Earnings call transcript Q2 2023

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Operator

Good day, everyone, and welcome to The Williams Second Quarter 2023 Earnings Conference Call.

Just a reminder, today’s call is being recorded.

And now 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, ESG, and Investment Analysis. Please go ahead, sir.

Danilo Juvane

morning, good and Bo, everyone. Thanks, joining Thank in for interest and Williams you Companies. for The your us Yesterday released Armstrong that to our Financial afternoon, the John this President and we’ve Officer, and our morning. earnings CEO, will Alan Porter, and Chief release our speak press presentation Operating Chad Strategic Also us Zamarin, Vice of Corporate Chief our call Wilson, our Michael Dunn, today Executive joining Lane are General Development. the our on Officer; Counsel; and President

statements. a our should is And This reconcile back presentation principles. in these accounting forward-looking today’s materials, are related In we materials. our review you measures generally materials non-GAAP the included disclaimer of presentation find and and disclaimer reconciliation to will Also integral the schedules important presentation accepted at to that to you remarks it. appear

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

Alan Armstrong

Danilo, today us on this some thanks, called here for Well, with another and and positive and of you thank all you to can X. see share highlighted quarter, you joining Okay. those Slide story out

First earnings and per of up were share X%, X%. adjusted up gathering volumes X%, our up adjusted EBITDA all,

impressive certainly, gave to this the And these this quarter. which is continues compound face swings more growth of another to and impressive, us low is despite while price commodity beat post distinguish even is natural ourselves in to declines resiliency opportunity prices our growth from largely the pack, and gas. And our in

the an period where saw strong example a X% increase for quarter This a perfect last back same we very on EBITDA was XX% increase year. the of

quarter. a let numbers few moment, with me out deeper dive John into but the a will highlights from the start in

results but execution drives our by teams the focus set financial day-to-day these is does is Our it really apart. our us record, that performance track and on

of an expansion a precedent already fact, newly our on a announce business, acquired our Overthrust into have to pleased core example, support job significant Pipeline. we’re agreements integrating we’ve secured and fantastic binding in teams MountainWest quickly the to acquisition done As that the

our the this This identified beyond continue expansion recently large expectations. progress around growth upside more states. in scale our advance not to of emission return in to conversions a reduction western to our – opportunities we growth high and Virginia, has team gas even investment, demand is completed this continues exceed Transco, project pipeline and even natural was large replacement that expectations. the in is centered completing On backlog program our that original our compressor of to driven to first continues of our coal Much case incremental wave by for come project

As needed XXX much recently evidence our wave project non-binding increasing large a South capacity of Station we that in Virginia. to will of advance of open continued season this serve another to customers demand, scale Transco concluded provide

customers Our been offered. requested recent of in excess per customers the well has capacity XXX,XXX that dekatherms we that – day

the Importantly, term confidence for to with lowest and underscores was our environmental this in XX years. capacity durable required in the the for the fast deliver this and belief offering growing market’s ability demand minimum our impact. service capacity This

approval Mountain Pipeline. the Following of Valley the

way on update to have to this of exciting working soon. and possible to serve a as We’re hope much now needs customers’ an find project our as

gathering EBITDA and exceeded that we record produced estimates. print either volumes our the earnings based that Within this comp not XXth environment, stated to consecutive met weakened earlier, across price only in far but in performance, results our on environment, difficult gas outpaced quarter Marcellus. growth total record financial financial delivering against I a the grew marked Moving as despite a consensus the business legacy production Northeast, difficult natural a or

$X business to to billion our The most per strategy of and growth local has is Pipeline, gas-fired will the generation Our in Valley continue nearing the reliable volume service Energy completion available the best growth EBITDA. grown continued market point focus our Regional connecting and project market customers provide with of Access markets of future. into the Mountain well producing year to this on it the to the

that our of record In Transco for to up deepwater achieve beginnings swings. of and of the is gathering price expected West, on volumes In transmission also are once we enjoying geographic growth again we growth enjoying diverse gearing our Mexico which a of long to better speaks our Gulf expansions long our successful the in string in showing commodity weather runway the MountainWest a acquisition, position than integration. in built segment,

of expected more strength the than business. earnings the out continue The prove inherent to our stability E&P weaker cash offset growth flows stubborn business results from our marketing our Importantly, of and and business. base seasonal low quarter’s

However, our to we when the market repurchase to fail appreciate see continue environments, execute in on authorized our deliver much price to quarter. the we ability will like during we most second did program

sustainability our on issues report week, we sustainability CDP important progress on notes issued completed key annual our XXXX few are our Questionnaire. and environmental sport, These stewardship, community that development. Climate a Last workforce our finally, detail efforts. like both And markers and

our sustainability will a way that running us, shareholder. business create the perpetual in To value means for

benefit will invested further shareholders to our growth we nine major as be with we’re have enhanced capital, fourth providing seven on top solid which So to large returns and proud the of include a our our of industry-leading of business. foundation sustainable that pipeline a also we and from of on quarter others backlog, projects among coming on that be capital are shareholders in stacked based execute returns XXXX expect out online

going to quarter. with the I’m us of And John? metrics walk financial turn through to the John to things over that,

John Porter

a quarterly with over over for Starting performance, our measure. years this adjusted X and year-over-year Alan. EBITDA, strong saw X% on year, coincide summary X.X% here Thanks, we the prior an another same last the financial happens of beginning with of to CAGR with Slide this five increase

half volumes, by growth XX% our of increase the gathering strength record focused first businesses, operational a XXXX, infrastructure our of and to our well, even And core as for natural X%. of very perform for demonstrating Year-to-date, XX% which is up strategy, EBITDA first assets, new adjusted which gas and this again, the strong versus of driven gas decreased natural the continue our our capabilities. resiliency price performance once now XXXX included the half

our growth in adjusted For X% AFFO second we’ve about our for quarter by X.X%. and X.XX XX%. strong EPS quarter, you from coverage was very our up growing quarter many adjusted was growing a dividend EPS strong in line year-to-date the over EBITDA growth with for AFFO second had last based our increased times X% quarter, funds on now the Available operations see second continuing EPS dividend years with the despite

of versus with Our to repurchasing $XXX last sheet now balance strengthen even Trace, primarily Gateway. On and year’s an Energy on continues to X.XX see that’s closing increase CapEx, our projects, the of since including reaching and some shares worth year. times NorTex Louisiana and and Regional we’re the you X.X progress adjusted times last reflecting after making Energy EBITDA Access MountainWest million also debt key acquisitions growth

thus I’ll expectations or to on of year, guidance adjusted remainder But the billion other there’s of EBITDA no the for guidance $X.X the performance For color to in far a our our of metrics. provide versus any our XXXX. the moment, billion in change $X.X we’ve consolidated little seen year a full

second down results. over take and strong in increase year prices to Upstream year’s next turn a quarter slide our billion, joint for at venture XX% to the are walking we million average closer start little let’s $XX A look that year. even decreased X% billion now with which our natural last this prior from the second were last $X.X year’s So included as versus quarter gas the in roughly segment, EBITDA $X.X operations other

substantially production realized about prices new in due of to EBITDA $XX a million beginning Our was much working and net higher interest January Haynesville wells XXXX. percentage despite Upstream down lower on lower

lower we first was production EBITDA down weather prices, but winter in primarily million saw the throughout historically impacted due quarter. the upstream Wamsutter $XX difficult to be Wyoming to continued April from also Our realized

including business as contribution in a business Pipeline our million transmission acquisitions, Gulf now about to core deepwater revenues million Mexico $XX transmission Shifting our and of $XX increases from other with our or and performance, improved but well. XX%, our in NorTex MountainWest

volumes performed we revenue up adjustment catch business in driven in million XX% million increase revenues. second or by $XX But Northeast. gathering increase increase, extremely really that a increase did a with have in this And fueled a in G&P increase revenue Northeast favorable the revenue. Our $XX in one-time total service an well by quarter X% million $XX service was

partially And strong results see on west, the which Marketing we the from actually benefiting business results NGL to $XX to decline Haynesville you hedge and year changes positive inventory of continued from related lower of where this volume offset valuation growth million last now commodity NGL increased X%, the $XX NGL the inventories decrease impact then million lower rates. or and loss the in Shifting in that Gas gain base to this our year. a marketing at and was majority had to

than driven spite strong performance quarter prices with continued lower in infrastructure the second our XXXX. core second that start quarter XXXX of XX% in growth again, to by So X% were EBITDA gas of business natural

were included page to the now venture billion, $XX million down XX% a start other the over with versus Year-to-date, this year. and last billion segment, increase $X.X touch year-to-date turn our year’s year’s in let’s joint walking which the seen $X we’ve on So operations XXXX, from last we comparison. upstream

Haynesville by is prices. been year-to-date, volume offset on growth strong that up lower Now, has realized significantly nicely very

this was the winter the by results However, Wyoming due primarily offset in difficult historically overall Haynesville lower year. Wamsutter to weather saw we increase

and the business of however, impacts similar our our significant really or $XXX Gulf seen that’s core transmission Shifting in Pipeline transmission of business quarter, our and to other million have acquisitions, the increases as MountainWest second namely deepwater now as X% well. improved performance, revenues we in themes NorTex Mexico

fueled liquids in has $XXX performed in well by with Our or in revenue. by very business rich increase service Northeast revenue This $XXX was focused driven X% appendix, increase G&P increase we total million XX% per slide our increase volumes a growth higher just X%. our X% that in than unit under volume our margin dry compares areas find tend growth a the have where of And overall to to areas. gas basin the you’ll million

Wyoming significantly $XX the at million weather processing severe or positive West, which benefiting results but our impacted Trace hedge by and acquisition, economics to now processing the increased Opal was January from plant. X%, and the the West unfavorably Wyoming Shifting

Gas business caused And of first quarter start million increase you Marketing $XXX had the the at see we NGL strong that the in then the our by and year.

a growth EBITDA, upstream the from continuation dramatically joint the driven business with with in by overcame start business strong marketing expected strength from ventures. to to core results performance that again, our infrastructure than XX% XXXX So weaker

have billion $X.X I any consolidated adjusted had or to natural mentioned to visibility of We’ve So historically a at guidance as change billion mid-point start half metrics. decline year earlier, other $X.X guidance thanks our gas base difficult And of clear our the to April. strong year. the business of definitely have continue the first $X.X and EBITDA least no a to even performance there’s to of of the impacts our winter after historic of through the a we our prices hitting EBITDA with in billion to that through guidance

ahead. may be such bright and raising wondering, guidance of future on aren’t you start the to why strong the a So our year back we a

quarter second First, range remind we than our include million third stronger midpoint. quarter, usually business. occasionally a experience the above guidance $XXX does outages our fourth while And will and second, deepwater third that see quarters hurricane for I our does you of

could joint see upstream our the still in balance prices ventures that in the natural gas downward unfavorably could for particular. shifts also year Finally, impact we of

the a it base likelihood guidance. is be guidance we impacts, realizing these scenarios. While we there of is continued once to or too are to are our high do businesses, raise prepared us our to infrastructure exceed to once Therefore, But we year allowing suggesting, again, early of in midpoint these need range. not the confident our again meet of full performance overcome

growth in continued before growth another step big on sites XXXX. our setting in XXXX We’re

that, And it back turn Alan. with to I’ll

Alan Armstrong

John. Thanks, Okay.

your we before remarks questions up closing open few it a Just here. for

remains opportunity. investment compelling First, belief I’ll reiterating that start Williams a by our

long We today is centric unique our the and have platform a which record integrated to best-in-class are our we gas it. business by pipes base the our delivers to are company that most upside large scale to nature Sequent track formidable and natural our of gathering midstream complimented our around from haul business prove assets,

XXX five resilience, our proven think our dividend, to and industry of combination XX%, S&P our coverage sheet within Second, unique and of unique strong EPS on a growing CAGR is steadily high the year balance growth sector. leading amongst visibility we

focused a gas inline growth That economic period. natural our to continuing of predictable that we’re downs the commodity environment. record up strategy is emphasize ups has in And results. stronger than now cycles. better deliver when delivering ever sectors of continue. setting me allowed adjusted number a quarterly through Let current the produce impressive or it long-term and celebrating X.X consider track years XX-year And And of is growing over you us EBITDA fundamentals and especially the to this for to growth this are significant

And out a solar without scale put, and reliable large we demand long-term wind, Simply natural big changes. finally, strategy, renewables partner and these of build as gas accelerate and key future. growth U.S. you complimentary to in meeting the implement as gas cannot electrification having both system today’s as projected our about infrastructure that we electrification think is see well energy natural as to

the growth high In Bcf as previous continued saw set loads. the week fact, gas natural top July, compounding growth demand last power X%, growth. country capacity, reaching This as despite per on July XX tops of record by to again, meet wind compounding record summer power in and solar day in last

to EVs and must like do centers gas infrastructure power for want wind accelerate our and growing demand data things solar capacity. And we country’s meet we natural so if and generation, increasing truly continue power

and has gas for came evident our Mountain the scale to for the committed the natural our are is of infrastructure legislators of large long unprecedented to here Williams network we Pipeline’s administration to for completion. the generations This they become as fact and out leveraging Valley come. benefit majority haul both with support Biden

it I’ll for And up with your open that, questions.

Operator

Mr. Dounis our this We’ll take Instructions] from you, at Thank morning [Operator Armstrong. first question Spiro Citi.

Spiro Dounis

Thanks, operator. Good morning, team.

gas macro. here like, approaching start First activity. some of the a Looks trough maybe question, with we’re maybe producer and

about seeing to really So XXXX slack. volume are trajectory volumes wait a all’s and what get LNG and the your up just producer head on doing into how from the view here and of and pick to customers really just thinking curious we lot price your you’re for as

Alan Armstrong

there’s answer bit. Yes. it one say, try little question, summarize to to Spiro, well, certainly, that wouldn’t I I’ll maybe but a

result that the future a a I letting from. recover now. hard And see of demand as pretty of producers right sure to fall for decline they’re not way in think a their bright they’re into be that, majority systems making that’d

but much areas. are in where growth I poised cost cat and can would kind So really trimming a capabilities demand cost up watching kind of they and they out of say, like for their the future, proving certain in

are So it feels volumes like the level trying poised maintain as that’s down say, possible, I producers the growth, as future evident demand to pretty would much road. for being to me but

Spiro Dounis

Yes. helpful. It’s

so as moving target down to now out, you’re to question maybe Second leverage is X.X quarter, your year. this guys on you times about below the already pointed

or lower utilizing the So at capacity. thinking plan this just that maybe you’re curious how these about even operating about thinking excess levels? Is really balancing

Alan Armstrong

an really It’s drive we higher returns, have to some base able now debt invest the ability been pretty our decent will right at return large nice the the I the clear pretty allocation. up, think returns get and such and even we’ve to a I that’s higher we about just flexibility rate say, rate case, be a would next of – to earn inflation our probably of base. that once through pool think in to capital and rate I enjoy some we have us cost even gone Yes. in that given

great of be pool that’s team’s able stack really of the sits of job of doing that. at to that a And capital our have capital in. bottom that deploying allocation, really So but of to invest to kind nice

we very our effort XXX, Michael in team by actually [indiscernible] bit ago I is few and there Station and our ahead the up little station there. compressor the a which completed As mentioned, brought modernizing that great large in and see a team to weeks go got of that I a and facilities schedule, of

would continue to place that, level flexibility we’ll return think place anyway, those towards capital say that nice able enjoy we directly, at to be I do like answer I to opportunities. of capital that question so just kinds we have have certainly we places but your for the and this And to more to

Spiro Dounis

for it guys. leave there. I’ll Thanks Great. time the

Operator

Tonet We down Morgan. go Thank you. next to JP at Jeremy

Jeremy Tonet

morning. good Hi,

Alan Armstrong

Good morning, Jeremy.

Jeremy Tonet

versus start seeing wet there. to if that just a wondering But normalized what And with trying G&P bit wanted talk a Northeast there, catch a revenue of I off trajectory Just Appalachia, is up could color get now. could impacting if Northeast and you timing for recognize of production the little G&P the quite bit in kind EBITDA quarter there’s the right to good a you a about what’s of here? dry in shift more a just are with margins, level is bit

Alan Armstrong

they I Yes. producers saw where shift. focusing saw themselves I think markets are producers we think at keeping ability time, same to definitely where while But We the have up. have on producers for poised that there that open focusing, wet it to available.

I so of we’ve what kind would And that’s say, seen.

of the are that. normalized I first sign think of EBITDA, pretty two terms In quarters good a

Regional you I a through over quarters, can open of do out But couple average I that’s just up pretty of normalized good think markets I as a think number. think both that a MountainWest sign and lasts Energy the well. and we’re think that local see continued winter year very – demand as time during or Access itself to and certainly found generation power PJM, industrial in going and power I the markets, short anytime

power to to think build people generation that. see we’re to of advantage take continue out And I going

do of an years opportunity couple back the market encouraged, outlook opening as I’m that across for the the U.S. take of the in about a the some pretty of to terms result markets share frankly, market have of see some of these I Northeast. we’ll up. next think over So Northeast the

Jeremy Tonet

say kind the helpful. prime regional very that clarify, [indiscernible] in to when is opening That’s or And of others? markets or just this new you energy up, MVP

Alan Armstrong

Well, be distinct confusion issues There’s there. there’s some and it’ll there. Mountain out three Valley competing. been really certainly, Pipeline

to of at coming I think on in to how deliver. Haynesville XX plenty all the of question capacity pull compete it’s going the a MountainWest in system. market, have with gas we that just can Station It’s

of in recent there that pretty got – question to just competing producers – markets. going And to will by situation as on open there’s be at particularly XXX, it’s short south is so of a was very I winter a demonstrated market a but season going for continue those And But to last gas. rapidly. say Station natural caught in grow

so to see Virginia and And there Carolinas continue the to and we’re to continue markets the Southeast expand. the going in

going Mountain connection. Valley Pipeline’s to be that

loads people there that the also going we’re generation cracker industry It’s and well pulled see to going out in to up natural area. open that’ll time. area fact, addition Regional as shell and take of kind load new as and as snap some the but In will that regional as continue it seeing finally, advantage to demand. just but be big mentioned, low growth area, power the market in taking is well there PJM Access of the build Energy a And price in fingers and is gas, of well growth, good I one new example provide and then not your to we’ll of markets that to new

growth really market think of clear So pretty I Northeast. the for examples

Jeremy Tonet

if Got it. could. I one just on gas, Very more helpful. And

seeing relates as across resource not wondering the And recent if had today? fallen in conversations of we’re stakeholder starting it years kind to lead its as gas in beyond had seen out and or to integrated in see maybe back our into recent that slides this particularly opportunities come positioning? to years. states, Transco we in various peakers incremental could planning what’s think this And trend just you’re unique well, I

Alan Armstrong

Yes.

for and expectations. think XXX we of attention, far capacity I mentioned, our that had caught really the of frankly, exceeded as open we season kind our south

was that offer, offer we And it large had say had very a we when there. we what versus exceeded so it what multiple to to

broader does And signs something gets often, follow of we sometimes to definitely – that low volume that It this an importantly, are as seeing be mean those people of Jeremy, are absolutely to but the I to is baseload. what advantage base people is I that’s price capacity. yes, and think have to buy that this in natural misses the taking think you I annual mean investor that capacity going peakers doesn’t going as we too increase missed know gas. average have sell So for this, much it for

see increasing on in well, centers, data actually, because And think as up can baseload a our amount excess is of to we up with. the and going bit load I the what solar going quite we’re of well of amount electrification pick that’s of generation keep wind

or not to seasons only as in see people area. capacity on been amount increase – so all our on in again, buy see down, that it’s to still to through pipeline. we’re baseload, going these the coming well. open boils of whether that that full peaking, But it’s And we’ve of having And going baseload that’s certainly peaking we’re have

Jeremy Tonet

Got a clearly gas I Coal baseload but there, it bit it. to Makes needs peaking Right. underappreciated. sense. the seems – think conversion

very Thank for So color. that. you helpful

Alan Armstrong

you. Thank

Operator

at to We’ll Ann you. Jean now Thank next Bernstein. Salisbury go

Jean Ann Salisbury

follow-up the capacity on Appalachian made kind between on about Alan Transco there morning. producers. just wanted being a of to good competition the and and just Haynesville that producers was comment plenty Hi, the of it I being

set that that for of XXXX. for for XXX,XXX, is think I timeline the kind open season the

it accurate over needs usable but to few is the that sort say be capacity next is unlocked years? there, to So to of be

Alan Armstrong

Energy Access projects think Ann, that Mountain Pipeline same into to were six that realize supplies corridor, not dependent in along excluding expansions are have we corridor Well, that also on or area I that along exist, also coming Jean along that area. you that five Regional that Valley have

our number we them listed there a that materials. and of projects in there’s so And got

the generation season demand So increments that those South Virginia, North and obviously Carolina is areas. would, serve to power but – in this open those before Georgia for increasing Carolina, on are latest come

Jean Ann Salisbury

kind – incremental – is of they’re kind that maybe question of need there I if does guess, are my But Williams like, like, to be contract. broader projects that Okay. negotiated rate

Alan Armstrong

think Well, period sentence that’s Jean from not into complicated. and gas point that to move capacity have yes, I the is we Station very misunderstood, XXX physical the Ann, that

from piece We think some missed would capacity that move the The move the because their got at point, same have people Station they – are north, point. from that buying XX plenty by those of consultants have the already if up it I of to shippers XXX supplies moving that much market from choose but actually how Station sorry, and or to. that pick the was ability gas to fact – XXX

So plenty matter of going a have out capacity Bcf to But move gas they day station, out their it’s of pick XXX. a just gas. of we to decide the to where of be X

capacity will will ones it XXX, that So to if the they move And system the up the backed how the the are buy we exists, want XXX decide and at decide, physical operate and supplies. get XX actually shippers get they from. gas picked we off where for

Jean Ann Salisbury

tick was classify driving volumes makes in and Rocky Got then Overland quarter. big that? Thanks. That it. and up What a as NGL this And there was Mountain follow-up, Midstream crude a Pass as that sense. you

Michael Dunn

Hey, is this Michael. Jean Ann,

volumes Some as line as in on third-party volumes the up from methane quarter. of in some the that coming was picked well Bakken a that OPPL

Jean Ann Salisbury

for you. me. Thank all That’s Great.

Alan Armstrong

Ann. Jean Thanks,

Operator

Thank you. We UBS. now Brian go next at to Reynolds

Brian Reynolds

least the start these normalized curious half some curious at you in midpoint. outperformance, you sensitize in commentary gas can give as Is hurricanes to supports the well. in of the range about thus the around, end around to could off the you if But upper and Maybe confidence just just in year-to-date remarks pricing. or just talked fundamentals, kind constructive prepared XXXX which baked nat Hi. that second John, midpoint kind the of uncertainty Good if of outlook, over assuming everyone. your Thanks. morning,

John Porter

Yes.

lot have hitting of confidence in I we think our want to midpoint. a

mentioned, come, account a So hurricane further that and we do in around I natural weakness as happen prices. perhaps from could that decline could season gas additional things the for

that to we’ve So some of in to making our relative handle we those hit built ability sure kinds midpoint. can downsides

things than is us possible. base in business, range forecasted better So performance conversely, higher the the the always I in just processing the systems would think move underlying and be which gathering that in would

also marketing is it result could a possible And in quarter. the fourth we that have stronger

that Novembers Sometimes we example, quarter. have that comes in of fairly is and performance Decembers, first but strong the Most for unpredictable.

to to like overly make don’t numbers. kind result any of depend marketing on we So a the

so and And from in lot it the business weren’t yet the hitting a we our early got but the guidance. exceed raising think just of of midpoint as certainly fairly still could confidence and well, around guidance just we comfortable base in the year

Brian Reynolds

I appreciate… Great.

Alan Armstrong

Brian, add just would yes, add I – I would just that. to

primarily it’s on natural important gas marketing inventory. think markdown business On was NGL just there the I that drove on to our that – sorry, really the recognize really what the in negative

moving cash, change hold. on the books, really a it’s through not inventory that that’s – just just in that’s the we So price

you up for the prices obviously, that’s understand important to I were pretty book But in so to really so that, big – right of now, come relative year. we ethane up if much. And you’d think step see unless the mark a because that to balance Street just have

Brian Reynolds

Appreciate sense. that. That lot makes a of

particularly see great Texas quarter. the border. environmental calls assessment Louisiana from the Energy bring theme, Pathway As Louisiana to on for be a continues the Project my LNG E&P into demand Texas follow-up, gas nat to to to gas this

Texas to even LNG if to So demand. that bring from to of gas could natural discuss Thanks. opportunities support across could just greenfield just TLEP beyond Williams pursue you perhaps future further more that curious kind

Alan Armstrong

at in are industry we’ll projects that our about excited we we’re add Well, And we and not disclose in to this there. projects to Yes. the in shareholders I well Thanks, of number engaged some as scale position as would we’re those Brian. a tell you a involved we lot general in a be able point, are but pretty needed. value to much and large think of

So about disclose on there. but in what’s a position we’re yet to that, going we’re not pretty exactly excited

Brian Reynolds

of Enjoy We’ll sense. Great. rest the leave Makes there. your Thanks. it morning.

Alan Armstrong

Thanks, Brian.

Operator

to now Satish next at go you. Praneeth Thank Wells We Fargo.

Praneeth Satish

do I The a the lead a still time be Southeast XXXX. for time. you long be morning. season? think there very is little permitting? or the on anything contingency project upsized I date may Supply And maybe the a to the first, that project on Is could bit It confused noted be particular seems Enhancement, given strong that guess, there QX I’m open pretty in-service timeline for Good has in long. of lead causing guess, you in there then an

Michael Dunn

Michael. Yes, through good and Praneeth. today. currently upsized the in notice the capacity can and the working customers the It season be various season to we’re XXX,XXX working pleasant Hi, the surprise is that This morning, through that just scenarios open published we’re definitely open be a requested with from were there. results

we’ll So very in information more to outcome those regard future some the negotiations. that the of near on have hopefully, in

of pipeline corridor. to looping compression But then it’s looping customers on the compression rates alongside combination by and identified proper And be the those and really done developing Transco the just it’s a scenarios just scenarios. brownfield and getting that giving hydraulic additions the the modeling our and would ultimately

from through little a it process, right be an now, which definitely upside day. but of bit iterative XXX,XXX a it’s So the we’re can going

customer’s lot the by desired a date. I’d schedule, that’s of service now, say the in right driven

power the the the generation expectation cash agreements And to think lot before there customers gas-fired us. in plants for this start designing we desired that of customer’s may at accelerate the place our capacity capital some for so laying project out have as come do is when anticipating those well power as the an opportunity but point, customer there we new is I for a online flow. new can have to and be obviously schedule

right at what we’re really now. that’s looking So

I we can. pull we’ll probably looking outside think where to try XXXX that date be that at is we’d the in and

Praneeth Satish

I Okay. the That makes looking at sense. pretty natural in And for then Contango, futures right just now. guess, curve it’s winter, summer it’s spread wide gas,

it advantage how Just at does talk and of right these how wondering take storage if open and ability able to much guess your spreads? Sequent. you wider I have kind to much of of could that is capture capacity through that now

Michael Dunn

expect around I disclosed the to can aggregate optimize a able value intrinsic also of know storage of it storage position storage think storage well. deliverability in it a that don’t the portfolio. to storage. lot size specifics they about expect a the to position, lot them lot very of of the we Yes, position absolutely. around. don’t that And a strong portfolio is, actually lock that large as of and a that have would very to in be we but would out Sequent able The large given storage of capabilities lock is them I we’ve and it be value that aggregate size is of a that we’ve has but storage

Alan Armstrong

Yes, I we we would actually just until we add to that, delivered. book book those earnings the earnings, would would not way those

so – offered us sizable that’s when the for that’s for the our period. usually why value that most first is is is fourth really you usually pretty see And our in sorry, that quarter and storage pricing

large. so tends that’s example our be of And a first to great so quarter why

the looks it in able take cycle them be like like we to to to if the earnings we cycle quarter have fourth do twice, storage and we said, make depending pricing on that, that on what but of that. can Some

Praneeth Satish

it. you. Got Thank

Operator

Colton next Company. to go TPH We’ll and now Bean at

Colton Bean

inflation morning. up a after But year-on-year for $XX there. above saw was adjusting the escalators catch following Northeast the know in payment sequential it benefit Good is still that, on revenue. from even on up increase we just G&P like you increase well I what would’ve mentioned it’s question million seems significant alone. pretty the I the expected from

any are the rates I there? unit are basin contractual higher that So there across other guess, pushing provisions

John Porter

think question rich a we lot more of that. offer services around I really earlier, there’s rich the more lean, obviously – gas when was No, that versus there’s drilling, asked as

drive that And richer shift margin so tend unit margin our does gas does the to to across that – basin. our up –

Colton Bean

Okay. And that’s on think consistent. a volumes in showing I gathering processing looked basis pretty primarily up

Alan Armstrong

Yes. Right.

Colton Bean

it. Got

on cost Okay. two And then control. related questions

transaction think expenses like transmission pre-acquisition levels is if we your there. look the I it after for the at flat looks to OpEx segment, adjusting roughly

seeing expect synergies of expected, earlier than should cost materialize MountainWest increase we forward? you degree moving some So or

it impressive cost broadly, looks just control all expenses year-over-year down then flat like basis. And across a on more pretty to segments

your the the So and more if on of control through balance comment just broadly year. expectations could initiatives cost you

Michael Dunn

the recognition. environment. a great that for even in our job inflationary team’s doing this thanks controlling Colton, Yes. Yes, costs

you’ve we’re actually really to the on acquisition business. ways some continue the found cost of out have increase as e-comm MountainWest cost We is the take that the to seeing indicated, business and of the there side

I the And think through an that continue have year, going so cost we would balance we of the expectation that control. can

maintenance a recurring we with the that overhauls typically than team’s other variability year. and between third see lot our always costs Now, up second be would that this second throughout are the controlling there’s and doing only would there our activities and job of but variance that third that the and coming quarter, great quarters a

Colton Bean

you. Thank Great.

Operator

to Mitra now Bank We’ll of go next America. of Neel

Neel Mitra

on I thanks clarify Jean Hi, capacity available question, wanted to on the Ann’s Transco. question. my for taking

on utility existing follow to would utilities, So to guess expansions. Zone from if I from Transco back right I you X? be on are would need I demand volumes you be it Am right, one essentially accommodate there’s area that and were capacity be there available thinking new to from the to So that understood shifting And demand. it new MVP to accommodate way? would that volumes if then growth to off the from saying about Transco another the

Alan Armstrong

way those gas they available Generally to pull corridor the volume up – they ability have utilities from. me Yes. moving rates matter is in work that explain Neel, the no points. at the of let and have where price, the a that have there, the The us most it system on pay receipt pick they more various gas shippers one same can the try the pay time. from

can it’s about every and base in actually are And where choose price delivery path have they out But talk buys to particular want from they the the somebody to on kind they capacity capacities, haul and so basically talking to day. on shippers the meters into that long that trying the ability from. the the this when we’re system the the supply lowest delivered gas original have – buy system system, of system. system locations, their we big those And capacity about to pull their

of is a buying static even going if likely at expansions or way if from environment, made number you in have they’re just even in either Station it that’s we but somebody today its And system gas on coming Offshore gas looked the so if the on, a Permian. in XX, gas gas was that in – from Haynesville or

their a maybe at Station gas buying if cheaper the Marcellus gas Same be to say, would producer sell they nominating from or But their be Haynesville customer’s they going that Station the from. XX. be nominate and XX. Station then they I’m – location to want XXX of able of somebody XXX from flows XX a If matter it’s point. decides, But to delivery customers where their XX would instead place be – gas at well, to from XXX, amount going they’d supplies their of just that source supply eventually a from to at

compete who their So we the set and a – gas of going be most producers supplies. in to – where just sell wants those question to for so to decide it’s

be of then matches always more build all in situation Zone now. in like People supply X would locations, needed, balance. the that’s always back build you supply where Station And we’re and out to at winter in There’s have you there eventually out coming delivery, periods back the caught these projects. is more which it short we the have was because up And then way sorry, then got there you but in the supply builds that not As right doing enough then and delivery supply the system – worked. the – up there. supply the system then demand because is market at kind

provide missing supply last that was will winter. MVP this needed that So

Neel Mitra

Yes.

static whether could volumes back I all MVP Zone are on with anything confusion you move X, XXX if coming down didn’t how you is things Transco South are and Zone think maybe that in? of much off from the the

Alan Armstrong

Well, North It have just can doesn’t South. to South. and move move it

demand missing directions day. move – think XXX I certainly So is the concept on system there X we than from a more the wherever market gas is, the in but that’s have both will Bcf the maybe can

Neel Mitra

it. got it, Got

you. Okay. Perfect. Thank

Alan Armstrong

you. Thank

Operator

Tristan to now next go of Scotiabank. Richardson We’ll

Tristan Richardson

guys. morning, good Hey,

like transmission curious with your bid? you just seen passive clear opportunities we’ve more they’re Just market And strategic you the these as in some growing the XX and the funnel stakes. seen a a be M&A of landscape. of then months, lot see assets only that on the mean, of if multiples even it we’ve Have past in seen do transactions views would potentially clear? attractive transmission I clearly the is really transactions seems

Alan Armstrong

we that rare we assets of multiple, Tristan. them, we just that pleased assets see been pick question, frankly growth say kind that Good with have to able – Yes. seldom MountainWest would really you were that has I the more pretty Pretty are were to which contracted get around that than well multiple. expected. even up much that

involved those the the over earlier transaction I assets. been Dominion and Hart-Scott-Rodino of that had think that concerns that the kind raised issue dampen Hathaway Berkshire market in that the there was

that. And I think that a on had the spooked bit market little

I we assets. But looking I keep in and that’s where have anomalies think on our yes, that of we that going issue assets see case. to it’s that circumstances say, over to usually surfaced like kind those to to were of a the the risk There’s But a think able so going value that rare to we those was would Hart-Scott-Rodino add itself be in for ability around bridge already why lot So maybe reason this earlier. it in multiple. I we’re confidence that those case,

Tristan Richardson

you time that of of anything expectations That’s the that opportunity is question there’s if on at Maybe least one maybe that was you or the of project And sounded occur. that acquisition MountainWest, set with timing I saw close. then for didn’t as of could helpful, a potentially already and Overthrust Expansion, what scale to mean, on just kind maybe it the incremental at Alan. like maybe curious the expansions And your the mention. then other

Alan Armstrong

that? Mike, want do take you to

Michael Dunn

that was our acquisition. pro in Tristan Yes. forma for not the economics

but pretty a XX% it’s two it’s capacity adding expansion. there. a a dekatherms acquisition. there that the simple upside facilities there’s It increase This XXX,XXX about compressors Overthrust pleasant opportunity that And day expansion. more the for So existing MountainWest certainly definitely we’re upside on the in with is at is compression system, an

up That’s be solid at California a for years at And higher economics we’ve trading toward this a been Westbound just $X to and gas that by pricing pretty there of to gas summer, Opal that’s the point. even even hits get pricing there. this Opal gas that, the picking heat seems There seen driven summer California generation a more than hub, desire with point the number now.

So that I Opal to would expect to customers get for see a lot pricing point. desire of to

into for lot There’s the coal as And far Overthrust do in bodes system, MountainWest opportunity power a for see coal-fired gas. plants conversion the have of And gas large we of connection hub. to opportunities Wyoming a of Utah that rest for as the that well there and natural certainly direct at to switching. number that very

[indiscernible] the X those to some X already and off And and we’ve converting of in system the gas. actually Overthrust expansions acquired are in for Units today we’re Wyoming Bridger building on system

building And pipeline over year. that we’re a – to facility the this

for we’ll certainly us, sourced field Wamsutter and will continue MountainWest system with opportunities, gas be are that the secret of those and as production on those platform. but we’re out Upstream driving gas with upside to that So not our to opportunities like well the only markets see the

Tristan Richardson

Mike. you, Thank it. Appreciate great. That’s

Operator

go We you. at Mizuho. Moreen to Thank now Gabriel next

Gabriel Moreen

in then bit E&P here. also side, creeped potentially your having around E&P lot good XXXX and not doing, in hedging like of XQ. thinking, can I dead of I’m was if a E&P XXXX hedges think horse on just everyone. with you’re you to what had the up exposure wondering last just a I looks and for on guidance, side, It doing also light on at some curve the a Hey, you morning, which point transactions the this is what update know you as gas but little maybe E&P which the since about beat

Alan Armstrong

take take Yes John, of last? the that you and I’ll want first to part the

John Porter

Absolutely. Yes.

like have offset. account kind We hedges in comfortable just hedged, what’s to hedged hedging. Upstream continued far JV the too the what’s to to have between for spread don’t go any production of We We and generally on production. expected a add for not potential

do We So and the that’s in materials there that all the that fairly Upstream business current is our the significant in have that we remains against outstanding a provide portion of hedges unhedged. appendix.

Alan Armstrong

in as to some want fact hedging so putting terms to E&P I think October an And been side, in – on through John April market. driven that, we Yes. just really in of that approach our the by XXXX. on of up large And to have Gabe, said, would I gas add hedges the don’t we get for part caught that’s short

years experienced that ago. I of couple a everybody think

production, tend so And not on we short production. caught get we could particularly to ourselves that where we operate get in since a don’t position

on that’s E&P So the think how we side hedging about there.

to just So – of a I terms of terms that. but continue lot in in of of we transactions – the around E&P, interest things, say scheme broader in would in the entertain

or production and we And have assets building is either demand a in seeing and oil this for we’re demand – things as but everybody’s a power I lot driver fuel in say pick to there’s around and LNG U.S. here onshoring landscape demand, seeing that that’s a by as and coal up to good just we that. going think well, look electrification we industrial of increase impressive. would picture pretty at of and just the in continues I – that on very around for were amount pretty be focused country also not a or demand the obviously insight And build to building that’s demand big our to the we’re just continue the and lot macro ammonia of previously the powered

of there. continue there So Haynesville out production seems team shortsighted in done lower at to kind the ways team, the hurry to GeoSouthern they job it’s particularly a sell to and like to the cost has a great where find get and increase

in a from just around operational compelling really So enjoying and to which fundamentals is gas we’re both macro reason we this liquidate environment. the not capabilities, think their

Gabriel Moreen

spend it, case think if ERP spend – doing but Transco’s on its about ask got about up that? and Transco, And Alan. refraining just having matter ERP follow-up at you recognize accelerating at do to awfully to rate upcoming, an as can the with coming you big it Thanks, that maybe a then base rate I file it’s it as and the rate context? far within Does Transco all as at how think from or the case I

Michael Dunn

the we’ve turbines, fashion Michael. more put very it’s test with Yes. replacement. service and that new be the case. Station closes got will three before Gabe, stations on period there units two replaced similar rate just at in Hey We’ve on XX We coming XXX state-of-the-art

to case XXX. bin case, emissions that’s to to what we we dependent the its really Transco and to on we achieve an there, highly so Northwest would tracker, whether the And did similar And we anticipated what rate rate do which the get on on on after were curve hope similar able Pipeline. outcome certainly that

the and But negotiated the into think to see out. going are and obviously beyond on settlement system looks out really try we’ll with Transco And those that tranche would in type what of turns on emissions timeframe. out with that to coming really making future. case curve in rate rate layer balance drive Transco we our where that our to the near-term spending this like go tracker, we decision XXXX, we tracker that an line achieve the XXXX that the next And how spending hope one into hoping customers modernization to there the cases

Gabriel Moreen

Got it. Thanks, Michael.

Operator

now We’ll Truist. Neal at to Dingmann go next

Jake Nivasch

Neal. on Nivasch Hi, this is for Jake

on Just allocation. one a quick cap

think I to make it, I that it but sure have correctly. guys just you I heard might covered want

mean, near-term? growth, that well already, some distribution point to you at the I – regards how might but in are pretty in Or after and boost accelerate curious X% to have are that? guys covered you Are you looking Just covered thinking this looking even that guys you year. just you are this about

Alan Armstrong

with question. said business somewhat our really growth would that would to say X% X% to expect generate all that. that to the along we this we we’ve that that and Yes, dividend expect I good on in in line keep EBITDA

share the drive forward. think I dividend number per looking to think decisions our we really AFFO that’ll it is keep so And eye about on your forward think on as I

it’s plenty And capacity of really so focus room, plenty really to a and per in of increase, just drive for But seeing certainly I going a share we’re what decisions. driven good is a by number as of what’s you think AFFO sustainable that that’s kind terms be to and dividend our have to going on. we of yes, dividend long-term

Jake Nivasch

Got you.

That’s you. Okay. for it Thank me.

Alan Armstrong

you. Thank

Operator

to CIBC go next at Capital Catellier Robert Markets. now we’ll And

Robert Catellier

Hi, M&A. time Rob Catellier, I capital on just wanted to follow-up allocation this on

on So company’s the understanding unique. that so. you appetite M&A last on been a of you’ve state or months the acquisitions the understanding market in MountainWest and that maybe Can quite additional little active was maybe the XX for comment

So prices of bid the higher spreads? commodity just low interest rates and how are impacting

Alan Armstrong

would transactions. exposed that But question a that’s that, I good would to that not I haven’t some some and would yet. certainly that say It’s ultimately occurring you clear drive Yes. floating rates that, of yet. would particularly evidence completely have just say it we think us that would impact, people seen to are great

drives shareholders. be and And have I really have the that we’re to a to we we our strong just advantage hoop been going things would where value around say like unique competitive for hanging accretion looking

things patience unique that and And that far competitive that keep off reason would very patience advantage so change unique well us. a kind for And see paid we has are don’t we have really for that those to I looking on. of any

of, tell that rate depressed being sitting yet more And that, from sure but be you I’m I with expect see flooded so I floating people market or that not capitalization. to what might that’s would yet the assets on

we rate So where an both we’re debt very floating without and rate fortunate capacity interest standpoint from stand exposure. a

and really just have us about there assets their but may stand, look bit we’re get that be problems, evident where little yet. and some to damaged to a solve excited to not So but we that’s businesses transactions for

Robert Catellier

Okay. the looking for. That I color was Thank you. was

Operator

Thank closing do things to turn Armstrong, this comments. no for further you. questions morning. I’d back to Mr. We you have like

Alan Armstrong

you for confidence and excited want the our Okay. you here in we morning. our the interest for we our reiterate this thank Thank on growth and about continued top quarter your of company demonstrate continued to questions your in business are Thank you. growth abilities our just how this the we resilience and in all appreciate to company. Well, great

Operator

wish conference great call. thank joining XXXX I Thank much quarter you you all for all us a you again. conclude Ladies The gentlemen, will to earnings and Goodbye. like I’d Williams second and so day.

The Williams Companies, Inc. (WMB) 3 Aug 232023 Q2 Earnings call transcript