Low Natural Gas Prices in 2009 Dampen Williams Companies' Annual Financial Results

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Natural gas production, processing and transmission company Williams Companies Incorporated (NYSE:WMB) (Tulsa, Oklahoma) recently reported fourth-quarter and full-year results for the company's 2009 fiscal year. Net income for the year was $285 million, down 80% from net income of $1.42 billion in 2008. The sharp decline in annual income was primarily caused by lower natural gas prices in 2009, compared with extremely high prices in 2008.

Natural gas spot prices at the Henry Hub peaked above $13 per million Btu in July 2008. By March 2009, this price had plummeted to below $4 per million Btu and was below $3 in August and September 2009. In mid-December 2009, Henry Hub gas spot prices went above $5 per million per Btu and have remained above $5 since this time. The lower prices throughout 2009 caused annual declines across all of Williams Companies' business segments for the full year, although quarterly results showed marked improvement from 4Q08.

Results for each segment were as follows:

• Exploration & Production (E&P) - annual profit of $418 million, down 67% from a $1.26 billion profit in fiscal year 2008
• Midstream Gas & Liquids - annual profit of $640 million, down 27% from fiscal year 2008
• Gas Pipeline - annual profit of $667 million, down 3% from fiscal year 2008

As natural gas prices continue to rise, so does the company's optimism about the future. Speaking of expected segment profit in 2009-11, Chairman, President and CEO Steve Malcolm said, "We expect to see greater than 100% growth in our E&P segment profit based on higher commodity prices, and by 2011, increased production volumes." Williams Companies plans to invest more than $3 billion in growth projects in 2010 and 2011. "Clearly, we're investing today in future growth," said Malcolm. "We're investing in projects coming online this year and in the future that we expect to make significant contributions to our earnings growth."

Industrial Info is currently tracking about $2.3 billion of Williams Companies projects in the U.S. and Canada. Some of Williams Companies' major projects that are under way or planned to kick off in the near future are occurring at the company's Echo Springs Gas Processing Plant, near Wamsutter, Wyoming. Williams Field Services Company is adding a 30,000-barrel-per-day production-train expansion at the 120 million-standard-cubic-foot-per-day gas-processing facility. The estimated $375 million project began in March 2009 and is expected to be completed this summer. Williams is also planning adding between 150 and 200 new wells in the gas field in the area, and a three-day maintenance turnaround is planned at the facility in the early summer. Information on these and several other Williams Companies projects throughout the U.S. and Canada can be found in Industrial Info's North American Industrial Database.

View Plant Profile - 1027431
View Project Report - 045000732 200005245 200005244

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy-related markets. For more than 26 years, Industrial Info has provided plant and project spending opportunity databases, market forecasts, high resolution maps, and daily industry news.