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March 2016 Investor Presentation – Oneok Inc.

Oneok Inc. · Mar 1, 2016 · 63 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. March 2016 Investor Presentation – Oneok Inc. – slide 1
    INVESTOR UPDATE New York City March 1-2, 2016
  2. March 2016 Investor Presentation – Oneok Inc. – slide 2
    INDEX ONEOK Partners Overview 4 ONEOK Partners 2016 Guidance 9 Financial Strength 23 ONEOK Overview and 2016 Guidance 27 Appendix ONEOK Partners Business Segments 32 2015 Volume Update 36 Natural Gas Liquids 39 Natural Gas…
  3. March 2016 Investor Presentation – Oneok Inc. – slide 3
    ONEOK PARTNERS OVERVIEW
  4. March 2016 Investor Presentation – Oneok Inc. – slide 4
    ONEOK PARTNERS ASSET OVERVIEW Owns and operates strategically located assets in midstream natural gas liquids and natural gas businesses Provides nondiscretionary services to producers, processors and customers Extensive…
  5. March 2016 Investor Presentation – Oneok Inc. – slide 5
    BUSINESS SEGMENTS INTEGRATION OUR COMPETITIVE ADVANTAGE Supply Diversification Predominantly Fee-Based Value Chain Long-term Growth Opportunities Natural Gas Pipelines Natural Gas Pipelines Growing exports Connected to 50…
  6. March 2016 Investor Presentation – Oneok Inc. – slide 6
    ONEOK PARTNERS WELL-POSITIONED TO CREATE LONG-TERM VALUE Increasing fee-based earnings through gathering, processing, fractionation, storage and transport services ONEOK Partners fee-based Earnings is expected to increase to…
  7. March 2016 Investor Presentation – Oneok Inc. – slide 7
    OUR KEY STRATEGIES A PREMIER ENERGY COMPANY GROWTH Increase distributable cash flow through investments in organic growth projects and strategic acquisitions Continue to increase NGL and natural gas volume Continue to grow/expand…
  8. March 2016 Investor Presentation – Oneok Inc. – slide 8
    ONEOK PARTNERS 2016 GUIDANCE
  9. March 2016 Investor Presentation – Oneok Inc. – slide 9
    ONEOK PARTNERS 2016 GUIDANCE SUMMARY ONEOK Partners expects: No public debt or equity needs until well into 2017 Distribution coverage of 1.0x or better* for 2016, and distributions to remain flat compared with 2015 Capital-growth…
  10. March 2016 Investor Presentation – Oneok Inc. – slide 10
    ONEOK PARTNERS SOURCES OF EARNINGS PERCENT OF EARNINGS Fee-based earnings expected to increase to Sources of Earnings approximately 85% in 2016 1.6 B 1.7 B 2.1 B 2.1 B 2.5 B Volume risk 11% 5% 5% 12% Exists primarily in natural…
  11. March 2016 Investor Presentation – Oneok Inc. – slide 11
    NATURAL GAS LIQUIDS EARNINGS PROFILE MIX Exchange Services Gather, fractionate, and transport raw NGL Exchange Services feed to storage and market hubs; primarily fee based 47% Transportation & Storage Services 70% 69%…
  12. March 2016 Investor Presentation – Oneok Inc. – slide 12
    NATURAL GAS PIPELINES PERCENT OF EARNINGS Sources of Earnings Nearly 100% of earnings is fee- 6% 4% 8% 2% 4% based Minimal volume risk Backed by firm demand contracts Roadrunner Gas Transmission 94% 96% 98% 96% pipeline project…
  13. March 2016 Investor Presentation – Oneok Inc. – slide 13
    NATURAL GAS GATHERING AND PROCESSING CONTRACT PORTFOLIO Achieving increased fee-based contract mix by restructuring percent-of-proceeds (POP) contracts with a fee component to include a higher fee rate Increasing fee-based earnings…
  14. March 2016 Investor Presentation – Oneok Inc. – slide 14
    NATURAL GAS LIQUIDS 2016 VOLUME GUIDANCE Gathered volumes expected to average approximately 800,000 870,000 bpd; fractionation volumes expected to average approximately 540,000 590,000 bpd Lonesome Creek natural gas processing plant…
  15. March 2016 Investor Presentation – Oneok Inc. – slide 15
    NATURAL GAS LIQUIDS ETHANE UPSIDE New world-scale petrochemical facilities expected to significantly increase ethane demand in 2017 and beyond Announced petrochemical facilities will create an incremental 565,000 bpd of ethane demand…
  16. March 2016 Investor Presentation – Oneok Inc. – slide 16
    ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND Approximately one-third of all U.S. ethane being rejected is on ONEOK Partners NGL system ONEOK Partners NGL infrastructure already connects supply to Gulf Coast region Incremental…
  17. March 2016 Investor Presentation – Oneok Inc. – slide 17
    NATURAL GAS PIPELINES 2016 GUIDANCE Earnings to remain more than 95% fee-based 92% of transportation capacity contracted under demand-based rates 76% of natural gas storage capacity contracted under firm, fee-based arrangements…
  18. March 2016 Investor Presentation – Oneok Inc. – slide 18
    NATURAL GAS PIPELINES INCREMENTAL FEE-BASED EARNINGS Converting coal-fired electric generators to Viking Gas cleaner natural gas Northern Border Transmission Pipeline Low natural gas pricing environment providing many opportunities…
  19. March 2016 Investor Presentation – Oneok Inc. – slide 19
    NATURAL GAS GATHERING AND PROCESSING 2016 VOLUME GUIDANCE Natural Gas Gathered Volumes (MMcf/d) Gathered volumes expected to average approximately 1,700- 1,700 1,800 1,800 MMcf/d or 2,2002,300 BBtu/d; processed volumes 1,524 1,404…
  20. March 2016 Investor Presentation – Oneok Inc. – slide 20
    WILLISTON BASIN VOLUME UPDATE* Natural gas gathered volume increases in 2016 even as natural gas production remains relatively flat Full-year benefit of the Lonesome Creek processing plant and additional compression which was placed…
  21. March 2016 Investor Presentation – Oneok Inc. – slide 21
    WILLISTON BASIN VOLUME UPDATE* Natural gas gathered volume expected to increase in 2016 Higher natural gas capture percentage (reduced flaring) as a result of pipelines, compression, processing plant placed in-service in late 2015…
  22. March 2016 Investor Presentation – Oneok Inc. – slide 22
    FINANCIAL STRENGTH
  23. March 2016 Investor Presentation – Oneok Inc. – slide 23
    OKS ADJUSTED EBITDA GROWTH DELIVERING RESULTS IN A CHALLENGING MARKET Q1 Q4 adjusted EBITDA Adjusted EBITDA and Distribution Coverage Ratio ( in thousands, except coverage ratio) increased 39% in 2015 450,248 Higher margin natural…
  24. March 2016 Investor Presentation – Oneok Inc. – slide 24
    CUSTOMER CREDIT INVESTMENT-GRADE PROFILE REDUCED RISK ONEOK Partners No single customer represents more than 10% of 2015 revenues, only 15 customers individually represented 1% or more of 2015 revenues The ten largest customers…
  25. March 2016 Investor Presentation – Oneok Inc. – slide 25
    OKS STRONG BALANCE SHEET INVESTMENT GRADE ONEOK Partners Capital structure targets 50/50 capitalization GAAP Debt-to-EBITDA Ratio Debt-to-Adjusted EBITDA ratio < 4.0x 4.1x GAAP debt-to-adjusted EBITDA ratio in the fourth-quarter…
  26. March 2016 Investor Presentation – Oneok Inc. – slide 26
    ONEOK OVERVIEW AND 2016 GUIDANCE
  27. March 2016 Investor Presentation – Oneok Inc. – slide 27
    OKS GROWTH BENEFITS OKE VALUE OF GP INTEREST TO ONEOK ONEOK Partners capital-growth Distributions Declared to ONEOK projects and strategic ( in Millions) 18% CAGR 790 acquisitions expected to drive 735 continued distribution growth…
  28. March 2016 Investor Presentation – Oneok Inc. – slide 28
    ONEOK 2016 GUIDANCE SUMMARY ONEOK expects: Dividend to remain flat Cash flow available for dividends of approximately 675 million Dividend coverage ratio of approximately 1.3x Free cash flow after dividends and cash on hand…
  29. March 2016 Investor Presentation – Oneok Inc. – slide 29
    KEY INVESTMENT CONSIDERATIONS PREMIER ENERGY COMPANIES ONEOK Stable cash flow Cash flow underpinned by investment-grade MLP with fee-based business model GP and LP distributions from ONEOK Partners drive significant cash flow…
  30. March 2016 Investor Presentation – Oneok Inc. – slide 30
    APPENDIX Page 31
  31. March 2016 Investor Presentation – Oneok Inc. – slide 31
    APPENDIX ONEOK PARTNERS BUSINESS SEGMENTS
  32. March 2016 Investor Presentation – Oneok Inc. – slide 32
    NATURAL GAS LIQUIDS ASSET OVERVIEW Provides nondiscretionary, fee-based services to natural gas processors and customers Gathering, fractionation, transportation, marketing and storage Extensive NGL gathering system Connected to…
  33. March 2016 Investor Presentation – Oneok Inc. – slide 33
    NATURAL GAS PIPELINES ASSET OVERVIEW Primarily fee-based income 92% of transportation capacity contracted under demand-based rates in 2015 83% of contracted system transportation capacity serves end-use markets in 2015 Connected…
  34. March 2016 Investor Presentation – Oneok Inc. – slide 34
    NATURAL GAS GATHERING AND PROCESSING ASSET OVERVIEW Nondiscretionary services to producers Williston Basin Gathering, compression, treating and processing Diverse contract portfolio More than 2,000 contracts Powder River Percent of…
  35. March 2016 Investor Presentation – Oneok Inc. – slide 35
    APPENDIX 2015 VOLUME UPDATE Volume Growth Continues in Challenging Environment
  36. March 2016 Investor Presentation – Oneok Inc. – slide 36
    NATURAL GAS LIQUIDS VOLUME UPDATE Gathering Volume (MBbl/d) 11% - 14% CAGR Gathered volumes increased 44% in 2015, 175 compared with 2014, impacted by: 155 Volume growth in the Williston Basin, 800-870 Powder River Basin and…
  37. March 2016 Investor Presentation – Oneok Inc. – slide 37
    NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE Gathered Volumes* (MMcf/d) Rocky Mountain 828 869 Q4 2015 gathered volumes increased 16%, 760 compared with Q3 2015, and 36% compared with Q4 657 2014 Lonesome Creek completed in…
  38. March 2016 Investor Presentation – Oneok Inc. – slide 38
    APPENDIX NATURAL GAS LIQUIDS
  39. March 2016 Investor Presentation – Oneok Inc. – slide 39
    PETROCHEMICAL ANNOUNCEMENTS APPROXIMATELY 565,000 BPD OF NEW ETHANE DEMAND Ethane Capacity *Potential Ethane Company Project Location Start-up (bpd) Recovery Basin LyondellBasell Expansion 21,000 Corpus Christi Q2 2016 Texas &…
  40. March 2016 Investor Presentation – Oneok Inc. – slide 40
    POTENTIAL PETROCHEMICAL ANNOUNCEMENTS APPROXIMATELY 430,000 BPD OF POTENTIAL ETHANE DEMAND Ethane Capacity Company Project Location Start-up (bpd) Aither Chemicals New Build 16,000 West Virginia 2017+ Shell Appalachia New Build…
  41. March 2016 Investor Presentation – Oneok Inc. – slide 41
    ETHANE EXPORTS ANNOUNCED AND POTENTIAL ETHANE EXPORTS Ethane Export Capacity Company Export Ethane Capacity (bpd) Location Start-up Cochin (EP) Pipeline 8,000 Conway, KS to Sarnia current Vantage Pipeline 60,000 Tioga, ND to…
  42. March 2016 Investor Presentation – Oneok Inc. – slide 42
    APPENDIX NATURAL GAS GATHERING AND PROCESSING
  43. March 2016 Investor Presentation – Oneok Inc. – slide 43
    WILLISTON BASIN VOLUME UPDATE Natural gas gathered volume increases in 2016 even as natural gas production remains relatively flat Higher natural gas capture percentage (reduced flaring) as a result of pipelines, compression,…
  44. March 2016 Investor Presentation – Oneok Inc. – slide 44
    WILLISTON BASIN VOLUME UPDATE BASIN WIDE North Dakota Natural Gas Production, Case 1 and 2 2,400,000 Due to high-grading of rigs to most 2,200,000 prolific areas, the natural gas 2,000,000 1,800,000 volume does not decline in…
  45. March 2016 Investor Presentation – Oneok Inc. – slide 45
    WILLISTON BASIN Significant number of drilled but not completed wells are located in our asset footprint and acreage dedications Represents 5 wells waiting on completion* Existing OKS plants Compressor stations completed in…
  46. March 2016 Investor Presentation – Oneok Inc. – slide 46
    WILLISTON BASIN INITIAL PRODUCTION RATES AND STATE-WIDE PRODUCTION North Dakota Crude Oil and Natural Gas Production** 1,800,000 1,700,000 Max Monthly Production, Mcfd* 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000…
  47. March 2016 Investor Presentation – Oneok Inc. – slide 47
    WILLISTON BASIN INCREASED GAS CAPTURE AND VOLUME BACKLOG BENEFITS OKS Increased natural gas capture results in increased NGL and natural gas value uplift 85% of North Dakotas natural gas production was captured in December 2015 North…
  48. March 2016 Investor Presentation – Oneok Inc. – slide 48
    NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE RISK MITIGATION 2016 natural gas equity volumes are expected to be lower than in 2015 due to contract restructuring efforts. As contracts continue to become more fee-based, the…
  49. March 2016 Investor Presentation – Oneok Inc. – slide 49
    ONEOK PARTNERS COMMODITY PRICE ASSUMPTIONS AND SENSITIVITIES NYMEX Crude Oil NYMEX Natural Gas NGL composite Conway/Belvieu Ethane Spread 2016 (/Bbl) (/MMBtu) (/gallon) (/gallon) 43.50 2.35 0.39 0.02 Unhedged Annual Contribution…
  50. March 2016 Investor Presentation – Oneok Inc. – slide 50
    APPENDIX ONEOK PARTNERS GROWTH PROJECTS
  51. March 2016 Investor Presentation – Oneok Inc. – slide 51
    WILLISTON BASIN-RELATED GROWTH PROJECTS 1.5 BILLION COMPLETED CapEx Contract Major Project Scope Completed ( Millions) Type Bakken NGL Pipeline Bakken NGL Pipeline: 600-mile, 12-inch NGL pipeline with initial 90 Fee based September…
  52. March 2016 Investor Presentation – Oneok Inc. – slide 52
    WILLISTON BASIN-RELATED GROWTH PROJECTS 1.3 BILLION ANNOUNCED CapEx Contract Major Project Scope Timing ( Millions) Type Stateline de-ethanization facilities 26,000 barrels per day (bpd) of ethane produced at Stateline I and II…
  53. March 2016 Investor Presentation – Oneok Inc. – slide 53
    MID-CONTINENT AND GULF COAST-RELATED GROWTH PROJECTS 1.8 BILLION COMPLETED Major Project Scope CapEx Contract Completed ( Millions) Type Sterling III pipeline and 550-mile, 16-inch NGL pipeline 808 Fee based March 2014…
  54. March 2016 Investor Presentation – Oneok Inc. – slide 54
    PERMIAN GROWTH PROJECTS 540 MILLION ANNOUNCED Approximate Contract Major Project Scope Costs Type Timing ( Millions) WesTex Transmission Pipeline Expansion Constructing two new and upgrading three 70-100 Fee based First quarter…
  55. March 2016 Investor Presentation – Oneok Inc. – slide 55
    ACQUISITIONS 1.2 BILLION COMPLETED Major Project Scope CapEx Contract Timing ( Millions) Type Sage Creek natural gas 50 MMcf/d* natural gas processing capacity 305 POP with fee September 2013 processing plant Powder River Basin…
  56. March 2016 Investor Presentation – Oneok Inc. – slide 56
    NON-GAAP RECONCILIATIONS ONEOK
  57. March 2016 Investor Presentation – Oneok Inc. – slide 57
    NON-GAAP RECONCILIATIONS ONEOK, INC. ONEOK has disclosed in this presentation anticipated cash flow available for dividends, free cash flow and dividend coverage ratio, all amounts that are non-GAAP financial measures. Management…
  58. March 2016 Investor Presentation – Oneok Inc. – slide 58
    OKE FINANCIAL MEASURES CASH FLOW AVAILABLE FOR DIVIDENDS ( in Millions) 2014 2015 2016G Recurring cash flows: Distributions from ONEOK Partners declared 633 735 790 Interest expense, excluding non cash items (69) (78) (105) Cash…
  59. March 2016 Investor Presentation – Oneok Inc. – slide 59
    OKE NON-GAAP RECONCILIATION CASH FLOW AVAILABLE FOR DIVIDENDS AND FREE CASH FLOW ( in Millions) 2014 2015 2016G Net income attributable to ONEOK 314 245 360 Depreciation and amortization 15 2 5 Deferred income taxes 141 133 200…
  60. March 2016 Investor Presentation – Oneok Inc. – slide 60
    NON-GAAP RECONCILIATIONS ONEOK PARTNERS
  61. March 2016 Investor Presentation – Oneok Inc. – slide 61
    NON-GAAP RECONCILIATIONS ONEOK PARTNERS ONEOK Partners has disclosed in this presentation its historical and anticipated adjusted EBITDA, distributable cash flow (DCF) and cash distribution coverage ratio, which are non-GAAP financial…
  62. March 2016 Investor Presentation – Oneok Inc. – slide 62
    OKS NON-GAAP RECONCILIATIONS ADJUSTED EBITDA AND DISTRIBUTABLE CASH FLOW ( in Millions) 2011 2012 2013 2014 2015 2016G Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Net Income 831 888 804 911 598 1,120…
  63. March 2016 Investor Presentation – Oneok Inc. – slide 63

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