JEFFERIES 2016 GLOBAL ENERGY CONFERENCE Houston, TX Nov. 29, 2016
INDEX ONEOK Overview 4 ONEOK Partners Overview 6 Appendix ONEOK Partners 17 Financial Strength 20 ONEOK Partners Business Segments 24 Natural Gas Liquids 25 Natural Gas Gathering and Processing 29 Natural Gas Pipelines 35 ONEOK…
ONEOK OVERVIEW
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…
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…
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…
STACK AND SCOOP PLAYS* POSITIONED AS A CRITICAL SERVICE PROVIDER ACROSS ALL BUSINESS SEGMENTS Natural Gas Liquids Approximately 100 third-party plant connections in Mid-Continent Incremental 100,000 bpd of expected supply by 2019…
STACK AND SCOOP PLAYS NATURAL GAS LIQUIDS POSITIONED AS A CRITICAL NGL TAKEAWAY PROVIDER Currently gathering approximately 150,000 200,000 bpd of NGLs Three new processing plant connections in the STACK and SCOOP expected by the…
STACK AND SCOOP PLAYS NATURAL GAS GATHERING AND PROCESSING WELL-POSITIONED FOOTPRINT Approximately 200,000 acres dedicated to ONEOK Partners in the STACK Well completions expected to increase in the fourth quarter 2016 Producers…
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 Recently announced…
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…
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ONEOK PARTNERS
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 more…
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…
FINANCIAL STRENGTH
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…
TOTAL SHAREHOLDER RETURN ONEOK AND ONEOK PARTNERS PROVEN 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…
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…
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) 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…
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 of…
NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE Gathered Volumes (MMcf/d) Expect higher natural gas gathered and processed 1,524 1,520 1,600 1,404 volumes in the fourth quarter 2016 compared with the third quarter 2016 as a…
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 August…
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…
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…
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…
NON-GAAP RECONCILIATIONS ONEOK PARTNERS
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.…
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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