Investorideas.com - Energy Stocks: Trading Alert on Williams Companies (NYSE: WMB)
May 14, 2010
On January 14, 2010, Mr. Miller published analysis titled "Natural Gas Pipelines: Some Get It and Some Don't" and issued a Buy opinion for Williams Companies (NYSE: WMB).
In his opinion, Mr. Miller cited that he believed WMB management and Board of Directors had been appropriately overhauled WMB, gotten its combined act together after years of languishing and put serious focus on its two core businesses; I) transporting natural gas on its mainline pipes and; II) natural gas exploration and production, with very stated high drilling success rates.
Highlights of WMB announced restructurings announced January 19, 2010 include:
Williams to modify and accelerate its MLP strategy; contribute its premier interstate gas pipeline, domestic midstream assets and interests to Williams Partners in $12 billion restructuring
Williams Partners to become leading diversified MLP with approximately $2 billion of 2010 segment profit plus DD&A (forecast pro-forma) and strong growth outlook
Williams to own approximately 80% of new, much larger Williams Partners, up from 24% of current partnership
New structure to significantly enhance growth prospects for both Williams and Williams Partners:
New self-funding Williams Partners will have reliable access to capital markets, lower capital costs, and greater ability to pursue development projects and acquisitions; expects investment-grade credit ratings
Williams can allocate more capital to exploration and production business for growth and diversification; expects to retain investment-grade credit ratings
Williams' previous '09-'11 recurring guidance is unchanged; Williams Partners announces distribution increase, 2010-11 guidance with '09 guidance unchanged
Following the restructuring and per the Company, most of Williams€™ interstate gas pipeline assets are owned by Williams Partners L.P. (NYSE:WPZ), one of the largest energy master limited partnerships in the country. Williams owns 84 percent of Williams Partners, including the controlling general partner interest, which provides WMB with a healthy and steady cash flow stream to utilize for their core oil and gas production business.
full article : http://www.naturalgasstocks.com/Karl_Miller/news/5141.asp
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