Skip to main content CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. Investor Presentation | Shale Experts
Loading...
Pm

CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P.

Oneok Partners, L.P. · Jun 26, 2013 · 73 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 1
    Credit Suisse MLP and Energy Logistics Conference New York City June 26, 2013
  2. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 2
    Terry K. Spencer President Page 2
  3. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 3
    What Well Cover Key Points Vision and Strategy A premier energy company Well-positioned assets Connecting prolific supply basins to key markets Disciplined growth continues Investing in new and existing infrastructure…
  4. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 4
    Vision & Strategy Page 5
  5. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 5
    Our Vision A Premier Energy Company Creating exceptional value for customers Rebundling services across the value chain, primarily through vertical integration, to provide customers with premium services at lower costs Applying our…
  6. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 6
    Our Key Strategies A Premier Energy Company ONEOK Partners Increase distributable cash flow per unit through investments in internal growth projects Financial Manage our balance sheet and maintain investment-grade credit rating at…
  7. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 7
    Well-Positioned Assets Page 8
  8. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 8
    ONEOK Partners Asset Overview Owns and operates assets in midstream natural gas and natural gas liquids businesses Provides non-discretionary services to producers, processors and customers Primarily fee-based earnings Aligned…
  9. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 9
    ONEOK Partners Strong Asset Position Strategic assets connecting prolific supply basins to key markets Embedded growth opportunities within existing operating footprint Provides non-discretionary services to producers, processors…
  10. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 10
    Asset Overview Natural Gas Gathering and Processing Non-discretionary services Williston Basin to producers Gathering, compression, treating and processing Wind River Powder River Natural gas supplies from six basins Diverse…
  11. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 11
    Asset Overview Natural Gas Pipelines Predominantly fee-based Viking Gas Northern Border Transmission income Pipeline Assumes 89% of transportation Guardian capacity contracted under Pipeline demand-based rates in 2013* 100% of…
  12. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 12
    Asset Overview Natural Gas Liquids Provides non-discretionary and fee-based services to processors and customers Gathering, fractionation, transportation, marketing and storage Extensive NGL gathering system Connected to…
  13. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 13
    Well Positioned in Shale Plays Our Fairway Active in and evaluating numerous shale plays Producer supply commitments are key Exposure to NGL-rich resource development Provides platform for future growth Bakken Shale Williston…
  14. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 14
    OKS Predominantly Fee-Based Earnings Percent of Margin Fee-based margins expected to increase in 2013 Sources of Margin Capital investments provide 0.9 B 1.1 B 1.1 B 1.2 B 1.6 B 1.6 B 1.7B predominantly fee-based earnings 9% 9% 13%…
  15. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 15
    Commodity Price Risk Mitigation Natural Gas Gathering and Processing Commodity Price Sensitivity Before Hedging Contract restructuring reduced Margin Impact keep-whole sensitivity 2.9 2013 hedged positions* 2.5 2.2 2.1 Natural…
  16. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 16
    Disciplined Growth Continues Page 17
  17. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 17
    Disciplined Growth Continues 9 to 10 Billion in Capital Investments Announced approximately 4.7 to 5.2 billion in growth projects in 2011-2015 Adjacent to and within our existing operating footprint, including: Williston Basin to…
  18. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 18
    Announced Capital Investments 4.7 to 5.2 Billion By Region* By Segment* 1.0 2.6 2.2 2.8 1.4 Williston Basin to Bushton, Kan. Natural Gas Gathering and Processing Mid-Continent to Mont Belvieu, Texas Natural Gas…
  19. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 19
    Williston Basin Strategic Fit Largest independent processor Extensive infrastructure Williston Basin Best positioned to provide Bakken Shale critical midstream capability Knowledgeable workforce and contractors in place Strong…
  20. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 20
    Williston Basin Natural Gas Gathering and Processing Investments Five new plants and related 1.7 billion to 1.8 billion infrastructure Garden Creek 100 MMcf/d Williston Basin In service December 2011 Bakken Shale Garden Creek II…
  21. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 21
    Williston Basin Natural Gas Liquids Investments Bakken NGL Pipeline Approx. 740 million to 780 million 590-620 million 600-mile, 12-inch diameter Williston Basin Initial capacity of 60,000 bpd Bakken Shale In service April 2013…
  22. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 22
    Sterling NGL Pipelines Investments 610 million to 810 million Construct Sterling III pipeline Flexibility to transport purity products and unfractionated NGLs 540-plus-mile, 16-inch diameter 193,000 bpd expandable to 250,000 bpd…
  23. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 23
    New Fractionators and E/P Splitter Investments at Mont Belvieu 890 million to 1.0 billion MB-2 fractionator 300-390 million Expected to be completed in third quarter 2013 75,000 bpd capacity 100% of available capacity committed…
  24. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 24
    Cana-Woodford - Canadian Valley Plant Natural Gas Gathering and Processing Investments Canadian Valley Plant 190 million Mississippian 200 MMcf/d natural gas processing Lime facility Expected to be completed in first quarter 2014…
  25. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 25
    Future Growth 2 to 3 Billion Backlog Lengthy backlog of unannounced growth projects Includes natural gas, NGL and crude-oil-related infrastructure projects, including: Natural gas processing plants Natural gas pipelines NGL…
  26. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 26
    Demonstrated Ability to Create Value Page 27
  27. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 27
    Creating OKS Unitholder Value Distribution Growth and Total Unitholder Return 29% total increase in distributions paid since 2010 59% since 2006 8-12% annual distribution growth between 2012-2015* Distributions Paid Per Unit Per…
  28. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 28
    OKS Distribution Coverage Financial Discipline Distributable Cash Flow (DCF) Target long-term annual ( in Millions) 15% CAGR coverage ratio of 1.05x to 1.15x 1,008 955 Considerations 946 8 190 Capital project execution 320…
  29. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 29
    OKS Financial Guidance Summary* 2013 Net income: range of 790 million - 870 million Distributable cash flow: range of 910 million - 1.0 billion Expected annual minimum coverage ratio of 1.0x Capital expenditures: approximately 2.6…
  30. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 30
    OKS Three-year Financial Outlook* 2012-2015 Expected average annual EBITDA growth of 15-20% comparing 2012 results with 2015 Driven by earnings from completed capital projects Sustainable distribution growth Projected…
  31. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 31
    OKS Strong Balance Sheet Investment Grade ONEOK Partners Committed to investment-grade Long-Term Debt-to-Capitalization Ratio credit rating S&P: BBB (stable) Moodys: Baa2 (stable) 47% 51% 46% 52% 52% 54% 53% Capital structure…
  32. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 32
    Key Investment Considerations A Premier Energy Company Strategic assets connecting prolific supply basins and key markets Non-discretionary services to producers, processors and customers Focused on creating value for both customers…
  33. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 33
    Questions Page 34
  34. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 34
    Index Overview Vision and strategy 5 Well-positioned assets 8 Disciplined growth continues 17 Demonstrated ability to create value 27 Appendix ONEOK Partners Growth Projects 36 Financial 49 Natural Gas Gathering & Processing…
  35. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 35
    Appendix ONEOK Partners Growth Projects Page 36
  36. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 36
    OKS Growth: 2006-2009 More than 2 Billion of Growth Projects Completed 2010 was first full year of all projects contributing EBITDA Two-thirds of investments were NGL-related projects fee based Set the stage for next tranche of…
  37. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 37
    Williston Basin Natural Gas Flaring Currently flaring 30-35% of natural gas production* Loss of NGL and natural gas value uplift North Dakota Monthly Natural Gas Flared Garden Creek startup Percent of Production* % 45 40 35 30…
  38. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 38
    Williston Basin Drilling Economics More than 90% of producer Producer Economics* economics from crude-oil production NGLs Natural 6% gas Drilling is economical with 3% crude-oil prices as low as 55-70 per barrel (WTI)*…
  39. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 39
    Williston Basin-related Project Status 2011-2015 Contract Major Project Contracting Status Committed Completed Type Garden Creek plant and related Backed by acreage dedications Acreage dedications POP with fee December 2011…
  40. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 40
    Williston Basin Garden Creek Plants Natural Gas Gathering and Processing Investments Garden Creek plant 100 MMcf/d natural gas processing facility Williston Basin In service December 2011 Bakken Shale Garden Creek II plant 100…
  41. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 41
    Williston Basin Stateline Plants Natural Gas Gathering and Processing Investments Stateline I plant 100 MMcf/d natural gas Williston Basin processing facility Bakken Shale In service September 2012 Stateline II plant 100 MMcf/d…
  42. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 42
    Williston Basin Divide County Natural Gas Gathering and Processing Investments Divide County gathering system Williston Basin 270-mile system in Divide Bakken Shale County, N.D. Expected to be completed in third quarter 2013…
  43. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 43
    Mid-Continent-Gulf Coast-related Project Status 2011-2015 Contracting Contract Major Project Committed Completed Status Type Sterling I expansion Capacity available for 100% Differential or fee November 2011 optimization based…
  44. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 44
    Cana-Woodford Shale and Granite Wash Natural Gas Liquids Investments 220 million Natural Gas Liquids Expanded partnerships existing Mid- Continent NGL gathering system Connected three new processing plants and expands capacity at…
  45. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 45
    NGL Pipeline Natural Gas Liquids Investments 140 million Hutchinson, Kan., to Medford, Okla. 95-mile NGL pipeline between existing NGL fractionation infrastructure Modifications to existing NGL fractionation infrastructure at…
  46. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 46
    Niobrara Shale Growth Potential Producers accumulating significant acreage Williston Basin Bakken Shale Driven by crude-oil economics Gathering and processing infrastructure required Bakken NGL pipeline designed to expand in…
  47. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 47
    Mississippian Lime New Play with Great Potential Existing natural gas gathering and processing and NGL assets are well positioned Significant potential Mississippian Lime Eastern section contains higher amount of NGLs Western…
  48. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 48
    Appendix ONEOK Partners Financial Page 49
  49. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 49
    OKS 2013 Financial Guidance By Segment Natural gas gathering and Operating Income and Equity Earnings** processing: ( in Millions) Higher gathered and processed volumes 12% CAGR Benefit of three new processing plants 1,067 1,086…
  50. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 50
    Appendix Natural Gas Gathering and Processing Page 51
  51. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 51
    Contract Portfolio Natural Gas Gathering and Processing Current contract mix aligns interests with customers Minimal keep-whole contracts by volume and margin Contract restructuring is a core capability Contract Mix by Volume…
  52. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 52
    Volume Growth by Basin Natural Gas Gathering and Processing Williston Basin produces high NGL-content gas - produced with crude oil Oklahoma and Kansas regions produce moderately wet gas - requires processing Powder River Basin…
  53. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 53
    Gathered Volumes Natural Gas Gathering and Processing 2013 volumes gathered Natural Gas Gathered (BBtu/d) expected to increase 22% 1,370 from 2012 Wells connected 1,171 1,164 1,123 1,067 1,030 1,119 2013: 1,000+ (estimate)…
  54. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 54
    Processed Volumes Natural Gas Gathering and Processing 2013 processed volumes Natural Gas Processed (BBtu/d) expected to increase 30% 1,125 from 2012 Higher volumes in Williston Basin 866 Stateline I in service September 632…
  55. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 55
    OKS Commodity Price Risk 2013 Hedging Commodity price risk primarily 2013 Margin Breakdown** resides in natural gas gathering and processing Equity production from percent-of- 9% proceeds contracts 2013 hedged positions* 23%…
  56. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 56
    Commodity Price Point-of-View Price Assumptions (Unhedged)* 2013 2014 2015 NYMEX crude oil/Bbl 88.00 100.00 102.00 NYMEX natural gas/ MMBtu 3.75 3.80 4.20 NGL composite/gallon 0.66 Upper 0.80 - Upper 0.80 - (assumes ethane…
  57. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 57
    Commodity Statistics Natural Gas Gathering and Processing 2012 2013 Operating Information Q1 Q2 Q3 Q4 Total Q1 Previous Presentation Percent of proceeds NGL sales (Bbl/d) 7,275 10,146 9,941 11,186 9,803 10,603 Residue gas sales…
  58. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 58
    Appendix Natural Gas Pipelines Page 59
  59. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 59
    Northern Border Pipeline 50-Percent Equity Investment Links natural gas supply from western Canada to Midwest markets Williston Basin Bakken Shale Bison Pipeline interconnection Supply diversity accessing Rockies natural gas with…
  60. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 60
    Appendix Natural Gas Liquids Page 61
  61. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 61
    Volume Growth Natural Gas Liquids 2013 gathering volumes estimated to increase by 14%; fractionation volumes estimated to increase by 8% Bakken NGL Pipeline in service April 2013 Widespread and prolonged ethane rejection in 2013…
  62. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 62
    Margin Profile Natural Gas Liquids Margin Profile Mix Exchange & Storage Services Gather, fractionate, transport and store NGLs and deliver to market hubs; primarily fee based 68% 55% Exchange & Transportation Storage Services…
  63. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 63
    NGL Demand Driven by Petrochemical Companies Petrochemical demand remains strong NGLs enjoy significant price advantage vs. crude oil-based feedstocks Cracker capacity utilization rates expected to remain more than 90% Petrochemical…
  64. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 64
    Ethane Fractionation and Cracker Capacity Outlook for Ethane Capacity* Ethane Fractionation Capacity and Cracker Capacity 1,900 1,800 1,700 1,600 1,500 MBPD 1,400 1,300 1,200 1,100 1,000 900 Sep-12 Mar-13…
  65. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 65
    Arbuckle Pipeline Delivering Unfractionated NGLs to Gulf Coast Expanded to 240,000 bpd From southern Oklahoma through Barnett Shale to Mont Belvieu In service April 2012 Expanding to 255,000 bpd in 2013 Another option to deliver…
  66. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 66
    Overland Pass Pipeline 50-Percent Equity Investment Williston Basin Links NGL supply from Bakken Shale Rockies to Mid-Continent and Gulf-Coast markets Williams is 50% owner and became operator in April 2011 Williams is anchor…
  67. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 67
    Optimization Opportunities Natural Gas Liquids Provides earnings upside to fee- based business How it works: Ability to deliver NGL products to either Conway or Mont Belvieu Utilize assets, contract portfolio and market knowledge…
  68. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 68
    Fractionation Capacity Natural Gas Liquids Currently 609,000 bpd, net ownership* Increasing our fractionation capacity 60,000 bpd of fractionation services from Targa began in second quarter 2011 Bushton 60,000 bpd expansion in…
  69. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 69
    U.S. NGL Supply Sources and End Uses 2012 Averages NGL Supply Sources NGL products1 NGL End Uses Ethane - 41% Primary Propane - 29% Petrochemicals 53% of NGLs Supplied Gas Processing Normal Butane - 8% 81% of U.S Supply…
  70. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 70
    Non-GAAP Reconciliations ONEOK Partners Page 71
  71. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 71
    Non-GAAP Reconciliations ONEOK Partners ONEOK Partners has disclosed in this presentation historical and anticipated EBITDA and Distributable Cash Flow (DCF) levels that are non-GAAP financial measures. Management believes these…
  72. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 72
    Non-GAAP Reconciliations EBITDA and Distributable Cash Flow ( in Millions) 2006 2007 2008 2009 2010 2011 2012 2013G* Reconciliation of Net Income to EBITDA and Distributable Cash Flow Net Income 445 408 626 435 473 831 888 830 Interest…
  73. CREDIT SUISSE MLP AND ENERGY LOGISTICS CONFERENCE – Oneok Partners, L.P. – slide 73

From the store

Browse maps, data & reports in the Shale Experts store