Slide 1: Investor Presentation
INVESTOR PRESENTATION September 2023
Slide 2: Cautionary Statement
CAUTIO NARY STATEMENT Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in t
Slide 3: Cautionary Statement (continued)
CAUTIO NARY STATEMENT (CO NTINUED) No Offer or Solicitation This presentation is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any s
Slide 4: Acquisition of Magellan Midstream Partners
ACQUISITION OF MAGELLAN MIDSTREAM PARTNERS
Slide 5: Acquisition of Magellan Midstream Partners
ACQ UISITIO N O F MAG ELLAN MIDSTREAM PARTNERS This acquisition provides a compelling long-term value proposition, resulting in a more diversified company with added scope, scale and synergy opportunities. Diverse free cash Enhanced growth flow generation opportunities Combining two industry Strong
Slide 6: Diversifying Transaction Adds Scope and Scale
DIVERSIFYING TRANSACTIO N ADDS SCO PE AND SCALE ONEOK MAGELLAN PRO FORMA Gas Crude Gas 7% Pipelines Pipes 14% Crude Oil 10% 25% NGL G&P Refined G&P 44% NGL 26% Products 18% 60% 75% Refined Products 21% ◆ Natural Gas Liquids ◆ Refined Products ◆ Highly complementary asset base with significant long-t
Slide 7: Synergy Opportunities
SYNERG Y O PPO RTUNITIES IMMEDIATE TO NEAR-TERM (1-4 YEARS) WITH SIGNIFICANT POTENTIAL UPSIDE BATCHING BLENDING Risk-weighted Synergy Opportunities Assumed Near-term ◆ Liquids pipelines provide opportunities to move NGLs or ◆ Ability to mix products to obtain the (in millions) Potential refined prod
Slide 8: Expected Timeline to Close Magellan Acquisition
E X P E C T E D T I M E L I N E TO C L O S E M A G E L L A N A C Q U I S I T I O N May 14, 2023 June 27, 2023(a) September 21, 2023 ONEOK enters into Announces expiration Special meetings set for definitive agreement of the waiting period ONEOK shareholder and to acquire Magellan under the HSR Act T
Slide 9: ONEOK Standalone
ONEOK STANDALONE
Slide 10: ONEOK vs. S&P 500
O NEO K VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY 389 Investment Grade Credit Rating (BBB-/Baa3) 288 Large Market Cap 29 (>$20 billion) High ESG Rating 13 (‘AAA’ from MSCI) Consensus EPS Growth (>10% 2022-2023E) 1 High Dividend Yield and Dividend Stability (~6%; >25 years without a dividend cut) S
Slide 11: Attractive Dividend Profile
ATTRACTIVE DIVIDEND PRO FILE ONE OF THE HIGHEST YIELDS IN THE S&P 500 >25 YEARS OF DIVIDEND STABILITY 12% annual growth rate dividends paid (2000 – 2023) $3.82(a) 191 183 102 5.7% dividend yield 27 $0.31 0% > 0% - 2% > 2% - 5% > 5% 2000 2023 Source: Bloomberg dividend yield data as of July 31, 2023.
Slide 12: Proven Growth Through Commodity Cycles
PRO VEN G RO WTH THRO UG H CO MMO DITY CYCLES Sustainable adjusted EBITDA growth ($ in millions) $4,675(b) midpoint $5,000 $150 $4,000 Historical Strength WTI(a) Nine consecutive years of adjusted EBITDA WTI ($/Bbl) ◆ $100 $3,000 growth $2,000 ◆ >12% annual EBITDA growth rate (2013-2022) $50 ◆ Signi
Slide 13: Integrated. Reliable. Diversified.
INTEG RATED. RELIABLE. DIVERSIFIED. ◆ Competitively positioned – key asset locations and market share ◆ Approximately 40,000-mile network of natural gas liquids (NGL) and natural gas pipelines ◆ Greater than 10 Bcf/d (or 10%) of U.S. natural gas production is reliant on the utilization of ONEOK’s in
Slide 14: Key Investment Considerations
KEY INVESTMENT CO NSIDERATIO NS ONEOK’s Competitive Position Capital Allocation Priorities Market share Connectivity Invest in high-return organic projects Strategic assets in NGL-rich Fully integrated assets. 1 Adjacent to existing asset footprint U.S. shale basins. Primary connectivity between key
Slide 15: Delivering the Energy That Improves Our Lives
DELIVERING THE ENERG Y THAT IMPRO VES O UR LIVES COMMON USES OF NATURAL GAS AND NGLS Natural Gas: A lower-emission hydrocarbon-based fuel, producing reliable and cleaner energy, compared with other fossil fuels. Electricity Generation Heating and Cooking Transportation Fuel Industrial/Manufacturing
Slide 16: Business Segments
BUSINESS SEG MENTS 2023 GUIDANCE N AT U R A L G A S N AT U R A L G A S G AT H E R I N G N AT U R A L G A S LIQUIDS AND PROCESSING PIPELINES >10% >25% 2023 ADJUSTED >60% EBITDA GUIDANCE EARNINGS MIX >90% fee based >75% fee based >95% fee based CONTRACT Fee-based, bundled service volume Fee contracts
Slide 17: Disciplined and Intentional Growth
DISCIPLINED AND INTENTIO NAL G RO WTH Executing highly capital efficient projects Organic capex drives adjusted EBITDA growth Return on Invested Capital(a) Adjusted EBITDA Capex ($ in millions) $4,575 – $4,775(b) 14.8% $3,620 $3,380 11.0% $1,575 $1,202 $697 2017 2022 2021 2022 2023G (a) Return on In
Slide 18: Natural Gas Liquids
NATURAL G AS LIQ UIDS ONE OF THE LARGEST INTEGRATED NGL SERVICE PROVIDERS Provides fee-based gathering, fractionation, transportation, marketing and storage services linking key NGL market centers Expect 2023 earnings to be >90% fee based Primary NGL transportation provider for the Williston Basin/P
Slide 19: Natural Gas Liquids: Regional Volume Update
NATURAL G AS LIQ UIDS REGIONAL VOLUME UPDATE Average Raw Feed Throughput Volumes(a) ◆ Rocky Mountain: Average Bundled Region First Quarter 2023 Second Quarter 2023 ▪ 17% increase in NGL raw feed throughput compared Rate (per gallon) with the first quarter 2023. Rocky Mountain(b) 321,000 bpd 374,000
Slide 20: ONEOK's Permian Basin NGL Strategy
O NEO K’S PERMIAN BASIN NG L STRATEG Y Capital-efficient project more than doubles ONEOK’s current pipeline capacity out of the Permian Basin. Connecting Permian supplies with Gulf Coast demand ◆ Announced plans to complete the remaining loop of the West Texas NGL Pipeline to connect with ONEOK’s Ar
Slide 21: Global NGL Demand Outlook
G LO BAL NG L DEMAND O UTLO O K DIVERSE USES DRIVE DEMAND GROWTH Global NGL Demand Forecast (Million bpd) LPG Ethane NGL Demand Growth Drivers 20 Ethane Liquified Petroleum Gas (LPG) 16 Petrochemical Demand Residential Transportation Fuel 12 ~20% Growth 2020-2050 Petrochemical Petrochemical Health C
Slide 22: Natural Gas Gathering and Processing
NATURAL G AS G ATHERING AND PRO CESSING SERVING PRODUCERS IN KEY BASINS Provides gathering, compression, treating and processing services to producers. Expect 2023 earnings to be >75% fee based Primarily fee-based contracts 13% 14% 14% 16% with a POP(a) component 22% <25% Primary natural gas process
Slide 23: Natural Gas Gathering and Processing: Regional Volume Update
NATURAL G AS G ATHERING AND PRO CESSING REGIONAL VOLUME UPDATE Average Processed Volumes ◆ Rocky Mountain: Region First Quarter 2023 Second Quarter 2023 ▪ 8% increase in processed volumes compared Rocky Mountain 1,361 MMcf/d 1,473 MMcf/d with the first quarter 2023. ▪ 284 wells connected year-to-dat
Slide 24: Williston Basin Production Efficiency
WILLISTO N BASIN PRO DUCTIO N EFFICIENCY Rising Gas-to-Oil Expanding Core Driven by Increased Coordination Between Improved Drilling and Producers & Midstream Operators Ratios (GORs) Completion Technologies Driving Higher Gas Capture 3.5 Basin-wide natural gas production has increased 250 ONEOK’s pr
Slide 25: Williston Basin Production
WILLISTO N BASIN PRO DUCTIO N RISING GAS-TO-OIL RATIOS (GORS) AND GAS CAPTURE PRESENT OPPORTUNITIES Williston Basin GORs have Statewide flaring has decreased from increased ~90% since 2016. 36% in 2014 to ~6% in June 2023. 3,500 3.00 3,500 Gas Produced (MMcf/d) 2.78 Gas Produced (MMcf/d) 3,000 Oil P
Slide 26: Increasing GORs Result in Natural Gas Volume Growth
I N C R E A S I N G G O R S R E S U LT I N N AT U R A L G A S V O L U M E G R O W T H 1,600,000 1,400,000 1.4 MMBOPD Flat 1.3 MMBOPD Flat 1,200,000 1.2 MMBOPD Flat ND Oil, MMBOPD 1.1 MMBOPD Flat 1,000,000 800,000 600,000 400,000 200,000 - 6,000,000 1.4 MMBOPD Flat 1.3 MMBOPD Flat 5,000,000 1.2 MMBOP
Slide 27: Williston Basin Production
WILLISTO N BASIN PRO DUCTIO N INCREASING PRODUCTION WITH FEWER RIGS AND IMPROVING WELL PERFORMANCE North Dakota Natural Gas Performance North Dakota Crude Oil Performance (Average Well Production, Mcf) (Average Well Production, Bbl) 600,000 IP Year 300,000 IP Year 2014 2014 2015 2015 500,000 250,000
Slide 28: Natural Gas Pipelines
NATURAL G AS PIPELINES CONNECTIVITY TO KEY MARKETS Provides fee-based natural gas transportation and storage services, and direct connectivity to end-use markets Expect 2023 earnings to be >95% fee based Connected directly to end-use markets: Local gas distribution companies, electric-generation fac
Slide 29: Natural Gas Pipelines – Market Connected
NATURAL G AS PIPELINES – MARKET CO NNECTED Intrastate Pipeline System Interstate Pipeline System ◆ Connectivity between key markets ▪ Bi-directional between Mid-Continent and Permian Basin; Mexico markets; Gulf Coast market through pipeline interconnects ◆ Significant storage position creates reliab
Slide 30: Saguaro Connector Pipeline
SAG UARO CO NNECTO R PIPELINE PROPOSED PROJECT OVERVIEW Transporting natural gas from West Texas to the Mexico Border ◆ Originating at the Waha Hub traversing west connecting at the International Intrastate pipeline originating at the Waha Hub Boundary with a new pipeline under development in Mexico
Slide 31: Non-GAAP Reconciliation
NO N -G AAP RECO NCILIATIO N Non-GAAP Reconciliation ($ in millions) Reconciliation of net income Updated 2023 to adjusted EBITDA 2021 2022 Guidance Range(c) Net income(a) (b) $1,500 $1,722 $2,390 - $2,590 Interest expense, net of capitalized interest 733 676 695 - 675 Depreciation and amortization
Slide 32: Environmental, Social and Governance (ESG)
E N V I R O N M E N TA L , SOCIAL AND GOVERNANCE (ESG) Arbuckle II Pipeline completed restoration — Oklahoma
Slide 33: Mission, Vision and Values
MISSIO N, VISIO N AND VALUES We deliver energy products and services vital to an CORE VALUES: Our Compass advancing world. We commit to a zero-incident culture for the well-being of our Safety & employees, contractors and communities and to operate in an MISSION: Environmental environmentally respon
Slide 34: ESG Performance Recognized
ESG PERFO RMANCE RECO G NIZED Sustainalytics ESG Risk Rating Lowest risk quintile, indicating risk ONEOK received an management in the Oil and Gas Storage and MSCI ESG Rating top 20% of the Refiners and Pipelines industry Transportation Industry of AAA Industry Mover As of 2022 Top 10% As of 2023 S&
Slide 35: ONEOK's Sustainability Journey
O NEO K’S SUSTAINABILITY JO URNEY MILESTONES ON OUR PATH TO CONTINUOUS IMPROVEMENT 2010 2009 2010 2014 2017 2018 2019 2020 2021 2022 1st ESG report GRI reporting Added Formed new Conducted first Established ESG Renewables team Announced 2030 Achieved GHG published environmental Sustainability GRI ma
Slide 36: ESG Initiatives and Practices - Highlights
ESG INITIATIVES AND PRACTICES - HIG HLIG HTS COMMITTED TO SAFETY & OUR PEOPLE & EFFECTIVE GOVERNANCE THE ENVIRONMENT COMMUNITIES & OVERSIGHT Absolute emissions reduction target: >$9 million contributed to local Diverse board of directors: Members 2.2 million metric ton reduction of combined communit
Slide 37: Absolute Emissions Reduction Target
ABSOLUTE EMISSIONS REDUCTION TARGET Total 2019 Scope 1 & 2 Emissions Emissions Reduction Opportunities (MMT CO2e) • Electrification of natural gas compression assets. Carbon Dioxide Electricity • Methane emission mitigation through (CO2e) Consumption best management practices. 2.2 MMT Reduction • Sy
Slide 38: Innovation and Infrastructure
INNO VATIO N AND INFRASTRUCTURE PROJECTS TO REDUCE EMISSIONS ONEOK is helping lead efforts The use of electric powered ONEOK interconnects with to reduce natural gas flaring compressors provides an renewable natural gas (RNG) in the Williston Basin, opportunity to reduce GHG facilities including lan
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