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Williams Partners Shares Quickly Gain Ground after IPO

Showing just how enamored Wall Street still is with energy industry IPOs, Williams Partners LP's shares rose more than 18% in its first day of trading following an initial public offering (IPO) last Thursday.

The company priced five million shares, trading under the symbol WPZ, at $21.50/share and by 10:30 a.m. the shares had already reached a high of $25.91. They ended the day at $25.50. The Tulsa-based midstream natural gas partnership raised $107.5 million in the IPO.

The Williams Companies Inc. and certain of its affiliates will own a 65% interest in Williams Partners LP. The five million common units in the IPO represented a 35% interest in the partnership.

The William Companies' natural gas midstream spin off owns a 40% stake in the 273-mile Discovery gas gathering and transportation system in the shallow and deep waters of the Gulf of Mexico. Discovery includes a natural gas processing plant and an NGL fractionation facility. The system has interconnections with five major pipelines and a design capacity of 600 MMcf/d.

Williams Partners LP also owns the 120 MMcf/d Carbonate Trend sour gas gathering pipeline, a 34-mile system off the coast of Alabama. And it owns three integrated gas liquids storage facilities and a 50% stake in a gas liquids fractionator near Conway, KS. The fractionation and storage complex is considered the largest in the Midcontinent region.

Lehman Brothers led the underwriting of the IPO. Certain affiliates of The Williams Companies have granted the underwriters a 30-day option to purchase up to an additional 750,000 common units at the same price to cover over allotments if any.

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