Oneok, Inc. · NYSE:OKE
Oneok — Investor Presentation (March 2024)
31 slides from Oneok's investor presentation, March 2024
Slide 1: Investor Presentation March 2024
Investor Presentation March 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: 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 products, natural gas and crude oil pipelin
Slide 4: 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 5: 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-) (>$40 billion) CAGR (‘AA’ or better from MSCI) (~8% 2024E-2026E) 1 OK E : MS C I E S G R a t i n g o f A A A ATTRACTIVE DIVIDEND YIELD AND 17 DIVIDEND STABILI
Slide 6: 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 7: Sustainable Adjusted EBITDA Growth
Sustainable Adjusted EBITDA Growth Proven Growth Through Commodity Cycles (adjusted EBITDA $ in billions) ~$6.1(c) $150 $6,000 ~$5.2(b) One-time insurance ◆ 10 consecutive years of adjusted $5,000 settlement gain of ~$630 MM EBITDA growth (2013-2023). WTI(a) WTI ($/Bbl) $100 $4,000 ◆ >15% annual adj
Slide 8: 2023 Accomplishments and Recent Highlights
2023 Accomplishments and Recent Highlights Compared with 2022, unless noted Financial Operational ESG • 10 consecutive years of EBITDA • Successfully completed acquisition • Received an MSCI ESG Rating of growth. of Magellan Midstream Partners. AAA in 2023. • 3.7% dividend increase. • Record volumes
Slide 9: 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 10: 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 11: Business Segments
Business Segments • Natural Gas Liquids: – Primary NGL transportation provider for the Williston and Powder River basins and Mid-Continent. E AR 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 and Crude: Gas Pipes 10% – Stable, demand driv
Slide 12: Synergy Opportunities
Synergy Opportunities Immediate to Near-Term (1-4 Years) with Significant Potential Upside Initially Near-term BATCHING BLENDING Risk-weighted Synergy Opportunities (in millions) Assumed Potential • Liquids pipelines provide • Ability to mix products to obtain the opportunities to move NGLs or hig
Slide 13: 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 2024 earnings to be >90% fee based Primary NGL transportation provider for the Williston Basin/PR
Slide 14: Natural Gas Liquids: Regional Volume Update
Natural Gas Liquids Regional Volume Update Average Raw Feed Throughput Volumes(a) • Rocky Mountain: Region Third Quarter 2023 Fourth Quarter 2023 Average Bundled Rate (per gallon) – 10% increase in NGL raw feed throughput Rocky Mountain(b) 391,000 bpd 399,000 bpd ~ 28 cents(e) compared with 2022. Mi
Slide 15: 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 16: Refined Products and Crude
Refined Products and Crude Critical Liquids Infrastructure and Fee-Based Business Model Provides refined products transportation, storage and distribution, and long-haul crude transportation and storage. Expect 2024 earnings to be >85% fee based Longest refined products pipeline system 8% 6% 7% 8% 1
Slide 17: Refined Products and Crude: Average Throughput Volumes
Refined Products and Crude Average Throughput Volumes (a) Fourth Quarter 2023 Refined Products Total refined products volume shipped 1,547,000 bpd (volumes by product) Gasoline 861,000 bpd Aviation Distillates 586,000 bpd Aviation 100,000 bpd 6% Average refined products tariff rate (per gallon) $0.0
Slide 18: 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 2024 earnings to be ~85% fee based 13% 14% 14% ~15% Primarily fee-based contracts 22% 20% with a POP(a) component Primary natural gas processer
Slide 19: Natural Gas Gathering and Processing: Regional Volume Update
Natural Gas Gathering and Processing Regional Volume Update Average Processed Volumes • Rocky Mountain: Region Third Quarter 2023 Fourth Quarter 2023 – 13% increase in processed volumes compared with 2022. Rocky Mountain 1,572 MMcf/d 1,590 MMcf/d – 581 wells connected in 2023, exceeded guidance Mid-
Slide 20: 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 ~7% in January 2023. 4,000 3.00 3,500 2.72 3,500 3,000 3,000 2.50 2,500 2.42 2,500 2.04 2,000 2,00
Slide 21: Williston Basin Production Efficiency
Williston Basin Production Efficiency ONEOK’s processed volumes have Longer laterals = fewer well connections needed • Three-mile laterals are increasing; 10% fewer wells needed increased >3x with ~40% fewer well to connect same lateral footage (2024 vs. 2022). connects (2014-2023) 1,635(a) ~70% 93%
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 2024 earnings to be >95% fee based Connected directly to end-use markets: Local gas distribution companies, electric-generation fac
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: Non-GAAP Reconciliation
Non-GAAP Reconciliation Non-GAAP Reconciliation ($ in millions) Reconciliation of net income to adjusted EBITDA 2023 2024 Guidance Net income(a) $2,659 $2,610 - $3,010 Interest expense, net of capitalized interest 866 1,195 - 1,165 Depreciation and amortization 769 1,090 - 1,060 Income taxes 838 830
Slide 25: Environmental, Social and Governance (ESG)
New photo? New Environmental, Social and Governance (ESG)
Slide 26: ESG Performance Recognized
ESG Performance Recognized ONEOK received Morningstar Included in the Oil and Gas an MSCI ESG Sustainalytics ESG Storage and FTSE4Good Transportation Risk Rating in the Rating of top 20% of the Index series Industry AAA refiners and Top 15% pipelines industry S&P Global ESG Score 2023 Included in th
Slide 27: ONEOK's Sustainability Journey
ONEOK’s Sustainability Journey Milestones on Our Path to Continuous Improvement Achieved GHG 1st ESG report Announced 2030 GHG reductions equating published Emissions Reduction to approximately 50% Established ESG Council Target of the 2030 target Added safety and health metric to Included in DJSI N
Slide 28: 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: >$9.5 million contributed to local Diverse board of directors: 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 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 30: 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 31: March 2024
March 2024