Williams closes asset sales with net cash proceeds of $1.4 billion

TULSA, Okla., Aug. 1, 2002 — Williams recently announced a series of transactions intended to resolve liquidity issues and strengthen the company’s finances. The transactions delivered net cash proceeds of $1.4 billion from asset sales and $2 billion in secured financing.

The following transactions have provided the company with $3.4 billion in cash or available credit:

* A $1.1 billion credit agreement providing for an amended $700 million secured revolving credit facility and a new $400 million letter of credit facility.

* A $900 million senior secured credit agreement with a group of investors led by Lehman Brothers Inc. and Berkshire Hathaway. This facility is secured by substantially all of the oil and gas interests of Barrett Resources, which Williams acquired last year. The loan has been fully funded and Williams has received the proceeds.

* The sale for approximately $1.2 billion of 98 percent of Mapletree LLC and 98 percent of E-Oaktree, LLC to Enterprise Products Partners L.P. Mapletree owns all of Mid-America Pipeline, a 7,226-mile natural gas liquids pipeline system. E-Oaktree owns 80 percent of the Seminole Pipeline, a 1,281-mile natural gas liquids pipeline system. The sale generated $1.1 billion in net cash proceeds.

* The sale of the company’s Jonah Field natural gas production properties in Wyoming for $350 million to EnCana Oil & Gas (USA) Inc. The company also completed the sale of the vast majority of its natural gas production properties in the Anadarko Basin to Chesapeake Exploration Limited Partnership for approximately $37.5 million. The sales generated $308 million in net cash proceeds.

“Tough times require tough decisions. We are committed to repositioning Williams to compete effectively in the energy industry of the future. In addition to these actions, we are continuing with our previously announced plans to sell assets that are non-strategic,” Malcolm said. “At the same time, we are increasing our efforts to exceed our annual cost-savings goal of $150 million.”

Late last week, the company announced it reached an agreement in principle that it hopes will lay the framework for resolving its California power issues. Also, Williams last week reached a settlement, which if approved by the court, would resolve the bankruptcy proceedings involving its former telecommunications subsidiary.

Separately, a senior Federal Energy Regulatory Commission official said the company had adequately addressed questions the agency raised in a June 3 order related to natural gas and power trading in Western markets.

Williams also announced that it has agreed to sell its Cove Pont liquefied natural gas facility and 87-mile pipeline for $217 million in cash to a subsidiary of Dominion Resources. The sale is expected to close in 45 days.

Williams expects the sale to reduce its capital expenditure requirements by $105 million for the remainder of this year and 2003.


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