Houston — Williams increased planned spending on growth projects during the rest of this year and in 2019 as it reported Wednesday with second-quarter financial results that benefited from the ramp-up of expansion projects tied to its Transcontinental Gas Pipe Line.
The pipeline operator said in a statement it expects to increase capital expenditures for full-year 2018 to $3.9 billion, up from a previous forecast of $3.1 billion. Expenditures for 2019 are now forecast to be $2.6 billion, up from previous guidance of $2.4 billion.
Transportation revenue in the April-June quarter got a lift from five Transco expansion projects placed in service in 2017 as well as expected mainline service on Atlantic Sunrise this year. As it nears completion of Atlantic Sunrise, Williams said it is setting aside more money for other growth opportunities, including the recently announced purchase of assets in the Denver-Julesburg Basin and expansions planned for next year in its West and Northeast segments.
"It is clear that our focus on natural gas volume growth combined with our advantaged infrastructure and the continued confidence in low-price natural gas continues to drive demand for services on our systems," CEO Alan Armstrong said.
A conference call with investors to discuss Williams' latest financial results and its future outlook was scheduled for Thursday.
For the second quarter, Williams earned $135 million, or 16 cents a share, an almost 67% increase versus a profit of $81 million, or 10 cents a share, in the same period a year ago.
Earlier this week, Williams announced that it and private equity group KKR have entered into an agreement to purchase Discovery DJ Services, a Dallas-based provider of natural gas and oil gathering and natural gas processing services in the southern portion of the DJ Basin, from TPG for $1.17 billion.
At the same time, Williams said it is selling assets and equity comprising its Four Corners Area business to Harvest Midstream for $1.125 billion. The proceeds will contribute to funding Williams' portfolio of growth investments, including those opportunities associated with the Discovery acquisition, the company said.
The DJ Basin has seen increased interest from producers over the last year, boosting demand for gathering, processing and transportation services that Williams provides. Meanwhile, development of the Paradox Basin in the Four Corners Area has declined significantly.
