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Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc.

Oneok Inc. · Mar 6, 2013 · 95 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. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 1
    Morgan Stanley MLP and Diversified Natural Gas Corporate Access Day New York City March 6, 2013
  2. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 2
    Index Overview Vision and Strategy 5 Well-positioned assets 8 Track record of disciplined growth 13 Demonstrated ability to create value 36 Appendix ONEOK Financial 43 Natural Gas Distribution 48 Energy Services 55 Appendix…
  3. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 3
    Overview Key Points Vision and Strategy A premier energy company Well-positioned assets Connecting prolific supply basins to key markets Track record of disciplined growth Investing in new and existing infrastructure Demonstrated…
  4. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 4
    Vision and Strategy Page 5
  5. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – 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. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 6
    Our Key Strategies A Premier Energy Company ONEOK Partners Increase distributable cash flow per unit through investments in internal growth projects Natural Gas Distribution Increase operating income through rate strategies and…
  7. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 7
    Well-Positioned Assets Page 8
  8. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 8
    ONEOK Today A Premier Energy Company Assets that fit and work together Integrated operations Connecting prolific supply basins to key markets Proven ability to grow profitably ONEOK Partners is ONEOKs primary growth vehicle…
  9. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 9
    Business Segments Provide Stability and Opportunity ONEOK Partners ONEOKs primary growth vehicle Growth at OKS benefits OKE Generates primarily fee-based earnings Provides non-discretionary services to producers, processors and…
  10. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 10
    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…
  11. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 11
    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…
  12. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 12
    Track Record of Disciplined Growth Page 13
  13. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 13
    Disciplined Growth Continues 9 Billion in Capital Investments Announced approximately 4.7 to 5.3 billion in growth projects in 2011-2015 Adjacent to and within our existing operating footprint including: 2.4 to 2.7 billion related…
  14. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 14
    Announced Capital Investments 4.7 to 5.3 Billion By Region* By Segment* 0.6 2.6 2.2 1.8 2.8 Williston Basin Natural Gas Gathering and Processing Mid-Continent to Gulf Coast Natural Gas Liquids Cana-Woodford Shale…
  15. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 15
    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…
  16. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 16
    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)*…
  17. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 17
    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…
  18. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 18
    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…
  19. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 19
    Williston Basin Natural Gas Gathering and Processing Investments Five new plants and related 1.7 billion to 1.9 billion infrastructure Garden Creek 100 MMcf/d Williston Basin Completed December 2011 Bakken Shale Garden Creek II…
  20. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 20
    Williston Basin Natural Gas Liquids Investments Bakken NGL Pipeline Approx. 700 million to 810 million 550-650 million 600-mile, 12-inch diameter Williston Basin Initial capacity of 60,000 bpd Bakken Shale Expected to be…
  21. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 21
    Williston Basin Crude-Oil Investment Bakken Crude Express 1,300-mile crude oil pipeline Proposed capacity of 200,000 bpd Transport light-sweet crude oil from Bakken Shale to Cushing, Okla. Binding open season concluded Nov. 20…
  22. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 22
    Williston Basin Garden Creek Plants Natural Gas Gathering and Processing Investments Garden Creek plant 100 MMcf/d natural gas processing facility Williston Basin Completed December 2011 Bakken Shale Garden Creek II plant 100…
  23. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 23
    Williston Basin Stateline Plants Natural Gas Gathering and Processing Investments Stateline I plant 100 MMcf/d natural gas Williston Basin processing facility Bakken Shale Completed September 2012 Stateline II plant 100 MMcf/d…
  24. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 24
    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…
  25. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 25
    Mid-Continent-Gulf Coast-related Project Status 2011-2015 Major Project Contracting Status Committed Contract Type Completed Sterling I expansion Capacity available for 100% Differential or fee November 2011 optimization based…
  26. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 26
    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…
  27. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 27
    New Fractionators and E/P Splitter Investments at Mont Belvieu 870 million to 1.0 billion MB-2 fractionator 300-390 million Expected to be completed in mid-2013 75,000 bpd capacity 100% of available capacity committed MB-3…
  28. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 28
    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…
  29. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 29
    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…
  30. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 30
    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…
  31. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 31
    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…
  32. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 32
    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…
  33. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 33
    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…
  34. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 34
    Future Growth 2 Billion-plus Backlog Lengthy backlog of unannounced growth projects Includes natural gas and NGL-related infrastructure projects, including: Natural gas processing plants NGL fractionation and storage facilities…
  35. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 35
    Demonstrated Ability to Create Value Page 36
  36. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 36
    Structure ONEOK, Inc. [NYSE: OKE] ONEOK Partners GP, L.L.C. General partner (100% of GP) Natural Gas Energy ONEOK Partners, L.P. Distribution Services [NYSE: OKS] *2% general partner interest and 41.4 % ONEOK, Inc. owns…
  37. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 37
    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 expected in 2012-2015* Distributions Paid Per Unit…
  38. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 38
    Creating OKE Shareholder Value Dividend Growth and Total Shareholder Return 63% total increase in dividends paid since 2010 143% since 2006 Long-term dividend payout target of 60-70% of recurring earnings Dividends Paid Per Share…
  39. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 39
    OKS Growth Benefits OKE ONEOKs Growth Engine Each 1-cent-per-unit Distributions Paid to ONEOK ( in Millions) distribution increase provides 21% CAGR 12.5 million in incremental 548 annual distributions to ONEOK at current…
  40. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 40
    OKE Free Cash Flow Provides Financial Flexibility 195-235 million in 2013 guidance Stand-Alone Cash Flow, Driven by growth at ONEOK Partners Before Changes in Working Capital Bonus depreciation in 2013 ( in Millions) Available…
  41. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 41
    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…
  42. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 42
    Appendix ONEOK Financial Page 43
  43. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 43
    OKE Financial Guidance Summary* 2013 ONEOK net income: range of 350 million - 400 million Capital expenditures: 316 million on a stand-alone basis Stand-alone cash flow before changes in working capital: midpoint of 835 million…
  44. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 44
    OKE Three-year Financial Outlook* 2012-2015 Expected average annual net income growth of 15-20% comparing 2012 results with 2015 Driven by continued earnings growth at ONEOK Partners, primarily through volume growth Total dividend…
  45. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 45
    OKE 2013 Financial Guidance ONEOK Partners decreases: Stand-Alone Operating Income Plus Equity Earnings** Ethane rejection ( in Millions) Lower optimization margins Lower commodity prices 716 Higher volumes from new projects 625…
  46. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 46
    OKE Strong Balance Sheet Investment Grade ONEOK Stand Alone Commitment to investment- Long-Term Debt-to-Capitalization Ratio grade credit rating S&P: BBB (stable) Moodys: Baa2 (stable) 31% 44% 41% 38% 45% Capital structure 51%…
  47. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 47
    Appendix Natural Gas Distribution Page 48
  48. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 48
    Natural Gas Distribution Asset Overview Kansas City Eighth largest U.S. natural gas distributor Wichita Tulsa Largest in Oklahoma and Kansas; Oklahoma City third largest in Texas More than 2 million customers served El…
  49. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 49
    Financial Performance Natural Gas Distribution Goal: Minimize the gap between allowed and actual returns* 2013 allowed return on equity (ROE): 9.9% 2013 ROE estimate: 8.3% Operating Income** ( In Millions) CAGR = 10% 225 216…
  50. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 50
    Regulatory - On the Horizon Natural Gas Distribution Oklahoma - Performance-based rate Oklahoma - Performance- filing in March 2013 with new rates to be based rate filing approved in Oklahoma - A effective July 2013, if applicable…
  51. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 51
    Oklahoma Natural Gas Natural Gas Distribution Largest customer base Approximately 87 percent of states natural gas customers 841,000 customers 75% in metropolitan areas Oklahoma Corporation Commission Three commissioners elected…
  52. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 52
    Kansas Gas Service Natural Gas Distribution Coldest territory Approximately 70 percent of states natural gas customers 633,000 customers 60% in metropolitan areas Kansas Corporation Commission Three commissioners appointed by…
  53. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 53
    Texas Gas Service Natural Gas Distribution Third largest natural gas distributor in the state Approximately 14 percent of states natural gas customers 627,000 customers 75% in metropolitan areas Home Rule with 10 jurisdictions…
  54. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 54
    Appendix Energy Services Page 55
  55. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 55
    Energy Services Asset Overview Delivers natural gas, together with bundled, reliable, premium services and products Peaking services Primarily to LDCs Leased Pipeline Capacity Leased Storage Capacity Storage* 71.5 Bcf of…
  56. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 56
    Action Plan Rebase Cost Structure Align leased transportation and storage capacity with premium- services requirements Turn back non-premium-services-related leases upon expiration Re-contract leased capacity at reduced costs and/or…
  57. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 57
    Capacity Realignment Efforts Energy Services Realign contracted capacity with premium-services customer requirements Expected storage capacity to 58 Bcf by year end 2013 Reduction in working-capital requirements Short-term storage…
  58. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 58
    Appendix ONEOK Partners Financial Page 59
  59. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 59
    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%…
  60. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 60
    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%…
  61. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 61
    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 coverage ratio between 1.0x - 1.05x Capital expenditures: approximately…
  62. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 62
    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…
  63. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 63
    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 9 190 Capital project execution 320…
  64. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 64
    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…
  65. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 65
    OKS Strong Balance Sheet Investment Grade ONEOK Partners Committed to investment-grade credit Long-Term Debt-to-Capitalization Ratio rating S&P: BBB (stable) Moodys: Baa2 (stable) Capital structure targets 47% 51% 46% 52% 54%…
  66. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 66
    Appendix Natural Gas Gathering and Processing Page 67
  67. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 67
    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…
  68. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 68
    Commodity Price Risk Mitigation Natural Gas Gathering and Processing Contract restructuring reduced Commodity Price Sensitivity Before Hedging keep-whole sensitivity 4.8 Margin Impact 4.5 2013 hedged positions* 3.8 Natural gas:…
  69. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 69
    Commodity Price Point-of-View ONEOK Partners 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…
  70. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 70
    Contract Portfolio Natural Gas Gathering and Processing Contract restructuring is a core capability Increases fee-based business and reduces commodity price sensitivity Conditioning fee on approximately 78% of keep-whole contracts to…
  71. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 71
    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)…
  72. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 72
    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 completed 632 September 2012…
  73. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 73
    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…
  74. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 74
    Appendix Natural Gas Pipelines Page 75
  75. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 75
    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…
  76. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 76
    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…
  77. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 77
    Appendix Natural Gas Liquids Page 78
  78. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 78
    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…
  79. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 79
    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…
  80. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 80
    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…
  81. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 81
    Volume Growth Natural Gas Liquids 2013 gathering volumes estimated to increase by 14%; fractionation volumes estimated to increase by 8% Bakken NGL Pipeline completed in first quarter 2013 Widespread and prolonged ethane rejection…
  82. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 82
    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…
  83. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 83
    Arbuckle Pipeline Delivering Unfractionated NGLs to Gulf Coast Expanded to 240,000 bpd From southern Oklahoma through Barnett Shale to Mont Belvieu Completed in April 2012 Expanding to 255,000 bpd in 2013 Another option to…
  84. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 84
    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…
  85. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 85
    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…
  86. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 86
    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…
  87. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 87
    U.S. NGL Supply Sources and End Uses 2011 Averages NGL Supply Sources NGL products1 NGL End Uses Ethane - 42% Primary Propane - 28% Petrochemicals 54% of NGLs Supplied Gas Processing Normal Butane - 7% 80% of U.S Supply…
  88. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 88
    Non-GAAP Reconciliations ONEOK Page 89
  89. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 89
    Non-GAAP Reconciliations ONEOK ONEOK has disclosed in this presentation stand-alone cash flow, before changes in working capital, free cash flow, and stand-alone operating income and equity earnings, amounts that are non-GAAP…
  90. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 90
    Non-GAAP Reconciliations Stand-Alone Cash Flow, Before Changes in Working Capital and Free Cash Flow ( in Millions) 2008 2009 2010 2011 2012 2013G* Net income attributable to ONEOK 312 305 335 361 361 375 Equity in earnings of ONEOK…
  91. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 91
    Non-GAAP Reconciliations Stand-Alone Operating Income and Equity Earnings ( in Millions) 2007 2008 2009 2010 2011 2012 2013G* Consolidated operating income from continuing operations 815 908 883 943 1,159 1,103 1,140 Operating…
  92. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 92
    Non-GAAP Reconciliations ONEOK Partners Page 93
  93. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 93
    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…
  94. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 94
    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…
  95. Morgan Stanley Midstream MLP and Diversified Natural Gas Corporate Access Day – Oneok Inc. – slide 95

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