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Wells Fargo Energy Symposium – Oneok Partners, L.P.

Oneok Partners, L.P. · Dec 6, 2017 · 60 slides

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Slides

  1. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 1
    W E L L S FA R G O ENERGY SYMPOSIUM N e w Yo r k D e c . 6 - 7
  2. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 2
    TERRY SPENCER PRESIDENT AND CHIEF EXECUTIVE OFFICER Mont Belvieu II fractionator Gulf Coast
  3. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 3
    WHAT WE LL CO V E R Strategic and integrated assets Simplified corporate structure Fee-based earnings across segments Disciplined growth continues Financial strength Bear Creek plant Williston Basin
  4. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 4
    O VERVIEW Garden Creek plant North Dakota
  5. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 5
    KEY INVESTMENT CO NSIDERATIO NS A PREMIER ENERGY COMPANY Sources of Earnings STRATEGIC, INTEGRATED ASSETS ( in billions) One of the largest energy midstream service providers in the U.S. 2.8 B Well-positioned in NGL-rich plays and…
  6. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 6
    INTEG RATED. RELIABLE. DIVERSIFIED. Approximately 38,000-mile network of natural gas liquids and natural gas pipelines Provides midstream services to producers, processors and customers Significant basin diversification Growth…
  7. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 7
    BUSINESS SEG MENTS Mustang Pipeline Oklahoma
  8. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 8
    NATURAL G AS LIQ UIDS Mont Belvieu II fractionator Gulf Coast
  9. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 9
    NATURAL G AS LIQ UIDS ONE OF THE LARGEST INTEGRATED NGL SERVICE PROVIDERS Provides fee-based services to natural gas processors and customers Gathering, fractionation, transportation, marketing and storage Extensive NGL gathering…
  10. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 10
    NATURAL G AS LIQ UIDS PREDOMINANTLY FEE BASED Sources of Earnings ( in billions) 1.5 B Exchange Services Primarily fee based 1.4 B Gather, fractionate and transport raw NGL feed to storage and 1.3 B market hubs 1.1 B Transportation…
  11. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 11
    ETHANE RECO VERY BY BASIN INCREMENTAL ETHANE DEMAND ONEOKs NGL infrastructure connects supply to the Gulf Coast region Incremental ethane transported and fractionated volume potential of 175,000 200,000 bpd Potential annual earnings…
  12. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 12
    NATURAL GAS G ATHERING AND PRO CESSING Garden Creek plant North Dakota
  13. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 13
    NATURAL G AS G ATHERING AND PRO CESSING 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)…
  14. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 14
    NATURAL G AS G ATHERING AND PRO CESSING PREDOMINANTLY 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…
  15. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 15
    NATURAL G AS PIPELINES Roadrunner Pipeline Permian Basin
  16. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 16
    NATURAL G AS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based income 93% of transportation capacity contracted under firm demand- based rates expected in 2017 82% of contracted system transportation capacity serves end-…
  17. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 17
    NATURAL G AS PIPELINES PREDOMINANTLY FEE BASED Firm demand-based contracts serving primarily investment- Sources of Earnings grade utility customers Roadrunner Gas Transmission pipeline project and WesTex 4% 2% 4% 3% 8% pipeline…
  18. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 18
    STACK AND SCO O P Mustang Pipeline Oklahoma
  19. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 19
    STACK AND SCO O P PRO DUCTIO N ONEOK ASSETS: WELL POSITIONED IN HIGH ACTIVITY AREAS Higher levels of proppant injection may be a leading indicator for Producers continue to expand their areas of focus based on production activity…
  20. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 20
    STACK AND SCO O P PLAYS RELIABLE FULL-SERVICE PROVIDER Natural Gas Liquids Approximately 110 third-party natural gas processing plant connections in Mid-Continent Approximately 140,000 bpd incremental ethane opportunity out of the…
  21. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 21
    PERMIAN BASIN West Texas LPG Pipeline Permian Basin
  22. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 22
    PERMIAN BASIN RELIABLE SERVICE PROVIDER Natural Gas Liquids Nearly 40 third-party natural gas processing plant connections in the Permian Basin Two new plant connections completed in 2017 West Texas LPG pipeline system expandable…
  23. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 23
    WEST TEXAS LPG EXPANSIO N EXTENDING REACH INTO PROLIFIC DELAWARE BASIN Approximately 120-mile, 16-inch pipeline extension with initial capacity of 110,000 bpd Supported by long-term dedicated NGL production from two planned…
  24. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 24
    WILLISTO N BASIN Bakken NGL Pipeline North Dakota
  25. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 25
    WILLISTO N BASIN INCREASING GAS-TO-OIL RATIOS (GOR) 55 percent of North Dakota rigs are on ONEOKs dedicated acreage North Dakota reports record levels of natural gas production in 2017: September 2017: 1.9 Bcf/d September 2016: 1.6…
  26. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 26
    WILLISTO N BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Liquids Four third-party natural gas processing plant connections Highest margin NGL barrel with average bundled fee rates of approximately 30 cents per gallon…
  27. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 27
    WILLISTO N 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 of natural gas processing capacity…
  28. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 28
    FINANCIAL STRENG TH Lonesome Creek plant North Dakota
  29. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 29
    2017 FINANCIAL G UIDANCE SUMMARY UPDATED AUG. 1, 2017 Dividends Paid Per Share Per Year Adjusted EBITDA: 1,885 million 2,055 million 19% CAGR since 2013 Distributable cash flow: 1,275 million 1,435 million Target dividend coverage…
  30. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 30
    STRO NG BALANCE SHEET COMMITTED TO INVESTMENT-GRADE CREDIT RATING Leverage target Credit ratings: GAAP debt-to-EBITDA ratio < 4.0x S&P: BBB (stable) Committed to taking necessary steps to maintain investment- Moodys: Baa3 (stable)…
  31. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 31
    ANNO UNCED G RO WTH PRO JECTS SINCE JUNE 2017 CapEx Expected Project Scope ( in millions) Completion Additional 200 MMcf/d processing capacity through long- Additional STACK processing term processing services agreement with third…
  32. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 32
    PRO JECTS UNDER DEVELO PMENT ORGANIC GROWTH PRIMARILY FEE-BASED Across multiple supply basins and major market areas Target adjusted EBITDA multiples of five to seven times 2.5 billion - 3.5 billion inventory of capital-growth projects…
  33. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 33
    O UR KEY STRATEG IES FEE-BASED GROWTH AT ATTRACTIVE RETURNS GROWTH Increase distributable cash flow through investments yielding attractive returns in organic growth projects and strategic acquisitions Execute on NGL and natural gas…
  34. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 34
    Q UESTIO NS Mont Belvieu II fractionator Gulf Coast
  35. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 35
    INDE X ONEOK OVERVIEW 5 BUSINESS SEGMENTS 8 STACK AND SCOOP 19 PERMIAN BASIN 22 WILLISTON BASIN 25 FINANCIAL STRENGTH 29 APPENDIX 37 Business Segments 38 Additional Basin Information 45 NON-GAAP RECONCILIATIONS 55 Mont…
  36. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 36
    APPENDIX Mont Belvieu II fractionator Gulf Coast
  37. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 37
    BUSINESS SEG MENTS Garden Creek plant North Dakota
  38. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 38
    NATURAL G AS LIQ UIDS VOLUME UPDATE G a t h e r e d Vo l u m e ( M B b l / d ) 2017 processing plant connections: Six completed in 2017: Three in the first quarter: Mid-Continent region (1), Permian Basin (1), Rocky Mountain region…
  39. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 39
    NATURAL G AS G ATHERING AND PRO CESSING 2017 VOLUME EXPECTATIONS G a t h e r e d Vo l u m e s (MMcf/d) 1,561 1,575 1,680 Williston Basin 1,404 1,524 130 well connects completed in the third quarter 2017; 313 through the 781 775-850…
  40. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 40
    NATURAL G AS G ATHERING AND PRO CESSING VOLUMES HEDGED AS OF SEPT. 30, 2017 Three Months Ending December 31, 2017 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (BBtu/d) 72.9 2.63 / MMBtu 89% Condensate (MBbl/d)…
  41. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 41
    NATURAL G AS G ATHERING AND PRO CESSING COMMODITY PRICE SENSITIVITIES AFTER HEDGING* Earnings Impact Earnings Impact Earnings Impact ( in Millions) ( in Millions) ( in Millions) Commodity Sensitivity 2017** 2018*** 2019***…
  42. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 42
    NATURAL G AS PIPELINES WELL-POSITIONED AND MARKET-CONNECTED N a t u r a l G a s Tr a n s p o r t a t i o n Capacity Contracted (MDth/d) Expect more than 95 percent fee-based earnings in 2017, and: Approximately 93 percent of…
  43. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 43
    O NEO K G RO WTH: 2006 -2016 9 BILLION INVESTED IN INFRASTRUCTURE 1. Bakken/Williston Basin 2. Niobrara/Powder River Basin 1 Plants: Garden Creek I, II and III; Grasslands Plant Niobrara NGL Lateral Expansion; Stateline I and II;…
  44. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 44
    STACK AND SCO O P Mustang Pipeline Oklahoma
  45. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 45
    STACK AND SCO O P PLAYS FULL-SERVICE CAPABILITY Natural Gas Liquids Currently gathering approximately 150,000 200,000 bpd of NGLs More than 110 existing natural gas processing plant connections in the Mid-Continent Three new…
  46. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 46
    STACK AND SCO O P PLAYS WELL-POSITIONED GATHERING AND PROCESSING ASSETS Natural Gas Gathering and Processing More than 300,000 acres dedicated in the STACK and SCOOP Producer results continue to improve through enhanced well…
  47. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 47
    STACK AND SCO O P 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 of…
  48. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 48
    PERMIAN BASIN Roadrunner Pipeline Permian Basin
  49. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 49
    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 Ability to offer transportation and fractionation services…
  50. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 50
    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 significant…
  51. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 51
    WILLISTO N AND PO WDER RIVER BASINS Bakken NGL Pipeline North Dakota
  52. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 52
    WILLISTO N BASIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 83% of North Dakotas natural gas production was captured in September 2017 North Dakota Industrial Commission (NDIC) policy…
  53. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 53
    PO WDER RIVER BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Liquids Assets located in NGL-rich Niobrara, Sussex and Turner formations NGL takeaway through Bakken NGL Pipeline and Overland Pass Pipeline Two third-party…
  54. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 54
    NON-GAAP R E C O N C I L I AT I O N S Mont Belvieu II fractionator Gulf Coast
  55. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 55
    NO N -G AAP RECO NCILIATIO NS ONEOK has disclosed in this presentation adjusted EBITDA, distributable cash flow (DCF) and dividend coverage ratio, which are non-GAAP financial metrics, used to measure ONEOKs financial performance, and…
  56. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 56
    NO N -G AAP RECO NCILIATIO N NET INCOME TO ADJUSTED EBITDA ( in Millions) 2013 2014 2015 2016 Reconciliation of Income from Continuing Operations to Adjusted EBITDA Income from continuing operations 589 669 385 746 Interest…
  57. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 57
    NO N -G AAP RECO NCILIATIO N 2015 2016 2017 ( in Millions) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Reconciliation of Income from Continuing Operations to Adjusted EBITDA Income from continuing operations 96 151 165 (27) 385 176 180…
  58. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 58
    NO N -G AAP RECO NCILIATIO N NET INCOME TO ADJUSTED EBITDA AND DCF 2017 Guidance Range* (Millions of dollars) Reconciliation of Income from Continuing Operations to Adjusted EBITDA and Distributable Cash Flow Income from continuing…
  59. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 59
    NO N -G AAP RECO NCILIATIO N SEGMENT ADJUSTED EBITDA TO ADJUSTED EBITDA 2017 Guidance Range* (Millions of dollars) Reconciliation of segment adjusted EBITDA to adjusted EBITDA Segment adjusted EBITDA: Natural Gas Liquids 1,135…
  60. Wells Fargo Energy Symposium – Oneok Partners, L.P. – slide 60
    Bear Creek plant Williston Basin

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