Travis Campbell - Head, IR Steve Malcolm - Chairman, President and CEO Ralph Hill - President, E&P Don Chappel - SVP, CFO Phil Wright - President, Gas Pipeline Alan Armstrong - President, Midstream Gathering & Processing

Craig Shere - Tuohy Brothers Investment Research Faisel Khan - Citigroup Mark Caruso - Millennium Partners Jessica Chipman - Tudor, Pickering & Holt Yves Siegel - Credit Suisse Carl Kirst - BMO Capital Markets

Good day, everyone and welcome to the Williams Companies fourth quarter year end 2009 earnings release conference call. At this time for opening remarks and introductions, I would like to turn the call over to Mr. Travis Campbell, Head of Investor Relations. Please go ahead, sir.

Thank you and good morning everybody, welcome to our fourth quarter call this morning. As always thanks for your interest in the company. As we've done in the last few quarter, Steve Malcolm will review a few slides. Be aware though, that all of our business unit heads and Don Chappel are available here to take questions which we will do right after Steve's remarks. Also as usual, we've put together our data book that includes the information that we typically provide each quarter. So, this morning, on our website williams.com, you should be able to find the slides, the data book and press releases that were issued earlier today. Those press releases are the release detailing our 2009 results as well as an additional release reporting our 2009 natural gas reserves. Last evening, I'm sure you also saw the release announcing the completion of the asset contribution between Williams and Williams' Partners WPZ. I should note that post that transaction WPZ is a significant part of Williams. WPZ will be having their 2009 earnings call this morning at 10 a.m. Eastern. At that time WPZ management will be available to talk more about their results and their future. It might be worthwhile to tune in for that call as well. At the beginning of the slide deck are the forward-looking statements and disclaimer on oil and gas reserves. Those are important and integral to our remarks, so you should review those. Also included are various non-GAAP numbers that have been reconciled back to Generally Accepted Accounting Principles. Those schedules are available and follow the presentation. So with that, I'll turn it over to Steve Malcolm.

Thank you Travis. Welcome to our fourth quarter earnings call. Thank you for your continuing interest in our company and as Travis said we are going to use the same format that we've used in our last few earnings call. I will be the sole presenter but the entire team is on hand to answer any questions. We continue to get good feedback on that approach and we will continue it today. So starting with slide 4, this slide talks a little bit about our 2009 results, recent developments, let me tick through the list here fairly quickly. 2009 recurring adjusted income was $552 million or $0.94 a share for 2009. I think most importantly we completed our asset contribution transaction with WPZ which is clearly designed to drive growth and value creation for our shareholders. Our year end 3P US and International reserves are up 14%. We continue the expansion of our Marcellus Shale position with a new long-term agreement with a major producer which will expand our business in the Marcellus, allow us to construct a new 28 mile natural gas gathering pipeline which will move gas into Transco. Construction on that project is expected to begin in the latter part of 2010 and is expected to be placed into service during 2011. We also brought other expansion projects into service on Transco and Northwest. I am speaking here about the Sentinel Expansion Phase II which is a little over 100 million a day of additional capacity which went into service in the fourth quarter of '09. The Colorado Hub Project which increases access to the Piceance Basin for our northwest pipeline customers that went into service, fourth quarter 2009. And our Eminence Storage Enhancement Project, which was placed into service in October 2009. As well, we recorded peak day delivery records on all three of our pipelines this winter. It's good to see that our pipes are getting a strong usage during peak days. Next slide is slide five. This is a slide that investors have appreciated in the past and so I'll spend a few minutes on this slide. It shows the reconciliation of how our domestic reserves grew during the year. So starting with that first bar there, we ended last year with 4.34 Tcf of proved reserves. We added a 159 Bcf through the Piceance acquisition that we closed in the third quarter. Our wellhead production was 435 Bcf. Then we go the next three bars, which show how the new SEC rules for reserves blow through our numbers, and so this year the rules call for using at the 12-month average price for the year rather than the year-end price and this resulted in a base in price of just over $3, which is a 33% drop from the price used for our year end 2008 proved reserved. And so at the lower price, we had 336 Bcf of price related revisions. Also the new SEC rules are much more specific about what undeveloped locations can be counted as proved. The rules restrict development time to five years and require for the first time that we consider the conversion ratio of probable to proved locations in our drilling program. This rule requires we reclassify 496 Bcf from proved back to probable. On the plus side of the new SEC rules for the first time allow us to count undrilled locations that are more than 1 offset way from a producing well as proved where we have a reasonable certainty of production. This allowed us to add 454 Bcf as shown on the next bar. We also added a net 570 Bcf of proved reserves through the drill bit. making our net proved reserves at the $3 price 4.255 Bcf. This is a very similar result as we've had the previous several years in spite of using a capital budget of about half the level from 2008 which reflects the strength of our overall 2009 drilling program. However since the 2009 price was unusually low and is much lower than current gas price expectations, the next couple of bars show important price sensitivities. Our proved reserves are 4.581 Bcf. If we simply add a $1 to the SEC price, hence we get back almost all of our price-sensitive reserves at about $4 in the basin. That's an apples-to-apples comparison; our proved reserves using the same price that we used last year or $4.61 in the Rockies, our proved reserves are 4.632 Bcf. This constitutes 7% reserves growth in the year where we significantly reduced capital spending and 167% domestic reserves replacement. We reduced our three-year finding and development cost to $2.38 per Mcf and our one year drill bit only F&D was $1.53. We were very pleased about this reserves performance which continues our multi-year trend of strong proved reserves growth and best quartile F&D costs. Looking at proved probable and possible reserves, the 3P side of the world, the story gets even better. We ended last year with 12.6 Tcf of domestic 3P reserves and have now grown that 14% to 14.4 Tcf of domestic 3P reserves. Turning to slide six, I'm not going to spend much time on this slide. This just shows US and international reserves and I think the key takeaway here is that proved, probable and possible, 3P reserves are up 14% year-over-year. Slide seven, yesterday we closed our $12 billion strategic transformational restructuring designed to drive growth in shareholder value. Clearly, it significantly accelerated our dropdown strategy and let me quickly run through the key points. This transaction created a large diversified MLP that has investment grade credit rating, much more reliable access to the market. It significantly increases our capital availability, improves I believe the competitiveness of our midstream and gas pipeline operations E&P and our Canadian projects will be funded from their own cash flows and WMB funds and WPZ distributions. Importantly, Williams is able to maintain scale, earnings, cash flows IDRs and control of the assets. This deal enhances our Williams growth profile and I think overall simplifies our corporate structure and creates a public marker in terms of having investors being able to value our company. The next slide I think shows that Williams and WPZ interests are clearly aligned. The moves that we've made result in two well capitalized entities that are better positioned to pursue value adding gross strategies. Certainly growth and projects at PZ lead to more value at Williams. And as you can see on the slide here, the ability of WPZ to fund the capital projects for its midstream and gas pipeline projects means that Williams can focus free cash flow on growth and diversification of our E&P portfolio. On the WPZ side, increased EBITDA and distributable cash flow translate into higher earnings per share for Williams, and as PZ increases its unit distributions, Williams receives more cash. And through William's significant ownership position in PZ, Williams will enjoy the value benefit of growth in PZ's unit price. Slide nine please; our guidance is unchanged, but just as a reminder, as you can see here, we expect that earnings growth will continue in a very strong fashion and yes, improving energy commodity prices do play a role in that earnings growth through 2011, but as you can see in these arrows in the lower left hand corner, we expect our earnings growth to be significantly greater than the improvement in commodity prices during that period. The green arrow shows 99% growth in our adjusted earnings per share from 2009 to 2011 and we don't need $100 oil, we don't need $10 gas in order to get there. You can see what assumptions that we're making with respect to crude oil prices and natural gas prices during the period and importantly the midpoint of our guidance range for 2011 moves us close to the record high earnings that we produced in 2008. So, clearly we're investing today in future growth. We have projects coming online this year and in the future that we expect to make significant contributions to our earnings growth. Slide ten, please. Here we take a look at what the 2009, 2011 growth looks like from a segment profit standpoint and overall we're expecting the increase our total recurring adjusted segment profit by nearly 50% from 2009 to 2011. We expect to see a greater than 100% growth in our E&P segment profit based on higher commodity prices and by 2011 increased production volumes, and in the WPZ and other course we're expecting increases there associated with the many growth projects that we're investing in over that time period. Slide 11, this slide shows the maintenance capital and growth capital for WPZ and E&P. This is a good reminder of the clear path that we have to our earnings growth. We're investing in excess of $3 billion in growth projects during 2010 and 2011 and I would remind you we're making investments with a continuing commitment to live within our means. Slide 12, I am not going to spend much time on this slide. This type of slide is appreciated by investors as simply shows the specifics on some of the growth projects and growth CapEx that we'll be spending in 2010 and 2011 on WPZ and on E&P projects. You might be surprised when you see a fairly large number that shows up under the other category and I would just remind you that much of that capital is tied to the Canadian NGL pipeline which is a new 12 inch pipeline project that will transport NGLs and olefins from our extraction plant in Fort McMurry to our Redwater processing facility. It's expected that we'll be spending somewhere between $275 and $300 million on that project, constructed using cash previously generated from our Canadian operations or other international projects and the construction is expected to begin in November of 2010 with an anticipated in-service date in the second quarter of 2012. Slide 13, the next few slides offer detailed comments on growth projects within all three of our business units, and I'll start with some comments on E&P and certainly in the E&P space most of our capital, most of our growth will be focused in the Piceance space, and so it's always worthwhile to emphasize the value creating strength of our Piceance space and strategy. Clearly, this is a world class resource. The drilling economics are Shale play strong. I've got my next slide talks a little bit about the typical well economics for a Valley well and just to foreshadow for you, the returns that we're looking at after tax returns based on current prices, current costs and the current basis differential. We're looking at after tax returns in the 53% range. So clearly, this is a world class resource that has drilling economics that match those that people are talking about in the various Shale plays as well our cost are low. We have a track record of high returns. We enjoy that benefits of scale. You know that there is extensive infrastructure in place including our own gathering, processing and pipeline assets and compare that please to the extensive investment that's still needed in some of those new Shale plays. So we expect to grow production. Our capital guidance numbers deliver about 12% production growth in 2011, but as the last bullet mentions, we are poised as we check sign posts along the way along the way, as we see what futures prices are doing and as we get through the heating season, we are poised to begin to accelerate our drilling activities by mid year and such an acceleration could if we decide to proceeded with that, could increase our production growth to back to the 20% range by 2011. You know we've been at that rate in the past and I think this demonstrates our ability to ramp up quickly if the commodity prices are attractive. I mentioned earlier next slide 14 is an update of our typical well economics for Piceance Valley well. I think we talked about this during our May call and just to compare the numbers, our net cash to margin back when we talked about this in May was $2.60, our after tax IRRs were 28% and you can see we now are looking at a net cash margin of $3.45, after tax returns north of 50% and it is simply a case of higher prices, lower basis differential translating into higher returns for a typical well in the Piceance Valley. Slide 15 please. This just highlights some of the strategic growth projects in the midstream space. Obviously we are very excited about expanding our footprint in the Marcellus. Of course, we did the Laurel Mountain JV in 2009. We have expanded upon that with what we are calling the Springville Project which I described earlier which expands our business in the Marcellus has us building a 28 mile natural gas gathering pipeline from a central delivery point in Susquehanna County Pa to Transco in Luzerne County, Pa, a 20-inch pipeline which is expected be placed into service in 2011. Other major PZ projects, Perdido Norte we are expecting to begin contributing to segment profit in mid 2010. Wamsutter TXP4, we expect to bring in additional 350 million a day of processing capacity onstream at our Echo Springs plant in late 2010, and the Willow Creek will be enjoying a full year of operations at Willow Creek. We achieved full processing operations in September of 2009 and are currently recovering up to 20,000 barrels of NGLs at that facility. Slide 16 please, gives a quick overview of all of the projects that we have in the gas pipeline space. We continue to receive long-term customer support to expand our footprint, along Transco, along North West pipeline and along Gulfstream. I would remind you the blue box projects are in guidance, the grey box projects are not in guidance and some of the more significant projects noted here are the 85 North Expansion is a $240 million expansion from Station 85 North to zones four and five adding over $300 million a day of capacity, that will be a two phase project going into service in mid 2010 and mid 2011. We have the Rockaway Lateral which is $120 million Lateral into National Grid's Distribution System in New York. The Mid-South project, a $195 million expansion from Station 85 to points North. So a lot of exciting projects and again all of these are backed by a long-term customer support. I am going to pause here for a minute in terms of my slides and go through some Q&A we did last time and deemed to play well, but we have been getting some questions from investors and some of the common themes of those questions I might cover right now, there have been a lot of questions on drilling cost on the Piceance side. We had the ability to lock-in any of the costs and as I am sure you are well aware of the cost for drilling and completion came down in 2009 and we have made efforts to try to contain future increases for 2010 and some of the success that we've had, we have locked in day rate costs for all of our rigs through 2010 in the $16,000 to $17000 per day range and I would remind you that about $2000 to $4000 a day lower than the average rates in 2009. Pumping service costs for cement and stimulation are also under price agreements through 2010. Other key service costs such as mud, water handling, rentals, construction, these are all looking to stay flat with 2009 based on discussions with many of our vendors, probably the only area where we are seeing some upward price pressure is on steel costs. We have also had a lot of questions about midstream economics with people who have recognized that economics are very strong right now and they have been asking what's outlook for the future and so you are absolutely correct. Our realized margin has risen from a three year low of less than $0.20 in the first quarter of 2009 to more than $0.50 in the fourth quarter of 2009 and given the current market and our assumptions about commodity relationships, the 2010 and 2011 margin should easily surpass what was achieved on average for all of 2009 and could even exceed the high point that we achieved in the fourth quarter of 2009. We also continue to be very pleased and optimistic regarding demand for our NGLs and the resulting NGL margins. Ethane demand in the US pet-chem industry averaged in excess of 900,000 barrels per day in the fourth quarter of 2009 and this is a new record high for demand on a quarterly average basis. We continue to expect to see demand stay high as the global oiled gas relationships continue to place the US pet-chem industry in a very competitive position globally as well as the continued conversion to a more light-end feedstock slate. NGL inventories continue to get worked off as the combination of gas plant production and other sources are not able to keep up with demand, and so this inventory work-off will continue to put strength around our NGL pricing complex as has been recently exhibited in the NGL to oil ratio which is now exceeding 60% on a composite basis versus a year ago's quarterly average of about 55%. So let me turn now to our concluding slide I think its slide 17. This shows just the key takeaways around the theme that Williams is a winning long term investment. Certainly as we have gone through the slide deck here, I hope you believe that we have a wealth of value creating growth opportunities which lead to the sustained growth ahead as reflected in our 2010 and 2011 guidance. The transformational transaction will clearly help fuel that growth. The integrated businesses, the integrated model I believe gives us a competitive advantage particularly as we intend to increase our footprint in the Marcellus. I believe that we are able to offer producer, customers a more comprehensive midstream pipeline in gas marketing solution to their service needs. The Piceance basin is a world-class resource continues to performance very positively and I think I would refer you back to the very attractive value returns that are reflective on that slide. We are committed to financial discipline as we grow. We've achieved investment grade ratings, we intend to keep those ratings and I think the final point we expect 2011 earnings per share to be double our 2009 performance. So with that, we will be delighted to take your question.

The question-and-answer session will be conducted electronically. (Operator Instructions). Our first question comes from Craig Shere with Tuohy Brothers Investment Research. Craig Shere - Tuohy Brothers Investment Research: Ralph can you talk through what basins were most affected by each of the respective price related and five year SEC development reserve revisions? And Steve can you kind of put more flesh on the bone regarding what kind of price points you're looking at before you start to decide to press harder on the gas pedal for E&P production?

This is Ralph, on the price side really it's proportional to the amount of reserves we have in the various areas. So on the 336 Bcf of price revision, first of all, about a 100 or so Bcf of that was just a tail reserves that would come off to become economic based on the lower price way out in the future. We obviously believe those will come back but proportionally most of our reserves are in the Valley and the Highlands so thus on a proportional basis, they came out of the Valley and the Highlands. Craig Shere - Tuohy Brothers Investment Research: Okay and five year development?

Five year was interesting. Really the way that works is about 80% of that was in the Highlands and the way that truly works is, its very complicated but in the past basically it was in our drilling program, it basically counted as approved and developed and we were able to count that. Not if it's in the drilling program but it might be a probable location because we haven't taken advantage yet of the Highlands and the one-off rule. We were only able to book the [part] side of that world. So most of that was in the Highlands and the interesting thing about the Highlands as we increased our drilling program which were in the process of drilling went from one rig last year, we're going to be at four. In August as Steve mentioned, we may pull the trigger and do some more. As we prove out more in that field and actually what we call triangulate some of these areas, the one-off rule could be a very big thing for us in Highlands since we have over five Tcf of problem possible in the area. So we look for that one-off rule to be a tremendous advantage for us in this five year limit to be a one-time disadvantage and we look forward to the opportunity to continue to drill, delineate the rest of that field, triangulate around that areas where we can call more than one offset and really take advantage of over 5 Tcf of problems and possibles. And in terms of the second part of your question, what kind of price points we're looking for. I mean there continues to be a great deal of uncertainty with respect to where prices are headed. We've been delighted by the winter, we have been delighted by the fact that storage inventories have been pulled down, but there remains uncertainty. I think people are trying to figure out the EIA supply data, trying to understand to what extent we have seen deliverability reductions, but I think the short answer would be if we get through the heating season and futures prices continue to be strong, particularly strong to the point where we are still able to capture the kinds of well economics that are shown for a typical Piceance Valley well, I think that under those circumstances we would want to accelerate our drilling activities in the Piceance. Craig Shere - Tuohy Brothers Investment Research: While your guidance for 2011 assumes 650 still or somewhere around may be a 612 strip right now, if you are given the profitability in the Piceance if you are still north of $6, after the withdrawal season here, would you still feel like it's $6 plus, there is no reason to hold back?

Yes I think the short answer is yes if we are still looking at that futures price is north of $6 given the kinds of returns that we are seeing in the valley I think that we would want to accelerate our activities.

Our next question comes form Faisel Khan with Citigroup. Faisel Khan - Citigroup: If I could ask a couple of questions, first on the Midstream segment, I noticed that the NGL equity sales volumes were down sequentially from third quarter to fourth quarter and it looks like a lot of those volumes were in the Gulf Coast region, could you guys talk about what was going on over there?

If you are looking at just the fourth quarter to fourth quarter? Faisel Khan - Citigroup: From third quarter '09 to fourth quarter '09?

We had a couple of issues one, we have a contract in the Mobile Bay area there with Exxon and Shell. Shell had a quite bit of work that went on, on one of their plants and Exxon had the right to have monthly right once a year to be able to elect out their liquids and take their liquids and take their liquids and so that's one of the primary drivers on that drop there in the fourth quarter. Faisel Khan - Citigroup: Should we see those volumes bounce back in the first quarter, is that fair?

That's correct. Faisel Khan - Citigroup:

That's consistent with that and that's the cash portion from a net income standpoint, we earn somewhat more, but with the coverage ratios and all those numbers on the slides there are cash numbers, but that's consistent with what we put out before. Faisel Khan - Citigroup: On the E&P side, the higher DD&A expense in the fourth quarter versus the third quarter, it looks it's ticking up. Is there something going over there or should we continue to see DD&A kind of go up through the year?

If you are talking about the rate, it is just a function of the capital investment over the last couple of years. So, it is going up slightly as we continue on. Faisel Khan - Citigroup: I also want to make sure I understood the last answer of the last question on the revisions related to the five-year limit. So, 80% of that was in the Highlands area and that was because of lower drilling activity last year in the Highlands, is that fair?

It's one way to look at it, because of lower drilling activity, we weren't able to really take advantage of what we did in the valley and the one-off rule, so essentially when you look at it, under the new rules, it's your historical conversion rate, I can go on and on but yes, I would say when we get back in the field which we are, and start drilling more and as prices improve which they have, I expect to see very positive results, assuming prices stay where they are and assuming also that we get back in the field which we are already in the process of doing. Faisel Khan - Citigroup: The CapEx guidance for 2011 for E&P is pretty wide, $1.3 billion to $2.1 billion, what does that large bandwidth sort of contemplate?

You are talking 2011? Faisel Khan - Citigroup: Yes

It's essentially the opportunities that Steve talked about, we already are moving from about 12 rigs in the entire Piceance complex area in 2010, the plan in 2011 is to go to 22 and we have the opportunity to do more so that's why the range is so wide plus there is some of the other new things we are looking at, could possibly play into that, so we are just giving it a wider range to what we hope we have succeed during this year

We have a fairly wide range on commodity price. I think the market is fairly close to our mid-point. So that's I think the best way to think about it, but if prices were very low, we would restrain our drilling activity, if prices were exceptionally high, we might put more capital, even more capital to work in E&P, than we would at something close to current market prices.

We will take our next question from Mark Caruso with Millennium Partners Mark Caruso - Millennium Partners: Just a few follow-up questions or a clarification actually. The first question is, could you give the capacity on the new Marcellus pipe. I know you are saying mid 2011, but I didn't hear a capacity on how large that pipe could be.

That will be a little over 350 million a day of capacity. Mark Caruso - Millennium Partners: 350 a day and is that a 100% contract with Cabot or is there still opportunity for you to equity volumes or more third party volumes?

There is some additional space. We have got the ability to expand that pipeline beyond the Cabot piece there initially. Mark Caruso - Millennium Partners: And then on the guidance side, it looks like if I do the math right midstream fracs on a gallon basis are higher than guidance but you guys didn't increase guidance for 2010. I didn't know if gave a little more color around that. Or there is a range of 27 I guess on midstream?

On midstream, well certainly if you look a the current markets, the current markets are certainly exceeding those guidance numbers that we've got in there as we head in the first part of the year. However if you look in any of the forward market that certainly is not supported above that and so we want to see what happens when we get through the first quarter. Here I will say that the fundamentals as Steve mentioned, the fundamentals are probably better right now than they have been in a long time and give of some optimism just looking at storage volumes in the way we are continue the Q through some of the light end production and storage right now, so we're hopeful that we will be able to do that but a little early to call it at this point. Mark Caruso - Millennium Partners: Okay and then just one last question looking at the 2011 numbers. It looks like E&P went up but overall didn't change. Is that just a matter of when I was looking at the slides getting lost in the consolidation, given the fact that you're now own 80% how it consolidates up?

Yes I think that was just a bit of refining in our guidance, we didn't think the changes were sufficient to warrant any overall change.

Our next question comes from Jessica Chipman with Tudor, Pickering & Holt. Jessica Chipman - Tudor, Pickering & Holt: I have a question related to Marcellus. I know that you guys are in the beginning stages there. My question is whether I can get a little more color going to 2010? I think that as of last update you had one rig running per year, Rex, JV and the Marcellus. And since then you have also added about 6000 net acres outside of that JV if I understand that correctly. My question is, if you wouldn't mind giving us a little color on where that acreage was added. Is that around in the current footprint? Are you looking at areas outside of those counties and also how you plan on allocating capital in the Marcellus? Do you plan on drilling on that acreage outside of the JV or at least take first via Rex JV?

Well, the acreage we acquired some of it is in the around the Rex deal and other acreage is up primarily in the North East areas some of the more active counties that you've seen the Susquehanna side of the world and surrounding counties. We actually have a large by- area that we have both starting from the North East side going down to the South West side. So, we're actively prospecting in the really the entire play. We currently have as we've just now taken our operations just the one rig that we will be operating I believe Rex will be operating on another part of rig or two. I think they'll give their update in a couple of days. So, our plan is going forward allocating capital would be, we will continue in the Rex area and we also would like to at some point add another rig into our new acreage and also, we would hope that we have some other successful deals concluded in other parts of the play. Jessica Chipman - Tudor, Pickering & Holt: Okay, and if you do a rig outside of that acreage in your JVs, will you press release the results or will you wait an update quarterly for the Marcellus?

We haven't really thought about that, we'll not want to ever beat the drum on an initial production that comes out of a well but we will probably, after we fill the wells in good shape, then we will probably give updates as needed at least quarterly but we may do it more often.

We will take our next question from Yves Siegel with Credit Suisse. Yves Siegel - Credit Suisse: Couple of questions, one, Alan as it relates to processing margins being so good right now, how does that figure in your decision to perhaps hedge or not hedge?

Well we certainly feel like the forward market right now on NGLs, if you went out and tried to hedge right now, we think is really over saturated with sellers largely I suspect driven by MLPs that don't have enough fee based business to produce the volatility in the kind of situation where they are having to go in and re-up those hedges and so there is just tremendous pressure on the self side in that forward market. And really the only buyers appear to be in that, appear to be the banks and so we just look at the value to spread between gas to crude going forward versus the gas the NGLs, it's a dramatic decline in fact forward market on crude, the NGLs is declining about 15% when even with crude in Contango, so we really feel like there is not much value right now in that forward-looking hedge. We certainly continue to look for opportunities there, but as it appears right now, it is more of a buyers market than a sellers in that forward market. Yves Siegel - Credit Suisse: Philosophically have you laid out any new guidelines in terms of how you want to approach hedging?

No we really haven't, we continue to look at that on an opportunistic basis and if we think the market is a fair reflection of the forward value and we need to reduce volatility, then we will certainly act whenever we see those opportunities, but we haven't laid our any new philosophy on that.

I would just add that again we have a very strong balance sheet at WPZ, we have a strong coverage ratio and we think we have strength to weather that volatility. Despite the fact we love to hedge more, but nonetheless I think as Alan points out, we are unwilling to give up a great deal of value because we don't need to, so we will be more opportunistic in terms of taking risk off the table. Yves Siegel - Credit Suisse: If we just turn back to the Marcellus number one, can you disclose how much of the pipeline will cost? Then number two, could you also talk about how you see gas flows going forward? I am talking about the dry gas that gets into Transco, is that going to be staying up in the east or do you think you might see a backhaul and then thirdly, have you given thought perhaps to the liquids in the Marcellus in terms of perhaps coming up with a solution, either going up to Canada of going down to Mount Bellevue?

Don't get me started on that third one, that third one has a lot of opportunity around it and certainly an issue in need of a solution right now that we are working hard. On the first matter, no use for competitive reasons we are not releasing that capital investment just for transparency sake on that and secondly on the question of volumes back on, certainly let Phil speak to his perspective on Transco on that I can tell you from our advantage point, that it's pretty early. There is not near as much production as there is talk of production just yet and so certainly I think it has the potential but we are [ways] from that and I let Phil speak what he is seeing.

This is Phil. I agree totally with Alan, I would say that the opportunities to do backhauls are clearly there and we have customers interested in backhauls and we have been doing it for a long time on Transco for instance. Customers in the southeast region have benefited from taking gas from Cove Point via the Leidy Hub into the Transco system and down for a long, long time. And so to the extent that volumes in the Marcellus ramp up and we have customers throughout the Transco system that through displacement want to do backhauls and like we can accommodate that very nicely.

We will go next to Carl Kirst with BMO Capital Markets. Carl Kirst - BMO Capital Markets: Ralph, you were mentioning that we are hopeful we are going to see some things shake loose here. I was wondering if you could comment on, we just had Anadarko which looked like a pretty good price for some of its acreage, are you seeing the land value is kind of continuing to heat up to the point where you know beyond you guys might be working on today, there will be further opportunities from sort of an acquisition side or are we kind of shifting back to more sort of a slower boot strapping approach, again like we saw in this last quarter where we will just kind of see the earnings release and every quarter we might be adding 5000 acres of quarter so to speak?

I would say that obviously as Steve mentioned we are going to very disciplined in what we do, but we are looking at it really from the grassroots leasing side, the joint venture side and obviously again in a very disciplined manner there are number of big players, small players, medium-sized players up there, so we are also looking at from the A&D side. So I think from an E&P perspective we are going to continue to look at it from all three of those angles and hopefully through a disciplined manner, you see some good growth there. I do think that we do bring to the table as Steve mentioned a very strong William story to the Marcellus. If you think about it, obviously E&P expertise that we have, our midstream expertise and the need, a desperate need for some midstream solutions up there. Transco runs right through the heart of the play and then our gas marketing people have been very successful in helping out in some of the ventures we have going and actually taking the producers staff and market it for them. So we are looking at it from E&P, from a three-pronged approach, that really Williams is looking at from a four-prong approach, so we think we have a great Marcellus story and we are getting a lot of good feedback on it and a lot of good meetings held, so hopefully we will see some success with those conversations we are having Carl Kirst - BMO Capital Markets: Where are we on the latest with respect to the Paradox?

On the Paradox we continue to be encouraged, I know [Baird] has their comps gone a couple of days, so we're encouraged with the thirteen H wells we caught that we've been monitoring for quite a while. I think Joe is actually going to give some decline curves and some tight curves around that. What we're really looking forward to is the ability to repeat that in that area and also in the area of extent of repeating that. So as we continue to work with them we hope to, if we remain encouraged which we are, probably drill at least a couple of wells continuing to delineate and see if there is an opportunity to find that area of extent of the play and see if it works like it is in that [costly] area so we're cautiously optimistic and looking forward to hopefully drill in a couple more wells and give you some more tests in some more areas defined out there.

We'll go next to Andrew Gundlach with ASB. Andrew Gundlach - ASB: I have a question on the Piceance Highlands and Valley, on the economics that you put in the data book I don't know if this is for Ralph or for Steve but I understand the difference in the drill and complete what I don't fully understand and which leads to a lower but now insignificant IRR is the location difference and differential and transport differences between the two areas and also the working interest. Could you just put a little light on that?

Yes on the working interest, what we have done is we have blended the various areas up there. For example we own on the trail ridge area we basically own all of that and the Ryan Gulch area we own 51% and (inaudible) owns 49% so that blends the working interest and this year we are drilling about two third Ryan Gulch and one third trail ridge out there. On the differential side, location and differentials, it's all in the liquid value basically. It's included between the two and the amount of reserves differentials, essentially the Highlands area has a little deeper formation that we're also tapping into a little thicker columns so a little bit more reserves in the Highlands area. Andrew Gundlach - ASB: I see and what explains geologically or reservoir wise the much higher IP rates in the Highlands?

Yes, in the Highlands its again it's a thicker column. It's the ability to tap into a little deeper formation also then just the (inaudible).

Our next question comes from Jonathan Lefebvre with Wells Fargo. Jonathan Lefebvre - Wells Fargo: Thanks guys. Most of my questions have been answered.

Or if you have any other questions? Jonathan Lefebvre - Wells Fargo: I do not. Thanks.

Okay. Thank you. We'll take our next question from Holly Stewart with Howard Weil. Holly Stewart - Howard Weil: Two questions, one for Alan following up on Mark's question on the new Marcellus gathering line. Is the 350, is that all for catheter or do you guys have some volumes on that as well?

No. it is not all for catheter. We do have some remaining space on that. Holly Stewart - Howard Weil: Can you break that out for us?

No. We're not disclosing that detail. Holly Stewart - Howard Weil: Okay and then I guess follow-up for Ralph. 4Q volumes a lot better than our expectations considering kind of the pull back in capital during the year. It looks like you got a bump in the Powder River and the San Juan. Can you provide a little color there for the Q and then thoughts kind of moving into '10?

Well, for the quarter basically, the Powder is just always a function of the dewatering side of the world and we had benefits from that. San Juan is just we actually did some additional drilling there that we haven't done before and under format. So just some good surprises, they are not surprises but just good timing of those things coming on. For 2010 essentially the plan and the guidance you've seen so far as it just basically shows like flat production for '10 and then growing to about 11% to 12% in '11 and that goes into what Steve talks about that to the extent we get back in the field earlier. We obviously plan to have a go from 12 to 22 rigs for example in the Piceance from 2010 to 2011 and you see that kind of growth as we come out with good strong prices. One of the goals would be to get into the field quicker than we are right now and since start adding rigs earlier than what the current plan has. So if we do that then we can have stronger production growth. Holly Stewart - Howard Weil: Okay, do you have an exit rate for the year you can share?

I don't have that in front of me. I think we can share that I'll just need to get that to you and if can give it out, (inaudible).

And our last question comes from Todd Godfrey with UBS. Todd Godfrey - UBS: Could you just give us pro forma corporate debt and corporate cash position and postal transaction last night? Thank you.

Pro forma corporate debt $2.3 billion cash position was $1.2 billion before closing the transaction, now draw our cash a little bit on a pre-tax basis and that will take the tax deduction and throughout the year and which would get the free tax cash back by the end of the year. So, does that help?

And with no questions remaining I'd like to turn the call over to your speakers for any additional or closing remark.

Yeah this is Steve. I would just say that the transformational transaction that we completed yesterday really puts us in good shape to capture all of the growth opportunities that we've spoken about today. We also believe that the Marcellus represents a wonderful opportunity for us and the integrated model is really working well for us there. And then the Piceance is a world class asset and it is every bit as good as any of the Shale plays out there. So with that look forward to talking to you next time bye.

Once again that does conclude today's conference call and we thank you for your participation.