Salt Lake City’s Questar Corp. said Wednesday it may spin off its natural gas and oil exploration and production (E&P) business, which also would contain the company’s midstream and energy trading units.

The new E&P company would be comprised of Questar E&P Co., Questar Gas Management and Questar Energy Trading. The gas management unit is a midstream field services company that gathers and processes natural gas in the Rocky Mountain region and in the Haynesville Shale of northwest Louisiana. The trading business markets natural gas and oil on behalf of Questar E&P and operates a gas storage facility in western Wyoming.

“A separation of our high-growth E&P business from our regulated businesses may be a logical step in a long-term strategy that has served all Questar stakeholders well over the past decade,” said CEO Keith O. Rattie. “We’re evaluating whether now is the time to take that step. If consummated, we believe the spin-off would create two top-tier companies in their respective market segments.”

After the spin-off, Questar Corp. would continue to be an integrated gas company holding subsidiaries Wexpro Co., Questar Pipeline and Questar Gas Co. Wexpro develops and produces gas on behalf of Questar Gas Co.’s utility customers. The pipeline unit operates interstate gas pipes and storage facilities in the western United States, and the regulated gas utility serves around 900,000 homes and businesses in Utah, Wyoming and Idaho.

The corporate headquarters would not change.

Questar already has engaged financial and legal advisers to assist with the evaluation, Rattie said. If the board of directors approves, the transaction could be done in the second half of the year, he said.

The company is scheduled to release its 1Q2010 earnings next Tuesday (April 27), with a conference call scheduled the following day.

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