J . P. M O R G A N U . S . A L L S TA R S CONFERENCE London Sept. 17, 2018
INDEX A PREMIER INFRASTRUCTURE COMPANY 4 HOW WE GOT HERE 16 FUTURE GROWTH 29 APPENDIX 37 STACK and SCOOP 38 Permian Basin 40 Williston Basin 43 Powder River Basin 47 NON-GAAP RECONCILIATIONS 49 HEDGING AND PRICE SENSITIVITIES…
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) 2.4 MAJOR ENERGY INFRASTRUCTURE COMPANY 2.0 Extensive systems connect North American energy supply with worldwide demand 1.8…
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…
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…
ONEOK VALUE CHAIN FROM WELLHEAD TO MARKET CENTERS LDCs Natural Gas Pipeline End-use Markets Electric generation Large industrials Residue Gas Natural Gas Gathering Raw Feed NGLs Ethane Well head Propane Natural Gas NGL…
ONEOK BUSINESS SEGMENTS Natural Gas Liquids Natural Gas Gathering Natural Gas Pipelines and Processing 15% 25% 2018 EARNINGS 60% GUIDANCE EARNINGS MIX 90 percent fee based 80 percent fee based 100 percent fee-based…
ONEOK'S ATTRACTIVE DIVIDEND PROFILE 1 OF 37 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 4 PERCENT S&P 500 Dividend Yield* 124 117 91 74 5.01% 62 21 10 6 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% - 6%…
THE HIGH DIVIDEND YIELD UNIVERSE ONEOK HAS RETURNED MORE VALUE TO SHAREHOLDERS THAN OTHER HIGH DIVIDEND PEERS Evaluating the ONEOK Peer Universe* ONEOK has 25+ years of dividend stability and growth To t a l S h a r e h o l d e r R e…
FINANCIAL STRENGTH INCREASING EXCESS CASH AND IMPROVED LEVERAGE METRICS Prefunded a significant portion of capital-growth projects and immediately reduced debt with a Adjusted EBITDA Growth 1.2 billion equity offering in January 2018 (…
ONEOKS ESG INITIATIVES AND PRACTICES PROMOTING LONG-TERM BUSINESS SUSTAINABILITY Effective Governance and Oversight Committed to Safety Diverse board of directors members elected annually, including a Training robust protocols and…
DELIVERING LONG -TERM VALUE ALIGNED WITH SHAREHOLDERS Value Creation and Equity Returns Drive Incentives Total Shareholder Returns ONEOKs executive compensation program is focused on ONEOKs total shareholder returns* have consistently…
ESG-RELATED RECOGNITION RECENT HIGHLIGHTS FTSE4Good Index Includes companies demonstrating strong ESG practices. The FTSE4Good indices are used by a variety of market participants to create and assess responsible investment funds and…
HOW WE GOT HERE Mustang Pipeline Oklahoma
HOW WE GOT HERE ANNOUNCED DISCIPLINED, STRATEGIC GROWTH & ACQUISITIONS ORGANIC GROWTH*: WTLPG Delaware Basin extension (2018) Sterling III expansion (2018) MLP ACQUISITION: ORGANIC GROWTH: Canadian Valley plant expansion (2018)…
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 Thousand barrels/day Percent Gulf (Permian/Eagle Ford) 2,388 55.2 Mid-Continent (includes…
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 G a t h e r e d Vo l u m e ( M B b l / d ) producer activity in the STACK and SCOOP areas and increased ethane recovery in the…
ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND ONEOKs NGL infrastructure connects supply to the Gulf Coast market 70,000 bpd of additional ethane on ONEOKs system 1 compared with July 2017 3 2 Conway-priced ethane expected to…
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 Fee-based contracts with a…
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) Williston Basin 1,840 2,050 Bear Creek natural gas processing plant expansion to 130 MMcf/d completed 1,524 1,561 1,680 Expect to connect…
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 markets…
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…
FUTURE GROWTH Bakken NGL Pipeline North Dakota
PRODUCER -DRIVEN NEED FOR MORE INFRASTRUCTURE CAPACITY EXPANSIONS CRITICAL TO MEETING GROWING PRODUCTION STACK/SCOOP Permian NGL Production Growth(Mb/d) NGL Production Growth (Mb/d) 2,400 800 2,000 Volume forecasts across the…
NATURAL GAS LIQUIDS GROWTH PROJECTS 4.0 BILLION ANNOUNCED SINCE JUNE 2017 CapEx Expected Project Scope ( in millions) Completion West Texas LPG (WTLPG) 120-mile pipeline lateral extension with capacity of 110,000 bpd in the Delaware…
GATHERING AND PROCESSING GROWTH PROJECTS 600 MILLION ANNOUNCED SINCE JUNE 2017 CapEx Expected Project Scope ( in millions) Completion 200 MMcf/d processing capacity through a long-term processing services agreement with a third…
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 ATTRACTIVE PROJECT RETURN 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…
APPENDIX Mont Belvieu II fractionator Gulf Coast
STACK AND SCOOP Mustang Pipeline Oklahoma
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 250,000 bpd of NGLs with incremental…
PERMIAN BASIN Roadrunner Pipeline Permian Basin
ONEOKS PERMIAN BASIN STRATEGY CONNECTING PERMIAN BASIN TO ARBUCKLE II UTILIZING INCREMENTAL, CAPITAL-EFFICIENT EXPANSIONS STRATEGY POTENTIAL FUTURE Legacy WTLPG system potential conversion to crude service New Permian to Arbuckle II…
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 Natural gas production of 2.3 Bcf/d reported in June 2018, production with fewer rigs compared with…
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 83% of North Dakotas natural gas production was captured in June 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 Approximately 1 million acres dedicated to ONEOK NGL takeaway through Bakken NGL Pipeline…
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 Q2 Reconciliation of Net Income to Adjusted EBITDA Net income 186 176 167 65 594 266 282 Interest expense, net of capitalized interest 116 118 127 125 486 116 113…
2018 FINANCIAL GUIDANCE UPDATED JULY 31, 2018 NON-GAAP RECONCILIATION 2018 Updated Guidance Range (Millions of dollars) Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Net Income 1,020 - 1,150 Interest…
HEDGING AND PRICE SENSITIVITIES Roadrunner Pipeline Permian Basin
NATURAL GAS GATHERING AND PROCESSING Six Months Ending December 31, 2018 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (BBtu/d) 67.1 2.79 / MMBtu 85% Condensate (MBbl/d) 2.3 53.20 / Bbl 82% 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 0.5 1.7 Natural Gas…
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