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Questar Says Four New Wells Validate Pinedale Anticline Productive Potential

Oct 25, 2000 Questar Corp. today said results from its drilling program in the Pinedale Anticline in western Wyoming tend to validate and may enhance earlier estimates about the field's productive potential.

In evaluating the new wells, the company compared them with two other Questar Pinedale Anticline wells completed in the first quarter of 2000 -- Mesa Unit wells No. 3 and No. 6. Those wells had initial production (IP) rates of 11.4 and 11.1 million cubic feet of gas and 113 and 89 barrels of condensate per day. The average estimated ultimate proved reserve recovery for the two wells is 5-6 billion cubic feet (Bcf) per well. The company evaluated the four new wells as if flow-tested in the same manner as wells No. 3 and 6.

Questar said the current drilling program may increase earlier estimates of the potential number of well locations on the company's acreage and tends to confirm estimates of a potential average 5-6 billion cubic feet equivalent of reserves per well. The company said that, while it is too early to make reserve estimates, pressures in the new wells have generally been higher than previously modeled. Correlations of the Stewart Point No. 6-32 and the Mesa No. 3-20 wells have resulted in a broadening of the structural contours on the west side of the Mesa portion of the Anticline. This could increase the number of potentially productive locations on Questar's acreage, the company said.

Two Questar subsidiaries -- Questar Exploration and Production Co. and Wexpro Co. -- have an approximate 60% average working interest in 14,800 gross acres in the Mesa area of the Pinedale Anticline. The Anticline is located southwest of the city of Pinedale, between Rock Springs and Jackson Hole. Based on an 80-acre spacing program, Questar estimates there are potentially 135 to 150 Lance formation wells on its acreage. If 40-acre spacing is deemed appropriate, the potential well locations and reserves could double.

Questar is a $2.3 billion diversified natural gas company headquartered in Salt
Lake City. Through subsidiaries, it engages in energy development and production; gas gathering and processing; wholesale gas, electricity and liquids trading; retail energy services; interstate gas transmission and storage; retail gas distribution; and information systems and technologies.

SOURCE Questar Corp

Additionally found on TMF at:
Questar Corp. said net income increased 81% in the third quarter of 2000 compared with a year earlier, boosted by a 157% rise in profits from oil and gas exploration and production activities. The diversified natural gas company reported net income of $27.3 million, or $.34 per share, in the 2000 period compared with $15.1 million, or $.18 per share, a year ago. Net income for both periods included gains from sales of company-owned securities. Excluding the gains, net income for the current-year quarter was $23.1 million, or $.29 a share, versus $11.2 million, or $.13 per share, in the 1999 period, a 106% increase. For the first nine months of 2000, Questar's net income was $103.7 million, $1.29 per share -- 27% above the $81.5 million, $.98 per share, in the comparable year-earlier period. Excluding securities sales, nine-month net income totaled $89.4 million, $1.11 per share, in 2000 and $65.9 million, $.79 per share, in 1999, a 36% increase. There was an average of 80.6 million shares of common stock outstanding during the first nine months of 2000 compared with 82.8 million in the prior-year period. Questar has repurchased 3.2 million shares since mid-1999, improving earnings by $.03 per share in 2000. R.D. Cash, Questar chairman, president and chief executive officer, said, "Questar continues to ride the crest of rising demand for natural gas combined with much-stronger energy commodity prices. We positioned ourselves over the past decade to take advantage of this positive combination by steadily expanding our production and reserves."

Questar management said several factors could positively affect the fourth-quarter 2000 earnings performance compared with the year-earlier period. If third-quarter 2000 trends continue, natural gas production and sales prices of natural gas and oil will be significantly higher in fourth-quarter 2000 compared with a year ago. In the 1999 quarter, the pipeline subsidiary recorded a $31.3 million, or $.38 per share, after-tax write-down of its investment in the TransColorado Pipeline partnership. Questar Gas received a positive general rate case order on Aug. 11, 2000, potentially adding another $6.5 million in revenues on an annualized basis to the $7 million granted on an interim basis effective Jan. 1, 2000. In addition, the pipeline and gas-distribution results will benefit from an early retirement program that could produce an estimated $1 million in cost savings in fourth-quarter 2000 and $6 million to $8 million annually. Questar's Pinedale Anticline drilling program could have a modest impact on production volumes and the full-cost amortization rate in fourth-quarter 2000, but a larger potential impact would occur in 2001.

Other stocks I am interested in DD on and possible positions are:

So you can see I have lots of studying to do and apperently little time with the recent interest and media notice of natural gas demand and the reserves coming on-line from the Rocky Mountains.

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