WMB - Earnings call transcript Q2 2020 | The Williams Companies, Inc.

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Operator

Good day, everyone, and welcome to the Williams Second Quarter 2020 Earnings Conference Call. Today’s conference is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Brett Krieg, Head of Investor Relations. Please go ahead.

Brett Krieg

Lindsey. Thanks, everyone. morning, Good joining for for The interest Williams Companies. us you your and in Thank released press and our presentation we speak afternoon, Yesterday earnings morning. President Officer, Chandler, CEO, to Financial this that release and Alan Chief Armstrong; our John will our the and on today Development. Vice Senior joining Officer; Corporate Dunn, Strategic Operating are President our our us Also, Wilson, Chad our Zamarin, Micheal Chief Lane General the call Counsel; and of related In our will you forward-looking presentation find the to statements. disclaimer materials, and important review is This our should to disclaimer and you integral it. remarks Also we included Accounting in measures our presentation materials reconcile Principles. are non-GAAP that Accepted to Generally And these presentation at back materials. of reconciliation today’s schedules appear the

So with to Armstrong. that, over Alan turn I’ll it

Alan Armstrong

Thanks, Great. joining you for all us and today. Brett, thank for

a testament the predictability share our and to to business. results of proud strong the is second the stability We’re really of quarter that

like by will its detail, number Gulf and share also breakout of Mexico a the shut-ins platform that Gulf platforms a variety that can be larger more plans against of and reasons, Mexico Storm shut-ins durable the for business of the of including in and John beyond this a us, Williams one Street the Tropical expanded a internal condensate in As the including production – serves Cristobal places price-related Ford the to and on the exceeded Marcellus. headwinds, showed COVID of Eagle how just Deepwater variety of expectations in

of past and and for of not the companies the But of quarter are easy that a navigate, business an the quarter. So have the to asking shown of you people really, variety on really been lots headwinds lot most look likely It’s of because for this on been environment to focus remainder our durability we the through. was stability and for But is the to the business fundamentals of performance, low-cost, benefit of that real focus to year. has and built it clean strategy natural on a demonstrate long-term a opportunity this the quarter’s our us the gas. contrary. We for QX quite want sound Williams,

me results, and then and to Q&A. broader gas turn key to volumes to overall on So thoughts some walk then natural it hit John market stats, I’ll let market investor over the before against and I’ll up some the on compare we of share through topics the Williams our get

So, John?

John Chandler

moment. Thanks, talk a Alan. X for We’ll here Slide to

We we’re not obviously surprised the and are pleased, frankly, quarter. this results with very

there to As statistics see in are Alan from and looks revenues inventory of And shine and difficult West. mentioned, of cloud our on per the reductions And adjusted for while prices benefit those the Mexico. two a NGL impact temporary some unusual the and few those the that adjusted items our realize in by earnings volumes environment comparability, items to somewhat by flat really the last X% our year, share this relate and of quarter. were very in offset the namely, earnings in the the Cash that shut-ins deferred Gulf negative a the while can EBITDA year-over-year. you and industry quarter, energy improved flow faced over last through, operations

If you EBITDA X%. exclude actually these items, was up our over adjusted

in alternative quarter minimum down But million We refund. $XX for the the was Distributable in an importantly, flow from discuss moment. variances a EBITDA benefited second will XXXX, cash more quarter. tax it of

showing Factoring The also very that is distributable this year, reflective increase flow quarter. of distributable dividend this X.XX but this will this increased cash very about We our saw that expect a year. the we out, strong million, of X%, or safe. $XX flow average come generated solid cash later EBITDA similar dividend refund times,

being in even lower-than-expected for cash of point, that capital expected range, of billion result, our for to come one This to our quarter with $X.X what to year. tax track to of of up. level in and project of on to year. capital lower-half the to the guidance the achieve looking and our plan, year-to-date original and range expansion that it produce expand flow original and capital benefit expansion the on cash our forecast, flow And cash expenditures. full-year, this generation was drive still EBITDA flow is distributable flow our of strong the has goals half our are the spending year cash of free metrics. free spending second-half now the The dividends at guidance versus we you about above If is midpoint the that our last discipline range. down, of deliver coverage all $X capital this improve as because Intentional billion of cash continues year and refund some spending capital With discipline to receive capital spending we’ll we and this our distributable leverage and shifting a maintenance due excess spending in helped guidance expect and the capital predict EBITDA to and

produces be XX from X.XX divided time last this same on net the finally, months our the page, Our by times a improvement and while metric of debt not over reflects ratio $X.X in we our EBITDA last a debt billion year. nice And This significant cash, liquidity which untapped provides did to revolver, company. retire of matures billion quarter cash, $XXX November. to that will the end used this with in with along $X.X million

despite adjusted market. Now, variances a the let’s waterfalls. tough little is Williams to deeper results our Again, bit X, which pretty dig for let’s about very the And quarter. our in EBITDA of energy go EBITDA Page well a performed

As a shown business. the which important of performance ongoing million. make And totaled and comparable consist more isolate the $XX few we numbers I of We’ve three to of things. as it’s and they comparability they to moment things unusual those chart the reflective on believe items, mentioned this item unusual identified ago, a are

the around Shale our down step around the Gulf non-cash Barnett is revenue The franchise in EBITDA area. West in first Mexico a East in deferred our million reduction of and Gulf area $XX to tied franchise

at As received a upfront revenue, time. payments on reminder, revenue cash not ago, deferred significant but years several recognize we did

been received have payments several into that shrinking those amortization we And has amortizing over the been years. that last year-over-year. income We

The our one second related the occurred second during was is Gulf they Mexico to to quarter, that to it extended to platform outbreak Storm million which our impact was due were because quarter. of a impacted a finally, of due customer a and also It was of on And that occurred during shut-ins COVID Tropical $XX then Cristobal. that our impacted of negative price-related some These had producers. unusual the due planned Deepwater shut-ins maintenance, shut-ins item significantly to results.

this benefit NGL item benefit The prices that the had impact our rebound third a the unusual is of inventory – value of on that quarter. the positive

in our understand quarter to accounting million in of purposes, understated first this of a the results, results inventory recall prices, partially inventory inventory, we not note in quarter, linefill. this operational the first may what and also operational this non-cash item highlighted in at results, second we note is You marketing sales the were commodity move due loss important when reduced that just inventory speculative driving first overstated. it’s to causing profits was that a look improvement that It’s first because turned write-down the losses quarter, in commodity NGL noted of a quarter down the $XX the quick West primarily recapturing you on and around That quarter. important our for results us It’s building to quarter. were some

to called of million better II year. variance our it’s that assets Transmission of Phase on came our in performances South Hillabee is With So out meaningful We ongoing including than were important into last a year. same of this the this results service And Gateway which from last comparison allows understanding into because, to projects portion & current service period brought late items, that – the feel three Rivervale year-to-date $XX allows by year A and separating Mexico is and Transco, projects, service commodities produced quarter. business. last those big project, it increase the impact not put out again, their better that note for this way, brought really on into of Gulf new the were these items, period. of a the each for it we of

this last we’re started year. of addition, did settlement, rate we from from quarter savings And Transco’s year. quarter last case which efforts benefited reach initiatives lower third In finally, benefited and both quarter not additional this making until this the terms settlement costs, year

EBITDA a to July as shut-in contributor the Gulf growth have in X, is quarter, revenues online. was the from back the While already volumes of of production quarter. And rebounded during issues and this experienced affected not all the Mexico

years and are more EBITDA several additional the joint revenues come million Mountain revenue this Equity we Collectively, volumes EBITDA Mcf online X% venture, our segment, volumes processing were where in higher where Marcellus NGLs. Northeast and new from the strong, to highest volumes up method $XX XXXX. in the in volumes higher that per Midstream moving it to also coming realizing South and Northeast These transportation their benefited a volumes earned and volumes to total we due grew Higher from gas late Laurel wells where June; growth quarter. over additional three of fractionation of gathered gathering due drove processing, revenues investments from contributing from XX%. in we reached peak benefited of our quarter system, on during to continues growth, of system drove quarter. Bradford and, expansion course, Now gathering

efforts, well maintenance favorable Finally, some as from the much last as Northeast began cost benefited expense reduction of also year, savings. which

now Northeast when X% a $X.XX that’s Northeast, final note compared $X.XX Mcf this for is per for of assets, assets you gathered a Mcf non-operated As same per second year, items time of last an quarter our XXXX, to adjusted Mcf proportion include our per in increase. the the EBITDA in operated

Now moving looking details revenue health special West year. the quarter benefited of items. service declined were those the the June I largely were – were largely repeated of of ended that of final XXXX the $XX cost year. not special and in important this the of at of mentioned of year of in second in segment ongoing dig Shale That into segment, And, was was the items year. Those revenues that the these this second last reduction to unusual million last When repeated of course, to in that neither West. true-up realizable the that year that really result the quarter which it’s Mid-Continent, last contract payments the Barnett MVC the

were down, but gathering the West the Combined somewhat Beyond quarter. for X% lower by were offset declined items, volumes for these cost. gathering revenues by

volumes Ford. Eagle However, the this in May was heavily influenced by in some shut-in

the our franchise other If you collectively all up Ford exclude of Eagle volumes on X%. systems were area,

Eagle is Ford though to relates realized basin, our it revenues less during quarter, there the Now, a And minimum gathering commitment. by we the volume actually Eagle were than as the commitment. from minimum agreement volume protected even increased Ford, volumes

EBITDA, dedicated decline Pass our Finally, and on shipper the This volumes not an line and lieu our line. also us pipeline that oil drop in a benefit relentless thing segment given that we the lower control. Pipeline. is our you revenues which costs hold in may statistics on of from a have on in keep and efficiency as shipping note keep odd One did other to pay on this comes a meaningful fee us focus Overland on impact agreed a transportation volume, NGL crude on

X, Slide to Now our year-to-date results. moving

results talked year-to-date by $XX a You affecting of adjusted a million step of down $XX and that accreted and factors growth. just in reduction a revenue many deferred accreted collectively EBITDA, quarter can second headwind. Gulfstar growth X% net accreted second about quarter we Barnett commodity EBITDA, that price see on the shut-ins reduction driven deepwater quarter second the million million same in impact negative the fluctuations of non-cash the showed the EBITDA $XX in year-over-year, in and nearly first negative

demand we second if realized of $XXX EBITDA X% gas off of year, adding from part year-to-date, with expansion So from profits. Gulf case quarter. well Mexico by some the described market, year. fractionation Alan adjusted overall the of huge West growth increase. and reasons delivering in key and out of in good growth the projects, & the uplift those we’re is start assets a items tough the Northeast reductions, Alan? up back a all, actually year is turn expense now a Mexico Transmission as for transportation you positives being NGLs. volumes offset an review take X% to processing, And call of I’ll over supply of and EBITDA results are The are a somewhat off over settlement year-to-date despite many the and in rate the really by all lower Again, with this revenues of in and last and fundamentals. the million Gulf mix, – to incremental for those comparability The same to some the

Alan Armstrong

And John. business thanks, the look to that X. support Well, now, Great. continue at our Slide here on fundamentals let’s

our that would people And be assume strategy stated, gas stalled gas and a demand. many consistently we’ve As by demand on depends greatly natural diminished COVID-XX economy. natural

Fortunately, have all. at out seen not we that play

to In market from Lower-XX broadly and systems, both grow, demand fact, of the was second natural on up in X% continued particular. across gas demand has quarter XXXX. the our Overall,

was about down that early not that and was segment grow And did the of in only XQ. slightly the only industrial load. industrial really most fact, even was load X.X% In

seen back levels. call up actually normal flat. level, really you rebound well So But we’ve pretty that that that at

the power the this quarter. X% XQ This if that And for early XQ side, the providing trend energy, an challenge additional installed remain be combination against reliable lowering have levels. last XX the U.S. the especially months, time U.S. show continues at is in gen the powerful healthy into the while and to renewable can and representing projects, here XXXX dual than power the numbers of over continuing is gas-fired we’re emissions. generation over July the XX greenhouse of the same higher gas On solar capacity with consider you strong loads generation look impressive the month when wind, like And XXX gigawatts up meeting of third how XXXX of low-cost tracking been

combining up U.S. of at lot show political We we issue. nice lot of goes a goes the the really issue. here continuing in end conflict, doing of a lot a a see with seeing fact job is the renewable that improvement But discussion, continue day, power of the in bantering really media benefits of lot gas-fired to a that the the that of U.S. into emissions there’s both here to of So And the power in bent generation. on despite this and a provide U.S. on low-cost and political basis, the are numbers around positive this

to that So front we and really got things positive we a expect that lot on of continue.

was and side, residential actually commercial X%. the On demand up

people the basis. think XX% pipeline export that I so And of on a primarily of quarter comprised, the as surprised LNG even XQ to well. a in And market lot in shipping Mexico up exports XQ was

from The the utilize the been as pipeline, at first down was Of in the there. course, to now. begin signs reaching the even Altamira typical positive have emerging and lifts, looking will have significantly supplies into areas cancellations pipeline exports of year, and LNG quarter get and the have are now exports to diminished from complete you particularly expected cargo part the September into where are soon supply further on there begun to diminish LNG infrastructure directly and Mexico number pipeline U.S. that’s are into of rise third the continue, as by but Mexico

average, and systems, on there. actually compared continue of a volumes on X% to markets. in three-year us, our on that’s we get and But So we because transmission capacity, looking to – on to generation that more of lot our own a a is good of as to contracted our how lot moving on paid are systems. certainly transmission On there at important basis continues parts average, gas to XQ see those up natural XXXX, XQ expensive things to course, their so gas Mexico bring in power volumes in going our the replace

we look side. on as X simple supply to Now move really and and the story pretty Slide here at production the update on

You gathering slightly like despite But pretty production XXXX Williams in XXXX can declined Mexico. to quarter see overall wellhead by flat. of the and and was Ford XQ the the the in Eagle of again, wellhead X.X%, the Lower-XX Gulf increased shut-ins versus that second X.X%, about places actually of

be be story the to a called variety growing demand. meet the continue to So we the be in this conditions, off supplies on last wide the of market expect and will low-cost to as to first

this business we’re We mind the with in our processing business excited gathering is here. have set way and G&P next about for principle focused and the really our up several years

third John, you focus continue as Looking our I’m areas. into heard fully seeing on quarter, grow to as now key the going deepwater we and exception, to no are here in rebounded. from volumes investor have July, volumes, gathering move to

for at And investors. X, look these areas take so here a key Slide on we

the business withstand conservative and the have we is the our manners right right that we contract Our assets, business second a durable, commodity we’ve of here kind witnessed upsets in quarter. in strategy, the because that can

and Looking assets critical our components by driven utilities and major capacity grid first long-term transmission perspective, a on are in of demand durability commercial natural populated from the the densely by premier gas for the the serve a areas. gas nation’s as

always has Our remember or back ground is that continually volume the and transmission We important most our of flows it that not about when the are cash by reserves available in to the that a exposure. owning no essential we do haul by Therefore, power customers, contracts, this long with with haul when very the providing capacity by In the contracting credit throughput it protect services primarily in cash long contracted infrastructure the is we as wellhead pipeline it principle have the producers. and business. in And way, the pipeline to high-credit dependent contract is we business, we And held long-term business, fully cases. commodity the G&P are utilities comes to we sell. said or to monetization business we and volumes. believe out flows that credit, quality important for on of we have the our speak

a basins lot our portfolio that gives and us producing changes change customers. of the to ability on within that – individual have also diverse amongst customers of a We withstand G&P business our go

a course, a large such the that Additionally, the very most continues you’re would the the contracts pricing for of of long And fact hot that’s of be is this here predictable processing Chesapeake do environment our being our cash Producer to number note topic not despite pipeline contracts wellhead. by primarily differential. to been the fee in despite due are continuing, filed and that listed basis a with price seeing commodity recently none commodity provide why or fixed difficult bankruptcy. bankruptcy for and flows vary have XQ. service there sector. being of And, Midstream to in rejection. I contracts we essential And of slated for haul that and rejection, Chesapeake back steady

bankruptcy expect to Chesapeake to relationship these and flexibility we fact, position strengthen a in fast restructuring the our navigate process serves opportunity the Chesapeake healthier to for see William put In the give in market growth. and basins shifting

great in of gets as out those PA, County, on got the basins Haynesville, of dry the Bradford here that serve called as has well Chesapeake the are So position the to gas over coming in both couple a and years. next well-positioned growth as we

X% start reason for to well covered and this side, to need Looking no over despite our is it expect year out our dividend. by that saying There reduce an excessively still or high intent we X.X% the let We X%. by yield, me grew very year. it’s be coverage the on now financial

to more continue year. in will also on addition dividend, the And improve cash fact, growth this cover generation metrics. free to the more have to to credit to to capital coverage in anyone really we than quarter, go especially net This hard improving metrics and actually credit In environment. expect X.XX their our down EBITDA our we flow consistently than this saw we find debt our times, in

note release. still the midpoint. the guidance. as and forecasting but spending for are pacing cash improved quarter, will of the billion, has to the down it lower-half providing Turning of side to CapEx, of On turmoil since we the in further flow billion on on most the major we’re from last of earnings But growth of land the range. expect is reducing outlook holding space, profit year. and the $X.X and to through course, On DCF, free the our in we’re we’re $X.X our $X.X adjusted still billion the for the that, the support $X.X reducing we range generation the side. range, of ahead have Despite quickly EBITDA, to additional original derisked On midpoint we original to billion guidance second you projects

lower-end the great with headed the this of by even So for and reduction And this drivers we’re one execution performance our CapEx. our of key risk teams actually project reduction, in new towards range. is the the

job of great there projects by and costs in on control our So our environment. execute out to a continuing teams difficult

and sustainability at about Over Williams. long-lived we long-lived that to think long-term how – is sensibility Turning on sustainability. requires Williams. at in here focus new infrastructure nothing grounded operating Sustainability this

on sustainability interest of aligned focus value the immense well that shareholders. long-term Our with continued is delivers

XXXX published demand methane More July I meeting environmental taking And to by I’m reducing since actions there practical report very solutions. proud really was you really being point of provides the Report with Our Sustainability emissions of energy, operating than XX that, and on view XX% and into would immediate emissions we’ve a highlights reduced for XX. that of balance dual teams are – to while increasing transparent impacts XXXX. our challenge in we and our this the focused reported so the for is that one on

the improve And permitting exists. our by environment growth. everybody look that teams job the at proud expressed concerns turning about and doing environment. to nice is of Lots what to our of part on to really we’re continue do that now So to difficult

Williams, for sword. a this double-edged course, Of is

less lower present. ability populated systems to pipes cost areas. and greenfield have environmental impact much would the most of serve we the positioned with expand right-of-ways densely to are And much as projects at some that and result, Our these a

us advantage that opportunities tremendous this us Of and the gives offset returns permitting provides with growth unique difficult can at risk associated course, with environment. this

the NESE decision unfortunate Looking execution the the we project rest the despite portfolio. during of terrific out quarter, New York across from at our on that had quarter, came

the on on system Bluestem XXX-mile our loop extending In XX-inch along pipeline for fact, the project Transco and tie-ins pipeline our Transco, placed completing Southeastern final our was in service we’re Kansas Oklahoma. through completed now as in and NGL Trail Virginia, well. And

really So the a a in great to by work to COVID. But to overcoming restrictions learning teams due our of time. deliver projects work and lot different on way and continuing budget on

– the was Compressor in schedule needs. on our dry which a expanded Utica in side, to Station, also We customer’s is G&P accelerated Ohio, Salem the meet

the lot of in great them there been our a great and with working really of expansion to out really their dry and So Encino keep team success. keeping see success job up drilling we’ve to needs being Utica hard successful. that a up And with by doing is great

in FERC project a Leidy our Pennsylvania. South Certificate received also for We

Energy the to progress, that Access Coast the load serve Regional So as required help really to plans well continues remains excited and see the Pipeline Mid-Atlantic. off along. that to ACP, Atlantic moving in project And dusting are we

been some off of that we’re And load. plans So that now had. we well-positioned serve to original we’ve dusting always the extremely

our gathering and the opportunity, opportunities near-term, Taking business. So system. long-term, that certainly processing growth in in think we but the not transmission along presents not our growth over presents a continued look at an – the

of for volume as Northeast out there. the And all, teams as on year. performance G&P G&P the great volume out with up meeting our the we’ve got business of out cost the a controlled First footprint, keeping is our – by well there, growth expectations both

really So operating performance. great

in continue and supply demand cash provide to range grow low-cost of wide position flow and scenarios. predictable Our to basins us a

I in lowest-cost gas basins As PA, very increase. we us as in come most places low Utica, we’re the continue demand The right see very a the low will on Counties being basins going in to and commodity in the – the Bradford the and to Haynesville. be is economic and we those being Marcellus mentioned we Southwest differentiator for into as do believe supplies, Dry spots both to like oil these lowest-cost core gas prices, continue earlier, moving – Susquehanna, out area the side Northeast think, of the

to stations tie-in and new compressor just Northeast clockwork both teams expand and the Haynesville. like Our the continue production in

of [ph] big now XXXX. the larger ahead sizable we’ve And EBITDA the signed that beyond radar great base out So out you projects, about of Mexico, don’t Taggart, And don’t we unique of but work they a Gulf products the estimate packages Spruance because set four by a Deepwater of in projects screen, new deepwater into there deliver But of to these XQ, going that our Prospect, on four will the just those were Fieldwood, going teams In in really well with you on to growth. on latest our amount up of string hear hear that majority major about, that the keeping the tremendous hit package hits. our come a have around million lot that of there. infrastructure. that Gulf. new up and contracted Taggart, projects, business Taggart to – a in discovery XXXX And online we of continue expansions build through are those expect a system, so $XXX expansions win to continuing lot well-positioned reported somewhere capabilities now and the we tie-back. very Katmai, on we teams from With LLOG Latest major really come we as in was we addition XXXX. on we even the LLOG by two four will And other plays. those great of as work

quarter and business steady a show in here, move headwinds. that durable to So a business is how intentionally a just close of to be we’ve can a against And was built chance number predictable. this this

capitalize gas continued us Our gas focus natural natural on to well strategy positions growth.

city communities to cities and the take entire and tremendous the growth, our for advantage, efforts Our infrastructure gas extremely enables the their efforts a everyday remarks safe remain coworkers as who on to general a extra during The scenarios. well will to we enhanced of see because it gas. our close energy granted of I’m for wide play to questions. investment mile if our transmission I their by delivery offers the clean public, low-cost and and smoothly, COX continue ensure as in up grow us natural in be great demand position renewable keep significant my Thanks open overlooked operations do while and and for along durability of natural flows. And didn’t These energy. that the reliable a continues across our predictable growth this supply of acknowledging employees our and going to in lives part infrastructure provide healthy. pandemic. for in does bullish And utility range cash role our also by existing of U.S. often country, – gas finally, running for And bills, COVID-XX energy the economy. lower critical safe basins proud efforts to has the to demand flows We recognize I’d who that, highly with frequently gas American workforce consumer are to and I’ll remiss jobs with your and keep continue their emissions, and natural reductions opportunities cash natural themselves

Operator

first Our Tonet Instructions] line JPMorgan. the of from Jeremy with [Operator question comes

line now Your is open.

Jeremy Tonet

morning. Hi, good

natural I has gas It coming guess, start your here. rebounded bit a commodity across prices up bit to a and footprint seems with, off producer like activity here. want Just

expected? any up across you was that a color, could what activity than G&P showing flavor that certainly wondering So on the better would be again you’re seeing give we footprint there helpful? just of producer footprint you us there? your could your Do I West So guess, tick across a if think quarter-over-quarter what

Micheal Dunn

Jeremy. morning, This good Hi, is Micheal.

seeing where across dry basins, some in well. We prices are that are of all activity expecting there seeing curve our forward gas the customers higher year and we’re as next producer

seen from some they expect even that workovers with in probably just the And in new cautious, some some in on activity see pretty would underperforming. production that we decent from think, our and what been in wells environment. seen they’re to participate the they’re Northeast of Barnett I and We’ve PA a some of not in only had the comments being Rockies, You’ve are higher-price the prepared but Haynesville. some the with there but that coming saying, customers to some

environment It a taking advantage. next potential anticipating looks are they higher-price like year. So and

Jeremy Tonet

utilities Or That’s But it’s switching of pretty And it like of probably more this And test point. it. helpful. hydrogen. gears, the data as just thoughts want something had on at could granted, thoughts if that running Got seems hydrogen helpful? if is going role forward? as Thanks. pilots Williams this with would in to you are regards later kind be topic any blending, far a Thanks. play any that to see

Alan Armstrong

Yes, thank question, and Jeremy, you. great

and in right from renewable where We have gas we’re several bringing operations dairy waste projects now, from areas.

lot a already And do we lot on will projects to and the are think that a decarbonization, coming presents those I hydrogen – so terms Also, the our the see like got online, from of customers that. say, We’ve we’ve be are we’re ahead New front, certainly, continuing projects. And of great that. in support on, working. investment loud them and political but at we hydrogen obviously work of on message invest for for opportunity opportunity we of a those like places about York clear would us with and to heard Williams around in

hydrogen advantage. that so renewable think think take part storage, front, are those and densely pipeline in we’re in solar and making where investments given that extremely – in certainly sense well-positioned, around be investments seen into form we that. converting well-positioned in able doing And well-positioned interested to extremely energy And in distribution our becomes take populated take to renewable systems power the to they on to areas. of opportunities. especially make we’re network extremely and to you’ve as we’re interested as as of our We we’re a excess certainly renewable available And advantage and

new up that. we’re team so team done for that’s think than of – Williams, frankly. Chad has And a And And like it. Zamarin have great opportunities into opportunities is look that. no stranger to that like I The better continued picking nobody his to and positioned job

to continuing those So opportunities. forward to into we look look

Jeremy Tonet

color. very Thank a you. That’s helpful

Operator

Colton & Tudor, the Holt. comes question of Bean from next Our Pickering with line

line Your now is open.

Colton Bean

morning. Good

How would solar And So, primarily you do initiative. Alan, on a cost what savings? years follow-up versus the maybe to playing evaluate five that on renewables as or just you that driver next need see so? the see to over to out revenue

Alan Armstrong

going I’m Yes, to you, have Colton. to Chad address for that Zamarin

Chad Zamarin

accretive Sure. We them one and that, see as renewable opportunity. is do Yes. as is solar good investments savings No, our I view examples. those cost think of one don’t of the position great just investments things a we about

invest solar years next we million expect immediately somewhere million our few to along $XXX over in are think to footprint. between that $XXX projects I the

installed I good front. have RNG have value will say, partners – the projects can gets coming that mentioned, the we would capture. likely and opportunities Alan into the optimize solar Alan the on we’ve got But system. pipeline optimize order Now, just projects we’re fairly those mentioned, in way that we to Williams existing a of in

of the and revenue I up farm, where very opportunity sight we’re do to our system, a Northwest create better our up towards then value follow-up Seaboard hydrogen And project, not along Eastern projects into opportunity, footprint, build well-positioned footprint I to can line generation create and that can a of pretty one gas we think, pipeline anywhere an you value I front, the into no be will there Williams. systems. in and we dairy the where just we add think, than project the to bring our opportunities. but line see, into When to Northeast, that opportunities on our only think footprint capture have main landfill that the is along We good if think, add positioned renewable infrastructure upstream as invest additional our

tell it’s solution because so you States. in truly invest in gas days. the how very United the natural we that part And for think that part further I But business, will of believe is can I early that renewables the we we focused on are of

opportunities that to the would several I focus So find expect over continue next and years. we’ll continue to

Colton Bean

XXXX. front, Great. producers And switching a I Northeast few there. I a over detail seen for the just appreciate added case think, to we’ve maintenance reference the capital

know what might flattish environment? a any volume look in like but WMB’s I needs for expectations great So preliminary, capital

Alan Armstrong

as Well, on the advantage Micheal a in curve, I see to to forward mentioned, have And but do of largely looking the think, lot take that. growth dependent we are say would it’s just of we continue Northeast. I producers that

the say, we’re replacement still to to don’t going an It’s as somewhere. there’s continue going to if those to oil growth And price would growth. so amazing to for exports low LNG well we grown. have of just is going to how be volumes, If as our come are from we demand recovery, demand meet pretty – has see year I yet the at look have and

And would outstripping the so think. LNG the typical demand, that right now market quickly, be pretty would other enjoying have if and were – a LNG we turning we the I really way

the So said that I like flat don’t low-price the certainly another basins, dry the Haynesville of Marcellus we’ll see and Utica. coming I’m and that sure would the out way, and not agree volumes see Northeast

a lower expanded has that, Northeast, now. see did lower We’ve I very we of if job our lower but – that. are the gotten say, and right in our and because systems done great So capital just would

are for just of that horizon are if see lot at a do the of mentioned, expansions, but now. kind flat, of right in whole We capital a planning the we not pretty as Micheal demand sizable, looking But that’s Northeast. couple there’s

already something. our us And swath acreage a dedicated of systems wide that’s so just such to are covering because the

Colton Bean

Okay. it, Alan. I appreciate

Operator

next Moreen Mizuho. Our Gabe line the comes from with of question

line is open. now Your

Gabriel Moreen

plans, it be these kind projects? bolt-on Hey, maybe something dusting and Can capacity? of the sizeable future just there? off everyone. strategy bite good Is demise. morning, more talk you the the APC’s would Alan, larger I’ll about on given Are smaller that

Alan Armstrong

customer-driven are the through expand are and stretch – main going with South always and two but cost. we just the would are that for goes the capacity the going that those that say, laterals, well And the that customers for say, area, purposes. would sizable obviously to two into those in I Virginia another better had low-cost. we’re as there I originally, deliver, demand as cost to And benefits we Nobody confident on ACP But provided we a with Virginia laterals, is be was there pretty a liability certainly system can to the certain area we positioned conflict, line to that. major much lower markets. there. to – were think and growing meet than we’re to help laterals the having very pressure well-positioned Cardinal in case Well, those with line work And we’re we’ve with both the we that expansion at we alternatives that of the primary for reason maintain reliability the that that

ability is incremental can closely to their to we’re got expand our than existing And to serve of can it so better it existing do we customers debt are they nobody customers to the at their an terms tailor great help And the say, and goes solutions basis. the markets, to And we in I we saying without the look a – right-of-way, And capacity, working requirements. needs. just do the the that would going those to positioned those we’re in with area capacity But fit on demand we’ve look in into those with that. markets. importantly, relationship

all when huge have to systems course. to demand course, of efficiency And at We of and so time. can needs, said build that’s cost another don’t the that all those once. a expand capital comes over to on capacity way, the to return we able be do And, as it advantage

that? anything would to Micheal, add you So

Micheal Dunn

commented that our in a expansions a today to those carry to these the on customers lower would to footprint aspect and that’s those bring And just well environmental regard have other regard Building in is think that will that bit incremental environmental say, area. that something brownfield we systems just existing much that in I we systems. we Alan impact. can as

Gabriel Moreen

it continues, ticked been if a then up ethane little I’m maybe could whether ask and it of bit. there that on whether out recovery a like in mean systems Thanks. also, of source you’re if a And I the improved seeing West, economics out can maybe upside Bluestem? that’s just seems your wondering what has

Alan Armstrong

boosting volumes We are and Yes. continue ethane in out certainly there the is area. recovery seeing that

a our their volume So actually efficiency you ship. But customer that’s that volumes, pay in than just the that and take rather chose we OPPL volumes have for seen to because we’re quarter. for may us had down off

a And another said so that off – way, from little volumes were while off that. revenues the there, were the not so bit

ethane And but so comes – do recovery as expanded opportunity, see we in.

rest of the is of to show on seeing year for the most margin actually market the We’re Ford continuing ethane.

of we’re And that we appetite present for of market advantage so, given itself see our advantage taking for taking that as that. risk, forward price limited commodity

Gabriel Moreen

Thanks, Great. Alan.

Operator

next of question of Bank line with the America. comes from Walker Derek Our

Your now open. line is

Derek Walker

the time. presenting Maybe Good of Bradford for a just me. ones counterparty actually about some and morning, some the the quick Thanks everyone. risk of in talked addressing about Chesapeake and around opportunities you potentially for Alan, you couple some benefit of talked potential obviously Haynesville. restructuring

just the more Eagle a a some bit in outcomes the dynamics about provide talk more I And some might bit see little want in or see color being you know you Just Thanks. little in some Ford? Can that exposure can you Ford, basin? test of of Chesapeake then to to has have if Eagle around there? exposure you

Micheal Dunn

Chesapeake and this basins Micheal. the the Yes, that I’ve I walked exposure with is Bradford. guess, through three have major we

well Haynesville, rate We agreement of It’s there not that It’s would we’re situation. they any service And very obviously, working enjoy have I for both expect, of that’s cost a the continued seeing. and service the low-cost agreement, very actually a a with that similar there very there. growth them. us with a customer. pressure cost

the growth Haynesville. of expect continued out We

prices favorable were working basin there prices in And some offer there’s and most incentive And there. in obviously incent right to it rate dry been continue we Those of that of were to growth that the And are don’t an future we if the to looks opportunity up for sense more to think another rebound. a prices. Chesapeake. volumes gas Chesapeake exposed lower, Eagle the for a have back are NGL the we condensate the additional makes would expected they and volume. Ford situation in whenever Ford, to that’s to have picked footprint as prices Eagle with area we the But to that see lot well, some with substantial as strip as number now, there and rebound those where that’s we Haynesville pre-COVID customers continue be We a in as the expect with move with part. oil would prices, drilling where a basin to well the demand,

So those three see see Midstream our major basins, we continuing as Chesapeake. regard have a We for horizon as there, in to well to economics our good don’t on for worry business. the customer

Derek Walker

And to that as charging be currently on production? look would is rate incentives that what what in of an like type that the far Haynesville, you’re as that – – in? the would incremental compared Would be

Micheal Dunn

on is incremental production only. That Yes.

have going We’re we not that volumes any our PDP systems on today. obviously, discounting,

Alan Armstrong

the And I that is doing would investment. where we have do only where agree we place would don’t to that add any to capital we that, are

drilling, So would incremental part. be this there’s on no required where just capital our

capital business well-connect love flowing out the we to spend have grow so to any having have revenue without that there. and And that volumes incremental

for a that producer. to capital. need prices low won’t. do that’s are great won’t that’s flows opportunity the bit, without great And for the to the building us and so firm a a spending then and there we us if prices both be there If new cash keep a enough, out way But

Derek Walker

just that. on heard a I numbers some of right. want make I the to follow-up sure Maybe deepwater. the I appreciate

based that flat? potentially a some Or get on $XXX on major actual natural and four to trying $XXX the you’re $XXX you So sort fairly million expected slide base EBITDA projects. decline as impact of being going think, the some or to of running million EBITDA there rate? is that decline? referenced is the of think from guidance, around from just we offsetting from with that be think incremental of I sense deepwater, I Should million

Alan Armstrong

$XXX many over business declines. in tending the question. not that news let’s be assume obviously, I’m of I’ve the great to and tying that good a mean, we’ve range. earlier, expect referred offset single I bigger The hits that it’s That’s Normally, base decline that’s ahead Yes. confirming normal does would you continued decline so those in time is to that deepwater projects. But million that to here.

declines. around really it that coming the producers actually if assets in, and is have that. the flat? then decline would far, So so offsetting say, We will would stay we underneath projects start those is be and environment from that’s But infill would no. our positive counting in those out there, I answer the some

And so those dependent tie-in. be incremental, but is continued this on would that

have I you. contractual out there. So – obviously, declines from there don’t I the protection remind we would guess,

John Chandler

ago. more add quarters years One thing One revenue much this I’d of of deepwater. in thing platform but at down downs big the step deferred for several quarters that, that too, John to to That have related pretty two year a deferred do probably and in $XX step the end stabilizes we’ve step the stopped, we of code this is – a between the downs customer next Chandler. revenue couple got million paid of another is ZIP

Alan Armstrong

Thanks, John.

Derek Walker

Thanks, it. That’s me. Mike. from guys. it. Got I Thanks, appreciate really John. Alan. it Thanks, Thanks,

Alan Armstrong

you. Thank

Operator

Our next line of UBS. from Shneur with question Gershuni comes the

open. now is line Your

Shneur Gershuni

morning, Most asked everyone. have my answered. Hi, questions good of been and

two Just if questions, clarification I may.

up, a higher could rates there these does position prevent of tax you perspective able just Transco to to entered an you that a into out of a the focus tax and rates sort go rates? from Or occurring? the in as from result be settlement The with that increase is days recent of lot first a would on in be one election expectation that

John Chandler

build part we No. – obviously, do mean, I exercise, settlement as tax rates. rate of we our in

next to have wait case, for that Now through rate our to rates. obviously, we our base to push

tax of are case. benefit negotiate on the would us rates future rate the higher rate rates subject to the clearly, the in higher that or yes, in our form So rates to

about negotiated. remember, system, of again, Transco on XX% Now our are our rates

on impact rates. of to subject rate – have the taxes on rate wouldn’t and – that. obviously, base So part But it an is certainly, tax the case our an assumption rate

Alan Armstrong

whole don’t in we Pipeline. Northwest rate Because have Northwest right? the in beneficial Certainly, be the element of almost Pipeline, that negotiated it’d

all Transco of benefit of that. nearly from about So and Northwest half would Pipeline

Shneur Gershuni

most updated your So quarter Thanks, that to us back quarter you formally was challenging said If hasn’t makes perfect last to for you supposed to second But more sense. respect today. think looking of pretty commentary promising. And guidance I strong clarification maybe be with things guidance were guys. Officially, your commentary sort in – quarter. XXXX. the just one when remarks, that prepared your Decent changed.

just So more than implies nuance of is sort read when I has to second-half change Is because changing to kind actually it? way at changed guidance that materially? sort of see all, XQ, no your that nothing not you’re be guidance, it of formally just the or the might worse this

Alan Armstrong

good would I was We’ve that, Shneur. a that, raise we you. of good wondering had who Thank say the I was a first-half going to just yes, quarter. had year.

low. You can our see extremely costs are

of more a into part make in there I to room think, for sure going intense hurricane we season. we’ve like want got that things to the we’re

And so that we on we like – and certainly things business. disrupting plan our

on basins guidance the other like disruptions So, setback oil always side, we’re extremely can – against on both go well. as cause yes, as on there in or outperform think in that, well are you that now right that might well-positioned shut-ins I to another – deepwater but crude cost as price the hurricanes in on or and oil things

So say, as to make uncertainties here we’re for sure sure got the in of we’re I the guidance. given we’ve that it wanting make the relates just to the wanting would year, – to balance room market,

Shneur Gershuni

in So read that basically is baked there. to to it? kind of paraphrase, way right an Is element of conservatism the

Alan Armstrong

rare we that wouldn’t necessarily big how impact I is But kind And also yes. well, more think, of rebound and say that I not impact it’s be a some think question might in that, have XQ pricing it’s would as Well, conservative obviously? we have to of here. it I would that would Hurricane that, say,

So things. for I we yes, have those room of think, kind

– going that conservative, that’s want claim say that’s can factor. to if you I then to say would You

John Chandler

I Chandler. other John is just thing. this one Shneur, say And,

don’t fantastic tough job our about as the cost, field mean, But going We’ve even and I forecasting any to year-to-date. talking think do for actually to that’s with got this come in with at It’s a savings continue. the COVID. teams it’s people people I’m COVID forecasting. level – when tremendous hard cost folks could forecast tell our environment, you done our office a I’ve know we to job of I well. of I suspicion in back have that that accuracy. looking at a

somebody to to just even about in so people, And or you an do. if thing the plan think that’s for field hiring not easy trying maintenance

very we’ve that continue, fully I So but as that’s suspect reductions. is successful to going as imagine we’re will in our been my forecast I good guess. baked cost don’t through do

Shneur Gershuni

that makes color sense, perfect the appreciate really No, I day. a safe and guys. have

Alan Armstrong

Shneur. Thanks,

Operator

question of Bernstein. with Salisbury comes the Jean next Our from line Ann

is line now Your open.

Jean Ann Salisbury

coal you to said Pipeline was the see but not assets. compared mostly Northwest from marker Gas, a those Good how contrast demand XXx one Dominion which was morning. especially sure it and Dominion assets, Warren space, compare a great and Did at the purchase Buffett’s the for gas in purchase? bulk of Transco I’m you

Alan Armstrong

on and well. that, that take Ann, Yes. as got has Micheal some I think I’ll Jean comments

in facility. still side hard against be Cove down have. systems a because was would that they Point. on Point the that assets quality terms you in also I it’d network up to there headroom remind and step compare think, were I the the of those like our and all, the growth paid getting were of markets There things of gasification coming of benefits there, First But Cove both the ours, for

own course, we used that. Of to

So, those understand contracts. we

take the that wouldn’t into see organization into not that certainly so Buffett consideration, to not think, consideration. to do you I And something take is

shifts I like And that like major you have get business in specific, at when a you’re so pretty looking anytime think have to you points, contract price especially that.

I you Micheal, additions? have if So know some don’t

Micheal Dunn

Yes.

reflective debt on just well. amount multiple the was think was as as the there taken would that of part on I that I of of add paid

you take Transco the for I system I into system said. our there’s transmission to right consideration, don’t not that’s for comparable that So And a especially system think today. marker assets, now, have a and certainly Transco Alan think as the good any of out there

Jean Ann Salisbury

Thank Great. just you. a That’s follow-up. as quick helpful. And

it’s actually the on getting of Transco, like Valley increased seems With opportunities close? Mountain firm drive transport potential pretty completion it

Alan Armstrong

Yes. market expansions. continue provide certainly rooting and MVP for a to where are supply point, could we would serve We at

we our to along our expansions expand to a see we point critical that allows certainly would our and so And supply continue to network into does love get that because system system. of completed, right it serve bring

Jean Ann Salisbury

lot. Great. Thanks a

Operator

next with Richardson line comes Our question from the of Tristan SunTrust.

now is line Your open.

Tristan Richardson

morning, guys. around I on comments capital particularly Good XXXX appreciate all update the the plans. today,

Bluestem we see and down, the you as the out you Leidy look similar renewables to about Southeastern South XXXX? winding towards As ramping and up, capital could and XXXX of think very it further, is look Taggart and possible Trail projects capital some

Alan Armstrong

Yes.

XXXX. XXXX we shale those to of well little capital end load seriously capital of as say, I those so that $X up quickly I for we for started And it. those Access, and drive it’ll a in – further. yes, projects investment billion would more $X.X of a cycle Energy and just would range. up against back that start being the think both of investing of obviously, on it’s somewhat or don’t drive a billion, bit little the timing projects will call later reasons. now end so number But I be our to see dependent projects bit early on how the whole to was But, the that right – having a Regional probably lot towards

Tristan Richardson

Thank very all I much. That’s great. That’s had. guys you

Operator

have to Alan comments. for Mr. today. closing for time call turn the over questions now we That’s all I back Armstrong the will

Alan Armstrong

say like Porter company Williams the Company that that’s Officer very hand established our – do fortunate was transition difficult very great in that do celebrations always for the and accounting business, Timmermans, for has is to certainly Officer excellence Accounting a to the the here of want served been the I’d quarterly years. Okay. to service Williams there, in Ted and It’s Accounting steady he for has one Williams And his years. Chief is Well, for over to on This for Ted I last Chief over his the as call, to all XX have very I at role – leadership taking we our the at way Williams. do John that just Williams note gone somebody a But huge the years the of XX have referred a here great thanks and his effort number efforts retirement. with for much very were keeping typical thank the company. much. who recognize that. does here on all of and Timmermans at But here you standards we to at has for have

And we in appreciate thank Ted, we we Williams. wish much, good here you story retirement. continuing to very the best and very at and Have you the much you that, So, day. to thank with share very good a

Operator

That concludes conference call. today’s

disconnect. You may now

The Williams Companies, Inc. (WMB) 4 Aug 202020 Q2 Earnings call transcript