Williams Companies (NYSE:WMB) produces about a billion cubic feet of natural gas every day, and runs nation-wide network of gas processing plants and transportation pipelines. In the Oil & Gas Pipelines industry, WMB competes against companies such as El Paso and Questar for pipelines in North America.

WMB's central focus is natural gas prices, which is most heavily affected by changes in demand for fuel, which in turn is affected by the weather and the price of natural gas. Though its pipelines segment is federally regulated, higher gas demand causes Williams will transport more natural gas and process more natural gas; since these two services make up about 76% of the company's revenue, higher transport volumes lead to significant increases in revenue. With no intrastate natural gas distribution segment, Williams only has to deal with one set of regulators: federal regulators. This puts it at an advantage over other pipeline companies, who sometimes have to deal with multiple complex regulatory codes. The company uses the cash flow from its pipeline business to fund its E&P business, which tends to explore for natural gas in unconventional, expensive to develop fields. Fortunately, natural gas prices have risen 43% since 2002^[1], making WMB's production strategy very profitable - until prices fall again.

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