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EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp

Questar Corp · Jun 27, 2014 · 87 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 1
    European Roadshow Investor Presentation June 23-27, 2014 Making lives better by developing and delivering essential energy
  2. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 2
    CORPORATE DATA ANALYST CONTACT: Ticker symbol and stock exchange: STR-NYSE At June 16, 2014 Tony Ivins Vice President Investor Relations Average daily trading volume (3 mos.): 900,000 shares & Corporate Treasurer Closing Price: 23.95…
  3. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 3
    Introduction and Overview Making lives better by developing and delivering essential energy
  4. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 4
    Questar Gas Achieved 1. Generate net income of 50.5MM // Adjusted net income was 52.8MM 2. Hold unit O&M expense to 145 per customer // Adj. O&M expense was 142 / customer 3. Earn authorized 10.35% return on equity // Adjusted ROE was…
  5. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 5
    Western United States IDAHO Primarily Utah, WYOMING Wyoming and Idaho UTAH Wexpro develops low-cost natural gas for Questar Gas utility customers under the 1981 Wexpro Agreement Questar Pipeline transports and stores natural gas in…
  6. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 6
    TTM 3/31/2014 Adj. Earnings 225.8MM* Wexpro - 19.9% earned ROE (TTM 3/31/2014) Wexpro - 100% equity capitalization 116.1 MM - 688 MM investment base (Mar 2014) 51% QPC* 60.5 MM Wexpro QGC 27% Questar Pipeline (QPC) 55.4 MM 25%…
  7. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 7
    Maintain and grow our vertically integrated business model Overall Strategy Develop and deliver essential energy in the western U.S. Manage commodity-price exposure and earnings volatility Meet customers energy needs through safe,…
  8. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 8
    Craig Wagstaff EVP & COO Making lives better by developing and delivering essential energy
  9. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 9
    Key Facts & Statistics Cities served 277 Customers 3/31/2014 952,516 Customer growth TTM 3/2014: 15,069 1.6% Deliveries (TTM 3/31/2014) 178 MMdth System miles (12/31/2013) 27,861 miles Rate base (12/31/2013) 1,042 MM Allowed Utah ROE…
  10. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 10
    Rate Case Order Summary: Allowed ROE of 9.85% (previously 10.35%) Annual revenue increased by 7.6 million or 2.6% Expanded infrastructure-replacement programs tracker to 65 million annually, up from 55 million Transportation…
  11. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 11
    In regards to delivering safe, reliable, natural gas service, and receiving high customer-satisfaction marks, the PSC stated in the recent rate case order from February 21, 2014: We are pleased with these results and believe Questars…
  12. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 12
    Pursue opportunities to sell gas and transportation Provide a high Provide safe level of and reliable customer service service Succession Manage future planning Questar transportation (developing and retaining qualified Gas…
  13. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 13
    25 20 US 15 12.32 UTAH 9.40 10 5 0 WV WA FL TN LA IN WY WI ID SC AR TX IA IL SD VT AL AZ DE RI NH NC DC NY VA CT PA KY KS US NJ NM…
  14. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 14
    18.00 16.00 14.00 US 12.00 10.00 UTAH 8.00 6.00 4.00 2.00 National Avg UT Avg 0.00 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  15. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 15
    Key performance metrics: Return on equity Earns at or near allowed ROE Efficiency Among lowest 5% in O&M/customer Customer rates Among the very lowest in the nation Customer growth 1.5% to 2.5% growth forecast Market penetration Greater…
  16. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 16
    Key regulatory attributes: Return on equity 9.85% (effective 3/1/2014) Revenue decoupling Protects revenue Conservation program Encourages energy efficiency Infrastructure upgrades Tracker avoids recovery lag Weather normalization…
  17. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 17
    1980s: All cast iron pipe replaced 1990s: All bare steel pipe replaced 2000s: Focusing on replacement of reconditioned, high-pressure, large-diameter pipe and IHP belt mains Now: Investing up to 65 million annually over the coming…
  18. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 18
    Expansion and upgrade of high-pressure Questar Gas natural gas feeder lines and IHP belt mains Rate-base forecast Infrastructure replacement and customer growth drives significant rate-base growth for many years to come Supports…
  19. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 19
    NGV Market Development Improving lives by developing and delivering essential energy
  20. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 20
    Questar Gas Company is a leader in the U.S. in regulated NGV market development Invests in NGV / CNG refueling infrastructure in regulated territory Refuel border-to-border in Utah - Over 60 public, private and municipal stations -…
  21. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 21
    Questar Fueling Company Established in March 2012 to meet needs of expanding market for compressed natural gas (CNG) for transportation. Provides consulting, design, packaging and installation of natural gas fueling stations. Priority…
  22. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 22
    Questar Fueling Update Questar Fueling was established in 2012 to meet the needs of an expanding market for compressed natural gas (CNG) for transportation Industry Development - Cummins-Westport launched full production of 12-liter…
  23. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 23
    Questar Fueling Stations Station Locations - Lower 48 states with national carriers and large fleets - High-traffic corridors PLANNED ESTIMATED STATIONS COMPLETION DeSoto, TX Summer 2014 Dallas, TX Summer 2014 Kansas City, KS…
  24. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 24
    Locations Lower 48 states with national carriers and large fleets High-traffic corridors 24
  25. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 25
    Location (proximity to customers, high-traffic areas, high-pressure gas lines, etc.) Preferred pricing agreements with customers Low price (accomplished through controlling costs on equipment and construction) Customer experience/…
  26. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 26
    The Fuel price difference between petroleum products and natural gas products presents a significant opportunity. 26
  27. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 27
    3.00 2.50 2.00 Commodity Cost 1.50 Taxes 1.00 Compression, Land, G&A, Operating 0.50 Expenses, Return - 4/ MMBtu 5/ MMBtu 6/ MMBtu 7/ MMBtu 8/ MMBtu * Assumes that 1 GGE of CNG contains 125,000 Btu ** Numbers…
  28. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 28
    Vehicle Fuel Component *Clean Skies Foundation Report: Driving on Natural Gas Figure 17 28
  29. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 29
    A recent Navigant Research report* projects: - Approximately 200,000 heavy-duty natural gas powered trucks to be sold over the next nine years Approximately 85% of these trucks are projected to be CNG Westport is projecting a 5 year…
  30. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 30
    *Westport Investor Slide Deck http://www.westport.com/company/media/presentations/corporate-update 30
  31. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 31
    Available 12 Liter now available Trucking Industry: 5 million heavy-duty trucks in the U.S. Consumes over 40 billion gallons of diesel per year Delivers 70% of all freight transported in U.S. 10% market conversion = Volume of 5…
  32. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 32
    Jim Livsey EVP & COO Making lives better by developing and delivering essential energy
  33. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 33
    Wexpro develops cost-of-service reserves that keep our gas utility rates among the lowest in the U.S. EBITDA ( millions) Wexpro offers consistent growth with high returns 300 272 259 250 236 1981 Wexpro Agreement 200 187 199 214…
  34. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 34
    Powell (1974) Mesa (1955) Dry Piney (1957) Baxter Birch Creek Bruff (1922) (1957) (1961) Creston Church Buttes (1972) (1946) Trail & Brady Canyon Creek (1972) (1941) Powder Wash Clay Basin (1931) (1927) Hiawatha…
  35. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 35
    Investment Base Successful wells * Net Income (Millions) Depletion (Millions) 687.7 Deferred taxes 589.7 116.1 110.6 531.1 103.9 95.2 456.6 474.4 88.1 431.9 80.7 2009 2010 2011 2012 2013 3/14 2009 2010 2011 2012 2013…
  36. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 36
    1000 100 900 90 2013 Reserves Replacement 2013 R/P Ratio 800 177 Bcfe / 64 Bcfe = 276% 845 Bcfe / 64 Bcfe = 13 years 80 Production NRI Bcfe 700 70 Reserves NRI Bcfe 600 60 500 50 400 40 300 30 200 20 100 10 0…
  37. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 37
    Finding Costs 1.80 1.81 1.80 1.82 1.66 1.44 1.35 1.08 2006 2007 2008 2009 2010 2011 2012 2013 * NOTE: Includes Wexpro-operated and non-operated development wells and recompletions. 37
  38. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 38
    8.00 Wexpros 1Q-2014 total cost structure versus 12 E&P peers** (LOE + production taxes + G&A + interest + DDA) 7.00 Peer Average 6.00 Wexpro 4.17/Mcfe 5.00 2.88/Mcfe* (Excl. 20% AT return) 4.00 3.00 2.00 1.00 0.00 Low costs and…
  39. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 39
    8.00 1,750 Cumulative savings for Questar Gas customers (MM) 7.00 1,500 (Source: Wexpro records) Purchased 6.00 gas /Dth 1 Forward curve 1,250 5.00 1,000 4.00 750 3.00 500 2.00 1.00 250 Cost-of-service /Dth 2 0.00 0…
  40. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 40
    140,000 120,000 100,000 41% 51% 48% 49% 49% 32% 80,000 MDth 60,000 40,000 68% 59% 49% 51% 51% 52% 20,000 - 2008 2009 2010 2011 2012 2013 Equity Purchased 40
  41. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 41
    QEP Resources continues to operate northern third of Pinedale Anticline 18 PA A wells forecast for 2014-2015 Spud in 2013, Turn On in 2014 20 PA C wells anticipated in 2016-2017 Spud in 2014, Turn On in 2014 Average completed well…
  42. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 42
    700-800 future development Big Horn locations 1.1 billion of future identified Wind River Pinedale investment 40 Locations WYOMING Annual investment driven by pace of field development, Moxa 140 Locations Green River…
  43. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 43
    Wexpro II Summary Key Provisions - Provides mechanism to acquire Rockies gas properties for future development - Modeled on provisions of original Wexpro Agreement - Properties purchased at Wexpros risk - Utah and Wyoming…
  44. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 44
    Acquire producing properties with future drilling potential - Having a property immediately available allows quicker execution of new cost-of-service arrangements - Reaching out to nearby utilities and large end-use customers…
  45. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 45
    Allan Bradley President & CEO Transmission Storage G&P Energy Services Making lives better by developing and delivering essential energy
  46. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 46
    Key Facts & Statistics Map of Operations Serves Questar Gas, other utilities and major export pipelines from four Rockies hubs WYOMING Questar Pipeline IDAHO Overthrust Pipeline Provides transportation and underground storage…
  47. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 47
    Hub of the Rockies: 2,662 miles of pipeline Key Field Services Highlights Four Pipeline Systems up to 36 diameter, 1440 psig (QPC, Overthrust, WRH, So. Trails) Safe, Efficient, Reliable 51 Compressor Units at 22 Stations up…
  48. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 48
    Operational efficiency and effectiveness Safety and reliability best in class Flexibility to meet changing demands Commercial Excellence Fully-contracted Hub of the Rockies Reputation of trust, responsiveness, compliance…
  49. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 49
    EBITDA ( millions) Average Deliveries (Mdth/d) 250 3500 3000 2891 200 182 182 181 2765 2720 176 177 177 2537 165 2450 2500 2178 150 2000 1711 100 1500 1000 50 500 330 309 307 320 293 327 312 0 0 2008 2009 2010 2011 2012…
  50. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 50
    O&M/dth includes Storage and 50% of WRH without QPC Contract 6,000,000 25.00 5,000,000 20.00 Contract 4,000,000 Demand 15.00 O&M/dth 3,000,000 10.00 2,000,000 5.00 1,000,000 0 0.00 2006 2007 2008 2009 2010 2011 2012…
  51. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 51
    QPC Maximum Delivery Days by Year Tools in the Toolbox Experienced workforce 6,000,000 Clay Basin storage Peaking aquifers 5,000,000 Integrated QPC and Overthrust systems 4,000,000 Bi-directional capability No-notice service…
  52. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 52
    Approved Budget is 120.9 Million QPC Capital Budget (MM) Facility Integrity and Upgrade Budget is 76.6 Million Upgrade & Maintenance Projects Include: - M. L. 3 Replacement - M. L. 68 AC Mitigation - Line Break Valve Operators…
  53. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 53
    Remain cost-competitive with regional pipelines Competitive cost Re-contract with customers Rate case strategy and new tariff Gathering Re-contract services and with processing customers Focus on incremental projects services…
  54. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 54
    Total: 11,000 MW NAUGHTON - 637 MW BRIDGER 1,412 MW Coal Fired: 8,640 MW Natural Gas Fired: 2,360 MW Questar Served: 2,360 MW LITTLE MOUNTAIN - 14 MW GADSBY - 475 MW CRAIG 1,274 MW KENNECOTT - 275 MW HEBER - 30 MW HAYDEN -…
  55. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 55
    55 Project Name: PacifiCorp Lake Side 2 Questar Pipeline Contracted Capacity 90,000 dth/d CLAY QGC High Pressure Line BASIN Investment 19.7 MM Rate (/dth) 0.14 KERN RIVER Revenue (Annual) 4.6 MM PacifiCorp Lake Side…
  56. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 56
    2009 2010 2011 Weber Canyon - 2014 2015 Length 1.2 miles 9.3 miles 13 miles 3.3 Miles 1.5 Miles 16 API 5L PSL2 16 API 5L PSL2 16 API 5L PSL2 16 API 5L PSL2 16 API 5L PSL2 New Pipe Type 0.250 X-65 0.250 X-52 0.250 X-52 0.250 X-52 0.250…
  57. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 57
    3.3 Miles of 16 replacement. Estimated project cost = 29.4 million. 0.75 Miles of standard construction. 2.5 miles of very constrained construction. 1.1 miles of temporary debris fence required, 1 mile of earth berm/mesh fence. FERC…
  58. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 58
    Inland California Express Railroad System WEST HYNES New Pipeline RAIL TERMINAL Completed Tasks - Engineering analysis for pipeline re-commission and extension - 10% design for two rail unloading facilities leading to rail…
  59. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 59
    Kevin Hadlock EVP & CFO Making lives better by developing and delivering essential energy
  60. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 60
    Investment Returns* Wexpro Questar Pipeline Questar Gas Questar Consolidated Return on equity Return on equity* Return on equity Return on equity** 25.0% 20.1% avg. 10.8% avg. 10.3% avg. 19.2% avg. 20.0% 18.8% 18.9% 15.0%…
  61. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 61
    Total Capital* (MMs) 3/31/2014 2,699 47% equity 1,011 1,142 695 55% equity 53% equity 100% equity -149 Wexpro Pipeline Gas Consolidated Corp Equity Debt *Total debt + shareholders equity 61
  62. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 62
    600 500 15 30 Corporate 400 166 & Other 3 300 190 Questar 162 73 Gas 200 Questar 61 120 Pipeline 250 100 Wexpro 145 100 - 2012 CAPEX 2013 CAPEX 2014F CAPEX 371 Million 504 Million* 440 Million * NOTE: Wexpros 2013…
  63. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 63
    Paid Dividend Growth Quarterly dividend increased 6% in May 2014 to 0.19 per share, 0.75 0.76 annualized 0.71 0.67 0.62 60% payout achieved 0.54 Future dividend growth to approximate earnings growth 2010 2011 2012 2013…
  64. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 64
    Key Drivers: Questar Gas: - Compound annual earnings growth rate of 6-8% - Supported by infrastructure replacement spending with a tracker for up to 65 million per year 595 MM - Annual customer growth rate of 1.5% to 2.5% - Utah…
  65. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 65
    What makes Questar unique Create value across entire natural gas chain (wellhead to burner tip) STRATEGY Regulated business model with superior risk-adjusted returns Take advantage of unique growth opportunities 18.9% normalized…
  66. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 66
    Making lives better by developing and delivering essential energy 66
  67. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 67
    Forbes magazine again ranks Utah as a top state for business and careers September 30, 2013 SALT LAKE CITY Utah ranked 3rd on Forbes magazine's 2013 list of Best States for Business and Careers behind Virginia and North Dakota, after…
  68. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 68
    Questar Wexpro Questar Parent/Other & Consolidated (MM) Gas Companies Pipeline Eliminations Questar Assets Current assets 270.9 117.2 121.4 (233.3) 276.2 Net PP&E 1,475.7 919.6 1,142.2 64.4 3,601.9 Other assets 24.9 26.3 36.5 8.6 96.3…
  69. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 69
    Questar Wexpro Questar Parent/Other & Consolidated (MM) Gas Companies Pipeline Eliminations Questar Revenues 963.5 358.2 265.7 (387.4) 1,200.0 Other income 5.2 4.1 1.8 (2.4) 8.7 Income from unconsol. affiliate - - 3.7 - 3.7 Operating…
  70. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 70
    Questar Wexpro Questar Parent/Other & Consolidated (MM) Gas Companies Pipeline Eliminations Questar Revenues 396.3 101.4 67.3 (108.1) 456.9 Other income 1.3 0.3 0.3 (0.1) 1.8 Income from unconsol. affiliate - - 0.9 - 0.9 Operating…
  71. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 71
    Questar Wexpro Questar Parent/Other & Consolidated (MM) Gas Companies Pipeline Eliminations Questar Operating cash flow 136.8 217.1 131.9 5.2 491.0 Changes in operating assets and liabilities 12.5 (4.2) 13.7 (4.0) 18.0 Net cash flow…
  72. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 72
    Questar Wexpro Questar Parent/Other & Consolidated (MM) Gas Companies Pipeline Eliminations Questar Operating cash flow 54.4 57.6 30.9 2.1 145.0 Changes in operating assets and liabilities 45.3 (7.5) 13.0 17.1 67.9 Net cash flow from…
  73. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 73
    580.0 600 2014 Embedded Debt Cost QPC: 460.1M 5.50% 4.80% QGC: 534.5M 5.07% STR RC Corp: 250.0M 2.75% 500 750 375.0 400 5.72% 300 250.0 2.75% 5.84% 200 4.875% Coupon (6.66% effective) 100 25.1 14.5 6.45% 6.85% 0…
  74. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 74
    INTEGRATED COMPARABLES (Proxy) AGL Resources Atmos Energy EQT Energen MDU Resources Group National Fuel Gas New Jersey Resources Nisource NW Natural Piedmont Nat Gas South Jersey Resources Southwest Gas Vectren WGL…
  75. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 75
    1,263 CNG stations 618 public 645 private 112 planned 81 LNG stations 42 public 39 private 66 planned Source: NGVAmerica, as of Nov. 2013 75
  76. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 76
    Gallons Cost/Gal. 500,000 4.00 3.50 400,000 3.00 2.50 300,000 2.00 200,000 1.50 1.00 100,000 0.50 0 0.00 Jan-08 Jan-07 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jul-11 Jul-07 Jul-08 Jul-09…
  77. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 77
    Determining Utility Revenue Requirement or Traditional Ratemaking: Decoupling: Volume-based Customer-based / Dth / Customer Rate X Dth of Customers X Revenue per Customer (Company collects as revenue) (Company collects as…
  78. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 78
    Questar Gas retained production from existing gas wells - Future production from productive gas reservoirs delivered at cost-of-service Established oil revenue sharing mechanism - 54% of oil profits credited to utility customers -…
  79. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 79
    Wexpro earns a specified return on successful wells - Includes recovery of income taxes - Producing wells existing at the date of the Wexpro Agreement earn at utility cost of capital - currently 7.64% - New Wexpro investment earns at…
  80. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 80
    Primary oversight assigned to - Utah Division of Public Utilities - Staff of the WY PSC - Agreement provides for two independent monitors Hydrocarbon Monitor (David Evans) Accounting Monitor (Eide Bailly) Arbitration procedures…
  81. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 81
    Major Provisions Capital Expenditures Operating Costs Successful wells & Dry holes non-drilling costs Questar Gas reimburses costs Excluded from Wexpro receives a return on No profit component investment base - investment base…
  82. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 82
    Production Tax 7% LOE 6% G&A 7% Royalties 13% Depreciation 24% 67% Finding Cost Return On Investment Driven With Fed+St. Tax Reimbursement 43% 82
  83. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 83
    WEXPRO Bonus Deprec. 100% 50% 0% Incremental Investment 10,000,000 10,000,000 10,000,000 Incremental MACRS Deprec. (1,600,000) (1,600,000) (1,600,000) Incremental Deferred Taxes (2,940,000) (1,440,000) 60,000 Addition to Investment…
  84. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 84
    Bits - Fewer bit replacements = faster drilling Top drive - Fewer joint connections = faster drilling Directional drilling equipment - Better accuracy = faster drilling Skid package - Less time moving = more time drilling…
  85. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 85
    85
  86. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 86
    The current Rockies pipeline capacity overhang is expected to remain well into the future with Rockies prices tracking Henry Hub 86
  87. EUROPEAN ROADSHOW INVESTOR PRESENTATION – Questar Corp – slide 87
    A Rockies-Based Integrated Natural Company Questar Corporation is a natural gas-focused energy company with core operations in the Rockies. We produce, transport, store and distribute clean, abundant and affordable American natural gas.…

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