Questar (NYSE: STR ) announced today that it is adding on to its natural gas investments. The company's subsidiary, Wexpro, has entered into an agreement to acquire $106.4 million of gas-producing property by increasing its working interest from 46% to 88% in 78 Wexpro-operated wells in southwestern Wyoming.
Since the new interests add on to Wexpro's current ownership, the acquisition falls under a 1981 agreement stipulating that the new natural gas be offered to Questar's Wyoming and Utah utility customers at "cost-of-service," upon regulators' request. Otherwise, Questar is free to develop and operate the new property at market-based costs and prices.
"We are excited to add this acquisition to our portfolio," said Chairman, President, and CEO Ron Jibson in a statement today. "It's in the heart of our operations and adds value to one of our premier assets."
Questar expects to seal the deal by the end of August and estimates the new interests to add 2.6 billion cubic feet equivalent of production for the remaining four months of 2013.