Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Investor Day (June 2008)
192 slides from Williams Companies, Inc. (the)'s investor day presentation, Jun 25, 2008
Slide 1: Williams 2008 Analyst Day
Williams 2008 Analyst Day June 25, 2008
Slide 2: Agenda
Agenda Continental Breakfast Welcome & Introductions Travis Campbell Introductory Remarks Steve Malcolm Commodity Outlook Jeff Nevins Exploration & Production Ralph Hill Break Midstream Alan Armstrong Gas Pipeline Phil Wright Corporate Overview Don Chappel Summary Steve Malcolm Lunch WPZ Alan Armstr
Slide 3: 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 4: Forward Looking Statements (cont.)
Forward Looking Statements (cont.) Our ability to receive services from outsourcing provider locations outside the United States might be impacted by cultural differences, political instability, or unanticipated regulatory requirements in jurisdictions outside the United States; We could be held lia
Slide 5: Oil and Gas Reserves and Resource Potential Disclaimer
Oil and Gas Reserves and Resource Potential Disclaimer The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves. We have used certain terms in this presentation such as "probable" reserves and "possible" reserves and "unrisked theoretical resource estima
Slide 6: Steve Malcolm, Chairman, President & CEO
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Steve Malcolm Chairman, President & CEO Williams
Slide 7: Very Small Exposure to Rockies Prices
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am 87% 13% Very Small Exposure to Rockies Prices Higher-Priced Markets and Hedges Markets in the Rockies 1Q 2008 domestic production
Slide 8: Williams' Powerful Piceance Package
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams' Powerful Piceance Package Top-Tier Growth Basin in North America Colorado Area Shown Rio Blanco County Garfield County Williams Parachute Lateral Williams PGX Pipeline (NGL) Williams Willow Creek Plant Site Proposed NGL Pipeline to
Slide 9: Williams' Powerful Piceance Package
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams' Powerful Piceance Package Largest, most active producer Running 26 rigs Delivering production growth Nearly 9,000 drilling locations 9.2 Tcfe proved, probable and possible reserves Operate ~2,400 wells Highly regarded operator - be
Slide 10: Williams' Powerful Piceance Package
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams' Powerful Piceance Package Willow Creek cryogenic plant PGX pipeline NGL pipeline to Overland Pass Colorado Area Shown Rio Blanco County Garfield County Largest, most active producer Running 26 rigs Delivering production growth Near
Slide 11: Williams' Powerful Piceance Package
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams' Powerful Piceance Package Adding pipeline takeaway capacity Colorado Hub Connection Sunstone Pipeline Top-Tier Growth Basin in North America Colorado Area Shown Rio Blanco County Garfield County Willow Creek cryogenic plant PGX pip
Slide 12: What's New Today
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am What's New Today Raising commodity price forecast Increasing earnings guidance Growing Raising capital expenditure guidance for new growth projects Lining up opportunities to significantly expand our gas-processing business in burgeoning Can
Slide 13: Williams - The Premier Natural Gas Investment
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams - The Premier Natural Gas Investment Portfolio of best-in-class natural gas assets in North America Sustainable, organic growth opportunities abound Benefit from favorable commodity markets Growth with discipline - EVA1 focus Pullin
Slide 14: June 2008 Economic Overview
June 2008 Economic Overview Jeff Nevins Vice President, Corporate Planning
Slide 15: Macro Environment Commodity Outlook
Macro Environment Commodity Outlook Global Crude Oil Supply / Demand Outlook North America Natural Gas Supply / Demand Outlook Global LNG Supply / Demand Outlook Rockies Basis Outlook Williams Updated Guidance Commodity Prices Crude (WTI) Henry Hub (NYMEX) Regional Basis Segment Profit / EPS
Slide 16: Global Crude Oil Supply / Demand Outlook
Global Crude Oil Supply / Demand Outlook Production Capacity Demand 2008 16.7 2008 25.3 2013 18.3 2013 25.8 Asia's Thirst for Oil and Ability to Pay for It Will Likely Keep World Oil Markets Moderately Tight Through 2013 Commodity Outlook World Oil Productive Capacity vs. Demand Estimates (mmbpd) No
Slide 17: Global Oil Supply / Demand Growth
2008 2013 Spare Capacity 2.01 4.95 Global Oil Supply / Demand Growth Historical Annual Average of 3.1 Commodity Outlook Global Oil Supplies Are Expected to Expand by Over 8 mmbpd by 2013, Increasing World Spare Oil Capacity by 3 mmbpd Spare Capacity Estimates World Oil Supply and Demand Growth 2008-
Slide 18: North America Natural Gas Supply / Demand Outlook
North America Natural Gas Supply / Demand Outlook Commodity Outlook Despite the Recent Surge in US Domestic Natural Gas Supplies, North America Will Still Need Twice the Amount of LNG That it is Importing Today by 2013 US & Canada Supply vs. Demand Estimates (bcfd) Production Capacity Demand 2008 68
Slide 19: Global LNG Supply / Demand Outlook
Global LNG Supply / Demand Outlook $18.00 to $20.00 $13.00 to $15.00 $10.20 to $10.60 Commodity Outlook Ample Storage Supplies and Growing US Natural Gas Production Should Allow North American Natural Gas Prices to Maintain a Discount to Oil Indexed Asian/European Cargoes Demand 2008 25.8 2013 38.8
Slide 20: Climate Change Mandate Scenario vs. Base Case
Climate Change Mandate Scenario vs. Base Case Base Case Supply Growth 2008-2013 Base Case Demand Growth 2008-2013 Climate Change Mandate Additional Demand Price assumptions to divert volumes away from... Commodity Outlook By 2013, a Climate Change Mandate Would Significantly Increase US Dependence o
Slide 21: Rockies Basis Outlook
Rockies Basis Outlook Commodity Outlook Incremental Natural Gas Demand Caused by Modest Climate Change Mandate Pulls Rockies Production to Coal Intensive US Midwest, and Declining Western Canadian Imports to US West Coast Pulls Rockies Production Westward 1.5 bcfd pipeline - Rockies to the West Coas
Slide 22: Economic Indicators
Economic Indicators Base Case Economic Assumptions US & Western Europe continue to depend on Asia and oil exporting countries for imports of goods, services and energy Global GDP remains strong @ 3.6% average growth through 2013 US GDP moderate growth @ 2.7% average growth through 2013 US Headline I
Slide 23: Commodity Price Changes (2008)
Commodity Price Changes (2008) 7 7.5 8 8.5 9 9.5 10 10.5 11 80 Crude Oil - WTI Natural Gas - NYMEX Previous Guidance Range (May 1, 2008) Commodity Outlook Un-hedged Commodity Price Assumptions 2008 2008 Un-hedged Commodity Price Assumptions Previous Range New Range Natural Gas - Henry Hub (NYMEX) (r
Slide 24: Commodity Price Changes (2009)
Commodity Price Changes (2009) 7 7.5 8 8.5 9 9.5 10 10.5 11 80 Crude Oil - WTI Natural Gas - NYMEX Previous Guidance Range (May 1, 2008) Commodity Outlook Un-hedged Commodity Price Assumptions 2009 2009 Un-hedged Commodity Price Assumptions Previous Range New Range Natural Gas - Henry Hub (NYMEX) (r
Slide 25: Oil & Gas History / NYMEX Forward Curve
Oil & Gas History / NYMEX Forward Curve1 Commodity Outlook J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D 63.15 51.13 58.07 56.73 63.38 64.97 68.19 75.57 69.47 83.32 87.56 95.1 90.49 89.85 100.74 104.48 119.37 129.06 134.01 134.53 135.02 135.33 135.54 135.7 135.77 135.78 135
Slide 26: Rockies Basis Overview
Rockies Basis Overview1 Commodity Outlook J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J Avg 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.51 1.4652 1.0826 1.1634 1.5197 1.1993 0.9528 0.
Slide 27: Commodity Price Summary (2008-09)
Commodity Price Summary (2008-09) 1 Oil = WTI and Natural Gas = Henry Hub Un-hedged Commodity Price Assumptions New (2008) New (2009) Natural Gas: Natural Gas: Natural Gas: Basin Prices Basin Prices Basin Prices Average Rockies $7.30-$8.10 $6.60-$8.10 Average San Juan/Mid-Continent $7.70-$9.00 $7.00
Slide 28: 2008 Segment Profit / EPS Change
2008 Segment Profit / EPS Change 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 2.6 80 Segment Profit ($ Millions)1 Earnings Per Share1 Previous Guidance Range (May 1, 2008) Commodity Outlook ($ in Millions) Previous (5/1/08) New (6/25/08) Segment Profit1 2,500-3,000 3,100-3,650 EPS1 $1.70-$2.10 $2.30-$2.80 1 Recu
Slide 29: 2009 Segment Profit / EPS Change
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 2.6 80 2009 Segment Profit / EPS Change Segment Profit ($ Millions)1 Earnings Per Share1 Previous Guidance Range (May 1, 2008) ($ in Millions) Previous (5/1/08) New (6/25/08) Segment Profit1 2,600-3,200 2,900-3,800 EPS1 $1.80-$2.30 $2.05-$2.90 1 Recurring and After MT
Slide 30: Commodity Price/Segment Profit Sensitivity
Commodity Price/Segment Profit Sensitivity Commodity Outlook Dollars in Millions Change in Segment Profit Change in Segment Profit Six Month Impact 2008 Full Year Impact 2009 $1.00 Increase in Natural Gas Prices: $1.00 Increase in Natural Gas Prices: $1.00 Increase in Natural Gas Prices: E&P +150 +3
Slide 31: Q&A
Q&A re Companies, ne. Aight esaved ‘Witiars 2008 Ants Day / une 25,2008 / 34
Slide 32: Exploration & Production
Exploration & Production Ralph Hill President
Slide 33: Agenda
Agenda Review E&P's Strategy and Outlook Ralph Hill Powder River Basin Jerry Barnes Piceance Basin Alan Harrison Conclusion and Q&A Ralph Hill
Slide 34: Unique Drilling Portfolio
Unique Drilling Portfolio Strategy is to rapidly develop our significant drilling inventory while adding new resource potential opportunities Focused North American unconventional natural gas portfolio of large well-defined resources Long-term, low-risk, high-return drilling portfolio Strong organic
Slide 35: Leader in US Gas Production Growth
Leader in US Gas Production Growth Exploration & Production Source: Publicly reported data from EvaluateEnergy.com Quarterly U.S. Daily Natural Gas Production
Slide 36: Leader in Operating Costs
Leader in Operating Costs * Top 20 U.S. Gas Producers - 2007 Production Cost* Exploration & Production * Production Cost defined as costs incurred to operate and maintain wells and related equipment and facilities, including property taxes applicable to proved properties, and severance taxes Source:
Slide 37: Leader in F&D Costs
Source: Publicly reported data from EvaluateEnergy.com Leader in F&D Costs Top 20 U.S. Gas Producers - 3 Year Average Finding and Developing Costs (Fully Loaded) Williams Consistently Remains in Top Quartile for F&D Costs Exploration & Production $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 BP XT
Slide 38: Leader in Growing Reserves
Leader in Growing Reserves * Reserves Replacement % calculated as follows: (Revisions + Additions + Acquisitions + Divestitures)/Production Source: Publicly reported data from EvaluateEnergy.com, press releases, and company websites Top 20 U.S. Gas Producers - 2007 Reserves Replacement % (Sorted by
Slide 39: 3P Reserves and Resource Potential Update
3P Reserves and Resource Potential Update Exploration & Production medicare medicaid all other 2.1 1.8 6.9 PDP 2006 3P Reserves 10.8 Tcfe Probable & Possible PUD medicare medicaid all other 2.4 1.9 9 PDP 2007 3P Reserves 13.3 Tcfe Probable & Possible PUD Moved 1.9 Tcfe over last three years from pro
Slide 40: 2007 3P Reserves Update
2007 3P Reserves Update Exploration & Production Piceance Mid-Continent Green River/Int'l San Juan Powder River * Production for 1Q '08 0.4 Tcfe Proved 1.3 Tcfe Prob/Poss 209 MMcfe/d* 2.8 Tcfe Proved 6.4 Tcfe Prob/Poss 607 MMcfe/d* 0.6 Tcfe Proved 0.4 Tcfe Prob/Poss 134 MMcfe/d* 0.3 Tcfe Proved 0.7
Slide 41: Evolution of Williams E&P - Historical Reserves Growth
Evolution of Williams E&P - Historical Reserves Growth Exploration & Production Domestic Proved Reserves (Bcfe) Acquisitions Asset Sales Drillbit Reserves Additions 200 700 1,200 1,700 2,200 2,700 3,200 3,700 4,200 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 42: Cash Margin Analysis
Cash Margin Analysis Exploration & Production $7.26 is after hedging and includes average basin market price of $7.53 before hedging Cash costs include LOE, G&A, taxes and gathering F&D costs include capital and exploration costs/proved reserves ('05-'07 average) 2 Year Average (2008-2009) Reflectiv
Slide 43: 87% Domestic Production Not At Rockies Prices
87% Domestic Production Not At Rockies Prices Total Domestic 1Q Production of 1,013 MMcfed 37% (370 MMcfed) at Rockies prices before hedging 63% (643 MMcfed) produced or transported to other price points Rockies hedges of ~240 MMcfed 370 MMcfed total less 240 MMcfed hedged = 130 MMcfed or 13% priced
Slide 44: San Juan Basin - Solid Performer
San Juan Basin - Solid Performer Conventional and coalbed methane production Long life / slow decline wells 2007 Proved reserves of 576 Bcfe 1Q '08 net production 134 MMcfe/d Approx. 120,000 net acres Low risk in-fill drilling 40-60 operated wells drilled per year 200-250 undeveloped locations with
Slide 45: Mid-Continent Region
Mid-Continent Region Arkoma Basin - Horizontal Expertise Approx. 90,000 net acres 1Q '08 net production 13 MMcfe/d Caney and Woodford Shale offer additional upside opportunities Ft. Worth - Barnett Shale 4 rigs active in the play 32,000+ net acres, 90% of investment in core and tier 1 areas 1Q '08 n
Slide 46: Barnett Shale Acreage Position
Barnett Shale Acreage Position Core Area Tier I Tier II South Tier II West Williams Acreage Exploration & Production
Slide 47: Barnett Shale Reserves Summary
F&D Cost: ~$1.30/Mcf (based on YE2007 3P reserves) 2007 Proved Reserves Replacement: 380+% Barnett Shale Reserves Summary Exploration & Production 175 277 27 80 131 61 116 35 68 0 50 100 150 200 250 300 YE 2005 YE 2006 YE 2007 Reserves, Bcfe 0 50 100 150 200 250 300 Op and Non-Op Well Count Proved B
Slide 48: International E&P
International E&P YE07 Proved reserves total 26 MMboe (154 Bcfe) 8.2 Mboe/d net oil and liquids production 69% ownership in Apco Argentina 70% of production from Entre Lomas in Neuquen basin Bajada del Palo and Agua Amargo acquisitions add Neuquen basin scale In-fill, field extension drilling 283,00
Slide 49: Powder River Basin
Powder River Basin Jerry Barnes Vice President
Slide 50: Powder River Basin CBM Production
Powder River Basin CBM Production 1 WOGCC Data Feb. 2008 2 USGS Estimate 2002 Current production 1.38 Bcf/d1 ~23% of Wyoming Gas Production Production is from Wyodak, Anderson, Wall, Canyon, and Big George coals ~60% is from the Big George Coals 39 Tcf Gas-In-Place2 25,687 wells drilled to date 25,3
Slide 51: Powder River Basin Cross-Section
Williams Operated Pilots Partner Operated Pilots Other Industry Pilots Powder River Basin Cross-Section Exploration & Production 120' Average 65' Average Wyodak Fairway Big George Fairway WEST EAST 200' 400' 600' 800' 1000' 1200' 1400' 1600' 1800' 2000' 24 Miles 12 Miles * IHS Data December 2007 Wyo
Slide 52: Powder River Current Development Status
Powder River Current Development Status High potential, low-risk development play, low cost wells YTD Big George production has increased over 30% Williams' proved reserves total 413 Bcfe (YE 2007), plus 1.3 Tcf Prob/Pos for a total of 1.7 Tcf reserves Leasehold 939,000 gross/427,000 net acres Willi
Slide 53: Powder River Achieving Impressive Growth
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Powder River Achieving Impressive Growth Exploration & Production 100 MMcfd Oct 1999 200 MMcfd Mar 2001 300 MMcfd Aug 2002 300 MMcfd Sep 2005 400 MMcfd Jan 2007 500 MMcfd Nov 2007 600 MMcfd Apr 2008 PRB O&G EIS ROD July 2003
Slide 54: Powder River Wyodak / Big George Production Histories
Powder River Wyodak / Big George Production Histories Exploration & Production Source: IHS December 2007 Data 1st Qtr 1987 20.4 88 30.6 89 45.9 90 91 92 93 94 95 96 97 98 99 2000 1 2 3 4 5 6 7 8 826 MMcf/d 518 MMcf/d Wyodak Years '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '0
Slide 55: Powder River Net Production Forecast
Powder River Net Production Forecast Exploration & Production 2007 2008E 2009E Valley 62 75 84 CAGR 16% 637 997 960 170 205 230 Wells Spud MMcfe/d
Slide 56: Powder River Basin Plan of Development Process
Powder River Basin Plan of Development Process Submitted Plans of Development Well Permits Date Submitted to BLM SRU 4 31 9/29/06 S Prong 1 and 2 176 8/17/07 E Bullwhacker POD Add 1 2 8/31/07 Wormwood 3 14 9/14/07 Tex Draw 63 9/17/07 Kingsbury 5 47 12/28/07 Laskie Draw 12 1/14/08 Carr V Add II 14 3/
Slide 57: Powder River Water and Surface Use Permits
Powder River Water and Surface Use Permits Exploration & Production Water Permits Approved by Plan Year Surface Use Agreements in Place by Plan Year 2008 2009 2010 Valley 97 51 56 96% 80% 65% 2008 2009 2010
Slide 58: Powder River Typical Seasonal Restrictions on Drilling
Powder River Typical Seasonal Restrictions on Drilling Jan Jan Feb Feb Mar Mar Apr Apr May May Jun Jun Jul Jul Aug Aug Sep Sep Oct Oct Nov Nov Dec Dec Wildlife Restrictions Elk Crucial Winter Range Elk Calving Areas Sage Grouse (Lek and Nesting) Bald Eagle Nesting Bald Eagle Winter Roosting Mountain
Slide 59: Powder River Produced Water Options
Powder River Produced Water Options Surface Discharge Impoundments Irrigation Sub-irrigation Treatment Storage and Retrieval Re-injection Exploration & Production Surface Discharge Ion Exchange/Reverse Osmosis/Filtration WDEQ WYPDES Permitted Outfall WSEO Permitted Reservoir Tire Tank for Stock Wate
Slide 60: Powder River Produced Water Irrigation
In conjunction with private surface landowners, hundreds of acres are being irrigated with produced CBNG water. Operators apply soil mitigation as soils analyses dictate resulting in the production of over 1 Ton per acre of greater than 10% protein content native hay Powder River Produced Water Irri
Slide 61: Produced Water Management - Reservoirs
Powder River Basin Produced Water Management - Reservoirs Exploration & Production Water Management Plan: WDEQ Permitted Storage and Release with Capability to Pump Water to Various Reservoir Pump Station
Slide 62: Powder River Key Points
Powder River Key Points Production rapidly growing 2008 seasonal bird stipulations behind us Rigs contracted and ramping up to run 20+ rigs Sage Grouse Interim Management Area (IMA) appears acceptable Water issues are manageable Take away capacity is available Exploration & Production
Slide 63: Piceance Basin
Piceance Basin Alan Harrison Vice President
Slide 64: Piceance Basin Overview
Piceance Basin Overview Basin centered gas system - Mesa Verde continuous gas play 200-300 Tcfe Piceance basin potential Current Production of ~1.8 Bcfe/d Over 15,000 wells in the basin One of the largest gas basins in the nation Exploration & Production Wood MacKenzie North American Gas Service Mes
Slide 65: Piceance Valley and Highlands - World Class Assets
Piceance Valley and Highlands - World Class Assets Exploration & Production Piceance Valley Piceance Highlands Newly Acquired Acreage Existing Williams Acreage Other operators Naval Oil Shale Res. Piceance Valley Piceance Highlands Williams is the largest gas producer in the Basin 2007 Proved reserv
Slide 66: Piceance Sub-surface View
Piceance Sub-surface View Piceance Valley: 6,000' - 9,000' Piceance Highlands: 9,000' - 12,000' Horizontal reach up to 3,000' Drilling Depths Piceance Valley 1,800' - 2,400' of Gas Saturated Mesa Verde Formation Coal Rich Interval Interbedded Sand/Mudrock Exploration & Production
Slide 67: Piceance Basin Production
Piceance Basin Production Exploration & Production 2007 2008E 2009E Valley 508 611.6 652 Highlands 33 54.6 80 CAGR 16%
Slide 68: Ryan Gulch SandRidge Acquisition
Ryan Gulch SandRidge Acquisition Bolt-on acquisition in Ryan Gulch area of Piceance Highlands 32,500 gross / 24,000 net acres with 75% working interest $285 million acquisition price $250 million for wells and acreage $35 million for plant and facilities 1.9 Tcfe net 3P reserves on 10-acre spacing W
Slide 69: Ryan Gulch Acquisition - Strategic Importance
Ryan Gulch Acquisition - Strategic Importance Consistent with Williams' strategy of growing in the Piceance Basin Williams is the operator of high working interest properties Low-risk bolt-on acquisition doubling Williams' existing acreage position in the Ryan Gulch area Multi-year drilling inventor
Slide 70: Leader in Innovation
Leader in Innovation 10 H&P Flex Rigs 4 Nabors Super Sundowner High Efficiency/ Fit for Purpose Drilling Rigs Safer Safer operations through more automation Fewer rig moves More Compact Operations - rig layout Iron roughneck Faster Top drive and pumps for greater reach (3,000') Up to 22 wells drille
Slide 71: Williams Pioneers Advancements in Piceance
Williams Pioneers Advancements in Piceance First to reduce natural gas flaring by 90%, Green Flow Back Completions First to recycle and handle produced water in more environmentally friendly way First to implement wellhead automation First to design and implement offshore rig design for pad drilling
Slide 72: Best Practice: Simultaneous Operations (SIMOPS)
Best Practice: Simultaneous Operations (SIMOPS) These rigs allow for drilling, completing, producing and selling gas at the same time from the same pad Williams green completion process eliminates flaring of produced gas during completions Simultaneous Operations (SIMOPS) means wells can be put on l
Slide 73: CPODS: Clustered Plan of Development
CPODS: Clustered Plan of Development Able to Fracture Stimulate wells using frac pumps up to 2 miles away Can Fracture Stimulate multiple sites from one location Eliminated over 12,000 water truck trips in this area Better efficiencies with Stimulation Crews (more jobs in a given day) Assist Regulat
Slide 74: Hayes Gulch - Piceance Basin
Hayes Gulch - Piceance Basin Exploration & Production
Slide 75: Piceance Basin Key Points
Piceance Basin Keys Points Largest operator in one of the nation's top basins Tremendous track record and long term opportunity Predictable reservoir performance Operational and cost efficiencies Completion effectiveness SIMOPS CPODS Leader in the Piceance basin Safety performance Pioneering new tec
Slide 76: Exploration & Production
Exploration & Production Ralph Hill President
Slide 77: Other Areas of Interest
Other Areas of Interest Exploration & Production Focus will remain on tight sands, shale, and coal bed methane Opportunities remain in existing basins 18 member Exploration staff pursuing other resource plays Dedicated A&D staff pursuing disciplined acquisitions Current Activity Paradox Uinta Picean
Slide 78: Key Points - Value Creation Continues
Key Points - Value Creation Continues On track for record year for segment profit and production 3P reserves of 13.3 Tcf Strategy is to rapidly develop our premier drilling inventory while adding new resource potential opportunities An industry leader in production growth, reserves replacement, prod
Slide 79: Q&A
Q&A The Witla Companies, ne, A igh reserved ‘atlas 2008 Anat Day sume 25,2008 / 79
Slide 80: Midstream
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream Alan Armstrong President
Slide 81: Midstream Agenda
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Agenda Review Midstream's Strategy and Outlook Alan Armstrong Valuing Midstream's Business David Darcey Exciting Growth Ahead Deepwater Gulf of Mexico Rory Miller Western Region Mac Hummel Canadian Oil Sands Randy Newcomer Conclusion and Q&
Slide 82: Midstream Assets in Hotspots
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream Assets in Hotspots Sources: Cambridge Energy Research Associates and Canadian Association of Petroleum Producers
Slide 83: Midstream Peer Comparison
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream Peer Comparison Earnings Before Interest & Taxes ($MM) Williams Midstream Enterprise Products Partners ONEOK Partners Williams Partners Energy Transfer Partners** DCP Midstream Partners Copano Energy Crosstex Energy 2007 2006 * CP
Slide 84: Midstream Free Cash Flow - Forecast
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm 2006 2007 2008 2009 Series 1 30 50 50 50 29 52 74 62 184 478 700 513 2006 2007 2008 2009 Series 1 2006 2007 2008 2009 Series 1 934 1290 1440 1475 105 205 Free Cash Flow - Forecast Note: Segment Profit is stated on a recurring basis. Segment
Slide 85: Valuing Midstream's Business
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Valuing Midstream's Business David Darcey Director, Planning & Analysis
Slide 86: Midstream Free Cash Flow - Forecast
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Free Cash Flow - Forecast Note: Segment Profit is stated on a recurring basis. Segment Profit + DDA and Capital Spending reflect midpoint of ranges Midstream 2006 2007 2008 2009 Series 1 30 50 50 50 29 52 74 62 184 478 700 513 2006 2007 200
Slide 87: Midstream Gross Margin
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Gross Margin $ Millions Midstream $0 $500 $1,000 $1,500 $2,000 $2,500 2005 2006 2007 2008L 2008H Fee Based Commodity Based Fee Based Commodity Based
Slide 88: Midstream Gross Margin Sensitivity
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Gross Margin Sensitivity medicare medicaid all other 33 11 48 8 Fee-Based 44% Commodity - -Based 56% 2007 Gross Margin by Revenue Stream medicare medicaid all other 43 15 33 8 Fee-Based 58% Commodity - -Based 41% 2007 Gross Margin by Revenu
Slide 89: Historical NGL Margins
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Historical NGL Margins Domestic NGL Average Realized Net Margin and Volumes by Quarter Note: Actual realized margins, does not include Discovery volumes. Five year average of 28 cpg is calculated for the period 2Q03-1Q08. Realized Margin Eq
Slide 90: Historical NGL Margins
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm 2003 2004 2005 2006 2007 2008L 2008H 5YR Average NGL Margin 2003-2007 28 28 28 28 28 Historical NGL Margins 11.1 15.3 15.7 32.6 56.3 2008 Estimated NGL Margins 57 68 Actual Average Domestic NGL Margins * Excludes Discovery Equity Volumes Mi
Slide 91: Commodity Price Relationships
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Commodity Price Relationships NGL Barrel Composition: Ethane 50% Propane 25% Butane 15% Natural Gasoline 10% Crude (WTI) NGL Barrel Gas at Henry Hub Gas at Rockies 5YR Avg 53.32 33.59 6.8 5.25 2007 70.95 45 6.98 4.52 2008L 100 56 9 7.6 2008
Slide 92: Midstream Fee Revenues
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Fee Revenues Data for Graph 2005 2006 2007 2008L 2008H Gathering and Processing 390.81 425.32 414.39 450.6 450.6 Production Handling and Transportation 77.41 133.81 107.61 71.7 71.7 Venezuela 153.51 153.76 147.88 153.2 153.2 Other 80.79 70.
Slide 93: Deepwater Growth
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Deepwater Growth Rory Miller Vice President, Gulf Coast
Slide 94: Williams' Deepwater Update
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Williams' Deepwater Update Why Deepwater GoM? The size of the prize Why Williams Midstream? Our competitive advantage What is Next? A new wave of development coming Midstream
Slide 95: Estimated Undiscovered Technically Recoverable Oil & Gas Resources
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Estimated Undiscovered Technically Recoverable Oil & Gas Resources* Federal OCS Areas 26.6 BBO + 132.1 TCF 3.8 BBO + 37.0 TCF 44.9 BBO + 232.5 TCF 10.5 BBO + 18.3 TCF * MMS 2006 Fact Sheet, Mean values MMS' Estimated Undiscovered Reserves M
Slide 96: MMS' Gulf of Mexico Gas Forecast
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm MMS' Gulf of Mexico Gas Forecast MMS OCS Report - 2007 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Shallow-water Shallow (historical) 11.95 11.83 12.15 11.78 1
Slide 97: MMS' Gulf of Mexico Oil Forecast
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm MMS' Gulf of Mexico Oil Forecast MMS OCS Report - 2007 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Shallow-water (historical) 735 743 743 794 818 833 786 739 6
Slide 98: GoM Central Lease Sales Results
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm GoM Central Lease Sales Results Source: Wood Mackenzie 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Series 1 600 130 190 310 200 140 170 170 400 2650 3350 1.09 1.43 1.57 1.69 1.17 0.66 0.91 1 2.09 5.43 8.6 Total Sales (US$ Million
Slide 99: Williams' Deepwater Strategic Advantages
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Williams' Deepwater Strategic Advantages Assets: Major oil & gas trunk-lines built in western and eastern corridors Significant Gas infrastructure (Discovery) in Green Canyon corridor Oil infrastructure in Garden Banks corridor All deepwate
Slide 100: Deepwater Generic SPAR Concept
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Deepwater Generic SPAR Concept Standard design SPAR based floating production system (FPS) "Turn Key" proposal to producers for the ownership & operation of FPS "Speed-to-market"- Producers benefit from improved NPV by reducing costs and cy
Slide 101: Gulf of Mexico
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Gulf of Mexico Midstream
Slide 102: Western Gulf
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Western Gulf Perdido project update All pipe and sleds on seafloor No standby so far Markham train #2 design complete, major equipment ordered Lower Tertiary prospects U.S. waters Mexican waters Midstream
Slide 103: Discovery
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Discovery Knottyhead, Pony Cascade & Chinook Jack, St. Malo Corridor Highlights Numerous small mini-basins targets Target-rich Lower Tertiary area Significant new oil infrastructure required Associated gas export and fuel gas import opportu
Slide 104: Eastern Gulf
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Eastern Gulf Devils Tower area Thunderbird Tubular Bells Kodiak Freedom Biogenic Gas Plays: Near-shelf; Canyon Station tie-backs Ultra-deep; new gas only hub opportunity Midstream
Slide 105: Western Region Growth
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Western Region Growth Mac Hummel Vice President, Western Region
Slide 106: Competitive Strengths
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Competitive Strengths Reliability Scale Hub Access Experience Midstream
Slide 107: West Region Assets - Scale Positions
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Opal - Second largest processor in lower 48 San Juan Basin - Largest gatherer Wamsutter - Largest gatherer and processor Piceance - Future scale position building Western Region - Exposure to significant drilling activity West Region Assets
Slide 108: Wamsutter and Opal
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Wamsutter Large, prolific field Robust drilling plans TXP 4 expansion announced in May Gathering expansions expected Opal Connected to Pinedale and Jonah fields Expanded twice in the past four years Second largest processor in Lower 48 Regi
Slide 109: Wamsutter: Future Drilling Drives Growth
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Wamsutter: Future Drilling Drives Growth Well Connects Gathering Volume (Bbtud) 2005 200 460 2006 237.5 500 2007 215 520 2008 225 550 2009 228 600 2010 300 615 2011 354 655 2012 387.5 716 2013 398 775 Plant Capacity (Bbtud) WMB TXP4 Midstre
Slide 110: Piceance Basin
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Piceance Basin Parachute lateral in service May 2007 PGX pipeline in service July 2008 Willow Creek plant in service mid to late 2009 Multiple additional Piceance Basin plants Midstream
Slide 111: Piceance Equity Volumes Growth
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Piceance 2004 2005 2006 2007 2008 2009 289.2004 402.6326 550.8143 791.467 1031.8015 1280.7777 Existing Equity Volumes and Future Drilling Drive Growth Midstream
Slide 112: Four Corners
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Four Corners Largest gatherer in San Juan Basin Significant flexibility offered by footprint Diversified portfolio of contracts Strong fee-based revenues Predominantly connected at wellhead Midstream
Slide 113: Canadian Oil Sands Opportunity
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Canadian Oil Sands Opportunity Randy Newcomer Vice President, Olefins & NGLs
Slide 114: Canadian Oil Sands Are One of the Fastest Growing Basins
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Canadian Oil Sands Are One of the Fastest Growing Basins in the World New Basin G&P Opportunity With Upgrader Offgas Production Venezuela 2.13 UAE 2.5 Canada 2005 2.5 Norway 2.75 Mexico 3.4 China 3.63 Iran 3.92 USA 5.1 Saudi Arabia 9.16 Rus
Slide 115: The Upgrading Process
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm The Upgrading Process SAGD Facility Oil Sands Trucks Photo Source: www.ostseis.anl.gov; Suncor Energy, Inc. Suncor Upgrader Oil Sands Midstream
Slide 116: Geographic Location of Assets
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Edmonton Calgary Ft. McMurray Redwater Extraction Compression To Edmonton Fractionation Legend Suncor Facility Williams Facility Suncor Pipeline Williams Pipeline U2 U1 To Edmonton Geographic Location of Assets Canadian Olefins Assets Consi
Slide 117: Canadian Oil Sands Upgrader Projects: Creating Value
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Canadian Oil Sands Upgrader Projects: Creating Value Fort McMurray Gas Plant Redwater Fractionator Photo Source: www.novachem.com; NOVA Chemicals Inc. Upgrader Olefins Ethane/ethylene mix Propane Polymer grade propylene (PGP) Butane/butylen
Slide 118: Midstream's Canadian Oil Sands Strategy
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream's Canadian Oil Sands Strategy Deploy Midstream's Large Scale Reliability Strategy and Become the Leading Provider of Offgas Liquids Extraction Services to the Oil Sands Upgraders Build on the foundation of our current assets at Fo
Slide 119: Potential Upgraders & Fractionation Customers
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Potential Upgraders & Fractionation Customers... Some Pretty Good Company CNRL Suncor Ft Hills Redwater Statoil Syncrude Total Fort McMurray Area Facilities already in operation Approved projects under construction Announced projects in app
Slide 120: Gas/Liquids Commodity Price Spreads
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Gas/Liquids Commodity Price Spreads Olefins production from NGL's and off-gas recovery adds significant (and increasing) additional margin potential to the natural gas value chain 0 5 10 15 20 25 30 35 Jan-98 May-98 Sep-98 Jan-99 May-99 Sep
Slide 121: Conclusion
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Conclusion
Slide 122: Significant Progress on Growth Projects
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream Significant Progress on Growth Projects * Estimated Segment Profit generated in first full calendar year of operation Dollars in Millions In Development/Proposal (through 2012) Spending $3,000 - 4,000 Under Negotiation (through 20
Slide 123: Midstream Key Points
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Key Points Midstream maintains tremendous cash flow generation Continues to generate high returns Strategy continues to yield unique competitive advantage Well positioned for growth Deepwater expansions progress Western opportunities abound
Slide 124: Corporate Finance Q&A
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Q&A
Slide 125: Gas Pipeline
Gas Pipeline Phil Wright President
Slide 126: Introduction
Introduction Dramatic Changes and Growth for Our Industry Geographic shifts in gas production Greenhouse gas and other environmental concerns driving gas demand Increased future reliance on LNG Competition has intensified Substantial Opportunities Linking Supply and Demand Our Pipelines A Closer Loo
Slide 127: Industry Overview
Industry Overview (©2008 The Wilams Companies Ine. All ight eserves Witla 2008 Ane ay une 25,2008 1127
Slide 128: Key Supply Changes
Key Supply Changes Geographic shifts in supply Dramatic shift to non-conventional supply sources, especially shale and tight sands New infrastructure needed to link non-conventional supply sources to growth markets LNG imports Western Canadian production declining while oil sands demand explodes Gas
Slide 129: Natural Gas Supply Outlook
WCSB US & Canadian Production Increase (2008-2018) Natural Gas Supply Outlook Arctic Rockies West Coast Permian Barnett MidCon GoM Shelf GoM Deep East US E. Canada San Juan Gulf Coast Total Decrease: (2.5) Bcfd Lower 48 Decrease: (0.4) Gas Pipeline
Slide 130: Key Demand Drivers
Key Demand Drivers Power Generation Tightening reserve margins New coal-fired generation plants limited in near-term by environmental concerns Nuclear not a near-term option Greenhouse gases Renewables are unreliable Ethanol and Fertilizers Impacting industrial demand growth Gas Pipeline
Slide 131: Gas Flow - Peak Demand
Gas Flow - Peak Demand Peak Month Gas Demand Increase (2008-2018) Total Demand Increase: 9.8 Bcfd 0.15 15.4% 0.96 13.2% 0.43 13.2% 0.55 4.8% 0.62 22.7% 1.42 58.0% 0.55 10.1% 1.69 13.6% 1.23 36.8% 0.21 22.3% 0.10 2.8% 0.59 3.8% 1.31 62.8% Bcfd % Gas Pipeline
Slide 132: Proximity to Gulf Coast and Eastern LNG Terminals
Proximity to Gulf Coast and Eastern LNG Terminals Golden Pass Sabine Pass Freeport Lake Charles Cameron Pascagoula Elba Island Cove Point Everett Neptune NE Gateway Canaport LNG Terminal Capacity Canaport 1.0 Bcf/d Neptune 0.4 Bcf/d NE Gateway 0.4 Bcf/d Everett 0.7 Bcf/d Cove Point 1.8 Bcf/d Elba Is
Slide 133: A Closer Look Inside: Attributes
A Closer Look Inside: Attributes
Slide 134: Stable, Substantial Free Cash Flow
Stable, Substantial Free Cash Flow Driven by: Long-term contracts with high credit quality customers Supply access Premium growth markets ....and robust outlook for value growth Gas Pipeline
Slide 135: Free Cash Flow Forecast
Free Cash Flow Forecast * Segment profit is stated on a recurring basis. Segment profit + DD&A and capital spending reflect midpoint of ranges. Gas Pipeline $0 $200 $400 $600 $800 $1,000 $1,200 2006 Capital Seg Profit + DDA 2007 Capital Seg Profit + DDA 2008G Capital Seg Profit + DDA 2009G Capital S
Slide 136: Revenue Breakout
TGPL 2007 Revenue $905 MM NWPL 2007 Revenue $413 MM ~90% of 2007 Operating Revenues Were from Transportation and Storage Demand Charges* Revenue Breakout * Notes: Revenue received regardless of pipeline usage Excludes tracked revenue (revenue directly offset by a related expense) Transportation Dema
Slide 137: Northwest Long-term Contracts
Northwest Long-term Contracts As of 03/01/2008 * $366 $324 $228 $199 $184 $129 $93 $91 $36 $93 $92 $86 $105 $102 $65 $18 $40 $42 $42 $23 $23 $6 $28 $35 $54 $63 $120 $159 $- $50 $100 $150 $200 $250 $300 $350 $400 2008 2009 2010 2011 2012 2013 2014 2015 In Million $ Base 2006-2007 Ctrct Extensions 200
Slide 138: Transco Long-term Contracts
Transco Long-term Contracts Transcontinental Gas Pipe Line Corporation Contract Primary Term Summary Weighted Average Contract Life = 4.74 In Primary Term In Evergreen/Rollover 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8
Slide 139: An Elegant, Simple Strategy
An Elegant, Simple Strategy Foster a culture of safety Be the low cost provider for our markets Supply access/optionality Cost control Efficiency Flexibility Reliability Uphold continuing high quality customer relationships Gas Pipeline
Slide 140: A Closer Look Inside: Our Growth Story
A Closer Look Inside: Our Growth Story
Slide 141: Quality Assets Serving Growing Markets
Northwest Pipeline Transco Gulfstream (50% Ownership) Quality Assets Serving Growing Markets Underground storage LNG peaking facility Gas Pipeline
Slide 142: Transco System Overview
Transco System Overview Transco Large and diverse supply sources Onshore and offshore Gulf of Mexico Pipeline Interconnects (including Barnett Shale and Bossier Sands) LNG Premium high growth markets Southeast Northeast New Pipeline Interconnects Totaling 18.5 Bcfd (2006-2009) Customers have high le
Slide 143: Transco Growth Projects
Transco Growth Projects Transco Sta. 85 North May 2011 Sentinel Nov 2008 / Nov 2009 Mobile Bay South May 2010 Eminence Enhancement Nov 09 Pascagoula Oct 2011 NE Supply Project Nov 2011 Gas Pipeline
Slide 144: Northwest Pipeline System Overview
"Backbone" of delivery infrastructure for northwest markets (WA, OR, ID) Only interstate pipeline serving Seattle, Portland and Boise Connects with major western pipelines Interconnects Off-system opportunities to serve CO, UT, WY, CA, NV, AZ and NM Uniquely situated to access diverse and strategic
Slide 145: Pipeline Projects - Northwest
Pipeline Projects - Northwest Pacific Connector Gas Pipeline Nov 2012/2013 Jackson Prairie Nov 2008 Blue Bridge 2011 Sunstone Pipeline Nov 2011 Sundance Trails Nov 2010 Colorado Hub Connection Nov 2009 WGP Projects NWP Projects Gas Pipeline
Slide 146: Gulfstream System Overview
Gulfstream System Overview Fully Subscribed Long-term contracts (remaining life 21 years) Fastest growing markets in North America Driven by power generation needs Flexible supply Gulfstream Storage Storage Mobile South Mobile Bay SESH Pascagoula Gas Pipeline
Slide 147: Gulfstream Growth Projects
Gulfstream Growth Projects SESH FGT Transco Gulfstream Phase IV Expansion Sep 2008 / Jan 2009 Phase III Expansion July 2008 Gas Pipeline
Slide 148: WGP Expansion Projects
WGP Expansion Projects 2010 & Beyond 2008-2009 2007 Placed In-service Potomac 20 miles 165 MDthd capacity Leidy to Long Island 14.5 miles 100 MDthd capacity Sentinel 16 miles 142 MDthd capacity Eminence Injection Enhancement Compression only Volume TBD Colorado Hub Connection 28 mile lateral 363 MDt
Slide 149: Growth Projects
Growth Projects Project In-service Date Pre-2008 2008 2009 Post 2009 Segment Profit1 Sentinel (Ph 1-4Q '08 & Ph 2- 4Q '09) $25 $30-40 $80-90 $1-5 $21 Jackson Prairie (4Q '08 1 10-15 - - 3 Eminence (4Q '09) - 1-5 5-10 - 2 Colorado Hub (4Q '09) - 5-10 30-50 1-5 7 Gulfstream III & IV (3Q '08 & 2Q '09)
Slide 150: Key Points
Key Points New pipeline infrastructure is critical Premier pipelines Stable, substantial cash flow Large and diverse supply Close proximity to LNG terminals Premium high growth Excellent investment opportunities Gas Pipeline
Slide 151: Q&A
Q&A ia Campane, ne. Al igh reserved ‘atari 2008 Ant Oay/une 25,2008 154
Slide 152: Corporate Finance 2008-09 Consolidated Outlook
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Consolidated Outlook Don Chappel Chief Financial Officer
Slide 153: Commodity Price Summary (2008-09)
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Commodity Price Summary (2008-09) Consolidated 1 Oil = WTI and Natural Gas = Henry Hub Un-hedged Commodity Price Assumptions 2008 2009 Natural Gas: Natural Gas: Natural Gas: Basin Prices Basin Prices Basin Prices Average Rockies $7.
Slide 154: 2008 Forecast Guidance
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008 2008 Dollars in millions, except per-share amounts June 25 Guidance May 1 Guidance 2008 Forecast Guidance Reported Segment Profit Before MTM Adjust. Net Interest Expense Minority Interest & Other Pretax Income Provision for Inc
Slide 155: 2009 Forecast Guidance
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2009 Forecast Guidance Recurring Segment Profit Before MTM Adjust. Net Interest Expense Minority Interest & Other Pretax Income Provision for Income Tax Recurring Income from Continuing Operations Diluted EPS - Recurring Diluted EPS
Slide 156: Consolidated 2008-09 Recurring Segment Profit
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Exploration & Production 1 Midstream Gas Pipeline Gas Marketing 2 Total Recurring Before MTM Adj. 3 MTM Adjustment Total Recurring After MTM Adj. 3 Gas Marketing After MTM Adj. 2 $1,350 - 1,700 1,100 - 1,300 625 - 675 (20) - 10 $3,1
Slide 157: Economic Natural Gas Exposure for E&P and Midstream
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Economic Natural Gas Exposure for E&P and Midstream Consolidated 2008 2009 E&P Length + Midstream Short 127719 126868 Midstream Fuel & Shrink -321162 -315739 E&P Unhedged Position 448881 442607 E&P Hedged Position 530000 586438 2008
Slide 158: Economic Rockies Natural Gas Exposure
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Economic Rockies Natural Gas Exposure for E&P and Midstream Consolidated 2008 2009 E&P Length + Midstream Short 14219 58288 Midstream Fuel & Shrink -177910 -165401 E&P Unhedged Position 163692 107114 E&P Hedged Position 200000 23500
Slide 159: 2008-09 Capital Expenditures
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Capital Expenditures Exploration & Production Midstream Gas Pipeline Other/Corporate Total Potential Future Projects Total Potential Capital $1,800 - 2,000 800 - 850 1 350 - 450 60 - 90 1 $3,025 - 3,375 100 - 300 $3,125 - 3,
Slide 160: 2008-09 Cash Flow
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Cash Flow Consolidated Dollars in millions 2008 2009 Notes: 1 Cash flow from continuing operations. 2 Calculated based upon current minority interest levels. 3 Balance of $1 Billion share repurchase program. Note $526 millio
Slide 161: Share Repurchase Update
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Share Repurchase Update 3Q '07 7.45 $234 $31.40 4Q '07 8.45 $292 $34.56 1Q '08 3.72 $126 $33.93 4/1/08 - 6/19/08 4.92 $188 $38.20 Total 24.53 $840 $34.23 Consolidated Note: The sum of the amounts may not equal due to rounding *Does
Slide 162: CFO's Summary
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm CFO's Summary Great Businesses with Abundant Opportunities: E&P Midstream Gas Pipeline Vast amount of growing/low-risk reserves Rapid organic production growth Attractive net back prices/low costs Very favorable returns on capital L
Slide 163: CFO's Summary (continued)
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm CFO's Summary (continued) Focus on sustainable value creation/EVA growth EPS 2007 vs. 2006: 61.7% increase, 2008 vs. 2007: 47.4% increase CFFO 2007 vs. 2006: 18.4% increase, 2008 vs. 2007: 47.5% increase Total Shareholder Return of
Slide 164: Summary
Summary Steve Malcolm Chairman, President & CEO
Slide 165: Williams - The Premier Natural Gas Investment
eSlide - P5055 - Analyst Day - Malcolm 6/23/2008 - 11:45am Williams - The Premier Natural Gas Investment Portfolio of best-in-class natural gas assets in North America Sustainable, organic growth opportunities abound Benefit from favorable commodity markets Growth with discipline - EVA1 focus Pullin
Slide 166: Q&A
Q&A re Companies, ne. Al ight resaved. ‘atari 2008 Anat Oay/une 25,2008 166
Slide 167: Appendix
Appendix panies, Ie. Allight revered ‘itr 2008 Anis Oay/ une 25,2008 167
Slide 168: Exploration & Production
——— Exploration & Production (©2008 The Wilams Companies Ine. All ight eserves ‘Wiams 2008 Anat Day Je 25,208 /168|
Slide 169: Powder River CBM Production
Powder River CBM Production Total Powder River Basin CBM Production * WOGCC Data Feb. 2008 1.38 Bcfd (MMcfd) Exploration & Production 0 200 400 600 800 1,000 1,200 1,400 1,600 Jan 97 Jul 97 Jan 98 Jul 98 Jan 99 Jul 99 Jan 00 Jul 00 Jan 01 Jul 01 Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Jul 04 Jan 05 Jul 0
Slide 170: Powder River Basin Pipeline Capacity
3.65 BCFD Midwest Markets (3.95 BCFD Q2 2009) Trailblazer 905 MMCFD WIC 770 MMCFD CIG 600 MMCFD Powder River Basin Cheyenne Hub KN- PE 135 MMCFD MIGC 185 MMCFD FUGG 1.0 BCFD (1.25 BCFD Q2 2008) Thunder Creek 450 MMCFD WIC Medicine Bow Lateral 1.113 BCFD (1.463 BCFD Q4 2008) KN 150 MMCFD KN 120 MMCFD
Slide 171: Piceance Highlands - Results to Date
Piceance Highlands - Results to Date Project Area Wells Drilled and Completed Average 30 Day Rate / Completed Well (MMcfed) Expected EUR* Range (Bcfe/well) Trail Ridge 60 1.2 1.2 - 1.8 West Grand Valley 2 1.3 1.2 - 1.8 Ryan Gulch 56 1.5 1.2 - 2.4 Allen Point 31 1.3 1.2 - 1.6 * Estimated Ultimate Rec
Slide 172: Rockies Producer Not Necessarily a Rockies Price Taker
Rockies Producer Not Necessarily a Rockies Price Taker 150 200 209 200 100 285 Rockies price risk managed through transport and basis hedges Our contracted pipeline capacity moves our Rockies production to more favorable price markets Firm Capacity Under Contract Firm Capacity Under Contract Wamsutt
Slide 173: 2008-09 Hedge Update
Note: The only remaining legacy fixed price hedges are in 2010 of 70MMcfd @ $3.73 2008-09 Hedge Update Exploration & Production 2Q-4Q 2008 2009 Legacy Fixed Price at the Basin Legacy Fixed Price at the Basin Legacy Fixed Price at the Basin Volume (MMcf/d) 70 106 Average Price ($/Mcf) $3.99 $3.67 At
Slide 174: Midstream
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream
Slide 175: What is Midstream's Business?
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm What is Midstream's Business? Geismar Midstream Net Book Value + Equity Investment @12/31/07 = $3,860 MM 2007 Recurring Segment Profit = $1,071 MM 2007 Recurring Segment Profit + DD&A = $1,285 MM
Slide 176: How To Calculate a Frac Spread
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm How To Calculate a Frac Spread Midstream Notes: 1. Commodity pricing per published indicies and do not reflect Williams' realized prices, costs or contract structure. 2. Above calculations do not reflect the higher transit inventory impact
Slide 177: Midstream Geographic Profile
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream Geographic Profile 2007 Gross Margin by Asset 2007 Net Book Value and Equity Investments by Assets MS West Region MS Gulf Region Venezuela Olefins MS Other WPZ West Region WPZ Gulf Region WPZ onway 31 17 8 10 1 26 4 3 MS West Regi
Slide 178: Historical Commodity Prices
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Historical Commodity Prices NGL Barrel Composition: Ethane 50%, Propane 25%, Butane 15%, Natural Gasoline 10% 1/1/2003 2/1/2003 3/4/2003 4/4/2003 5/5/2003 6/5/2003 7/6/2003 8/6/2003 9/6/2003 10/7/2003 11/7/2003 12/8/2003 1/8/2004 2/8/2004 3
Slide 179: Historical Commodity Prices
eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Historical Commodity Prices Stated in $ / MMBtu Q1'03 Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 Rockies Gas 3.96 4.17 4.34 4.53 4.97 5.13 4.83 5.57 5.71 5.93 7.32
Slide 180: Gas Pipeline
Gas Pipeline (©2008 The Wilams Companies Ine. All ight eserves ‘Wattara 2008 Ant Oay une 25,2008 /180|
Slide 181: Transco Rate Comparison
Transco Rate Comparison Zone 4 (MS thru GA) Rate Comparison - Transco Pipeline vs. Competitors (100% Load Factor with Basis) Zone 5 (SC thru VA) Zone 6 (MD thru NY) $0.448 $0.557 $0.878 $0.891 $1.238 $0.837 $0.878 $0.778 $0.654 $0.749 $0.557 Gas Pipeline ($0.10) $0.10 $0.30 $0.50 $0.70 $0.90 $1.10 $
Slide 182: Northwest Rate Comparison
Northwest Rate Comparison Demand Commodity Third Party Fuel Basis NWP/Paiute 0.3798 0.03 0.3353 0.1515 GTN/Tuscarora 0.319 0.0098 0.4019 0.2306 0.67 NWP 0.3798 0.03 0.096 GTN 0.6094 0.0117 0.1044 0.67 NWP 0.3798 0.03 0.096 GTN 0.0868 0.0017 0.0189 0.67 To Reno To Medford To Spokane Rate Comparison -
Slide 183: 2008-09 Capital Spending Detail
2008-09 Capital Spending Detail 2008 2009 Normal Maintenance/Compliance $180 - $260 $180 - $280 Expansion + Contributions to Gulfstream $180 - $235 $220 - $270 Total $360 - $495 $400 - $550 Dollars in Millions Gas Pipeline
Slide 184: Consolidated
——— Consolidated (©2008 The Watlams Companies, ne. Al ghis reserved Witla 2008 Anat Day Je 25,2008 1184
Slide 185: Reported to Recurring Segment Profit
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm Exploration & Production 3 Midstream Gas Pipeline Gas Marketing 2 Total Reported Before MTM Adj. 1 MTM Adjustment Total Reported After MTM Adj. 1 Nonrecurring Items Total Recurring After MTM Adj. 1 Gas Marketing After MTM Adj. 2 $1,
Slide 186: 2008-09 Interest Expense Forecast
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Interest Expense Forecast Guidance Interest on Long-Term Debt $605 - $620 $605 - $620 Amortization Discount/Premium and other Debt Expense 25 - 35 20 - 30 Credit Facilities: (Incl. Commitment Fees Plus LC Usage) 30 - 40 20 -
Slide 187: Non-GAAP Reconciliations
Non-GAAP Reconciliations
Slide 188: Non-GAAP Disclaimer
Non-GAAP Disclaimer This presentation includes certain financial measures, EBITDA, recurring earnings, operating free cash flow and recurring segment profit, that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission. EBITDA represents the sum of net in
Slide 189: 2008-09 Forecast EBITDA Reconciliation
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Forecast EBITDA Reconciliation Income from Continuing Ops. $1,458 - 1,758 $1,250 - 1,760 Net Interest 605 - 670 600 - 665 D D & A 1,230 - 1,330 1,350 - 1,450 Provision for Income Taxes 945 - 1,075 840 - 1,115 Other/Rounding
Slide 190: 2008-09 Forecast Segment Contribution
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Forecast Segment Contribution Segment Profit 1 DD&A Segment Profit Before DDA Minority Interest and Other Rounding TOTAL $3,228 - 3,778 2 1,230 - 1,330 $4,458 - 5,108 (220) - (275) (13) - (8) $4,225 - 4,825 $2,930 - 3,830 1,
Slide 191: 2008-09 Forecast Guidance Contribution
eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Forecast Guidance Contribution Income from Continuing Operations: Non-Recurring Items (Pretax) Less Taxes Non-Recurring After Tax Recurring Income from Cont. Ops Recurring EPS Mark-to-Market Adjustment (Pretax) Less Taxes @
Slide 192: The Williams Companies, Inc.
The Williams Companies, Inc.