I N V E S T O R U P D AT E J U LY 2 0 1 8 Lonesome Creek plant North Dakota
INDEX A PREMIER INFRASTRUCTURE COMPANY 4 FUTURE GROWTH 14 APPENDIX 23 Business Segments 25 STACK and SCOOP 38 Permian Basin 41 Williston Basin 43 Powder River Basin 47 Financial Guidance 49 NON-GAAP RECONCILIATIONS 51 Mont…
A PREMIER INFRASTRUCTURE C O M PA N Y Mont Belvieu II fractionator Gulf Coast
KEY INVESTMENT CONSIDERATIONS A PREMIER ENERGY INFRASTRUCTURE COMPANY Adjusted EBITDA Growth ( in billions) 2.3 MAJOR ENERGY INFRASTRUCTURE COMPANY 2.0 Extensive systems connect North American energy revolution with worldwide demand…
ONEOK VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY ONEOK has the fastest growing dividend and EBITDA of S&P 500 high dividend yield investment-grade companies (shown as percentages) Median S&P Median ONEOK Dividend S&P 500…
ONEOK'S ATTRACTIVE DIVIDEND PROFILE 1 OF 39 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 4 PERCENT S&P 500 Dividend Yield* 128 106 88 4.67% 81 58 23 8 8 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% - 6%…
THE HIGH YIELD DIVIDEND UNIVERSE ONEOK HAS RETURNED MORE VALUE TO SHAREHOLDERS THAN OTHER HIGH DIVIDEND PEERS Evaluating the ONEOK Peer Universe To t a l S h a r e h o l d e r R e t u r n v s . P e e r s Last three years,…
FINANCIAL STRENGTH INCREASING EXCESS CASH AND IMPROVED LEVERAGE METRICS 1.2 billion equity offering in January 2018 prefunded a significant portion of ONEOKs capital- Adjusted EBITDA Growth growth projects, immediately reducing debt (…
U.S. PROJECTED TO LEAD GLOBAL NGL PRODUCTION ONEOK IS WELL POSITIONED IN HIGH-GROWTH NGL REGIONS 2 0 11 2016 Forecast 2021 Canada & CAGR Canada & Mexico 2016-2021 Canada & Mexico 7% U.S. 5% Mexico 7% Canada 1% 9% Mexico (1)%…
LPG SUPPLY AND DEMAND U.S. WELL-POSITIONED FOR GROWING GLOBAL LPG DEMAND SUPPLY PUSH DEMAND PULL U.S. LPG Production (million barrels) LPG Exports from U.S (million barrels) CAGR 2016 2021: 3.7% CAGR 2016 2021: 9.7% 761 296 186…
ETHANE SUPPLY AND DEMAND U.S. WELL-POSITIONED TO MEET GROWING ETHANE DEMAND SUPPLY PUSH DEMAND PULL U.S. Ethane Production (million barrels) U.S. Ethylene Capacity (million barrels) CAGR 2016 2021: 11.5% CAGR 2016 2021: 7.2% 363…
S T R AT E G I C A L LY P O S I T I O N E D A S S E T S ASSETS IN BEST NGL PRODUCTION REGIONS IN THE U.S. U.S. NGL Production Region Million barrels/month Percent East Coast (Appalachian) 13.2 11.4 Mid-Continent (STACK/SCOOP) 18.8…
FUTURE GROWTH Bakken NGL Pipeline North Dakota
PRODUCER -DRIVEN NEED FOR MORE INFRASTRUCTURE CAPACITY EXPANSIONS CRITICAL TO MEETING GROWING PRODUCTION Permian NGL Production Growth(Mb/d) STACK/SCOOP 2,000 NGL Production Growth (Mb/d) 1,000 1,600 800 1,200 600 800 Volume…
NATURAL GAS LIQUIDS GROWTH PROJECTS 3.6 BILLION ANNOUNCED SINCE JUNE 2017 CapEx Expected Project Scope ( in millions) Completion 120-mile pipeline lateral extension with capacity of 110,000 bpd in the Delaware Basin West Texas LPG…
GATHERING AND PROCESSING GROWTH PROJECTS 600 MILLION ANNOUNCED SINCE JUNE 2017 CapEx Expected Project Scope ( in millions) Completion Additional STACK 200 MMcf/d processing capacity through long-term processing services agreement…
NATURAL GAS PIPELINES GROWTH PROJECTS ANNOUNCED SINCE JUNE 2018 Expected Project Scope Completion 100 MMcf/d westbound expansion from the STACK area to multiple western Oklahoma interstate pipeline ONEOK Gas Transportation delivery…
ELK CREEK PIPELINE PROJECT COMPELLING STRATEGIC RATIONALE Existing Bakken NGL Pipeline and Overland Pass Pipeline operating at full capacity Growing production in the region drives need for increased NGL takeaway Producer drilling and…
ARBUCKLE II PIPELINE AND MB -4 FRACTIONATOR CRITICAL INFRASTRUCTURE TO SERVE GROWING PRODUCTION Volume growth expected across ONEOK footprint, particularly in the STACK and SCOOP areas and Williston and Permian basins, creating a need…
DEMICKS LAKE PLANT PROCESSING CAPACITY TO SUPPORT PRODUCER GROWTH AND HELP MEET GAS CAPTURE TARGETS Williston Basin growth continues with enhanced well-completion techniques driving increased production and lower breakeven economics…
WEST TEXAS LPG EXPANSION 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 third-party…
APPENDIX Mont Belvieu II fractionator Gulf Coast
INTEGRATED. 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…
BUSINESS SEGMENTS Mont Belvieu II fractionator Gulf Coast
NATURAL GAS LIQUIDS 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…
NATURAL GAS LIQUIDS PREDOMINANTLY FEE BASED Sources of Earnings Exchange Services Primarily fee based Gather, fractionate and transport raw NGL feed to storage and market hubs Transportation & Storage Services Fee based Transport NGL…
NATURAL GAS LIQUIDS VOLUME UPDATE 2018 volume growth expected to be driven primarily by increased producer activity G a t h e r e d Vo l u m e ( M B b l / d ) in the STACK and SCOOP areas and increased ethane recovery in the Mid-…
ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND ONEOKs NGL infrastructure connects supply to the Gulf Coast market Incremental ethane transported and fractionated volume potential of 175,000 200,000 bpd Approximately 100 million of…
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) with…
NATURAL GAS GATHERING AND PROCESSING PREDOMINANTLY FEE BASED Increased fee-based contract mix by restructuring percent-of- Contract Mix by Earnings proceeds (POP) contracts with a fee component to include a higher fee rate Increasing…
NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE G a t h e r e d Vo l u m e s (MMcf/d) Mid-Continent 1,840 2,050 Increased producer activity in the STACK and SCOOP areas expected to be largest 1,524 1,561 1,680 driver of 2018 natural…
NATURAL GAS GATHERING AND PROCESSING Nine Months Ending December 31, 2018 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (BBtu/d) 67.1 2.79 / MMBtu 89% Condensate (MBbl/d) 2.4 52.84 / Bbl 79% Natural Gas…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES AFTER HEDGING* Earnings Impact Earnings Impact ( in Millions) ( in Millions) Commodity Sensitivity 2018** 2019*** Natural Gas 0.10 / MMBtu 0.2 2.8 Natural Gas…
NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based income 94% of transportation capacity contracted under firm demand- based rates in 2017 83% of contracted system transportation capacity served end- use…
NATURAL GAS PIPELINES PREDOMINANTLY FEE BASED Firm demand-based contracts serving primarily investment- Sources of Earnings grade utility customers Recently announced up to 1.7 billion cubic feet per day of 4% 2% 4%…
NATURAL GAS 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 2018, and: Approximately 95 percent of…
STACK AND SCOOP Mustang Pipeline Oklahoma
STACK AND SCOOP PRODUCTION 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 production…
STACK AND SCOOP PLAYS RELIABLE FULL-SERVICE PROVIDER Natural Gas Liquids More than 110 existing natural gas processing plant connections in the Mid-Continent Currently gathering approximately 200,000 250,000 bpd of NGLs with…
PERMIAN BASIN Roadrunner Pipeline Permian Basin
PERMIAN BASIN RELIABLE SERVICE PROVIDER Natural Gas Liquids Approximately 40 third-party natural gas processing plant connections in the Permian Basin Approximately 120-mile, 16-inch West Texas LPG pipeline extension into Delaware…
WILLISTON BASIN Garden Creek plant North Dakota
WILLISTON BASIN INCREASING GAS-TO-OIL RATIOS (GOR) DRIVING VOLUME GROWTH Producer efficiencies across the basin leading to increasing New all-time high natural gas production of 2.2 Bcf/d reported production with fewer rigs in April…
WILLISTON BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Gathering and Processing More than 1 Bcf/d of natural gas processing capacity, increasing to more than 1.2 Bcf/d by 2020 More than 3 million acres dedicated to ONEOK,…
WILLISTON BASIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 85% of North Dakotas natural gas production was captured in April 2018 North Dakota Industrial Commission (NDIC) policy…
POWDER RIVER BASIN Lonesome Creek plant North Dakota
POWDER 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 Elk Creek Pipeline…
GUIDANCE Canadian Valley plant - Oklahoma
2018 FINANCIAL GUIDANCE SUMMARY D ivid en d s Paid Per Sh are Per Year Adjusted EBITDA: 2,215 million 2,415 million 3.25 - 3.31 Distributable cash flow: 1,615 million 1,815 million 2.43 2.46 2.72 2.13 Target dividend coverage ratio…
NON-GAAP R E C O N C I L I AT I O N S Mont Belvieu II fractionator Gulf Coast
NON-GAAP RECONCILIATIONS 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 are…
NON-GAAP RECONCILIATION INCOME FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA ( in Millions) 2013 2014 2015 2016 2017 Reconciliation of Income from Continuing Operations to Adjusted EBITDA Income from continuing operations 589 669…
NON-GAAP RECONCILIATION 2017 2018 ( in Millions) Q1 Q2 Q3 Q4 FY Q1 Reconciliation of Net Income to Adjusted EBITDA Net income 186 176 167 65 594 266 Interest expense, net of capitalized interest 116 118 127 125 486 116 Depreciation…
NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA AND DCF 2018 Guidance Range (Millions of dollars) Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Net Income 955 - 1,155 Interest expense, net of…
NON-GAAP RECONCILIATION SEGMENT ADJUSTED EBITDA TO ADJUSTED EBITDA 2018 Guidance Range (Millions of dollars) Reconciliation of segment adjusted EBITDA to adjusted EBITDA Segment adjusted EBITDA: Natural Gas Liquids 1,300 -…
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