Williams Companies IncNYSE
Addressing The Williams Chesapeake Exposure
Williams Companies: Playing The Gas Infrastructure Super-Cycle
Stanislav Ermilov • 26 Comments
Stanislav Ermilov • 26 Comments
Yesterday, 12:44 PM
- Williams Cos. (WMB +2.1%) is reinstated with an Overweight rating and $35 price target, while Williams Partners (WPZ -1.4%) wins only an Equal Weight rating with a $37 target, at Barclays,
- WMB emerged from the broken merger with Energy Transfer by addressing most of the funding needs with the dividend cut at WMB and the DRIP program at WPZ, and Barclays believes these were placeholders with more announcements to come that could be catalysts for the Williams complex.
- The firm thinks management wants to eliminate the need for any external funding in 2017, which would position WMB/WPZ to simplify the structure over the next 12 months and reinvent itself as a standard C-corp that internally funds capex with debt capacity and cash flow while using the remaining cash flow to pay out a dividend and/or buy back stock.
Wed, Nov. 30, 9:50 AM
- Shares of energy companies surge at the open, as hopes for an OPEC deal to cut production send crude oil futures soaring.
- Reports say Saudi Arabia is prepared to accept "a big hit" to production and agree to Iran freezing output at pre-sanctions levels.
- In early trading: XOM +2.2%, CVX +2.3%, RDS.A +3.6%, BP +3.4%, TOT +1.7%, STO +5.1%, PBR +8.1%, COP +7.2%, MRO +12.1%, APC +8%, DVN +12.7%, HES +9.5%, ENB +2.1%, PSX +0.8%, SLB +4.2%, HAL +8.3%, BHI +4.3%, KMI +4.8%, EPD +2.7%, ETP +3.8%, WMB +5.4%, RIG +11.3%, SE +2.2%, CHK +9.4%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, PXI, FIF, PXJ, RYE, NDP, GUSH, PSCE, DRIP, DDG, FXN, CRAK
Tue, Nov. 29, 10:20 AM
- Crude oil continues to slide - WTI now -3.8% at $45.27/bbl, and Brent -3.8% at $46.40/bbl - dragging oil and gas equities (XLE -2.1%) down with it.
- Iran's oil minister says he is not prepared to reduce supply, and Saudi Arabia says it would not participate in a production deal without Iran and Iraq.
- Reuters reports that Iran has written to OPEC saying Saudi Arabia needs to cut oil output to 9.5M bbl/day; Saudi has said it was prepared to reduce its production only by 500K bbl/day from current levels of 10.5M.
- In early trading: XOM -1%, CVX -1.7%, RDS.A -1.4%, BP -1%, TOT -0.3%, STO -1.8%, PBR -3.7%, COP -2.9%, MRO -4%, APC -2.8%, DVN -2.7%, HES -3.6%, ENB -2.3%, PSX -1.2%, MPC -0.8%, SLB -2.2%, HAL -2.3%, BHI -2.1%, KMI -1.4%, EPD -2%, ETP -2.2%, WMB -2.4%, SE -2.3%, CHK -2.6%.
- ETFs: XLE, VDE, ERX, OIH, XOP, FCG, ERY, GASL, DIG, DUG, BGR, XES, IYE, IEO, FENY, IEZ, PXE, GASX, FIF, PXJ, RYE, NDP, GUSH, DRIP, DDG, FXN, CRAK
Tue, Nov. 22, 4:36 PM
Tue, Nov. 15, 3:59 PM
- California Resources (CRC +19.9%) surges nearly 20% for its biggest intraday jump since August after the George Soros bought a new stake in the oil explorer.
- Soros also bought more than 3M shares in pipeline owner Williams Cos. (WMB +2.7%), and took smaller positions in Petrobras (PBR +4.5%) and Rice Energy (RICE +4.1%), while selling his position in the SPDR Gold ETF (GLD +0.8%).
- Today's crude oil rally also is having an outsized effect on CRC, whose $32.50-$33.50/boe production costs make it very much a marginal-cost/bbl supplier of oil; a $1/bbl change in the Brent price equates to a $2.5M increase in net income, according to the company's own price sensitivities index.
Tue, Nov. 1, 3:55 PM
- Williams Cos. (WMB -2%) recent drop is not fundamentally driven, and shares should be bought on the current weakness, according to Evercore ISI analyst Timm Schneider.
- Expectations for Q3 results may have been elevated, as WMB “had been a bit of consensus long and heavy hedge fund holding," but turnover began after news from Williams Partners (WPZ -1.2%) of the Atlantic Sunrise delay, Schneider says.
- Also, Citi analyst Faisel Khan says he continues to rate both WMB and WPZ at Neutral as the complex’s relatively inexpensive valuation appears balanced by high leverage, significant funding needs, and weak coverage.
Mon, Oct. 31, 1:49 PM
- Williams Cos. (WMB -1.8%) and Williams Partners (WPZ -0.6%) are lower despite reporting Q3 profits (I, II), helped by higher olefin margins at the Geismar plant in Louisiana and lower costs.
- WPZ also revises its 2017 growth capital guidance, due primarily to previously disclosed timing changes for the Atlantic Sunrise pipeline, with partial service now expected to begin in H2 2017 and full service in mid-2018.
- WPZ sees total 2017 growth capex of $2.1B-$2.8B, including expected total 2017 growth capital for Transco of $1.4B-$1.9B.
- WMB says Q3 adjusted EBITDA rose 8% Y/Y to $1.19B, propelled mostly by the MLP, which reported $1.19B in adjusted EBITDA.
- WMB's Q3 dividend coverage was 2.94x, up from 0.91 in the year-ago quarter; WPZ's distribution coverage was 1.08x, up from 1.04x a year earlier.
Mon, Oct. 31, 6:58 AM
Sun, Oct. 30, 5:30 PM
Fri, Oct. 14, 6:58 PM
- Cabot Oil & Gas (NYSE:COG) and Williams Cos. (NYSE:WMB) have sold off since late Thursday after the FERC said it would give landowners until Nov. 14 to comment on new route alternatives for parts of WMB's Atlantic Sunrise project in Pennsylvania.
- Both WMB and COG, a would-be shipper on the line, have dropped as the route evaluation raises questions about how soon the project would start, but several analysts see an opportunity to buy the shares on weakness.
- Piper Jaffray says long-term investors should buy COG on weakness, citing the quality of the company’s assets and ability to generate free cash flow.
- KeyBanc says a delay of a couple of months for the pipeline’s environmental impact statement should not be materially negative for COG.
- RBC Capital says a potential delay should be manageable since new routes involve less than two miles of pipe; the firm suggests buying WMB on weakness. since a short delay should not materially impact cash flow expectations.
Thu, Oct. 13, 5:25 PM
- Cabot Oil & Gas (NYSE:COG), Williams Cos. (NYSE:WMB) and Williams Partners (NYSE:WPZ) tumbled into the close following a Bloomberg report that the proposed Atlantic Sunrise natural gas pipeline will be delayed after regulators requested more comments from Pennsylvania landowners over the environmental impact of the project.
- COG, WMB and WPZ closed lower by 4.6%, 2.3% and 1.9%, respectively - with nearly all losses coming in the final half-hour of trading - after a FERC filing included a letter asking landowners to submit comments about two new alternative routes by Nov. 14.
- COG CEO Dan Dinges had said last month that he expected FERC to issue final environmental approval for Atlantic Sunrise in middle or latter part of October.
Mon, Sep. 26, 10:14 AM
- Activist shareholder Corvex Management says it is withdrawing plans for a proxy fight after Williams Cos. (WMB +0.9%) names two new members to its board and says it will name two more before its annual meeting in November.
- Corvex managing partner Keith Meister, who has criticized the WMB board repeatedly since early July, says the new directors "will put the company in the best position to ensure a renewed focus on shareholder interests and the enhancement of shareholder value."
- WMB says it named Stephen Chazen, former president and CEO of Occidental Petroleum, and Peter Ragauss, former CFO of Baker Hughes and current Apache board member, to its board; three WMB directors who served prior to 2016 will not stand for re-election.
Mon, Sep. 12, 10:17 AM
- Activist investor Keith Meister at Corvex Management says in an open letter than Williams Cos.' (WMB -0.5%) three newly appointed independent directors should form a committee to examine the merits of a possible merger with Enterprise Products Partners or others.
- Last week’s withdrawal of interest by EPD in possibly buying WMB “makes it crystal clear to me both that the current board is not functioning properly and that it is imperative to quickly populate the board with a majority of qualified, independent directors,” according to Meister.
- Meister, who is engaged in a proxy fight with WMB, says the company's legacy directors "are both unable and unwilling to have a point of view differing from the CEO and are therefore opposed to change."
Fri, Sep. 9, 5:44 PM
- Activist investor Keith Meister of Corvex Management tells CNBC that he plans to issue a letter next Monday asking the three recently-installed Williams Cos. (NYSE:WMB) board members to form their own strategic review committee, after Enterprise Product Partners yesterday withdrew its indication of interest in merging with WMB.
- Although WMB said it was surprised by EPD's announcement because it was "engaged in the process of carefully reviewing the most recent indication of interest," Meister says he is skeptical that the WMB board constructively engaged EPD.
- Meister has launched a proxy contest to install 10 dissident director candidates to take over the WMB board at a meeting set for Nov. 23.
Fri, Sep. 9, 9:49 AM
Fri, Sep. 9, 4:50 AM
- Total (NYSE:TOT) is taking full control of the Barnett Shale in Texas after Chesapeake Energy's (NYSE:CHK) recent decision to exit the once prolific gas field to clean up its finances.
- Under terms of the deal, Chesapeake will pay $334M to Williams Cos. (NYSE:WMB), the gatherer of 80% of the gas from Barnett Assets.
- Total will then pay $420M to restructure the gas-gathering agreement and $138M to be released from three other contracts.