Williams (WMB) held a conference call on October 28, 2010, to discuss the company’s earnings report for the third quarter of 2010. The company made comments on its operations in Pennsylvania and West Virginia, where the company is developing the Marcellus Shale.
“We’re very excited about the progress that we’re making to grow out businesses in the Marcellus Shale, and let me just offer some color on that. In the E&P space, we’re now operating three rigs. That number will be increasing to six by the Q4 of 2011. Current returns are greater than 30%. We have seen and expect significant continued improvements as Williams becomes operator and as we proceed with the large Susquehanna drilling program.”
“As you know, we now have 100,000 net acres at an average cost of less than $7000 an acre, gross production near 20 million a day at the end of the Q3 and the Westmoreland County Slavic Trust wells have been the best performing to date.”
“The Marcellus will soon become our second largest producing basin. A couple other key points: our drilling returns remain strong and our major operating areas of the Piceance, Marcellus, and Powder River with returns ranging from 17% to near 40% – even in this low natural gas price environment.”
“The Marcellus is well positioned to survive a very low gas price environment and we’re certainly not seeing any signs of people backing off in the most prime parts of the Marcellus.”
Comments