Questar Dropped From Goldman Conviction List

NEW YORK (AP) — Questar Corp.'s lower production and weaker profit outlook factored into Goldman Sachs' decision to removed the natural gas provider from its Americas Conviction List.

Goldman Sachs analyst Brian Singer said that since adding the company to the conviction list on Dec., 8, 2008 shares of Questar have not risen as quickly as the Oil Exploration and Production Index. Singer said this slower rise resulted from news of lower total company production and reduced profit estimates, along with investors' preference for more volatile exploration and production companies focused on crude oil.

Singer said he still rates Questar at "Buy" due to expectations that, over the next two quarters, investor sentiment toward the company will turn more favorable. Singer attributes this improved outlook to additional drilling results in the Haynesville Shale, greater appreciation of Questar's defensive regulated gas distribution, pipeline and exploration and production businesses, attractive hedges and lower capital spending likely to drive low operating costs and high returns.

Singer assigns a $40 six-month price target to the stock.

Shares of the company added 12 cents to $30.75 in midday trading.