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Inside Williams Companies’ Key Indicator: Northeast Drilling Activity

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Northeast drilling activity

Drilling activity in the US Northeast, including the Marcellus and Utica Shales, has stayed resilient, despite the volatility in natural gas prices. According to the drilling report published by Baker Hughes (BHI) on July 7, 2017, the natural gas rig count in the Marcellus region has remained at 45 for five weeks (as of July 7).

Similarly, the natural gas rig count in the Utica region (28) has not changed for five weeks. This might indicate that drilling activity will likely pick up and improve natural gas prices.

Williams Companies (WMB) midstream MLP (master limited partnership) subsidiary, Williams Partners (WPZ), has a strong presence in the US Northeast. At the same time, WMB, which is dependent on Williams Partners for distribution income, benefits from resilient Northeast drilling activity.

According to a recent investor presentation, WMB alone accounts for ~34% of total natural gas gathered in the Marcellus and Utica regions.

In the next and final part of this series, we’ll look into the recent analyst recommendations for Williams Companies.

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