Williams Soars On Spin-Off News

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Williams Cos., the fourth-largest operator of U.S. oil and gas pipelines, saw its shares surge $2.32, or 8.36%, to $30.08 today on volume that was eight times the daily average after the company announced plans to split is exploration and production and pipeline businesses into two separate companies.

Oklahoma-based Williams (WMB) an initial public offering for its exploration and production business is scheduled for the third quarter. The rest of the business will be sold to shareholders in 2012.

Williams' oil exploration division produced $841 million in revenue in the third quarter, a fivefold increase over the 2009 third quarter while the pipeline and storage operations generated $1.4 billion in third quarter revenue, a 25% decline from the third quarter 2009, according to Bloomberg News.

The new E&P company is expected to have an enterprise value of $7 billion. Enterprise value is the measure of a company's debt and equity. Williams also said it will boost its quarterly dividend by 60% to 20 cents a share and that is planning another increase of at least 15% in 2012.