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    ONEOK Inc (OKE)

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    Business Description

    OKE, or ONEOK, Inc., is a leading midstream service provider in North America, specializing in gathering, processing, fractionation, transportation, storage, and marine export services for natural gas, natural gas liquids (NGLs), refined products, and crude oil . The company operates through four main business segments, with a focus on providing fee-based services, which accounted for more than 85% of its consolidated earnings in 2023 . ONEOK's operations are primarily centered around the handling and distribution of natural gas and its derivatives, making it a key player in the energy sector .

    1. Natural Gas Liquids - Involves gathering, treating, fractionating, transporting, storing, marketing, and distributing Purity NGLs, making it the largest revenue contributor.
    2. Natural Gas Gathering and Processing - Focuses on gathering, treating, processing, and marketing natural gas.
    3. Refined Products and Crude - Engages in transporting, storing, and distributing refined products and crude oil, added after acquiring Magellan Midstream Partners.
    4. Natural Gas Pipelines - Provides transportation and storage services for natural gas.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Julie H. EdwardsBoard Chair2022Julie H. Edwards has been serving as the Board Chair of ONEOK, Inc. since 2022. She has been a director at ONEOK since 2007. She is the first female Board Chair in ONEOK's 118-year history .
    Pierce H. Norton IIPresident and Chief Executive Officer2021Pierce H. Norton II is the President and Chief Executive Officer of ONEOK, Inc. since 2021. He joined ONEOK in 2004 and held various roles before becoming President and CEO of ONE Gas in 2014 .
    Walter S. Hulse IIIChief Financial Officer, Treasurer, and Executive Vice President2022Walter S. Hulse III has been serving in his current role since 2022. He previously held various executive positions at ONEOK from 2017 to 2021 .
    Kevin L. BurdickExecutive Vice President and Chief Enterprise Services Officer2023Kevin L. Burdick has been in his current role since 2023. He was previously the Executive Vice President and Chief Commercial Officer from 2022 to 2023 .
    Sheridan C. SwordsExecutive Vice President, Commercial Liquids and Gathering and Processing2023Sheridan C. Swords has been serving in his current role since 2023. He was previously the Senior Vice President of Natural Gas Liquids and Natural Gas Gathering and Processing from 2022 to 2023 .
    Lyndon C. TaylorExecutive Vice President, Chief Legal Officer, and Assistant Secretary2023Lyndon C. Taylor has been serving in his current role since 2023. Before joining ONEOK, he was with Devon Energy Corporation from 2005 to 2021 .
    Charles M. KelleySenior Vice President, Natural Gas Pipelines2022Charles M. Kelley has been serving as the Senior Vice President, Natural Gas Pipelines at ONEOK since 2022. He was previously the Senior Vice President, Natural Gas from 2018 to 2022 .
    Mary M. SpearsSenior Vice President and Chief Accounting Officer, Finance and Tax2022Mary M. Spears has been in her current role since 2022. She was previously the Vice President and Chief Accounting Officer from 2019 to 2021 .
    Scott D. SchingenSenior Vice President, Natural Gas Liquids and Natural Gas Operations2023Scott D. Schingen has been serving in his current role since 2023. He was previously the Senior Vice President, Operations from 2021 to 2023 .
    James R. HoskinSenior Vice President, Refined Products and Crude Operations2023James R. Hoskin serves as the Senior Vice President, Refined Products and Crude Operations at ONEOK since 2023. He was previously with Magellan Midstream Partners in 2023 .

    Questions to Ask Management

    1. How does the decision to rebuild the Medford fractionation facility for $385 million align with your recent Magellan merger and Easton acquisition, considering the potential to utilize existing infrastructure to transport NGLs from Mont Belvieu to Conway?
    2. Given that a peer is converting a pipeline to NGL service in the Bakken where you hold significant market share, how are you assessing the risk to your Bakken position, and could this impact your volumes or contracts in the region?
    3. With the strong performance in your refined products and crude segment this quarter, are these earnings levels sustainable or primarily driven by seasonal factors and temporary market conditions like refinery downtime in Chicago?
    4. Your leverage ratio is at 3.36x, hitting your long-term target. What factors are influencing your timing on executing the $2 million share repurchase program, and why not accelerate buybacks now that leverage is within your target?
    5. After the Magellan and Easton acquisitions, can you elaborate on how these integrated assets are providing asymmetric upside, and how you plan to capitalize on blending and optimization opportunities to enhance stable, long-term returns?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateJanuary 2024
    End Date/DurationJanuary 1, 2029 or upon completion of $2.0 billion repurchase
    Total additional amount$2.0 billion
    Remaining authorization$2.0 billion as of October 21, 2024
    DetailsPart of capital allocation strategy for long-term value, funded through cash on hand, operating cash flows, and short-term borrowings

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate% of Total Debt
    2025$250Senior Notes3.20%0.9% = (250 / 28100) * 100
    2025$500Senior Notes4.90%1.8% = (500 / 28100) * 100
    2025$387Senior Notes2.20%1.4% = (387 / 28100) * 100
    2025$120Guardian Term Loan6.47%0.4% = (120 / 28100) * 100
    2026N/A5.00% Senior Notes5.00%N/A
    2026N/A5.55% Senior Notes5.55%N/A
    2026N/A5.85% Senior Notes5.85%N/A
    2027$1,250Senior Notes4.25%4.4% = (1250 / 28100) * 100
    2028N/A4.55% Senior Notes4.55%N/A
    2028N/A5.65% Senior Notes5.65%N/A
    2029$600Senior Notes4.40%2.1% = (600 / 28100) * 100
    2030N/A3.25% Senior Notes3.25%N/A
    2030N/A3.10% Senior Notes3.10%N/A
    2030N/A5.80% Senior Notes5.80%N/A
    2031$1,250Senior Notes4.75%4.4% = (1250 / 28100) * 100
    2032N/A6.10% Senior Notes6.10%N/A
    2033N/A6.05% Senior Notes6.05%N/A
    2034$1,600Senior Notes5.05%5.7% = (1600 / 28100) * 100
    2035N/A6.00% Notes6.00%N/A
    2036N/A6.65% Senior Notes6.65%N/A
    2037N/A6.40% Senior Notes6.40%N/A
    2037N/A6.85% Senior Notes6.85%N/A
    2041N/A6.125% Senior Notes6.125%N/A
    2042N/A4.20% Senior Notes4.20%N/A
    2043N/A5.15% Senior Notes5.15%N/A
    2043N/A6.20% Senior Notes6.20%N/A
    2045N/A4.20% Senior Notes4.20%N/A
    2046N/A4.25% Senior Notes4.25%N/A
    2047N/A4.20% Senior Notes4.20%N/A
    2047N/A4.95% Senior Notes4.95%N/A
    2048N/A5.20% Senior Notes5.20%N/A
    2049N/A4.85% Senior Notes4.85%N/A
    2049N/A4.45% Senior Notes4.45%N/A
    2050N/A3.95% Senior Notes3.95%N/A
    2050N/A4.50% Senior Notes4.50%N/A
    2051N/A7.15% Senior Notes7.15%N/A
    2053N/A6.625% Senior Notes6.625%N/A
    2054$1,500Senior Notes5.70%5.3% = (1500 / 28100) * 100
    2064$800Senior Notes5.85%2.8% = (800 / 28100) * 100

    Auditor

    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP2007 PresentCurrent auditor

    Latest news

    Recent developments and announcements about OKE.

    Financial Reporting

      Earnings Report

      ·
      Jan 22, 2025, 10:37 PM

      ONEOK, Inc. (NYSE: OKE) has announced that it will release its fourth quarter and year-end 2024 earnings results after the market closes on February 24, 2025. A conference call and live webcast to discuss the results will be held the following day, February 25, 2025, at 11 a.m. Eastern Time (10 a.m. Central Time). The call will be accessible via phone or webcast on the company's website. Replay options will also be available for those unable to attend the live session.

    Corporate Leadership

      Leadership Change

      ·
      Jan 7, 2025, 9:30 PM

      Randy Lentz is leaving his position as CEO of Medallion Midstream to become the Executive Vice President and Chief Operating Officer at ONEOK. Sheridan C. Swords is stepping up to the newly created position of Executive Vice President and Chief Commercial Officer at ONEOK. These appointments are effective immediately as of January 6, 2025.

    Financial Actions

      Strategic Assets

      ·
      Jan 3, 2025, 11:21 AM

      ONEOK Completes Sale of Interstate Natural Gas Pipelines

      ONEOK, Inc. has successfully closed the sale of its three wholly owned interstate natural gas pipeline systems to DT Midstream, Inc. The transaction, effective as of December 31, 2024, was completed for a total cash consideration of $1.2 billion, subject to customary adjustments. The pipelines involved in this sale are the Guardian Pipeline, Midwestern Gas Transmission, and Viking Gas Transmission.

      Impact on Financials and Operations

      This strategic move is part of ONEOK's efforts to optimize its asset portfolio and align with its capital allocation priorities. The proceeds from this sale are expected to enhance ONEOK's financial flexibility, aiding in the achievement of its leverage target of 3.5 times by 2026. This transaction is anticipated to support ONEOK's operational and financial strategies, potentially leading to improved financial health and operational efficiency.

      Operational Transition

      DT Midstream, as the new owner, shares a commitment to safety and reliability, which is expected to benefit all stakeholders. Employees transitioning to DT Midstream will play a crucial role in establishing the company's new Tulsa office and ensuring the continued success of these essential natural gas systems.

      Strategic Assets

      ·
      Nov 22, 2024, 10:15 PM

      ONEOK's Asset Sale to DT Midstream

      ONEOK, Inc. has entered into a definitive agreement to sell its three wholly owned interstate natural gas pipeline systems to DT Midstream, Inc. for a total cash consideration of $1.2 billion. The transaction, announced on November 19, 2024, is expected to close in the fourth quarter of 2024, pending regulatory approvals and customary closing conditions .

      Details of the Transaction

      • Assets Involved: The sale includes the Guardian Pipeline, Midwestern Gas Transmission, and Viking Gas Transmission systems.
      • Financials: The purchase price represents 10.8 times the previous 12 months EBITDA as of June 30, 2024 .
      • Strategic Rationale: This move is part of ONEOK's strategy to optimize its asset portfolio and enhance its capital allocation priorities. The transaction is expected to improve ONEOK's financial flexibility and support its deleveraging efforts towards a target of 3.5 times by 2026 .

      Potential Effects on Financials and Operations

      • Financial Flexibility: The proceeds from the sale are anticipated to enhance ONEOK's financial flexibility, aiding in its deleveraging strategy .
      • Operational Impact: The transaction aligns with ONEOK's focus on its integrated operating footprint, and DT Midstream is considered an ideal owner for these assets due to its similar culture of safety and reliability .

      This strategic disposition underscores ONEOK's commitment to maintaining its position as a leading diversified energy infrastructure company .

    Legal & Compliance

      Legal Proceedings

      ·
      Nov 25, 2024, 10:18 PM

      Summary of the Legal Matter Involving ONEOK, Inc. and EnLink Midstream, LLC

      Key Parties Involved:

      • ONEOK, Inc.: A leading midstream service provider involved in the gathering, processing, storage, and transportation of natural gas.
      • Elk Merger Sub I, L.L.C. and Elk Merger Sub II, L.L.C.: Subsidiaries of ONEOK, Inc. created for the purpose of the merger.
      • EnLink Midstream, LLC: A company providing integrated midstream services across natural gas, crude oil, and NGL commodities.
      • EnLink Midstream Manager, LLC: The managing member of EnLink Midstream, LLC.

      Nature of the Proceedings: The legal matter involves an Agreement and Plan of Merger dated November 24, 2024, between ONEOK, Inc., its subsidiaries (Elk Merger Sub I and II), EnLink Midstream, LLC, and EnLink Midstream Manager, LLC. This agreement outlines the terms and conditions under which ONEOK, Inc. will acquire EnLink Midstream, LLC through a merger process involving the aforementioned subsidiaries .

      Potential Financial or Operational Consequences:

      • Merger Consideration: The agreement specifies the merger consideration, which includes the exchange of certificates and adjustments, but does not provide for dissenters' rights .
      • Operational Changes: Post-merger, the organizational documents of the surviving entity will be amended, and new officers and directors will be appointed .
      • Indemnification and Insurance: The agreement includes provisions for indemnification and insurance to protect the officers and directors of the involved companies .
      • Regulatory Approvals: The merger is subject to obtaining necessary regulatory approvals and satisfying other conditions precedent .
      • Impact on Stock: The Parent Common Stock to be delivered to the Company Unitholders must be approved for listing on the NYSE .

      This merger is a significant strategic move for ONEOK, Inc., potentially enhancing its service capabilities and market reach in the midstream sector. However, it also involves complex legal and regulatory processes that must be navigated to ensure a successful integration of the two companies.