Coronavirus in Oklahoma: Virus-caused commodity turbulence throws ONEOK to a loss
TULSA — Publicly traded energy companies that move natural gas from wells through processing plants and ultimately to customers were the first Oklahoma-based public companies this month to post results for 2020.
ONEOK, which gathers, processes and ships natural gas and natural gas liquids, posted a net loss for the first quarter of the year.
Meanwhile, ONE Gas, a stand-alone, 100% regulated utility that distributes natural gas to more than 2 million customers in Oklahoma, Kansas and Texas, earned a net income for the same period not unlike what it earned during the same period a year ago.
ONEOK announced it posted a net loss of $141.9 million, or 34 cents a share, after taking noncash impairment charges of $641.8 million on natural gas gathering and processing systems it operates in western Oklahoma, Kansas and the Powder River Basin.
The company earned a net income of $337.2 million, or 81 cents per share, during the same quarter in 2019.
Officials said ONEOK’s first quarter 2020 adjusted earnings before income taxes, depreciation and amortization was $700.8 million, compared to $637.5 million during the first quarter of 2019.
Officials said the company has paused a majority of construction that involved an expansion of its Bear Creek natural gas processing plant in the Williston Basin, the building of a fractionator in Mont Belvieu, Texas, the expansion of a liquid petroleum gas pipeline system in west Texas and other fractionation expansions in its mid-continent operational area.
“Given the uncertainty around the global COVID-19 pandemic and its impact on commodity prices and global energy demand, the company’s 2020 financial guidance published Feb. 24 is not reflective” of the current market, noted Terry K. Spencer, ONEOK’s CEO.
“We continue to prioritize the health and safety of our employees and stakeholders while remaining focused on operating responsibly and providing the essential services that our customers rely on us for,” he said.
ONE Gas announced it earned a first-quarter net income of about $91.7 million, or $1.72 a share, on total revenues of about $528.2 million.
The company earned a net income of about $93.7 million, or $1.76 a share, on total revenues of $661 million during the first quarter of 2019.
While first-quarter revenues were lower for the company year-over-year, its bill to acquire the natural gas it distributes to customers also was markedly less.
In the first quarter of 2019, it spent about $365 million to acquire the fuel, compared to about $226.2 million this year.
Officials said the company also benefited this year from new rates that regulators set in Kansas and Texas, plus a net growth in the number of residential customers it serves.
However, officials said those gains were partially offset because of significantly warmer weather than average during the first three months of this year.
“In the midst of the COVID-19 pandemic, our focus remains on continuing to protect our workforce and customers while operating our systems safely during this difficult time,” Pierce H. Norton II, ONE Gas’ CEO, stated in an earnings release.