MERGER TRANSACTION SUMMARY CREATES 30 BILLION ENTERPRISE VALUE COMPANY; LOWERS COST OF FUNDING On Feb. 1, 2017, ONEOK and ONEOK Partners announced a definitive agreement under which ONEOK will acquire all of the outstanding common…
COMPELLING LONG-TERM VALUE FOR OKE SHAREHOLDERS & OKS UNITHOLDERS Expected dividend increase of 21 percent to 0.745, or 2.98 per share on an annualized Significant upfront basis, with expected subsequent dividend growth of 9 to 11…
ONEOK OVERVIEW
ONEOK OVERVIEW EXTENSIVE. INTEGRATED. RELIABLE. DIVERSIFIED. 37,000-mile network of natural gas liquids and natural gas pipelines Provides midstream services to producers, processors and customers Supply in attractive basins…
ONEOK SOURCES OF EARNINGS CONTINUED FEE-BASED GROWTH ACROSS MULTIPLE SUPPLY BASINS AND MARKETS Volume risk Sources of Earnings ( in billions) Exists primarily in natural gas gathering and processing and natural gas liquids…
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 GATHERING AND PROCESSING PRIMARILY FEE BASED Achieved 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 PIPELINES PREDOMINANTLY FEE BASED Nearly 100 percent of earnings is firm, fee-based Firm demand-based contracts serving primarily Sources of Earnings investment-grade utility customers 4% 2% 4% 3% 8% Roadrunner Gas…
ONEOK GUIDANCE
OKE FINANCIAL GUIDANCE SUMMARY 2017 Net income range*: 575 million 755 million Adjusted EBITDA range*: 1,870 million Dividends Paid Per Share Per Year 2,130 million 19% CAGR since 2013 Distributable cash flow*: 1,245 million 1,505…
NATURAL GAS LIQUIDS 2017 VOLUME 2017 third-party processing plant connections Three completed during the first quarter 2017: Mid-Continent region (1), Permian Basin (1), Rocky Mountain region (1) Expected connections remaining during…
NATURAL GAS GATHERING AND PROCESSING 2017 VOLUME Mid-Continent Williston Basin Increased producer activity expected in the STACK Increased well completions and rig activity and SCOOP plays expected in 2017 12 rigs on ONEOKs…
ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND ONEOKs NGL infrastructure already connects supply to Gulf Coast region Incremental ethane transported and fractionated volume potential of 175,000 200,000 bpd Potential annual…
PROJECTS UNDER DEVELOPMENT 1.5 BILLION TO 2.5 BILLION PRIMARILY FEE BASED Project backlog: evenly distributed between ONEOKs three business segments Target adjusted EBITDA multiples of five to seven times Future growth across…
FINANCIAL STRENGTH
OKE STRONG BALANCE SHEET COMMITTED TO INVESTMENT-GRADE CREDIT RATING Leverage target Expected credit ratings: GAAP debt-to-EBITDA ratio < 4.0x S&P: BBB Committed to taking necessary steps to Moodys: Baa3 maintain investment-grade…
APPENDIX
ONEOK 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;…
STACK AND SCOOP
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 Gathering capacity expandable by…
STACK AND SCOOP PLAYS FULL-SERVICE CAPABILITY Natural Gas Liquids 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 an…
STACK AND SCOOP PLAYS WELL-POSITIONED GATHERING AND PROCESSING ASSETS Natural Gas Gathering and Processing Approximately 200,000 acres dedicated to ONEOK in the STACK 12 rigs on ONEOKs dedicated acreage in the Mid-Continent;…
STACK AND SCOOP PLAYS PROVIDING CONNECTIVITY Natural Gas Pipelines 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…
PERMIAN BASIN
PERMIAN BASIN RELIABLE SERVICE PROVIDER Natural Gas Liquids Nearly 40 third-party natural gas processing plant connections in the Permian Basin One new natural gas processing plant connection in the Permian Basin completed in the…
PERMIAN BASIN FULL-SERVICE CAPABILITY Natural Gas Liquids Extensive network of natural gas liquids pipelines connecting supply to Gulf Coast and Conway, Kansas, market centers Potential to offer transportation and fractionation…
PERMIAN BASIN PROVIDING CONNECTIVITY Natural Gas Pipelines Connected to more than 25 natural gas processing plants serving the Permian Basin with a total capacity of 1.9 Bcf/d Well-positioned in the Delaware Basin with a…
WILLISTON BASIN
WILLISTON BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Liquids Four third-party natural gas processing plant connections in the Williston Basin Bakken NGL Pipeline expandable to 160,000 bpd with additional pump stations,…
WILLISTON BASIN COMPETITIVELY ADVANTAGED ASSET FOOTPRINT Natural Gas Gathering and Processing More than 3 million acres dedicated to ONEOK Approximately 1 million acres in the core Nearly 1 Bcf/d natural gas processing capacity…
POWDER RIVER BASIN
POWDER RIVER BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Liquids Assets located in NGL-rich Niobrara, Sussex and Turner formations NGL takeaway through the Bakken NGL Pipeline and Overland Pass Pipeline Two third-party…
BUSINESS SEGMENTS
NATURAL GAS LIQUIDS
NATURAL GAS LIQUIDS ONE OF THE LARGEST IN THE U.S. Provides fee-based services to natural gas processors and customers Gathering, fractionation, transportation, marketing and storage Extensive NGL gathering system Connected to…
NATURAL GAS GATHERING AND PROCESSING
NATURAL GAS GATHERING AND PROCESSING SERVING PRODUCERS IN KEY BASINS Provides gathering, compression, treating and processing services to producers Diverse contract portfolio More than 2,000 contracts Percent of proceeds (POP)…
WILLISTON BASIN INCREASED GAS CAPTURE AND VOLUME BACKLOG BENEFITS ONEOK Increased natural gas capture results in increased NGL and natural gas value uplift Approximately 89% of North Dakotas natural gas production was captured in…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE RISK MITIGATION Nine Months Ending December 31, 2017 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (MMBtu/d) 73,000 2.63 / MMBtu 97% Condensate (bpd) 1,800…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES AFTER HEDGING* Earnings Impact* Earnings Impact* ( in Millions) ( in Millions) Commodity Sensitivity 2017** 2018*** Natural Gas 0.10 / MMBtu 0.1 0.6 Natural Gas…
NATURAL GAS PIPELINES
NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based income 92% of transportation capacity contracted under firm demand-based rates in 2016 82% of contracted system transportation capacity serves end-use…
NON-GAAP RECONCILIATIONS
NON-GAAP RECONCILIATIONS ONEOK, Inc. ONEOK has disclosed in this presentation expected 2017 adjusted EBITDA and distributable cash flow (DCF), which are non-GAAP financial metrics, used to measure ONEOKs financial performance, and are…
OKE NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA ( in Millions) 2013 2014 2015 2016 Reconciliation of Net Income to Adjusted EBITDA Net income from continuing operations 589 669 385 746 Interest expense, net of capitalized…
OKE NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA AND DCF 2017 Guidance Range (Millions of dollars) Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Excludes one-time transaction fees associated…
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