RBC CAPITAL MARKETS MIDSTREAM CONFERENCE NOVEMBER 2019
INDEX OVERVIEW 4 FUTURE GROWTH 17 APPENDIX 26 Business Segments 28 Williston Basin 40 Mid-Continent 44 Permian Basin 47 Powder River Basin 50 NON-GAAP RECONCILIATIONS 52 Elk Creek Pipeline Kansas
OVERVIEW Mont Belvieu fractionators 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…
KEY INVESTMENT CONSIDERATIONS A PREMIER ENERGY INFRASTRUCTURE COMPANY Adjusted EBITDA Growth ( in billions) MAJOR ENERGY INFRASTRUCTURE COMPANY 2.45 2.60 Extensive systems connect North American energy supply with worldwide demand…
FINANCIAL STRENGTH A COM PETITIVE ADVANTAGE INCREASING LIQUIDITY Distributable Cash Flow (DCF) in Excess of Dividends Paid Significant liquidity from a 2 billion senior notes issuance completed in ( in millions) August 2019 183(a)…
INVESTMENT THESIS ONEOKs Competitive Position Key Priorities Connectivity Makes system duplication uneconomic Operate safely and environmentally Full NGL value chain essential for operations NGL pipelines, fractionators, storage and…
ONEOK BUSINESS SEGMENTS Natural Gas Liquids Natural Gas Gathering Natural Gas Pipelines and Processing 15% 25% 2019 EARNINGS 60% GUIDANCE EARNINGS MIX 80% fee based 85% fee based 95% fee based CONTRACT Fee-based, bundled…
EARNINGS DRIVERS EXPECTED KEY DRIVERS FEE-BASED SOLUTIONS 2020 OUTLOOK NATURAL GAS FLARING 300 MMcf/d 500 MMcf/d recent new capacity from ONEOK and third-party processing 550 MMcf/d currently flaring in North Dakota on ONEOK…
AT T R A C T I V E - R E T U R N P R O J E C T S E X PA N D C O R E I N F R A S T R U C T U R E PROJECTS EXPECTED TO GENERATE 4-6X ADJUSTED EBITDA MULTIPLES 4.5 billion in capital-growth projects expected to be completed through Q1…
LONG -TERM GROWTH OUTLOOK LEADING EARNINGS PER SHARE (EPS) GROWTH 3-year EPS Growth (Median CAGR) 12/31/2018 - 12/31/2021 ONEOK 15.8% S&P 500 (a) 7.0% (shown as percentages) Median S&P 500 Median ONEOK Dividend S&P 500…
ATTRACTIVE DIVIDEND PROFILE 1 OF 26 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 5% S&P 500 Dividend Yield 126 106 81 70 62 5.24% 34 13 13 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% - 6% 6% Source:…
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 training…
ESG-RELATED RECOGNITION RECENT HIGHLIGHTS Index Inclusions: Dow Jones Sustainability North America Index - Tracks the stock performance of the world's leading companies in terms of economic, environmental and social criteria.…
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…
FUTURE GROWTH Elk Creek Pipeline Kansas
ELK CREEK PIPELINE VOLUME RAMP EXPECT TO ACHIEVE FOUR TO SIX TIMES EBITDA MULTIPLE IN FIRST QUARTER 2020 Up to 240,000(a) Plants contracted: volumes up to 225,000 bpd Additional contracted volume: Demicks Lake II, Bear Creek…
NORTH DAKOTA NATURAL GAS FLARING CONNECTED MORE THAN 600 WELLS IN 2018 O N E O K D e d i c a t e d G r o s s P r o d u c t i o n (a) 1,500 Capacity with Demicks Lake II Capacity with MMcf/d Demicks Lake I GGaass…
WILLISTON BASIN PRODUCTION INCREASING PRODUCTION AT LOWER CRUDE OIL PRICES AND WITH FEWER RIGS Rig Count vs. Natural Gas Production(a) N o r t h D a k o t a C r u d e O i l P e r f o r m a n c e (c) 250 3.5 Natural Gas Production 14%…
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 3 Bcf/d reported in production with fewer rigs August…
WILLISTON BASIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 81% of North Dakotas natural gas production was captured in August 2019 North Dakota Industrial Commission (NDIC) policy…
NATURAL GAS LIQUIDS GROWTH PROJECTS CapEx Expected Project Scope ( in millions) Completion 900-mile NGL pipeline from the Williston Basin to the Mid-Continent with capacity of up to 240,000 bpd, and related infrastructure Elk Creek…
GATHERING AND PROCESSING GROWTH PROJECTS CapEx Expected Project Scope ( in millions) Completion 200 MMcf/d processing plant in the core of the Williston Basin Demicks Lake I plant Contributes additional NGL and natural gas volume…
NATURAL GAS PIPELINES GROWTH PROJECTS Expected Project Scope Completion ONEOK Gas Transportation 100 MMcf/d westbound expansion from the STACK area to multiple western Oklahoma pipeline delivery points Complete (OGT) westbound…
APPENDIX Mont Belvieu fractionator Texas
ONEOK VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY Note: Data as of Oct. 31, 2019. PAGE 27
BUSINESS SEGMENTS Mustang Pipeline Oklahoma
NATURAL GAS LIQUIDS ONE OF THE LARGEST INTEGRATED NGL SERVICE PROVIDERS Integrated NGL pipeline system from the Williston Basin to the Gulf Coast, linking key NGL market centers at Conway, Kansas and Mont Belvieu, Texas Provides…
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 Rocky Mountain(a) NGL raw reed throughput volume increased approximately Average NGL Raw Feed Throughput Volumes(b) 7% compared with the second quarter 2019 Region Second Quarter 2019 Third Quarter…
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) Rocky Mountain 1,915 2,115 1,937 Expect to connect approximately 525-550 wells in 2019 1,680 1,561 412 well connects through the first nine…
NATURAL GAS GATHERING AND PROCESSING Three Months Ending Dec. 31, 2019 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas (BBtu/d)(a) 82.0 2.30 / MMBtu 71% Condensate (MBbl/d) 2.6 58.55 / Bbl 74% Natural Gas Liquids…
NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES(a) Earnings Impact Earnings Impact ( in Millions) ( in Millions) Commodity Sensitivity 2019(b) 2020(c) Natural Gas 0.10 / MMBtu 1.1 4.0 Natural Gas Liquids…
NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based earnings 96% of transportation capacity contracted under firm demand-based rates in 2018 85% 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 completed approximately 1.5 billion cubic feet per day 2% 4% 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) Natural gas transportation capacity contracted increased 12% compared with the third quarter 2018…
WILLISTON BASIN Bear Creek plant North Dakota
WILLISTON BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Gathering and Processing More than 1.2 Bcf/d of natural gas processing capacity, increasing to more than 1.6 Bcf/d in the first quarter 2021 More than 3 million acres…
ELK CREEK PIPELINE PROJECT ATTRACTIVE PROJECT RETURN Existing Bakken NGL Pipeline and Overland Pass Pipeline operating at full capacity Expected to reach 100,000 bpd in the first quarter 2020 Growing production in the region drives…
WILLISTON BASIN PROCESSING PLANT PROJECTS 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…
MID -CONTINENT REGION Canadian Valley plant Oklahoma
MID -CONTINENT REGION RELIABLE FULL-SERVICE PROVIDER SERVING GROWTH IN THE STACK AND SCOOP PLAYS Natural Gas Liquids More than 115 existing natural gas processing plant connections Raw feed throughput greater than 550,000 bpd…
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…
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 Current West Texas LPG pipeline expansion projects to increase mainline capacity…
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…
UPDATED 2019 FINANCIAL GUIDANCE NON-GAAP RECONCILIATION Updated 2019 Guidance Range (Millions of dollars) Reconciliation of Net Income to Adjusted EBITDA and Distributable Cash Flow Net Income 1,220 - 1,330 Interest expense, net of…
NON-G A A P RECONCILIATION 2017 2018 2019 ( in Millions) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Reconciliation of Net Income to Adjusted EBITDA Net income 186 176 167 65 594 266 282 314 293 1,155 337 312 309 Interest expense, net of…
NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA (millions of dollars) 2014 2015 2016 2017 2018 Reconciliation of net income to adjusted EBITDA Net income 663 379 744 594 1,155 Interest expense, net of capitalized interest 356…
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