WMB - Earnings call transcript Q2 2021 | The Williams Companies, Inc.

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Operator

Good day, everyone, and welcome to the Williams Second 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

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

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

Alan Armstrong

and thanks, and morning, all Danilo, for you Good today. thank joining us

connecting best fastest-growing with metrics. financial the markets second our solid deliver key of supplier to as financials gas the demonstrated results by quarter strong natural long-term Our our continues across strategy

by has year Our in that strategy this supported stellar demonstrate this to equally results put enviable strong position. sticking fundamentals were an us how

Williams the evidence, prove of X% gas in natural U.S.'s declined volumes gas basins. are volumes grew half actually the while assets in our X.X%, production continuing XXXX, that by the to low-cost first gathering As

projects significant our as our macro Leidy gas to come. expect constructive clear on such years gathering to projects expansions commentary to are a Access volumes Transco pathways our market We Northeast natural coupled South business. to area Regional continue value to Transco backdrop growth commitments drive for for Recent with Energy for producer and

just last attention report, I of moment, to week. want call our first walk business published will we in but details sustainability We our which XXXX a more to through just

ESG-related we headway on fronts. this report are making As details, critical

leaders to the the right also emission to our to first American us progress adaptable For the to here, focus opportunities like hydrogen goal suited demand climate a nationwide set positions future. is generations energy clean based Williams' our example, on clean looking reduction footprint and developing infrastructure renewable future now to and well energy on RNG for steady meet We're right company making well and operations near-term midstream as ongoing becoming sustainable come. North for blending. sources on

are visit our new year-to-date and sustainability But to transportation fact, to time for John and things X turn to gas more we John? review some and sources our a our In our are read I can up renewable into let X now, now right over flowing hope report. XQ find natural systems, of website that we in progress. gas you have me Chandler results.

John Chandler

At in Alan. the on year. our the uplift quarter into positives strong compensation Thanks, upstream the offset from Wamsutter. of this resulting you the operations somewhat unfolding page. over slightly a strong statistics new our projects Northeast increased incentive Transco performance were gathering an pipeline revenues very expenses, this from and that last is year by our These performance see on increases the high-level expenses been in higher can And operating contributions reflective benefited from profitability our service from systems, summary, that have nice from put in in

In fact, in once our again, we key financial saw metrics. improvements

year-to-date. adjusted million we X% for $XX and have our up the seen in X%, was First, or increase EBITDA a EBITDA quarter

quarter X% capital excluding essentially cash growth in is AFFO working will for quarter increased We discuss in a the for Adjusted $X.XX EBITDA grew a and from operations, similar the and variances AFFO flows our fluctuations. EPS to depth or including in more moment. cash share JV EBITDA.

maintenance along investments $XXX excess we a is of generated Included, in of the note, of our and have side put goal year-to-date can Also, you If where cash strong about coverage million of metric EBITDA set million dividends capital included exceeding billion as our cash X.XXx we're million up the of our currently on and generation to dividends is $XXX our year-to-date. leverage at against quarter, debt-to-EBITDA. $X.XXX capital capital AFFO our has X.XXx capital. continued strong $XXX dividend This for year-to-date divided investments million, based about our $XXX year-to-date. a AFFO you with healthy by discipline, see led

around our You than of from guidance the in will now less the year year. see we've later for in end X.Xx this for guidance deck the year the that update moved to our by being debt-to-EBITDA X.Xx

and the of fundamentals second for good set year, half are So for and quarter really a year. up the strong performance the the

performed results Williams So now for let's very quarter. dig a into quarter. this EBITDA the our Again, well deeper little

small will EBITDA the $XX BP this it therefore, that X.X the Wamsutter from production Wamsutter PDP owned The for incremental added amount operations Haynesville Wamsutter acreage has we only our from upstream but million was EBITDA the produced coming combined it upstream the And of given EBITDA, month quarter, Southland Bcf take entire therefore, time totaled we before see acreage a the reserves. new quarter. assets. during quarter. assets X these owned very and this Our acreage entirely Remember quarter. of Production for And the from EBITDA only little some new upstream acreage.

million of moving period last assets. were Transmission our more Gulf to They than the produced Now results year. & Mexico $XX that same

up last the which went XXXX. you project of of X% into reserve this South service portion last in projects versus Southeastern pipeline a in in quarter project last see And quarter year, including service can the added Trails Leidy the as fourth fourth in as the also the of year, $XX into evidenced went second the capacity, that revenues growth that quarter well from transmission firm second during incremental the million New year. quarter is of our

Gulf due In to second year. addition, the Mexico less were somewhat of of up issues to revenues compared shut-in our last quarter

slight quarter incentive mostly for due in volumes. was In a gas to prices million total those Northeast can higher and at Supply higher our gathering we increase Northeast Marcellus system versus grew gathering segment clear, or larger this year, by to were which addition, do processing statistics. EBITDA The and expenses, contributing X% $X set in from to our XXX increases offset G&P system productive somewhat the are processing part while again, The Collectively, the These NGL on quarter. $XX last JVs of and large processing additional quarter a volume compensation included not day supply volumes of basin, because second volumes from was benefited where that attributed Bradford to record. of from Midstream, in on benefited Gulf XX% at commodity predominantly growth be about Blue volumes continues we in operate margins come volume the grew of to operating South Mexico a million XXXX; Hub, expansion higher be where this Mcf late revenue a due a And not just strong, accruals. expenses, employee-related of wells more we our pads. volumes new Racer

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

million compared to G&P the down to the was West moving year. prior It Now $XX segment.

have area rate reduce but for for we in those in operating that an the impact developing gathering are quarter. negative of upstream seeing to assets acreage. million of named was about begin benefit we the a just The partner I the reduction However, Haynesville of did Haynesville. gathering $XX yet to agree the remember mentioned, acreage as return upstream that the first, not receiving South in rates we Again, Mansfield the

deficiency volume year. see see this fee In last addition, had pull deficiency we to to in deferred not noncash One us million and revenues. quarter, year, obligation the $X that due OPPL last One assets, Shale to step-down that in is allowed Oak did decline did therefore, does paid also year. revenue And gathering have year Oak to from saw million this Barnett which finally, related the them $X to in a otherwise we less OPPL, revenue that a our they OPPL submitted a which volume EBITDA not we

namely more group West is realizing Barnett, influenced our lack million commodity second while elevated West in more the marketing profit last down were by the where is our this higher due Barnett, in of And than of part in revenue decline large prices. was X in Piceance again, the revenue offset gathering the NGL were second commodity other the negatives, better the the otherwise quarter Haynesville $XX versus OPPL, gathering to than prices. by those And last So step-down efficiency year. once rate assets the are rates and in contracted this and deferred versus our the from NGL up where on gather our year, margins, X.X% volumes quarter of rates, about overall

course, growth of So a in Uri now first Winter the results quarter EBITDA or Year-to-date, in moving driven, Storm results. million our to show of impact the $XXX by roughly of by year-to-date had and many $XX operations X% of the Wamsutter, upstream mentioned in and storm that the marketing Combined just same positive factors of combined second quarter of activities our affecting I impact a positive between our winter million. growth. Uri EBITDA,

additional addition, year-to-date. In have $XX added operations million an otherwise upstream our

to some These Gulf Mexico regulated from this service of again, where, revenues have resulting due because downtime strong positives this lower better, expenses due -- and from driven partially put assets, our were year. with largely compensation day less higher to were are into year & new last or X% additional largely are that transmission from Transmission increase higher on expenses, Mexico about projects billing of million incremental higher offset Our transmission a due performance. this expenses revenues last year, revenues assets pipeline lower $XX up to by COVID from incentive X being expenses, Gulf versus delayed been year-to-date year's and by due and

are Bradford systems. Hub assets namely our almost from million, and investments, up Marcellus gathering from JV South driven profits the system G&P North gathering our Our by entirely $XX Supply

versus Midstream. commodity lower last on million up lower year-to-date operating top winter In deficiency and just year, costs, were mentioned volume earned $XX more but by offset gathering lower acreage, revenues, finally, from up $XX Otherwise, we focus investor slightly The addition, gathering the remarks. rates, that MVCs by this increased then XX% higher offset year-to-date and Racer I now for I'll Uri. ownership gathering to processing of decline turn million a gathering storm X% is year and margins us. Northeast the deferred see did Alan? by that for while rates, to the the E&P benefited million was of Blue this XX%. as XQ are up volumes a is In Haynesville West which the be we Barnett $XX my versus West, than driven increase from a lower And upstream quarter for we exchanged total, are the XXXX, again volumes is OPPL in number back of revenues and higher cover in second key good to stacking is up Again, call I areas. Alan my mentioned remarks. again, over very that year-to-date,

Alan Armstrong

here we're areas to Great. Well, the key on on and focus thanks, Slide investor X. John, here moving

all, leverage last us earnings of call. of against metric that on First recently range closer are to of supported end financial and guidance EBITDA has increased regarding the we X.Xx. The expectations, our resilience generate results helped business to the track our just financial our previous of our our goal we overachieve high at

we result, agencies. equivalent credit amongst the BaaX and upgrade Moody's As a a BBB key now a X have rating to recently rating received

the remains XXXX strategy long-range in recent and for outlook And continued in intact. metrics. flow fact, steady plan EBITDA unveiled growth forecasted cash most Board our during improvement in continued credit free session our Our

potential share these free our allocation excess funding to after enhance will that long-range also tuned our that buybacks, stay growth will so shows poised robust generate cash many even our opportunistic returns support including multifaceted plan the front. shareholders, capital is a for significant business this flows opportunities, and on that approach Importantly, for

and Next, looking at recent our development. project transactions

the upstream first Our organization effort great -- JVs, here. of all, on the

upstream Crowheart contiguous venture to basin, were joint with legacy X.X in into As Southland footprint our we month, we able an acres. the upstream million finalize announced Wamsutter assets BP Crowheart than consolidating of more X and last

mentioned here. was acreage we've as checker-boarded So before, very divided this and out

GeoSouthern just us developed being the to there advantage at so inked be to South a of will business, it important obligation Mansfield as cost can cost to with these GeoSouthern ownership Under agreement, low midstream And assets the business acreage. in the for benefits: our leaseholds milestones. critical able consolidate that in latent deliver they the taking will is the the capacity really upstream we way drilling and with provides we the this carry increased And agreed-to a in development Haynesville venture value have us a of following Williams the unlocks on to first, develop significant of joint to through midstream today. a out that it value GeoSouthern's portion earn and recently,

with close close to all opportunities, future our provides it Sequent source of with being the provides to the LNG development proximity being responsibly-sourced natural in in the the with fee the market. through Williams fixed Second, Mansfield Transco, gas with ability area -- South in and marketed the Williams South third, opportunity natural by gas into Mansfield growing it business. optimize including And production deliver agreements to

the out both with both the heating new In reached EBITDA on runway beginning we driving last we expansion Wamsutter reduce today's project market technology to on the season. to high-performing in emissions we've same also rate-based significant And region. Haynesville projects, week. growth just projects improve proposition growth emissions. the carbon gas these local it report in provide we top and Importantly, both well-positioned, the for At deals I of as the Mid-Atlantic development to properties mentioned to the our add in continues immediate fronts, our then to and modernization is Whale a I'll the highly the finally, recently Disclosure XXXX. Carbon of leverage our and contribute continue disclosure growth key value at and Leidy Transco be such our South, visible, JVs Transco both show next in of has continue enabling projects. highlight here, energy an will that deliver filed The and for remain online renewable growth track And Project strategy on gas-focused execution power of will wave generation the we for generation additional bringing these to before with clean Shenandoah up infrastructure to great and definitive technologies. also the of of projects us received of commitments continue natural call, sustainability natural deepwater From the volumes we're now recent constraints: time, operators Gulf low-risk opportunities winter solution assets. sustainability. for No X scale to transmission on gas can other infrastructure next are the agreements our the the on downstream partnering and opportunities population ample customer critical We basins including recently that through X require with deliver critical standpoint, a delivery early of in-service which believe reliable we've does. a near- a multiple to as centers the the and against integrates solutions. massive into network and energy. energy storage Mexico, infrastructure storage be and natural the transmission key system importantly, midstream long-term our part the

advance In similar end announced X another about now are these total, development. these and CapEx. million start cash under the of that with year, ready the were I'm XX flows approximately projects million operator to amount beginning should and share $XXX our by approval projects regulatory XXXX. XX in we continue We same projects of have to in It approval we the XXXX, that $XXX have grid last from solar pleased to to awaiting for that another projects

In use awarded the clean in forward And energy our of evaluate We of to -- Wyoming partnership feasibility and to would innovations the a to which clean have rights, now Wyoming. we grant networks acres million our in existing in Crowheart addition we surface that X.X this in to dedicated million that anticipating to acres million green energy clean example key future. fact, are But we we a development. awarded to intend University creation deliver a assets how through and operations of from recently the Wamsutter, to we study recently country's we or and on with that, another energy our energy State looking we own our our drive technologies future a about can a control is of hub fund midstream the $X And hydrogen Wyoming, solutions. really the continue were where JV. footprint for $X near leverage assets on leverage XXX,XXX we have the

returns So and in and strong significant steady translated that our into growing with strategy our a I'll business improving that a continued has dividend. sheet reiterate cash intense growth, on built balance a This flows. is closing, focus natural free well-covered gas-based and and predictable, has

and place grow. low-cost recognized Pipeline bullish And it we've critical play gathering design, right an Natural Our basins the natural a prioritized will to by are best-in-class important our the right of We to gas continue it world's of role the in the tools one pipelines, to energy assets world. Transco, meet as fuels Northwest in component continues called both remain and demand markets. plays clean are gas the our the is mix be countries important will should that Gulfstream, of as fuel long-haul pursuit today's displace on most in around gas and aggressively formidable the to on future. be carbon-intensive more and and because

lower open it critical serving are and questions. your that, networks domestic Our economically-viable a for with to carbon global manner. And up both demand energy and in I'll

Operator

Instructions]. [Operator

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

Jeremy Tonet

point? if end whether your gas drives How expectation. wondering expanding thoughts into does position on higher I and backdrop off macro this you start this the your on the guide was XXXX could that of current bit just a at outlook, trajectory

Alan Armstrong

is of the we've seeing to recently looking response we to advantage in Cabot there continued that. say, pretty of really in And areas. there put are well, you heard Marcellus Jeremy, demand probably would tremendous see right we're of the in is starting obviously that's well. the those all the kind you -- run-up follow know, as area activity up their up more drilling the certainly, seeing had that, that of and Utica that The the well, the a from markets Haynesville Haynesville pressure our as gearing And responses as forward and growth of call. really across wake now. Southwest, Sure. Yes. But to pricing earnings on bit. response will I amount producers the from course, kind to take Strong strong probably response quickest and comments price and as the

So I this think not production a issue. to grow. it's important is that note to Demand just continues

'XX saw And the saw looking And -- it comparisons, against by at XQ you're so demand grow XQ seen about we against X.X about XQ, of if sorry, yes, we've X.X%. 'XX, we grow X%. a

I strong to we really steady demand demand really that, We're growth is COVID think, fluctuate to a really really continued growth on on impact a COVID see continued don't that. And market. resurgence required to prices to or as on the steady, will healthy see. obviously, coming any our we're And we have saw gas continuing obviously to the all going So demand perspective, last is that the from -- this expect year, but is that. it front. natural we that as drive to price seeing and along, business But growth our on, we're demand balance respond it as said going of continuing

will what a predict producer So fundamentals continue as strong, to right looking But healthy we do. and certainly, kind hard demand response. the we seeing gas now, look of are into are 'XX, to

Jeremy Tonet

were a you just I'm would to in make helpful. authorize if could wondering, what are of Just buybacks, would bit buybacks, probably a has here, thoughts that those in given most what you myself That's generally something on if of flow about to I be but not, at getting a opportunistic it respects? it. it? it realize where Got whether as a going systematic cash in pursue sense? buybacks ahead year? the plan. to your buyback something -- And just And think stage, wondering Williams take this nature applied And Or percentage authorized as to relates little

Alan Armstrong

I thank that Jeremy, question out Yes, of way. well you. might get the this knew I was as coming.

So up I'll this. on square

a about growth energy continue continued on capital, excess So that last comes Board funding probably amount exist to of important for showing cash flows flow. top of of all, Allowing with remarkable base what degree the growth most fund really And that was EBITDA that discussion that, venture on we have of first in think I able to with the of and investments. rate was all top free free that did week. are significant of both we new deleveraging still being and pretty investments cash

think I probably that's so the takeaway. biggest And

have I will is framework March there be runs putting are specific will you our of with a that around. terms a Board has be And from markets some to been be program, we And drivers that recommendation has wherever my saw stay reality, in likely in tell steady process to price about of around it market certainly, the in into I somewhat those steady be have times opportunistic, pricing levels that. continued April can will around if yet will In we those the its But will a out and but like be. scares debt detailing it last bit. that, and very that it quite appropriate our some what what the in can and prices of where But will tell trading. very the terms parameters that while you whipped year. of perspective, and debt you think stock And of multiple debt our flipped

to opportunities right we are acquire And to so when will that stock. think the point

around around size we drivers both it perfect do program that. -- parameters It be will of our announce be we just the intend won't it should with announce will terms won't likely away say, details is that thinking it right -- in how the We announcing parameters but won't on multiples, it and and get we have that to, once for multiples in specific Board. squared random, now. will the debt be So it. have And we're of those the I about

John Chandler

probably I'm Jeremy, to trades yield here, where And our is relative to really but in Alan referring what our is debt self-evident dividend comparison at.

Alan Armstrong

John. Thank you,

Operator

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

Shneur Gershuni

question cash bit. excess to be a portion this your leverage. to a a going on together. is And prepared as opportunistic. projections Is will should for buybacks, comments that to Alan, should leverage declining going comment towards component is about to little Jeremy's -- it square and to the available to we a Should your then that it's be showed up decline? will in achieved? remarks, be we continue increasing flow this follow had as or I'm needs whether thinking that about those this? Maybe steadily Or of the it XX-XX there leverage you way be think reductions how go we there think target the put about just about to EBITDA steadily Board out there's a new to trying

Alan Armstrong

Yes. Well, to improve. about we think it obviously, our that I is that to way think we, our Shneur, hold metric it, EBITDA is, grow continuing and continues debt to with where the easiest

really fashion. that so about think in should And it

we a we terms that significant firepower all like all opportunity and feel energy able pretty that that's continued off growth, that excess say as is base things can through process. right. and base driving can But metric. when metric flow hit new for the of of amount the We see buybacks we fit in balance of and improvement assessment coming improved I investment our of that like of such significant really decisions those to that continued we'd rate And dividend will driver and so left credit there rate cash in we ventures. on be have earnings would And make our share primary do we credit just to both that, still in the is

us and message invest So is drive in very the really, the of be allows continue those to is it to to cash value. to significant, folks shareholder all ought that measures flow -- getting we

Shneur Gershuni

in of about both aspect transportation chain. blue hydrogen talked talked think a and participate little you hydrogen your kind comments Gulf Williams talking of Maybe as to bit. where like Williams' expect creation be you centers the of here. capital-wise of wondering transportation in a of be a about evaluating recently the do it? the get that value it I'm And invest? where just interesting you seems just in Coast. Do side? I trying report to electrolysis? you I sort where Or see thinking about how bit because appreciate sort in position could the you're on it Haynesville, of would Because you're reformation it that and clarification in see a sustainability and sense strategy was about your on there. pivot about you Will industrial participating reading I just yourself there. and blue really to actually very in role hydrogen the is you the to I'm in the green you as the sort see little

in So will let's X hydrogen the to you now say, of of just on strategy. where curious from years be, feel Williams X kind

Alan Armstrong

invest just comments and around here, most some to competitive follow he would let is if Yes. to I that say that I'll where up assets. will going I Zamarin with say, would our be have likes. obvious we're what we Chad and you just But start advantages

don't we the up. that stretch transportation, big study. and obviously, processing places We like think a and Wyoming for available such got do the capabilities in that's we least have we've so us transportation. and that mass already points But at where land the And believe set have to we to system is

where going going where be opportunity should we're sure not have is any quickly. returns going by, it making we then those that above not as we we're let One, making to returns. that that very terms what in not and always things. of the be to investment. so get at are means kind a strikes competitive think attacking secondly, of us over to pass it and about any plate advantages we're are we're opportunities, couple a taking have making you allowing advantage. kind we're to So of be sure one it -- market that -- on see only And competitive going that an to letting leaving going doing decent the of that We're And to using is us that not to we we're today

So there's to add if Chad, that. you don't know anything might I

Chad Zamarin

Yes.

storage an solution that, on said the part remarks, operate infrastructure of and next infrastructure, think is of that it we're focused I we incredible for ensuring energy transmission you in generation your and energy. very the

our focus. I would so of with can days and to hydrogen drive our say equation to it's and infrastructure. the And of it production the be early it side in economic volumes hydrogen are can working that ensure we that's that primary the

us production? Or But what an business. footprint. at investment. investing that a we're participating will earn will project advantage? that pilot working as blending. that assets and a defined that It leverage be as infrastructure?" on our we've development will prepared way strategic way to read -- across looking can small the a our in It So we those And hydrogen. drive support be, on will infrastructure Haynesville. we you, the a that We're make will we small Alan to participate I our in that volumes our Regional I solutions it and us invest the project, We're be and the in not just be of provide will capabilities return compatible in hydrogen or evaluate way that production assets basis. that across leverage we'll to whether kind We attractive think we're mentioned project develops on at it into table that scale, an up, working our to footprint our our entire a complements that, forward think sure And we our right it with in Energy can should infrastructure scales driving involve of Energy And hydrogen and permitted ongoing advantage and will and to our tell a looking Regional "Do project technology Access then that we're on hydrogen with initially ensure you would that but Access an said. demonstrate I support exactly we on very

Operator

You Fargo. have with a Satish question line from Praneeth Wells of the

Praneeth Satish

executed the Wamsutter 'XX I provide you've the you and the wondering versus clarity in that's was that lost. JVs, you just could now some and flow cash into EBITDA 'XX help if So Haynesville midstream pick up on upstream could incremental

transactions I'm guess I figure be. just -- will how accretive out to Just these trying

Alan Armstrong

to they powerful capacity anytime an mostly start that obviously on Yes. off I in latent late volumes adding to surprisingly area comes would are -- it start with you fast.

any not to permitting midstream are there's facilities So sitting ready go. there

it So we've this. that's is powerful, on why been very focused so and

speak about we very on for growth of let that. areas all Chad I'll think like look what we're I in So those excited to the... metrics the kind on

Chad Zamarin

announce with And will our that GeoSouthern, And GeoSouthern's that a thrilled we're operator a map And contribute. color that of how help give there a little Sure. XXX,XXX going about development. of they're lateral you derive I'll record be complementary will they with see long to more think the commitment well-proven with I to appendix value with partnership, But and is drilling a highly in a it's track on footprint. folks map, it's how structure a Haynesville much feet think pursuing. that's there's over our contiguous that GeoSouthern, shows acreage, you

there's economic a of inventory at So very long lot returns. lateral

but they're economics, us, economics, XX% that, splits commitments, for And XX% capital beyond the initial perform, opportunities. don't of drilling if And commitment million. carry $XX so to as up economics. expect of XX% Williams economic economic highly will will are we the it's of the they to them at the XX% upstream development and a cap And upstream the achieved, our at -- cap they because of revert economics upstream of they meet but upstream incentivized. will expect having to that the they drilling Williams once have GeoSouthern we There them penalties those outperform have is

treating. of for development. a gas ramp of market assets. next solution that we around Alan drive that, what systems So we to would our integration We've mentioned, have have including fast all that today. and our an volume how gas as give is gathering the that on customers. to that ability newly day fee And platform. midstream that to they're be and for dekatherms with highly Transco. a about the And working of is through XX $X.XX occurs over downstream is that going a you gas will then incentivized top marketing And incremental offer wellhead-to-water development, We're powerful we be talked to to that we And acquired gas months. responsibly-sourced to at opportunities, that midstream for That's to idea relatively our extremely expect XX primarily that committed capacity towards from to drive systems, can that available XXX,XXX high on Sequent us. XXX,XXX our continue of midstream To of margin volume to somewhere

base what will a midstream math, to that perspective area. reduction the Chesapeake. outpace in And rapidly our value be assets lot you gave of business do so there's fee with we just driven it if the a up alone, to from And

And And so Haynesville. Crowheart and were the a picture bit years. similar working again, been of big as kind on. have that several you thrilled that basin a asset we the it's In a the They little gives our with Wamsutter, for structure very partner. in of

have we the of commitment a together And is Crowheart. And at the acreage. look achieve of you Crowheart, to at XX% again, over a they feet Williams as with really initial you now-contiguous they lateral If industrial and feet. Crowheart X split across there's lateral can XX%. put have at that XXX,XXX of with a XX-XX ability our drilling But partnering acres map appendix, million to see And over there up the with earn in split. of development, we XXX,XXX logic, performance XX-XX% announced, as

$X.XX has a highly million dekatherm, high system cubic capacity. so and That process very and we to feet high drive And approximately day margin the to feet It's gather business over growth. in for that's cubic in volume dedicated us. Wamsutter capacity that basin, have We basin. a they're And incentivized day of gathering we have XXX margin million processing. so very again, today of volumes. a latent And around XXX

and top margin at NGLs the are we gathering we've -- to Mont gas of fixed pricing. now processing, dedicated the on a of all Williams Belvieu So at

don't Targa. we partnership And risk, commodity for Pass cover wear revenues so Overland significant with and we our and price Pipeline downstream for Bluestem

So on little that a of to hopefully how those will assets. drive downstream gives and value midstream color our bit

John Chandler

to The real the because has a is PDPs But here Wamsutter. Wamsutter acreage you of couple where very significant maybe Haynesville different quick give and just Haynesville to the numbers the today, doesn't.

PDP prices from on. just start So be gas that produce paid bit wells in going for value. the drilled And 'XX. exact drilling going we we see gas That but And significantly on 'XX beyond quite we'll the really see being into new than in uplifts the and And for with and production. and in and that paid X of course, numbers to to as hand, that with less for will to XXXX need completely give where production coming South upstream what up not are BP EBITDA on I and that really future comes for a midstream other development itself. value coming I'm is the occur paying tell the the prices here, you're you can and will higher, will and meaningful Wamsutter, you Southland acreage for be years those to

of give frame. the with we Northern sense gas Chesapeake Wamsutter, part least but to that won't that and NPV generation in the That's value our there the upstream look the at that, you of our look In Mansfield of rates value They're work So it's in yes, rigs very more developed combination when million, PDP $XXX of as total South over acreage the at exact in actually midstream the the life give in is we we from we I get of We'll capital at did and Haynesville, but as production look number, up at system, the value, system. bringing part just of that the the acreage. you a prices. very value the and of the a short simply significantly uplift time return the -- this. because from the NPV, return the this, higher than can value

Alan Armstrong

in John. we, Yes, Haynesville. well not time think been the great I win-win of Chesapeake last to creating put, a increase rigs It's, this think, was And our and customer. us a able has for year, also I example that's Chesapeake still activity. running

offered, Springridge reduction their running have that they fee area. in the With rigs now we X

as John South value the give that on as over mentioned, virtually fee incremental that reduction tripling of And significant But incentivized so own back see Mansfield as the show will we that also, an perspective. its time. NPV has through earnings activity the from up transaction,

larger, So both and benefit able pie really, that with Chesapeake the made much to we're transaction. from

Praneeth Satish

helpful. Great. Super

peers the you've switching you invest wondering are of could of kind reluctant for actual if little know Just space. RNG the But second. a into the business. in RNG some I the now been your on in gears was facilities. a past, to I moving broadly comment aggressively more

your on changed RNG at curious just strategy all. I'm whether or views So have

Chad Zamarin

is Chad again. this Yes,

we a strategic economic have about willing And talked RNG makes to what processing that it and we aggregation if in said to we perspective. an we've sense think are again, I similar invest hydrogen, advantage. from

We've perspective. identifying We talked at attractive delivery and have processing that that We from hundred that, dollars a footprint. RNG couple been economically, sites scale. think our small potentially attractive have been opportunity relatively is looking in economics of about but potential an of capture million investment. We've set

But require primarily our relatively for The that we've have into we been are where investments just the processing interconnects that area LCFS aggregation few We actual projects our volumes. far we're areas an those is and those a project straightforward. not investments. to upon economics. invest it's dependent credits again, our evaluating heavily I of one required existing we done develop the to and going so that technology at say heavily infrastructure. the in that that we And business is have subsidized could will We're strategy where, entire in look is of around RINs. disciplined that going areas be

LCFS our of we value a because it place those I strategic And of invest we modest rapid there's and -- for can we I you opportunities footprint. level credits, would would investments. tell where areas And will dependency those pretty significant credits we're identifying and those I at can on so payback drive of and of those in think where because think have a

us that attractive those very returns provide would in with structures. the So confidence

Alan Armstrong

subsidies you I chime are paying RINs and the in supplement I that's on sustainability looking the of are degree the carbon LCFS making big credits low there, just at the be start we the on out to projects. think against driver particular, and is really LCFS, risk. in we're certainly some of and And not the are of there those sure these and and if something weight that Yes. the to California, in standard, subsidies would certainly, program attention fuel going comment on to the that overinvesting the that

a that's and that it's you your front loaded we but that to that the end So to on that keeping on say load pretty take the the eye on risk, won't add putting a projects let worth various not given I find ways somebody be else -- on up to do to carbon them monetize starts there. It put the where big starts number. or R&D that's think if capture a COX there ethanol on there's of all risk

So that's investment. I on important eye your to thing as an keep think an

Operator

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

Christine Cho

X.Xx about the any Is still agencies contributions to change And right there leverage I how upstream ownership think What get clarification a of about? calculation? how What leverage. are the and that? is sort the Maybe rating long-term we the the factored timelines thinking how just Wamsutter? percentages view are on could the should is Haynesville we And target? if both into for the

Alan Armstrong

the tell next the midstream from pretty don't down coming you, rapidly just start again to I I pretty the are the cash any would Christine, the that to think roll change. upstream And years. over naturally. there's X metrics flows

so bit Haynesville the quick. in And take a is little does pretty in longer development it The Wamsutter.

we agencies And well over that design are on and our pretty aware it rating certainly, strategies of how to quickly. get rolls So the there.

anything got I know you if add. don't John, to So

John Chandler

And for to I are our designed us position, in that's structures Wamsutter our interest No, sets Haynesville there. both the think -- Alan right. longer Again, are Haynesville, more designed would as sizable us Wamsutter reduce bigger for the said, deals both the interest. be and

this that whether bought to gets long-term or be just in upstream do in transfers our value ultimately out And don't to those, we partner a to in the business the intent to have drive so intend and midstream.

at do again, opening and out growth agencies But we comments, his a it Alan rating and exactly all as flows. in it. sense I and Haynesville don't to in long about the a about in expect, over value. pointed we So Alan see talked allows not this, plays is pretty converts term curves that concern sure clear said, out coverage over the and as how our Wamsutter business are coming still a long lot of metrics ultimately things X-year as today right deleveraging addition like those as or EBITDA, strong now what us see of dividend doing to so do in the which incremental improve. to time and we're and our X- frame, coverage metrics creates to from midstream credit our In meantime, natural We've cash of our drilling

agency the so rating numbers And that has well. as seen show that

Alan Armstrong

a is question. It good

upstream on margin you understand cash really side makes cash midstream the the you -- I flows think look into much see transitions driven margin of that's if at the flows side, this of midstream it value side. pretty us the of versus we to what the to that midstream cash that and really But that how piece and transitions, make on can so quick. there's the work on the the transition E&P out kind cash us

area, amount enormous margin has for of to longer-term the but really business we've Haynesville, an along, So the as the midstream deal moving and tremendous is cash just inventory issue it's all shorter-term cash us. get such be really is the of powerful -- going issue goal that's a on and developed because a rapidly to said providing will get our is that flows so those it in -- In such Wamsutter, is -- that. on a that that's that

doesn't dramatically. side on flows all side, of cost move midstream very but Our go at the that up pretty cash much

Christine Cho

Got Okay. if then And to Northeast. it. move the just I could over

Your Or off short-term with some run Do a guys quarter-over-quarter. there we competitor outage? new volumes volumes jumped rate a a quite that bit processing from is go benefit you of? should

Micheal Dunn

the at -- operator is up those This And occurred, Christine. both challenges were we that big outages having time operators lived. were there same Micheal. ironically, short resolved. some were That No, quickly they -- very the that were

did our a run us nor So that I we rate if didn't are But online running TXP have it our filled for most Grove tilt time. came for our really is III obviously, say just competitors would first at new benefit same Oak at we in And the the full there in up the OVM quarter. second processing project on quarter part. and that because

opportunities Blue that as drill lot a to who's to I that's a of activity not full. ago liquid-rich Racer an chasing really well gas pleased and and there a But pad well our couple And of. would there we capacity a there's they Blue that at the so of private say very advantage right full and up that take outs why years we're operator, interconnect we we're EQT have. and is facilities, are processing now, But as to activity acquired looking Southwestern as active Racer to as robin of UEO now capacity some our seeing going are our those lot they there are producer with from facilities seeing we opportunity that advantage facility well lease take our may and round of potential own Encino,

Operator

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

Tristan Richardson

around Should as appreciate energy about particularly about, to capital investment, you've against this all think Gulf in dollars Mexico CapEx year comments allocation. next build the be the XXXX some really projects to of the the of could level and look we awaiting thinking new off to flow kick work? opportunities these start approval, FIDs. similar put opportunities I project some of year of cash talked But just your rate-based

Alan Armstrong

yes. is answer Simple

driving of as well been this year of acquisition. the expense the Sequent upstream has as that's One capital some acquisitions things the

had some this. we've range -- included are still that driving that's so And acquisitions in have we've out, that so that put

obviously will into Leidy Energy we'll start to permitting occur then the in end will the prior of as fourth will In as for If fortunate But we addition that most be of the hit next 'XX. spending in year, to South of Whale Next process, most of that. 'XX, on quarter the Regional towards Access. well. And capital get that, year, as year, on we get this the spending hopefully, year we're the completed. be will spending into spending

of frankly, this driven than But being that we it's of looking acquisitions bit some lot levelized, year, mentioned. pretty continued projects a expected year in done. would little with that have these the next a with higher So expansion we've we've

like So and steady current a it's pretty relatively the -- kind spending. looks rate at run capital of

John Chandler

say is math straightforward. the pretty just that I'd obviously

that's a starting guidance our $X.X capital, use you If million than this you just high end on midpoint capital. range as the generating We're on other the $XXX $X.X higher spending, look deleveraging. year, we're say, at the capital, expansion at if so we'll point, end at our -- on maintenance -- million let's be billion of still

multiple EBITDA be a today. see Next that leveraging against it, on allow if year, from any But explicit we level not to just growth. you Xx still EBITDA put today. X.XX think us that if about growth, giving We're a guidance we

we're substantially that amount EBITDA of year. top of kind reasonable $X.X any adds so growth And spending on that this of billion

an investable our a So with got EBITDA still allowing what confidence that deleverage on coming that's see for -- of -- ratio kind of standpoint. we've you growth comes obviously an hear a that and from this that capital we expansion and part

Tristan Richardson

a John. then it, appreciate guess quick acquisition I That's follow-up I on the side. just And opportunity on helpful. really

transactable the West? the out sheet even bolt-on talked opportunities over and on have activity the or seen things and and guys packages there, there. the look or Curious storage some you are for out in past that about in the Are across You Are across transmission repurchase. capital there asset small there Northeast balance when out even attractive CapEx We've allocation potential the either landscape? in year.

Alan Armstrong

would certainly I we eyes say our that. on keep

And that those making more so dependent far, are are acquisitions I those growth on think for folks acquisitions.

But our a vantage than kind way our continue time. driving market from so will It's we've now that right that better got that. opportunities investment what's And looking people of And -- we investments I now for is produced point, substantial at right And that very market now. growth for broader period option have right better long think now. what us, hopefully, we've that's certainly opportunities growth right of within return M&A in not. whether that seen than have market or are M&A the

our can opportunities, certainly going compete keep investment where tremendous well. deals our share and -- to it's other So those make have including with eyes that a amount we'll open, as we but that of synergies be investment buybacks opportunities

calculus. those higher And to very a we're much be broad into patient. But return where going -- get are So going be would competitively do of we're demonstrated, right market all advantaged we've the to we're than as able go deals to to realize. that that

Operator

comes with Spiro line question Credit Suisse. next of Your Dounis from the

Spiro Dounis

early transition to expressed you. goals. the interest with past, work administration receptivity what had willingness for one first current in gap a natural opinion on how gas' In you've you Curious on energy some in the and of the on you what still Alan, demonstrating is the emissions the where you've and see transition. reducing areas there's term. approach maybe of hurdles a long or over And emissions role

Alan Armstrong

Yes.

focus interesting and everybody Otherwise, we and the natural part the industry be a cost do his other on of realization people state a right a a is will, countries. There's and of there a and to, I to drive country and have gas would for to that And this from okay, very benefit we consumers. off a on jobs to now big sensible I for it of Senator focused back means with in And say, likes it's the West starting that reduction. what manner. jobs, and Manchin that, the on result time because a sustainable And what recognition Virginia standpoint makes sense. strong an emissions of has well, our enter to we're are just sobering, think to what kind of to as you pivoting of globally is can -- that do is shipping economic. be this great if

the own a by in the on it And control intended issue so I economic on no focus would between you of doing between, that one sustainable we, kind on and that and on, perspective. reductions and carbon an of if the issue hand intense just as the way, will, there, destiny say a the and other reconciling going way pun tackling stay actually can U.S., our in from it is there's

look is for as think start those grind X to things positioned well so deliver against on sensible each really And extremely solutions today. intelligent start I other natural gas that and we to can

consumer direct in some cost as reliability. I these of start about And of solutions terms the to people on cost of so I and of both think terms would start say means have seen what of go actually some recognition to in

to really little start And people the sober as starting so issues solutions. to up a bit describe are

is I on -- where positioned be thought I better gas starting people consumers. attention kind than it would natural because I impact to pay now noticing so right of think even And am to that the are

Spiro Dounis

Helpful. Understood.

just $XX million range million as you've Sequent Sequent. entire in network Second contemplates sort of whole. I could asset talked uplift about provide question $XX is the to to imagine a don't the But on generation that the follow-up a EBITDA annually. I know

integrate ramp into in help starts quantify overall and potential us Sequent And benefit that up I can to way you of system? assumption? any right So curious, is sort the am the as there

Alan Armstrong

any But services we're Williams more has provide that. and existing to we to acquisition, you offer. Yes. synergies that on team we specific what at what than to are And in are tell between Unfortunately, correct. really going be we of terms Sequent the would That is I provide value I acquisition was even you for, far, of don't purpose customers were can to and benefit. so further excited the able think numbers drive and that has our want when looking originally and you,

lot really they're opportunities of rapidly. tremendous a to together, starting team very excited synergies, So and here identifying work to see the

to honeymoon team Sequent seeing continues, ability our we're the the excited So base. I be value guess, I across and say, from continue and their what to very would we about drive asset

Operator

comes last Goldman from Your with question the Lapides Sachs. line of Michael

Michael Lapides

here. kind the What question. the come the can capital Two-parter that disclosing? first required That's investment for you XXXX? One, of projects you're by remind deepwater X what's the online for should us

terms is, Second next Access? Energy of process question in what's for the approval step Regional

Alan Armstrong

Yes. I'll the on take capital. that the of part first

but it's south of just capital, that would We you, specifics I haven't tell on just disclosed billion. $X.X

the to the expansion project's the connection -- And side benefit on as will really, about so some together. our terms expansion in team that gas. way, by system which and really [indiscernible] for take all and that we're out be this the of team for has of for out that rich of of an our significant capital cost way pay project find haven't excited projects laid the anything to there's oil the handle continued includes and able ways the future well. gas an well facility of to that expansion And and come and system that. detail And But to and that of we as that

oil of processing profits between So gas that gas. transportation, transportation lines and the lots of of the the

about is that fruitful the I add, well. we're paying would returns off and so that there's there area the way very excited large really are as also And prospects out looking and other several

could better in the there out so time. growth And be even story of over terms

at And a turned deepwater that construction that point. really in a has job. So project We're to into great nice done our this be team project. well has

agreement you with a had we reimbursable Shell. As know,

the but now -- the bought U.K., in had we're of into details all and is engineering. the that project So deepwater in well already all And fact, here now have U.S. was delivered pipe of in -- the it's for built

want to the efforts great Energy you So Mike, by team. do the take Access? Regional

Micheal Dunn

Sure, Alan.

project March, the in a environmental project, Chairman. an as initially We door year stand a the a an completed environmentally-backed at for expect year. go of next the would to date the have on longer new basically appreciable in but atmosphere little QX XXXX that be for pushing take It us. changing Access, and projects in-service shouldn't could statement schedule. Glick an XXXX Energy filing We to in then Chairman bit a back made for we begin Regional assessment even there that impact they will to overall today. on expected FERC, the as FERC we still to To have were already Just were the the and project project that that the still where come for with prior becoming some construction later plan certificate reminder, all FERC

Alan Armstrong

And budget. project. that into add the gone is Micheal, I would and and lot already lot a That year's on in pipe of engineering well that's capital on fabrication deepwater the just this the the of a specialty

this pipe the of in included or lot has budget. paid already materials and for year's been a So is

years' So debt. they'll next pile it on to couple of the

Operator

no this back I'll to call from Armstrong over there additional time, At Alan the are turn questions. Williams.

Alan Armstrong

Okay. Well, very thank you all much.

'XX, great in growth on though importantly, show 'XX. we've for positioned for we're a in And beyond. about continue great how is here drivers we're in future will the in number success here growth of even what future now hit up really the excited very that got important Continued 'XX with all cylinders. Teams here to and

nice growth So come. for for platform years really setting for business a our to

attention So again soon. we your and thank great speak you we'll for to the you and questions, today

Operator

conference conclude this Ladies gentlemen, and call. does today's

You disconnect. may now

The Williams Companies, Inc. (WMB) 3 Aug 212021 Q2 Earnings call transcript