Williams CEO Says Future of Natural Gas Looks Good

- Williams CEO Says Future of Natural Gas Looks Good

Wednesday, August 31, 2011
Tulsa World, Okla.
by Rod Walton

Falling natural gas prices can benefit the country and smart companies if they're willing to take advantage by getting bigger, Williams Cos. Inc. CEO and Chairman Alan Armstrong said Tuesday.

"Production companies are going to have to operate on a large scale," Armstrong said during the inaugural lecture of this academic year's Friends of Finance series on the University of Tulsa campus. "You better be a big player."

Williams knows something about size within the industry -- 14 percent of daily U.S. natural gas consumption moves on the company's interstate pipelines, while Williams' exploration and production side produces 1.2 billion cubic feet per day, according to the most recent data.

More efficient drilling techniques and shale gas discoveries have driven down natural gas prices from an average $7.91 per thousand cubic feet midway through the last decade to $4.37 in the past year. Crude oil now trades at 3.5 times the price of natural gas on an energy-equivalent basis.

And that's not such a bad thing, Armstrong told a capacity audience in the Great Hall of the Allen Chapman Activity Center. Cheaper natural gas pushes up demand, including the fuel's use as a petrochemical feedstock that is more cost-effective than plastic and petchem products made abroad.

In fact, the U.S. now enjoys a $16.4 billion trade surplus in basic chemical and plastics products, Armstrong said. Power generation companies also are replacing coal-fired units with gas-fired operations.

"We really do embrace the concept of low natural gas prices," Armstrong said. "We feel that growth is coming."

Change is certainly almost routine at Williams since Armstrong took over for Steve Malcolm in January. The Tulsa-based company announced the partial IPO and eventual spinoff of its exploration and production side into WPX Energy Inc., and it's also pursuing Houston-based pipeline and utility supplier Southern Union Co. for a possible merger.

Armstrong would not detail the offer for Southern Union since Williams is still in a bidding war with Energy Transfer Equity LP. But he did note that Southern Union's pipeline network and gas utility connections are attractive as power generation shifts toward natural gas.

"We really do believe that power generation markets will continue to expand," Armstrong said.

Energy Transfer Equity currently holds the higher offer at $44.25 per share in stock and cash. Williams, however, has argued that its all-cash bid, at $44 per share, is a better value for Southern Union because of stock market volatility.

The WPX Energy spinoff and IPO offers more immediate benefits locally. Few investors view Williams as a producer despite its top-10 domestic status, so WPX will give a strong, focused option to long-term investors who are not interested in the quarterly distributions promised by fee-based master limited partnerships.

"There really is a revolution going on before us," Armstrong said of the production and processing opportunities awaiting growth-oriented natural gas players.

Williams still would own 80 percent of WPX after the partial IPO, using the maximum $750 million in equity raised to pay down debt and shore up the company's investment-grade status. Williams shareholders would receive the remaining stake in a tax-free spinoff next year.

The final result would be that two of the nation's largest independent pure-play energy companies would both based in Tulsa.

Williams currently employs about 1,300 people in the city. The companywide workforce, including operations in offshore drilling and Canadian off-gas processing and olefins production, stands at about 5,000. Williams Cos. Inc. by the numbers

• 103 years old
• 1,300 employees in Tulsa; 5,000 companywide
• 14 percent of U.S. natural gas consumption moves on its pipelines
• 1.2 billion cubic feet in natural gas produced per day

Copyright (c) 2011 Tulsa World (Tulsa, Okla.)

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Williams Cos Affirmed Its Strong Interest In Acquiring Southern Union Company

- Williams Cos Affirmed Its Strong Interest In Acquiring Southern Union Company



Aug 17, 2011

Williams Cos (NYSE:WMB) affirmed its strong interest in acquiring Southern Union Company (NYSE:SUG) for $44 per share in cash. The all-cash proposal represents value certainty of $44 per share to Southern Union shareholders, which is a premium of 4% over the implied value of the agreement with Energy Transfer Equity (NYSE:ETE) of $42.32.

Alan Armstrong, president and chief executive officer said, "Forty-four dollars a share, cash, for every shareholder is a superior offer for Southern Union's shareholders. Southern Union's current agreement with Energy Transfer includes illiquid partnership units whose value will be exposed to equity markets in the months until closing and beyond."

The Williams Cos has a potential upside of 25% based on a current price of $28.15 and an average consensus analyst price target of $35.2.

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Williams Declares Dividend

- Williams Declares Dividend

Wednesday, July 20, 2011
Williams Cos. Inc.

Williams' board of directors has approved a regular dividend of $0.20 per share on the company's common stock, payable Sept. 12, 2011, to holders of record at the close of business on Aug. 26.

The company has paid a common stock dividend every quarter since 1974.

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Williams Responds to Southern Union's Decision to Engage in Discussions

-  Williams Responds to Southern Union's Decision to Engage in Discussions



Jul 15, 2011

Williams (NYSE:WMB) commented on the announcement by Southern Union Co. (NYSE:SUG) that the Special Committee of its Board of Directors has authorized Southern Union to engage in discussions with Williams regarding Williams' $44.00 per share all-cash proposal to acquire all the outstanding shares of Southern Union. The Special Committee of Southern Union made the determination to engage in discussions and to provide information to Williams pursuant to Section 5.4 of Southern Union's merger agreement with Energy Transfer Equity, L.P. (NYSE:ETE).

Alan Armstrong, Williams' President and CEO said, "We are confident that our all-cash, premium proposal is in the best interests of both companies' shareholders, and we are pleased that Southern Union will engage in discussions with Williams. We look forward to working together with Southern Union and to quickly executing a definitive merger agreement."

Williams has a potential upside of 23.7% based on a current price of $29.74 and an average consensus analyst price target of $36.8.

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Williams Raises Bid for Southern Union to About $5.6B

- Williams Raises Bid for Southern Union to About $5.6B

Thursday, July 14, 2011
Dow Jones Newswires
by Ben Lefebvre

Williams Cos. raised its bid for Texas pipeline company Southern Union to about $5.6 billion in cash in the latest round of a takeover battle with Energy Transfer Equity.

Williams latest bid tops Energy Transfer's previous $5.1 billion cash-and-stock offer and its own previous bid of $5 billion in cash. The two companies have been competing to merge with Southern, with the winner of the competition expected to become the country's largest natural-gas pipeline company.

Williams said it hopes to have an agreement hammered out with Southern by Tuesday, which it maintains is enough time to share business data with Williams and hold the necessary management meetings to get approval.

"It's fairly simple as to what we have to offer," Williams Chief Executive Allan Armstrong said in an interview. "We don't think the decision process is real complex."

Representatives of Southern and Energy Transfer were not immediately available to comment.

Williams all-cash bid might be simple, but in the end it might not be as compelling as the company is portraying, said Morningstar equities analyst Jason Stevens said. Morningstar values Energy Transfer's cash-and-stock offer at $46 a share--higher than William's $44 a share offer--because of tax benefits and dividends the stock portion of the deal would offer. A merger with Southern might also force Williams to sell some of its pipeline assets in Florida to win over antitrust regulators, Stevens said.

"They'd have to sell their premiere assets," Stevens said. "It's just not as compelling an offer."

It might be difficult for Williams to go any higher than its current 10% premium to Energy Transfer's current offer, said BMO Capital Markets analyst Carl Kirst.

"Williams paying more than $44 would start facing investor blowback given the premium involved," Kirst said in an investors note.

Energy Transfer and Southern Union last week set a deal initially valued at $40 a share, four dollars lower than Williams's latest bid. Energy Transfer also agreed to sell some assets in order for the deal to pass muster with antitrust regulators.

The companies also raised the breakup fee for their agreement to $162.5 million from $92.5 million in the original agreement, another indication that a higher bid was expected. Williams in its latest bid said it would pay the breakup fee and related expenses for Southern.

Both companies had expressed willingness to assume Southern's debt, totaling $3.7 billion.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Williams Announced It Submitted An Enhanced Proposal To Acquire Southern Union Company

- Williams Announced It Submitted An Enhanced Proposal To Acquire Southern Union Company



Jul 14, 2011

Williams (NYSE:WMB) announced that it submitted an enhanced proposal to acquire Southern Union Company (NYSE:SUG) for $44 per share in cash, for a total enterprise proposal via a letter to the Special Committee of Southern Union's Board of Directors.

The enhanced proposal represents a premium of 10% over the nominal purchase price in Southern Union's recently revised agreement with Energy Transfer Equity (NYSE:ETE), announced on July 5.

Alan Armstrong, Williams' President and Chief Executive Officer said, "Based on the due diligence we have completed to date, we have revised our forecasts and synergy estimates and are pleased to deliver Southern Union an enhanced proposal to acquire the company for $44.00 per share in cash. We are more convinced than ever of the strategic and financial benefits of Williams' acquisition of Southern Union. Our proposal offers more than just premium value and full liquidity to the Southern Union shareholders; it is designed to result very quickly in a merger agreement and provide certainty around financing and regulatory approvals. Williams is offering Southern Union a clear, direct path to the highest value for its shareholders."

The Williams Cos has a potential upside of 27.8% based on a current price of $28.79 and an average consensus analyst price target of $36.8.

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Southern Union Sharing Information With Williams in Defiance of Energy Transfer

- Southern Union Sharing Information With Williams in Defiance of Energy Transfer



Jun 28, 2011

Southern Union Co (NYSE:SUG) has begun the process of providing takeover suitor Williams Cos. (NYSE:WMB) with confidential business information, according to a filing today with the SEC.

That's despite a warning from the company's original acquisition partner Energy Transfer Equity (NYSE:ETE) that doing so would be in violation of their signed agreement.

Williams offered $4.9 billion, all in cash, for Southern Union last week.

While Energy Transfer maintains that its $4.2 billion offer is still superior due to its deferred tax structure, things aren't looking good for the company.

Shares of The Williams Cos are trading up 2.33% at $29.47.

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Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams

- Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams



Jun 27, 2011

Energy Transfer Equity (NYSE:ETE) said in a letter to Southern Union Co (NYSE:SUG) that it cannot hold deal talks with Williams Companies (NYSE:WMB).

In the letter to Southern Union, Energy Transfer wrote that company's board "is not permitted by the merger agreement to engage in any discussions or negotiations with Williams." It also stated that Southern Union cannot provide nonpublic information to Williams.

The filing also said that Energy Transfer, "does not believe that the board can conclude, in good faith, that the Williams proposal constitutes, or is reasonably likely to result in, a superior offer."

It was also disclosed in a letter from Southern Union that Williams had bid $30 per share for the company in January, an offer that was inferior to one Southern had already received at the time from another, unnamed company.

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Both Williams Firms Tap Strong Q1 Returns

Both Williams Firms Tap Strong Q1 Returns

Thursday, May 05, 2011
Tulsa World, Okla.
by Rod Walton

Williams Cos. Inc. and Williams Partners LP both exceeded $300 million in profits for 2011's first quarter, the Tulsa natural gas, oil and natural gas liquids firms reported Wednesday.

Higher NGL margins sparked the strong returns for the three months ending March 31. Parent Williams tapped $321 million, or 54 cents per share, in net income while Williams Partners totaled $307 million, or 81 cents per unit, in profit.

"We're off to a good start this year, and we're expecting an even stronger performance for the remainder of 2011 and 2012," Alan Armstrong, president and chief executive officer, said in a statement. "We've increased our earnings guidance 11 percent for both years, as we expect strong NGL and olefin margins in our midstream businesses."

Williams Cos. net income was a dramatic increase over 2010's first quarter, when the company announced a $195 million net loss. Williams Partners' total was down slightly from the $322 million same time last year, but 33 percent higher on a per-unit basis, according to the release.

The traditionally natural gas-rich Tulsa company has upped its stake in oil and NGL plays in the past year due to higher prices and increased demand for ethane for use in petrochemical production. Williams has $4.8 billion in growth capital projects planned through 2012.

"We continue to invest in and bring more value-adding natural gas and NGL infrastructure projects online," Armstrong added. "With abundant supplies in the new shale plays and growing demand from natural gas-fired electrical generation, the need for natural gas infrastructure will continue to grow."

Williams Cos. is focused on infrastructure, exploration and production although a new subsidiary, WPX Energy Inc., will spin off the E&P segment in the near future. Williams Partners handles natural gas and NGL gathering, transport and processing assets.

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Williams Says It Has No Utica Drilling Plans

Williams Says It Has No Utica Drilling Plans

Tuesday, May 03, 2011
Knight Ridder/Tribune Business News
by Elizabeth Skrapits, The Citizens' Voice, Wilkes-Barre, Pa.

Beneath the deep-lying Marcellus Shale lies the even deeper Utica Shale, a rock formation that geologists say also has the potential to be rich in natural gas.

However, nobody is tapping into it in Northeastern Pennsylvania just yet, and the Utica remains largely unexplored in the rest of the state.

The state Department of Environmental Protection issued Williams Production Appalachia LLC a permit on Feb. 4 to drill deeper for its exploratory well on Route 487 in Sugarloaf Township, Columbia County, past the Benton Foundry.

The permit sparked rumors Williams planned to drill into the Utica Shale, but company spokeswoman Helen Humphreys says they're not true.

"I know that we are not going into the Utica Shale at all," she said.

The plan is to drill down past the Marcellus Shale to tap into the Onondaga limestone formation beneath, then go back up into the Marcellus, Humphreys said. The well has been drilled and the next step will be to hydraulically fracture it, but she said she didn't have a date for when it will be done.

A map issued by DEP on April 5 shows that, like the Marcellus, the Utica Shale runs completely through Northeastern Pennsylvania including Luzerne, Lackawanna, Wyoming and Columbia counties.

Although DEP keeps track of Marcellus Shale drilling permits, the Utica is still pretty much off the radar for the state agency.

"We don't have anything really identifying the formation in our system right now," said Dave English of the DEP Bureau of Oil & Gas Management. "Basically all we're tracking at this point in time is the Marcellus."

There have been permits issued for the Utica Shale -- although not many, and none in Northeastern Pennsylvania -- and there are several other shale formations being tested, English said.

Range Resources, the first company to drill a Marcellus Shale well in Pennsylvania, in 2004, is a pioneer in the state's portion of the Utica Shale as well.

Last year, the company drilled a productive well in Beaver County. Range Resources President and Chief Operating Officer Jeffrey Ventura reported in an April 27 conference call the company is planning a second horizontal well in the Utica Shale later this year.

Copyright (c) 2011, The Citizens' Voice, Wilkes-Barre, Pa. Distributed by McClatchy-Tribune Information Services.

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Williams Officials Outline New Gas Pipeline Project

Williams Officials Outline New Gas Pipeline Project

Thursday, April 07, 2011
Knight Ridder/Tribune Business News

by  Elizabeth Skrapits, The Citizens' Voice, Wilkes-Ba

Work should begin this spring on a new natural gas pipeline system that will connect Marcellus Shale wells in the northeast with a route to major metropolitan markets.

Three Williams representatives -- Ryan Savage, general manager for Appalachian Midstream Operations; Tunkhannock-based Manager of Operations Mike Dickinson and Communications Specialist Helen Humphreys -- met with The Citizens' Voice on Wednesday to outline details of the Springville Gathering System project.

"It's clear that a lot of residents don't have a good idea about our projects, and also don't have all of the facts," Humphreys said. "We think it's important that the Springville project, which is Williams' pipeline project, be evaluated on its own merits, and that Williams be evaluated on its own merits."

Tulsa, Okla.-based Williams owns the Transco interstate pipeline that Savage said starts in south Texas and supplies 60 percent of the gas to cities like Philadelphia and New York. The Transco has been in Luzerne County since 1958, and there are currently four metering stations in the county, Savage said.

The company plans to run a new 24-inch diameter gas gathering pipeline that will run approximately 33.5 miles from the Lathrop compressor station at Springville in Susquehanna County to a new compressor station outside Tunkhannock. From there it will connect to the Transco by way of a new metering station in Dallas Township, to be located on private property about half a mile from the Dallas schools.

Williams plans to use the line for natural gas from its own wells, and has an agreement with Cabot Oil & Gas to transport gas from Susquehanna County. Williams also has been talking to other companies about using the new pipeline, Savage said.

Williams will have a hearing at 7 p.m. May 16 in Dallas Township for the proposed metering station.

For the pipeline itself, the company has already started designing the route, buying pipe and lining up contractors, Savage said.

Most requirements, including permits and an archaeological survey, have been fulfilled. After a permit from the state Department of Environmental Protection is granted, work can start in May or June and will be a three- to four-month process, he said.

"It takes a long time to get to this point, and we're in the last throes," Savage said. "Construction's really the short period. It takes a long time to get your right-of-way, and get all your permit applications in, and do all of your endangered species testing and all your other environmental protection work."

Williams' compressor station in Tunkhannock, which is under construction, will be located in a rural area away from the road, he said.

"You'd never know where it was unless somebody pointed it out to you," Savage said.

He said the same will go for the metering station. Williams will build a private, padlocked road to it from Lower Demunds Road. There will be no access from Fairground Road. Truck traffic will not come near the school during construction, Humphreys said.

The metering station will be constantly monitored at a facility in Tulsa, Dickinson said. If there is anything outside normal operating parameters, an alarm goes off and a local operator can be called or the station can be shut down remotely, he said.

Savage said a metering station is one of the most innocuous natural gas facilities, comparing it to a gas meter on a home, but larger.

"On the scale of things, these aren't dangerous facilities," he said.