TUOHY BROTHERS ALL-IN- ONE ENERGY CONFERENCE New York Aug. 9, 2016
INDEX ONEOK Overview 4 ONEOK Partners Overview 6 ONEOK Partners Business Segments Natural Gas Liquids 13 Natural Gas Gathering and Processing 18 Natural Gas Pipelines 26 Financial Strength 31 Appendix ONEOK Non-GAAP…
ONEOK OVERVIEW
OKS GROWTH BENEFITS OKE VALUE OF GP INTEREST TO ONEOK ONEOK Partners capital-growth Distributions Declared to ONEOK projects and strategic ( in Millions) 790 18% CAGR acquisitions expected to drive 735 distribution growth 633…
ONEOK PARTNERS OVERVIEW
ONEOK PARTNERS GEOGRAPHICALLY DIVERSE ASSETS Owns and operates strategically located assets in midstream natural gas liquids and natural gas businesses Provides nondiscretionary services to producers, processors and customers…
OKS GROWTH: 2006 2016 COMPLETED 9 BILLION OF GROWTH PROJECTS AND ACQUISITIONS 1. Bakken/Williston Basin 2. Niobrara/Powder River Basin 1 Plants: Garden Creek I, II and III; Grasslands Niobrara NGL Lateral Plant Expansion; Stateline I…
ONEOK PARTNERS SOURCES OF EARNINGS TRANSFORMED TO MORE FEE BASED Volume risk Sources of Earnings Exists primarily in natural gas gathering and ( in billions) processing and natural gas liquids segments 1.6 B 1.7 B 2.1 B 2.1 B 2.5 B…
ONEOK PARTNERS UNIQUELY POSITIONED TO CREATE LONG-TERM VALUE Increasing fee-based earnings through gathering, processing, fractionation, storage and transport services ONEOK Partners fee-based earnings are expected to increase to…
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…
ONEOK PARTNERS BUSINESS SEGMENTS
NATURAL GAS LIQUIDS
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 Second largest…
NATURAL GAS LIQUIDS PREDOMINANTLY FEE BASED Exchange Services - Primarily fee based Gather, fractionate and transport raw NGL feed to Exchange Services storage and market hubs Transportation & Storage Services - Fee based…
NATURAL GAS LIQUIDS VOLUME UPDATE Gathered Volume (MBbl/d) Approximately one-third of all U.S. ethane being rejected is on ONEOK Partners NGL system 175-200 155 Potential annual earnings uplift from full ethane recovery 800-870…
ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND CAPACITY 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…
NATURAL GAS GATHERING AND PROCESSING
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…
NATURAL GAS GATHERING AND PROCESSING PRIMARILY FEE BASED 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…
NATURAL GAS GATHERING AND PROCESSING VOLUME AND EARNINGS UPDATE Gathered Volumes (MMcf/d) 1,700 1,800 Increased Earnings Q2 vs Q1 2016 1,524 Higher average fee rates on natural gas volumes in the 1,404 Williston Basin 9501,000…
WILLISTON BASIN INCREASED GAS CAPTURE AND VOLUME BACKLOG BENEFITS OKS Increased natural gas capture results in increased NGL and natural gas value uplift More than 88% of North Dakotas natural gas production was captured in May 2016…
WILLISTON BASIN VOLUME UPDATE* Natural gas gathered volumes 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…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE RISK MITIGATION Six Months Ending December 31, 2016 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (MMBtu/d) 79,100 2.81 / MMBtu 93% Condensate (bpd) 1,800…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES 2016 Commodity Price Sensitivity After Hedging Commodity Sensitivity Earnings Impact* ( in Millions) Natural Gas 0.10 / MMBtu 0.1 Natural gas liquids 0.01 / gallon…
NATURAL GAS PIPELINES
NATURAL GAS PIPELINES ASSET OVERVIEW Predominantly fee-based income 92% of transportation capacity contracted under firm demand-based rates in 2015 83% of contracted system transportation capacity serves end-use markets in 2015…
NATURAL GAS PIPELINES PREDOMINANTLY FEE BASED Nearly 100% of earnings is firm, fee-based Sources of Earnings Firm demand-based contracts serving primarily 6% 4% 8% 2% 4% investment-grade utility customers Roadrunner Gas Transmission…
NATURAL GAS PIPELINES SERVING MOSTLY INVESTMENTGRADE UTILITIES 2016 Percent of Revenues From Firm, Fee Contracts* 2016 Largest Pipeline Customers* Roadrunner Gas Transmission** 100% AGL Resources Guardian Pipeline 98% Atmos Energy…
NATURAL GAS PIPELINES STORAGE REVENUE AND CAPACITY Revenues have remained stable, despite a decrease in contracted storage capacity since 2012 Customers are paying increased rates for deliverability 85 81.4 100% 78.7 78.0 73.5…
FINANCIAL STRENGTH
STRONG BALANCE SHEETS COMMITTED TO OKS INVESTMENT-GRADE CREDIT RATING ONEOK Partners OKS Adjusted EBITDA Growth Capital structure targets ( in Billions) 1.9 1.6 1.6 50/50 capitalization 1.2 1.3 1.3 Debt-to-Adjusted EBITDA ratio <…
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…
APPENDIX Page 34
NON-GAAP RECONCILIATIONS ONEOK
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…
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 (69) (78) (105) Released contracts from the…
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…
NON-GAAP RECONCILIATIONS ONEOK PARTNERS
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…
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…
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