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8-K - FORM 8-K - WILLIAMS COMPANIES, INC. | c63136e8vk.htm |
EX-99.1 - EX-99.1 - WILLIAMS COMPANIES, INC. | c63136exv99w1.htm |
Exhibit 99.2
News Release
|
Williams (NYSE: WMB) One Williams Center Tulsa, OK 74172 800-Williams www.williams.com |
DATE: Feb. 17, 2011
MEDIA CONTACT:
|
INVESTOR CONTACTS: | |||||
Jeff Pounds
|
Travis Campbell | Sharna Reingold | David Sullivan | |||
(918) 573-3332
|
(918) 573-2944 | (918) 573-2078 | (918) 573-9360 |
Williams Reports Year-End 2010 Oil and Gas Reserves
| Total proved reserves for 2010 were approximately 4.5 Tcfe | ||
| Proved, probable, possible reserves up 7% to 15.9 Tcfe | ||
| Total net reserves replacement ratio was 107% for proved | ||
| 2010 adjusted U.S. proved F&D before acquisitions was $1.87 per Mcfe |
TULSA, Okla. Williams (NYSE: WMB) announced today that its total proved natural gas and oil
reserves as of Dec. 31, 2010, were approximately 4.5 trillion cubic feet equivalent (Tcfe)
including international reserves of approximately 0.2 Tcfe.
Approximately 94 percent of total proved reserves are natural gas, with approximately 59 percent
proved developed and 41 percent proved undeveloped, reflecting a continuation of the increase in
the ratio of proved developed to undeveloped.
Under Securities and Exchange Commission reporting rules, material undeveloped oil and gas reserves
should not remain undeveloped for five years or more after disclosure without an explanation of the
specific circumstances warranting their disclosure. Williams anticipates that all of its
disclosed proved reserves can be developed within the next five years per SEC definitions for
proved reserves.
Williams has reclassified a net 253 billion cubic feet equivalent (Bcfe) from proved to probable
reserves attributable to locations not expected to be developed within five years. This amount is
predominately in the Piceance Basin where the company has a large inventory of drilling locations.
In total, Williams estimates it has
353 Bcfe of undeveloped reserves that could be classified as proved with an additional two years of
development beyond the five-year limit.
Adding these reserves to Williams year-end SEC U.S. proved reserves makes a total of 4.6 Tcfe for
a reserves replacement ratio of 188 percent vs. 104 percent on an unadjusted basis. The following
table sets out the companys total year-end 2010 SEC U.S. proved reserves and an alternate scenario
considering seven years of development activity instead of five.
2010 Year-End U.S. Proved Reserves
Amounts in billions cubic feet
equivalent (Bcfe) of natural gas
Amounts in billions cubic feet
equivalent (Bcfe) of natural gas
Alt. Scenario: | ||||||||
Using 7 Years to | ||||||||
Under SEC Rules | Develop | |||||||
Proved Developed |
2,498 | 2,498 | ||||||
Proved Undeveloped |
1,774 | 2,127 | ||||||
Total Proved |
4,272 | 4,625 | ||||||
In 2010, Williams invested almost $2.7 billion of capital in its U.S. exploration and
production business. That figure includes $988 million for development drilling and $1.7 billion in
growth acquisitions.
Our new positions in the Bakken and Marcellus turned 2010 into a transformational year, said
Ralph Hill, president of Williams E&P business. We diversified both geographically and in terms
of our product slate.
We have significant scale in these areas now, similar to the framework we established in the
Piceance and Powder River basins, Hill said.
In 2010, Williams participated in 1,162 gross wells in the United States, achieving a drilling
success rate of 99 percent.
Williams added 528 Bcfe through 2010 U.S. drilling activity for an adjusted proved developed
domestic reserves replacement cost of $1.87 per Mcfe.
Year-end 2010 proved, probable, and possible (3P) reserves increased by 7 percent to 15.9 Tcfe from
14.8 Tcfe at year-end 2009. In accordance with SEC reserves reporting rules, proved reserves were
calculated using the average of the first day of the month prices for the twelve months in 2010
held constant. Probable and possible reserves were calculated using forward-market prices.
The three-year average proved developed finding and development cost from drilling activity was
$2.44 per Mcfe, which is calculated by dividing the three-year total development capital by the
three-year net change in proved developed reserves plus production.
International proved reserves for year-end 2010 increased to approximately 35.3 million barrels of
oil equivalent, or approximately 0.2 Tcfe, which reflects an increase of 7 percent from the prior
year of approximately 32.9 million barrels of oil equivalent for a reserves replacement ratio of
165 percent.
Approximately 94 percent of Williams year-end 2010 U.S. proved reserves estimates were audited by
Netherland, Sewell & Associates, Inc. (93%), or Miller and Lentz (1%).
Their judgment determined that Williams estimates are, in the aggregate, reasonable and have been
prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas
Reserves Information promulgated by the Society of Petroleum Engineers (SPE standards).
Approximately 94 percent of proved reserves estimates for international properties were reviewed
and certified by Ralph E. Davis and Associates, with the remaining approximately 6 percent reviewed
and certified by RPS Energy.
Proved reserves are estimated quantities that geological and engineering data demonstrate with
reasonable certainty to be recoverable in the future from known reservoirs under existing economic
conditions, operating methods and government regulations.
Williams exploration and production business primarily develops natural gas reserves in the
Piceance, Powder River and San Juan basins in the Rocky Mountains, the Marcellus (Pennsylvania) and
Barnett (Texas) shales, and oil reserves in the Bakken Shale/Three Forks formations in North
Dakota, and internationally in Argentina and Colombia.
Proved Reserves Reconciliation | ||||
Amounts in Bcfe of natural gas | ||||
U.S. proved reserves Dec. 31, 2009 |
4,255 | |||
Acquisitions |
162 | |||
Wellhead production |
(420 | ) | ||
Revisions due to 5-year limit |
(253 | ) | ||
Other additions/revisions net |
528 | |||
U.S. proved reserves Dec. 31, 2010 |
4,272 | |||
International reserves |
212 | |||
Total Dec. 31, 2009 proved reserves |
4,484 | |||
About Williams (NYSE: WMB)
Williams is an integrated natural gas company focused on exploration and production, midstream
gathering and processing, and interstate natural gas transportation primarily in the Rocky
Mountains, Gulf Coast, Pacific Northwest, Eastern Seaboard and the Marcellus Shale in Pennsylvania.
Most of the companys interstate gas pipeline and midstream assets are held through its 75-percent
ownership interest (including the general-partner interest) in Williams Partners L.P. (NYSE: WPZ),
a leading diversified master limited partnership. More information is available at
www.williams.com. Go to
http://www.b2i.us/irpass.asp?BzID=630&to=ea&s=0 to join our e-mail list.
# # #
Our reports, filings, and other public announcements may contain or incorporate by reference
statements that do not directly or exclusively relate to historical facts. Such statements are
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We make these forward
looking statements in reliance on the safe harbor protections provided under the Private Securities
Litigation Reform Act of 1995. You typically can identify forward-looking statements by various
forms of words such as anticipates, believes, seeks, could, may, should, continues,
estimates, expects, forecasts, intends, might, goals, objectives, targets,
planned, potential, projects, scheduled, will or other similar expressions. These
forward-looking statements are based on managements beliefs and assumptions and on information
currently available to management and include, among others, statements regarding:
| Amounts and nature of future capital expenditures; | ||
| Expansion and growth of our business and operations; | ||
| Financial condition and liquidity; | ||
| Business strategy; | ||
| Estimates of proved, probable, and possible gas and oil reserves; | ||
| Reserve potential; | ||
| Development drilling potential; | ||
| Cash flow from operations or results of operations; | ||
| Seasonality of certain business segments; and | ||
| Natural gas, natural gas liquids, and crude oil prices and demand. |
Forward-looking statements are based on numerous assumptions, uncertainties and risks that could
cause future events or results to be materially different from those stated or implied in this
announcement. Many of the factors that will determine these results are beyond our ability to
control or predict. Specific factors that could cause actual results to differ from results
contemplated by the forward-looking statements include, among others, the following:
| Availability of supplies (including the uncertainties inherent in assessing, estimating, acquiring and developing future natural gas and oil reserves), market demand, volatility of prices, and the availability and cost of capital; | ||
| Inflation, interest rates, fluctuation in foreign exchange, and general economic conditions (including future disruptions and volatility in the global credit markets and the impact of these events on our customers and suppliers); | ||
| The strength and financial resources of our competitors; | ||
| Development of alternative energy sources; | ||
| The impact of operational and development hazards; | ||
| Costs of, changes in, or the results of laws, government regulations (including climate change legislation and/or potential additional regulation of drilling and completion of wells), environmental liabilities, litigation, and rate proceedings; | ||
| Our costs and funding obligations for defined benefit pension plans and other postretirement benefit plans; | ||
| Changes in maintenance and construction costs; | ||
| Changes in the current geopolitical situation; | ||
| Our exposure to the credit risk of our customers; | ||
| Risks related to strategy and financing, including restrictions stemming from our debt agreements, future changes in our credit ratings and the availability and cost of credit; | ||
| Risks associated with future weather conditions; | ||
| Acts of terrorism; and | ||
| Additional risks described in our filings with the Securities and Exchange Commission (SEC). |
Given the uncertainties and risk factors that could cause our actual results to differ materially
from those contained in any forward-looking statement, we caution investors not to unduly rely on
our forward-looking statements. We disclaim any obligations to and do not intend to update the
above list or to announce publicly the result of any revisions to any of the forward-looking
statements to reflect future events or developments.
In addition to causing our actual results to differ, the factors listed above may cause our
intentions to change from those statements of intention set forth in this announcement. Such
changes in our intentions may also cause our results to differ. We may change our intentions, at
any time and without notice, based upon changes in such factors, our assumptions, or otherwise.
Investors are urged to closely consider the disclosures and risk factors in our annual report on
Form 10-K filed with the SEC on Feb. 26, 2010, and our quarterly reports on Form 10-Q available
from our offices or from our website at www.williams.com.
The SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves,
which are those quantities of oil and gas, which, by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be economically producible from a given date
forward, from known reservoirs, under existing economic conditions, operating methods, and
governmental regulations. The SEC permits the optional disclosure of probable and possible
reserves. We have elected to use in this presentation, but not in our Annual Report on Form 10-K,
probable reserves and possible reserves, excluding their valuation. The SEC defines
probable reserves as those additional reserves that are less certain to be recovered than proved
reserves but which, together with proved reserves, are as likely as not to be recovered. The SEC
defines possible reserves as those additional reserves that are less certain to be recovered
than probable reserves. Williams has applied these definitions in estimating probable and
possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate
quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are
not specifically designated as being estimates of proved reserves may include estimated reserves
not necessarily calculated in accordance with, or contemplated by, the SECs reserves reporting
guidelines. Investors are urged to consider closely the disclosure in Williams Annual Report on
Form 10-K for the fiscal year ended December 31, 2009, available from Williams at One Williams
Center, Tulsa, OK 74172 (Attn: Investor Relations). You can also obtain this report from the SEC by
calling 1-800-SEC-0330 or from the SECs website at www.sec.gov.
The SECs rules prohibit us from filing resource estimates. Our resource estimations include
estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient
information to date to classify as proved, probable or even possible reserves, (ii) other areas to
take into account the low level of certainty of recovery of the resources and (iii) uneconomic
proved, probable or possible reserves. Resource estimates do not take into account the certainty of
resource recovery and are therefore not indicative of the expected future recovery and should not
be relied upon. Resource estimates might never be recovered and are contingent on exploration
success, technical improvements in drilling access, commerciality and other factors.