Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — The Williams Companies — NYSE and PEG Growth Conference 2006
36 slides from Williams Companies, Inc. (the)'s conference presentation, Jan 18, 2006
Slide 1: NYSE and PEG Growth Conference: Williams Update
NYSE and PEG Growth Conference Williams Update Don Chappel, CFO January 18, 2006
Slide 2: Forward Looking Statements
Forward Looking Statements Our reports, filings, and other public announcements might contain or incorporate by reference statements that do not directly or exclusively relate to historical facts. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigatio
Slide 3: Oil & Gas Reserves Disclaimer
Oil & Gas Reserves Disclaimer The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves. We use certain terms in this presentation, such as “probable” reserves and “possible” reserves and “new opportunities potential” reserves that the SEC’s guidelines st
Slide 4: Overview Headlines
Overview Headlines E&P ready to ramp up pace of growth again with arrival of new rigs in Piceance Basin Midstream captures significant deepwater production commitment, prepares to expand capacity in West Gas Pipeline continues to expand system to meet demand of growth markets Power completes
Slide 5: Exploration & Production
Exploration & Production Williams. [
Slide 6: Unique Drilling Portfolio
Exploration & Production Unique Drilling Portfolio Strategy remains rapid development of our significant Powder River drilling inventory North American unconventional natural gas production Focused portfolio of large well- Piceance defined resources Repeatability of results, very San Juan hi
Slide 7: Strong Domestic Production Growth
Exploration & Production Strong Domestic Production Growth 650 Net MMcfed 550 450 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 2004 2005 7 / NYSE and PEG Growth Conference / Wednesday, January 18, 2006 © 2005 The Williams Companies, Inc.
Slide 8: Williams is the Leader in Gas Production Growth through the Drill Bit
Exploration Williams is the Leader in Gas Production Growth & Production through the Drill Bit Top 20 U.S. Gas Producers Top 20 U.S. Gas Producers sorted by Production Growth MMcfd Percent MMcfd Percent Company 3Q ‘04 3Q ‘05 change Company 3Q ‘04 3Q ‘05 change 1 BP 2,685 2,456 -8.5% 1 Chesapeake* 90
Slide 9: Midcontinent Area – Horizontal Expertise
Midcontinent Area – Horizontal Expertise CBM and emerging shale activity Williams’ Statistics: Proved reserves total 121Bcfe ~23 MMcf/d net production Leasehold approx. 118,000 net acres 2004 drilling success rate of 90% 50 – 60 Operated wells drilled per year Caney and Woodford Shal
Slide 10: San Juan Basin -- Foundation
San Juan Basin -- Foundation Conventional and coal bed methane production Long life / slow decline wells Williams’ proved reserves total 671 Bcfe ~150 MMcfe/d of net production 3-5% annual growth Low risk in-fill drilling 40-60 operated wells drilled per year 200 – 250 undeveloped lo
Slide 11: Powder River Basin – Growing Again
Powder River Basin – Growing Again High potential, low-risk development play, low cost wells Williams’ proved reserves total 299 Bcfe Leasehold 1,021,400 gross/466,000 net acres 2004 drilling success rate of 99% ~120 MMcfe/d net production ~9,000 drilling locations; 46% operated 11 / NYS
Slide 12: Piceance Basin Area Map
Piceance Basin Area Map 26 25 30 29 28 27 26 25 30 29 28 27 26 25 30 29 28 27 26 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 36 31 32 33 34 35 1 6 5 4 3 2 1 6 5 4 3 2 1 6 5 4 3 2 1 6 5 12 8 9 7 7 8 10 11 12 9 10 11 12 7 8 9 10 11 12 7 8 9 13 17 18 16 18 17 15 14 13 16 15 6S 96W 6S 95W 14 13 18 17 1
Slide 13: 3P Reserves
Exploration & Production 3P Reserves 8.5 Tcf 3P ’04 YE 7.0 Tcf 3 Tcf ’04 YE Proved '04 YE Proved Existing Proved, Prob. & Poss. August ’05 Announcement: 37.5% increase in probable and possible reserves since year end ‘04 Extensive study of Piceance Valley yielded additional 1,600 locations and a
Slide 14: Piceance Highlands – Operations Update
Exploration & Production Piceance Highlands – Operations Update 14 / NYSE and PEG Growth Conference / Wednesday, January 18, 2006 © 2005 The Williams Companies, Inc.
Slide 15: Piceance Highlands Projects Summary
Exploration & Production Piceance Highlands Projects Summary Estimated Estimated Net Gross Net Potential 2004 2005 2006 Project Area Acres Potential Reserves Wells Wells Wells Locations (BCF) (1) Trail Ridge 20,638 1,500 – 2,000 1,500 – 2,000 3 12 20 (10-acre density)(2) Ryan Gulch 15,780 770 700 3
Slide 16: Cash Margin Analysis
Exploration & Production Cash Margin Analysis 3-Year Average (2005-07) $5.00 Previous Previous $ 4 .5 6 $3.75 Cash $3.71 Margin $ 3 .0 0 $5.52 $2.50 $1.25 Cash Costs* $1.81 $ 1 .5 6 $0.78 $0.00 Realized Gas Price Margin/Cost F&D Costs** Assumption Assumption Reflective of core basins * Includes LOE,
Slide 17: Exploration & Production Key Points
Exploration & Production Key Points Strategy remains rapid development of our premier drilling inventory Delivering meaningful volume growth through expanded development drilling activity -- Piceance is primary growth driver Long history of high drilling success, low finding costs Short time
Slide 18: Midstream
Midstream Williams. [
Slide 19: Gulf Coast Assets
Midstream Gulf Coast Assets • World’s largest dry tree spar • GOM’s deepest sub-sea tie-back • Significant number of large scale, high growth opportunities 19 / NYSE and PEG Growth Conference / Wednesday, January 18, 2006 © 2005 The Williams Companies, Inc.
Slide 20: West Region Assets
Midstream West Region Assets Opal Echo Springs Milagro Kutz Lybrook • Exposure to significant drilling activity • 2nd largest NGL producing complex in lower 48 • Largest gatherer in San Juan Basin • Enjoys advantages of economies of scale 20 / NYSE and PEG Growth Conference / Wednesday, January 18,
Slide 21: Major Growth Projects Update
Midstream Major Growth Projects Update Contracted/Approved Under Negotiation Development/Proposal Stage 2005 2006 2007 2006 2007 2008 2006 2007 2008 Spending $250MM Spending $200-300MM Spending $500-700MM Western Region: Wamsutter Phase II Western G&P Expansions Blind Faith Echo Springs TXP-IV Overl
Slide 22: Midstream Key Points
Midstream Key Points Strong earnings and cash flows despite hurricanes MLP supplements growth strategy Capturing growth opportunities Delivered on “First Tranche” of expansion opportunities Organic growth around our Western assets Footprint expansion in the deepwater Robust opportuniti
Slide 23: Gas Pipeline
Gas Pipeline Williams. [
Slide 24: Quality Assets Serving Growth Markets
Gas Pipeline Quality Assets Serving Growth Markets Northwest Transco Underground storage Gulfstream LNG peaking facility (50% Ownership) 24 / NYSE and PEG Growth Conference / Wednesday, January 18, 2006 © 2005 The Williams Companies, Inc.
Slide 25: Gas Pipeline Strategy Overview
Gas Pipeline Strategy Overview Strategic Objective Maximize utilization of pipeline system capacity – Provide high quality, low cost services – Maintain access to supplies and markets Customer Value Proposition Reliable service Low cost 25 / NYSE and PEG Growth Conference / Wednesday, Janu
Slide 26: Transco – Premier System Serving the Atlantic Seaboard
Gas Pipeline Transco – Premier System Serving the Atlantic Seaboard Peak day design capacity of 8.1 Bcf/d Assets 10,500 miles of pipeline 7 storage facilities Zone 6 44 compressor stations; 1,630,000 HP Rate base $2.7 B Zonal rate structure Transco Seasonal storage Zone 5 220 Bcf o
Slide 27: Northwest – Multiple Supply Sources Serving the Northwest
Gas Pipeline Northwest – Multiple Supply Sources Serving the Northwest Peak Day design capacity of 3.5 Bcf/d Assets Northwest 4,100 miles of pipeline 3 storage facilities 42 compressor stations; 350,000 HP Rate base $1.1 B Postage stamp rates Seasonal storage 12.4 Bcf of capacity
Slide 28: Gulfstream – Pipeline To A Fast Growing Market
Gas Pipeline Gulfstream – Pipeline To A Fast Growing Market Large supply sources Mobile Bay Eastern Louisiana Mississippi High growth Gas fired power generation Population Gulfstream Phase I Long term contracts 591 miles of pipe 114,000 HP compression $1.461 B capital Average contr
Slide 29: Gas Pipeline Key Points
Gas Pipeline Key Points Strong performance continues; operationally and financially Strong cash flow provider Continued progress Compliance and reliability projects Expansion developments Preparation for rate cases on schedule to be in effect 2007 29 / NYSE and PEG Growth Conference / We
Slide 30: Power
Power Williams. [
Slide 31: Power Regional Review: West
Power: Regional Review West Resale Resale of of Toll: Toll: 490 490 MW MW Through Through 2008 2008 Owned: Owned: Tolling: Tolling: Milagro Milagro AES AES 4000 4000 60 60 MW MW 4,141 4,141 MW MW Natural-gas Natural-gas fired fired Through Through 2018 2018 Forward Forward Power Power Sale: Sale: CD
Slide 32: Power Regional Review: Northeast
Power: Regional Review Northeast Owned: Owned: Hazleton Hazleton 147 147 MW MW Tolling: Tolling: Natural Natural gas-fired gas-fired Red Red Oak Oak 766 766 MW MW Through Through 2022 2022 Full Full Requirements: Requirements: Tolling: Tolling: Allegheny Allegheny Electric Electric Co-op Co-op Ironw
Slide 33: Power Regional Review: Mid-Continent and South Central
Power: Regional Review Mid-Continent and South Central Tolling: Tolling: Jackson Jackson Jackson 541 541 MW Through MW Through 2018 2018 MISO market implemented in April, resulting in immediate improvement to Jackson’s dispatch utilization Reserve margins beginning to tighten Evangeline Tolling:
Slide 34: Power Regional Review: Southeast
Power: Regional Review Southeast Materially hedged with full-requirements load contracts Southern reserve margins remain high Benefiting supply obligations for EMC’s Full Full Requirements: Requirements: Tolling: Tolling: Four Four Georgia Georgia EMCs EMCs Lindsay Lindsay Hill Hill 600-1,500
Slide 35: 2005 Successes
Power 2005 Successes West 1,500 MW resale of tolling from AES 4000: 854 MW starting in 2006 and growing to 1,500 MW in 2007-10 490-MW resale of toll from AES 4000 for 2006-08 100-MW heat rate call option for 2008 690-MW capacity sales: from AES 4000 for June-Sept 2005 Resale of tolling a
Slide 36: Q&A
Q&A Williams. [
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