Oneok, Inc. · NYSE:OKE
Oneok — Investor Presentation (September 2022)
30 slides from Oneok's investor presentation, September 2022
Slide 1: Investor Update
I N V E S T O R U P D AT E SEPTEMBER 2022 MB-5 NGL Fractionator – Texas
Slide 2: Forward-Looking Statements
FORWARD -LOOKING STATEMENTS Statements contained in this presentation regarding company expectations, outlooks, targets, predictions and other similar statements should be considered forward-looking statements that are covered by the safe harbor protections provided under federal securities legislat
Slide 3: Mission, Vision and Values
MISSION, VISION 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 responsi
Slide 4: ONEOK vs. S&P 500: A Unique Investment Opportunity
ONEOK VS. S&P 500 A UNIQUE INVESTMENT OPPORTUNITY 379 Investment Grade Credit Rating (BBB-/Baa3) 271 Large Market Cap 175 (>$20 billion) High ESG Rating 146 (‘A’ or better from MSCI) Consensus EPS Growth (>5% CAGR 2022-2024E) 1 High Dividend Yield and Dividend Stability (>6%; >25 years without a div
Slide 5: Financial Strength
FINANCIAL STRENGTH DELIVERING LONG-TERM VALUE TO SHAREHOLDERS SOLID RETURNS SUSTAINABLE EBITDA GROWTH >25 YEARS OF DIVIDEND RETURN ON INVESTED CAPITAL(a) STABILITY EBITDA vs. WTI ($ in millions) $4,000 $3,620 13.6% $150 $3.74 WTI(b) $125 $3,000 13% CAGR Dividends Paid $100 2000 - 2021 11.0% $2,000 $
Slide 6: Integrated. Reliable. Diversified.
INTEGRATED. 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 inf
Slide 7: Investment Thesis
INVESTMENT THESIS A PREMIER ENERGY INFRASTRUCTURE COMPANY ONEOK’s Competitive Position Key Priorities Operating Market Share Connectivity Operate safely and environmentally Leverage 1 responsibly Strategic assets in NGL Fully integrated assets Available capacity and Reinvest cash flow in high-return
Slide 8: Delivering the Energy That Improves Our Lives
DELIVERING THE ENERGY THAT IMPROVES OUR 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 Nat
Slide 9: Business Segments
BUSINESS SEGMENTS 2022 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% 2022 ADJUSTED ~60% EBITDA GUIDANCE EARNINGS MIX ~90% fee based >80% fee based >95% fee based CONTRACT Fee-based, bundled service volume Fee contracts w
Slide 10: Natural Gas Liquids
NATURAL GAS LIQUIDS ONE OF THE LARGEST INTEGRATED NGL SERVICE PROVIDERS Provides fee-based gathering, fractionation, transportation, marketing and storage services linking key NGL market centers Expect 2022 earnings to be ~90% fee based Primary NGL transportation provider for the Williston Basin/PRB
Slide 11: Natural Gas Liquids Regional Volume Update
NATURAL GAS LIQUIDS REGIONAL VOLUME UPDATE Average Raw Feed Throughput Volumes(a) ◆ Rocky Mountain: Average Bundled Region First Quarter 2022 Second Quarter 2022 ▪ 5% increase in NGL raw feed throughput compared Rate (per gallon) with the first quarter 2022, despite severe weather Rocky Mountain(b)
Slide 12: Strong Natural Gas Liquids Volume Recovery
STRONG NATURAL GAS LIQUIDS VOLUME RECOVERY Rockies Region NGL Raw Feed Throughput (bpd) Capacity Expandable to ~540,000 bpd • Minimal capital needed to further 100,000 expand Elk Creek Pipeline with pump stations to meet future Current Total Capacity ~440,000 bpd customer needs. • Significant operat
Slide 13: Global NGL Demand Outlook
GLOBAL NGL DEMAND OUTLOOK 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 2020-2040 Petrochemical Petrochemical Health Care Pr
Slide 14: Natural Gas Gathering and Processing
NATURAL GAS GATHERING AND PROCESSING SERVING PRODUCERS IN KEY BASINS Provides gathering, compression, treating and processing services to producers. Expect 2022 earnings to be >80% fee based Primarily fee-based contracts 15% 13% 14% 14% 16% <20% with a POP(a) component Primary natural gas processer
Slide 15: Natural Gas Gathering and Processing Regional Volume Update
NATURAL GAS GATHERING AND PROCESSING REGIONAL VOLUME UPDATE G a t h e r e d Vo l u m e s ( M M c f / d ) ◆ Rocky Mountain: Rocky Mountain Mid-Continent ▪ Rocky Mountain region natural gas processed volumes reached 2,090– 2,370 approximately 1.4 Bcf/d in July 2022. 2,065 1,909 2,030 ▪ 157 wells conne
Slide 16: Williston Basin Production Efficiency
WILLISTON BASIN PRODUCTION 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 proce
Slide 17: Williston Basin Production
WILLISTON BASIN PRODUCTION RISING GAS-TO-OIL RATIOS (GORS) AND GAS CAPTURE PRESENT OPPORTUNITIES Williston Basin GOR’s have Statewide flaring has decreased from increased >80% since 2016. 36% in 2014 to ~6% in June 2022. 3,500 3.00 3,500 Gas Produced (MMcf/d) 2.79 Gas Produced (MMcf/d) 3,000 Oil Pro
Slide 18: Limited Activity Needed to Maintain Volumes
LIMITED ACTIVITY NEEDED TO MAINTAIN VOLUMES ONEOK Illustrative Williston Basin 1,750 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) ~45 average well completions per month 1,500 ~35 average well completions per month ~25 average well completions per month Gas capture opportunity ~15 average well
Slide 19: 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 20: Williston Basin Production
WILLISTON BASIN PRODUCTION 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 250,000 IP Year 2014 2014 2015 500,000 2015 2016 200,0
Slide 21: Natural Gas Pipelines
NATURAL GAS PIPELINES CONNECTIVITY TO KEY MARKETS Provides fee-based natural gas transportation and storage services, and direct connectivity to end-use markets Expect 2022 earnings to be >95% fee based Connected directly to end-use markets: Local gas distribution companies, electric-generation faci
Slide 22: Natural Gas Pipelines – Market Connected
NATURAL GAS PIPELINES – MARKET CONNECTED 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 reliabil
Slide 23: 2022 Financial Guidance
2022 FINANCIAL GUIDANCE 2022 Guidance Range 2022 Guidance Drivers ($ in millions, except per share amounts) ◆ Higher Rocky Mountain region natural gas Net income $ 1,550 – $ 1,830 and NGL volumes Diluted earnings per common share $ 3.45 – $ 4.07 ◆ Higher Permian/Gulf Coast NGL volumes Adjusted EBITD
Slide 24: 2022 Financial Guidance: Non-GAAP Reconciliation
2022 FINANCIAL GUIDANCE NON-GAAP RECONCILIATION 2022 Guidance Ranges ($ in millions) Reconciliation of net income to adjusted EBITDA Net income(a) $ 1,550 - $ 1,830 Interest expense, net of capitalized interest 705 - 685 Depreciation and amortization 655 - 655 Income tax expense 495 - 575 Noncash co
Slide 25: 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 26: ESG Performance and Reporting
ESG PERFORMANCE AND REPORTING ESG Ratings and Rankings ONEOK received an MSCI ESG Rating CDP of AA Top 30% As of 2021 U.S. and Canada Oil and Gas sector (C rated) #5 out of 57 companies assessed in the ONEOK’s ESG Risk Rating places it in Oil and Gas Storage and Transportation the top 10% in the Ref
Slide 27: ONEOK's Sustainability Journey
ONEOK’S SUSTAINABILITY JOURNEY MILESTONES ON OUR PATH TO CONTINUOUS IMPROVEMENT 2010 2007 2009 2010 2014 2017 2018 2019 2020 2021 Formed ESH 1st ESG report GRI reporting Added Formed new Conducted first Established ESG Renewables team Announced 2030 Leadership published environmental Sustainability
Slide 28: ESG Initiatives and Practices - Highlights
ESG INITIATIVES AND PRACTICES - HIGHLIGHTS COMMITTED TO SAFETY & OUR PEOPLE & EFFECTIVE GOVERNANCE THE ENVIRONMENT COMMUNITIES & OVERSIGHT Absolute emissions reduction target: >$8 million contributed to local Diverse board of directors: Members 2.2 million metric ton reduction of combined communitie
Slide 29: Absolute Emissions Reduction Target
ABSOLUTE EMISSIONS REDUCTION TARGET Total 2019 Scope 1 & 2 Emissions (MMT CO2e) Emissions Reduction Opportunities Carbon Dioxide Electricity Electrification of natural gas (CO2e) Consumption compression assets. 3.1 3.0 2.2 MMT Reduction Methane emission mitigation through Combined Scope 1 & 2 best m
Slide 30: Innovation and Infrastructure
INNOVATION 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 landf