Williams Cos. Inc. (NYSE: WMB) said it would go ahead with the $33 billion deal to be acquired by pipeline giant Energy Transfer Equity LP (NYSE: ETE), allaying concerns that the transaction might fall apart due to the steep slide in oil prices.
Analysts have raised questions whether the deal would be renegotiated or canceled following a 60% drop in stocks of both companies since Sept. 28, when Energy Transfer agreed to buy Williams for $43.50 per share.
Williams' shares closed at $16.10 on Jan. 15, while Energy Transfer's closed at $8.78.
"In response to market speculation, The Williams Cos. Inc. today announced that its board of directors is unanimously committed to completing the transaction with Energy Transfer Equity," the company said in a statement.
After the recent rout, ETE's cash-and-stock offer now puts Williams' equity at only about $17 billion.
Analysts have said Williams' high levels of debt also puts the deal at risk. Moody's Investors Service cut its credit rating on Williams to junk last week, saying it was concerned about the ability of customers like Chesapeake Energy Corp. (NYSE: CHK) to make good on their contractual obligations if low crude prices continue.
A fund manager invested in Williams told Bloomberg Business earlier this week that the slump in the value of both stocks had fueled uncertainty over closing of the deal.
Recommended Reading
Analysis: Middle Three Forks Bench Holds Vast Untapped Oil Potential
2025-01-07 - Williston Basin operators have mostly landed laterals in the shallower upper Three Forks bench. But the deeper middle Three Forks contains hundreds of millions of barrels of oil yet to be recovered, North Dakota state researchers report.
E&P Highlights: Jan. 6, 2025
2025-01-06 - Here’s a roundup of the latest E&P headlines, including company resignations and promotions and the acquisition of an oilfield service and supply company.
Halliburton, Coterra Launch Fully Automated Hydraulic Fracturing Tech
2025-01-06 - Halliburton Energy Services and Coterra Energy’s initial rollout of their autonomous hydraulic fracturing technology led to a 17% increase in stage efficiency.
Equinor’s Norwegian Troll Gas Field Breaks Production Record
2025-01-06 - Equinor says its 2024 North Sea production hit a new high thanks to equipment upgrades and little downtime.
US Oil, Gas Rigs Unchanged for Fourth Straight Week
2025-01-03 - The oil and gas rig count stayed at 589 in the week to Jan. 3. Baker Hughes said that puts the total rig count down 32 rigs, or 5% below this time last year.