Oneok, Inc. · NYSE:OKE
Oneok — Investor Presentation (January 2024)
34 slides from Oneok's investor presentation, January 2024
Slide 1: Investor Presentation
Investor Presentation January 2024
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 legislati
Slide 3: ONEOK vs. S&P 500: A Unique Investment Opportunity
ONEOK vs. S&P 500 A Unique Investment Opportunity INVESTMENT GRADE LARGE MARKET CREDIT RATING CAP STRONG ESG RATING CONSENSUS EPS (Baa3/BBB-) (>$35 billion) GROWTH (‘AA’ or better from MSCI) (>10% 2022-2023E) 1 OKE:MSCI ESG Rating of AAA ATTRACTIVE DIVIDEND YIELD AND 10 DIVIDEND STABILITY OKE Debt C
Slide 4: Key Investment Considerations
Key Investment Considerations Scale. Scope. Growth. Resiliency. S&P 500 index member Diversified services, Flexibility to grow at the Strong balance sheet and one of the largest product mix and free cash pace customers need and investment-grade energy infrastructure flow generation with through high
Slide 5: Enhanced Capital Allocation Framework
Enhanced Capital Allocation Framework Value-driven Framework Illustrative Long-term Cash Allocation(a) Debt reduction / • Remain committed to high-return capital-growth Other opportunities and maintaining a strong balance sheet. – Investment-grade credit ratings. Dividends Share – ~3.5x long-term le
Slide 6: Attractive Dividend Profile
Attractive Dividend Profile ONEOK Dividend Growth Outpaces C-Corp Peers(a) >25 Years of ONEOK Dividend Stability(b) $3.96 150% Percent Change in Annual Dividends 100% 50% 0% -50% $0.31 -100% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2000 2024 ONEOK Peer 1 Peer 2 Peer 3 . (a) Defined as
Slide 7: Business Segments
Business Segments • Natural Gas Liquids: – Primary NGL transportation provider for the Williston and Powder River basins and Mid-Continent. E A R N I N G S B Y S E G M E N T (a) – End market connectivity: Williston Basin to Gulf Coast. • Refined Products & Crude: Gas Pipes – Stable, demand driven bu
Slide 8: Synergy Opportunities
Synergy Opportunities Immediate to Near-Term (1-4 Years) with Significant Potential Upside BATCHING BLENDING • Liquids pipelines provide • Ability to mix products to obtain the opportunities to move NGLs or higher value. refined products through the same product pipelines. Near-term • Increased unle
Slide 9: Sustainable Adjusted EBITDA Growth
Sustainable Adjusted EBITDA Growth Proven Growth Through Commodity Cycles (adjusted EBITDA $ in billions) ~$6.0(c) $150 $6,000 $5.1(b) midpoint ◆ Nine consecutive years of adjusted One-time insurance $5,000 settlement gain of ~$630 MM EBITDA growth (2013-2022). WTI(a) WTI ($/Bbl) $100 $4,000 ◆ >12%
Slide 10: Diversified. Reliable. Integrated.
Diversified. Reliable. Integrated. • Competitively positioned – key asset locations and market share. • Provides midstream services to producers, processors and downstream customers. • Approximately 50,000-mile network of natural gas liquids (NGL), refined petroleum products, natural gas and crude o
Slide 11: Delivering the Energy That Improves Our Lives
Delivering the Energy That Improves Our Lives ONEOK delivers energy products that help meet domestic and international energy demand, contribute to energy security and provide safe, reliable and responsible energy solutions needed today and into the future. These essential energy products have many
Slide 12: 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 2023 earnings to be >90% fee based Primary NGL transportation provider for the Williston Basin/PRB
Slide 13: Natural Gas Liquids: Regional Volume Update
Natural Gas Liquids Regional Volume Update Average Raw Feed Throughput Volumes(a) Average Bundled Region Second Quarter 2023 Third Quarter 2023 Rate (per gallon) • Rocky Mountain: Rocky Mountain(b) 374,000 bpd 391,000 bpd ~ 28 cents(e) – 5% increase in NGL raw feed throughput compared with the secon
Slide 14: ONEOK's Permian Basin NGL Strategy
ONEOK’s Permian Basin NGL Strategy 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 Arbuck
Slide 15: 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 2020-2050 Petrochemical Petrochemical Health Care Pr
Slide 16: 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 2023 earnings to be >75% fee based 16% 13% 14% 14% Primarily fee-based contracts 22% <25% with a POP(a) component Primary natural gas processer
Slide 17: Natural Gas Gathering and Processing: Regional Volume Update
Natural Gas Gathering and Processing Regional Volume Update Average Processed Volumes • Rocky Mountain: Region Second Quarter 2023 Third Quarter 2023 – 7% increase in processed volumes compared with the second quarter 2023. Rocky Mountain 1,473 MMcf/d 1,572 MMcf/d – 450 wells connected through third
Slide 18: Williston Basin Production Efficiency
Williston Basin Production Efficiency Rising Gas-to-Oil Expanding Core Driven by Increased Coordination Between Ratios (GORs) Improved Drilling and Producers & Midstream Operators Completion Technologies Driving Higher Gas Capture 4.0 Basin-wide natural gas production has increased 250 ONEOK’s proce
Slide 19: Williston Basin Production
Williston Basin Production 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 October 2023. 4,000 3.00 3,500 2.73 3,500 3,000 3,000 2.50 2,500 2.48 2,500 2.06 2,000 2,00
Slide 20: Increasing GORs Result in Natural Gas Volume Growth
Increasing GORs Result in Natural Gas Volume Growth 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 MMBOPD Flat 1.1 MMBOPD Flat 4,000,000 G
Slide 21: 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 300,000 IP Year 2014 2014 2015 2015 500,000 250,000 20
Slide 22: 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 2023 earnings to be >95% fee based Connected directly to end-use markets: Local gas distribution companies, electric-generation faci
Slide 23: 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 reliab
Slide 24: Saguaro Connector Pipeline
Saguaro Connector 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 fo
Slide 25: Refined Products and Crude
Refined Products and Crude Critical Liquids Infrastructure and Fee-Based Business Model Provides refined products transportation, storage, distribution, blending services, and long-haul crude transportation and storage Expect 2023 earnings to be ~90% fee based Longest refined products 6% 8% 6% 7% 8%
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation ($ in millions) ONEOK Pre-Acquisition Reconciliation of net income Updated 2023 Consolidated 2023 to adjusted EBITDA 2021 2022 Guidance(c) Guidance(d) Net income(a) (b) $1,500 $1,722 $2,560 - $2,660 $2,550 - $2,650 Interest expense, net of capitalized
Slide 27: Environmental, Social and Governance (ESG)
New photo? New Environmental, Social and Governance (ESG)
Slide 28: Mission, Vision and Values
Mission, Vision and Values Our Mission (Why we exist) Our Vision (What we want to be) We deliver energy products and services vital to an To create exceptional value for our stakeholders by advancing world. providing solutions for a transforming energy future. Our Core Values (What guides us) SAFETY
Slide 29: ESG Performance Recognized
ESG Performance Recognized ONEOK received Morningstar Included in the Oil and Gas an MSCI ESG Sustainalytics ESG FTSE4Good Storage and Risk Rating Transportation Rating of indicating risk Index series Industry AAA management in the Industry Mover top 20% of the Top 10% refiners and S&P Global ESG In
Slide 30: ONEOK's Sustainability Journey
ONEOK’s Sustainability Journey Milestones on Our Path to Continuous Improvement 1st ESG report Announced 2030 GHG published Emissions Reduction Established ESG Council Target Added safety and health metric to Included in DJSI North Added reporting incentive program 2014–2018 American Index 2020 refe
Slide 31: ESG Initiatives and Practices - Highlights
ESG Initiatives and Practices - Highlights Committed to Safety Our People and Effective Governance and the Environment Communities and Oversight Absolute emissions reduction target: >$9 million contributed to local Diverse board of directors: 2.2 million metric ton reduction of combined communities
Slide 32: Absolute Emissions Reduction Target
Absolute Emissions Reduction Target Total 2019 Scope 1 & 2 Emissions Emissions Reduction (MMT CO2e) Opportunities • Electrification of natural gas SCOPE 1 SCOPE 2 2.2 MMT Reduction compression assets. Carbon Dioxide Electricity Combined Scope 1 & 2 Emissions by 2030(a) • Methane emission mitigation
Slide 33: Innovation and Infrastructure
Innovation and Infrastructure Projects to Reduce Emissions NATURAL GAS CAPTURE COMPRESSION ASSET RENEWABLE NATURAL GAS ELECTRIFICATION ONEOK is helping lead efforts to reduce ONEOK interconnects with renewable natural gas flaring in the Williston Basin, The use of electric powered compressors natura
Slide 34: January 2024
January 2024