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Williams Ups Profit Forecast

June 26, 2008

By Rod Walton, Tulsa World, Okla.

Jun. 26–Williams Cos. Inc. raised its earnings forecasts Wednesday 34 percent for this year and 21 percent for 2009, citing favorable energy exploration and pricing conditions.

Tulsa-based Williams increased its predicted earnings to a range of $2.30 to $2.80 per share for this year, compared with a previous range of $1.70 to $2.10. The company raised its profit outlook to a range of $3.1 billion to $3.65 billion, about $600 million higher than earlier expectations.

The 2009 profit guidance was raised to a range of $2.9 billion and $3.8 billion, between $300 million and $500 million above the previous forecast. Williams’ 2009 earnings should be in the $2.05 and $2.90 per share range, according to a company news release.

The company said it believes that natural gas and oil prices will stay steady over the next year. Williams expects 2008′s unhedged natural gas prices to remain around $9 to $10.50 per million cubic-feet equivalent (Mcfe) out of the Henry Hub spot market in Louisiana, while West Texas Intermediate crude oil will price between $100 and $120 per barrel.

“The more favorable prices are expected to benefit the company’s exploration and production and midstream businesses,” the report concluded.

Williams

also updated its capital expenditure plan for the next 18 months. The company could spend between $5.66 billion and $6.4 billion on capital projects, according to the report.

The recent purchase of 24,000 net acres in the Piceance Basin in Colorado and an increase in drilling activity are driving factors for the higher capital-expenditure forecast, the report noted. Williams also plans to expand its Echo Springs cryogenic natural gas processing plant in the next year.

Williams, through subsidiaries such as Williams Partners and Williams Pipeline Partners, explores, produces and transports natural gas.

Rod Walton 581-8457 rod.walton@tulsaworld.com

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