Quarterly / Earnings Reports | Second Quarter (2Q) Update | Midstream - Construction

OneOk Partners Announces WesTex Expansion

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   |    Thursday,August 06,2015

ONEOK Partners, L.P. has announced second-quarter 2015 financial results.

Highlights:

• Announcing in July the WesTex Transmission Pipeline expansion, an investment of $70 million to $100 million to construct two compressor stations and upgrade three existing compressor stations. 
• The expansion project will complement the Roadrunner Gas Transmission pipeline joint venture and provide markets in Mexico access to upstream supply basins in West Texas and the Mid-Continent;
• Adding two new third-party natural gas processing plant connections to the partnership's NGL system, one each in the Williston Basin and Mid-Continent;
• Adding two new compressor stations totaling 28,000 horsepower to the partnership's natural gas gathering system, both in McKenzie County, North Dakota;
• Completing the sale of approximately 5.5 million common units through the partnership's at-the-market (ATM) equity program in the second quarter. The net proceeds, including ONEOK's contribution to maintain its 2 percent general partner interest, were approximately $208.1 million, which resulted in ONEOK's aggregate ownership interest in ONEOK Partners decreasing to 36.8 percent at June 30, 2015, from 37.6 percent at March 31, 2015. As of June 30, 2015, the partnership had approximately $238 million of common units available to issue through its $650 million ATM program

Business-Related Segments:

Natural Gas Liquids Segment

• The natural gas liquids segment benefited from volume growth of NGLs gathered and fractionated during the second quarter 2015 and through the first six months of the year. NGLs transported on gathering lines increased approximately 50 percent for each period compared with 2014, primarily due to new Permian Basin volumes transported on the acquired West Texas LPG pipeline system. 
• Recently connected natural gas processing plants across ONEOK Partners' system, including two new third-party plant connections in the second quarter, also contributed to volume growth. NGLs fractionated increased 7 percent for the second quarter 2015, compared with 2014. 

Natural Gas Pipelines Segment

• The natural gas pipelines segment experienced fairly normal operating conditions during the second quarter 2015. Variances in financial performance between the six-month 2015 period and the same period in 2014 were primarily a reflection of significantly higher weather-related seasonal demand resulting in higher natural gas prices during the first quarter 2014.

Natural Gas Gathering and Processing Segment

• The natural gas gathering and processing segment experienced significant volume growth in the second quarter 2015 and through the first six months of the year, primarily from the completion of growth projects in the Williston Basin and Mid-Continent areas.

Terry K. Spencer, president and chief executive officer of ONEOK Partners said: "Our natural gas liquids and natural gas gathering and processing segments continued to see volume growth in the second quarter 2015, which we expect will ramp up more significantly in the second half of the year.  Based on our operating performance through the second quarter, we have increased confidence that we will reach our natural gas gathering and processing volume guidance expectations for the year and be within our 2015 financial guidance ranges. Continued producer activity in the high-return areas of the basin, flared natural gas inventory, new natural gas compression and a large backlog of uncompleted wells being added to our systems all in the Williston Basin, and new well connections in the Mid-Continent will be the largest contributors to these volumes.

We're seeing positive results from our recontracting efforts in the natural gas gathering and processing segment as we continue to focus on enhancing our fee-based asset mix by working with producers to convert existing percent-of-proceeds contracts to include a larger fee component," said Spencer. "Our long-term goal is to increase the partnership's overall fee-based margin mix to a level where we can maintain a 1.0 times coverage of our cash distributions in any commodity price environment."