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US Capital Advisors Midstream Corporate Access Conference – Oneok Inc.

Oneok Inc. · Jan 28, 2020 · 55 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. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 1
    U . S . C A P I TA L ADVISORS MIDSTREAM C O R P O R AT E A C C E S S CONFERENCE JANUARY 2020
  2. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 2
    INDEX OVERVIEW 4 FUTURE GROWTH 17 APPENDIX 25 Business Segments 27 Williston Basin 39 Mid-Continent 43 Permian Basin 46 Powder River Basin 49 NON-GAAP RECONCILIATIONS 51 Elk Creek Pipeline Kansas
  3. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 3
    OVERVIEW Mont Belvieu fractionators Gulf Coast
  4. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 4
    INTEGRATED. RELIABLE. DIVERSIFIED. Approximately 39,000-mile network of natural gas liquids and natural gas pipelines Provides midstream services to producers, processors and customers Significant basin diversification Growth…
  5. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 5
    KEY INVESTM ENT 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…
  6. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 6
    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)…
  7. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 7
    INVESTM ENT 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…
  8. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 8
    ONEOK BUSINESS SEGM ENTS 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…
  9. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 9
    EARNINGS DRIVERS EXPECTED KEY DRIVERS FEE-BASED SOLUTIONS 2020 OUTLOOK 650 MMcf/d recent new capacity 300 MMcf/d NATURAL GAS FLARING on ONEOK dedicated acreage and from ONEOK and third-party processing plants currently online;…
  10. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 10
    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…
  11. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 11
    LONG-TERM GROWTH OUTLOOK LEADING EARNINGS PER SHARE (EPS) GROWTH 3-year EPS Growth (Median CAGR) 12/31/2018 - 12/31/2021 ONEOK 16.5% S&P 500 (a) 6.8% (shown as percentages) Median S&P 500 Median ONEOK Dividend S&P 500…
  12. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 12
    ATTRACTIVE D IVIDEND PROFILE 1 OF 54 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 4% S&P 500 Dividend Yield 131 114 81 4.84% 64 60 34 10 10 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% - 6% 6%…
  13. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 13
    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…
  14. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 14
    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.…
  15. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 15
    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…
  16. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 16
    FUTURE GROWTH Elk Creek Pipeline Kansas
  17. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 17
    ROCKY M OUNTAIN REGION NGL VOLUM E GROWTH EXPECTED TO REACH GREATER THAN 240,000 BARRELS PER DAY BY THE END OF Q1 2020 300,000 250,000 25,000 240,000 bpd expected in 200,000 5,000 30,000 Q1 2020 Barrels Per Day (bpd)…
  18. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 18
    WILLISTON BASIN PRODUCTION INCREASING PRODUCTION AT LOWER CRUDE OIL PRICES AND WITH FEWER RIGS Rig Count vs. Natural Gas Production(a) North Dakota Crude Oil Performance(c) 250 3.5 Natural Gas Production 13% CAGR(b) 200 3.0…
  19. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 19
    WILLISTON BA SIN 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 3.1 Bcf/d reported in production with fewer rigs.…
  20. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 20
    WILLISTON BA SIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 83% of North Dakotas natural gas production was captured in November 2019 North Dakota Industrial Commission (NDIC) policy…
  21. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 21
    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…
  22. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 22
    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…
  23. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 23
    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…
  24. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 24
    APPENDIX Arbuckle II Pipeline Texas
  25. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 25
    ONEOK VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY Note: Data as of Dec. 31, 2019. PAGE 26
  26. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 26
    BUSINESS SEGM ENTS Mustang Pipeline Oklahoma
  27. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 27
    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…
  28. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 28
    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…
  29. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 29
    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…
  30. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 30
    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…
  31. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 31
    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…
  32. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 32
    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…
  33. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 33
    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…
  34. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 34
    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…
  35. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 35
    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…
  36. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 36
    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%…
  37. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 37
    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…
  38. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 38
    WILLISTON BASIN Demicks Lake plant North Dakota
  39. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 39
    WILLISTON BA SIN 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…
  40. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 40
    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…
  41. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 41
    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…
  42. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 42
    M ID-CONTINENT REGION Arbuckle II Pipeline Oklahoma
  43. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 43
    M ID-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…
  44. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 44
    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…
  45. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 45
    PERM IAN BASIN Roadrunner Pipeline Permian Basin
  46. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 46
    PERM IAN 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…
  47. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 47
    ONEOKS PERM IAN 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…
  48. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 48
    POWDER RIVER BASIN Demicks Lake plant North Dakota
  49. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 49
    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…
  50. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 50
    NON-GAAP R E C O N C I L I AT I O N S Mont Belvieu II fractionator Gulf Coast
  51. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 51
    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…
  52. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 52
    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…
  53. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 53
    NON-GAAP 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…
  54. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 54
    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…
  55. US Capital Advisors Midstream Corporate Access Conference – Oneok Inc. – slide 55
    Depew Storage Facility Oklahoma

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