Acquisition and Divestitures

Acquisitions

On September 27, 2012, QEP Energy completed an acquisition of oil and gas properties in the Williston Basin for an aggregate purchase price of approximately $1.4 billion, subject to post-closing adjustments (the 2012 Acquisition). The properties are located in Williams and McKenzie counties of North Dakota, approximately 12 miles west of QEP's then-existing core acreage in the Williston Basin.

The 2012 Acquisition meets the definition of a business combination under ASC 805, Business Combinations, as it included proved properties. QEP allocated the cost of the 2012 Acquisition to assets acquired and liabilities assumed based on fair values as of the acquisition date. Revenues of $56.5 million and $114.1 million and net income of $10.3 million and $23.4 million were generated from the acquired properties during the three and six months ended June 30, 2013, respectively, and are included in QEP's Condensed Consolidated Statements of Operations.

QEP Energy recorded the 2012 Acquisition on its Condensed Consolidated Balance Sheet; however, the final purchase price is subject to revision based on the settlement of post-closing adjustments. The following table presents a summary of the Company's preliminary purchase accounting entries:



	As of June 30, 2013
	(in millions)
Consideration given:
Cash consideration	$	1,392.3
Amounts recognized for preliminary fair value of assets acquired and liabilities assumed:
Proved properties	$	713.8
Unproved properties	683.1
Asset retirement obligations	(0.9		)
Liabilities assumed	(4.5		)
Other assets	0.8
Total fair value	$	1,392.3

The following unaudited, pro forma results of operations are provided for the three and six months ended June 30, 2012. These supplemental pro forma results of operations are provided for illustrative purposes only and may not be indicative of the actual results that would have been achieved by the acquired properties for the period presented or that may be achieved by such properties in the future. Future results may vary significantly from the results reflected in this pro forma financial information because of future events and transactions, as well as other factors. The pro forma information is based on QEP's consolidated results of operations for the three and six months ended June 30, 2012, on the acquired properties' historical results of operations and on estimates of the effect of the transaction on the combined results. The pro forma results of operations have been prepared by adjusting the historical results of QEP to include the historical results of the acquired properties based on information provided by the seller and the impact of the preliminary purchase price allocation. The pro forma results of operations do not include any cost savings or other synergies that may result from the 2012 Acquisition or any estimated costs that have been or will be incurred by the Company to integrate the acquired properties.



	Three Months Ended					Six Months Ended
	June 30, 2012					June 30, 2012
	Actual			Pro forma		Actual		Pro forma
	(in millions, except per share data)

Revenues	$	499.3		$	543.6	$	1,102.5	$	1,181.5
Net income attributable to QEP	(0.7		)	2.8		154.5		160.1
Earnings per common share attributable to QEP
Basic	$	—		$	0.02	$	0.87	$	0.90
Diluted	—			0.02		0.87		0.90

Divestitures

In June 2013, QEP Energy sold its interests in several non-core oil and gas properties located in the Northern Region for total cash proceeds of $139.7 million and recorded a pre-tax gain on sale of $102.5 million, both of which are subject to post-closing adjustments. During the quarter ended June 30, 2013, QEP Energy recorded the gain on its Condensed Consolidated Statement of Operation in "Net gain from asset sales".