3Q2005

Tulsa-based Williams net income for the third quarter was $106.2 million (18 cents/diluted share), more than 24 times the $4.4 million (1 cent/diluted share) net income of 3Q2005. The spike came from a 112% increase in natural gas liquids (NGL) sales margins, 22% higher gas production, and significantly reduced forward unrealized mark-to-market losses. These benefits were partially offset by higher operating and maintenance costs.

The “extraordinary” surge in 3Q2005 natural gas prices — up 63% over a year ago — dramatically impacted margin calls for energy merchants and producers hedging their production; however, most companies either maintained or were able to secure enough of a cushion to withstand the higher prices, according to a report by Standard & Poor’s (S&P).

In the first third quarter earnings report by a major producer, BP plc on Tuesday reported a 34% hike in 3Q2005 net profit, but it blamed a 2% production loss on the devastating hurricanes that struck the Gulf of Mexico. In the storms’ aftermath, the London-based major warned that its deepwater Thunder Horse platform may not ramp up until the second half of 2006 — a year later than scheduled — and the producer cut its production forecast for 2005 by 100,000-200,000 boe/d.