Filed by: The Williams Companies, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Barrett Resources Corporation
Commission File No. 1-13446
Transcript of the Williams Conference Call held on May 7, 2001
WILLIAMS COMPANIES
Host: Keith Bailey
May 7, 2001/9:00 a.m. CDT
Page 1
WILLIAMS COMPANIES
May 7, 2001
9:00 a.m. CDT
Moderator Ladies and gentlemen, thank you for standing by,
and welcome to the joint Williams and Barrett
Analyst teleconference call. At this time, all
participants are in a listen-only mode. Later,
we will be on a question and answer session. And
I will give you instructions at that time.
Should you require assistance while you're on
this call simply press 0 then star and an
operator will come on the line to assist you. As
a reminder, today's conference call is being
recorded. It will also be replayed. Please stay
on the line at the conclusion of the call for
the replay information.
I would now like to turn the conference over to
the Chairman of the Board and the Chief Executive
Officer of Barrett Resources, Mr. Peter Dea.
Please go ahead.
P. Dea Thank you. Good morning from Denver, Colorado.
Welcome to the Barrett Resources and Williams
Conference call. I am Peter Dea, Chairman and
Chief Executive Office of Barrett, and with me
today is Keith Bailey, Chairman, Chief Executive
Officer and President of Williams.
We are pleased to have you join us this morning
on such short notice. Barrett Resources
announced today that it has reached a definitive
agreement for the Williams Companies to acquire
Barrett for 50% cash and 50% stock. Williams
will acquire all of the outstanding shares of
Barrett in a transaction valued at approximately
$2.8 billion, including the assumption of about
$300 million in debt. Based on Williams' closing
price on Friday, May 4, 2001, the transaction
has a blended value of $73.32 per share.
Before I turn the call over to Keith Bailey to
take you through the details of what this merger
means for our two companies, I'd like to just
spend a few brief moments to share some of my
thoughts on our process and what this means for
Barrett. Barrett's Board of Directors and I are
very excited to have accomplished this extremely
successful transaction for our shareholders,
employees and customers. The process was
designed to maximize shareholder value, while
keeping our interested parties on a level
playing field. This is all a tremendous success.
Williams will benefit from Barrett's leading
position in the Rocky Mountain Region, where we
are at the forefront of natural gas exploration
and production. Barrett's substantial acreage
and natural gas reserves lie within some of the
largest and least exploited natural gas basins
in the lower 48 states. The acreage in reserves
consists predominantly of natural gas located on
properties where Barrett has a high working
interest ownership, and Barrett operates over
90% of its production.
As most of you know, Barrett recently received a
favorable ruling from the Colorado Oil & Gas
Conservation Commission, allowing the company to
add 212 billion cubic feet of proved gas
reserves from 202 additional well locations in
the Piceance Basin. As of April 30, 2001,
Barrett's total proved gas and oil reserves
equal 2.1 trillion cubic feet of gas
equivalents, an increase of over 50% from
December 31, 2000. The reserve additions
demonstrate the inherent quality of Barrett's
core holdings in the Rocky Mountains, and the
success of our exploration and development
strategy that we look forward to continuing as
part of Williams.
We are very pleased that many of our employees,
who have been the key to our success, will have
exciting opportunities within Williams. We are
also extremely pleased to receive William's
equity, along with cash, which will allow our
shareholders to continue to participate in the
significant upside of the combined company.
After comments from Keith, we will have a
question and answer period, and then adjourn
this at 9:45, since we need to have an employee
meeting here in Denver. I'd now like to turn it
over to Keith Bailey.
K. Bailey Thank you, Peter. As you saw in the Williams' Press
Release, this is a very exciting day for
Williams. As I look back over the various
acquisitions that we've made during the course
of my career at Williams, I really have not
thought of one that is a better fit, from the
standpoint of both the value that we will
receive from the transaction, as well as what it
does for our company in a strategic sense.
We point out in the press release that this will
be immediately accretive to earnings, that
because of the structure of the agreement with
half cash/half stock, it's being done in a way
that strengthens our balance sheet and improves
our credit ratios. We are acquiring a group of
talented people, as well as ideally situated
energy assets, that will reinforce our
businesses comprehensively west of the Rockies.
If you look at the map of where these reserves
fall, the primary area of concentration for
Barrett, they're an ideal fit and very
complimentary to Williams and our position in
the Rockies as well. We are a major gatherer and
processor in this region, and this offers
additional opportunities to that part of our
business. We have major natural gas pipelines
and gas liquids pipelines that move product out
of the Rockies, and this provides an opportunity
to reinforce growth in those parts of our
company as well.
Most importantly, it is a very significant
strategic acquisition, in that it balances the
risk profile of our rapidly growing power
portfolio, by enabling us to add significant
additional new gas reserves, so that we have a
physical hedge, and natural hedge, against the
short position that's created as we add
additional power generation facilities.
Another aspect that we find very attractive
about this transaction is the fact that these
are long-lived reserves, and have a high
percentage of what we consider to be very good
probable opportunities. It's an asset that will
not only serve in the short-term, but offers the
opportunity for long-term and steady growth.
Again, as we look at this from a Williams'
perspective, I really can't think of a better
acquisition from the standpoint of the immediate
value that it should create for our
shareholders, the long-term value that it should
continue to add, and the strategic goal that it
achieves of creating a good balance in the risk
profile, as between our physical and natural gas
position and our power generation position.
I think with that, it probably would be well to
turn to your questions, and we'll do that at
this time.
Moderator Our first question comes from the line of Jeff
Dieter of Simmons. Please go ahead.
J. Dieter Keith, Jeff Dieter with Simmons & Company. Could
you talk about the synergy values that you're
expecting, either from a cost savings
perspective, or the synergy associated with the
midstream or petroleum services businesses that
you've got?
K. Bailey Jeff, from the standpoint of the traditional sorts
of synergies that you would see in a merger of
two companies, one of the things that we have in
this situation is just very little overlap. Each
of the companies have had similar staffing
philosophies, so I would guess that we would see
synergies only in the $10 to $20 million range,
because of that, as we said in the press
release, our expectation is simply to roll our
Rocky Mountain activities into the Barrett
offices in Denver. As we look at the
organization, we see that the substantial
majority of the organization are important, and
were an important part of the consideration that
we had as we looked at doing this transaction.
From the standpoint of other synergies, clearly
those will play out over time, but by being a
major, actually probably the major natural gas
producer in the Rocky Mountain Regions, we think
this should steadily add to our ability to grow
our gathering and processing businesses, our gas
liquids business, and it can reinforce the
expansions we have in our gas pipeline
activities. As you know, we have a major
expansion underway, both going to the West Coast
and one leaving the Rockies and coming back to
the mid-continent.
J. Dieter Good. Can you talk a little bit about how you
would approach this acquisition from a hedging
perspective? Would you consider costless
collars? Would you lock in some hedging for a
portion of the production? Would you talk about
that a little bit?
K. Bailey Well, we will do this in the context of
our overall trading book. Remember at the outset
that the physical gas provides a natural hedge
to some of the short positions that we would
have on gas in our power portfolio. We will
simply need to look at this in the context of
our overall book, and we will hedge
appropriately according to that.
J. Dieter Thank you.
Moderator The next question comes from the line of Scott
Merviss of Glenview Capital. Please go ahead.
S. Merviss Yeah, Hi. As far as the hedging, as you put on
power, you constantly hedge out the gas exposure
as well, so would this acquisition make you long
that gas at this point and as you put on power
you won't have to hedge out? Can you go into a
little bit further explanation?
K. Bailey No. It does not make us long. With the combined
production, we still would be short the gas that
would be associated with the power portfolio
that we have in place today, and as you know,
that's grown to around 15,000 megawatts at the
end of the first quarter. If you look at that,
my recollection is that should be approaching a
Bcf-and-a-half a day of natural gas, and
obviously you have to make some heat rate
assumptions, but in round numbers that's roughly
the gas demand for that. We would be in
generally a 50% hedged position with the
physical gas, when you combine the production of
the two companies as it develops out, concurrent
with the full development of that 15,000
megawatts.
S. Merviss Okay. Also, can you talk about what kind of
discount it was to buy Barrett versus going into
the forward market and proceeding with your
hedging as you've been going that way?
K. Bailey Well, it changes day-to-day, as you know, because
the forward market moves with every day's
activities, but as your question obviously
points out, it has been a reality that a
transaction like this, and this transaction will
be a discount to the forward market in terms of
the trading market or the strip. I can't tell
you today what the precise update is with regard
to the level of that discount.
S. Merviss But presumably you took into consideration the
percentage of probability that you got gas out,
and going through all those calculations when
you were looking at, it was still cheaper to buy
the physical assets than going forward, and
doing it in the forward market?
K. Bailey Yes. That was one of the elements we looked at.
The other thing we would observe is that the
physical gas has a lot higher BTU content than
the forward market strip. When you look at the
reality of hedging and the strategic value
that's created, you do have the ability to fill
a significant percentage of your requirements
with physical gas. Depending on supply/demand
balances at any point in time, we believe that
can be strategically very important and
certainly provides a moderating influence on the
risk profile of Williams' power portfolio.
S. Merviss Okay. Thanks.
Moderator The next question comes from the line of Ray
Deacon of Dain Rauscher. Please go ahead.
R. Deacon Good morning. Keith, I had a question about how
you looked at the stock and valued it, in terms
of either net asset value? What was your main
valuation criteria, was it EBIT DA multiple or
asset value, Mcf in the ground? Could you just
elaborate on that?
K. Bailey Well, our basic evaluation tool is the discounted
cash flow analysis. As we look at the discounted
cash flow returns, this fell very much in the
fairway of the kinds of returns we look for with
these kinds of activities. We also tested this
against the entire range of ways that you might
value this business, including comparable
transactions, including cost per Mcf of gas in
the ground. We went through the whole range of
that as we considered it. As we look at it, we
believe that the transaction measured by some of
the comparables is sort of in the middle of the
range of recent activities. As we look at the
overall portfolio though, and what we consider
to be very high-quality probables, we would
actually assess the cost in the ground at a very
attractive number.
R. Deacon Okay. Just one more quick question. They had some
oil properties in the Uinta Basin, would you
consider those non-core, maybe sell some of the
assets that are not gas-oriented?
K. Bailey Clearly, our businesses are gas dominated, but it's
premature to make any judgment with regard to
any particular piece of the business. You are
correct, in that we are gas dominated, both EMP
business and company.
R. Deacon Okay. Thanks.
Moderator The next question comes from the line of Jay
Unello, of UBS Warburg. Please go ahead.
J. Unello Good morning, Keith. I know I'm a little ahead of
myself here, but given that the target is to get
roughly 25,000 megawatts by year-end 2003 and
40,000 megawatts by year-end 2005. Given the
momentum lately, where you're having great
success in achieving those goals, and it looks
like you're on track to blow those goals away,
though there's no guaranties. Looking out over
the next couple of years, is it fair to say we
should be looking for other transactions to
deliver this?
K. Bailey Well I do think you're a little ahead of yourself,
Jay. Obviously, this was an opportunity that was
created really by an event that Barrett didn't
precipitate, but based on that event, they
engaged in a process that gave this a current
reality. I think what we need to do is get
through the process of getting these two
companies put together smoothly. We will
continue to be opportunistic. There will be
times that this sort of opportunity presents
itself, that we may in fact take a look at.
But from the standpoint of our own process,
again, one of the real attractions of Barrett is
the significant inventory of opportunities to
drill and to build our gas production through
the drill bit. That is one of the things that we
think is most attractive, because we can do much
of what we would hope to do from a hedging point
of view with an orderly capital program.
J. Unello Okay. Thank you.
Moderator The next question comes from the line of Louis
Sarks of Chesapeake Partners. Please go ahead.
L. Sarks Hi, and congratulations. A couple of questions,
one of which is mechanical. Can you just go
through the up front tender? Is that going to be
a normal time frame tender, 20 business days,
and then a back end merger, or is it going to be
an exchange offer?
K. Bailey No, it will be a front end. You described
the tender correctly, and we'll attempt to begin
moving on that, if not this week, early next
week. We would anticipate that that would be
done over the normal 20-day period, and then we
would follow that with a second step merger
process on the exchange ratio that was described
in the press release.
L. Sarks If you do not get the 50% up front, is there a
provision to make this a total one-step
transaction?
K. Bailey This is a transaction that is conditioned on
getting the 50%.
L. Sarks Okay, but you could go to a one-step, I assume, if
you decided that you needed to? If people really--
K. Bailey I have no reason to believe that we won't be
successful, under the structure that we have on
the table.
L. Sarks Okay. My next question is for Peter. Thank you
very much for maximizing shareholder value. I
just wanted to know if you could tell us what,
if anything, Shell has indicated to you all, in
terms of their participation in the process or
did they give you any indication that they bid
and would not participate at these levels?
P. Dea Sure, well as you know, as of April 30th, we
submitted a letter to Shell that was publicly
released. That laid out very specific guidelines
to the bidding process. That puts them on a
level playing field with all of the other
participants, who incidentally had previously
signed confidentiality agreements and come to
our data room. Shell had not signed the
confidentiality agreement, had elected not to
come to the data room, and they also elected not
to participate in our process, following the
April 30th letter.
Right from the very beginning, we have been very
open about inviting Shell into our process, and
they have, up to this point, elected not to
participate in our process whatsoever.
L. Sarks So they did not participate in this last round here,
or in any round, and you just have not heard
from them, as to their pending tender offer?
P. Dea Everything that Shell has done has been
publicly disclosed, which they have to via their
tender offer, so you've seen everything
regarding their actions.
L. Sarks Okay. Thank you.
Moderator The next question comes from the line of Stuart
Morrell of UBS Warburg. Please go ahead.
S. Morrell Good morning. I was curious, looking at
the balance sheet impact of this transaction, I
was curious to know what new, if any, balance
sheet parameters you have for leverage? Just
looking at this transaction, is this something
that had been discussed previously with the
rating agencies and what your expected outcome
would be?
K. Bailey Well, because of the process that we've gone
through, we have not talked in advance to the
rating agencies about this, but from a rating
agency perspective, this ought to be viewed
positively, because of the structure that we
have used. It will improve both the balance in
the balance sheet, I think by about one
percentage point, in terms of debt to total cap.
It will actually be positive from a coverage
ratio point of view as well, because it is
accretive to earnings.
S. Morrell Thank you.
Moderator The next question comes from the line of Pierre
Connor of Hibernia. Please go ahead.
P. Connor Good morning. I've got a couple questions, sort of
around valuations, mainly for Peter. On the
reserves that you recently disclosed, could you
tell us what percentage of that would be proved
undeveloped on the 2.1 T's?
P. Dea Approximately 60% of that are PUDs of the total
2.1 Tcfe.
P. Connor Okay. Then can you tell us what cap ex you would
have assigned to developing those?
P. Dea Well, we look at it on a per Mcf basis. We're in
very, very attractive finding and development
costs on the reserves in the Piceance, in the
Powder River Basin. The Piceance F&D is in that
$0.65 per Mcf range. In the Powder River coal
bed methane, where we also released new
reserves, you're looking about $0.30 per Mcfe,
so extremely attractive finding costs in both of
those core assets.
P. Connor Right. Okay, Great. Then a question for Keith.
You mentioned a lot of value on the probables. I
wondered if you could characterize that a little
more for us, kind of what percent of the value
you would have assigned to the proved reserves,
and what percentage of the valuation you have
for the probables?
K. Bailey Well, probably the most straightforward way to
answer that would be you've seen the purchase
price spread over the proved reserves in the
press release, the $1.34. If you were to take
the proved reserves and our risk weighting of
the probable reserves, that number drops by over
half. That gives you a sense of where we believe
we came out in the mix.
P. Connor It sure does. Okay, Great. All right, very good.
Thanks.
Moderator The next question comes from the line of Bob
Christensen of First Albany. Please go ahead.
B. Christensen Congratulations, guys. I'm very happy about this.
Just give me a sense of this breakup fee though.
How are these things, termination fees, who
determines them? Just briefly on that?
K. Bailey That's an element of the negotiation.
B. Christensen Okay. I guess the other question is that Barrett
has quite a trading desk. Does this get rolled
into Williams in Tulsa, the Energy Trading Desk,
and how do you plan, Keith, on keeping all the
talent that Barrett has?
K. Bailey My sense, Bob, is that it's probably more
fairly characterized as a marketing operation,
and we would anticipate moving the
responsibility for the marketing risk management
to our trading floor.
B. Christensen Then how about some of the engineering, geologic
staff that has been so good working in the
Rockies over the years, that Barrett has?
K. Bailey As I said in my opening comments, Bob, one of the
attractions of the talented work force and
people that they have in the organization. What
you do in a process like this, we have an energy
services team here in Denver with us today, and
that process of trying to lock down the talent
will begin as we speak. As Peter said, we have
an employee meeting coming up here in a few
minutes, and we will start then and will
continue that from this point forward.
B. Christensen Great. Congratulations to both of you.
Moderator The next question comes from the line of Irene
Hoff of Sanders, Morris, Harris. Please go
ahead.
I. Hoff My questions have been answered. Congratulations,
everybody.
Moderator Okay. The next question comes from the line of John
Woodbury of Cobalt Capital. Please go ahead.
J. Woodbury Hi, guys. Congratulations. Listen, just a
question, you were saying that this transaction
obviously reduces your short position. Could you
comment on how short you would like to be over
the next few years, or perhaps how hedged you'd
like to be over the next couple of years?
K. Bailey Well, I don't know that we have a precise
number that we could pin down, but just speaking
on a personal level, I'd like to see us have
physical hedges in place at least in the 25 to
50% range. While that's a fairly wide range, it,
I think, captures also the range of opinion that
you might have within the Trading and Management
group at Williams.
J. Woodbury So the production coming out of Devon takes your
short book from what percent to what percent?
K. Bailey Well, we really don't have a lot of production
coming out of Devon, but the production that
will come--
J. Woodbury So you're long gas, you become more long gas,
obviously. Barrett, I'm sorry.
K. Bailey Yes, but the Barrett combined with ours should move
us up into that range, with the current
capacity.
J. Woodbury From 20 to 50?
K. Bailey In that 25 to 50% range for the current
operating capacity, and as we look at a drilling
program, as we bring the balance of that 15,000
megawatts on line, I think it gives us the
capability of staying in that range.
J. Woodbury Would you rather buy more assets or start selling
more electricity?
K. Bailey We would like to do some of both. I don't
know that we necessarily need to buy assets, but
we would like to grow both businesses, and we
would like to grow them proportionately, because
we think the strategic benefits of doing that
are significant.
J. Woodbury Great answer. Thanks.
Moderator The next question comes from the line of Denatto
Easee of Merrill Lynch. Please go ahead.
D. Easee Good morning, gentlemen. Congratulations as well.
Keith, I have a handful of quick questions. One
is, how much of Barrett's production is
currently hedged? How much do you have to work
with on a leveraged basis?
Two, on the breakup fee, is it specific to the
entire transaction or just the equity portion of
the transaction, just to clarify that?
In step with Who Wants to be a Millionaire, is
this your final answer, if Shell comes in and
trumps your bid, where do you go from there?
Thank you.
K. Bailey Let me answer the first question. I
believe roughly a third of the production is
hedged currently. Those hedges have various
durations and will burn off over time, and we
will, as I say, move the production back into
our overall risk management portfolio and hedge
it in the context of our overall book.
From the standpoint of the breakup fee, I'm not
sure I really understood your question, in the
sense that without equity there's not a deal, so
it is tied to the execution of this deal.
D. Easee Just as the breakup fee on the total transaction
value?
K. Bailey Well the breakup fee is described in absolute
dollars, and you can apply that against whatever
numbers you want to.
D. Easee I didn't get the ratios, so I apologize.
K. Bailey Yes. The breakup fee is described in dollars in
the press release.
Then from the standpoint of your last question,
that's not a polite question, and it's not one
that I think warrants an answer.
D. Easee Okay. Fair enough, Keith, and good luck with it.
K. Bailey Thank you, Denatto.
D. Easee One last question, you mentioned in your opening
remarks that out of all the transactions that
you've looked since you've made some
acquisitions, this clearly is one of the best.
Obviously, every time you've made an
announcement the stock tends to take a bit of a
beating early, but tends to rebound rather
nicely. Even when you contrast this versus the
Transco acquisition, could you kind of give us a
flavor for the balance in that acquisition
versus this one, in your overall opinion?
K. Bailey Obviously, with Transco we had a combination of the
market that didn't like it, that layered on top
of the typical arbitrage of shorting the
acquirer and going long on the acquired company
that happens in virtually any merger. Yet, when
people look back on it, it's been judged as one
of the top ten transactions of the 90's for
creating shareholder value.
I think as people look back on this decade, this
has exactly the same opportunity. If you look at
the way this suite of activities and businesses
fit, it is a much tighter fit with Williams,
because of the fact that we already have assets
in the Rocky Mountains, and when we did Transco,
that was really a physical step out from a
historic footprint. This is not. This is a very
complimentary acquisition in a geography where
we have a number of complimentary assets and
activities. I think this is, on that basis
alone, going in, is a better transaction. It's
our intent to do exactly what we did with
Transco, and that's have the business perform
over the next number of years in a way that
makes it equally good in a retrospective way
from a shareholder point of view.
D. Easee Right. Thanks, Keith, and good luck.
Moderator The next question comes from Anatoll Fajen of JP
Morgan. Please go ahead.
A. Fajen Good morning, Keith. Congratulations. A quick
question, you guys were kind enough to share
with us last week the methodology for risk
management that you follow. Does this deal
impact significantly, or to ask another way, is
the accretion from this deal to some extent
driven by the hedge that you're putting on with
this physical gas?
K. Bailey No. As I said, the hedging philosophy will be
done in the context of our overall book, and
you, as you point out, had an opportunity last
week to visit with our trading folks and gain an
understanding of that philosophy. The accretion
is based on just our sense of the business
performance and what we would anticipate
delivering as a result of net income, without
considering hedging. To the extent that we can
optimize or reduce the risk profile of that
forward income stream, we will certainly do
that, but only in the context of the overall
book.
A. Fajen Right, but from the standpoint that this
provides a large physical hedge to the book
going forward, that's an incremental benefit,
that's not captured in the kind of straight out
accretion analysis that we're doing right now?
K. Bailey That's right. That, again, is probably not
described as much in the actual printed earnings
as it is in the risk profile surrounding those
earnings.
A. Fajen Great.
K. Bailey This will have, I think, a significant
moderating impact on the risk profile, even
though, as you know from your visit, we take a
very conservative approach, I think relative to
our peers in that regard in any event.
A. Fajen Absolutely. Thanks, Keith.
Moderator Next we go to Oscar Woo of Numera Securities.
Please go ahead.
O. Woo Thanks. My questions have been answered.
Moderator Next we go to Todd Mason of Alpine Associates.
Please go ahead.
T. Mason Yes. The question was asked earlier, concerning
what might happen, I guess if the stock of
Williams rallied a lot, so that the value of the
stock part of the merger would be a lot higher
than the tender price. I gather there's nothing
in the agreement to contemplate that sort of
situation?
K. Bailey Actually we're doing a fixed exchange ratio, and
frankly, that's a very happy answer for every
shareholder.
T. Mason Sure, but you get sort of a funny, catch
22 situation, where if it's a condition that
people must tender to a lower price, there
should be a mechanism, so that there doesn't
have to be a renegotiation of the agreement to
get some closing on the merger?
K. Bailey Again, as you well know in a situation like this,
you probably have reprofiled the shareholder
base to one that has a lot of trading money in
it, in addition to the long-term investors. My
sense is that a lot of that trading money will
move to the cash and the long-term investors
have a very good opportunity to continue to
invest in these assets in the context of a
larger company.
T. Mason The happier situation you have with Williams, the
more the traders are going to be inclined to
want to go for a stock election if it's a
premium to the cash?
K. Bailey We'll just have to see how that plays itself out.
T. Mason I assume there'd be some flexibility, if
you got to a situation where-- There have been
situations before where there weren't enough
shareholders to take cash, and in those
situations companies have sat down and
re-jiggered the structure to allow a one-step
and finesse that problem.
K. Bailey Well as I say, I learned a long time ago
that it's probably not useful to speculate and
deal with assumptions based on assumptions. We
have what I consider to be an executable deal on
the table. We think the structure makes a lot of
sense, and we have every expectation of this
deal going to the finish line as we've proposed
it.
T. Mason Okay. Thank you.
Moderator The next question comes from the line of Jeff
Dieter of Simmons. Please go ahead.
J. Dieter It's Jeff Dieter with Simmons. Could you talk about
what kind of production growth rate you would
expect as an overall company after the Barrett
merger is closed? Production growth.
K. Bailey Jeff, I think that is something that will be
picked up in the context of the tender documents
themselves.
T. Mason Okay. Thank you very much.
Moderator The next question comes from the line of Ray
Deacon of Dain Rauscher. Please go ahead.
R. Deacon Keith, are there any employment contracts on the
Barrett side that are going to go along with
this? You talked about trying to retain as many
people as you could, but are you going to try to
lock anybody up?
K. Bailey At this point, Williams obviously isn't in a
position to do anything in that regard.
R. Deacon Okay.
K. Bailey Whatever exists, from a Barrett point of
view, is there and will be just a factor that we
deal with, as we look at putting together the
team that we'll have going forward.
R. Deacon Okay. You said you'd talk about the production
levels you see in the tender offer document I
guess, but can you say anything about the
budget? Are there any areas where you feel like
you would maybe accelerate what Barrett is doing
or expand the budget in any way?
K. Bailey Let me just answer that in a broad sense, as we've
looked at their budget, it is not at all
inconsistent with the sort of budget that we
think we would have put together for the same
properties. Clearly, one of the things that we
will do over the course of time, as we lead up
to the completion of this merger, will be to
fine-tune that. Based on what we have seen
through the data room process, and through our
discussions with the Barrett management, I would
be surprised if there are any major changes from
what they had outlined.
R. Deacon Okay. Thank you.
Moderator There are no further questions at this time.
Please continue.
K. Bailey From our point of view, again, this is a very
exciting day. I think it will go down as one of
the best acquisitions that Williams has been
able to engage in, certainly over the course of
my time at the company. I think as people look
back, it will be something that they're very
pleased with, whether they are shareholders that
elect to take the cash portion, or those that
elect to remain an ongoing shareholder.
P. Dea I'd just like to close by saying that I believe
this transaction allows Barrett shareholders to
participate in a broader range of the value
change between the well head, the burner tip,
and the electrical generation side. What Barrett
brings to the new company are core assets of
natural gas, and a very talented exploration and
production pool of employees, who as I mentioned
before, can produce gas for as low as $0.30 per
Mcfe. So when we add these high quality physical
and human assets, and link those with Williams'
midstream and downstream, and some of their
upstream assets, you've really got a powerhouse
to bring some very powerful synergies and value
to all the shareholders.
With that, I'll thank you all very much for your
participation today.
K. Bailey Thank you.
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