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ONEOK results stronger, thanks to performance upgrades

ONEOK's Demicks Lake I and II natural gas processing plants in North Dakota are seen. [PROVIDED BY ONEOK]
ONEOK's Demicks Lake I and II natural gas processing plants in North Dakota are seen. [PROVIDED BY ONEOK]

TULSA — ONEOK is cooking with gas.

In earnings results the company posted this week, the company reported an 11% increase in net income, year-over-year, higher volumes of processed natural gas and natural gas liquids and increased commitments from shippers to use the company’s growing interstate pipelines system.

The company’s top executive attributed most of its 2019 measurement upgrades to natural gas processing projects the company completed in the Williston Basin, the construction of the Elk Creek Pipeline to carry natural gas liquids from the basin to Bushton, Kansas, and an ongoing project to build a new fractionator in Mont Belvieu, Texas.

And it isn’t done growing, either.

The company announced it plans to increase the capacity on the Elk Creek line to 400,000 barrels a day.

It announced it also plans to expand its West Texas LPG Pipeline, a 2,600-mile system that moves unfractionated natural gas liquids from the Permian Basin and the Barnett and Haynesville Shale fields to multiple fractionation and storage facilities in Mont Belvieu by 100,000 barrels a day.

Finally, it plans to add yet more capacity to process natural gas in the Williston Basin.

Terry K. Spencer, ONEOK’s CEO, predicted those projects, once complete, will continue to move the operation forward in future years.

“2019 was another successful year, with volume growth driving strong results across our business segments,” Spencer stated in ONEOK’s earnings release.

“With the completions of the Elk Creek Pipeline and the Demicks Lake I and II plants, we continue to demonstrate our ongoing commitment to expanding our infrastructure to help our producer customers reduce natural gas flaring in the Williston Basin.”

The company earned a 2019 net income of about $1.3 billion, or $3.07 a share, on an operating income of about $1.9 billion and adjusted earnings before interest, taxes, depreciation and amortization of about $2.6 billion.

In 2018, the company earned a net income of about $1.2 billion, or $2.78 per share, on an operating income of about $1.8 billion and adjusted EBITDA of about $2.5 billion.

The company posted a distributable cash flow of about $2 billion in 2019, compared to about $1.8 billion the previous year.

The company’s fourth-quarter 2019 results also were higher than the same quarter in 2018, with per-share earnings at 77 cents in 2019, compared to 70 cents in 2018.

Spencer stated as part of the earnings release that ONEOK expects to see its adjusted earnings continue to climb through the end of next year as the company brings those additional upgrades online.

It also expects to pay a 9% higher dividend in February 2020, compared to what it paid this year.

“This growth program is providing needed pipeline, processing and fractionation services to our customers from the Williston and Permian basins and the Mid-Continent region to the Texas Gulf Coast, growing our fee-based earnings for years to come,” he said.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›