ONEOK PARTNERS LP TULSA, Okla., May 5, 2015 /PRNewswire/ -- ONEOK, Inc. (NYSE: OKE) today announced first-quarter 2015 net income attributable to ONEOK of $60.8 million, or 29 cents per diluted share.
First-quarter 2014 net income attributable to ONEOK was $93.5 million, or 45 cents per diluted share, which includes income from discontinued operations of $1.8 million, or 1 cent per diluted share.
Income from continuing operations attributable to ONEOK was $60.9 million in the first quarter 2015, compared with $91.7 million in the first quarter 2014.
Distributions declared from ONEOK's general and limited partner interests in ONEOK Partners (NYSE: OKS) were $169.1 million in the first quarter 2015, a 16 percent increase compared with the first quarter 2014.
First-quarter 2015 cash flow available for dividends was $152.1 million, providing 1.20 times coverage of cash dividends. First-quarter 2014 cash flow available for dividends was $211.4 million, providing 1.82 times coverage, which included $82.8 million in cash flows from the former energy services business.
"As the pure-play general partner of ONEOK Partners, we remain focused on making prudent financial decisions that will benefit our shareholders in the long term," said Terry K. Spencer, president and chief executive officer of ONEOK. "During the current challenging market conditions, our balance sheet continues to reflect our financial strength as we maintain a strong liquidity position and continue to benefit from the partnership's completed capital-growth projects in the form of increased cash flow to ONEOK.
"We expect to achieve our 2015 guidance announced earlier this year, supported by the partnership's anticipated natural gas and natural gas liquids (NGL) volume ramp up in the second half of the year and firm primarily fee-based earnings in the natural gas pipelines segment," continued Spencer.
The company is reaffirming its 2015 cash flow available for dividends guidance range of $570 million to $650 million and free cash flow guidance range of $90 million to $120 million, provided on Feb. 23, 2015.
FIRST-QUARTER 2015 FINANCIAL PERFORMANCE
First-quarter 2015 financial performance compared with first-quarter 2014 financial performance was impacted positively by:
-- Higher natural gas volumes gathered, processed and sold, and higher NGL
volumes sold in the natural gas gathering and processing segment as a
result of recently completed capital-growth projects;
-- Higher NGL exchange service volumes from recently connected natural gas
processing plants in the Williston Basin, Powder River Basin and
Mid-Continent regions, additional revenues from minimum volume
obligations and increased NGL transportation margins primarily from new
volumes on the West Texas LPG pipeline system, which was acquired in
November 2014; and
-- Higher transportation revenues in the natural gas pipelines segment from
increased rates on intrastate pipelines and increased rates at Viking
Gas Transmission Company.
Natural gas and NGL volume increases in the first quarter 2015 were more than offset by impacts from continued commodity price declines, resulting in first-quarter 2015 operating income of $196.5 million, compared with $294.1 million in the first quarter 2014. First-quarter 2014 results were positively impacted by higher propane and natural gas prices as well as wider NGL location and product price differentials primarily related to significantly higher weather-related seasonal demand for propane and natural gas in the Midwest.
Decreases in first-quarter 2015 operating income reflect:
-- Lower net realized NGL prices in the natural gas gathering and
processing segment;
-- Reduced optimization and marketing margins as a result of narrower NGL
location price differentials, narrower realized NGL product price
differentials and decreased weather-related demand for propane in the
natural gas liquids segment; and
-- Decreased short-term natural gas storage services and lower contracted
storage capacity in the natural gas pipelines segment as a result of
significantly higher weather-related seasonal demand in the first
quarter 2014.
Operating costs were $179.0 million in the first quarter 2015, compared with $149.1 million in the same period last year. Depreciation and amortization expense was $85.9 million in the first quarter 2015, compared with $67.4 million in the same period last year. These increases were due primarily to the growth of the partnership's operations related to completed capital-growth projects and acquisitions.
First-quarter 2015 equity earnings were $30.9 million, compared with equity earnings of $33.7 million in the first quarter 2014, due primarily to decreased natural gas park-and-loan services on Northern Border Pipeline as a result of significantly higher weather-related seasonal demand in the first quarter 2014, offset partially by higher volumes delivered to the Overland Pass Pipeline from the Bakken NGL Pipeline.
Capital expenditures were $343.8 million in the first quarter 2015, compared with $429.5 million in the same period in 2014. The first quarter 2014 included one month of capital expenditures from our former natural gas distribution business prior to the separation on January 31, 2014.
ONEOK's future cash payments associated with the released natural gas transportation and storage capacity from the former energy services segment are expected to be approximately $37 million on an after-tax basis, which consists of approximately $15 million to be paid in the remainder of 2015; $11 million in 2016; $6 million in 2017 and $5 million over the period 2018 through 2023.
> View earnings tables
FIRST-QUARTER 2015 SUMMARY:
ONEOK:
-- Cash flow available for dividends of $152.1 million;
-- Receiving $95.2 million in distributions from the company's general
partner interest and $73.3 million in distributions from the company's
limited partner interest in ONEOK Partners in the first quarter 2015;
-- Ending the first quarter 2015, on a stand-alone basis, with $148.9
million of cash and cash equivalents, $1.8 million in letters of credit
issued and $298.2 million available under its $300 million credit
facility; and
-- Declaring in April 2015 a quarterly dividend of 60.5 cents per share, or
$2.42 per share on an annualized basis, unchanged from the previous
quarter, and an 8 percent increase compared with first quarter 2014.
ONEOK Partners:
-- Announcing in April 2015, a joint venture with Mexico City-based natural
gas infrastructure company Fermaca to construct a 200-mile natural gas
pipeline - the Roadrunner Gas Transmission pipeline - from the Permian
Basin in West Texas to the Mexican border near El Paso, Texas. The
project, which was fully subscribed in its initial design, is supported
by a 25-year firm (take-or-pay) transportation agreement with Mexico's
national electric utility, Comisión Federal de Electricidad (CFE);
-- Adding four new third-party natural gas processing plant connections -
one each in the Williston Basin and Powder River Basin, and two in the
Mid-Continent - to the partnership's NGL system;
-- Completing in April 2015 the construction of an approximately 95-mile
NGL pipeline between existing NGL fractionation infrastructure at
Hutchinson, Kansas, and Medford, Oklahoma, and the modification of the
partnership's NGL fractionation infrastructure at Hutchinson to
accommodate unfractionated NGLs produced in the Williston Basin;
-- Completing in March 2015 an $800 million public offering of senior
notes, consisting of $300 million of five-year senior notes at a coupon
of 3.8 percent and $500 million of 10-year senior notes at a coupon of
4.9 percent, generating net proceeds of approximately $792.3 million;
-- Increasing the partnership's revolving credit facility and commercial
paper program to $2.4 billion each from $1.7 billion;
-- Completing the sale of approximately $71.6 million of common units
through the partnership's at-the-market equity program (ATM program),
which resulted in ONEOK's aggregate ownership interest in ONEOK Partners
decreasing to 37.6 percent at March 31, 2015, from 37.8 percent at Dec.
31, 2014;
-- Having, as of March 31, 2015, $90.5 million of cash and cash
equivalents, $825.5 million of commercial paper outstanding, $14.0
million in letters of credit issued and no borrowings outstanding under
the partnership's $2.4 billion revolving credit facility; and
-- Declaring in April 2015 a first-quarter 2015 distribution of 79 cents
per unit, or $3.16 per unit on an annualized basis, unchanged from the
previous quarter, and a 6 percent increase compared with first quarter
2014.
BUSINESS-SEGMENT RESULTS:
Natural Gas Gathering and Processing Segment
The natural gas gathering and processing segment reported first-quarter 2015 operating income of $19.7 million, compared with $59.9 million in the first quarter 2014, which reflects:
-- A $17.0 million increase due primarily to natural gas volume growth in
the Williston Basin and Cana-Woodford Shale, which resulted in higher
natural gas volumes gathered, compressed, processed, transported and
sold, higher NGL volumes sold and higher fees;
-- A $7.9 million increase due primarily to changes in contract mix; and
-- A $53.8 million decrease due primarily to lower net realized NGL and
condensate prices.
Operating costs in the first quarter 2015 were $69.2 million, compared with $64.8 million in the first quarter 2014, due primarily to completed capital-growth projects, which reflect:
-- A $4.3 million increase from higher labor and employee benefit costs;
-- A $3.0 million increase in outside services expense; and
-- A $2.5 million decrease due to lower costs for materials and supplies.
Depreciation and amortization expense in the first quarter 2015 was $35.8 million, compared with $28.8 million in the first quarter 2014 due to the completion of capital-growth projects.
Key Statistics: More detailed information is listed in the tables.
-- Natural gas gathered was 1,808 billion British thermal units per day
(BBtu/d) in the first quarter 2015, up 21 percent compared with the same
period in 2014 due to the completion of capital-growth projects in the
Williston Basin and Mid-Continent areas;
-- Natural gas processed was 1,625 BBtu/d in the first quarter 2015, up 28
percent compared with the same period in 2014 due to the completion of
capital-growth projects in the Williston Basin and Mid-Continent areas;
-- NGL sales were 108,000 barrels per day (bpd) in the first quarter 2015,
up 20 percent compared with the same period in 2014;
-- The realized composite NGL net sales price after transportation and
fractionation costs, and hedging was 38 cents per gallon in the first
quarter 2015, down 64 percent compared with the same period in 2014;
-- The realized condensate net sales price after transportation costs and
hedging was $30.02 per barrel in the first quarter 2015, down 61 percent
compared with the same period in 2014; and
-- The realized residue natural gas net sales price after hedging was $3.96
per million British thermal units (MMBtu) in the first quarter 2015, up
10 percent compared with the same period in 2014.
The following table contains equity-volume information for the periods indicated:
Three Months Ended
March 31,
Equity-Volume Information (a) 2015 2014
---------------------------- ---- ----
NGL sales (MBbl/d) 16.8 17.8
Condensate sales (MBbl/d) 3.2 3.5
Residue natural gas sales (BBtu/d) 132.9 88.5
---------------------------------- ----- ----
(a) -Includes volumes for
consolidated entities only.
The natural gas gathering and processing segment is exposed to commodity-price risk as a result of percent-of-proceeds contracts, where the segment receives a percentage of volumes processed, or equity volumes, in exchange for services. ONEOK Partners is actively pursuing opportunities to convert its percent-of-proceeds contracts to fee-based contracts or increase the fee component of these contracts.
The partnership establishes hedges to mitigate its commodity-price risk. The following tables provide hedging information as of April 2015 for equity volumes in the natural gas gathering and processing segment in the periods indicated:
Nine Months Ending December 31, 2015
------------------------------------
Volumes Average Price Percentage
Hedged Hedged
------ ------
NGLs
(MBbl/d)
-Conway/
Mont
Belvieu 12.0 $0.59 / gallon 59%
Condensate
(MBbl/d)
- WTI-
NYMEX 3.3 $55.14 / Bbl 75%
Natural
gas
(BBtu/d)
-NYMEX
and basis 118.7 $3.89 / MMBtu 79%
---------- ----- ----- ------- ---
Year Ending December 31, 2016
-----------------------------
Volumes Average Price Percentage
Hedged Hedged
------ ------
NGLs
(MBbl/d)
-Conway/
Mont
Belvieu 1.2 $0.57 / gallon 6%
Condensate
(MBbl/d)
- WTI-
NYMEX 1.0 $62.10 / Bbl 20%
Natural
gas
(BBtu/d)
-NYMEX
and basis 35.0 $2.98 / MMBtu 20%
---------- ---- ----- ------- ---
All of the natural gas gathering and processing segment's commodity price sensitivities are estimated as a hypothetical change in the price of natural gas, NGLs and crude oil as of March 31, 2015, excluding the effects of hedging and assuming normal operating conditions. Condensate sales are based on the price of crude oil.
The natural gas gathering and processing segment estimates the following sensitivities:
-- A 10-cent-per-MMBtu change in the price of residue natural gas would
change 12-month forward net margin by approximately $5.6 million;
-- A 1-cent-per-gallon change in the composite price of NGLs would change
12-month forward net margin by approximately $3.1 million; and
-- A $1.00-per-barrel change in the price of crude oil would change
12-month forward net margin by approximately $1.7 million.
These estimates do not include any effects on demand for ONEOK Partners' services or natural gas processing plant operations that might be caused by, or arise in conjunction with, price changes. For example, a change in the gross processing spread may cause a change in the amount of ethane extracted from the natural gas stream, affecting natural gas gathering and processing margins for certain contracts.
Natural Gas Liquids Segment
The natural gas liquids segment reported first-quarter 2015 operating income of $145.7 million, compared with $176.8 million in the first quarter 2014, which reflects:
-- A $65.2 million increase in exchange-services margins, resulting
primarily from increased volumes from new natural gas processing plants
connected in the Williston Basin, Powder River Basin and Mid-Continent
regions, higher fees for exchange-services activities resulting from
contract renegotiations, and additional revenues from minimum volume
obligations;
-- An $18.8 million increase in transportation margins primarily from new
Permian Basin NGL volumes from the West Texas LPG pipeline system, which
were lower than expected due to the impact of well freeze-offs on the
system from severely cold weather during the first quarter 2015;
-- A $73.3 million decrease in optimization and marketing margins, which
resulted primarily from a $39.8 million decrease from significantly
narrower NGL location price differentials; a $19.4 million decrease due
to narrower realized NGL product price differentials; and a $14.1
million decrease in marketing margins; all primarily related to the
increased weather-related seasonal demand for propane during the first
quarter 2014;
-- An $8.4 million decrease from the impact of ethane rejection, which
resulted in lower NGL volumes;
-- A $2.2 million decrease due to the impact of operational measurement
losses; and
-- A $1.3 million decrease related to lower isomerization volumes,
resulting from narrower NGL product price differentials between normal
butane and iso-butane.
Operating costs were $82.2 million in the first quarter 2015, compared with $65.1 million in the first quarter 2014, due primarily to completed capital-growth projects and acquisitions, which reflect:
-- A $7.3 million increase due to higher outside services expenses
associated primarily with scheduled maintenance and the growth of
operations;
-- A $5.4 million increase due to higher labor and employee benefit costs;
and
-- A $4.7 million increase due to higher property taxes.
Depreciation and amortization expense in the first quarter 2015 was $39.3 million, compared with $27.1 million in the same period in 2014, due to the completion of capital-growth projects and acquisitions.
Equity earnings from investments were $7.0 million in the first quarter 2015, compared with $4.8 million in the same period in 2014, due primarily to higher volumes delivered to the partnership's 50 percent-owned Overland Pass Pipeline from the Bakken NGL Pipeline.
Key Statistics: More detailed information is listed in the tables.
-- NGLs transported on gathering lines were 709,000 bpd in the first
quarter 2015, up 49 percent compared with the same period in 2014, due
primarily to new Permian Basin volumes transported on the West Texas LPG
pipeline system, which were lower than expected due to well freeze-offs
from severely cold weather, and increased volumes from recently
connected plants in the Williston Basin, Powder River Basin and
Mid-Continent regions, offset partially by increased ethane rejection in
the Mid-Continent and Rocky Mountain regions;
-- NGLs fractionated were 475,000 bpd in the first quarter 2015, relatively
unchanged compared with the same period in 2014;
-- NGLs transported on distribution lines were 388,000 bpd in the first
quarter 2015, down 10 percent compared with the same period in 2014, due
primarily to the increased weather-related seasonal demand for propane
during the first quarter 2014 and increased ethane rejection, offset
partially by an increase in exchange services volumes delivered to Mont
Belvieu due to the completed Sterling III pipeline, which was placed in
service in March 2014; and
-- The average Conway-to-Mont Belvieu price differential of ethane in
ethane/propane mix, based on Oil Price Information Service (OPIS)
pricing, was 1 cent per gallon in the first quarter 2015, compared with
12 cents per gallon in the same period in 2014.
Natural Gas Pipelines Segment
The natural gas pipelines segment reported first-quarter 2015 operating income of $31.1 million, compared with $55.1 million for the first quarter 2014, which reflects:
-- A $4.2 million increase from higher firm transportation revenues
resulting primarily from higher rates on its intrastate natural gas
pipelines and increased rates at Viking Gas Transmission Company;
-- A $13.6 million decrease from lower short-term storage services as a
result of higher weather-related seasonal demand associated with
severely cold weather in the first quarter 2014;
-- A $6.2 million decrease from lower net retained fuel due to lower
natural gas prices and lower natural gas volumes retained;
-- A $4.7 million decrease due to decreased natural gas park-and-loan
services on its interstate pipelines as a result of increased
weather-related seasonal demand due to severely cold weather in the
first quarter 2014; and
-- A $4.5 million decrease due to lower storage revenues from lower firm
contracted capacity.
Operating costs in the first quarter 2015 were $27.2 million, compared with $27.5 million in the same period in 2014.
First-quarter 2015 equity earnings from investments were $19.7 million, compared with $23.4 million in the same period in 2014, due primarily to decreased natural gas park-and-loan services on Northern Border Pipeline as a result of increased weather-related seasonal demand due to severely cold weather in the first quarter 2014.
Key Statistics: More detailed information is listed in the tables.
-- Natural gas transportation capacity contracted was 5,939 thousand
dekatherms per day in the first quarter 2015, up 1 percent compared with
the same period in 2014; and
-- Natural gas transportation capacity contracted was 93 percent in the
first quarter 2015, unchanged from the same period in 2014.
EXPANDING EXPORT CAPABILITIES:
In April 2015, ONEOK Partners announced its 50-50 joint venture with Mexico City-based natural gas infrastructure company Fermaca to construct a 200-mile natural gas pipeline - the Roadrunner Gas Transmission pipeline - from the Permian Basin in West Texas to the Mexican border near El Paso, Texas.
The project, which was fully subscribed in its initial design, is supported by a 25-year firm (take-or-pay) transportation agreement with the Comisión Federal de Electricidad (CFE), Mexico's national electric utility. The total cost of the project is expected to be approximately $450 million to $500 million. ONEOK Partners expects to make equity contributions of approximately $50 million in 2015.
The pipeline will connect with ONEOK Partners' extensive existing natural gas pipeline and storage infrastructure in Texas and is expected to create a platform for future cross-border development opportunities.
The Roadrunner Gas Transmission pipeline will be constructed in three phases, as follows:
Roadrunner Gas Transmission Pipeline (a) Capacity Approximate Expected Completion Date
Costs
--- --- ---
(In millions)
Roadrunner Gas Transmission Pipeline - Phases I, II, III 640 MMcf/d $450-$500 Various
-Phase I 170 MMcf/d $200-$220 First quarter 2016
-Phase II 400 MMcf/d $220-$240 First quarter 2017
-Phase III 70 MMcf/d $30-$40 2019
---------- --------- ------- ----
(a) 50-50 joint venture.
CAPITAL-GROWTH ACTIVITIES:
Since 2011, the natural gas gathering and processing segment has completed approximately $2.2 billion of capital-growth projects and acquisitions, which include the following projects completed in 2014:
Completed Projects Location Capacity Approximate Completion Date
Costs (a)
--- --- ---
(In millions)
Rocky Mountain Region
Garden Creek II
processing plant
and infrastructure Williston Basin 100 MMcf/d $300-$310 August 2014
Garden Creek III
processing plant
and infrastructure Williston Basin 100 MMcf/d $300-$310 October 2014
------------------- --------------- ---------- --------- ------------
Mid-Continent Region
Canadian Valley
processing plant
and infrastructure Cana-Woodford Shale 200 MMcf/d $255 March 2014
------------------- ------------------- ---------- ---- ----------
(a) Excludes AFUDC.
The partnership has announced approximately $1.8 billion to $2.6 billion of capital-growth projects in the natural gas gathering and processing segment, which include the following:
Projects in
Progress Location Capacity Approximate Expected
Costs (a) Completion Date
--- --- --------- ---------------
(In millions)
Rocky Mountain Region
Sage Creek
infrastructure Powder River Basin Various $50 Fourth quarter 2015
Natural gas
compression Williston Basin 100 MMcf/d $80-$100 Fourth quarter 2015
Lonesome Creek
processing plant
and infrastructure Williston Basin 200 MMcf/d $550-$680 Fourth quarter 2015
Stateline de-
ethanizers Williston Basin 26 MBbl/d $60-$80 Fourth quarter 2015
Bear Creek
processing plant
and infrastructure Williston Basin 80 MMcf/d $230-$330 Third quarter 2016
Bronco processing
plant and
infrastructure Powder River Basin 50 MMcf/d $130-$200 Suspended
Demicks Lake
processing plant
and infrastructure Williston Basin 200 MMcf/d $475-$670 Suspended
------------------- --------------- ---------- --------- ---------
Mid-Continent Region
Knox processing
plant and
infrastructure SCOOP 200 MMcf/d $240-$470 Suspended
--------------- ----- ---------- --------- ---------
(a) Excludes AFUDC.
Since 2011, the natural gas liquids segment has completed approximately $3.9 billion of capital-growth projects and acquisitions, which include the following projects completed in 2014 and 2015:
Completed Projects Location Capacity Approximate Costs (a) Completion Date
------------------ -------- -------- -------------------- ---------------
(In millions)
Ethane/Propane Splitter Texas Gulf Coast 40 MBbl/d $46 March 2014
Sterling III Pipeline and
reconfigure Sterling I
and II Mid-Continent Region 193 MBbl/d $808 March 2014
Bakken NGL Pipeline
expansion -Phase I Rocky Mountain Region 75 MBbl/d $75-$90 September 2014
Niobrara NGL Lateral Powder River Basin 90 miles $70-$75 September 2014
West Texas LPG pipeline
system (b) Permian Basin 2,600 miles $800 November 2014
MB-3 Fractionator Texas Gulf Coast 75 MBbl/d $520-$540 December 2014
NGL Pipeline and
Hutchinson Fractionator
infrastructure Mid-Continent Region 95 miles $110-$125 April 2015
------------------------ -------------------- -------- --------- ----------
(a) Excludes AFUDC.
(b) Acquisition.
The partnership has announced approximately $190 million to $220 million of capital-growth projects in the natural gas liquids segment, which include the following:
Projects in
Progress Location Capacity Approximate Expected Completion Date
Costs (a)
--- --- ---
(In millions)
Bakken NGL Pipeline
expansion -Phase
II Rocky Mountain Region 25 MBbl/d $100 Second quarter 2016
Bear Creek NGL
infrastructure Williston Basin 40 miles $35-$45 Third quarter 2016
Bronco NGL
infrastructure Powder River Basin 65 miles $45-$60 Suspended
Demicks Lake NGL
infrastructure Williston Basin 12 miles $10-$15 Suspended
---------------- --------------- -------- ------- ---------
(a) Excludes AFUDC.
EARNINGS CONFERENCE CALL AND WEBCAST:
ONEOK and ONEOK Partners executive management will conduct a joint conference call at 11 a.m. Eastern Daylight Time (10 a.m. Central Daylight Time) on Wednesday, May 6, 2015. The call also will be carried live on ONEOK's and ONEOK Partners' websites.
To participate in the telephone conference call, dial 888-240-9267, pass code 2050829, or log on to www.oneok.com or www.oneokpartners.com.
If you are unable to participate in the conference call or the webcast, the replay will be available on ONEOK's website, www.oneok.com, and ONEOK Partners' website, www.oneokpartners.com, for 30 days. A recording will be available by phone for seven days. The playback call may be accessed at 888-203-1112, pass code 2050829.
LINK TO EARNINGS TABLES:
http://www.oneok.com/~/media/ONEOK/EarningsTables/2015/OKE_Q1_2015_earnings09hdMW7.ashx
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURE:
ONEOK has disclosed in this news release cash flow available for dividends, free cash flow and dividend coverage ratio, which are non-GAAP financial metrics, used to measure the company's financial performance and are defined as follows:
-- Cash flow available for dividends is defined as net income less the
portion attributable to non-controlling interests, adjusted for equity
in earnings and distributions declared from ONEOK Partners, and ONEOK's
stand-alone depreciation and amortization, deferred income taxes,
stand-alone capital expenditures and certain other items;
-- Free cash flow is defined as cash flow available for dividends, computed
as described above, less ONEOK's dividends declared; and
-- Dividend coverage ratio is defined as cash flow available for dividends
divided by the dividends declared for the period.
These non-GAAP financial measures described above are useful to investors because they are used by many companies in the industry as a measurement of financial performance and are commonly employed by financial analysts and others to evaluate our financial performance and to compare our financial performance with the performance of other companies within our industry. ONEOK cash flow available for dividends, free cash flow and dividend coverage ratio should not be considered in isolation or as a substitute for net income or any other measure of financial performance presented in accordance with GAAP.
These non-GAAP financial measures exclude some, but not all, items that affect net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies. A reconciliation of cash flow available for dividends and free cash flow to net income is included in the tables.
ONEOK, Inc. (pronounced ONE-OAK) (NYSE: OKE) is the general partner and as of March 31, 2015, owns 37.6 percent of ONEOK Partners, L.P. (NYSE: OKS), one of the largest publicly traded master limited partnerships, which is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and owns one of the nation's premier natural gas liquids (NGL) systems, connecting NGL supply in the Mid-Continent, Permian and Rocky Mountain regions with key market centers. ONEOK is a FORTUNE 500 company and is included in Standard & Poor's (S&P) 500 Stock Index.
For information about ONEOK, Inc., visit the website: www.oneok.com.
For the latest news about ONEOK, follow us on Twitter @ONEOKNews.
Some of the statements contained and incorporated in this Quarterly Report are forward-looking statements as defined under federal securities laws. The forward-looking statements relate to our anticipated financial performance (including projected operating income, net income, capital expenditures, cash flow and projected levels of dividends), liquidity, management's plans and objectives for our future growth projects and other future operations (including plans to construct additional natural gas and natural gas liquids pipelines and processing facilities and related cost estimates), our business prospects, the outcome of regulatory and legal proceedings, market conditions and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under federal securities legislation and other applicable laws. The following discussion is intended to identify important factors that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this Quarterly Report identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast," "guidance," "could," "may," "continue," "might," "potential," "scheduled" and other words and terms of similar meaning.
One should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. In addition to any assumptions and other factors referred to specifically in connection with the forward-looking statements, factors that could cause our actual results to differ materially from those contemplated in any forward-looking statement include, among others, the following:
-- the effects of weather and other natural phenomena, including climate
change, on our operations, demand for our services and energy prices;
-- competition from other United States and foreign energy suppliers and
transporters, as well as alternative forms of energy, including, but not
limited to, solar power, wind power, geothermal energy and biofuels such
as ethanol and biodiesel;
-- the capital intensive nature of our businesses;
-- the profitability of assets or businesses acquired or constructed by us;
-- our ability to make cost-saving changes in operations;
-- risks of marketing, trading and hedging activities, including the risks
of changes in energy prices or the financial condition of our
counterparties;
-- the uncertainty of estimates, including accruals and costs of
environmental remediation;
-- the timing and extent of changes in energy commodity prices;
-- the effects of changes in governmental policies and regulatory actions,
including changes with respect to income and other taxes, pipeline
safety, environmental compliance, climate change initiatives and
authorized rates of recovery of natural gas and natural gas
transportation costs;
-- the impact on drilling and production by factors beyond our control,
including the demand for natural gas and crude oil; producers' desire
and ability to obtain necessary permits; reserve performance; and
capacity constraints on the pipelines that transport crude oil, natural
gas and NGLs from producing areas and our facilities;
-- difficulties or delays experienced by trucks or pipelines in delivering
products to or from our terminals or pipelines;
-- changes in demand for the use of natural gas, NGLs and crude oil because
of market conditions caused by concerns about climate change;
-- the impact of unforeseen changes in interest rates, equity markets,
inflation rates, economic recession and other external factors over
which we have no control, including the effect on pension and
postretirement expense and funding resulting from changes in stock and
bond market returns;
-- our indebtedness could make us vulnerable to general adverse economic
and industry conditions, limit our ability to borrow additional funds
and/or place us at competitive disadvantages compared with our
competitors that have less debt, or have other adverse consequences;
-- actions by rating agencies concerning the credit ratings of ONEOK and
ONEOK Partners;
-- the results of administrative proceedings and litigation, regulatory
actions, rule changes and receipt of expected clearances involving any
local, state or federal regulatory body, including the FERC, the
National Transportation Safety Board, the PHMSA, the EPA and CFTC;
-- our ability to access capital at competitive rates or on terms
acceptable to us;
-- risks associated with adequate supply to our gathering, processing,
fractionation and pipeline facilities, including production declines
that outpace new drilling or extended periods of ethane rejection;
-- the risk that material weaknesses or significant deficiencies in our
internal controls over financial reporting could emerge or that minor
problems could become significant;
-- the impact and outcome of pending and future litigation;
-- the ability to market pipeline capacity on favorable terms, including
the effects of:
-- future demand for and prices of natural gas, NGLs and crude oil;
-- competitive conditions in the overall energy market;
-- availability of supplies of Canadian and United States natural gas
and crude oil; and
-- availability of additional storage capacity;
-- performance of contractual obligations by our customers, service
providers, contractors and shippers;
-- the timely receipt of approval by applicable governmental entities for
construction and operation of our pipeline and other projects and
required regulatory clearances;
-- our ability to acquire all necessary permits, consents or other
approvals in a timely manner, to promptly obtain all necessary materials
and supplies required for construction, and to construct gathering,
processing, storage, fractionation and transportation facilities without
labor or contractor problems;
-- the mechanical integrity of facilities operated;
-- demand for our services in the proximity of our facilities;
-- our ability to control operating costs;
-- acts of nature, sabotage, terrorism or other similar acts that cause
damage to our facilities or our suppliers' or shippers' facilities;
-- economic climate and growth in the geographic areas in which we do
business;
-- the risk of a prolonged slowdown in growth or decline in the United
States or international economies, including liquidity risks in United
States or foreign credit markets;
-- the impact of recently issued and future accounting updates and other
changes in accounting policies;
-- the possibility of future terrorist attacks or the possibility or
occurrence of an outbreak of, or changes in, hostilities or changes in
the political conditions in the Middle East and elsewhere;
-- the risk of increased costs for insurance premiums, security or other
items as a consequence of terrorist attacks;
-- risks associated with pending or possible acquisitions and dispositions,
including our ability to finance or integrate any such acquisitions and
any regulatory delay or conditions imposed by regulatory bodies in
connection with any such acquisitions and dispositions;
-- the impact of uncontracted capacity in our assets being greater or less
than expected;
-- the ability to recover operating costs and amounts equivalent to income
taxes, costs of property, plant and equipment and regulatory assets in
our state and FERC-regulated rates;
-- the composition and quality of the natural gas and NGLs we gather and
process in our plants and transport on our pipelines;
-- the efficiency of our plants in processing natural gas and extracting
and fractionating NGLs;
-- the impact of potential impairment charges;
-- the risk inherent in the use of information systems in our respective
businesses, implementation of new software and hardware, and the impact
on the timeliness of information for financial reporting;
-- our ability to control construction costs and completion schedules of
our pipelines and other projects; and
-- the risk factors listed in the reports we have filed and may file with
the SEC, which are incorporated by reference.
These factors are not necessarily all of the important factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other factors could also have material adverse effects on our future results. These and other risks are described in greater detail in Part 1, Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and in our other filings that we make with the Securities and Exchange Commission (SEC), which are available on the SEC's website at www.sec.gov and our website at www.oneok.com. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Any such forward-looking statement speaks only as of the date on which such statement is made, and, other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.
Analyst Contact: T.D. Eureste
918-588-7167
Media Contact: Brad Borror
918-588-7582
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/oneok-announces-first-quarter-2015-results-reaffirms-2015-financial-guidance-300077938.html
SOURCE ONEOK, Inc.
