The board of Williams Cos., Tulsa, has approved a revised plan, driven by weak equity markets, to separate the company’s businesses into two stand-alone, publicly traded corporations.
The revised plan calls for Williams to fully separate its exploration and production business via a taxfree spinoff to Williams shareholders by yearend. The new independent E&P business will be known as WPX Energy Inc.
The previous proposal was to conduct an initial public offering of WPX Energy in 2011 followed by a spinoff of Williams’ remaining WPX Energy shares in the first quarter of 2012.
Following the spinoff, Williams shareholders will own common stock in Williams, a premier owner-operator of North American midstream and natural gas pipeline infrastructure assets, and common stock in WPX Energy, a large-scale, independent North American diversified E&P company with positions in key North American oil shale and gas basins along with additional holdings in South America.
“The continued instability and weakness in equity markets, especially for new issuances, makes the IPO of WPX Energy appear unattractive in the near term,” said Alan Armstrong, president and chief executive officer. “However, the strong growth in cash flows from our energy infrastructure businesses gives us the flexibility to revise our plans and prepare to separate WPX Energy by the end of this year.
“Despite the change, the outcome of the separation remains the same—we’re creating two distinct and well-positioned companies, each of which will provide an opportunity for shareholders to realize greater value.”
WPX Energy has named the members of its senior management team. Among them are: Ralph A. Hill, chief executive officer; Rodney J. Sailor, senior vice-president, chief financial officer, and treasurer; James J. Bender, senior vice-president, general counsel, and corporate secretary; Bryan K. Guderian, senior vice-president of operations; and Steven G. Natali, senior vice-president of exploration.
Williams said its preparations for the spinoff do not preclude the company from pursuing the alternative of a WPX Energy IPO followed by a spinoff of its remaining WPX Energy shares, as originally planned, in the event that market conditions become favorable.
Alan Petzet | Chief Editor Exploration
Alan Petzet is Chief Editor-Exploration of Oil & Gas Journal in Houston. He is editor of the Weekly E&D Newsletter, emailed to OGJ subscribers, and a regular contributor to the OGJ Online subscriber website.
Petzet joined OGJ in 1981 after 13 years in the Tulsa World business-oil department. He was named OGJ Exploration Editor in 1990. A native of Tulsa, he has a BA in journalism from the University of Tulsa.