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Smart Investments Are The Key To Success: Williams JV Brought Benefits At The End Of The Year

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.

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The Final Stretch: Energy Transfer Pushes For Mariner East Project Ahead Of The Stunning Q3 Results

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.

Permian Basins gas infrastructure boom: Summit Midstream puts into service a new pipeline system, aimed at reducing gas flaring in the area. Besides ecological concerns, the project will also transport almost 1,5 billion cubic feet of gas per day — enough to supply 5 million U.S. homes every day. According to Federal Energy Statistics, the project cost a whopping $450 million.

Oil output in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. Additionally, gas productivity in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Given that this growth has been expected, recent global market changes make forecasting the output even more challenging. Learning how production will change is easier with early activity tracking, a new service recently launched by Rextag – Pad Activity Monitor. With the help of PAM, you are able to monitor well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days. Additionally, it cuts down activity reporting lag times by at least 98%, from 120-180 days down to just 5-8 days. In order to access reports, charts, tables, and mapping visualizations via Rextag’s Energy DataLink use a web-based application allowing users to filter, download and identify activity on a map or data table. Moreover, customers will be able to set up daily, weekly, and monthly email report notifications.

The EIA forecasts that total output in the main U.S. shale oil basins will increase 142,000 bbl/d to 8.761 million bbl/d in June, the most since March 2020. Oil productivity in the Permian Basin in Texas and New Mexico is supposed to go up 88,000 bbl/d to a record 5.219 million bbl/d in June, as the U.S. Energy Information Administration (EIA) announced in its report on May 16. In the largest shale gas basin, the productivity in Appalachia in Pennsylvania, Ohio and West Virginia will grow up to 35.7 Bcf/d in June, its highest since beating a record 36 Bcf/d in December 2021. Gas output in the Permian Basin and the Haynesville in Texas, Louisiana and Arkansas will rise to record highs of 20 Bcf/d and 15.1 Bcf/d in June, respectively. Speaking of the Permian future output, putting hands on upcoming changes in production has recently been made easier with the new Rextag's service - Pad Activity Monitor. Thanks to satellite imagery and artificial intelligence, customers are able to monitor the oil and gas wells and are provided with near real-time activity reports related to drilling operations. However, it is noticed that productivity in the largest oil and gas basins has decreased every month since setting records of new oil well production per rig of 1,544 bbl/d in December 2020 in the Permian Basin, and new gas well production per rig of 33.3 MMcf/d in March 2021 in Appalachia.

No sooner had the crude prices soared above $100/bbl than the industry professionals believed in an incredible growth of drilling activity in North America’s largest shale patch. Analysts speculate that additional output of 500,000 barrels of oil daily would become a significant part (4%) of overall U.S. daily production. That is going to flatter oil and gasoline prices. Drilling permits in the Permian Basin are persistently growing, averaging approximately 210 at the beginning of April. Moreover, the permits trend is noticed as an all-time high as a total of 904 horizontal drilling permits were awarded last month. Nowadays, learning and analysing the current situation and predicting the future development become easier with early activity tracking, a new service recently launched by Rextag. Rextag's Pad Activity monitor (PAM) allows you to see well pad clearing, drilling operations, fracking crew deployment and completions with new data collected approximately every 2 days with the help of satellite imagery and artificial intelligence. While the increase in drilling will result in higher production, U.S. shale producers will have to overcome several hurdles including labor shortages and supply constraints.

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