QEP Resources Reports First Quarter 2014 Financial and Operating Results

  QEP Resources Reports First Quarter 2014 Financial and Operating Results

  *Increased crude oil production by 55% over the first quarter 2013 to 37
    Mbod driven by Williston Basin oil production growth of nearly 100%.
  *Grew crude oil production to 27% of total production from 16% in the first
    quarter 2013.
  *Delivered significant year-over-year increases in Net Income, Adjusted Net
    Income and Adjusted EBITDA.
  *Acquired Permian Basin assets (the "Permian Basin Acquisition") for
    approximately $945 million with early drilling and production results
    surpassing initial expectations.
  *Entered into definitive agreements to sell multiple non-core E&P assets
    for an aggregate price of $807 million, subject to customary adjustments.
  *Entered into a definitive agreement to sell a 40% equity interest in QEP's
    affiliate Green River Processing, LLC to QEP Midstream Partners, LP
    (“QEPM”) for an aggregate price of $230 million.

Business Wire

DENVER -- May 7, 2014

QEP Resources, Inc. (NYSE: QEP) ("QEP" or the "Company") today reported first
quarter 2014 financial and operating results. The Company reported net income
during the first quarter 2014 of $39.7 million, or $0.22 per diluted share,
compared to a net loss of $4.3 million, or $0.02 per diluted share, in the
first quarter 2013.

Net income or loss includes non-cash gains and losses associated with the
change in the fair value of derivative instruments, gains and losses from
asset sales, and impairment charges. Excluding these items, the Company’s
Adjusted Net Income (a non-GAAP measure) was $68.1 million, or $0.38 per
diluted share, for the first quarter 2014, compared to $49.4 million, or $0.28
per diluted share, for the comparable 2013 period. The higher Adjusted Net
Income was due primarily to higher oil and NGL production and improved
realized natural gas prices partially offset by higher lease operating
expenses and production taxes and a realized loss on derivative instruments in
the first quarter of 2014 compared to a realized gain in the comparable 2013

Adjusted EBITDA (a non-GAAP measure) for the first quarter 2014 was $386.3
million, compared to $375.0 million in the first quarter 2013, a 3% increase.
The definition of Adjusted EBITDA and reconciliations of Adjusted EBITDA and
Adjusted Net Income to net income are provided within the financial tables of
this release.

“During the first quarter we made substantial progress on positioning QEP to
have a more focused asset portfolio with significant positions in high-return,
high-margin crude oil and liquids-rich gas plays,” commented Chuck Stanley,
Chairman, President and CEO of QEP Resources. “In addition, our asset managers
delivered solid execution during the quarter as Williston Basin crude oil
production nearly doubled from a year ago, and the Permian Basin contributed
one month of production in the quarter with initial vertical well production
results exceeding our estimates at the time of the acquisition. We have
already ramped up our Permian Basin rig count from two rigs in early March to
five today, and we are making substantial progress on data collection to
better plan the horizontal development of this newly acquired asset."

"The announced sales of non-core E&P assets, totaling approximately $807
million, a 40% interest in our Green River processing business to QEPM for
$230 million, and the anticipated divestiture of additional Midcontinent E&P
assets, with aggregate net production of approximately 21 MMcfed, will further
strengthen our financial position and focus our upstream portfolio."

"As we continue to make progress on the previously-announced separation of our
midstream business, the underlying performance of the business remains strong.
In the quarter, we initiated multiple expansion projects and delivered a
processing margin that was at the highest level in two years."

"We continue to maintain our relentless focus on shareholder value creation
through growing crude oil production from our Williston Basin assets,
integrating and accelerating development of our newly-acquired Permian Basin
crude oil properties, divesting non-core E&P assets, and completing the
separation of our midstream business,” concluded Stanley.

Slides for the first quarter 2014 with maps and other supporting materials
referred to in this release are posted on the Company’s website at

QEP Financial Results Summary

Adjusted EBITDA by Subsidiary^(1)

                               Three Months Ended
                                    March 31,
                                    2014          2013          Change
                                    (in millions)
QEP Energy                          $ 331.8           $ 323.7           3    %
QEP Field Services                  53.2              53.2              —    %
QEP Marketing and                   1.3              (1.9    )         168  %
Adjusted EBITDA                     $ 386.3          $ 375.0          3    %

^(1)  See attached financial tables of this release for a reconciliation of
       Adjusted EBITDA to net income attributable to QEP.

QEP Energy

  *Net natural gas equivalent production decreased by 6% to 73.7 Bcfe in the
    first quarter 2014 compared to 78.0 Bcfe in the first quarter 2013, due
    primarily to decreased gas production in the Haynesville, Midcontinent and
    Pinedale areas offset by increased crude oil and NGL production in the
    Williston Basin and the addition of Permian Basin Acquisition production
    during the month of March. Crude oil and NGL production increased 55% and
    41%, respectively, while natural gas production decreased 24%, in the
    first quarter 2014, compared to 2013.
  *Adjusted EBITDA increased 3% compared to the first quarter 2013, driven by
    increases in crude oil and NGL production volumes and a 10% increase in
    the net realized price for natural gas. This increase was partially offset
    by an 11% and 12% decrease in the net realized prices of crude oil and
    NGLs, respectively.
  *Crude oil and NGL revenues increased 44% compared to the first quarter
    2013, and represented approximately 61% of field-level production
  *QEP Energy's capital investment (on an accrual basis) for the first three
    months of 2014, excluding the $945.0 million related to the Permian Basin
    Acquisition, was $318.2 million.

QEP Field Services

  *QEP Field Services’ Adjusted EBITDA during the first quarter 2014 was
    equal to the prior-year period. The first quarter 2014 Adjusted EBITDA was
    driven primarily by an increase in processing margin of $16.5 million,
    offset by a 13% decrease in natural gas gathering volumes as a result of
    declining dry gas production volumes on the Haynesville gathering system.
  *QEP Field Services' capital investment (on an accrual basis) for the first
    quarter of 2014 totaled $21.5 million.

QEP 2014 Guidance

QEP Resources' full year 2014 guidance is shown below. The Company’s updated
guidance assumes a June 30, 2014 closing of the announced E&P asset sales,
ethane rejection for the remainder of 2014, operating impact of the Permian
Basin Acquisition starting on March 1, 2014, and other assumptions summarized
in the table below:

Guidance and Assumptions

                      2014                                2014
                         Previous       Asset       Forecast         Current
                         Forecast     sale      Revision^(1)   Forecast
QEP Energy oil           14.0 -       (0.3)     0.5            14.2 -
production (MMBbl)       15.0                                        15.2
QEP Energy NGL           4.0 - 4.5      (0.7)       0.5              3.8 - 4.3
production (MMBbl)
QEP Energy natural
gas production        175 - 190    (9)       0              166 - 181
QEP Energy total
equivalent               283 - 307                                   274 - 298
production (Bcfe)
Lease operating          $1.50 -                                     $1.50 -
and transportation       $1.65                                       $1.65
expense (per Mcfe)
QEP Energy
Depletion,               $3.50 -                                     $3.30 -
Depreciation and         $3.80                      ($0.20)          $3.60
Amortization (per
Production and
property taxes, %        9% - 10%                                    9% - 10%
of field-level
                         (figures below in millions)
QEP Resources
General and              $190 -                                      $190 -
Administrative           $210                                        $210
QEP Energy capital       $1,650 -       ($50)                        $1,600 -
investment^(2)           $1,750                                      $1,700
QEP Field Services       $80                                         $80
capital investment
Corporate and
other capital         $25                                 $25
Total QEP                $1,755 -                                    $1,705 -
Resources capital        $1,855                                      $1,805

^(1)  Revision of forecast for retained assets
^(2)   Excludes acquisitions

Operations Summary

QEP Energy

Williston Basin:

Williston Basin net production averaged approximately 31.1 Mboed (96% liquids)
during the first quarter 2014, a 12% improvement over the fourth quarter 2013,
and an 87% improvement over the first quarter 2013. The Company completed and
turned to sales 14 gross operated wells during the quarter, including eight
wells in South Antelope, and six wells in the Fort Berthold Reservation. The
Company also participated in 20 gross outside-operated Bakken/Three Forks
wells that were completed and turned to sales during the quarter (average
working interest 7%). QEP Energy continues to reduce costs with recent drill,
complete, and equipment capital costs of less than $10.0 million per well.

At the end of the first quarter, QEP Energy had eight operated rigs running in
the Williston Basin on the South Antelope acreage.QEP Energy had 24 gross
operated wells waiting on completion (average working interest 80%). In
addition, the Company had interests in 33 gross outside-operated wells being
drilled (average working interest 7%) and ten gross outside-operated wells
waiting on completion (average working interest 10%) at the end of the first

Slides 6-8 depict QEP Energy's acreage and activity in the Bakken/Three Forks

Permian Basin:

QEP Energy closed the previously-announced Permian Basin acquisition on
Febuary 25, ^ 2014 and assumed all field-level operations on April 1, 2014.
Daily production during the month of March averaged 6.6 Mboed (85% liquids).
In the first quarter, QEP Energy, along with the previous owner of the asset,
completed and turned ten gross vertical Atokaberry wells to sales.

At end of first quarter, QEP Energy had three operated rigs in the Permian
Basin; two drilling vertical Atokaberry wells and one drilling a horizontal
target in the Wolfcamp section. QEP Energy had three gross operated wells
waiting on completion (average working interest of 95%) at end of the first

Slide 9 depicts QEP Energy's acreage and activity in the northern Midland

Pinedale Anticline:

During the first quarter 2014, QEP Energy's Pinedale net production averaged
232 MMcfed (24% liquids). QEP Energy began recovering ethane from Pinedale
production on October 1, 2013, and partial ethane recovery continued
throughout the first quarter 2014.

The Company completed and turned to sales 22 gross Pinedale wells during the
first quarter 2014, including one well for which QEP Energy was the operator
but owns only a small overriding royalty interest. In 2014, Pinedale
completions will focus on those areas of the field where QEP Energy has a
majority working interest. QEP Energy suspends Pinedale completion operations
during the coldest months of the winter, generally from December to
mid-February. At the end of the first quarter, the Company had 55 gross
Pinedale wells with QEP working interests drilled, cased and waiting on
completion (average working interest 83%).

Drilling and completion efficiencies have allowed QEP Energy to maintain
industry-leading average well costs at Pinedale. In the first quarter, drill
times from spud to total depth averaged 11.3 days, compared to an average of
12.0 days in 2013. At the end of the first quarter, QEP Energy had four rigs
operating at Pinedale. The Company currently expects to complete a total of
approximately 110 - 115 gross wells during 2014, including approximately ten
wells for which QEP Energy is the designated operator but owns only a small
overriding royalty interest.

Please refer to slides 10-11 for additional details on the Company's Pinedale

Uinta Basin:

During the first quarter 2014, Uinta Basin net production averaged 68 MMcfed
(33% liquids) of which 31 MMcfed (24% liquids) was from the Lower Mesaverde
play. QEP Energy began recovering ethane from Uinta Basin gas production on
October 1, 2013, and partial ethane recovery continued throughout the first
quarter 2014.

At the end of the first quarter, the Company had one operated drilling rig
working in the Lower Mesaverde play, 81 producing wells in the play, and one
well waiting on completion (working interest 100%). QEP Energy has over 3,200
potential remaining locations in this liquids-rich gas resource play. At the
end of the first quarter, the Company was drilling its third Lower Mesaverde
well with a fundamentally different design that could considerably alter the
well economics and lead to an accelerated development approach.

Slide 12 depicts QEP Energy's acreage and additional details of the Lower
Mesaverde play.

QEP Field Services

During the first quarter 2014 QEP Field Services' processing margin (total
processing plant revenues less shrink, transportation, fractionation, and
operating expenses) was $42.8 million, a 63% increase compared to the $26.3
million generated in the first quarter 2013. This increase was driven by a
154% increase in the keep-whole margin (NGL sales revenue less shrink,
transportation and fractionation expenses), which was $23.1 million in the
first quarter of 2014 and $9.1 million a year earlier, offset by a 2% decrease
in processing fee-based revenues.

Gathering margin declined 10% in the first quarter of 2014 compared to the
first quarter of 2013, due to a 13% decrease in gathering system throughput.
Gathering system throughput volumes decreased primarily as a result of a 42%
decline at QEP Field Services' Northwest Louisiana Hub primarily due to lower
QEP Energy production resulting from the ongoing suspension of drilling in the
Haynesville, as well as lower gathering volumes on the Uinta gathering system
and QEPM's Vermillion gathering system. Approximately 69% and 83% of QEP Field
Services' total margin was derived from fee-based gathering and processing
agreements in the first quarter 2014 and 2013, respectively.

As a result of the initial public offering of QEPM, QEP Field Services saw an
increase in net income attributable to noncontrolling interest. For the first
quarter 2014, this change resulted in negative impacts on QEP's net income and
Adjusted EBITDA of $4.9 million and $8.2 million, respectively.

First Quarter 2014 Results Conference Call

QEP Resources’ management will discuss first quarter 2014 results in a
conference call on Thursday, May 8, 2014, beginning at 9:00 a.m. EDT. The
conference call can be accessed at www.qepres.com. You may also participate in
the conference call by dialing (877) 869-3847 in the U.S. or Canada and (201)
689-8261 for international calls. A replay of the teleconference will be
available on the website immediately after the call through June 8, 2014, or
by dialing (877) 660-6853 in the U.S. or Canada and (201) 612-7415 for
international calls, and then entering the conference ID # 13580524. In
addition, QEP’s slides for the first quarter 2014, with updated maps showing
QEP’s leasehold and current activity for key operating areas discussed in this
release, can be found on the Company’s website.

About QEP Resources, Inc.

QEP Resources, Inc. (NYSE:QEP) is a leading independent natural gas and crude
oil exploration and production company focused in two major regions: the
Northern Region (primarily the Rockies and the Williston Basin) and the
Southern Region (primarily Oklahoma, Texas, and Louisiana) of the United
States. QEP Resources also gathers, compresses, treats, processes and stores
natural gas. QEP Resources is the majority owner of QEP Midstream Partners, LP
(NYSE:QEPM) and owns 100% of the partnership’s general partner. For more
information, visit QEP Resources' website at: www.qepres.com.

Forward-Looking Statements

This release includes forward-looking statements within the meaning of Section
27(a) of the Securities Act of 1933, as amended, and Section 21(e) of the
Securities Exchange Act of 1934, as amended. Forward-looking statements can be
identified by words such as “anticipates,” “believes,” “forecasts,” “plans,”
“estimates,” “expects,” “should,” “will” or other similar expressions. Such
statements are based on management’s current expectations, estimates and
projections, which are subject to a wide range of uncertainties and business
risks. These forward-looking statements include statements regarding:
forecasted production, lease operating and transportation expense, DD&A
expense, general and administrative expense, property taxes and capital
investment for 2014 and related assumptions for such guidance; plans to drill
and complete wells; cost reductions in the Williston Basin; well costs and
completions in the Pinedale Anticline; potential locations and anticipated
results from changes in drilling designs in the Uinta Basin; focus on
shareholder value creation; integration and acceleration of development of the
Permian Basin properties; separation of the midstream business; financial
position; focus on upstream assets; and importance of non-GAAP financial
measures. Actual results may differ materially from those included in the
forward-looking statements due to a number of factors, including, but not
limited to: the availability of capital; global geopolitical and macroeconomic
factors; general economic conditions, including interest rates; changes in
local, regional, national and global demand for natural gas, oil and NGL;
natural gas, NGL and oil prices; impact of new laws and regulations, including
regulations regarding the use of hydraulic fracture stimulation and the
implementation of the Dodd-Frank Act; elimination of federal income tax
deductions for oil and gas exploration and development; drilling results;
shortages of oilfield equipment, services and personnel; operating risks such
as unexpected drilling conditions; transportation constraints; weather
conditions; changes in maintenance and construction costs and possible
inflationary pressures; permitting delays; the availability and cost of
credit; outcome of contingencies such as legal proceedings; inability to
successfully integrate acquired assets; inadequate supplies of water and/or
lack of water disposal sources; and the other risks discussed in the Company’s
periodic filings with the Securities and Exchange Commission, including the
Risk Factors section of the Company’s Annual Report on Form 10-K for the year
ended December 31, 2013. QEP Resources undertakes no obligation to publicly
correct or update the forward-looking statements in this news release, in
other documents, or on the website to reflect future events or circumstances.
All such statements are expressly qualified by this cautionary statement.

Disclosures regarding Estimated Ultimate Recovery (EUR)

The Securities and Exchange Commission requires oil and gas companies, in
their filings with the SEC, to disclose proved reserves that a company has
demonstrated by actual production or through reliable technology to be
economically and legally producible at specific prices and existing economic
and operating conditions. The SEC permits optional disclosure of probable and
possible reserves, however QEP has made no such disclosures in its filings
with the SEC. QEP uses certain terms in its periodic news releases and other
presentation materials such as “estimated ultimate recovery” or “EUR”,
“resource potential”, and “net resource potential”. These estimates are by
their nature more speculative than estimates of proved, probable or possible
reserves and accordingly are subject to substantially more risks of actually
being realized. The SEC guidelines strictly prohibit QEP from including such
estimates in filings with the SEC. Investors are urged to closely consider the
disclosures about the Company’s reserves in its Annual Report on Form 10-K for
the year ended December31, 2013, and in other reports on file with the SEC.



                                       Three Months Ended
                                           March 31,
                                           2014                2013
REVENUES                                   (in millions except per share data)
Gas sales                                  $   222.5           $  197.6
Oil sales                                  288.7                  194.2
NGL sales                                  101.1                  68.4
Gathering, processing and other            44.4                   45.6
Purchased gas, oil and NGL sales           227.2                 190.7     
Total Revenues                             883.9                 696.5     
Purchased gas, oil and NGL expense         224.3                  196.8
Lease operating expense                    55.3                   40.1
Gas, oil and NGL transportation            43.4                   32.8
and other handling costs
Gathering, processing and other            25.8                   20.6
General and administrative                 56.6                   46.0
Production and property taxes              49.3                   35.9
Depreciation, depletion and                240.2                  254.2
Exploration expenses                       2.2                    5.1
Impairment                                 2.0                   —         
Total Operating Expenses                   699.1                  631.5
Net gain (loss) from asset sales           2.4                   (0.2      )
OPERATING INCOME                           187.2                  64.8
Realized and unrealized losses on          (80.9      )           (34.6     )
derivative contracts
Interest and other income                  2.9                    2.0
Income from unconsolidated                 2.2                    1.3
Interest expense                           (42.5      )           (39.4     )
INCOME (LOSS) BEFORE INCOME TAXES          68.9                   (5.9      )
Income tax (provision) benefit             (23.4      )           2.2       
NET INCOME (LOSS)                          45.5                   (3.7      )
Net income attributable to                 (5.8       )           (0.6      )
noncontrolling interest
NET INCOME (LOSS) ATTRIBUTABLE TO          $   39.7              $  (4.3   )
Earnings Per Common Share
Attributable to QEP
Basic total                                $   0.22               $  (0.02  )
Diluted total                              $   0.22               $  (0.02  )
Weighted-average common shares
Used in basic calculation                  179.7                  177.0
Used in diluted calculation                180.0                  177.0
Dividends per common share                 $   0.02               $  0.02



                                         March 31,        December 31,
                                             2014                 2013
ASSETS                                       (in millions)
Current Assets
Cash and cash equivalents                    $ 3.9                $  11.9
Accounts receivable, net                     586.5                408.5
Fair value of derivative contracts           —                    0.2
Gas, oil and NGL inventories, at             7.8                  13.4
lower of average cost or market
Deferred income taxes - current              50.4                 30.6
Prepaid expenses and other                   61.8                54.4       
Total Current Assets                         710.4               519.0      
Property, Plant and Equipment
(successful efforts method for gas
and oil properties)
Proved properties                            12,401.4             11,571.4
Unproved properties                          1,102.5              665.1
Midstream field services                     1,719.2              1,698.1
Marketing and resources                      89.4                 85.5
Material and supplies                        64.8                59.0       
Total Property, Plant and Equipment          15,377.3            14,079.1   
Less Accumulated Depreciation,
Depletion and Amortization
Exploration and production                   5,146.5              4,930.9
Midstream field services                     425.0                409.7
Marketing and resources                      24.2                22.1       
Total Accumulated Depreciation,              5,595.7             5,362.7    
Depletion and Amortization
Net Property, Plant and Equipment            9,781.6             8,716.4    
Investment in unconsolidated                 38.5                 39.0
Fair value of derivative contracts           3.9                  1.0
Restricted Cash                              —                    50.0
Other noncurrent assets                      45.2                51.4       
TOTAL ASSETS                                 $ 10,579.6          $  9,376.8 
Current Liabilities
Checks outstanding in excess of cash         $ 78.4               $  90.9
Accounts payable and accrued                 581.0                434.9
Production and property taxes                62.3                 51.8
Interest payable                             34.2                 37.2
Fair value of derivative contracts           71.8                26.7       
Total Current Liabilities                    827.7                641.5
Long-term debt                               3,919.2              2,997.5
Deferred income taxes                        1,601.7              1,560.6
Asset retirement obligations                 204.3                191.8
Fair value of derivative contracts           2.9                  —
Other long-term liabilities                  108.1                108.6
Commitments and contingencies (see
Note 11)
Common stock - par value $0.01 per
share; 500.0 million shares
authorized;                                  1.8                  1.8
180.7 million and 179.7 million
shares issued, respectively
Treasury stock - 0.6 million and 0.4         (20.9      )         (14.9      )
million shares, respectively
Additional paid-in capital                   508.1                498.4
Retained earnings                            2,953.8              2,917.8
Accumulated other comprehensive loss         (25.5      )         (26.5      )
Total Common Shareholders' Equity            3,417.3              3,376.6
Noncontrolling interest                      498.4               500.2      
Total Equity                                 3,915.7            3,876.8    
TOTAL LIABILITIES AND EQUITY                 $ 10,579.6         $  9,376.8 



                                              Three Months Ended
                                                  March 31,
                                                  2014           2013
                                                  (in millions)
Net income (loss)                                 $  45.5            $  (3.7 )
Adjustments to reconcile net income to
net cash provided by operating
Depreciation, depletion and amortization          240.2              254.2
Deferred income taxes                             20.7               (9.3    )
Impairment                                        2.0                —
Equity-based compensation                         6.8                6.1
Amortization of debt issuance costs and           1.7                1.5
Net (gain) loss from asset sales                  (2.4     )         0.2
Income from unconsolidated affiliates             (2.2     )         (1.3    )
Distributions from unconsolidated                 2.7                1.5
affiliates and other
Unrealized loss on derivative contracts           45.5               85.3
Changes in operating assets and                   (38.1    )         (162.4  )
Net Cash Provided by Operating Activities         322.4             172.1   
Property acquisitions                             (946.6   )         (23.6   )
Property, plant and equipment, including          (330.2   )         (361.0  )
dry exploratory well expense
Proceeds from disposition of assets               2.9                1.5
Acquisition deposit held in escrow                50.0              —       
Net Cash Used in Investing Activities             (1,223.9 )         (383.1  )
Checks outstanding in excess of cash              (12.5    )         60.0
Long-term debt issued                             300.0              —
Long-term debt issuance costs paid                (1.1     )         —
Proceeds from credit facility                     1,643.0            1,027.0
Repayments of credit facility                     (1,021.5 )         (866.5  )
Treasury stock repurchases                        (5.5     )         (7.5    )
Other capital contributions                       2.9                2.1
Dividends paid                                    (3.6     )         (3.6    )
Excess tax benefit on equity-based                (0.6     )         1.0
Distribution to noncontrolling interest           (7.6     )         (1.5    )
Net Cash Provided by Financing Activities         893.5             211.0   
Change in cash and cash equivalents               (8.0     )         —
Beginning cash and cash equivalents               11.9              —       
Ending cash and cash equivalents                  $  3.9            $  —    




QEP Energy - Production by Region

                         Three Months Ended
                               March 31,
                               (in Bcfe)
                               2014          2013          Change
Northern Region
Pinedale                       20.9                 21.7                 (4  )%
Williston Basin                16.8                 9.0                  87  %
Uinta Basin                    6.2                  5.8                  7   %
Other Northern                 2.5                 3.5                 (29 )%
Total Northern                 46.4                40.0                16  %
Southern Region
Haynesville/Cotton             14.4                 22.3                 (35 )%
Permian Basin                  1.2                  —                    —   %
Midcontinent                   11.7                15.7                (25 )%
Total Southern                 27.3                38.0                (28 )%
Total production               73.7                78.0                (6  )%

QEP Energy - Total Production

                                Three Months Ended
                                    March 31,
                                    2014          2013          Change
QEP Energy Production
Gas (Bcf)                           44.5              58.5              (24 )%
Oil (Mbbl)                          3,312.0           2,138.9           55  %
NGL (Mbbl)                          1,568.3          1,108.5          41  %
Total production (Bcfe)             73.7              78.0              (6  )%
Average daily production            819.3             866.4             (5  )%

QEP Energy - Prices

                      Three Months Ended
                            March 31,
                            2014            2013            Change
Gas (per Mcf)
field-level                 $ 5.00                $ 3.38
derivative                  (0.46   )             0.76    
Net realized                $ 4.54               $ 4.14               10  %
Oil (per bbl)
field-level                 $ 87.16               $ 90.81
derivative                  (3.91   )             2.43    
Net realized                $ 83.25              $ 93.24              (11 )%
NGL (per bbl)
field-level                 $ 40.26               $ 45.64
derivative                  —                    —       
Net realized                $ 40.26              $ 45.64              (12 )%
Average net
price (per
field-level                 $ 7.79                $ 5.67
derivative                  (0.45   )             0.64    
Net realized                $ 7.34               $ 6.31               16  %

QEP Energy - Operating Expenses

                           Three Months Ended
                                  March 31,
                                  2014          2013          Change
                                  (per Mcfe)
depletion and                     $ 3.03             $ 3.05             (1  )%
Lease operating                   0.76               0.53               43  %
Gas, oil and NGL
transport & other                 0.88               0.72               22  %
handling costs
Production taxes                  0.65              0.44              48  %
Total Operating                   $ 5.32            $ 4.74            12  %

                                    Three Months Ended
                                        March 31,
                                        2014         2013         Change
QEP Field Services Gathering Operating Statistics
Gas gathering volumes (millions         97.3            111.3           (13 )%
of MMBtu)
Gathering revenue (per MMBtu)           $ 0.34          $ 0.34          —   %
QEP Field Services Gathering Margin (in millions)
Gathering revenue                       $ 32.6          $ 37.6          (13 )%
Other Gathering revenue                 11.1            10.2            9   %
Gathering expense                       (10.0   )       (10.3   )       (3  )%
Gathering margin                        $ 33.7         $ 37.5         (10 )%
QEP Field Services Processing Margin (in millions)
NGL sales                               $ 38.0          $ 17.8          113 %
Processing (fee-based) revenues         16.0            16.4            (2  )%
Other processing revenues               8.1             4.9             65  %
Processing expense                      (4.4    )       (4.1    )       7   %
Processing plant fuel and               (11.3   )       (5.9    )       92  %
shrink expense
Gas, oil and NGL transport &            (3.6    )       (2.8    )       29  %
other handling costs
Processing margin                       $ 42.8         $ 26.3         63  %
Keep-whole margin^(1)                   $ 23.1          $ 9.1           154 %
QEP Field Services Processing Operating Statistics
NGL sales (MBbls)                       669.2           341.1           96  %
Average net realized NGL sales          $ 56.78         $ 52.32         9   %
price (per Bbl)^(2)
Total fee-based processing              54.7            53.7            2   %
volumes (in millions of MMBtu)
Average fee-based processing            $ 0.29          $ 0.31          (6  )%
revenue (per MMBtu)

       Keep-whole margin is calculated as NGL sales less processing plant fuel
^(1)  and shrink, natural gas, oil and NGL transportation & other handling
       Average net realized NGL sales price per barrel is calculated as NGL
^(2)   sales including realized gains from commodity derivative contracts
       settlements divided by NGL sales volumes.


This release contains references to the non-GAAP measure of Adjusted EBITDA.
Management believes Adjusted EBITDA is an important measure of the Company’s
cash flow, liquidity, and ability to incur and service debt, fund capital
expenditures and make distributions to shareholders. The use of this measure
allows investors to understand how management evaluates financial performance
to make operating decisions and allocates resources. It is also an important
measure for comparing the Company’s financial performance to other gas and oil
producing companies. Management defines Adjusted EBITDA as earnings before
interest, income taxes, depreciation, depletion and amortization (EBITDA)
adjusted to exclude changes in fair value of derivative contracts, exploration
expenses, gains and losses from asset sales, impairment, and certain other
non-cash and/or non-recurring items. The following tables reconcile QEP
Resources’ and its subsidiaries’ net income attributable to QEP to Adjusted

                  QEP          QEP Field    Marketing    QEP
                     Energy          Services        &               Resources
Three Months
Ended March          (in millions)
31, 2014
Net income
attributable         9.5             25.4            4.8             39.7
to QEP
losses on            45.2            —               0.3             45.5
Net gain from        (2.4   )        —               —               (2.4   )
asset sales
Interest and         (2.9   )        —               —               (2.9   )
other income
Income tax           5.9             14.6            2.9             23.4
expense              48.9            0.4             (7.0   )        42.3
(income) ^(1)
depletion and        223.4           12.8            0.3             236.5
Impairment           2.0             —               —               2.0
Exploration          2.2            —              —              2.2    
Adjusted             331.8          53.2           1.3            386.3  
Three Months
Ended March
31, 2013
Net (loss)
income               (29.8  )        21.6            3.9             (4.3   )
to QEP
losses on            84.0            —               1.3             85.3
Net (gain)
loss from            (0.1   )        0.3             —               0.2
asset sales
Interest and         (1.7   )        (0.3   )        —               (2.0   )
other income
Income tax
(benefit)            (17.2  )        12.5            2.5             (2.2   )
Interest             45.3            4.0             (9.9   )        39.4
depletion and        238.1           15.1            0.3             253.5
Exploration          5.1            —              —              5.1    
Adjusted             323.7          53.2           (1.9   )        375.0  

       Excludes noncontrolling interest's share, of $0.2 million during the
^(1)  three months ended March 31, 2014, of interest expense attributable to
       QEP Midstream.
^(2)   Excludes noncontrolling interests' share of $3.7 and $0.7 million
       during the three months ended March 31, 2014 and 2013, respectively.

This release also contains references to the non-GAAP measure of Adjusted Net
Income. Management defines Adjusted Net Income as earnings excluding gains and
losses from asset sales, unrealized gains and losses on derivative contracts,
accrued litigation loss contingency, costs from early extinguishment of debt
and asset impairments. Management believes Adjusted Net Income is an important
measure of the Company’s operational performance relative to other gas and oil
producing companies.

The following table reconciles net income attributable to QEP Resources’ to
Adjusted Net Income:

                              Three Months Ended
                                  March 31,
                                  2014                       2013
                                  (in millions, except per earnings per share)
Net income (loss)                 $   39.7                   $   (4.3   )
attributable to QEP
Adjustments to net income
Net (gain) loss from              (2.4       )                   0.2
asset sales
Income tax provision
(benefit) from asset              0.9                            (0.1       )
Unrealized loss on                45.5                           85.3
derivative contracts
Income tax (benefit) on
unrealized loss on                (16.9      )                   (31.7      )
derivative contracts
Impairment Charges                2.0                            —
Income tax (benefit) on
non-cash price-related            (0.7       )                   —          
impairment charge
Total after-tax                   28.4                          53.7       
adjustments to net income
Adjusted net income
attributable to QEP               $   68.1                      $   49.4   
Earnings per Common Share
attributable to QEP
Diluted earnings per              $   0.22                       $   (0.02  )
Diluted after-tax
adjustments to net income         0.16                          0.30       
per share
Diluted Adjusted Net              $   0.38                      $   0.28   
Income per share
Weighted-average common
shares outstanding
Diluted^(1)                       180.0                          177.3
Weighted-average common
shares outstanding
diluted Non-GAAP
Weighted-average common
shares outstanding used                                          177.0
in GAAP diluted
Potential number of
shares issuable upon
exercise of in-the-money                                         0.3        
stock options under the
long-term stock incentive
Weighted-average common
shares outstanding used                                          177.3      
in Non- GAAP diluted

       The three months ended March 31, 2013, diluted common shares
       outstanding for purposes of calculating Diluted Adjusted Net Income per
       share include potential increases in shares that could result from the
^(1)  exercise of in-the-money stock options. These potential shares are
       excluded for the three months ended March 31, 2013, in calculating
       earnings-per-share for GAAP purposes, because the effect is
       antidilutive due to the Company's net loss for GAAP purposes.

The following table presents open 2014 derivative positions as of April 30,

Year      Type of Contract    Index        Total         Swap
                                                    Volumes          price
                                                                     per unit
Gas                                                 (MMBtu)
2014         SWAP                   NYMEX           19.6             $  4.22
2014         SWAP                   IFNPCR          53.9             $  4.08
2015         SWAP                   NYMEX           25.6             $  4.14
2015         SWAP                   IFNPCR          7.3              $  3.97
Oil                                                 (Bbls)
2014         SWAP                   NYMEX WTI       7.2              $  92.59
2015         SWAP                   NYMEX WTI       4.7              $  88.17

The following table sets forth QEP Energy's oil basis swaps as of April 30,

                          Index Less             Total            Weighted
Year      Index     Differential          Volumes       Average
Oil                                              (in
basis                                            millions)
2014         NYMEX        ICE Brent              0.5              $    13.78
2014         NYMEX        LLS                    0.5              $    4.00
2015         NYMEX        LLS                    0.1              $    4.00

The following table sets forth QEP Marketing’s volumes and swap prices for its
commodity derivative contracts as of April 30, 2014:

                                                    Total            Average
Year           Type of          Index                   Swap
                   Contract                         Volumes          price
                                                                     per MMBtu
Gas sales                                           (MMBtu)
2014               SWAP                IFNPCR       2.6              $   3.77
Gas                                                 (MMBtu)
2014               SWAP                IFNPCR       0.8              $   3.82


QEP Resources, Inc.
Greg Bensen
Director, Investor Relations
Brent Rockwood
Director, Communications
Press spacebar to pause and continue. Press esc to stop.