Williams Companies, Inc. (the) · NYSE:WMB

Williams Companies, Inc. (the) — Lehman Brothers 2008 CEO Energy/Power Conference

48 slides from Williams Companies, Inc. (the)'s conference presentation, Sep 3, 2008

  1. Slide 1: Lehman Brothers 2008 CEO Energy/Power Conference

    Lehman Brothers 2008 CEO Energy/Power Conference Steve Malcolm Chairman, President & CEO September 3, 2008

  2. 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 Litigati

  3. Slide 3: 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

  4. Slide 4: 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

  5. Slide 5: Prime Position

    Prime Position Prime Position

  6. Slide 6: Williams - The Premier Natural Gas Investment

    Williams - The Premier Natural Gas Investment Pure-play natural gas company Strong and growing demand for natural gas well into the future Cleaner-burning natural gas is the 'fuel of choice' Key role in expanding infrastructure, growing production Track record of disciplined execution Consistent str

  7. Slide 7: Track Record of Disciplined Execution

    Track Record of Disciplined Execution Achieving strong earnings and outlook Performing well in a variety of commodity markets Growing production, adding to reserves Capturing opportunities - strategic bolt-on acquisitions Successfully managing basis differentials General partner and L.P. unitholder

  8. Slide 8: Exploration & Production

    —__ ae Exploration & Production (©2006 The Wier Lehman Bthrs 2008 CEO EnergyiPowe Confrence Seplamber 9, 2008. 8

  9. Slide 9: 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

  10. Slide 10: Production Highlights

    Production Highlights Piceance Valley up 26% over one year ago, at 626 MMcfed, 18 rigs currently operating. Piceance Highlands up 32% over one year ago, at 33 MMcfed, 8 rigs currently operating. Powder River up 41% over one year ago, at 234 MMcfed. Ft. Worth up 25% over one year ago, at 40 MMcfed, 4

  11. Slide 11: 83% Production Not At Rockies Prices

    83% Production Not At Rockies Prices Midstream's Rockies Short Position Further Reduces Exposure Total Domestic 2Q Production of 1,110 MMcfed 35% (384 MMcfed) at Rockies prices before hedging 65% (726 MMcfed) produced or transported to other price points Rockies hedges of ~200 MMcfed 384 MMcfed tota

  12. Slide 12: Rockies Basis Exposure - Minimal through 2010

    2008 2009 Rockies Basis Exposure - Minimal through 2010 Production Transported out of Rockies Hedged Production Unhedged Production Less Midstream Fuel & Shrink WMB Rockies Exposure * All values are undiscounted * International E&P volumes are not included * Projected E&P volumes are reduced for fue

  13. Slide 13: 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:

  14. Slide 14: 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

  15. Slide 15: 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

  16. Slide 16: 2007 3P Reserves Update

    2007 3P Reserves Update Exploration & Production Piceance Mid-Continent Green River/Int'l San Juan Powder River * Production for 2Q '08 0.4 Tcfe Proved 1.3 Tcfe Prob/Poss 234 MMcfe/d* 2.8 Tcfe Proved 5.8 Tcfe Prob/Poss 659 MMcfe/d* 0.6 Tcfe Proved 0.4 Tcfe Prob/Poss 150 MMcfe/d* 0.3 Tcfe Proved 0.7

  17. Slide 17: 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

  18. Slide 18: Key Points - Value Creation Continues

    Key Points - Value Creation Continues On track for record year for segment profit and production 3P reserves of 12.9 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

  19. Slide 19: Midstream

    eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Midstream

  20. Slide 20: 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

  21. Slide 21: 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. Three year average of 42 cpg is calculated for the period 3Q05-2Q08. Realized Margin E

  22. Slide 22: Midstream 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

  23. Slide 23: 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

  24. Slide 24: 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

  25. Slide 25: Key Points - Midstream

    eSlide - P5055 - Analyst Day - Midstream 6/22/2008 - 2:00pm Key Points Midstream once again was tremendous cash flow generator Continues to generate high returns Strategy continues to yield unique competitive advantage Well positioned for growth Deepwater expansions progress Western opportunities ab

  26. Slide 26: Gas Pipeline

    —____ ae Gas Pipeline (©2006 The Wier Lehman Bthrs 2008 CEO EnergyiPomr Confrence Sepamber 9, 2008 26

  27. Slide 27: Quality Assets Serving Growing Markets

    Northwest Pipeline Transco Gulfstream (50% Ownership) Quality Assets Serving Growing Markets Underground storage LNG peaking facility Gas Pipeline

  28. Slide 28: Gas Pipeline Expansions

    Sentinel 4Q'08/4Q'09 Gulfstream Phase IV 2Q'09 Pacific Connector Pipeline 2012/2013 Colorado Hub Connection 4Q'09 Gulfstream Phase III 3Q'08 Eminence Enhancement 4Q'09 Pascagoula 4Q'11 85 North 2Q'11 Northeast Supply 4Q'11 Mobile Bay South 2Q'10 Sunstone Pipeline 4Q'11 Sundance Trail 4Q'10 Projects

  29. Slide 29: Growth Projects

    Growth Projects Projects - In Guidance Pre-2008 2008 2009 Post 2009 Segment Profit* Sentinel (Ph 1-4Q '08 & Ph 2- 4Q '09) $25 $50-60 $80-90 $1-5 $21 Gulfstream III & IV (3Q '08 & 2Q '09) 38 90-110 5-10 - 46 85 North (2Q '11) - 5-10 35-45 180-190 37 Other 4 36-65 68-100 80-110 50 Market Access Produc

  30. Slide 30: 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

  31. Slide 31: Key Points - Gas Pipeline

    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

  32. Slide 32: Summary

    Summary (©2006 The Wier Lehman thors 2008 CEO EnergyiPowr Confrence Sepamber 9, 2008 32

  33. Slide 33: Williams - The Premier Natural Gas Investment

    Williams - The Premier Natural Gas Investment Pure-play natural gas company Strong and growing demand for natural gas well into the future Cleaner-burning natural gas is the 'fuel of choice' Key role in expanding infrastructure, growing production Track record of disciplined execution Consistent str

  34. Slide 34: Q&A

    Q&A (©2008 The Witems Companies, el ighsesaved. Lehman Bthrs 2008 CEO EnergyiPowe Confrence Sepamber 9, 2008 34

  35. Slide 35: Appendix

    —__ ae Appendix (©2006 The Wier Lehman thors 2008 CEO EnergyiPowr Confrence Sepamber 9, 2008 25

  36. Slide 36: 2008-09 Hedge Update

    Note: The only remaining legacy fixed price hedges are in 2010 of 70MMcfd @ $3.73 2008-09 Hedge Update Exploration & Production 3Q-4Q 2008 2009 Legacy Fixed Price at the Basin Legacy Fixed Price at the Basin Legacy Fixed Price at the Basin Volume (MMcf/d) 70 106 Average Price ($/Mcf) $3.98 $3.67 At

  37. Slide 37: NGL Forward Sales Update

    NGL Forward Sales Update Ethane Volume (mmgal) Average Price ($/gal) Average Realized Price ($/gal) Propane+ Volume (mmgal) Average Price ($/gal) Average Realized Price ($/gal) Total Volumes (mmgal) Estimated NGL Margins* ($/gal) Realized NGL Margin ($/gal) 2008 Collars 1Q 2Q 3Q 4Q 54.2 $.97 - 1.09

  38. Slide 38: 2008-09 Cash Flow Guidance

    eSlide - P5055 - Analyst Day - Corporate Finance 6/22/2008 - 2:00pm 2008-09 Cash Flow Guidance 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 $5

  39. Slide 39: Non-GAAP Reconciliations

    —__ ae Non-GAAP Reconciliations (© 2008 The Wiams Companies, ne. lights eserves. Lehman Bthrs 2008 CEO EnergyiPower Confrence Sepamber 9, 2008 28

  40. Slide 40: 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

  41. Slide 41: Non-GAAP Reconciliation Schedule

    Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation

  42. Slide 42: Non-GAAP Reconciliation Schedule

    Non-GAAP Reconciliation Schedule Non-GAAP Reconciliation

  43. Slide 43: Non-GAAP Reconciliation Schedule - Recurring Segment Profit

    Non-GAAP Reconciliation Schedule - Recurring Segment Profit Non-GAAP Reconciliation

  44. Slide 44: Non-GAAP Reconciliation Schedule - EPS after MTM adjustment

    Non-GAAP Reconciliation Schedule - EPS after MTM adjustment Non-GAAP Reconciliation

  45. Slide 45: EBITDA Reconciliation

    EBITDA Reconciliation Non-GAAP Reconciliation

  46. Slide 46: 2Q 2008 Segment Contribution

    2Q 2008 Segment Contribution Non-GAAP Reconciliation

  47. Slide 47: 2008 YTD Segment Contribution

    2008 YTD Segment Contribution Non-GAAP Reconciliation

  48. Slide 48: The Williams Companies, Inc.

    The Williams Companies, Inc.

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