Williams: Negative Implications Of Chesapeake Deal
- Williams agrees to fee cuts for higher volumes from Chesapeake Energy.
- The auction process for the company remains in limbo placing the positive merger with Williams Partners and the promised higher dividends on hold.
- The uncertainty around Williams makes the stock difficult to own despite the collapsing price.
In possibly a somewhat surprising move, Williams Cos. (NYSE:WMB) subsidiary Williams Partners L.P. (NYSE:WPZ) agreed to lower the gathering and processing costs for Chesapeake Energy (NYSE:CHK) for higher future volumes. The move is rare for the MLP sector and has some troubling implications despite the signaling by Williams that the move is a win-win for both parties.
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