Font ResizeQuestar Corp. said Tuesday the precipitous decline in natural gas prices over the past year hurt its recent financial results.
The Salt Lake City-based energy company, which is the parent of the state-regulated utility that provides most Utahns with the natural gas used in their homes, reported that its net income fell 55 percent in the second quarter to $77.9 million, or 44 cents per share.
A year ago, Questar posted a second-quarter net income of $172.6 million, or 98 cents per share.
"The decline took a toll on our first-half financial results," Questar CEO Keith O. Rattie said in a statement announcing the company's second-quarter and first-half results.
For first six months of 2009, Questar saw earnings of $145.1 million, down 60 percent from the first half of 2008, when its net income reached $358.4 million.
Still, Rattie noted that the company's cash flow remains strong.
In a research report written earlier this year, Morningstar securities analyst Catharina Milostan pointed out that Questar, faced with lower oil and gas prices and limited funding options, prudently was scaling back 2009 spending plans and targeting higher-return projects.
"Questar has a funding advantage over pure oil and gas producers because it can use steady cash flow from its regulated pipelines and gas utility to fund drilling and midstream projects," she said.
And Rattie pointed out that during the first half of 2009
He said that growth, which was achieved despite lower capital spending, was tied to strong results from the company's high-margin fields -- the Haynesville Shale play in Louisiana and the Pinedale Anticline play in Wyoming.
Rattie also reported that Questar Gas, the natural gas utility that serves customers in Utah, Wyoming and Idaho, earned $29.8 million in the first half of 2009, a 4 percent gain from the year-earlier period.
For the second quarter, however, Questar Gas reported a seasonal loss of $2 million, the same as the second quarter in fiscal 2008. As of June 30, 2009, Questar Gas was serving 890,000 customers, up 9,000 or 1 percent from June 30, 2008.
