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The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

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The oil and gas company was founded in 1908 and grew quickly to manage nationwide pipelines, which it still maintains today.

This year's Fortune 500 marks the 66th running of the list.

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The Tulsa-based energy company focuses on natural gas and petroleum exploration and production, with assets concentrated along the Gulf of Mexico and the Eastern Seaboard.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

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Williams is a leading energy infrastructure company. Founded in 1908, Williams specializes in the gathering, processing, storage, and transportation of natural gas, operating over 30,000 miles of pipelines across the United States, including the flagship Transco pipeline network, the nation's largest-volume natural gas pipeline, stretching from Texas to New York. Handling approximately 30% of the natural gas consumed daily in the U.S., Williams plays a crucial role in delivering reliable and low-cost energy to homes and businesses.

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Williams (WMB): Company Profile, Stock Price, News, Rankings

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Williams

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Good day, everyone, and welcome to the Williams First Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Danilo Giovanni, Vice President of Investor Relations, ESG and Investment Analysis. Please go ahead.

Thanks, Ari, and good morning, everyone. Thank you for joining us and for your interest in The Williams Companies. Yesterday afternoon, we released our earnings press release and the presentation that our President and CEO, Alan Armstrong, and our Chief Financial Officer, John Porter, will speak to you this morning. Also joining us on the call today are Larry Larson, our Chief Operating Officer Lane Wilson, our General Counsel and Chad Zemmerich, our Executive Vice President of Corporate Strategic Development. In our presentation materials, you'll find a disclaimer related to forward looking statements.

This disclaimer is important and integral to our remarks, and you should review it. Also included in our presentation materials are non GAAP measures that we reconciled to generally accepted accounting principles. And these reconciliation schedules appear at the back of today's presentation materials. So with that, I'll turn it over to Alan Armstrong.

Okay. Well, thanks, Danilo, and thank you all for joining us today. We do have a very positive story to share with you on our first quarter performance, which was really driven by the exceptional results within our base business in this quarter. So but before I dive into my remarks, I do want to welcome Larry Larson, our new Chief Operating Officer to the call. This is technically day two for Larry, but he's been a valuable member of the Williams team for more than twenty five years.

So I know you're going to come to value his perspective and knowledge of our operations just as you have enjoyed that for Michael Dunn, who did retire this past Friday. So Larry has served as an important member of Michael's leadership team over the past several years. So this will be a seamless transition with Larry carrying forward the commitment to excellence that Michael had established in all aspects of our operations. Obviously, some other leadership changes to hit on, but I'll save my remarks on that matter for the end of the call. So beginning here on Slide two, it really is staggering when you step back and consider all the facets of our businesses that are providing high return growth opportunities.

The positive results in the near term, like the 9% growth this year coupled with an improved credit rating already continue to speak for themselves, but the continued string of very high return projects suggest that we are in the early innings of this long horizon of growth. So let me just share a few of the drivers for my optimism in this level of growth continuing. First, we will be a big beneficiary of the fast rising data center power load. And we are very encouraged by the uptake we are seeing on the new model we have brought to market and the indirect business we are seeing on our gas transmission systems that is showing up as very high return large scale expansions. Socrates is our first example on the direct service front and we talked first about this project during our earnings call in February and since then we have fully contracted this project that will deliver speed to market solutions for the growing data center demand in Ohio.

Williams will invest approximately $1,600,000,000 to provide committed power generation and associated gas pipeline infrastructure for our customer in this area, and the project is backed by a ten year fixed price power purchase agreement with an opportunity to extend the contract for another five years and beyond. Importantly, we expect the project to generate earnings consistent with a five times EBITDA build multiple, an impressive return given the low risk nature of the power purchase agreement and the fact that this project does not leverage Williams' existing asset footprint to a meaningful degree. We are full steam ahead on this project and anticipate completing the build out in the second half of twenty twenty six. We also have two other projects that are utilizing the same model in flight now and have ordered equipment that has the same backstopping agreements that we used in the original Socrates project. Much more to come on this, but it is clear that we have a model that works for this customer base and the opportunities are developing fast in this space.

Next on the indirect side, we are pleased to announce Transco's Power Express Pipeline, a nine fifty million cubic feet per day expansion to markets North Of Station 165, helping to serve the power hungry Virginia area. The project is backed by a significant commitment from an anchor shipper and will utilize existing right of ways and infrastructure to dramatically reduce permitting risk and provide scalability. This project will provide the same kind of return as our CECI project and the demand for this capacity has been robust. And finally, we acquired a 10% interest in Cogentrix Energy, closing on this deal in early March. This investment enhances our sequent market intelligence and gives Williams insight into how to better serve the emerging power markets with natural gas supply.

Importantly, we are excited to be working with the Quantum team on this business and to ensure that the gas supply is optimized for these gas fired power plants. Next, turning to our operational execution. Our team continues to flawlessly deliver on a string of high return projects that will accelerate earnings growth throughout the balance of the year. This quarter, we successfully placed two projects into service, the Southeast Energy Connector in Alabama and the Texas to Louisiana Energy Pathway along the Gulf Coast. These fully contracted Transco expansions were designed to reduce land use and minimize community and environmental impacts, while also delivering clean and affordable natural gas volumes to the region.

These projects demonstrate both LNG export growth and coal to gas conversion opportunities. Our project execution team continues to deliver on projects throughout this year, Starting construction on another expansion in the Southeast on Transco, the Leg project in Haynesville, and out West on our Overthrust westbound expansion. These projects represent nearly two Bcf a day coming online for the balance of this year. Also, in the deepwater, the deepwater really is coming on strong this year and shows no signs of slowing down. We recently completed two expansions that add significant earnings growth.

The Whale expansion went into service in the first quarter and has been ramping up through the first quarter. And Chevron's Valley Moor started up two weeks ago. Both of these projects both of these prospects are large scale and will be significant contributors for the balance of the year. Additionally, in the deepwater, both the Shenandoah and Salamanca floaters are now being commissioned and these will drive significant cash flows across our discovery assets, which is now wholly owned. These projects are expected to make meaningful contributions in the third quarter.

And finally, let me just hit on a few key financial highlights from the quarter before I turn it over to John to walk through the results in detail. First of all, we are raising our adjusted EBITDA guidance midpoint by $50,000,000 to $7,700,000 driven by our strong base business performance and our Cogentrix investment addition. Our CapEx increase of $925,000,000 reflects the update that we provided with the announcement of our Socrates project. And also in recognition of the resilient business model and balance sheet strength, we received an S and P credit rating upgrade to BBB plus during the quarter and very recently were assigned a positive outlook by Moody's. The strength of the base business was really the story in the first quarter with both the transmission and golf hitting new record EBITDA and strong rebounds from the West and Northeast gathering.

In the Transmission and Gulf, this record was driven by both record contract gas transmission capacity and record gathering, processing, and storage fee based revenue. So the transmission business, we again saw now a record in the long term transmission capacity, but also saw the fee based revenue in gathering in the deepwater and in our storage business pick up. In the West, it was driven by strong gathering volume rebounds and bolt on acquisitions. Given the strong volumes we are currently seeing, we expect to see more records surpassed again in the second quarter. Speaking of the second quarter, this marks the thirty seventh consecutive quarter of meeting or beating consensus, And that is on top of this was the eighth time that we've raised our guidance during the same period.

So lastly, we increased Williams quarterly dividend in the quarter, up 5.3% to $0.50 per share and demonstrating continued commitment to Williams' long standing and well covered dividend program. And with that, I'm going to turn it over to John.

All right. Thanks, Alan. Starting here on slide three with a closer look at our adjusted EBITDA performance, which was up 3% over the first quarter of twenty twenty four. Excluding the Marketing business, our adjusted EBITDA was up 5% with growth across all the other segments. Our overall first quarter twenty twenty five results were basically right on top of our business plan.

Additionally, I will note that our business plan anticipated our first quarter to show the least amount of quarterly growth over 2024 with our forward 2Q through 4Q 'twenty five quarters each showing substantially higher growth rates. In other words, we expect growth over the prior year will accelerate each quarter through the remainder of the year. I'll address our current thoughts on full year performance in a moment. Walking now from last year's $1,934,000,000 to this year's record $1,989,000,000 we start with our transmission and golf business, which improved $23,000,000 or 3%, setting an all time record due primarily to higher revenues from expansion projects. At Transco, we had increases from regional energy access, Southside Reliability Enhancement and partial quarter contributions from Carolina Market Link.

We also continued to see growth from our storage businesses with renewals at Gulf Coast Storage and Nortex coming in at higher rates as we had expected from those two acquisitions, as well as incremental contributions from our market based rate at our Washington storage facility. In The Gulf, we saw contributions from our Discovery acquisition, as well as initial contributions from our Whale project that were partially offset by some maintenance and producer issues. Even with those issues, we saw about a 12% increase in Gulf gathering volumes and about 42% higher NGL production. Lastly for this segment, I'll just note that although our new Transco rates went into effect on March 1, you're not really seeing much of an impact here as we continue to maintain a conservative reserve pending the final settlement. Next, our Northeast G and P business improved $10,000,000 or 2%, primarily on higher revenues, including the effects of higher gathering and processing rates.

This segment was unfavorably impacted by the Aux Sable divestiture that we made last August. Overall volumes were basically pretty flat with the first quarter of 'twenty four. However, they are up about 6% sequentially over the fourth quarter of 'twenty four, and we've continued to see overall additional growth in April. In the West, we were $26,000,000 or 8% higher, driven by strong margins, Overland Pass pipeline volumes and a partial quarter from the Rimrock acquisition that closed at the January. We did have a small gain on an asset sale that was under our materiality threshold for adjustment of around $10,000,000 The West was negatively impacted by a step down in our minimum volume commitments at Eagle Ford.

On the volume front, similar to the Northeast, overall volumes were basically pretty flat with the first quarter of 'twenty four, but up about 5% sequentially over fourth quarter 'twenty four, and we've continued to see overall additional growth in April. Our Sequin Marketing business had another strong start to the year with $155,000,000 of adjusted EBITDA, which is the third straight year where our first quarter marketing results exceeded $150,000,000 However, the '25 results were still down about $34,000,000 overall versus 2024. And this segment did see a small one month three million dollars contribution from the Cochentriqs investment that Alan discussed earlier. And then finally, our upstream business included in our other segment was up about $37,000,000 and roughly half of that was related to our consolidation of the Wamsutter upstream position effective in November of last year. Also, we did see some overall improvement in gas prices year over year.

So that gets you to the $1,989,000,000 of EBITDA for first quarter 'twenty five or 3% growth, which as I mentioned a moment ago, should be the lowest growth rate we see this year as we look forward to accelerating growth through the remainder of this year. Now let's move to the next slide and discuss what we're seeing in our outlook for the remainder of 'twenty five. As Alan mentioned, we are revising our 2025 adjusted EBITDA guidance upward from a previous midpoint of $7,650,000,000 to now $7,700,000,000 and we're moving the top of the range to $7,900,000,000 At $7,700,000,000 we will see 9% growth in adjusted EBITDA over 'twenty four and a 9% CAGR from 2020. Our current guidance reflects a solid start to 'twenty five, the addition of the Cogentrix investment and our overall confidence in the growth of our underlying business plus line of sight to an extraordinary number of projects coming online in the near future. Speaking specifically to the segments, in our Transmission and Golf segment, we look forward to settling our Transco rate case and seeing the contributions from the two transmission projects we recently placed in service, as well as completing six additional transmission projects by the end of this year, and we remain optimistic about continued upside from the re contracting of our storage business.

Additionally, in the deepwater, we've now completed the Whale and Ballymore projects and still have the Shenandoah and Salamanca projects to go for 2025. In the deepwater, we are only in the early stages of a volume ramp that will accelerate through the remainder of the year. In our gathering and processing businesses, we continue to see overall strengthening in our volumes, reflecting our exposure to crucial natural gas focused basins and our Haynesville expansions, including our large scale Louisiana Energy Gateway project, is proceeding very well with expected completion in 3Q 'twenty five. In our more commodity exposed upstream and marketing businesses, we've generally lowered our expectations for pricing tailwinds. However, we are still well positioned to deliver on our plan for our upstream business as the combination of our first quarter performance and forward hedge book have basically already locked in about 65% of the expected 2025 revenues.

And the majority of the Marketing Businesses plan has been realized through the first quarter. As we've demonstrated over the last ten plus years, our business is very resilient to commodity price swings and especially insulated from the risk of crude oil downturns associated with economic downturns. Williams continues to be primarily focused on two things: demand for natural gas pipeline capacity and the growth in natural gas volumetric demand. We continue to have confidence in the outlook for both of these regardless of near term macroeconomic conditions and look forward to delivering at least 9% growth this year. And with that, I'll turn it back over to Alan.

Okay, great. Thanks, John. And just a few closing remarks before we turn it over to your questions. I'll start by saying it should be very apparent that our business is firing on all cylinders, and we have a track record of generating predictable growing earnings in a variety of economic cycles, which underscores the value of Williams as a weatherproof long term investment with a high growth dividend. With an ever expanding backlog of fully contracted projects extending beyond 02/1930 and our proven ability to capture new business in emerging markets, Williams is positioned better than any other company to benefit from the coming wave of natural gas demand, from the power generation market, industrial reshoring, and LNG exports, while continuing to deliver on traditional market needs.

Williams is excelling on all fronts, thanks to a strong and energized organization that is very passionate and dedicated to our strategy and to doing the right thing. So I feel that the time is right for the transition we announced yesterday that effective July 1, Chad Zamarin will succeed me as President and CEO, and I will serve as Executive Chairman of the Board. And Steve Bergstrom, who has been a great leader of our Board and a great thought partner to me personally, will become our Lead Independent Director. Since joining Williams, Chad and I have worked together closely and he has successfully built on our strong natural gas focused strategy while advocating for Williams and the role of natural gas in our clean energy future. He is the right next leader for Williams at this point in our company's history, and I know he will take the company forward with pride and commitment to Williams' values.

And with that, I'll turn the call over to Chad for a few brief remarks before we get to Q and A. Chad?

Thanks, Alan. I am truly humbled and honored to be asked to lead Williams in the months and years ahead. The rich history of Williams is truly the story of a great American company and we have many amazing chapters left to right.

Alan, you've been a great mentor, leader and thought partner for me and I'm grateful for the trust that you and our Board of Directors have placed in me and in our leadership team to carry Williams vision forward. Rest assured that there are no major sea changes here and no change in how the compass is set for Williams. Alan and I together with the entire leadership team have for years worked closely with our board to craft and continually tune our natural gas focused strategy. And as you've heard today, our strategy continues to deliver with abundant opportunities on the rise. I look forward to continuing to work with the board and with Alan in his role as Executive Chairman to continue to build on our success.

Alan, on behalf of every shareholder and on behalf of every current and former employee that has proudly worn the Williams badge, I want to say thank you. It has been one of the greatest privileges of my career to work with you and to witness your unwavering dedication to this great company. I know how much you love Williams, and I know how much that you and Shelley have sacrificed for the company, and know that we will strive every day to match your passion for Williams, and we will always work to make you proud. I hope that you know how much

and I'm glad that you will still be close by in your role as Executive Chair. And now, we will open up the call for questions.

Thank you. At this time, we will conduct a question and answer session. Please limit to one question and one follow-up. Our first question comes from the line of Praneeth Satish of Wells Fargo. Your line is now open.

Good morning. First, let me offer my congratulations to both Alan and Chad. And Chad, you have some big shoes to fill. Alan, I think you mentioned during your prepared remarks that Williams has ordered equipment for two more behind the meter power projects, if I heard you correctly. Can you help us just understand if the size and returns for these potential projects are going to be similar to what we see saw with Socrates?

Or do you think that the returns could be even better in the extent to the extent you're able to leverage your own existing infrastructure? And separately, given that you've already ordered the equipment, should we expect FID in the coming months?

Yes, Preeti, I'm going to have Chad take that one. He's been right in the middle of that. So Chad can take that.

We do expect these projects to reach full commercialization throughout the remainder of the year. And we also expect these projects to be contracted very similarly to Socrates and have likewise really attractive returns. I think we'll hold to see if they're materially different than

But I think generally scope and scale will be similar, maybe a bit smaller as we get more efficient in how we design these solutions. For the most part, we'll look similar to Socrates.

Got it. And then maybe if you can elaborate on the strategic rationale for the Cogentrix investment beyond, I guess, market intelligence, do you anticipate this evolving into a platform for additional power generation investments? What's your appetite for increasing your ownership stake beyond the 10% or just making more investments into IPPs?

Yeah, Patrice, I'll take that one. I think people should realize that there is a lot of change afoot, particularly in the Northeast, on the power market and the way that business is contracted. It's becoming very evident that the short term power auction markets don't provide for those merchant power plants taking out long term firm capacity. And that's going to have to happen to maintain a reliable grid in those markets. So we are really watching that with a lot of close interest.

And this is a great way for us to really be in a position to help on the gas supply side of that. So you really shouldn't see it as an investment into the merchant power generation space as a strategy as much as you should see it. We recognize there's a lot of change that's going to happen in terms of the gas supply into that business, particularly in the Northeast. And we want to be front and center on what that's going to look like. And then finally, would just say really excited to be working with the Quantum Energy Group, Great partner in a lot of areas, and we really like working with them.

And so this is a great opportunity for us to expand that relationship. So it's not quite what people might think it is in terms of us thinking about going into the merchant power business. And I appreciate that coupled along with going into the serving the data centers, people might get that impression. But that's not at all what our strategy is.

Thank you. Our next question comes from the line of Jeremy Tonet of JPMorgan. Your line is now open.

yeah, congratulations both Alan and Chad. Congrats on that. And maybe just moving into, behind the meter as well with the question here. Just wondering, I guess, you know, Williams has provided a solution that I think a number of others in the market have looked to pursue but have not been able to deliver, you know, companies or IPPs or other. I guess, what has enabled Williams to do this versus others?

What do you see as your competitive advantage here? How big is this opportunity set for Williams as you see it?

Yeah, thanks Jeremy. This is Chad. I mean, first thing I'd say is a huge shout out to the Williams team. We are very focused on collaborating across the organization in driving growth within our core businesses. And frankly, I credit a lot of our success on the Socrates project and Empower Innovation to the team and to that collaboration.

And then beyond that, it's just making sure we can put together solutions for customers and bring all of the different capabilities of the organization. We can provide gas supply solutions. We understand pipeline capacity are our own and even third party pipelines through our Sequin Market Intelligence. We obviously build a lot of pipeline and turbine facilities. And so bringing all the different pieces together into a solution that is ready made for a customer, think has been truly a differentiator.

And again, credit to the teams for being able to pull all that together. And then I would just mention that, I think John was mentioning earlier, we like this opportunity. We think it will layer in nicely over time. It's not I know there's a lot coming at us really fast. The team is working on making sure that this complements our investment strategy and we've got a nice layering in of projects over time.

And so I would think of these next two projects that we're working to commercialize in addition to other projects as layering in over the next few years and through the end of the decade.

Yeah, and I would just add Jeremy, one of the things that I think we are really good at as a company is developing high trust relationships. And that reputation helps us obviously when we go into situations like this. But importantly, we also work to have that on the supplier side as well. And so us having a long term relationship with Solar in a way that provides us a leg up on being able to get the equipment there is very valuable.

Those relationships pay off in moments like this instead of just beating down vendors to the very last nickel all the time, but really trying to work with them to improve their product and service in a high trust relationship really pays off dividends in times like these. And so I think you see that coming through as well.

Got it. That's helpful there. Thanks. And just kind of shifting towards the gas markets maybe a bit more color versus in addition to what you said before. In thinking about your conversations with producer customers here, there's a lot of focus on oil directed drilling, but there's impacts on the gas market as well.

I'm just wondering if you could comment a bit more how you see the gas market unfolding here given these dynamics and what it means for your systems if the call on gas continues in this less associate gas or otherwise? Just how you see this playing out and what are the impacts for Williams?

Yeah, we certainly are seeing that call on gas right now and a lot response in the dry gas basins for sure. And obviously, if oil continues to soften, we'll continue to see rigs rotate into the gas areas, I think. It's going to be a little choppy because we're going to see big increases on the demand side and we're going to see supply responses that are not always directly in line with the market demand. So I think it's going to be kind of choppy on the way up, if you will, on the demand side, but we certainly are seeing responses on our system. Saw that growth during the first quarter and certainly seeing that growth on our systems here in April and in the second quarter.

So we are extremely well positioned for that call and we're certainly seeing it come through our systems right now. So that's been a strategic decision for a long time to really focus on the gas directed basins because we think that they'll have to be called on in a growing gas demand. And I would just say that's come a little stronger than we even expected So very well positioned on that take and we certainly are seeing a big call on gas supply in those cases.

Thank you. Our next question comes from the line of Spiro Dounis of Citi. Your line is now open.

Thanks, operator. Morning, team, and congrats, Alan, Chad and Larry. Maybe just to start with the project backlog as it relates to capital spending. It sounds like a lot of healthy backlog materializing here, and we've already sort of seen that impact on 2025. But just given sort of constantly sort of percolating list of items coming in, curious how you're thinking about elevated CapEx going forward?

Is this going to be a feature over the next few years given all these projects starting to manifest themselves? And are there any self imposed limits in any given year on how much you want to spend?

Yeah, thanks for the question, Spiro. I mean, think as we have discussed in the past in our long range forecasting exercise we do every year, we've just continuously seen this twenty twenty five-twenty twenty six timeframe as being a period of time where the company was going to have really more and more balance sheet capacity. Again, reminding folks that our targeted leverage range is 3.5 to four times. And even with this first Socrates project, our guidance this year is for 3.65 times, still very comfortably within that range. And as we've talked about before, as we look forward into the future, we saw sort of an ever increasing capacity coming on the balance sheet, even with, I think, what are ultimately probably going to be pretty conservative cash tax assumptions going forward.

We still saw that sort of ever increasing level of balance sheet capacity. And so going back over a year ago or so, lot of the focus has been what's going to come along to make a really good use of that balance And so what we've seen,

twelve months is our commercial teams are very busy, and maybe as busy as I've ever seen them. And then, course, we've had the power innovation stuff come along as well. And so really, it's very exciting. We're seeing a time frame where we have enormous opportunities in business coming along at a time when we have really strong balance sheet capacity. And I think what's really exciting is the stuff that's coming in has a very strong return profile, great credit, long term terms.

And so we really like the capital that's coming at us organically. And I think we have more than enough capacity to fund what's in front of us. And we've stress tested that. And of course, we'll be very disciplined on the returns and the credits and looking for the long term contracts that we think we've got plenty of capacity and very excited about the projects we're seeing coming from our commercial teams.

Yeah, I would just add to that that it's very different. The short cycle that we're seeing for these for the power innovation projects are such a quicker turn on the capital. Five times EBITDA multiple on a project that takes eighteen months to have online is very different than one that takes thirty six months to have online. So really strong returns from these projects that will continue to expand the balance sheet and our capacity, as John said. So I would say a great problem to have, but so far we feel like we have plenty of capacity of taking on what's out there.

And very glad that we've held our return threshold so high against our projects because it is giving us that kind of capacity that we wouldn't otherwise have if we've been investing at lower return projects.

Got it, helpful. Thanks, John and Alan. Second question, maybe just to quickly go back to the leadership change. You both addressed this to some degree in your remarks, but maybe just to put a finer point on it. Alan, long successful tenor at Williams, curious why now is the right time.

And Chad, it sounds like not a lot will change going forward, but just curious what you think your mandate is going forward.

Yes, Thura. Thanks for the question. Well, I would just say, it's such a great time. We have I think our culture as a company is in great shape. The business is really running well right now.

Very excited about the talent in both Chad and the team that's coming up in the organization. So I think the mix is just right. And I think it's a great time to bring Chad's energy and passion to bear across all these opportunities. So this is not necessarily anything other than just a very objective viewpoint from a shareholder perspective about what I think is the right time for making the change. And so I couldn't be more excited about this as a personal shareholder myself.

And so I do think it's the right time and we just got a great future and a lot of passion and energy in Chad and I think he's going to do a fantastic job of taking the organization to the next level.

Yeah. And Alan, as far as mandates go, I still remember eight years ago when I joined the company, one of the first things Alan asked me to do is to facilitate our strategy process. And we've built a process where we work very collaboratively as a team across the organization and with our board of directors. And when you ask about a mandate, I would expect more of the same.

This has been a strategy that we've been very committed to. We will continue to stay committed to stable, predictable growth, protecting the balance sheet. We do explore adjacent opportunities, but with the clear eyed focus on driving growth in business back to our core business. Alan mentioned that Cogentrix is a great example. We're not taking a large turn into a different strategic area.

We're to take a very small position that will allow us to be better positioned to drive business back to our core business because that's a strong fundamental tailwind that we see in the natural gas value chain. So I would expect that you would continue to see more of the same. This team has been very ingrained in our strategy process. And the great news is Alan isn't going far. He's going to be our Executive Chair and will continue to work through that same strategy process that we have been now for great years.

Great. I'll leave it there. Alan, don't be a stranger.

Thank you. Our next question comes from the line of Theresa Chen of Barclays. Your line is now open.

Morning. I'd like to also offer my congratulations to Alan for your announcement and congratulations as well to Chad and Larry and your new roles. First, following the FID of Transco's Power express, I'd like to know what is the capacity at this point across Transco for additional efficient high returning projects using existing right of ways to mitigate potential permitting delays. How much more capacity is there to bring on projects like Power Express? And what are the next areas of growth and development on Transco?

Yeah, I'll take that one. Yeah, great question. Obviously, we're excited to be able to deliver another great project by PowerXpress, which is really building along our footprint across Transco with easy brownfield expansions that provide us opportunity to kind of streamline through the permitting process. I think as the dynamics and the demand continue to grow across footprint on Transco, we're finding new opportunities left and right. As we're seeing the growth right now in Virginia that's driving Power Express, we're seeing continued growth throughout the Southeast markets, as well as along The Gulf as we see rapid growth in the LNG space.

And so those dynamics change quite a bit, especially as we see new supply coming into different parts of the system. And so I think we'll continue to find these opportunities to meet our customers' needs. And I think it's going to be dependent upon where the demand materializes and the supply that we start targeting to bring into the system.

And on the deepwater side of things, with contribution visibly stepping up in the second half, What are you assuming at this point for annual contribution for this group of projects within guidance relative to the $300,000,000 exit?

Yeah, I don't think we really have a deepwater guidance number. But I would say there's been

these projects over the last few years since we have first talked about the overall contribution of these projects in that $300,000,000 number. But ultimately, by the time you get to 2026, you should be more at

a run rate level relative to this group of projects.

Yeah. So just to be clear on that, the 300 as an addition to these projects is looks like we'll probably hit that stride towards the end of this year at a run rate level. And so that remains. I would say that some of these are looking even better. I know Chevron is really excited about Ballymore and how those wells are doing right now.

And so I'm really encouraged to see that. Is doing really well even though it had a very slow start at the beginning of the year, but right now it is really getting on stride. So we may be on the higher end of that by the end of the year. But obviously, there's a few things left to happen on Salamanca and Shenandoah that are hard to predict at this point. But But so far looking really good and very encouraged to hear Chevron's comments on what their cost structure is looking like around developing more and more reserves around the infrastructure, existing infrastructure because obviously that will just continue to feed our downstream pipeline.

So great times in the deepwater both in the current, but I think looking forward, the producers have really learned to take the cost down out there and that's all that's going to benefit us directly out there.

Thank you. Our next question comes from the line of Gabriel Moreen of Mizuho. Your line is now open.

Hey, good morning everyone and my congratulations to Alan and Chad as well. May I want to start out sort of at a different angle on the Socrates and data center projects. Can you talk about risk management overall for these projects given long term fixed price contracts on the power side? To what extent you're comfortable with locking in gas and gas costs, I guess, for that long? What happens in the event of force majeure?

And also to what extent CEQUENT may or may not be involved in helping you manage all this risk?

Yeah, thanks, Gabriel. Good questions. First of all, what I'd say is when we talk about a fixed price purchase agreement, it's a fixed price effectively return on our capital and a pass through for the gas that we'll be sourcing the customer. So we are not exposed to commodity price and Sequent will be helping to source and deliver gas on behalf of our customer. But we aren't taking commodity price exposure.

On things like force majeure, I would just say that Alan said it, we are and the team is building a very high trust relationship with these counterparties. I mean, this is some of the best credit out there from a customer opportunity perspective. And the customer has been with us in lockstep, making sure that we can go out and invest in these projects in a bit of a new arena, albeit playing to our core strengths and capabilities and things we've done before. But we have very high degree of protection from a contracting perspective. And so I think the team's done a great job of mitigating the risk and capturing very attractive returns.

And so I don't see any of the risk issues that are problematic for us. In fact, would say we've mitigated risk on these projects beyond what we could even see on some of our core transmission projects.

Williams (WMB) Q1 2025 Earnings Call Transcript

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