Williams Partners already owns a 40 percent interest in Discovery. Discovery provides gathering, transportation, fractionation, and processing services to producers operating in the shallow and deep waters of the Gulf of Mexico.
The transaction is expected to be immediately accretive to distributable cash flow for Williams Partners on a per unit basis for Williams Partners' unitholders.
The equity earnings attributable to a 20 percent interest in Discovery were $5.4 million for the 12-month period ending March 31, 2007. Distributable cash flow attributable to a 20 percent interest in Discovery was $10.3 million for the same period.
A table reconciling Discovery's distributable cash flow to a measure included in Generally Accepted Accounting Principles for the 12-month period ending March 31, 2007, is included at the end of this press release. For Discovery, distributable cash flow is defined as net income plus depreciation and accretion and less maintenance capital expenditures.
Williams Partners plans to fund its payment of the purchase price with cash on hand. The transaction, subject to standard closing conditions, is expected to be completed before the end of the month.
The board of directors of the general partner of Williams Partners approved the transaction based on a recommendation by its conflicts committee. The conflicts committee, which is comprised entirely of independent directors, retained independent legal and financial advisors to assist it in evaluating and negotiating the transaction.
Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. The company also manages a wholesale power business. Williams' operations are concentrated in the Pacific Northwest, Rocky Mountains, Gulf Coast, Southern California and Eastern Seaboard.
Williams Partners L.P. primarily gathers, transports and processes natural gas and fractionates and stores natural gas liquids. The general partner is Williams Partners GP LLC.
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