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Smart Investments Are The Key To Success: Williams JV Brought Benefits At The End Of The Year
12/09/2021
The Williams Companies, Inc. reported stunning results, surpassing the previous year's third-quarter adjusted EBIDTA by 12% to $153 million. This is a $383 million increase in year-to-date EBIDTA.
The third quarter as a whole was spectacular for midstream companies. Dividend increases and buyback activity highlight management's confidence in their business. For the first time in two years, no midstream index members cut any of their dividends. And The William Cos. is not an exception.
Though the vast majority of the quarter's EBIDTA growth was attributed to production in Wyoming's Greater Green River Basin's Wamsutter Field. In this regard, Williams concluded a joint venture with Denver-based Crowheart Energy in July, in which Crowheart began operating properties owned by BP Plc and Southland.
As part of this upstream joint venture, three legacy assets of BP Plc and Southland were combined with Crowheart Energy's asset base into a contiguous area totaling over 1.2 million net acres.
A JV agreement states that 75% in this collaboration belongs to Williams, while Crowheart got the remaining 25%, although Crowheart may increase its ownership stake through performance for the sake of the development program designed to enhance the value of Williams midstream assets down the road.
Williams saw success in the development of its midstream assets and retained full ownership in the Wamsutter Field's consolidated upstream position under the JV. Furthermore, the company retained real estate, surface, and other rights that will enable it to expand the midstream and renewable energy businesses in Wyoming in the coming years.
Thanks to this agreement, Williams' upstream business contributed $55 million to adjusted EBITDA this quarter alone, since, according to CFO John Chandler, the majority of the production came from Wamsutter's upstream assets. Additionally, net of ownership fees, for the quarter the company earned 232 million CFEs. And they have also benefited from upstream operations of $83 million, almost entirely from the Wamsutter properties.
Analysts expected earnings of $0.28 per share from Williams, but it reported $0.34 per share, while revenue of $2.48 billion, which by itself was a 28.6% increase over the same period in 2020, beat the analyst estimate of $2.09 billion. With a net margin of 10.67% and a return on equity of 10.84%, Williams is poised for success in the fourth quarter as well.
According to president and CEO Alan Armstrong, Williams did not only exceed market expectations this quarter in terms of its financial performance but also continued to successfully execute multiple key projects and transactions that provided the company with a clear path to sustained growth in the foreseeable future.
The Final Stretch: Energy Transfer Pushes For Mariner East Project Ahead Of The Stunning Q3 Results
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Energy Transfer's lead in the world's NGL exports booked the company another successive quarter. With a global market share of almost 20%, the company is nigh unstoppable. But will it be enough to, finally, push the Mariner East project over the edge? If everything goes as planned, Mariner East's last segment could be operational by the end of the first half of 2022.
Delays Are Finally Over: Enbridge Reports Strong Third Quarter 2021
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Enbridge Inc. finally delivered on several of its long-overdue promises, including the $4 billion Line3 Replacement project. Which consisted of replacing an existing 34-inch pipe with a new 36-inch one for 13 miles in North Dakota, 337 miles in Minnesota, and 14 miles in Wisconsin. Midstream companies, in general, had a stunning Q3. It was the first quarter in two years that no midstream index members cut their dividends.
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In order to sell its part of the sprawling Eagle Ford Shale acreage, Chesapeake Energy Corp. on January 18 concluded an agreement to trade its Brazos Valley region assets to WildFire Energy I LLC for $1.425 billion.
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On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.