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Wells Fargo Energy Symposium – Oneok Inc.

Oneok Inc. · Dec 5, 2018 · 58 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Wells Fargo Energy Symposium – Oneok Inc. – slide 1
    W E L L S FA R G O ENERGY SYMPOSIUM DECEMBER 2018
  2. Wells Fargo Energy Symposium – Oneok Inc. – slide 2
    TERRY SPENCER PRESIDENT AND CHIEF EXECUTIVE OFFICER
  3. Wells Fargo Energy Symposium – Oneok Inc. – slide 3
    KEY TOPICS ONEOK is a unique investment opportunity Strategic and integrated assets Fee-based earnings More than 6 billion of high-return capital- growth projects Financial strength and flexibility Elk Creek Pipeline Wyoming
  4. Wells Fargo Energy Symposium – Oneok Inc. – slide 4
    SINCE LAST YEAR Organic growth projects announced now total more than 6 billion Prefunded a significant portion of capital growth projects with 1.2 billion equity offering in January 2018 Continued volume growth across ONEOKs…
  5. Wells Fargo Energy Symposium – Oneok Inc. – slide 5
    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…
  6. Wells Fargo Energy Symposium – Oneok Inc. – slide 6
    KEY INVESTMENT CONSIDERATIONS A PREMIER ENERGY INFRASTRUCTURE COMPANY Adjusted EBITDA Growth ( in billions) 2.5 MAJOR ENERGY INFRASTRUCTURE COMPANY Extensive systems connect North American energy supply with worldwide demand 2.0 1.8…
  7. Wells Fargo Energy Symposium – Oneok Inc. – slide 7
    ONEOK BUSINESS SEGMENTS Natural Gas Liquids Natural Gas Gathering Natural Gas Pipelines and Processing 15% 25% 2018 EARNINGS 60% GUIDANCE EARNINGS MIX 80 percent fee based 85 percent fee based 100 percent fee based…
  8. Wells Fargo Energy Symposium – Oneok Inc. – slide 8
    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…
  9. Wells Fargo Energy Symposium – Oneok Inc. – slide 9
    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…
  10. Wells Fargo Energy Symposium – Oneok Inc. – slide 10
    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…
  11. Wells Fargo Energy Symposium – Oneok Inc. – slide 11
    FINANCIAL STRENGTH A COM PETITIVE ADVANTAGE INCREASING EXCESS CASH Prefunded a significant portion of capital-growth projects and immediately reduced Adjusted EBITDA Growth debt with a 1.2 billion equity offering in January 2018,…
  12. Wells Fargo Energy Symposium – Oneok Inc. – slide 12
    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…
  13. Wells Fargo Energy Symposium – Oneok Inc. – slide 13
    GROWTH PROJECTS Elk Creek Pipeline Kansas
  14. Wells Fargo Energy Symposium – Oneok Inc. – slide 14
    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…
  15. Wells Fargo Energy Symposium – Oneok Inc. – slide 15
    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…
  16. Wells Fargo Energy Symposium – Oneok Inc. – slide 16
    ARBUCKLE II PIPELINE 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 for additional…
  17. Wells Fargo Energy Symposium – Oneok Inc. – slide 17
    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…
  18. Wells Fargo Energy Symposium – Oneok Inc. – slide 18
    DEMICKS LAKE I AND II PLANTS 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…
  19. Wells Fargo Energy Symposium – Oneok Inc. – slide 19
    KEY TAKEAWAYS ONEOK is a unique investment opportunity Strategic and integrated assets Fee-based earnings More than 6 billion of high-return capital-growth projects Financial strength and flexibility Commitment to ESG…
  20. Wells Fargo Energy Symposium – Oneok Inc. – slide 20
    QUESTIONS Elk Creek Pipeline Colorado
  21. Wells Fargo Energy Symposium – Oneok Inc. – slide 21
    INDEX OVERVIEW 4 GROWTH PROJECTS 14 KEY TAKEAWAYS 20 APPENDIX 23 Business Segments 26 STACK and SCOOP 39 Permian Basin 41 Williston Basin 43 Powder River Basin 47 Environment, Social & Governance (ESG) 49 NON-GAAP…
  22. Wells Fargo Energy Symposium – Oneok Inc. – slide 22
    APPENDIX Mont Belvieu fractionator Texas
  23. Wells Fargo Energy Symposium – Oneok Inc. – slide 23
    ONEOK'S ATTRACTIVE DIVIDEND PROFILE 1 OF 53 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 4 PERCENT S&P 500 Dividend Yield* 120 113 91 81 5.21% 47 32 14 7 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% -…
  24. Wells Fargo Energy Symposium – Oneok Inc. – slide 24
    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 1 To t a l S h a r e h o l d e r R…
  25. Wells Fargo Energy Symposium – Oneok Inc. – slide 25
    BUSINESS SEGMENTS Mustang Pipeline Oklahoma
  26. Wells Fargo Energy Symposium – Oneok Inc. – slide 26
    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…
  27. Wells Fargo Energy Symposium – Oneok Inc. – slide 27
    NATURAL GAS LIQUIDS VOLUME UPDATE Third quarter 2018 volumes gathered increased approximately 6 percent, compared G a t h e r e d Vo l u m e ( M B b l / d ) with the second quarter 2018 2018 volume growth expected to be driven…
  28. Wells Fargo Energy Symposium – Oneok Inc. – slide 28
    ETHANE RECOVERY BY BASIN INCREMENTAL ETHANE DEMAND ONEOKs NGL infrastructure connects supply to the Gulf Coast market 100,000 bpd of additional ethane volumes gathered on 1 ONEOKs system compared with third quarter 2017 3 2…
  29. Wells Fargo Energy Symposium – Oneok Inc. – slide 29
    NATURAL GAS LIQUIDS GROWTH PROJECTS 5.0 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…
  30. Wells Fargo Energy Symposium – Oneok Inc. – slide 30
    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…
  31. Wells Fargo Energy Symposium – Oneok Inc. – slide 31
    NATURAL GAS GATHERING AND PROCESSING VOLUME UPDATE G a t h e r e d Vo l u m e s (MMcf/d) Rocky Mountain 1,900 1,980 Third quarter 2018 natural gas volumes processed increased approximately 8 1,680 1,524 1,561 percent, compared with…
  32. Wells Fargo Energy Symposium – Oneok Inc. – slide 32
    NATURAL GAS GATHERING AND PROCESSING Three Months Ending December 31, 2018 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas* (BBtu/d) 67.1 2.79 / MMBtu 74% Condensate (MBbl/d) 2.3 53.20 / Bbl 74% Natural Gas…
  33. Wells Fargo Energy Symposium – Oneok Inc. – slide 33
    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 0.4 Natural Gas…
  34. Wells Fargo Energy Symposium – Oneok Inc. – slide 34
    GATHERING AND PROCESSING GROWTH PROJECTS 1.0 BILLION 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…
  35. Wells Fargo Energy Symposium – Oneok Inc. – slide 35
    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%…
  36. Wells Fargo Energy Symposium – Oneok Inc. – slide 36
    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…
  37. Wells Fargo Energy Symposium – Oneok Inc. – slide 37
    NATURAL GAS PIPELINES GROWTH PROJECTS ANNOUNCED SINCE JUNE 2018 Expected Project Scope Completion ONEOK Gas Transportation 100 MMcf/d westbound expansion from the STACK area to multiple western Oklahoma pipeline delivery points…
  38. Wells Fargo Energy Symposium – Oneok Inc. – slide 38
    STACK AND SCOOP Canadian Valley plant Oklahoma
  39. Wells Fargo Energy Symposium – Oneok Inc. – slide 39
    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 285,000 bpd of NGLs with incremental…
  40. Wells Fargo Energy Symposium – Oneok Inc. – slide 40
    PERMIAN BASIN Roadrunner Pipeline Permian Basin
  41. Wells Fargo Energy Symposium – Oneok Inc. – slide 41
    PERMIAN BASIN RELIABLE SERVICE PROVIDER Natural Gas Liquids Approximately 40 third-party natural gas processing plant connections in the Permian Basin Completed West Texas LPG pipeline extension into Delaware Basin with initial…
  42. Wells Fargo Energy Symposium – Oneok Inc. – slide 42
    WILLISTON BASIN Garden Creek plant North Dakota
  43. Wells Fargo Energy Symposium – Oneok Inc. – slide 43
    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 2.53 Bcf/d production with fewer rigs reported in…
  44. Wells Fargo Energy Symposium – Oneok Inc. – slide 44
    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 1.4 Bcf/d in the first quarter 2020 More than 3 million acres…
  45. Wells Fargo Energy Symposium – Oneok Inc. – slide 45
    WILLISTON BASIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 82% of North Dakotas natural gas production was captured in September 2018 North Dakota Industrial Commission (NDIC) policy…
  46. Wells Fargo Energy Symposium – Oneok Inc. – slide 46
    POWDER RIVER BASIN Lonesome Creek plant North Dakota
  47. Wells Fargo Energy Symposium – Oneok Inc. – slide 47
    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…
  48. Wells Fargo Energy Symposium – Oneok Inc. – slide 48
    ENVIRONMENT, SOCIAL & GOVERNANCE Mont Belvieu II fractionator Gulf Coast
  49. Wells Fargo Energy Symposium – Oneok Inc. – slide 49
    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…
  50. Wells Fargo Energy Symposium – Oneok Inc. – slide 50
    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…
  51. Wells Fargo Energy Symposium – Oneok Inc. – slide 51
    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…
  52. Wells Fargo Energy Symposium – Oneok Inc. – slide 52
    NON-GAAP R E C O N C I L I AT I O N S Mont Belvieu II fractionator Gulf Coast
  53. Wells Fargo Energy Symposium – Oneok Inc. – slide 53
    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…
  54. Wells Fargo Energy Symposium – Oneok Inc. – slide 54
    NON-GAAP RECONCILIATION 2016 2017 2018 (millions of dollars) FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Reconciliation of net income to adjusted EBITDA Net income 744 186 176 167 65 594 266 282 314 862 Interest expense, net of capitalized…
  55. Wells Fargo Energy Symposium – Oneok Inc. – slide 55
    NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA (millions of dollars) 2013 2014 2015 2016 2017 Reconciliation of net income to adjusted EBITDA Net income 577 663 379 744 594 Interest expense, net of capitalized interest 271…
  56. Wells Fargo Energy Symposium – Oneok Inc. – slide 56
    2018 FINANCIAL GUIDANCE INCREASED SEGMENT ADJUSTED EBITDA Updated 2018 Guidance Range Reconciliation of segment adjusted EBITDA to adjusted EBITDA (millions of dollars) Segment adjusted EBITDA: Natural Gas Liquids 1,485 1,535…
  57. Wells Fargo Energy Symposium – Oneok Inc. – slide 57
    2018 FINANCIAL GUIDANCE INCREASED Updated 2018 Guidance Range Reconciliation of net income to adjusted (millions of dollars) EBITDA and distributable cash flow Net income 1,140 1,220 Interest expense, net of capitalized interest…
  58. Wells Fargo Energy Symposium – Oneok Inc. – slide 58
    Elk Creek Pipeline Kansas

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