Questar Exploration and Production (E&P) Co. said late Monday its 1Q2010 natural gas-rich output reached 51.5 Bcfe, which is 10% higher than in the year-ago period.

The E&P unit also raised its 2010 production guidance to 212-217 Bcfe.

Natural gas comprised 90% of production in the first three months of this year, said the Questar Corp. subsidiary, which may be spun off later this year (see Daily GPI, April 22).

The E&P unit produced more gas and oil in the last three months of 2009 — 55.4 Bcfe. It credited the increased volumes on wells that were returned to sales after being shut in or curtailed in 2Q2009 and 3Q2009, as well as the completion of an inventory of standing drilled and cased wells.

The E&P Rockies region production “typically” declines in the first half of every year, said the E&P, because of planned deferral of well completions during the coldest winter months. Most of the deferrals were at the Pinedale Anticline field in western Wyoming.

“Questar E&P is on track to grow 2010 production to 212-217 Bcfe, or 12-15% over 2009 volumes,” said Questar E&P CEO Chuck Stanley. “Our diversified growth strategy is paying off. Driven by strong well results from the Haynesville Shale in Louisiana, and the Woodford ‘Cana’ Shale in Oklahoma, 51% of Questar E&P first quarter 2010 production came from the Midcontinent region.

“Our talented asset managers continue to drive down drilling and completion times, and thus overall well costs in our core plays in the Rockies and the Midcontinent.”

Since its last operations update, Questar E&P has completed and turned four operated Haynesville wells in northwestern Louisiana to sales, each with strong initial rates and flowing pressures that range from a low of 11.6 MMcf/d to a high of 16.3 MMcf/d. Its current gross output from its operated wells in the field is more than 180 MMcf/d.

In the Pinedale Anticline, Questar E&P drilled a 14,165-foot directional well from spud to total depth in 12.8 days, which bested its previous drilling record there of 13 days, set in 4Q2009.

One new company-operated well was completed in 1Q2010 in the Anadarko Basin’s Cana Shale, which is part of the Woodford Shale in western Oklahoma. This year the unit plans to participate in 12 new Woodford Shale completions, including two that are company-operated.

Questar E&P also completed its first operated horizontal well in Granite Wash in the Texas Panhandle. The well was drilled in the Caldwell zone of the Granite Wash to a measured depth of 17,050 feet. Since the last operational update, the E&P unit has increased its leasehold in the 25,900 net acres. For the rest of this year, the unit said it plans to operate two drilling rigs and participate in several wells.

Questar Corp. is planning to hold a conference call to discuss quarterly earnings at 9:30 a.m. ET on Wednesday.

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