

"Our proposal was made in response to a request from the U.S. Department of the Interior for ideas on how we and other Rockies producers could quickly increase natural gas production in response to hurricane-related curtailments in the Gulf of Mexico," said Charles Stanley, CEO of Questar Market Resources. "The prolific individual well production at Pinedale, coupled with our substantial existing environmental mitigation efforts, allows us to increase production from these properties without compromising the environment."

Stanley said Questar has committed to additional mitigation measures, including adding 250 acres to its existing 1,500-acre habitat enhancement project at Pinedale where it is studying the best way to enhance habitat to offset the impact of development activity. "We'll also take the opportunity to collect important scientific data on the response of wintering mule deer to winter completion operations," he said.

As a result of the production increase, customers of utility subsidiary Questar Gas are expected to see a 2.4 Bcf increase in cost-of-service production in 2006.

Wexpro develops and produces natural gas on behalf of Questar Gas under a long-standing contractual arrangement and currently delivers about half of the utility's natural gas supply on a cost-of-service basis significantly below current market prices.

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