Williams Field Services Group

Growing Volumes

A Williams Field Services processing plant is constructed in the Oklahoma Panhandle. The Baker Plant went into service in November 1995.

Williams Field Services Group operates or has an interest in 12,000 miles of gathering systems and 14 processing plants with a capacity of 2.3 Bcfd and 11 treating plants with a capacity of 4.4 Bcfd. Other activities include natural gas exploration and production, as well as electrical power generation.

Gathering and production Basins

At Williams Field Services, the operative word in our name is Services. We know that for us to succeed, the producers we serve must succeed. This philosophy drives our daily operations and has helped make us, by several measures, the largest natural gas gatherer in the United States. Through grassroots projects, acquisitions and expansions ranging from the Rocky Mountains to the Gulf coastal waters, we're growing volumes.

Selected Financial Data (dollars in millions)	1995**	1994***	1993***
Revenues	$591.80	$375.70	$432.20
Operating profit	157.6	129.3	126.7
Identifiable assets*	2,116.50	1,093.60	967.8
Operating profit as % of average assets	8.10%	12.50%	12.70%
Capital expenditures	247.7	163.5	116.7
Depreciation and depletion	110.2	46.7	43.5
Operating Statistics
Gathering volumes (TBtu)	1,806	895	789
Processing volumes (TBtu)	406	392	323
Natural gas liquids sales (million gallons)	298	281	295
Employees (December 31)	1,132	778	740
*Defined in Note 16 of the Notes to Consolidated Financial Statements, page 53.
**These amounts include Transco Energy Company's gas gathering operations and statistics since January 18, 1995.
***Reclassified as described in Note 1 of the Notes to Consolidated Financial Statements, page 42.

Key Points

• We achieved another year of increased operating profit in 1995, despite the impact of extremely low gas prices on our customers. Volumes doubled, mostly as a result of operating Transco's Gulf Coast gathering assets. During the second half of the year, we executed contracts for more than 300 MMcfd of additional gathering volumes on these Transco assets, which flowed an average of 2.5 Bcfd in 1995.
• Favorable settlements and adjustments of certain prior-period accruals contributed $12 million in operating profit to both 1995 and 1994.
• During 1995, we acquired and began increasing the load factor of Gas Company of New Mexico's processing plants and gathering systems, though not to the extent originally planned. Also, we placed additional treating plants into service on our San Juan Basin coal-seam gas gathering system; doubled capacity of a Wyoming processing plant; added approximately 36 Bcf in proved developed reserves via our ongoing drilling program; and began operating our first grassroots processing facility in Oklahoma.
• In first-quarter 1996, we expect to file application to remove the Gulf Coast gathering systems from FERC jurisdiction, giving us more flexibility to meet producers' needs and allow ing us to charge market-based rates. Transco's Gulf Coast gathering systems are in an ideal position to provide services for a significant portion of expected increase in both reserves and deliverability.
• Also in early 1996, our first non-regulated merchant power plant begins operation in New Mexico. Other areas on our system hold potential for similar cogeneration investments. n Even if gas prices and liquids margins remain depressed, our 1996 results should improve as we realize a full year's impact of facilities brought on line during 1995.
• We will continue following our proven formula for success, namely pursuing greater volumes via first-dollar projects and expansions, acquisitions and increased utilization of existing assets - provided they reach a specific return hurdle.