WMB - Earnings call transcript Q1 2021 | The Williams Companies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, everyone and welcome to The Williams First Quarter 2021 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. Danilo Juvane, Vice President of Investor Relations. Please go ahead.

Danilo Juvane

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

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

Alan Armstrong

Danilo Great. and thank Well, us thanks, for all joining you today.

deliver quarter this results to Our solid financial was different. natural past gas and strategy no focused continues

was Our will later, benefit remarkably performance severe another EBITDA operations we without weather despite key in in quarter weather. in as metrics Once but business. first those boosted or in through came was and base benefits, delivered well-positioned operating these winter our assets of the detail even and marketing our all again, of John reliable margins, growth adjusted severe almost the our February weather base reflecting quarter up, strength business strong as

meet systems storm. pipeline experienced for contracts In record increased first all fact, be the any volumes work natural of we having the that day daily support no We transported basis. throughput another fact, growing on gas out to affordable volumes during key in resilient this of part both transmission as the on service also climate peak for existing during financial firm and truly we was believe change the we going as capacity, in stood will abroad. the transmission Williams will network. economy. economies gas daily underscores in to the hit Williams’ meantime, a cut firm demonstrates face I average inlet the in energy weather around our and key a areas. mix Uri. critical plant volumes, And energy Extreme dependable and It through key to very and daily But more U.S. on John we is when a of reliable infrastructure energy go and get average of is results. John? about quarter Northwest tomorrow’s to are focus our how front average the average importance clean daily the planning quarter-over-quarter really future talk our challenges gathering

John Chandler

the our solid positives is year, last segment. somewhat by reflecting bonus expense were activity our the higher offset from year West in marketing downtime in performance due the and see page. our Gulf statistics lower you this in level And we winter Thanks, a benefited collected Alan. from But beyond high systems, Northeast to uplift that even service pipeline At nice very profitability the from the projects we from have summary, be our an increases And Uri. on relative winter issues to of Mexico year. first can to Transco some been revenues this of gathering strong have new our the clear, storm that in of event. over impact, receivables profits the These saw revenues accruals, NGL all higher quarter that and on into storm impact put quarter during unfolding

In financial metrics. fact, of our saw key improvements all we in

up EBITDA even up EBITDA impact was the our the our for excluding X%. winter storm adjusted But or was Uri, quarter $XXX First, XX%. adjusted of million after

flows, cash grew quarter the in from after-tax EBITDA. our AFFO EBITDA is And cash We simply higher EBITDA. working will in but depth variances capital similarly AFFO XX%, the for again, more growth fluctuations. JV discuss quarter the excluding impact a moment. Adjusted EPS essentially in increased the for of operations, reflecting including to

AFFO for million Also, quarter, this move dividend for $XXX of strong $XX divided us against sets be coverage of our cash million with generated that you cash consider million, If has of leverage AFFO helped you that capital X.XXx. million, page along roughly X.XXx. maintenance metric goal a which to against capital by of based you $XXX $XXX see we quarter up the put on put our quarter. it our dividend of we generation dividends can see and our at strong the strong very for discipline, in capital continued EBITDA over investments up on towards This the excess and you

later deck, year the around in at moved of really our on to the see now the X.XXx at year. year X.XXx front. this guidance will of end update our of we am from I proud around for have the the in this success our guidance You now end

now to So, let’s go next slide. the

little we dive few into a this performed to in our EBITDA quarter. But quarter. important that before our not deeper it’s believe segment, each business. isolate part dig into the core Let’s we very well are Again, results a items for Williams of

of on processing whose the rates $XX revenues are impact The our net somewhat by at net and benefit impact million first in impacted on facility, by the Uri a item impact margins. winter our produced the included our liquid net offset reduced storm operations That operations marketing Piceance is positive West.

estimate in volumes the during volumes at And the quarter. storm winter XX had a our about Haynesville. lower by we day collectively, slightly impacted also Uri MCF We West Mid-Continent

the from from top a these upstream we profits from $X $XX is upstream we addition, February storm from operations that Wamsutter in million assets. assets In Uri uplift realized acquired normal on in also million that BP the of and

– storm total storm without benefit, even that up Again, was about XX%. a up winter X%. was winter And $XX with was EBITDA impact impact the EBITDA million the of was So, benefit. Uri,

assets core Transmission last less Mexico about that our results period So, operations, digging million Gulf & our are the $X into of same than year. produced

the that the quarter service last of for into in fourth However, quarter, went year. Southeastern the South revenues year, service projects Trails added including Hillabee year, quarter that into of during of last project the last project pipeline incremental into X went portion the the the new second in project transmission service in Phase a million that came of fourth $XX and Leidy quarter

Leap You which reserve almost from rates Transco issues, closing not, by offset in this Gulf year has last downtime Mexico rate a is few up the or evidenced effect see which, believe it from that last to of than of firm revenues into and day due can entirely were our first capacity, lower year transmission a million These last went X% given on in $X increases in our this production year just quarter the a billing case X the some lower year growth less markets and XXXX. impact upon revenues. revenue lower Year, revenues was

So, are revenues the later by EBITDA for We being largely given until accruals not interestingly which, segment have equity to the strong reduced higher to are year. accruals increase those impacted results off accruals and start higher in expenses, operating enough such to a do do bonus traditionally this that really we due with nothing are year. to compensation and the

slightly segment. see did this higher for expenses we compression addition, In

from this quarter. last on year, strong, EBITDA to quarter volumes XXX the gathering the versus a this the processing of Collectively, grew day to contributing $XX total quarter first at continues growth Northeast, moving of The benefited while MCF million about Northeast segment Now, come Marcellus volumes a was G&P XX% additional or Basin, our that Hub, we XX%. gathering late Supply where in volume wells larger the in we system our XXXX where on grew JVs and at benefited South more pads. Supply predominantly Bradford expansion from system at productive

As to which a EBITDA from last acquired our equity of increased ownership, Blue result, benefit we $XX in little the also mid-November due method investments over which improved includes from year. Racer million, profits additional our by

moving that prior million up storm segment, the G&P Now, benefit the from this $XX winter the to remember, compared it year. net million to excludes again Uri. And West $XX was

$XX XXXX. all of related from These benefit activities versus that excludes big contributed during and the of improvement, just the result they margins of commodities. only prices quarter. from things, Uri were commodity first by NGL So, were storm marketing part to commodity quarter $XX few winter And this driven $XX the a of a again, million increased up higher the improvement million this million margins our

and while gain this loss, first year, in to Last during is prices realized year related small on inventory transit. significant saw a the a The we increasing inventory. and most we and saw had decline prices quarter that

saw The during of and are to transfers higher markets, NGLs and real the second we take some advantage propane market differentials where we to that. to able relates netback other quarter of

on a our For margins storm JVs. were JV. example, between JV Offsetting benefit We Uri winter commodity Conway Belvieu. the the lower profits our from Mont from see and $X million differentials did [indiscernible] higher

about be commodity by if when Ford, a and doesn’t remind mostly their lower they a exclude MCF million in were course with higher to $XX on lower will so in down protected down you to you and day, mostly the Eagle owned if the negative West moved revenue explain in revenues were about a West. were our Volumes where winter offset and again expenses. that tied by Uri I Haynesville profits, in in margins. XXX system. lower exclude the was JV volume MCF their Ford, the related XXX that, of million it revenues $X the West down you can much we that attributed down namely OPPO, offset variance were liquid impact. Uri, to Otherwise, are Oak solely $XX reduction that One margins, or which winter storm Revenues of about impact million exclude net MVC, So Piceance and by most items, storm JVs Those has pulled that a of the have the Eagle mostly you – to again, were day

that South in Chesapeake receiving was So volume reduction you that for And I really, Haynesville traded impact remind Mansfield reduction from the at in slight acreage and on revenues this earlier the in rate we will biggest rate Haynesville. reduction the year. part Haynesville the a the

compression Now guidance. quarter no those again, Wamsutter that will Alan? of call XXXX, bad over to the several our to back MVC we realizing cost, now the offsetting during south first expense, I including the for debt updates lower now lower with as and the revenues XXXX areas to lower did [ph]. Alan and were of where reserve important cost focus investor turn MVCs part settlement discuss the are

Alan Armstrong

continued midpoint key focus $XXX areas thanks Slide guidance we guidance John. to as to here, would And of Achieving on this up billion, X-year after beyond Well, also business. investor the EBITDA to storm realized the is base free our CapEx our about The Great. million. X, our $X.X midpoint of the are increase dividends. in have CAGR sheet improve reflects moving while the new X.X%, the gains even strength which goes ‘XX and flow during a increasing it of winter cash our confidence balance we in produced and produce on range

our the the de-leveraging at had we Regarding obviously as goal currently is Moody’s forecasted is sheet, target see to quarter, watch and are an now hit than balance a this of on X.X earlier hope have we credit positive upgrade accelerated on earlier which we and path soon.

milestones of our Given various will begin allocation key sheet, on the capital we evaluate to alternatives. accelerated balance achievement

‘XX best As priority and flow you evaluate will debt in cash the beyond. capital of our has begin free use reduction now top been know, to we and

the a acquisition. Sequent the few on next here list thoughts is about So,

Canada way and Energy plus night, years, well Management at in we have for several integrated, recently Williams be agreement purchase a working at revenues way Sequent capabilities Southern best been And we aligned Company across of capital our focused from announced last enhance Gas network $XX to a evaluating for that on price As Energy million, reached we years. several the and fee-based driving it culturally could for marketing close. our Sequent an purchase to

So, something we and had strategic our have this in for we needed several is years. to build something capabilities

current excited business. geographic And Sequent, and strategic gap. storage platform, talented including fulfill core be leading of capability so workforce to been we footprint are its transportation and complements of taking really pipeline addition our what’s industry a The this the to step

combined storage XX% per that natural we gas, generation, power up natural and customers, handled new from markets per facilitate transport the of capabilities X it perspective, a incremental natural increases BCF BCF future so here previously liquefied optimization natural per see RNG have as day. transport we with gas reach but natural focused to Williams. company day line existing both business For BCF to This existing to as In were water document market doing that the X expansions to can which supplies. produced as scale wellhead potential demonstrate allow assets, is in need with approximately nation’s a for responsibly certainly not our LNG into The this we day Williams, only to are acquisition XX our focused also of opportunities gas effectively large optimization for gas and it We of our opportunities. bringing carbon more will gas will aggregate, gas-fired clear acquisition hearing these way in-demand supplies more supplies. and and low and exports a discussion within

finally, we the our acquisition business any really our don’t current mix EBITDA are welcome expect Sequent Williams summer. a So, later the ‘XX on of we to material excited CapEx or And to for to impact dramatic guidance. team nor have this impact

Regional project still, continued in on Southeastern great and gas project blending Trail growing Access PA – Appalachian Slide particularly here additional centers a designed Northeast progress impact to strong moving project, and our We manner blend early first our environmental the now to Transco a is hydrogen service along placing Leidy for the FERC January energy renewable South project quarter, So, in the by hydrogen Energy making of execution to clean RNG. like acceptable into project in execution now from on next that Atlantic bring sources filed on X being clean winter. future to pace like seaboard the project we full area, our and application low demand

important are existing and is Trails valuable Leidy nature all we and and of regional and examples more learning infrastructure to as more that. ever than more South are environment, Brownfield today’s more energy access the and in So Southeastern great all

and lower Williams those the carbon new also through largest demand With serve while the impact, enabling facilities established expansions. and This and the of means in growth nation, system and community fuels reduced the primarily gas and in in most of corridors transmission use flexible transmission maximizing economic can resulting environmental Brownfield use markets.

Gulf online to projects, Mexico look next on of forward Mexico these here very progressing X years. the on Gulf which Quail, to and Next, we is and projects remain These are here, the executing now the to few on opportunities coming well Taggart Anchor. of track Ballymore, projects we key over

We a attention also have the to on. other ones those focus your smaller projects, that are of but number we continue

before, mode, Northeast project Marcellus producers demand trying project processing some our busy and in fractionation And services execution, have for the growing rich execution the up service remain gas volumes of team next the on volumes G&P as a So, in Northeast to the certainly, stated keep capture. area. and is the for margin with in provide Southwest with the maintenance gas production fee higher rich the but us increased we much

climate XX% with administration’s of year, I finally, focusing now are commitment, solutions continue in on last by are Williams became we on near-term thrilled greenhouse commitment, to a emissions change. American of we continued midstream that a So, first climate operations. by XX% XX% area. recently goal ready determined we issue company in here, see Biden And of sustainability expansion a And contribution the climate to to that reduction focus part to the a to target And a XXXX remind sustainable setting North you will gas reduction on as XXXX. announced by in well our line nationally address

what’s are been we country. ahead goal are So, here really said the we aggressive excited for of actually that that an in as

can the our for not renewable in energy natural emissions. with our generation time, reliable our is solar a natural renewable part near-term gas nation infrastructure supply and another massive infrastructure our energy solutions. on bringing really of We on in to There a near At of immediate that are gas infrastructure We continue footprint clean natural that gas, natural solution enabling the across to technology focused gas the And focus and today’s does. ideal scale will our a mix. a opportunity solar and gas integrates we efforts, projects critical infrastructure focused technology. is long-term are believe delivery next energy. leverage system markets be on to natural network storage both same to on And our strategy reduce and the

front, operating identified total have of should in XX a have XXXX. solar solar that additional the On we now beginning project opportunities and X projects currently start

fuels both in gas a storage vehicle the as On renewable in renewable natural expect renewable zero green future and energy energy emerging front, such and hydrogen as gas. excess and emitting for that in an natural we to clean green form certainly play gas, of hydrogen role as natural the the net the form of a increasing

sure to of So, front those opportunities. on we make continue edges we are the that

innovations We of are on technologies transition. anticipating the energy future looking on to energy phase our can use and forward deliver next key this and that network we

pursue with In a the the to us a we and state a pursue could an presented it to a filing study of will evaluate feasibility in context understand fact, program is I step Wyoming that a pursuing Wyoming, simply University Authority in for you. to we green of that be the a of fund to for near the study the in hydrogen partnership study hub the determine are hydrogen That for currently Energy of operations to would if Wyoming creation grant working be pilot The our initial pilot there Williams want keep a to certainly economy. there. Wyoming. want better from to

of kind kind getting of is to on of a that a want we from going I we sure and This that. are something is front but stay skis big we out that making people long certainly opportunities, in any decisions step, investment these So way make are to see on don’t here. perhaps over our

for we Future the to hydrogen pathway joined energy a as incubator a clean Houston’s Greentown Hydrogen And Labs, recently launched advanced support finally, proud Coalition to sponsor de-carbonization founding of global was are also to start-ups. and U.S. be that a achieving climate Clean key tech competitiveness. technology green We

our in continued a flows. an has built free focus natural business on I and strategy cash So reiterate will and growth, closing, amount of increasing returns is our intense with gas moderate improving based that steady that predictable

will to Our right low pipeline place the Gulfstream, continues be formable Northwest as our and grow. right called it gathering in best-in-class basins Transco, on and design, long-haul are the assets are demand markets. by that And in to pipes, meet gas cost

a mix basins basis, Lower X%, energy are be fuels is gas aggressively a importance prioritized gas the important and is of natural producer volumes indicating of customer and crystal for and here, ability gas on key both irreplaceable continue We has us as to careful clear bankruptcies the of we into carbon-intensive value the evidence, it recognized natural of bullish chain, At important the today’s of working. gas XX remain the more should the the the gas X% navigate were to long-term proposition the that play Haynesville clean of was on value countries a net is on improve natural strategy by a most our actually that world’s time, will declined role our example up and because that by this future. substantial bankruptcies way one year-over-year States first within gathering These in basin. pursuit as infrastructure This dire displace the same allows As production in quarter. around contracting Gas the assets in in in tools infrastructure the world. critical such our gathering the proven natural Williams an recent two in Natural to and to United even negative and Natural circumstances, critical and course, low-cost the focusing here approach have positives turn in our fuel most plays component Williams. Wamsutter

lower critical manner. are and networks both a and energy demand global carbon economically domestic serving viable to Our in

will you and that, thank I up with us it open joining we questions. your much So very for for today,

Operator

Fargo. Wells the Praneeth [Operator of Satish question with first Your Instructions] comes from line

Praneeth Satish

I Thanks. first just Good access. on morning. regional question guess energy

being to it’s designed or RNG blending. hydrogen You accept mentioned that

what you elaborate – pipes? and Just you take Can steps other it Just more different if that exactly? curious any you mean does any on taking could this curious, hydrogen those Are are doing comments? on project?

Alan Armstrong

you can take that please? Yes. Mike, one,

Michael Dunn

Yes. Good morning.

of exiting about and We the encompasses are and proximity renewable close pipeline. talking they either that that that bring our expect system hydrogen into this natural asset away they produce contemplating customers are possibly right can to looking gas footprint that have facilities utilization solar and at the our to opportunities and pipeline it to on or

any a really but hydrogen there. in in blend, seeing nature that’s accommodating so the that hydrogen bring the to typical It the potentially you into our be system sources that project of that’s partnership system. to It’s are able no anything to that that in in comment metals customers be of will or And with it’s country are exotic pipeline the accommodate pipeline of forward that system. participating ability us pipeline existing

Praneeth Satish

capacity? just your that, the other new then where just to any in Northeast, NGL have there? think running. in got you give turning integrate need to on And that terms processing expansion you frac volumes Northeast? to systems you plant tied see tie to of frac expansion kind opportunity Maybe the still will that, and long synergies of up your to the and And one in Blue it do yourselves Northeast now some Great. Racer add maybe stand any take up? do versus Grove is to you Oak How Do the capacity there to more the to

Michael Dunn

take Yes. I one Michael. will again. that is This

they very was primarily pad prolific processing there, their line developed developments The the is exceeding and that customers on expectations. processing by virtually So that full basically, our EQT have and The today. the there, were came Southwestern, pads robust. behind production facility capacity very

and said we like to their first did an earlier, were we there now our virtually growth. full. TXPX and so with volumes agreement any customers of our in And sure didn’t I that our while impact online, quarter, That’s offload finishing make the we

summer the part. So, full processing capacity. through capacity seeing is of we on facilities. for the there be Harrison also are our limits fractionation facility at those months, the at suspect will I we And approaching most And

And potentially spare they some capacity. where with of of over And so volumes to the to have can there in can ownership situation our and crossover Blue able opportunities pipeline to transport when them those we systems contemplating we Racer be are to create utilized a and to can system that bi-directionally one potentially we us either where be offload other. capacity have future the

And something so low project prospect But have that’s like term year, or fractionation this we a a longer it’s project. potentially it a it’s online in building facility. could we processing cost to feel and either very new comparison

Praneeth Satish

Great. Thank you.

Michael Dunn

you. Thank

Operator

line Cho of next the Your comes question from with Barclays. Christine

Christine Cho

would to the it degradation quarter future to the storm first get out start we guidance. the take If imply some quarters like off with guidance. the impact, to in midpoint I adjust would of to

is about would later wanted just that down guidance numbers be somewhat thinking if should that here year is just or the see in anything to we bring there the from So, conservative?

John Chandler

this will John I Yes, take that. Chandler. is

other of I say a are should items think quarter in Storm beyond Uri of first there think all, about. First the couple would I you Winter

margins in probably is quarter. first it, some would $XX we million to million did on more put would So, quarter And we a just inventory X made impact. that, normally of X, valuation. $XX make X X, call the think a made. make, NGL what to than outsized the storm had relative this I number we I Winter let’s with which a during start We

you make quarter. activity I my remember we if to million NGL outside more $XX Uri. $XX made a So $XX million commentary, in said Storm of in We marketing Winter usually million

million we NGL southern well. margins as million and we and an back own in some outside be will million relative also, you once That ourselves and close an $XX out, back And Wamsutter. will out MVC, so properties, if take accrual book we be for charging you that you then $XX the $XX our did we out MVC to customer

add $X.X kind back, we to are And close X midpoint. under times normal of will X.X those you quarter. get the take you out, you you billion If items take our really X, – numbers that if if for those

in upstream; the around bit will Now of million year. the for upstream course, might a million, and little $X times the X% have guided too. made come Uri, without we Storm We of we X, made out our you to say, that’s Winter $XX on – EBITDA stronger,

too. there uplift the is upstream, certainly So on some

sensitive So, I is number. a in am our have conservatism those to to think close that. to you to or we bit say probably little want a But to there I I hurricane there things. other season say try But going to be things I of isn’t we guidance. – got get obviously not would to if tough to really take have you X out, are think going

year. Our and forecast remains very the of remainder remains strong, our business performance really strong for the

Christine Cho

on touch And of Okay. I the purchase to wanted of Sequent. Got it. then helpful. kind That’s

responsible to commentary source is gas Your notable.

I with about maybe with gotten flows as out might pre could volatility mean coming play utilities in over what you this more that Sequent well last role? mentioned rather what a about not bigger how that than net and on be has what So, LNG requirements pipeline a may guys seasonal been natural know much zero to you for – thinking may you historically materialize gas decade. it’s contracting natural But here. this much gas what or smaller shale, a basis could the But talk customers. and you basis, marketing the if entails, was wondering with was a are utility then business exactly And talk and daily

Alan Armstrong

really mentioned our – we this of great Christine, big in that of but the a question years, as have gas, could of to a lot just limited I Yes. first we been last like couple business. and have of a very earlier, use is services all, approach We have very gas marketing, thoughtful. I that. been, we thinking, would lot boy, say, for and touched customers

business And team a so a has well. and knows and us asset to of contracts the extremely an a management this platform basically and Sequent contracts that great buy opportunity and risk gave set controlled opportunity really

to And so strategic fulfill allowed a really gap. us

capacity this the However and there the in say just – last I around make with was a of will for And quarter as with weight of way, that to a value do need is it thought we because risk the need confidence the would during believe we got to relates management we think wide space the the risk, – sure Winter volatility out even issue. relate that associated came even that it as that of managing done as so benefit relative value exposed team – and happened But the and both the this of this. greater along. Storm this has by that has the and at what just Sequent – tell I the volatility certainly entered job before the management utilities fuels low-carbon great through in this risk Uri you

important in have but new customers And so we value we a could just associated think us being the in use of a to you And managing to that and new there together really for capacity certainly just the contacts water as and of lot is list the way of to. capability but assets, low the is really customers We and long-term lot in wellhead us and don’t with on able really managing faded together opportunity able companies, talk we now a tool we right carbon all to a document our to the value service. say, to that regular all people. kind really going bring market to from way to put think of value all also we But think those it’s that the with And clearly being about risk. have be that we the an it’s kind chain away supplies of generally, as on as basis. for the the have utilities

we the not their business. are them to about readily in We out volatility talking how manage

this and so forward. us that And look to gives do opportunity a great really

the changes would that our say this I So is thanks some pointed to at become and for evident to that occurred. add to e us the more question, it’s you has of – out capabilities we something and more just needed are

Michael Dunn

upstream were add transaction Wamsutter. gives were well. that’s that approved acreage the as in Wamsutter if Southland to the properties. those BP loan from to that we us the Alan, own I the and market to now coming now acreage potentially properties court The natural ability could gas The bankruptcy in Haynesville once that

mentioned. are going zero those way find to utilities so And ownership, market brand we or low work that Alan to carbon them closes, our by to to when ultimately, a those supplies, to the that LNG take net and way new with and as then facilities Sequent

Christine Cho

Thank Got it. you. Very helpful.

Alan Armstrong

Christine Thanks,

Operator

Your next of from JPMorgan. with Jeremy line comes Tonet question the

Jeremy Tonet

Hi, good morning.

Alan Armstrong

morning. Good

Jeremy Tonet

update have kind Just would to Is there, want to might the able there? missed timing? acreage still it here. far I of has it your or I process of be kind you sale us is process July concerned, as see, But changed thought as as as E&P far anything guess, in

Alan Armstrong

into Yes. one skilled we negotiations say in – operators Jeremy, one Yes, the adjacent for very are acreage working Wamsutter, Haynesville. And and local are the in two we with with both through well process would area. parties, thank in are and the producers I the they the question. you different in of

situation we that on keys we been will be form transactions drilling you the to for can the so along those of And cash imagine, until that to over increase where that acreage. protection, moving handed haven’t sure and interest, part we the the invested are is credit has make of And retain a as an that. probably

in being cash that flows flows. should midstream those then cash and – that think converts long cash the of midstream from time building interest over you drilling life upstream our about as dilution and into flows business So of over the time, a up as reinvested

looking than very that’s we even in kind way us expected bankruptcy ever would who bigger had what of to to are our exactly you much were really at modest And accomplish. been conditions, with bigger solutions tell are really up when to that’s with we fantastic of we us will excited tell that processes for out team Zamarin, win-win Chad to than – you, has and that. turn I parties. a And just going has the we preparing for job done I the coming So, leading for coming value value much about us, much

if you anything have don’t I Chad, So to add on know that.

Chad Zamarin

finalized transactions we days on I timing, XX those over expect next would Just XX that days. the to

volumes midstream scenarios. now just that marketing drive along our way development a and Michael mean, and will I of the an and that those optimization our And structured part think in they aggregate supply operator, I will, put our and be transactions, will benefit have acquiring for are in Alan bring ability on systems, with both structures our marketing as the – and those of be will to in that We takeaway. gathering emphasis said, downstream far require Sequent, with And of what both capitalized efforts. downstream a and be pretty well will capability of said, strong, the asset to ownership the to we as systems, pipeline a structure

Wamsutter for partners, expect So really XX us would and both to the next I in XX days but a and we days. see outcome our think the something great to Haynesville over

Jeremy Tonet

And for energy topic just Got is was radar. capture on I then wondering it. that. the carbon if Thanks of your on transition,

see more of guess, changes as else, potential that a for I for Williams? think the the do economics there is or out possibility processing stream given these here to or do you could plants coming make and projects anywhere for specifically economic, sufficient viable make that you that support enhance Williams of the – the as such more, If D.C. you to of current on projects see purity XXQ

Alan Armstrong

take Chad, that? do you want to

Chad Zamarin

expect like be of to pipelines may that looking in you in capture both we at carbon our opportunity one the is might and we a to nature. carbon an have would We investment do even say And opportunities wouldn’t something capture but they we may It’s looking we in in for on plus material about But provide which be well say, to would they storage. hydrogen, projects as and year days. I expect emissions multiple be, in tell early with storage see table Wyoming. to opportunity viable at we would are to looking to opportunities think I those that I look mature. able and across and you something with Much of the the – the an are investment we areas and storage opportunity, those. and material hydrogen require, it’s today, tell before different that long-term would assets set is I are very from set. think we actual like. opportunity see near-term. infrastructure, evaluation if carbon significant capture in I participate a have just aggregate every perspective where But what storage we us Yes. to facilities wouldn’t there at capabilities trying are some I leverage are

Jeremy Tonet

you. that’s helpful. Thank Great, very

Operator

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

Shneur Gershuni

everyone. have morning, today on allocation, you Good follow-up uptick Hi. capital for the Alan, thank I questions. two

gathering And of protect basis it go Williams see sort that you do to assets in that, in upstream you setting in the assets, long-term part yourself related be do assets of you the selling back just going see up, are it contracts restructuring, very future? executing structure the terms to just of First, the as or JV sort see down terms seeing new the these eventually retaining do went through you a with of on that you the process you any road? of are from the to – learnings of

John Chandler

heard we Shneur, vaguely your question.

repeat bit. You please are Can that? you cutting out quite a

Shneur Gershuni

Sure.

Just repeat. to

you contracts designing this learnings assets looking right had are upstream now, that So you take a through you and the hold pursue to a are you with protected that the of midstream long-term sure bankruptcy do the the assets the be in advantage for process of a to And point to going more very basis? are is JVs period whole plan make you at that the the to long-term or medium-term? to

Alan Armstrong

with question, to the some Great gathering especially and courts outcomes it land of whether those as from or the on bankruptcy not. contracts and relates Delaware Yes.

can improve position on certainly are So, our we doing those. to everything we

As all gives we’re not way to importantly, out law and you all cases, is the party it are to we the in to to and these that, the fact nature protection back on bargain or the in develop the the kind we’ve invest basis. that thing need it’s asset, the cutting on lot it certainly, in said your of many situation. one supportive. Having the is going that the a it economic and that that of wellhead, transactions is dollars these really depending other said contracts acreage, be the of good being proved before, the – I and But mean, times just physical

increase that And spent. developed dollars – to the so get in more to going developing going money to capital we to interests those invested we’re the If until a those been spent they that, be doesn’t it is to get ourselves retain point, acreage. And until have right spent, we to retain own prove whether money still in interest and that property.

well, we’re strong don’t So a We I they would talking financial here that pretty we to have partners and expect certainly the say, both know very that. position.

we’re That given would bankruptcy I of the this situation. acreage. dollars develop on say continued case, about that really form we’ve and But the terms of structure proved in have the good is seeing. feel holdings if our the invested in the suspenders to effectively been So we that belt got until

Michael Dunn

Yes.

didn’t that I the that we of Alan projection think year. contract through to emphasize occurred important it’s all meaningful a have bankruptcies last

infrastructure We is is can’t deliver And have asset the in been of was critical our infrastructure the and Haynesville asset all upstream bankruptcy that it, the that the absolutely value. process without and absolutely was very upstream the deliberate so relevant. to At critical. that day, in wasn’t in really end Wamsutter. What investing both relevant

volume. deliver can’t You

footprint. position And so have we very a our strong across

rejection bankruptcy critical invested risk. And contracts is, because protects brings year, to available then on development proceeding proved high-quality infrastructure way against not single acreage, of very a nature, just, that its of our again capacity. of a on we have last think it one led to that a we’ve that I long-term add we investment, I in we by the Alan back areas are structuring transactions existing in want where may think focused to midstream these upstream

into will from but ownership that deliver the to properties sure the near-term make our as takes that hold volume these perspective, ownership retain we going from perspective, a to and back interest properties as midstream We long-term likely structures a will have JV long drive that the in may ownership primarily a gets long-term And we these interest small only investment we’re partner. our in the it so to development a to assets. see

we to a in are value – that’s way forever. properties strategy, upstream our think own own So not drive that just our drives that laser-focused will the to that them on It’s we development to assets. as midstream

Shneur Gershuni

that with this laser-focused given are beyond business in Well, you’ve that out thoughtful. with a on do Or Sequent today. capacity the fact management is Are with you technology – that and to to capabilities past? and team respect in as capabilities they come with follow-up acquisition. just laid Thank and acquisition. it a very And trying so come to Appreciate can the algorithms you’ve data understand just I’m that scientists maybe already the something the everything well you come is your does that. forth? for buying been that the that current basically

Alan Armstrong

manage this I’ll contracts, team I the let through asset is skilled – tackling and control. and would agreements taking just kind basis management It that’s simply say contracts really are Chad utilities. differential, they’re a of nothing positions to with And risk I say, blocking, exotic. No. looking Yes. at reimburse is would manage

to time it very of basis a But it’s physical customers is contact on and a lot opportunity approach, serve of involve versus a and this customer space. lot value low-risk storage does inventory. So but in basically

and market-making kind or of nothing it’s So activities. exotic market-leading

Chad Zamarin

our we growing done expanding a been And Alan and on has of been Shneur, their last years. have this that for great earlier, team job. on our They’ve couple capabilities we said intentionally And – focused capabilities. the

capability have systems. This the level, level a us more to work larger quality risk high-quality more much have have gets very a quicker So internally process lot of on we from system. still we within small very – a team. They but scale very, a very a it’s control to small sophisticated still a back Williams. control a grew They on of the been risk

the helps quicker quickly. a something us up of more X picked just And that so control, very or there from get systems, build, would and – it risk forward we move to spent we next have we that accounting structure benefits systems. the well trying years probably much trade, marketing We out X thought

Alan Armstrong

turn so And I this have around culture reason down really say, look building of and Southern lot Yes. transaction standpoint just comfortable the a at with addition from in that, of in job keeping screws fantastic we is we would the got different that. opportunities this a a to really space. a And done risk companies control

this on impressed have controlled the long-term way downstream we and companies well a business. all the doesn’t so that customers business, making And is very effort this controlled the time the in with upstream companies a invested very been end and day, external do. Southern at the heavily Southern big and the has both we’ve But of the

understand terms And this for the their assets well sale. I from gas, handles XX% an in of really fit customers around work and those as well nation’s for a this lot And to of natural of think opportunities where got But company in coming they’re so to important us, capability we’ve offer that to terms of totally a is is complementary. really our new that team for services. a as great us. I off

bringing business that know we’re other excited transaction attractive of between this really together, – and a I about well each really team. it think, So this is really, two and lot done companies

Michael Dunn

Yes.

I by utility. it got really was owned optimization it, a platform and think storage a you simply pipeline

a are is pipeline optimizing focused into and construction, is be on of the of an value and optimization taking now a own This in existing And we’ll areas era and and is going that the of left a move storage storage expansion optimization just infrastructure. fundamentals infrastructure realizing when to we’ve storage about pipeline speculative an valuable. infrastructure, and pipeline not existing This trading. platform company. we the really of marketing and era platform. – think And you understanding We

And with think, capabilities to be the going to And team. a of different addition it so across of of I as accelerator opportunity ways, see an we our exploring we’re lot Sequent core create business.

Shneur Gershuni

a very Perfect. for color day. the and that. great have Thank much you Appreciate

Alan Armstrong

Thanks.

Operator

Richardson comes Your next of line from Tristan with Securities. Truist the question

Tristan Richardson

Hi, good morning guys.

Just in are emphasized in calls, a in long-term base is question on once the reduction further rate projects initiatives for investing the priorities I allocation. like capital that the capital emissions at target Alan the priorities think the and XXXX, prior or leverage

in you returning further that prepared wanted comments, cash de-levering get about your on Just suggested versus to to thinking shareholders. as views or,

Alan Armstrong

up we just a starts has you is. we start our run once capital much. build investment at next into us that as to But that options that get enter to – committed value into price science until flow I is look ‘XX, ‘XX good the where of best – whatever on free rocket cash here stock us. very that year. we at certainly would we the look opportunities Yes. against we but – the down we But a we’ve Obviously, those realize are look modest when eliminated obviously. and sitting option those you projects, we remain to that that, as think gives news amount been road, the and we’ll the – in is of flexibility, and math time then all we’re with take take Thank say,

returns add is debt that’s emission obviously, as our we become that well. quite certainly to to but down projects And debt those reduction bit that further further to lever that making there. And I is, price of – committed what reduction And I shareholders, we stock the so then on one we a continue if look on think until value yet we say reduction, to convinced could opportunity seeing like, pull of options. the would get a wouldn’t will have we’re what happen

into And extra on beyond. the ‘XX discussion, flow we as look best and certainly point we the with hard the prevalent get you markets Board say, topic, as predict but from in is will, now, we of to use this of the this the will becoming are, more what’s like if to cash continue what a meetings free at terms now so Board engage I it’s would just months X to

Tristan Richardson

should a be just the It’s businesses, then where stronger helpful. with seeing in follow-up, And today? possibly second combined and sit both activity you’re Northeast the G&P XXXX in growth half the in Grove, of of projects some on Oak both for optimistic segments, with we quick the just G&P like looking we

Alan Armstrong

look PA, out Northeast I and Well, make I on or pricing it’s favorable to the is price. pretty almost the whether months now right say look markets. pretty into well the are in this environment PA, $X of the summer Utica the areas, that Southwest prices, call here gas gas to starting margin NGL starting looking now. the a good would things they’re prices mean in four through market positioned gas Haynesville, seeing to put you’re kind these the all the summer Certainly,

those will if continues, growth. that yes, assets activity So drive that and will on drive

we’re being reserved in drives of how we’re you guidance, And is obviously, our about market said, that balance that the a a those for think some putting times, customers decisions, say, for I year. the lot as it into good. John looks would So lot drives what I but setup like forward really if those our of of Obviously, decisions. of the that

And area. drive how to so how like in they that’s in the activity, the what of going lay drilling looks to to an frankly, will strip many in terms commitments and start make look forward they hedges. at – much And start

both eyes forward we indicator and just kind your those good kind would focused expect and the keep I on pretty NGLs, areas. across activity of what of So gas should a for say, markets that’ll be of

Tristan Richardson

Appreciate. Thank you, Alan.

Alan Armstrong

you. Thank

Operator

the Research. line Kania Wolfe Your next question comes of Alex with from

Alex Kania

the in that Hi. just of that maybe guess try there. minimize other on as be about the required going my looking on might be parental are broader predictable may the about is some guarantees on talking kind a relative are the is well said. their parental having Southern? average, to of any as one just, the the it think, required to maybe kind platform terms Good more that kind just to they Southern’s volatility has that maybe maybe volatility But a company of of call, the maybe significant about on questions guarantee I to able maybe that sense just synergies – there some have? comments overall, morning. that results $XX balance that’s the net did support Sequent there, a And of what of they under talk you follow-up there and might you make of back or questions, be sheet Maybe a stable income, I amount million

John Chandler

Well, yes, Chandler. John is this

on need understand think subsidiaries, First you they our the a guarantees, to simply of Sequent. about were they that we number, a the part I at guarantees is too, guarantee make of just for big transactions lot monthly and talking

risk. I the parent a range. very subsidiary AMA marketing was look with have at general control low somewhere – I by are revenues under very the activities happening think risk is its was you guaranteeing just the mean, And that in if transactions all if $X you billion doing purchase XX who that’s divide or their They process. Sequent, tight

trades. risk on So there’s those not

guarantees. subsidiaries. in guaranteed million So $XXX there our That’s $XXX subsidiary, their just to of we a of one million was guarantee like

And not like sense. so that but not it’s that Hopefully, number risk guaranteeing anything was some a substance. makes It’s of little bit flashy, asset.

And regulated you grade. below pipelines invest fees, most if really, beyond transport fall XX have of the that, days maximum requirements so

investment obligations, days. you only requirements. you’re any have you you XX investment If grade, they’re fall have but But if below grade, don’t

part that So much guarantee. that’s of smaller a

– would for So quarterly about, under expect to talked their from history we pretty guarantees think, million this, our That somewhere to much have that but way. – just – we doesn’t million to a risk, guarantees there mean normal EBITDA really, talk changes generation that about just business Southern just dislocation there consistent, will and again, million is because that. thing consistently about monthly this heard course to $XX mean are I earnings be will $XXX $XX with we I of an a the $XX really $XX I rate of One guarantee like generation. it saw, we we see or EBITDA Southern business, stay may of in generally, little their be pretty number That’s market of generation. occasional talked that consistent million EBITDA the $XXX just monthly haven’t you very say, million activity. to million no simple

a quarters, it quarters, to doing But bigger; year, We will may over a average million would $XX to that out where million. less. EBITDA, our quite it be some be bit adjustments to $XX some

there’s So of But hopefully, exposure that just huge company normal business than other answers activities your for the question. Sequent. not credit as us ongoing a

Alex Kania

Great. That was helpful. Thanks.

Operator

from comes with question line next the Mizuho. Gabriel of Moreen Your

Gabriel Moreen

answered. everyone. think, that takes you of my Most closer questions just been just kind bogey that of you Hey, the projects on the out million, to ESG that good where are during or think that? have Day? in were curious the I morning I’m you additional that identified, Does how asked solar put $XXX there you much –

Chad Zamarin

showed potentially Of even what the Investor line that pretty we in sight we of Chad. We’ve that. Yes. ESG in This and projects what had than utility our we’ve Day is Yes. regulators to locked X, filed got more half XX beyond scope. locked of those which in with advance order day over those us now land. to consider for projects, We’ve in advance are means in

with We is comfortable Gate go what near-term, those have a commercial construct are in FID will the stage. X and in that we which effectively beyond call we

we’ve of we have, considering of would we’re have opportunities. half that at $XXX projects – a expect goal be. projects size project. to making projects of to pretty land, now the ultimate gating is what million But XX where that That investment get really got drives all the least achieve sure item and will initial the over scope year. primary and what FID We sufficient need that’s for those I’m of and this we the we those confident So it’s

we that’s Investor we most front scale I’d identified line on the kind spending to time Day. on, our so end And of still what say of we’re the during here. that have the pretty But strong sight

Gabriel Moreen

now maybe think at extension that project I project filed FERC. the worked? enhancement Is noticed kind for at still Northeast considering a just curious regional an all I’m of if just portfolio I the quick Chad. fits And – Thanks, Supply mean that in then that follow-up, I quite access? being how energy

Michael Dunn

had that Hi, certificate upcoming. Gabe, an it’s expiration that was We – Yes. Michael. a of

an have the customers, a course, a they the the project to struggling, just that usage through other that. there. obviously, natural customer getting so And permitting from their their near-term, of ability the off ground gas. requested we’re to not going in supplement are a basically on serve projects their yet. normal still standpoint increased We They extension have And agreement, still proceeding contract canceled our as with

this and to Northeast. do that, There still So customers serve projects of still in us the to we other there ready in and not market. prudent is market emissions We great working fit our the having than extension. with see is thought exception to go opportunity regulatory with still at a the customer great think that to a market to the that profile or allow jurisdictions And gas was natural out And the it we’re we’re ahead with when that. of improve that oil time. need take conversations for fuel that

Gabriel Moreen

Michael. Thanks,

Michael Dunn

no clear. be have the this capital just to we project allocated to at But time,

Gabriel Moreen

you. Thank it. Got

Operator

for with comes the U.S. day Capital line from Advisors. the final of Our question Followill Becca

Becca Followill

Will to make the up you’ve that how allocate in you’re capital your allocation you following you that maybe review reached on target. Tristan’s capital that finish decisions that review? given at talked Just public plan to the beginning you or XXXX question, beginning type when leverage some

Alan Armstrong

two capital probably done or shares commit kind higher, it out for of haven’t ‘XX of would we in, instance, think projects – alternative. I naturally then just And to would the our we drive it then Becca, to be would that for then that’s budget come we that. just announce reduction for will options that, where further that if buybacks emission another debt reduction as if

that’s And left the to would further the going say XXXX go I of really do CapEx we it investments the on we to decisions two think that towards Board, of be sessions formulate our position making then budget will by to year, we’ll first then when strategy to alternatives. if in in as capital and towards whether or other I investment. budget those end money with expect would rotate we the that So the a new our CapEx start meetings think year, what into the which wasn’t would be

Becca Followill

Great. had. Thank you, that’s all I

Alan Armstrong

Thanks, Becca.

Operator

Ladies for today’s call. Thank gentlemen, this concludes and participating. conference you

disconnect. now may You

Alan Armstrong

Thank you, Amicus.

Operator

Thank a you. Have nice day.

The Williams Companies, Inc. (WMB) 4 May 212021 Q1 Earnings call transcript