Decisions pave way for Williams’ reserve growth in Rockies

TULSA, Okla., May 8, 2003 — Two regulatory decisions have paved the way for a unit of Williams to increase its natural gas reserves in two key areas of the U.S. Rocky Mountain region.

A decision in Wyoming provides guidelines for developing coalbed natural gas on federal lands in the Powder River Basin and a decision in Colorado is expected to substantially increase the company’s proved undeveloped reserves on 11,000 acres in the Piceance Basin. Williams is one of the largest producers in both basins.

“Our exploration and production reserves in the Rockies are one of our greatest growth assets going forward,” said Steve Malcolm, chairman, president and chief executive officer. “We expect this portion of our business to continue to grow and generate considerable cash flow.”

Powder River Decision

On May 1, the Bureau of Land Management issued its Record of Decision on the Powder River Basin Oil and Gas Environmental Impact Statement.

The decision establishes guidelines that will be used in reviewing future site-specific permit applications to develop this essential domestic resource, allowing for the continuation of responsible development of coalbed natural gas in the Powder River Basin.

“With this decision, we move one step closer toward fulfilling our plan to tap resources in a basin with an estimated 25 trillion cubic feet of recoverable natural gas,” said Ralph Hill, Williams’ senior vice president of exploration and production. “We have an attractive development drilling inventory in the Powder River Basin and look forward to implementing our drilling programs.”

Williams plans to drill or participate in approximately 750 new Powder River wells in 2003, consistent with its current capital spending plan. Williams has already requested 459 drainage permits, which are a prerequisite to drilling, from the Buffalo Field Office of the BLM in Wyoming. The company expects to request an additional 275 permits in the next 90 days.

Colorado Decision

Also in the Rockies, the Colorado Oil & Gas Conservation Commission recently gave Williams the formal go-ahead on a plan for more than 550 natural gas wells over the next decade in Colorado’s Piceance Basin.

The commission approved Williams’ application for 10-acre bottom hole well spacing within the application area. Williams will drill all 10-acre wells directionally from either existing or future 40-acre or 20-acre surface locations. Williams will minimize surface impacts by using existing infrastructure.

Williams submitted the application based on results from an extensive research and pilot program. The company found 10-acre spacing could recover up to 80 percent of the natural gas versus 40 to 45 percent recovery on 20-acre spacing.

“Williams has successfully led the charge in recognizing the tremendous potential of tight gas sands in one of the largest basins in the Rockies,” Hill said. “This approval unlocks new value for Williams, not only this year but for many years to come.”

About Williams

Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. Williams’ gas wells, pipelines and midstream facilities are concentrated in the Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard. More information is available at .

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