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Credit Suisse Energy Conference – Oneok Inc.

Oneok Inc. · Mar 2, 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. Credit Suisse Energy Conference – Oneok Inc. – slide 1
    CREDIT SUISSE ENERGY CONFERENCE MARCH 2-3, 2020
  2. Credit Suisse Energy Conference – Oneok Inc. – slide 2
    INDEX OVERVIEW 4 VOLUME GROWTH 18 APPENDIX 25 Business Segments 27 Williston Basin 39 Mid-Continent 43 Permian Basin 46 Powder River Basin 49 NON-GAAP RECONCILIATIONS 51 Arbuckle II Pipeline Texas
  3. Credit Suisse Energy Conference – Oneok Inc. – slide 3
    OVERVIEW Demicks Lake plants North Dakota
  4. Credit Suisse Energy Conference – Oneok Inc. – slide 4
    INTEGRATED. RELIABLE. DIVERSIFIED. Approximately 40,000-mile network of natural gas liquids and natural gas pipelines Provides midstream services to producers, processors and customers Significant basin diversification Growth…
  5. Credit Suisse Energy Conference – Oneok Inc. – slide 5
    KEY INVESTMENT CONSIDERATIONS A PREMIER ENERGY INFRASTRUCTURE COMPANY MAJOR ENERGY INFRASTRUCTURE COMPANY Sources of Earnings Extensive systems connect North American energy supply with worldwide demand Premier assets in most prolific…
  6. Credit Suisse Energy Conference – Oneok Inc. – slide 6
    FINANCIAL STRENGTH A COM PETITIVE ADVANTAGE INCREASING LIQUIDITY Distributable Cash Flow (DCF) in Significant liquidity from a 2 billion senior notes issuance completed in Excess of Dividends Paid ( in millions) August 2019 No…
  7. Credit Suisse Energy Conference – Oneok Inc. – slide 7
    INVESTMENT THESIS ONEOKs Competitive Position Key Priorities Connectivity Makes system duplication uneconomic Operate safely and environmentally 1 responsibly Full NGL value chain essential for operations NGL pipelines,…
  8. Credit Suisse Energy Conference – Oneok Inc. – slide 8
    BUSINESS SEGMENTS Natural Gas Liquids Natural Gas Gathering Natural Gas Pipelines and…
  9. Credit Suisse Energy Conference – Oneok Inc. – slide 9
    EARNINGS DRIVERS KEY DRIVERS FEE-BASED SOLUTIONS 2020 GUIDANCE 300 MMcf/d NATURAL GAS FLARING on ONEOK dedicated acreage and 850 MMcf/d volume growth from continued strong recent new processing capacity from 500 MMcf/d currently…
  10. Credit Suisse Energy Conference – Oneok Inc. – slide 10
    ONEOK 2020 FINANCIAL GUIDANCE 2020 Guidance ( in millions) Net income 1,355 1,605 Diluted earnings per common share 3.25 3.85 Adjusted EBITDA 3,100 3,350 Distributable cash flow 2,245 2,505 Capital-growth expenditures 2,250…
  11. Credit Suisse Energy Conference – Oneok Inc. – slide 11
    E X PA N D I N G C O R E I N F R A S T R U C T U R E PROVIDING ADDITIONAL CONNECTIVITY FROM THE WILLISTON BASIN TO THE GULF COAST Expected to generate 4-6x adjusted EBITDA multiples or better MB-5 fractionator (Q1 2021, 750M)…
  12. Credit Suisse Energy Conference – Oneok Inc. – slide 12
    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…
  13. Credit Suisse Energy Conference – Oneok Inc. – slide 13
    ATTRACTIVE DIVIDEND PROFILE 1 OF 65 COMPANIES IN THE S&P 500 WITH A DIVIDEND YIELD GREATER THAN 4% S&P 500 Dividend Yield 127 106 81 4.99% 63 63 40 13 12 0% 0% - 1% 1% - 2% 2% - 3% 3% - 4% 4% - 5% 5% - 6% 6% Source:…
  14. Credit Suisse Energy Conference – Oneok Inc. – slide 14
    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…
  15. Credit Suisse Energy Conference – Oneok Inc. – slide 15
    ESG-RELATED RECOGNITION RECENT HIGHLIGHTS Included in 30 ESG-related indexes, including: Dow Jones Sustainability North America Index - Tracks the stock performance of the world's leading companies in terms of economic, environmental…
  16. Credit Suisse Energy Conference – Oneok Inc. – slide 16
    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…
  17. Credit Suisse Energy Conference – Oneok Inc. – slide 17
    VOLUME GROWTH Elk Creek Pipeline Kansas
  18. Credit Suisse Energy 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 12% CAGR(b) 200 3.0…
  19. Credit Suisse Energy Conference – Oneok Inc. – slide 19
    WILLISTON BASIN INCREASING GAS-TO-OIL RATIOS (GOR) DRIVING VOLUME GROWTH Producer efficiencies across the basin leading to increasing Natural gas production of more than 3 Bcf/d reported in production with fewer rigs. December 2019,…
  20. Credit Suisse Energy Conference – Oneok Inc. – slide 20
    WILLISTON BASIN INCREASED NATURAL GAS CAPTURE RESULTS Increased NGL and natural gas value uplift Approximately 84% of North Dakotas natural gas production was captured in December 2019 North Dakota Industrial Commission (NDIC) policy…
  21. Credit Suisse Energy Conference – Oneok Inc. – slide 21
    ROCKY MOUNTAIN NGL VOLUME GROWTH 2.1 BCF/D OF NEW PROCESSING CAPACITY CONTRACTED TO ONEOKS NGL SYSTEM SINCE JANUARY 2019 A 200 MMcf/d plant in the Williston Basin is Rocky Mountain Processing Capacity (a) typically capable of producing…
  22. Credit Suisse Energy Conference – Oneok Inc. – slide 22
    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…
  23. Credit Suisse Energy Conference – Oneok Inc. – slide 23
    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…
  24. Credit Suisse Energy Conference – Oneok Inc. – slide 24
    APPENDIX Arbuckle II Pipeline Texas
  25. Credit Suisse Energy Conference – Oneok Inc. – slide 25
    ONEOK VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY Note: Data as of Jan. 31, 2020. PAGE 26
  26. Credit Suisse Energy Conference – Oneok Inc. – slide 26
    BUSINESS SEGMENTS Mont Belvieu fractionators Gulf Coast
  27. Credit Suisse Energy 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. Credit Suisse Energy 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. Credit Suisse Energy Conference – Oneok Inc. – slide 29
    NATURAL GAS LIQUIDS VOLUME UPDATE Average NGL Raw Feed Throughput Volumes(b) Rocky Mountain(a) NGL raw reed throughput volume increased approximately 9% compared with the third quarter 2019 Average Bundled Region Third Quarter 2019…
  30. Credit Suisse Energy 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. Credit Suisse Energy 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. Credit Suisse Energy 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 2,1252,405 2,065 526 well connects completed in 2019 1,937 1,680 835-945 Expect to connect approximately 575-625 wells in 2020…
  33. Credit Suisse Energy Conference – Oneok Inc. – slide 33
    NATURAL GAS GATHERING AND PROCESSING Year Ending Dec. 31, 2020 Commodity Volumes Hedged Average Price Percent Hedged Natural Gas Liquids (MBbl/d)(b) 10.3 0.55 / gallon 63% Condensate (MBbl/d) 3.0 54.08 / Bbl 62% Natural Gas…
  34. Credit Suisse Energy Conference – Oneok Inc. – slide 34
    NATURAL GAS GATHERING AND PROCESSING COMMODITY PRICE SENSITIVITIES(a) Earnings Impact Earnings Impact ( in Millions) ( in Millions) Commodity Sensitivity 2020(b) 2021(c) Natural Gas 0.10 / MMBtu 6.1 7.1 Natural Gas Liquids…
  35. Credit Suisse Energy Conference – Oneok Inc. – slide 35
    NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Predominantly fee-based earnings 98% of transportation capacity contracted under firm demand-based rates in 2019 85% of contracted system transportation capacity served end-use…
  36. Credit Suisse Energy Conference – Oneok Inc. – slide 36
    NATURAL GAS PIPELINES PREDOMINANTLY FEE BASED Firm demand-based contracts serving primarily investment- Sources of Earnings grade utility customers Approximately 1.5 billion cubic feet per day of system 2% 4% 4% 3%…
  37. Credit Suisse Energy 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 9% compared with the fourth quarter 2018…
  38. Credit Suisse Energy Conference – Oneok Inc. – slide 38
    WILLISTON BASIN Demicks Lake plant North Dakota
  39. Credit Suisse Energy Conference – Oneok Inc. – slide 39
    WILLISTON BASIN PROVIDING VALUABLE TAKEAWAY CAPACITY Natural Gas Gathering and Processing More than 1.5 Bcf/d of natural gas processing capacity, increasing to approximately 1.9 Bcf/d in the third quarter 2021 More than 3 million…
  40. Credit Suisse Energy 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. Credit Suisse Energy 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. Credit Suisse Energy Conference – Oneok Inc. – slide 42
    MID -CONTINENT REGION Arbuckle II Pipeline Oklahoma
  43. Credit Suisse Energy Conference – Oneok Inc. – slide 43
    MID -CONTINENT REGION RELIABLE FULL-SERVICE PROVIDER SERVING GROWTH IN THE STACK AND SCOOP PLAYS Natural Gas Liquids More than 125 existing natural gas processing plant connections Raw feed throughput of approximately 550,000 bpd…
  44. Credit Suisse Energy 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. Credit Suisse Energy Conference – Oneok Inc. – slide 45
    PERMIAN BASIN Roadrunner Pipeline Permian Basin
  46. Credit Suisse Energy Conference – Oneok Inc. – slide 46
    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…
  47. Credit Suisse Energy Conference – Oneok Inc. – slide 47
    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…
  48. Credit Suisse Energy Conference – Oneok Inc. – slide 48
    POWDER RIVER BASIN Demicks Lake plant North Dakota
  49. Credit Suisse Energy 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. Credit Suisse Energy 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. Credit Suisse Energy 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. Credit Suisse Energy Conference – Oneok Inc. – slide 52
    2020 FINANCIAL GUIDANCE NON-GAAP RECONCILIATION 2020 Guidance Range (Millions of dollars) Reconciliation of net income to adjusted EBITDA and distributable cash flow Net Income 1,355 - 1,605 Interest expense, net of capitalized…
  53. Credit Suisse Energy Conference – Oneok Inc. – slide 53
    NON-G A A P RECONCILIATION 2017 2018 2019 ( in Millions) FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Reconciliation of Net Income to Adjusted EBITDA Net income 594 266 282 314 293 1,155 337 312 309 321 1,279 Interest expense, net of capitalized…
  54. Credit Suisse Energy Conference – Oneok Inc. – slide 54
    NON-GAAP RECONCILIATION NET INCOME TO ADJUSTED EBITDA (millions of dollars) 2015 2016 2017 2018 2019 Reconciliation of net income to adjusted EBITDA Net income 379 744 594 1,155 1,279 Interest expense, net of capitalized interest…
  55. Credit Suisse Energy Conference – Oneok Inc. – slide 55
    Demicks Lake plant North Dakota

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