Williams

Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

ETE Wants Out of Williams Merger/Takeover, Offering $2B Breakup Fee
February 26, 2016February 26, 2016

It was a long courting period before Energy Transfer Equity finally cajoled, harangued, and eventually forced the board of Williams to agree to a merger/takeover. ETE’s billionaire CEO Kelsy Warren revealed he had been propositioning Williams for over six months–offering Williams $64 per share to buy the company, totaling $48 billion (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). Williams resisted, but eventually they caved and agreed to the deal–although the deal price went down $10 billion by the time they accepted (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). Like a lover who finally had his way and then finds out it wasn’t “all that”, it seems Warren is having second thoughts. The New York Times is reporting that the deal “has become a nightmare” and Warren wants out and is offering to pay Williams a $2 billion break-up fee…
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Chesapeake Energy | Energy Companies | Energy Services | Southwestern Energy | Williams

Southwestern, Chesapeake Negotiate Lower Midstream Rates from Williams
February 26, 2016February 26, 2016

Used to be when a driller signed a contract with a midstream company to gather, process and transport the company’s gas (or oil) to market, the driller was locked in for a minimum of 15-20 years. The rates NEVER change. Midstream companies will build expensive pipeline systems and all of the associated infrastructure only if they’re guaranteed a certain return. Which is why investors love midstream companies–it’s like investing in an annuity, a guaranteed rate of return for 15-20 years to come. And then the bottom fell out of the market. As we wrote about Wednesday, some bankrupt drillers are seeking court action to dissolve those contracts (see Shock: Judge May Allow Drillers to Cancel Gathering Pipeline Deals). We have another new development to tell you about: drillers not in bankruptcy are renegotiating once sacrosanct, set-in-stone contracts, to reduce the amount they pay midstreamers. Southwestern Energy and Chesapeake Energy have both recently negotiated lower rates with Williams. The beginning of a trend?…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | Susquehanna County | Williams

Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else
February 22, 2016February 22, 2016

Starting this week the sugar maples along the path of the Constitution Pipeline will come down. MDN previously told you about the Holleran family in New Milford, PA who make maple syrup by tapping the trees on their five acres of land (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). While it’s unfortunate that Williams, the builder of the pipeline, could not find an alternate route (they did try), and unfortunate that media reports say up to 80% of their maple trees (~200) will need to be cut, we’re not sympathetic. The Hollerans have steadfastly refused any kind of offer from Williams to compensate them, instead aligning themselves with some of the most radical of radical anti-drillers in a publicity quest to pressure Williams to stop. It didn’t work and now a federal judge is telling the family if they prevent the trees from coming down, starting today, they’re going to the clink…
Read More “Judge Tells NEPA Family to Let Williams Cut Maple Trees, Or Else”
Chesapeake Energy | Energy Companies | Energy Services | Williams

CEO: What Williams Would Do if Chesapeake Declared Bankruptcy
February 19, 2016February 19, 2016

Alan Armstrong, president and CEO of Williams, spoke on an investor/analyst phone call yesterday to discuss Williams’ fourth quarter and full year financial and operational results. He had a lot to talk about. As we reported yesterday, the company saw massive losses in 2015 (see Williams 2015: $1.6B Loss in 4Q15, $1.4B Loss Full Year 2015). However, early in Armstong’s talk, he addressed an issue that’s gotten a fair bit of press lately: What would Williams do if Chesapeake Energy declared bankruptcy? Armstrong spent several minutes discussing such a possibility and how it might affect Williams. Here’s what he said on the call about a potential Chesapeake bankruptcy scenario…
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Energy Services | Williams

Williams 2015: $1.6B Loss in 4Q15, $1.4B Loss Full Year 2015
February 18, 2016February 18, 2016

Drillers (the “upstream”) are not the only companies being negatively affected by the crash in oil and gas prices and the resulting slowdown in drilling. Midstream companies (pipelines and processing plants) are also affected. If drillers drill less and shut-in wells, that means less gas flowing through pipelines. Although certain minimums are charged, contracts with pipeline companies are complex and involve many factors, among them the price received for the gas flowing through them. Williams, which is in the process of being sold to/merged with Energy Transfer Equity (see Williams Board “Unanimously” Committed to Selling to ETE), rivals MarkWest Energy (which was sold to Marathon Petroleum) as the biggest midstream company in the Marcellus/Utica. Williams released their fourth quarter and full year 2015 financial update yesterday. The company lost $1.6 billion in 4Q15 alone, but because they made money in other quarters, Williams “only” lost $1.4 billion for the entire year in 2015. Here’s yesterday’s 2015 financial update…
Read More “Williams 2015: $1.6B Loss in 4Q15, $1.4B Loss Full Year 2015”
Boardwalk Pipeline Partners | Energy Services | Ethane | Industrywide Issues | Litigation | NGLs | Pipelines | Williams

Bluegrass Pipeline Aborted Before It was Born – RIP
February 17, 2016February 17, 2016

Is it time to declare the Bluegrass Pipeline dead? It certainly appears that way. The Bluegrass, you may recall, was a $1.5 billion joint venture between Williams and Boardwalk Pipeline Partners project that would have piped natural gas liquids (NGLs, mostly ethane) from the Utica/Marcellus all the way to Gulf Coast for processing and sale. Some 200 miles of the pipeline was due to be built through Kentucky–the Bluegrass State. But the wacky libs of Kentucky pushed back, suing Bluegrass over its plan to use eminent domain. In March 2014, Franklin Circuit Judge Phillip Shepherd ruled Bluegrass could not use eminent domain (see Judge Rules Bluegrass Pipeline Cannot Use Eminent Domain in KY). At that point Williams and Boardwalk squabbled over the future of the project (see Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”). The case moved on to the Court of Appeals. In May 2015, a three-judge panel agreed with Franklin Circuit Judge Shepherd that only pipeline companies that are or will be regulated by the state’s Public Service Commission can use eminent domain (see Appeals Court blocks Bluegrass Pipeline eminent domain). The case went all the way to the Kentucky Supreme Court where, last week, the high court ruled the lower court rulings will stand. Case closed…
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Chesapeake Energy | Columbia Pipeline Group | Energy Companies | Energy Services | Energy Transfer Partners | Industrywide Issues | Marathon Petroleum | Pipelines | Spectra Energy | Williams

Pipeline Companies May Lose Big-Time if Chessy “Restructures”
February 9, 2016February 9, 2016

Yesterday’s free fall of Chesapeake Energy’s stock based on rumors that the company may be considering bankruptcy (see today’s lead story) is not only affecting Chesapeake’s stock price. It’s also affecting the stock price of Energy Transfer Equity and Williams, two huge midstream companies. Why? ETE, you may recall, is in the process of buying Williams for $37.7 billion (see Looks Like a March 2016 Wedding for ETE & Williams). The main reason ETE is buying Williams, with its major presence in the Marcellus/Utica, is because of long-term contracts to use its pipelines in the northeast. One of Williams’ main customers with those long-term contracts is (yes) Chesapeake Energy. What if Chessy is forced to renegotiate or cancel or otherwise can’t honor those contracts? Whoops. There goes one of the big reasons for the deal in the first place. Which may explain why ETE’s stock went from $7.01 on Friday to closing at $4.09 yesterday (down 42%), and why Williams’ stock went from $17.11 on Friday to closing at $11.16 yesterday (down 35%). Here’s how/why Chesapeake’s troubles will not only affect ETE and Williams, but other midstream companies like Spectra Energy, Columbia Pipeline Partners and Marathon Petroleum as well…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Susquehanna County | Williams

Actor James Cromwell Admits He’s Clueless, Fights Pipeline Anyway
February 8, 2016February 8, 2016

James Cromwell as Zefram Cochrane

Hollywood stars are some of the dumbest people on the planet. We’ve seen it again and again. They glom onto a “cause” either to boost their own sagging careers (get their name into the press again), or because they have an otherwise empty and meaningless life, or because–who the heck knows why? They certainly aren’t experts–although they pretend to be. Susan Sarandon and Yoko Ono joined the anti-fracking movement and rode a fossil-fuel-belching bus from New York City up to Susquehanna County, PA two years ago to “tour” the fracking fields of northeastern PA (see Looney Toons Anti-Fracking Celebrities Visit Montrose, PA). Another Hollywood nutjob is James Cromwell, who played Zefram Cochrane (mythical creator of the warp engine) in the 1996 movie Star Trek: First Contact (one of our favs). Cromwell, a New York City resident, owns a home in upstate, in Orange County. A natural gas-fired power plant is scheduled to be built near his summer home and he’s been protesting, to the point of getting himself arrested in December (see Actor James Cromwell Arrested Protesting NY Power Plant Site). Cromwell has been unsuccessful in stopping progress on the power plant. Apparently he’s in a down cycle right now with his career, and he was reading the newspapers and noticed a story we also noticed (and highlighted) last Friday–an anti-drilling family trying to stop a pipeline from clipping a few maple trees on their property (see Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It). Cromwell decided to take a Friday drive to visit the five acre plot and lend his name to their cause. Thing is, he admitted he’s essentially clueless about the whole thing–but since it’s a natgas pipeline, and he now hates natgas, what the heck. It only took him maybe two hours to drive from his upstate home to Susquehanna County to pay some fellow antis a visit…
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Anti-Drilling/Fossil Fuel | Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Susquehanna County | Williams

Maple Syrup Farm in Path of PA Pipeline, Antis Make Most of It
February 5, 2016February 5, 2016

We’ve often said that pipelines should not be allowed to use eminent domain. But what about when there’s no other choice? What if there are one or two holdout landowners whose land over which a pipeline must travel if it is to get built at all? In those cases, pipeline companies are left with no other choice but to invoke eminent domain. Williams, in planning and now beginning to build the Constitution Pipeline from Susquehanna County, PA into New York to Schoharie County, NY, has bent over backwards, forwards, and sideways to accommodate landowners along the proposed route. In fact Williams has changed more than half of the route in response to requests from landowners. Williams is, today (Feb. 5), beginning to selectively cut down trees along the route–in Pennsylvania for now (New York is next). There’s one small portion of the route Williams wanted to avoid but could not–running through a stand of maple trees. The owners of those trees have aligned themselves with some of the most radical of radical anti-drillers to oppose the pipeline and they are now running a public relations campaign to attempt to try and create a public uproar. We at MDN do NOT sympathize with them–for a number of reasons…
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Energy Services | Industrywide Issues | New York | Pennsylvania | Pipelines | Regulation | Statewide NY | Susquehanna County | Williams

FERC OKs Tree-Cutting for Constitution Pipeline – in PA
February 1, 2016February 1, 2016

In a crushing blow to anti-drilling radicals who have tried their best to stop the Constitution Pipeline, the Federal Energy Regulatory Commission (FERC) has granted Williams, builder of the Constitution, permission to begin cutting down trees along the pipeline’s path in Pennsylvania. Williams still cannot fell trees in New York State, where the bulk of the pipeline will be built. However, FERC would not grant permission for PA unless they intend to grant permission on the other side of the border too–and everyone knows it. Currently New York’s anti-drilling governor, Andrew Cuomo, is holding up the 125-mile project that will deliver natural gas from Susquehanna County, PA to Schoharie County, NY by connecting with two interstate pipelines. Cuomo is about to create a constitution crisis in which the federal government will be forced to overrule the state and allow the pipeline to be built. Cuomo is withholding stream crossing permits–the only thing left before bulldozers begin to clear a path. Cuomo is once again caving to pressure from his lunatic left base of supporters. And he’s about to turn New York into a third-rate state, controlled by the federal government, through his unwillingness to grant the permits…
Read More “FERC OKs Tree-Cutting for Constitution Pipeline – in PA”
Chenango County | Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

Cuomo Needs to “Snap on a Pair” and Approve the Constitution Pipe
January 26, 2016January 26, 2016

Constitution Pipeline Meeting in Afton – click picture for larger version

“What do we want? Pipeline! When do we want it? Now!” It was a raucous crowd who gathered last Saturday in the tiny village of Afton, New York to show support for the Williams Constitution Pipeline project. The River Club in Afton was jammed with people–by our estimation some 250-300 people. The meeting was organized and hosted by the Joint Landowners Coalition of New York (JLCNY). The JLCNY’s attorney, Scott Kurkoski (from Levene Gouldin & Thompson LLP) began the meeting with a full-throated yell: “New York Can’t Wait!” That simple sentence summed up the focus of the rally. The Constitution Pipeline is fully permitted by the Federal Energy Regulatory Commission (FERC). The only thing holding up construction of the pipeline is a stream-crossing permit from New York State. The tail is wagging the dog. Speaker after speaker (politicians, business people, labor reps) outlined the reasons why New York State can no longer wait for Gov. Cuomo to continue his waffling on this project. The frustration with Cuomo and the DEC was palpable in the audience. Whenever Cuomo’s name was mentioned there were cat calls and boos. Perhaps the best line of the day, from all of the speeches, was uttered by Assemblyman Clifford Crouch. Cliff mentioned he had called the Dept. of Environmental Conservation (DEC) just a few days prior to ask about the status of the permits. Without saying so, the DEC rep indicated the delay is not due to the agency itself. The implication was clear: Cuomo is holding it up. Crouch then said this: “We need to contact Snap-on Tools and get the governor a pair to snap on!” The crowd roared. They loved it!…
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Energy Services | Williams

Williams Slashing 2016 Capital Budget by $1B
January 26, 2016January 26, 2016

While Marcellus/Utica midstream giant Williams won’t release a full financial and operating update until Feb. 17, yesterday the company did release the outlines of spending plans for 2016 yesterday. The big news from that announcement is this: Williams will spend $1 billion less on capital projects in 2016 than it did in 2015–a 32% decrease. In 2015 Williams spent, in round numbers, $3 billion on capital projects. In 2016 that number will be $2 billion. The reason? The slowdown in drilling. Here’s yesterday’s announcement…
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Chenango County | Energy Services | Industrywide Issues | New York | Pipelines | Williams

Rally to Support Constitution Pipeline in Afton, NY Tomorrow
January 22, 2016January 22, 2016

As we’ve previously mentioned, a few times, there will be a meeting tomorrow in Afton, NY to support the Constitution Pipeline. The Joint Landowners Coalition of New York (JLCNY) is sponsoring this rally to support the Constitution. MDN editor Jim Willis plans to be there–and we hope you do too. Meeting details are listed below. It’s time–in our opinion long past time–to sue the state and force the issue. It’s time to build the Constitution Pipeline!…
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Energy Services | Industrywide Issues | Pipelines | Transco | Williams

Williams’ Transco Pipeline Floats New IOUs to Raise $1 Billion
January 20, 2016January 20, 2016

Transcontinental Gas Pipe Line Company (Transco), is a pipeline that runs from Pennsylvania to the Texas Gulf Coast. Transco is a wholly owned subsidiary of Williams Partners L.P., and Williams Partners is part of Williams. Williams, including Transco, is about to become part of Energy Transfer Equity (see Williams Board “Unanimously” Committed to Selling to ETE). In a pair of announcements yesterday, Williams revealed that Transco will float new notes (also known as private debt, what we call IOUs). Transco will use the money they raise from these new IOUs to pay off $200 million of existing IOUs coming due in 2016. New debt to replace old debt. That’s what the first announcement revealed. The second announcement said not only do they want to pay off that $200 million coming due this year, they actually want to raise $1 billion (!) and the new IOUs will be due and payable in 2026–ten years from now. So what do they plan to do with the other $800 million not used to pay off old debt?…
Read More “Williams’ Transco Pipeline Floats New IOUs to Raise $1 Billion”
Energy Services | Industrywide Issues | New York | Pipelines | Regulation | Statewide NY | Williams

NY AG Objects to Williams Tree Clearing for Constitution Pipeline
January 19, 2016January 19, 2016

This one was easy to predict. Last week we told you that Williams had asked, and received permission from the New York Dept. of Environmental Conservation (DEC), to begin clearing trees along the path of the Constitution Pipeline in upstate New York (see Williams Plans to Start Clearing Trees for Constitution Next Week). Anti-fossil fuelers went squealing like petulant three year-olds to their favorite “parent,” Attorney General Eric Schneiderman, asking daddy to stop Williams from killing trees. And so last Thursday Schneiderman filed an objection to the tree-clearing plan with the Federal Energy Regulatory Commission (FERC), to placate the petulant three year-olds that are his favorite constituents. The question now is, will FERC put a halt to the tree clearing, which must happen before April 1st when it becomes bat season and companies can no longer clear trees for fear of roosting Northern long-eared bats…
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Energy Services | Energy Transfer Partners | Industrywide Issues | M&A | Williams

Williams Board “Unanimously” Committed to Selling to ETE
January 19, 2016January 19, 2016

Apparently somebody has been whispering nasty rumors that Williams isn’t really all that committed to completing a sale of themselves to Energy Transfer Equity (ETE). After six months of wooing Williams, ETE got tired of being rebuffed and went public with their bid to buy out Williams, one of the northeast’s biggest midstream companies (see Energy Transfer Makes “Indecent Proposal” to Buy Williams for $48B). In the end Williams caved and decided to sell, but they did it too late. By the time they accepted ETE’s offer in September, the market (and stock prices) in the oil/gas sector had already started a downward spiral, and Williams ended up getting $10 billion less than originally proposed (see Williams Accepts ETE’s “Indecent Proposal” – Price Went Down $10B). It’s now January and the deal is still not closed. And apparently somebody has either been telling tales out of school, or simply spreading nasty rumors, because the entire board of Williams voted, unanimously, to tell the world they really do want to sell. Really. Williams felt compelled to issue a press release stating as much…
Read More “Williams Board “Unanimously” Committed to Selling to ETE”