Salt Lake-based Questar Corp., an oil and natural-gas producer that owns Utah's only gas utility, said second-quarter net income rose 54 percent on higher prices and production.
Net income rose to $172.6 million, or 98 cents a share, from $112.2 million, or 64 cents, a year earlier, the company said in a statement on Business Wire. Questar was expected to earn 88 cents a share, the average estimate of four analysts compiled by Bloomberg.
"Obviously it's a beat any way you look at it," said Holly Stewart, an analyst at Howard Weil Inc., who has a "market outperform" rating on Questar and doesn't own any shares. "Production looks good, and price realizations on the gas side were above our expectations."
Questar has been drilling in the Rockies, the most productive new region for U.S. gas. During the quarter, gas prices rose 50 percent to an average $11.47 per million British thermal units, while oil rose 90 percent to an average $123.80.
Natural gas prices in the Rockies region trade at a discount to the New York Mercantile Exchange because there is limited pipeline capacity to get the power-plant fuel to markets where it can command a higher price.
Earlier this month, Questar raised its earnings guidance this year to $3.05 to $3.20 from $2.90 to $3.05. The company also said it expects production growth of 14 percent to 16 percent this year.
Questar also said its estimated proved reserves as of March 31 rose 16 percent to 2.16 trillion cubic feet of natural gas equivalent from 1.87 trillion at year-end 2007. The increase reflected its $659 million acquisition of properties in northwest Louisiana.
Shares of Questar, which have gained 7 percent this year, were unchanged at $57.50 Monday in New York Stock Exchange composite trading. The company released its earnings report after the close of regular trading on North American markets.