Tulsa, OK-based energy firm Williams Companies Inc’s. (WMB - Analyst Report) interstate natural gas transmission unit – Transcontinental Gas Pipe Line Company LLC (or Transco) – said that it hopes to finish working on planned maintenance on its Central Louisiana Lateral natural gas pipeline near Kaplan, Louisiana, on March 11. Transco had initially mentioned March 5 as the completion deadline.
Transco is a 10,200-mile conduit system that carries natural gas to markets all over the northeastern and southeastern U.S. Following a host of expansions, the total system capacity has been boosted to approximately 9.9 billion cubic feet per day, which allows Williams to continue meeting the region's growing energy needs by providing clean-burning natural gas in time for the winter heating season.
Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing and transportation of natural gas.
Williams Companies’ midstream assets, which are less sensitive to commodity prices, help the company to maintain a steady stream of revenues and cash flow even if natural gas prices stay low. Furthermore, Williams Companies is poised to benefit from the rebound in industrial activity, which will include increased natural gas demand in the form of natural gas liquids.
Williams Companies, after the volatile and capital-intensive WPX Energy Inc. (WPX - Snapshot Report) spin-off in 2011, has transformed itself into a pure play midstream conglomerate with operations spanning from the Canadian oil sands to deepwater fields in the Gulf of Mexico.
However, Williams Companies’ extensive natural gas exposure raises its sensitivity to the commodity’s price, which continues to be volatile. This translates into an uncertain near- to medium-term outlook for the company.
Additionally, we remain concerned about Williams Companies’ high debt levels, which leave it vulnerable to an extended drop in commodity prices. As of Dec 31, 2013, Williams Companies had long-term debt of $11.4 billion, representing a debt-to-capitalization ratio of 70.4%.
Williams Companies currently holds a Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked stocks in the energy sector include Warren Resources Inc. (WRES - Snapshot Report) and Range Resources Corp. (RRC - Analyst Report). Both these domestic upstream players, with a Zacks Rank #1 (Strong Buy), have seen solid secular growth and harbor the potential to rise significantly from the current levels.