During the first quarter, Williams Partners LP saw improved net income and adjusted earnings compared with the year-ago quarter. While rough weather caused production freeze-offs in the Rockies, it drove up throughput on Northwest Pipeline. Northeast gathering and processing volumes were up as well.
“Despite a mild winter throughout most of the U.S., the West experienced some extreme weather in January that caused widespread production freeze-offs in the Rockies,” CEO Alan Armstrong told analysts during a conference call Thursday morning. “
“We have seen a pretty good rebound in volumes as things have thawed and several rigs have returned to the area. In fact, already our overall volumes in the West are tracking 2.4% higher than the average during the first quarter of 2017.”
The company’s West segment includes Northwest Pipeline, and natural gas gathering, processing, and treating operations in New Mexico, Colorado and Wyoming, as well as the Barnett, Eagle Ford and Haynesville shales and operations in the Midcontinent region.
Northwest Pipeline saw record throughput during the quarter, thanks to the cold weather. “To summarize,” Armstrong said, “stable performance continues in the West with Barnett stabilization, recovery in the Rockies and some growth in areas like the Haynesville, Eagle Ford, Niobrara and potentially even the Wamsutter field, which we look forward to as we get into ‘17 and ‘18."
Northeast Gathering and Processing volumes were up by nearly 5% and would have increased more were it not for the sale of some isolated gathering systems last year, Armstrong said. Adjusting for the sales, volume growth would have been closer to 6.5%, he said.
“This quarter, our growth was delivered despite some significant impacts from third-party outages and more extreme weather in the Rockies area, proving once again the resiliency of our business model,” Armstrong said.
Going forward, with the sale of the company’s Geismar olefins plant in Louisiana and the sale of its Canadian business late last year, Williams will realize about 97% of its gross margins from fee-based sources, Armstrong said.
Williams Partners reported first-quarter net income of $634 million, a $584 million increase over first quarter 2016. The improvement was driven by a $271 million increase in investment income, primarily associated with a transaction involving joint-venture interests, as well as a $141 million improvement in operating income and the absence of $112 million of impairments of equity-method investments in 2016.
The partnership reported first-quarter adjusted earnings before interest, taxes, depreciation and amortization of $1.12 billion, a $57 million increase over first quarter 2016 due primarily to $37 million higher commodity margins and $30 million lower operating and maintenance and selling, general and administrative expenses, as well as a $16 million improvement in other income and expense primarily related to the former Canadian operations.
An analyst day is scheduled for May 11.