OPPapers.com

Questar Company Risk Analysis

INTEROFFICE REPORT
Questar Corporation: Energy Company

October 6, 2004
Prepared for: S.E. Parks, Senior Vice President and Chief Financial Officer
Prepared by: Cathy Caton, Accountant

Three segments of Questar operations cover resources and regulated services. Follows is the risk assessment for Questar: Resources, Lack of internal control in estimating reserve(s) revenue, Financial analysis and the market, New land developments, and the Environment.

Most of the company's operations are located in the Rocky Mountain region of Wyoming, Utah, Colorado, Texas, Oklahoma, and Louisiana (5). Distribution is throughout the United States.

QUESTAR OPERATIONS
A multi-faceted holding company formed through reorganization in 1984 into an energy company to distinguish non-utility services (5). Crude resources from fossil fuels (oil, natural gas) are developed through drilling for interstate transmission, storage and distribution. The resource division involves gas, oil, natural gas for marketing, cost analysis of gas development, risk management, and distribution for the wholesale/retail industry (5).

1. Market Resources is the major producer of income driving segments of the business. Natural gas (nonregulated) is 86% of its focal point on evaluating crude resources for process through "gas management" (5).

2. Questar Pipeline (regulated) is responsible for transportation and storage. This includes the development of pipeline. Business is dependent on acquiring leases and the use of land. Operations at well sites can have a life of 20-40 years.

3. Questar Gas (regulated) involves retail distribution. Sales are based on seasonal usage and economic factors such as the market's going rate (5).

RISK ASSESSMENT
Resources: Price Risk and Land Opportunity
• Crude resources are a distinct global market. Questar is a profitable and reliable enterprise with all three segments highly revenue driven, secured by federal and state...