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Wells Fargo Energy Symposium – Oneok Inc.

Oneok Inc. · Dec 6, 2016 · 46 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. Wells Fargo Energy Symposium – Oneok Inc. – slide 1
    WELLS FARGO ENERGY SYMPOSIUM New York Dec. 6, 2016
  2. Wells Fargo Energy Symposium – Oneok Inc. – slide 2
    TERRY K. SPENCER President and Chief Executive Officer Page 2
  3. Wells Fargo Energy Symposium – Oneok Inc. – slide 3
    WHAT WELL COVER KEY POINTS ONEOK and ONEOK Partners overview Connecting prolific supply basins to key markets Business segments overview Continued focus on fee-based earnings Volume growth continues Benefits from 9 billion of new…
  4. Wells Fargo Energy Symposium – Oneok Inc. – slide 4
    ONEOK OVERVIEW
  5. Wells Fargo Energy Symposium – Oneok Inc. – slide 5
    OKS GROWTH BENEFITS OKE VALUE OF GP INTEREST TO ONEOK Nearly 70% of every incremental ONEOK Distributions Declared to ONEOK Partners adjusted EBITDA dollar, at current ( in Millions) 790 18% CAGR ownership level, flows to ONEOK as…
  6. Wells Fargo Energy Symposium – Oneok Inc. – slide 6
    ONEOK PARTNERS OVERVIEW
  7. Wells Fargo Energy Symposium – Oneok Inc. – slide 7
    ONEOK PARTNERS EXTENSIVE. INTEGRATED. RELIABLE. 37,000-mile network of natural gas liquids and natural gas pipelines Provides nondiscretionary services to producers, processors and customers Supply in attractive basins Growing…
  8. Wells Fargo Energy Symposium – Oneok Inc. – slide 8
    OKS GROWTH: 2006 2016 9 BILLION INVESTED IN INFRASTRUCTURE WITH ROOM FOR GROWTH 1 1. Bakken/Williston Basin 2. Niobrara/Powder River Basin Plants: Garden Creek I, II and III; Grasslands Niobrara NGL Lateral Plant Expansion; Stateline…
  9. Wells Fargo Energy Symposium – Oneok Inc. – slide 9
    ONEOK PARTNERS SOURCES OF EARNINGS CONTINUED FEE-BASED GROWTH 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…
  10. Wells Fargo Energy Symposium – Oneok Inc. – slide 10
    ONEOK PARTNERS FEE-BASED GROWTH AT ATTRACTIVE RETURNS Market-driven projects NGL and natural gas Natural gas exports to Mexico driven by growing demand Ethane demand projected to significantly increase due to petrochemical…
  11. Wells Fargo Energy Symposium – Oneok Inc. – slide 11
    OUR KEY STRATEGIES FOCUSED ON DISCIPLINED GROWTH GROWTH Increase distributable cash flow through investments yielding attractive returns in organic growth projects and strategic acquisitions Execute on NGL and natural gas volume…
  12. Wells Fargo Energy Symposium – Oneok Inc. – slide 12
    ONEOK PARTNERS BUSINESS SEGMENTS
  13. Wells Fargo Energy Symposium – Oneok Inc. – slide 13
    NATURAL GAS LIQUIDS
  14. Wells Fargo Energy Symposium – Oneok Inc. – slide 14
    NATURAL GAS LIQUIDS ONE OF THE LARGEST IN THE U.S. Provides nondiscretionary, fee-based services to natural gas processors and customers Gathering, fractionation, transportation, marketing and storage Extensive NGL gathering…
  15. Wells Fargo Energy Symposium – Oneok Inc. – slide 15
    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…
  16. Wells Fargo Energy Symposium – 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. Wells Fargo Energy Symposium – Oneok Inc. – slide 17
    NATURAL GAS GATHERING AND PROCESSING
  18. Wells Fargo Energy Symposium – Oneok Inc. – slide 18
    NATURAL GAS GATHERING AND PROCESSING SERVING PRODUCERS IN KEY BASINS Nondiscretionary services to producers Williston Basin Gathering, compression, treating and processing Diverse contract portfolio More than 2,000 contracts Powder…
  19. Wells Fargo Energy Symposium – Oneok Inc. – slide 19
    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…
  20. Wells Fargo Energy Symposium – Oneok Inc. – slide 20
    NATURAL GAS PIPELINES
  21. Wells Fargo Energy Symposium – Oneok Inc. – slide 21
    NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based income 94% of transportation capacity contracted under firm demand-based rates in 2016 81% of contracted system transportation capacity serves end-use…
  22. Wells Fargo Energy Symposium – Oneok Inc. – slide 22
    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…
  23. Wells Fargo Energy Symposium – Oneok Inc. – slide 23
    STACK AND SCOOP
  24. Wells Fargo Energy Symposium – Oneok Inc. – slide 24
    STACK AND SCOOP PLAYS RELIABLE FULL-SERVICE PROVIDER Natural Gas Liquids Approximately 100 third-party plant connections in Mid-Continent Incremental 100,000 bpd of expected supply by 2019 40,000 bpd of available gathering…
  25. Wells Fargo Energy Symposium – Oneok Inc. – slide 25
    STACK AND SCOOP PLAYS NATURAL GAS LIQUIDS NGL FULL-SERVICE CAPABILITY Currently gathering approximately 150,000 200,000 bpd of NGLs Three new processing plant connections in the STACK and SCOOP expected by the end of 2017 Expect…
  26. Wells Fargo Energy Symposium – Oneok Inc. – slide 26
    STACK AND SCOOP PLAYS NATURAL GAS GATHERING AND PROCESSING WELL-POSITIONED Approximately 200,000 acres dedicated to ONEOK Partners in the STACK Well completions expected to increase in the fourth quarter 2016 Producers are…
  27. Wells Fargo Energy Symposium – Oneok Inc. – slide 27
    STACK AND SCOOP PLAYS NATURAL GAS PIPELINES PROVIDING CONNECTIVITY Connected to 34 natural gas processing plants in Oklahoma with a total capacity of 1.8 Bcf/d Access to on-system utility and industrial markets with peak demand…
  28. Wells Fargo Energy Symposium – Oneok Inc. – slide 28
    PERMIAN BASIN
  29. Wells Fargo Energy Symposium – Oneok Inc. – slide 29
    PERMIAN BASIN RELIABLE SERVICE PROVIDER Natural Gas Liquids Approximately 37 third-party natural gas plant connections in the Permian Basin New processing plant connections in the Permian Basin expected in 2017 West Texas LPG…
  30. Wells Fargo Energy Symposium – Oneok Inc. – slide 30
    FINANCIAL STRENGTH
  31. Wells Fargo Energy Symposium – Oneok Inc. – slide 31
    STRONG BALANCE SHEETS COMMITTED TO OKS INVESTMENT-GRADE CREDIT RATING ONEOK Partners OKS Adjusted EBITDA Growth ( in Billions) 1.8 1.9 Leverage target 1.6 1.6 Debt-to-adjusted EBITDA ratio < 4.0x 1.3 Committed to taking necessary…
  32. Wells Fargo Energy Symposium – Oneok Inc. – slide 32
    TOTAL SHAREHOLDER RETURN ONEOK AND ONEOK PARTNERS DELIVERING LONG-TERM VALUE Long-term investors have experienced high returns from both ONEOK and ONEOK Partners 10-year returns for both investments outperformed the S&P 500 Index…
  33. Wells Fargo Energy Symposium – Oneok Inc. – slide 33
    KEY INVESTMENT CONSIDERATIONS STABILITY WITH DISCIPLINED GROWTH ONEOK Stable cash flow Cash flow underpinned by investment-grade MLP with primarily fee-based businesses GP and LP distributions from ONEOK Partners drive significant…
  34. Wells Fargo Energy Symposium – Oneok Inc. – slide 34
    QUESTIONS
  35. Wells Fargo Energy Symposium – Oneok Inc. – slide 35
    INDEX ONEOK Overview 5 ONEOK Partners Overview 7 ONEOK Partners Business Segments Natural Gas Liquids 14 Natural Gas Gathering and Processing 18 Natural Gas Pipelines 21 STACK and SCOOP 24 Permian Basin 29 Financial Strength 31…
  36. Wells Fargo Energy Symposium – Oneok Inc. – slide 36
    APPENDIX Page 37
  37. Wells Fargo Energy Symposium – Oneok Inc. – slide 37
    NATURAL GAS LIQUIDS
  38. Wells Fargo Energy Symposium – Oneok Inc. – slide 38
    NATURAL GAS LIQUIDS VOLUME UPDATE Gathered Volume (MBbl/d) Continue to benefit from strong NGL asset 175-200 position in the STACK and SCOOP 155 780 STACK wells have shown strong results and are 769 105 NGL-rich with six to nine…
  39. Wells Fargo Energy Symposium – Oneok Inc. – slide 39
    NATURAL GAS GATHERING AND PROCESSING
  40. Wells Fargo Energy Symposium – Oneok Inc. – slide 40
    NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE Gathered Volumes (MMcf/d) Expect higher natural gas gathered and processed 1,524 1,520 1,600 volumes in the fourth quarter 2016 compared with the third 1,404 quarter 2016 as a…
  41. Wells Fargo Energy Symposium – Oneok Inc. – slide 41
    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 September…
  42. Wells Fargo Energy Symposium – Oneok Inc. – slide 42
    NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE RISK MITIGATION Three Months Ending December 31, 2016 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (MMBtu/d) 77,800 2.82 / MMBtu 93% Condensate (bpd) 1,800…
  43. Wells Fargo Energy Symposium – Oneok Inc. – slide 43
    NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES AFTER HEDGING* Earnings Impact* ( in Millions) Commodity Sensitivity 2016** 2017*** Natural Gas 0.10 / MMBtu 0.1 0.9 Natural Gas Liquids 0.01 / gallon 0.2 1.0…
  44. Wells Fargo Energy Symposium – Oneok Inc. – slide 44
    NON-GAAP RECONCILIATIONS ONEOK PARTNERS
  45. Wells Fargo Energy Symposium – Oneok Inc. – slide 45
    NON-GAAP RECONCILIATIONS ONEOK PARTNERS ONEOK Partners has disclosed in this presentation its historical and anticipated adjusted EBITDA, which is a non-GAAP financial metric, used to measure the partnerships financial performance.…
  46. Wells Fargo Energy Symposium – Oneok Inc. – slide 46
    OKS NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA Trailing 12 ( in Millions) 2011 2012 2013 2014 2015 months* 2016G Reconciliation of Net Income to Adjusted EBITDA Net Income 831 888 804 911 598 803 1,120 Interest expense,…

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