Williams Companies, Inc. (the) · NYSE:WMB
Williams Companies, Inc. (the) — Howard Weil 2009 Energy Conference
37 slides from Williams Companies, Inc. (the)'s conference presentation, Mar 24, 2009
Slide 1: Howard Weil 2009 Energy Conference
1 Howard Weil 2009 Energy Conference March 24, 2009 Steve Malcolm and Ralph Hill Strength and Stability; Well-Positioned for Long-Term Value Creation
Slide 2: Premier assets + positive long-term fundamentals
Premier assets + positive long-term fundamentals Gas Pipeline Critical U.S. infrastructure; large, diverse supply sources; connected to most LNG terminals; premium market-delivery areas; large project backlog Connects to leading, high growth supply basins - Gulf Coast, emerging Midcontinent basins,
Slide 3: Outstanding track record
Outstanding track record Exceptional performance Recurring net income and EPS average annual growth of 61% and 57% over 2004-2008 period Invested ~$11.0 billion in asset base over 2004-2008 period Funded by operating cash flow of ~$10.4 billion and MLP equity of $1.5 billion Maintained a flat total
Slide 4: Delivering results
Delivering results Recurring Net Income * Diluted Recurring EPS CFFO vs. Capex Total Debt and Cash 4 *Recurring income from continuing operations after MTM adjustments per share. 2004 & 2005 amounts have not been recast to reflect certain components of the former Power segment as discontinued operat
Slide 5: Strength and stability
Strength and stability Strong financial position $3.1 billion of liquidity as of February 16; $600 million inflow on March 5 Investment-grade credit rating No significant debt maturities until 2011; primary credit facilities don't expire until 2012 and 2013 Flexibility to adjust capital spending fur
Slide 6: 2009 priorities
2009 priorities Maintaining strong balance sheet and liquidity Liquidity - $600 million added in February through debt offering Investment-grade credit rating - agencies removed negative watch Driving down costs through rigorous execution and expense discipline Seeing rapid drop in many operating ex
Slide 7: Disciplined growth in challenging market
Disciplined growth in challenging market 7 Maintain strong balance sheet and liquidity EVA-based investments; returns that balance risk/reward Note: 2009 figures represent midpoint of expected spending range. 2007A 2008A 2009E $2,837MM $3,528MM $2,250MM 2007A 2008A 2009E $3,533MM $4,185MM $3,063MM C
Slide 8: Favorable long-term outlook for natural gas
Favorable long-term outlook for natural gas Long-term demand drivers Electric Power Tightening reserve margins Environmental concerns limit new coal-fired generation in near term Nuclear not viable near-term Greenhouse gases Natural-gas-fired generation required to back up renewables Ethanol and fer
Slide 9: Supply responds to lower drilling activity
Supply responds to lower drilling activity Historical Natural Gas Production Source: IHS Energy. Data represents ~95% of U.S. marketed natural gas production 42% fewer rigs drilling for gas now1 than '08 average2 Current level1 is 47% below '08 peak3 Expect a 50% drop in average rig count to reduce
Slide 10: Williams is a great investment opportunity
Williams is a great investment opportunity Well-positioned to weather the economic storm Strong financial position Stable foundation of cash flows Ability to adjust spending Integrated model best suited for success Substantial upside to current valuation Market recovery and more normal commodity pri
Slide 11: Ralph Hill President
11 Ralph Hill President Exploration & Production
Slide 12: Williams Premier Portfolio
Williams Premier Portfolio Piceance Mid-Continent Green River/Int'l San Juan Powder River 1.7 Tcfe 3P* 431,500 net acres 8.6 Tcfe 3P* 190,900 net acres 1.0 Tcfe 3P* 121,800 net acres 1.0 Tcfe 3P* 374,697 net acres 0.6 Tcfe 3P* 134,325 net acres Total Reserves 1,253,222 net acres 12.9 Tcfe 3P Reserve
Slide 13: U.S. Production & Reserves Growth Trends
U.S. Production & Reserves Growth Trends Exploration & Production 2005 2006 2007 2008 Developed 1643 1945 2251 2456 Undeveloped 1739 1757 1892 1883 CAGR 9% 2005 2006 2007 2008 612 752 912 1094 Domestic Production CAGR 21% Proved Reserves 51% 49% 2005 2006 2007 2008 R/P Dev. 7.4 7.1 6.7 6.1 R/P Undev
Slide 14: Strong 2008 Reserves Performance
Strong 2008 Reserves Performance Total proved reserves 4.5 Tcfe U.S. proved reserves 4.34 Tcfe, up 5% 148% domestic reserves replacement, 602 Bcfe net additions Greater than 99% drilling success rate Added 714 Bcfe to proved before price related revisions Price revision of ~ 112 Bcf 176% domestic re
Slide 15: Williams E&P An Industry Leader on Costs
Williams E&P An Industry Leader on Costs Source: IHS Herolds Exploration & Production WMB
Slide 16: The Advantages of Williams' Premier Rockies Portfolio
The Advantages of Williams' Premier Rockies Portfolio Extensive infrastructure in place and additional pipelines underway Many diversified outlets for Rockies gas Projections are Rockies production will not be constrained by year end Williams has significant probables/possible/potential reserves inv
Slide 17: Forward Average Regional Price (2010 thru 2015)
Forward Average Regional Price (2010 thru 2015) 17 TCO $6.65 Sumas $6.12 Malin $6.07 Socal $5.94 San Juan $5.62 Ventura $6.25 Midcontinent $5.73 Rockies Production $5.38 ..69 Bcf 1.3 Bcf 2 Bcf ..81 Bcf 1.8 Bcf 0.6 Bcf 3.4 Bcf Full Cost Spread Difference Socal 0.54 0.56 0.02 Sumas 0.41 0.74 0.33 San
Slide 18: Rockies Exports and Takeaway Capacity
Rockies Exports and Takeaway Capacity Rockies Exports and Takeaway Capacity Exploration & Production
Slide 19: Piceance Valley and Highlands - Leader in Innovation, Performance and Growth
Piceance Valley and Highlands - Leader in Innovation, Performance and Growth Exploration & Production Williams acreage in premier economically advantageous position Core of sweet spot Depth and topography advantage Owner/Operator of fully integrated gathering & processing infrastructure Leader in dr
Slide 20: Piceance Valley - Williams the Low Cost Operator
Piceance Valley - Williams the Low Cost Operator 2008 Williams 1620 Average Offset Operator 2133 2008 Williams 0.27 Average Offset Operator 0.42 Exploration & Production 32% 56%
Slide 21: Williams Efficiency of Development
Williams Efficiency of Development Exploration & Production
Slide 22: Piceance Valley - Superior Reserve/Production Growth
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr East 27.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Piceance Valley - Superior Reserve/Production Growth Exploration & Production 2004 2005 2006 2007 2008 Proved 1830 2013 2131 2241 2332 Total 3P 3179 3896 4040 4152 4300 Gross Production 268 368 474 601
Slide 23: Piceance Highlands-Competitive Advantages
Piceance Highlands-Competitive Advantages Leveraging knowledge and history from Valley assets Strategy of delineation/phased development proving to be advantageous Large leasehold position allows maximum flexibility Continually improving drilling efficiencies First to build and operate gas gathering
Slide 24: Piceance Highlands - Improving Drilling Performance
Piceance Highlands - Improving Drilling Performance Allen Point Trail Ridge Ryan Gulch Exploration & Production
Slide 25: Piceance Highlands - Vast Location and Reserve Inventory
Piceance Highlands - Vast Location and Reserve Inventory Only 5% of 3P locations drilled Considerable amount of additional potential locations Drilled Wells Undrilled 3P Locations East 271 5129 Drilled Locations vs. 3P Locations 271 5,129 Exploration & Production
Slide 26: Piceance Highlands: Exceptional Reserves/Production Growth
Piceance Highlands: Exceptional Reserves/Production Growth Exploration & Production 2006 2007 2008 Proved 338 607 763 Total 3P 2980 3185 4485 Gross Production 24.486 45.971 59.45 * Total 3P is YE 2007 plus 2008 acquisitions; to be updated May 2009
Slide 27: Powder River
Powder River Williams is the largest operator is the lowest cost operator is a leader in water management options and costs Take away capacity out of the Rockies has been secured Vast resource with nearly one million gross acres under joint venture Exploration & Production
Slide 28: Significant Location and Reserve Inventory
Significant Location and Reserve Inventory Powder River Basin Not all drilled wells have proved reserves - dewatering etc. Significant Prob/Poss reserves associated with drilled wells Drilled Wells vs. 3P Locations Exploration & Production 1st Qtr Drilled Wells 6254 Drilled-not producing gas (dewate
Slide 29: Powder River - Maximizing the Resource
Powder River - Maximizing the Resource 2006 2007 2008 Proved 372 413 390 Total 3P 1813 1714 1714 Gross Production 342 417 583 Exploration & Production * Total 3P is YE 2007; to be updated May 2009
Slide 30: Barnett Shale - New Basin Success Story
Successful franchise building value Gross production 110 MMcfd, Net 81.5 MMcfd (Mar-09) Current location inventory of ~250 locations, based on 250 ft spacing Successfully high grading to core properties at attractive returns Core and Tier 1 areas exceeding expectations 35,000 net acres and 90% in Co
Slide 31: Barnett Shale Impressive Reserve Growth
Exploration & Production Barnett Shale Impressive Reserve Growth 2005 2006 2007 2008 Proved 27 80 131 190 Total 3P 61 175 277 430 Gross Production 2 15 42 64 * Total 3P is YE 2007 plus 2008 acquisitions; to be updated May 2009
Slide 32: Paradox Basin - Gothic Shale Play Update
Paradox Basin - Gothic Shale Play Update 45% partnership with Bill Barrett Corporation in 850,000 acre AMI Partnership controls 301,000 gross/256,000 net acres (116,000 acres net to Williams) Horizontal well costs decreasing 5 vertical wildcats drilled; 2 producing, 2 waiting on completion, 1 plugge
Slide 33: E&P's 3Ps for Success
E&P's 3Ps for Success Performance Superior Growth 21% CAGR production 9% CAGR reserves Industry cost leader Technical innovator Responsible stewardship Diverse reserve base Exploration & Production Preserve Majority of portfolio held by production Long term value Cost efficiencies Capital flexibilit
Slide 34: Appendix
Appendix (©2009 The Wms Companies, ne Al igh reserved ‘Winans ivester Presentation Maven 2008 ©
Slide 35: Forward Looking Statements
35 Forward Looking Statements Our reports, filings, and other public announcements may 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
Slide 36: Oil and Gas Reserves and Resource Potential Disclaimer
36 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 est
Slide 37: Non-GAAP reconciliation EPS after MTM adjustment 2004-08
Non-GAAP reconciliation EPS after MTM adjustment 2004-08 37
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