Williams may have come up short in its bid to acquire Southern Union Co., but that doesn’t mean there aren’t other deals waiting to be made, CEO Alan Armstrong said Wednesday.

He and his management team spoke with analysts during a conference call to discuss the company’s third quarter performance.

“Our business is perfectly positioned as the United States turns to natural gas,” Armstrong told analysts. “Our infrastructure is very well positioned to help arbitrage natural gas and oil-based products and to provide services to get natural gas into critical markets and to for critical access.” He added, “our strategy is clear — we’ll be one of the premier energy infrastructure companies in North America and we’ll be a leader in delivering high growth and high dividends.”

Armstrong was asked whether Williams still would pursue acquisitions after rival Energy Transfer Equity LP (ETE) and Southern Union came to terms on a merger. Southern Union began distributing proxy statements to prepare for a special shareholder meeting in December to vote on ETE’s proposed takeover, which would create the largest gas pipeline company in the country — until the Kinder Morgan Inc./El Paso Corp. deal is completed (see Daily GPI, Oct. 31).

“We continue to be very excited about the infrastructure plays here as the United States starts to take advantage of natural gas,” Armstrong told an analyst. “We think infrastructure assets play an important role in that. We’re well positioned and continue to grow in that space and we will work aggressively to grow any opportunity to do that. We will continue to be aggressive in that space.”

Considering the broad competition in the U.S. market for oil and gas properties, and the potential impact of near-term capacity, CFO Don Williams was asked if Williams, which is spinning off its exploration and production (E&P) business by the end of the year, would have the ability to take on more debt.

“It does make a difference and obviously is a factor but we don’t think it makes a strategic difference in terms of what we pursue,” he said. “Beyond that we continue to look at assets. We’re disciplined in our approach in the market where there is a lot of competition for assets. We’ll look where we have unique advantages and we’ll be looking to use those.”

Armstrong said there is a variety of “large growth assets” that could be immediately accretive to Williams’ balance sheet “but for the most part those are going to be smaller kinds of assets, emerging assets. We’ll certainly look at those kinds of assets in basins like the Marcellus where we have great opportunities going forward and have a great opportunity to build a franchise there.”

Even though it lost its bid to acquire Southern Union Williams apparently expressed an interest in acquiring some of the company’s assets, according to a Securities and Exchange Commission filing (see Daily GPI, Oct. 13). Armstrong was asked if Williams still wanted to buy some of Southern Union’s portfolio, if any were for sale.

“I wouldn’t say the door is closed but I would say that Southern Union has been clear in terms of their position on that in the immediate term. But that may not necessarily be the case in the longer term. We will continue to be very disciplined on that. We think we’re the right buyer for certain of those assets and we’ll see where it ultimately falls.”

The Tulsa-based company’s net income in 3Q2011 rose to $272 million (46 cents/share) versus a loss of $1.26 billion (minus $2.16) in 3Q2010. The reversal of fortunes “was primarily due to the absence of approximately $1.7 billion in noncash charges” from a year ago, which included a $1 billion impairment of goodwill and pre-tax charges of $678 million related to proved and unproved natural gas properties, primarily in the Barnett Shale.

Williams Partners reported segment profit of $471 million, compared with $371 million in 3Q2010. The higher earnings resulted from higher natural gas liquids margins and higher fee-based revenues in the midstream business, as well as improved results in the gas pipeline business. The Exploration & Production unit, which is set to spin off as a stand-alone company by the end of this year, reported segment profit of $48 million in the latest period, versus a loss of $1.63 billion a year ago.

Williams adjusted its commodity price assumptions for 2012, cutting its forecasts for natural gas. On the New York Mercantile Exchange the average low price is expected to be $3.95/MMBtu, while the high is forecast at $4.20.

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