Good day, everyone. And welcome to the Williams First Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Mr. Danilo Juvane, Vice President of Investor Relations and ESG. Please go ahead.

Thanks, Sara, and good morning, everyone. Thank you for joining us and for your interest in the Williams Company. Yesterday afternoon, we released our earnings press release and the presentation that our President and CEO, Alan Armstrong, and our Chief Financial Officer, John Porter, will speak to this morning. Also joining us on the call today are Micheal Dunn, our Chief Operating Officer, Lane Wilson, our General Counsel, and Chad Zamarin, our Senior Vice President of Corporate Strategic Development. In our presentation materials, you'll find a disclaimer related to forward-looking statements. This disclaimer is important and integral to our remarks and you should review it. Also included in the presentation materials are non-GAAP measures that we reconciled to generally accepted accounting principles, and these reconciliation schedules appeared at the back of the base presentation materials. So with that, I'll turn it over to Alan Armstrong.

Thank you, Danilo. Our natural gas focused strategy continued to deliver steady, predictable growth, and this past quarter was certainly no exception. In fact, we posted yet another quarter of record EBITDA driven by growth across all four of our core business segments as well as our Upstream JV operations. We continue to set new records for contracted transmission capacity and expect this record-breaking performance to continue for many years to come as we execute on the six unique transmission expansion projects totaling 1.9 Bcf per day, and our GMP business remains strong with modest growth during the quarter expected to ramp up over the balance of the year. We continue to further advance our clean energy strategy through tightly aligned deals announced this quarter, including our acquisition of the Trace Midstream assets in the fast-growing Haynesville region, which just closed this past Friday, and through our partnership with Context Labs that I will detail more when we get to our key investor focus areas. Overall, we expect strong natural gas market fundamentals and steadfast project execution to drive additional growth for our business in ‘22. As a result, we are raising financial guidance with expectations of another remarkable year of growth. Importantly, the midpoint of this new guidance is beyond the top of our previous range. So an impressive start to the year with a number of clear catalysts for growth for the balance of the year and into ‘23. And now I'll turn it over to John to go through the results for the quarter and our raised guidance.

Thanks, Alan. So starting here on slide 1 with a summary of our year-over-year financial performance, overall, ‘22 is off to a strong start. We've seen 7% growth in EBITDA or 13% if you adjust last year to remove the favorable effects of last year’s severe winter weather, including winter storm Uri. Our core natural gas focus transmission and gathering and processing businesses have fueled this EBITDA growth. Although, we have also enjoyed continued strength in our Upstream and marketing businesses. Our adjusted EPS increased 17%, continuing the strong trend of double-digit growth we've seen now for many years. Available Funds from Operations, AFFO grew a bit more than EBITDA continuing the trend of strong growth in this measure, up 16% year-over-year. As a reminder, AFFO is cash from operations including JV cash flows, but excluding working capital fluctuations. If you compare AFFO to our capital investments of $316 million and our dividends of $518 million, you see that we generated over $350 million in excess cash for the quarter. Also, you see our dividend coverage on this page based on AFFO continues to be very strong at 2.3x. Our debt to adjusted EBITDA metric continues to improve based on our strong growth and EBITDA and cash generation and our capital investment discipline. So now let's move to the next slide and dig a little deeper into our EBITDA results for the quarter. Again, another strong start this year with 7% growth reflecting the combined effect of the performance of our core business and upside in our upstream operation. Walking now from last year's $1.415 billion to this year's $1.511 billion, we start by isolating those favorable effects from last year’s severe winter weather which were $77 million, and are shown here in gray. Maybe just a quick opening comment regarding expense trends since inflation has been such a big topic lately; we've actually continued to see very solid cost control in our business. You may have noticed the $34 million increase in operating and maintenance expense on the face of our income statement, but this is really driven by a combination of higher reimbursable expenses that are offset in other fee revenue, new lease payments that were just the planned part of Transco’s Leidy South expansion project, and finally operating expenses associated with our new upstream operations. And related to the $31 million increase in SG&A on the face of the income statement, you should know that this is pretty much entirely related to the addition of the Sequent business. That also includes their bonus accrual and also an $8 million credit reserve related to a small customer bankruptcy. Moving next to our upstream operations on the waterfall chart here included in our other segment, upstream operations were at $56 million, excluding the $22 million of winter weather benefits from last year. Importantly, our first new Haynesville production only began in April so really no contribution in this $54 million yet from Haynesville. So the full amount of the growth is attributable to our Wamsutter properties. And it's a bit of an apples to oranges comparison in that. As a reminder, last year we owned 100% of the acreage we acquired from BP only for February and March; but in the first quarter of this year, we owned 75% of the Wamsutter upstream JV which now includes the combined BP, Southland and Crowheart acreage. Shifting now to our core business performance, our Transmission and Gulf of Mexico business improved $37 million, or 6%, primarily at Transco and largely from the Leidy South Expansion Project, which came online in phases last year. Overall, our average daily transmission volumes for Transco increased over 6% versus the prior year as we once again saw record winter natural gas demand. And Transco’s revenues are driven by reserve capacity, not actual throughput, but continued growth in actual throughput does highlight the criticality of Transco’s service. We also saw higher margins in our Gulf of Mexico business. Our Northeast G&P business increased $16 million, or 4%, driven by top line gathering and processing revenue growth on slightly lower volumes. G&P rate growth was supported by a combination of factors including higher commodity base rate, annual fee escalation and other expansion-related fee increases that more than offset lower cost to service rate at our Bradford franchise. The slightly lower year-over-year Northeast volumes in the first quarter were anticipated in our initial guidance, and we expect a continued quarterly increase for the remainder of the year compared to the first quarter of ‘22 levels. We continue to expect a gradual increase in overall Northeast volumes throughout the remainder of the year. But ultimately, our plan for the Northeast in ‘22 continues to see higher EBITDA versus ‘21 on pretty flat volumes. However, we are well-positioned to resume stronger volume and EBITDA growth in the Northeast in ’23 driven by several expansion and optimization projects underway that Alan will discuss in more detail. Shifting out to the West, which saw an impressive $35 million or 17% improvement over ‘21. In the West, we continue to see upside from our commodity price-exposed rates in the Barnett, Piceance and Haynesville as well as substantially higher volumes in the Haynesville that drove an 11% overall increase in volumes for the West. In the West, we see a strong quarter-over-quarter growth trajectory throughout the rest of the year, especially in the second half of the year driven primarily by strong drilling activity in the Haynesville. Next, you see a $30 million increase in our Gas and NGL marketing services business, which includes both our legacy gas and NGL marketing business as well as Sequent. This improvement was primarily caused by the addition of Sequent in July of last year. Overall, this segment produced $65 million of EBITDA. As a reminder, the first quarter of each year is typically when Sequent creates the majority of its EBITDA. This was a strong performance for the team. While we expect to see $50 million to $70 million of annual adjusted EBITDA contribution for this combined segment, Sequent plus our legacy marketing business, this year we've gotten off to a stronger start than expected. With the strong commodity price expectation for ‘22, we expect to exceed this $50 million to $70 million range. So again, another strong start to the year with 7% growth in EBITDA at over $1.5 billion, driven by core business performance and upside in our upstream and marketing operations. Let's move to slide 3 to look at our latest financial guidance thoughts for full year ‘22. We are pleased to share a substantial improvement in our ‘22 financial guidance versus what we provided in February of this year. I won't go through each of these metrics but we'll offer some commentary on the most pivotal numbers. Let's start with adjusted EBITDA where our midpoint is increasing $250 million, moving from $5.8 billion to $6.05 billion with the tightened range of plus or minus $150 million versus the original plus or minus $200 million. This substantial raise in EBITDA guidance is grounded in our confidence in the continued growth in our core business before considering the Trace acquisition. Specifically, we expect steady quarterly EBITDA in our Transmission and Gulf of Mexico business through the remainder of the year, the continued quarterly EBITDA and volume growth from our West and Northeast segments, with some level of acceleration through the second half of the year. Additionally, for the remainder of ‘22, we expect a growing contribution from the Trace acquisition, which closed last week as it moves towards the targeted approximately 6x acquisition multiple based on its ‘23 EBITDA. And finally, with respect to our upstream operations, we are encouraged by the results we've seen thus far in ‘22 and remain confident in the fourth quarter exit rates we quoted at our Analyst Day. Shifting down the page now to growth CapEx you'll note a $1 billion increase in guidance from a combination of the $950 million Trace acquisition value and other Trace-related CapEx. Note that we've closed the Trace acquisition using a combination of cash on hand and other sources of liquidity including our revolver and commercial paper. You see that our debt to adjusted EBITDA remained steady at 3.8x reflecting the balancing of our increase EBITDA with our increased growth CapEx portray. The remainders of the guidance items either changed in relation to the change in EBITDA that I just discussed or remain unchanged as in the case of maintenance CapEx. So again, a substantial increase in EBITDA dollars at the midpoint driven by continued growth in our core business as well as contributions from the Trace acquisition and sustained expectations for our Upstream JV operations. So with that, I'll pass it back to Alan to review our key investor focus areas.

Okay. Well, thanks, John. I am going to move on to key investor focus here on slide 4. Our natural gas-focused strategy continues to play out with strong fundamentals that are driving incremental growth opportunities particularly as we continue to see increasing demand for US LNG exports along the Transco corridor, as well we've seen domestic demand for power and industrial sectors continue to grow despite much higher natural gas prices. Admittedly, it has been somewhat surprising to us how inelastic the challenge ahead to meet this higher cost of supply is the infrastructure to connect some of the world's lowest cost supplies to this burgeoning demand. I'll point out that Transco delivered a record-breaking 17.15 million dekatherms on January 3rd and while extreme winter day deliveries this volume record, it was due to growing demand in the Transco markets. We expect this natural growth in demand to continue as we continue to see loads within our existing footprint. Our G&P business continues to thrive in the current environment, allowing us to capture the upside benefit of pricing and inflation adjusters in our rate that have been sitting on their floor for many years and we continue to execute our upstream JV strategy by realizing the near-term benefits of its commodity price exposure while setting the stage for continued use of our latent midstream capacity in the longer term as these volumes grow. And now I'm going to move on to our financial strength and stability. As detailed earlier by John, we increased our guidance midpoint to $6.05 billion driven by the following. First of all, strong base business performance with volumes in the Northeast G&P business expected to rebound for the balance of the year. This along with the higher rates that we're seeing in some of our consolidated assets is set to drive very strong performance for the balance of the year. Strong performance of our Gas and NGL marketing business in the first quarter and the growing volumes in our Upstream JV, which are enjoying higher than planned pricing is another driver. Finally, incremental volume and earnings from the Trace acquisition as we've mentioned earlier with our recent updated guidance, we expect to achieve a four-year EBITDA CAGR now at 7% and an impressive EPS CAGR of 19% at our midpoint. On the whole, our business continues to fire on all cylinders, driving our financial strength and stability. The picture actually just keeps improving as we have been well-positioned to capture the upside in this environment. Looking now at our exposure to growth, given the current strength of natural gas fundamentals in the US and abroad, we see a significant runway of growth opportunities for Williams. First of all, we now have 1.9 Bcf per day of high return Transco projects that have now moved into execution. This has been raised since our Analyst Day due to recently secured customer commitments to advance the Texas Louisiana Energy Pathway Project, which moved out of the development bucket into execution. This project connects low-cost South Texas gas supplies with LNG markets in Louisiana. In the Gulf of Mexico, we secured another customer agreement at Salamanca further building on growth momentum in the Deepwater Gulf of Mexico, which continued to deliver more and more opportunities in response to these higher oil prices. In the Northeast, we've reached agreements with our producing customers for significant gathering expansions in both the rich Utica and the rich Marcellus. We now have four significant expansion projects under execution that will drive growth showing up later this year and in 2023. Our strategic bolt-on acquisition of assets from Trace Midstream closed last week, and this now positions Williams as the second-largest gas gatherer in the fast-growing Haynesville. This is consistent with our long-held strategy to seek a number one or number two position in the key basins in which we operate. With our Haynesville gas gathering capacity now about 4 Bcf per day, we continue to crisply execute on our wellhead to water strategy. In fact, we are close to commercializing the Louisiana Energy Gateway project. Given significant interest from its various shippers, we expect to announce a final investment decision on that project soon. Our growth prospects don't stop with these projects; however, we see more opportunities on the horizon even as we navigate an evolving regulatory environment. Importantly, we saw that FERC respond to concerns from both industry and legislators in a constructive manner this past quarter, and we are optimistic that regulators recognize the need for a reliable permitting process to support natural gas infrastructure. Key legislative leaders have renewed their focus on streamlining permitting in our country to ensure that we have the necessary midstream infrastructure to support our country's LNG build-out goals. Finally, let's look at the developments related to our new energy ventures. As we think about decarbonization, there are a lot of opportunities to invest in energy innovation and new technologies. As part of our strategy to accelerate the next generation energy marketplace, Williams has established a Corporate Venture Capital Fund that is set up to support direct investments in startups that leverage Williams’ assets for decarbonization solutions, as well as limited partnership funds that specifically invest in low carbon technologies. A great example of how we're utilizing this VC fund is our recently announced partnership with Context Labs on a technology solution to support the gathering, marketing, and transportation of responsibly sourced natural gas from wellhead to end user. By leveraging the Context Labs technology, we will enable supply and delivery decisions that connect the cleanest energy sources to meet real-time energy needs across the country. Also supporting our work in this space, we just announced a collaboration with Cheniere Energy to implement a QMRV pilot that will further the development of advanced monitoring technologies to enhance clean energy supply and delivery for Williams and its customers. So lots of exciting things happening in this space and all positioned around supporting and enhancing our natural gas-focused strategy. In closing, I'll reiterate that our intense focus on our natural gas-focused strategy has built a business that is steady and predictable with continued growth, improving returns and free cash flow. Our best-in-class long-haul pipes are in the right place serving the very best markets and by design our formidable gathering assets are in the low-cost basins that will be called upon to meet gas demand as it continues to grow. These gathering assets are irreplaceable and critical infrastructure within the natural gas value chain. Our Sequent platform that extends across the natural gas pipeline and storage industry is providing infrastructure optimization services that create value for Williams and our customers while mitigating downside risk. You've heard me say it before, but we remain bullish on natural gas because we recognize the critical role it plays and will continue to play in both our country’s and the world's pursuit of a clean energy future. Natural gas is an important component of today's fuel mix and should be prioritized as one of the most important tools to aggressively displace more carbon-intensive fuels around the world. Our networks are critical to serving both domestic and global energy demand in a lower carbon and economically viable manner. As we look overseas to the energy crisis in Europe and its ripple effects on energy security, the importance of affordable and reliable energy supplies on a global scale has now taken center stage. Williams is excited about the important role we will play in meeting the dual challenge of delivering increasing amounts of reliable affordable energy while also continuing to decrease greenhouse gas emissions around the world. Utilizing our critical infrastructure that is connected to the best natural gas basins in the US to increasingly serve LNG export facilities and growing US demand for clean affordable energy is a great place for our organization to start. And with that, I'll open it up for your questions.

Operator, please open the Q&A line.

Your first question comes from Brian Reynolds of UBS.

Hi, good morning, everyone. Maybe to talk on the EBITDA guidance a little bit. I was curious if you could provide a little bit more color on the upside and downside of the EBITDA range. First look at apples-to-apples comparison seems like commodity exposure is really the main driver of guidance in addition to the Trace acquisition. I am just wondering if you have anything to add to that, in addition to that, if there are any volumetric assumption changes to the guidance update. Thanks.

Yes, actually, the drivers are kind of primarily as you stated that the driver absolutely is based business. If you look at first quarter volumes in the Northeast, and you consider the rebound that we're seeing from very active drilling operations, a lot of that in the third and fourth quarter just due to infrastructure issues, but that is the primary driver—just seeing a nice rebound in the Northeast. I would say we're being pretty modest in our expectation of pricing. In fact, if you look at this quarter, Haynesville really didn't even produce this quarter, other than the base level it's been producing at and certainly didn't contribute to EBITDA. So the upside that we have is really just from volumetrics, those with pretty modest assumptions on pricing for the balance of the year. The primary driver for growth is first, our base business and second, the E&P in the Haynesville and that ramp up that is going very well at this point but did not contribute in the first quarter. Finally, there's the Trace acquisition in that order in terms of the value.

Great, appreciate that color. And then maybe as a follow-up on just the evolving regulatory environment. It appears that there are some near-term tailwinds in support of natural gas and LNG infrastructure permitting. I was curious if you could comment on this evolving environment and curious if Williams is considering adding new Transco growth projects for FERC approval for the docket that may not have been pursued in the last year, the beginning of this year? Thanks.

Well, I would just say, first of all, we have a long list within those six projects that are under execution and we are encouraged in our discussions with the FERC and their clear desire to see good projects that reduce emissions in the markets they serve. I would say we're very fortunate to have a number of projects that actually reduce emissions in the markets they serve. We certainly are seeing support out of the FERC and obviously, they've been moving projects through pretty quickly. On the increment, I would say nothing really changed that much for us; it’s just kind of a steady beat right now of continued demand from customers and RFPs that we're responding to and working with customers on. I will say that, I think on the one hand, you kind of have this popular notion that gas demand is not increasing, while on the other hand, the reality is it is increasing. We’re certainly seeing that through RFPs coming from our various customers on the demand side. So we're pretty excited about the way the future is shaping up on that front, and we do think particularly at FERC level, that they are being supportive, particularly of projects that we can demonstrate reduce emissions in the markets we serve, and we have a great track record of working with the FERC in a constructive manner. We expect that to continue.

Your next question comes from the line of Chase Mulvehill from Bank of America.

Hey, good morning. I guess the first question is just really on LEG. It sounds like you guys are getting close to FID in that. Could you talk about I guess how much contracting that you still have left that you need to accomplish and how much capacity you expect to be in maybe the total cost there as well. And I'm going to follow up after that.

Sure, hey, this is Chad. So LEG is a full-capacity 1.8 Bcf a day project. We have over half of that contracted today. We would expect to achieve a sufficient level of commercial contracts over the next couple of months to FID the project. We see a pretty significant need for volumes that are growing in Haynesville to get to Gulf Coast markets. So I would feel pretty good about that getting done.

Yes, I would say so the capital cost estimates are really pretty much in line with the other projects that we've been executing on the large diameter type activities. We're not ready to disclose the actual capital investment opportunity there. Suffice it to say that the returns are very nice. The fact that we also have options on the pipe right now tells us that we are locking in on what we think the cost will be, just because the volatility of steel prices right now is pretty uncertain. We were able to acquire some options on some surplus pipe from cancelled projects, and you can apply that towards the LEG project. So we feel good about the material costs right now that we have the budget and certainly feel pretty good about the capital costs that will take to construct it, based on what we know today.

Yes, and it's important to remember that when we executed on the Trace acquisition, Quantum did, and we announced that Quantum will be an equity partner in the project. So that'll reduce our capital load a bit. It could be that we bring in an additional equity partner in the project. We think this will de-risk a portion of the capital budget and we will benefit from creating that full value chain from wellhead to water across our infrastructure. We'll work with our partners on the project to optimize the entire value chain.

Okay, alright, perfect. The quick follow up is just directly on that strategy of wellhead to water. We get questions from investors about midstream and if they would ever consider LNG export facilities. Obviously, we've got one of your peers that are considering this. So I guess my question to you is, would you ever consider building an LNG export facility?

Yes, I'll start and then Alan can follow up. I'd say for the Haynesville strategy, the wellhead to water, there's a pretty good existing footprint of LNG export facilities that we're focused on connecting to. We are the largest infrastructure provider to the LNG terminals across the entire footprint. So for the near term, our focus is on making sure that our customers can access those LNG terminals, and also we can connect our customers to the very best markets, whether those are domestic or international. Our strategy of building that full value chain is not dependent upon us building and operating LNG terminals. So our strategy today is to serve as a reliable supplier to LNG export terminals, and then increasingly provide access to our customers to those LNG markets.

Yes, no, I think you said that very well, Chad. I think obviously, there's a lot of project debt that's utilized in that space today that gets those down to some pretty low cash-on-cash returns, so we think it's a great way to ensure there's plenty of capacity to get out if we determine that there wasn't going to be plenty of capacity to get out. We might consider that, but as it sits today, it looks like there's plenty of new capacity that is trying to get built and at low costs, and fairly low returns given the project financing things like this project. So we see better places that we can put our capital to use better today than they are, so that keeps us focused on the areas where we have very strong competitive advantages, as Chad pointed out.

Your next question comes from the line of Praneeth Satish from Wells Fargo.

Thanks. Good morning, just staying on the Haynesville. There's a lot of midstream companies now evaluating takeaway projects, including you guys. I guess my question is, how competitive is it to secure contracts for a new pipeline? I mean, I know you have a head start on LEG because of the Trace deal. But do you think you can generate the same return on LEG as you would on Transco projects? Just trying to get a sense of competitiveness.

Yes, that's a great question. I would say generally, probably not because our returns on Transco have gotten to be much higher than normal projects. Thanks to the efforts of the environmental opposition and making pipeline permitting so difficult in the areas that we operate, it's allowed us much higher returns in that space than would normally be allowed. So yes, it's definitely more competitive. We like it because we've got follow-on business upstream and downstream with Transco, so it makes the kind of total incremental return on those projects attractive, but it is not as high as kind of bolt-on expansions that we see on Transco today just because of our strong competitive position in those areas.

Got it. And then maybe if you could just give us an update on producer activity in the Northeast, sounds like you're positive given the gathering expansions you've announced, but do you see the potential for a more meaningful volume increase in 2023? And then maybe tied to that, where do you stand in terms of NGL volumes versus frac capacity? Do you see the need to expand frac capacity at any point over the coming years? Thanks.

Good morning, this is Michael. I’ll take the Northeast question. We saw in the first quarter of this year, really a convergence of several things that impacted volume in the Northeast across the entire basin. A lot of that was driven by reduction increases that occurred in the fourth quarter of ‘21, where a lot of producers accelerated their well path connections early in order to hit great exit rates for the end of 2021, which was great for our systems. We saw a lot of peaks on our systems in 2021, but that obviously hurt ‘22 performance in the first quarter with all of that really execution and then the decline that occurs from those new wells. We saw significant winter weather in the Northeast this year, something that we haven't seen in several years of this magnitude and that did impact a lot of the production from the producer freeze off. Not only just on our systems but the production that was gathered by others that would be brought to our processing facilities. We also saw some impacts there. So we did see inlet plant volume decline because of that. Finally, we had a producer that had a well path that came online that had significant levels of condensate, which is good for them from a production standpoint, but it overwhelmed their facilities. They weren't able to bring those volumes to us until they rectify that situation, and so that's been fixed. But that did impact some significant volumes from that producer in the quarter. We had several big items that impacted that and developed, and we expect an acceleration of volume coming on between now and the end of the year. We've talked about volumes in the Northeast being somewhat flat this year from some of the producers talking about being in maintenance mode, but we see 2023 shaping up pretty well with the four expansions that we have underway across all of the dry and rich basin in the Northeast.

Just to be clear, when we say we're talking about flat volumes, we're saying flat to ‘21. So there'd be a growth point from where we are here in the first quarter for sure.

Our next question comes from the line of Gabriel Moreen from Mizuho.

Hey, good morning, everyone. With some of the gathering contracts now it sounds like being off the minimums from, I guess, a commodity price standpoint, I was wondering if there's a possibility for getting enterprise rise rules some for sensitivity to net gas prices overall. I'm also just curious, what gas price forecasts are using in your guidance now?

Yes, thanks for your question. I don't think we've released that sensitivity on price. We have said the contracts that we have are around our Laurel Mountain midstream business with EQT in the Marcellus; those have that feature, as well as the Barnett gathering contracts in total and with Total in the Barnett Shale, so those are kind of the two primary areas of exposure to those. There are a lot of areas of smaller ones, but in terms of any significance, those are bigger ones. We have not provided that. In terms of the pricing that's in there, I would just tell you, we're not counting on the kind of current pricing that we have, obviously for the balance of the year. I'd say we're being a bit conservative about what we expect for the balance of the year because we do think given the kind of growth that we're seeing in both the Haynesville and it's gearing up in the Marcellus and Utica that the workflows do, we can't very well on one hand, see the kind of prices to remain at these levels. Those two things have to be considered jointly.

Got it. And maybe if I can just ask one follow-up on the Haynesville. After, hopefully, like FIDs in a not too distant future just how you're feeling about your current footprint there relative to kind of where you want to be, clear there's some other assets, I think that are out there on the market. So maybe you could just kind of speak to that as your balance sheets kind of giving you more room here, I think to play some more offense.

Yes, I would just say, we're as usual, going to be patient and picky and we've done that, and that has served us well. In the case of Trace, we kind of caught that at from a timing standpoint. I think we caught that at great timing, and we had unique considerations that we had to offer Quantum and Rockcliff in terms of access to LNG markets via our LEG and Transco systems, as well as an interest in LEG with Quantum, which was valuable to them. So we will continue to look for those kinds of unique opportunities as they pop up where we've got significant value that we can add between us and environs. I wouldn't say we're not going to look at everything because we probably will, but I think we'll remain fairly patient and picky about how we choose our points of growth.

Your next question comes from the line of Jeremy Tonet from J.P. Morgan.

Hi, good morning. I wanted to discuss Appalachia's production outlook. With the Mariner East pipeline operational and the shell cracker coming online, I'm curious if the increased demand for NGLs is leading to a shift towards liquids-rich regions, or if the focus is still primarily on dry gas due to the higher prices. How are your conversations with producers progressing, and what are your thoughts on how growth will develop this year or next?

Hey, Jeremy, it’s Michael. We're noticing an uptick in growth expectations for 2023 in both the rich and dry gas segments. We have an expansion in Northeast Pennsylvania that will go live in 2023, which will increase our volumes through the gathering system. The expansions we discussed are primarily in the rich areas, and we're collaborating with Ancino, who has production acreage from Chesapeake from years ago. They have access to both rich and dry gas as well as the Flint Cardinal gathering systems, allowing them to leverage the advantages of being in close proximity to both. They are benefiting from available capacity. We are also increasing capacity with some interconnections to facilitate gas movement and capitalize on latent capacity, and those will be operational next year. In summary, we are anticipating significant growth in 2023, particularly on the rich side, supported by NGL and condensate prices linked to WTI.

Got it. Thanks for that; I just wanted to touch on higher net gas prices a little bit more, if I could. And whether these higher prices impact your thoughts on monetizing William Center, Haynesville, E&P assets given the strong price in gas here. At the same time, higher prices, more volatility leading to wider basis differentials. Do you see this driving more upside in through the Sequent operations in the near term given this backdrop?

Yes, great question, Jeremy. I will tell you, I've been really impressed with the way our commercial teams have been working together on Sequent. So I'm going to go into the back—at the end of your question for really, if you think about Sequent and the way that they run the business of optimization, being in a basin that is starting to get crowded from the transport standpoint and starting to have volatility in the bases, allows us to capture an aggregate supplies into then turning that into an infrastructure solution is exactly what we bought Sequent for. That's turning out to be a pretty powerful tool for us, and probably while I certainly expected over time for us to get there, I've been very impressed with how quickly the teams have come together to materialize some opportunities on that front. Really excited about that. I think not just the nice performance that we got out of Sequent here in the first quarter but just seeing strategically what it's doing for us in terms of intelligence in the basin, and dealing with volatility in the basin as markets grow. Optimization of capacity becomes critical as you get up near the limits of the basins’ capacity to export. Again, that allows us then to aggregate those supplies that need optimization, which, of course, gives us a front seat as it relates to infrastructure solutions for that. So really, that has gone according to plan and then some I would say. The question of monetization of the E&P business, remember that first on the long starter, our primary goal and the real value there is for us to build those volumes built up, so the structure that we have today there with Crowheart gives them a very powerful incentive to dramatically grow volumes. That cash margin that flows back to us through the midstream asset is exactly what we're looking for, which is obviously a much more durable solution than depending on high prices here in the current environment. So that strategy remains intact. We remain very focused on getting the volumes built up in that basin before we would think about the next step of monetization, which may very well come there. On the E&P side, somewhat similar, except that in that structure, the undeveloped, not producing reserves but undeveloped acreage does transfer over as the development is done by GeoSouthern, and they are just doing an incredible job; I want to give them a lot of credit here on the way they've been managing as an operator out there on the drilling operations. We're really excited to see what that means for us both in terms of responding to this very strong pricing environment we have on gas and here in the near term but as well as the volumes and the cash margin that we get from the downstream assets in the longer term. So both of those are going extremely well. The Haynesville obviously is going to be a much more near-term catalyst for growth given the ability to very quickly attack and drill out the acreage there, but some of that value will be transferred in the undeveloped acreage not in the producing acreage but in the undeveloped acreage will transfer over to GeoSouthern over time.

The current pace is such that with GeoSouthern operating in the Haynesville, we expect to see a reversion of interest in our undeveloped assets by early 2023. The situation in the Haynesville is self-sustaining, so this will occur naturally.

Your next question comes from the line of Michael Lapides from Goldman Sachs.

Hey, guys, thank you for taking my question. One modeling one and one citing and permitting longer-term one, just on the modeling one, can you remind us I want to make sure I caught this correctly, what was the Sequent contribution in the first quarter? And what do you expect for the full year?

We are speaking to a run rate in our overall combined marketing business of Sequent and our legacy NGL and Gas marketing at $50 million to $70 million on a normal run rate. What we said though is that the $65 million that segment produced in the first quarter, given the strong start that we've seen, and the price outlook for the rest of the ‘22 means that we'll likely exceed that range for ‘22. But $50 million to $70 million is what we're targeting as a normal run rate for our overall marketing business, which is now combined Sequent and our legacy gas and NGL business.

Got it. And then on the permitting front, I know there's lots of discussion in DC about doing things that can make the development of gas infrastructure assets easier over time, but we just saw the administration in the couple of weeks revise some of the NEPA-related requirements for gas infrastructure, which strikes me that would actually make it a little more onerous in the citing and permitting process. We just saw yesterday, a challenge to a license amendment for a Louisiana LNG project that already has an EIS. I'm just curious kind of from your thinking longer-term, what do you think the messages that are coming out across the board or in terms of either from policymakers, environmental groups or others in terms of the desire but more importantly, the process for citing and permitting the asset infrastructure?

Yes, Michael, great question, that model that we study a lot. First of all, that is not a well-oiled machine we're talking about there and I'm not sure if sometimes the right hand knows what the left hand is doing in that regard. Certainly, the FERC got some very clear instruction from the Energy and Natural Resource Committee, so I think that was very helpful in terms of getting the FERC lined out. The CEQ activity that you spoke about was certainly a step backwards, but frankly, the previous path that the Trump administration set on CEQ was helpful. So that’s why I wonder how much impact it had on that discussion, but it certainly was a step in the wrong direction. I don't really have a comment yet on that EIS and re-licensing issue that you mentioned, but I'm not familiar enough with it to comment. I would say yes, we think there's a desire from the administration, and certainly from some of the key Senate committees to streamline permitting. But I'm not sure that everybody's moving in lockstep with that amongst the various agencies just yet. I'm very hopeful, given the direction that FERC responded, that we'll see some work.

Your next question is from the line of Jean Salisbury from Bernstein.

Hi, good morning. How close do you think the Haynesville is to turning out of capacity today? Do you think that it will actually run out before the next wave of projects come on, beginning with go front or it’s like not that close, but maybe next year?

Yes, this is Chad, Jean. Good question. I think that the Haynesville does have takeaway capacity that we see providing relief through probably the next couple of years. I'd note, though, that the traditional Haynesville capacity wasn't necessarily built to the markets that need the gas today. It's not the most efficient path for getting gas to the growing markets, which is why our Louisiana Gateway project makes a lot of sense. We are targeting that project to move directly from the Haynesville south to LNG and industrial markets on the Gulf Coast. We do see the capacity that will allow the Haynesville growth to continue over the next couple of years. But we see a need for projects to come online in the 2023-2024 timeframe.

Great, that makes a lot of sense. And then sort of a related follow-up. We're obviously kind of getting tight on gas takeaway from all of the major tier one databases. Are you starting to see any increase in interest or planned activity from the so-called tier two basins like the Barnett or the Flint set the current gas strip?

Yes, Jean, this is Michael. We are at capacity. We've got a lot of capacity available at the Rockies, for example. I would say you'll see some uptick in activity out of the Rockies to move gas out of there with those pipes that were built historically to move that Rockies gas. There's definitely opportunity to continue to increase from those basins that you called tier two. We have a large footprint there, certainly in the Rockies. We're pretty optimistic about that. We're seeing some drilling activity in the Barnett as well. But most of that is keeping production flat to slightly growing on our systems there. A lot of that's been drilled out and it’s a more tough environment to drill in predominantly being urban. But we are seeing some activity that's very pleasing to us with the rate structure that we have there in the Barnett. For us, the producers with takeaway capability available, and you're going to see some increased activity if these prices continue as they happen.

Your next question comes from the line of Sunil Sibal from Seaport Global.

Yes, hi, good morning, folks. I just wanted to go back to the venture capital fund, which was mentioned for clean energy and greenhouse gas monitoring. I was curious if you could talk about the investment opportunity in terms of the size and threshold on returns on that?

Sure, yes, I would just say, we're being pretty modest in those investments. We have a pretty tight screening process in that regard. We're not putting large amounts of capital to work right now on that, but it is important capital because we think it has a long-term benefit; it will be a differentiator. We've been very clear with ourselves that we want to think about where the buck is going in that regard. We do think that reducing methane emissions and overall greenhouse gas emissions from our natural gas value chain is essential for natural gas to be a powerful tool and be considered the most powerful tool at reducing an impact on climate change. We're dead serious about making sure that on the QMRV front and our ability to, in an unassailable way, certify responsibly sourced gas, we think that's going to be very important in the long run. It's not super expensive because it's not big capital, but we are certainly engaging our organization and making sure that we don't sit around and wait for really good solutions to be developed. We think there’s a lot of efforts going on that front. But at the end of the day, these are going to have to be really strong unassailable solutions that people can trust, whether they're an NGO or a gas producer.

Yes, if you look at that on the venture capital fund, we have been smart investing alongside proven venture capital investors; that's not our core business. We've invested in a couple of existing funds. On the Context Labs investment, we're actually investing alongside Energy Partners; they are the largest investor in that platform, which again we really like; a highly credible investor who is a relatively small minority investment. This allows us to have a significant impact over and how that technology will develop and deploy. We want to make sure that we can help bring to market the very best decarbonization solution. This strategy of finding really promising technologies, partnering with investment platforms that understand these markets, knowing how to put good money to work, then having our company at the table to influence the direction of the technology will achieve the goal that we are all trying to achieve. So that’s how we're approaching the investment strategy.

Got it. Thanks for that. And just one follow-up: I think you mentioned about the gas prices, and I was curious how much of that production that you have ex-player to hedged thought end of 2022 or for 2023.

Yes, so Sunil, thank you for the question. As we discussed in Analyst Day, our upstream hedging program we've been pretty much focused on supporting our original street guidance and the underlying capital investments that we're making in those upstream businesses supporting the plan, upstream gross margin, and those have been at favorable prices versus the original guidance. A couple of points, though, because a good portion of our production volumes is really dependent on future production. We generally don't hedge more than about 70% of our expected exposure for the year. Also in this environment with the strong current pricing that we're seeing, we do expect that operators will push for volumes beyond what those original plans were. But until we see those volumes really materialize, we don't intend to hedge more than really 70% of those originally expected volumes. We do, as we've already discussed, have significant contracts that direct exposure to prices, especially at the Barnett and in the Marcellus. So those contracts also provide us with exposure to gas prices beyond the Upstream JVs.

Your next question comes from the line of Alex Kania from Wolfe.

Great, thanks. Maybe just a follow-up from earlier discussions on policy, but from the administration, you’ve talked about the agencies, but do you think there’s a chance that we may be able to see some sort of legislative kind of work being done that maybe kind of is kind of sort of an all-of-the-above sort of strategy coupling clean energy incentives with kind of more focus on natural gas?

Yes, I'll take the first part of that, and I'll hand the solar question off to Chad. First of all, I would just say on the policy question, normally, my immediate response to that would be void to a crowded field of issues and it would be hard to get any movement on energy policy. But Senator Manchin has been very well seated and very well positioned to drive the solutions, and he has been putting forth some thoughts on energy policy, and I'm very thankful for that. I think the timing is right to get some attention to that and actually come up with an energy policy; people would, I think all of us would question whether we've actually had an energy policy or not. The timing is right for that. Getting some clarification on that would really benefit our country and hopefully, set legislation in place that puts aside some of the ways that we continue to stand in our own way as a country in using our natural gas resource as both a powerful economic driver for us which, in the next year or so, we're going to wish we had, as well as a powerful geopolitical tool, obviously. I think the timing is right, and we’ve got a really good advocate for that in Senator Manchin. So I would just say we're very hopeful on that front. I’ll turn the solar question over to Chad.

Yes, I would just say that we are watching proposed tariffs, we're watching the discussions regarding incentive structures for solar. I will remind you that our solar program is primarily focused on installing solar in facilities where we utilize power that in many cases is more expensive than standalone solar that we can install. We are—the economics of our investments are primarily driven by our ability to install solar projects that, frankly, compete even without incentives, almost irrespective of some of the cost pressures that we're seeing. As it relates to the $100 million that we've talked about this year, I'd say not so much affected by the policy issues. I will say that we have, we're keeping a close eye on supply chain issues. We are under no time demand to install our solar facilities by a certain date; we are going to make sure that we time those projects appropriately. We don't want to get caught subjected to higher prices than we need to pay for materials because of supply-constrained issues. We're keeping a close eye on the supply chain side of things, which has a much bigger impact, we think, at least for the projects that are currently underway than the policy issues that we're keeping an eye on.

And I would like to turn the call over to your President and CEO, Mr. Alan Armstrong. Please go ahead.

Thank you very much, and appreciate everybody tuning in today and appreciate great questions. I just want to reiterate here on the backhand that the drivers for the growth for the balance of the year are really powerful and really across our base business, the Marcellus and Utica as we discussed, obviously, the Haynesville growth is powerful, and I think people are starting to see strong evidence of that. In the deep-water business, we've got a couple of really nice tie-in projects this year that will add value towards the end of this year. One set or later this year, as our drilling operations pick up towards the very end of this year, we'll see volumes on the long side that will drive the base business as well out there. Finally, as I mentioned earlier, the Haynesville, we really haven't even seen the power of that yet on the E&P side. The first quarter was definitely not driven by that because that's really a balance of the year and into ‘23. Really attractive earnings coming out of that area as well. So a lot of great quarter but a whole lot of firepower left here to drive growth for balance of the year and into ‘23. With that, I thank you for your attention today and look forward to talking to you soon.

And ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.