ONEOK INC /NEW/ Q3 FY2024 earnings call

• Announced third quarter 2024 earnings and new consolidated guidance including EnLink and pending Medallion acquisition. Increased 2024 stand-alone financial guidance for the second time. Completed acquisition of EnLink Midstream and near finalizing Medallion acquisition. Synergy opportunities from acquisitions highlighted. Commercial updates on NGL, refined products, gathering/processing, and pipeline segments. Appreciation for employees' resilience during weather events and community contributions.

Natural Gas Liquids

• Rocky Mountain volumes increased 7% year-over-year, driven by higher propane plus volume but partially offset by less ethane recovery. Mid-Continent ethane recovery lower due to economic opportunities. Permian Basin NGL volume benefited from short-term increase, with West Texas NGL pipeline expansion on track to be in service by year-end. The Medford fractionator rebuild has phases expected for completion in 2026 and 2027.

Refined Products and Crude

• Record refined products volumes at nearly 1.6 million barrels per day; gasoline and jet fuel demand benefited from peak driving season. Tariff adjustments in July provided mid-single-digit increase. Crude oil volumes shipped on wholly-owned assets increased 10% YOY; pending Medallion acquisition offers synergy opportunities for long-haul crude pipeline.

Natural Gas Gathering and Processing

• Rocky Mountain processing volumes had a record in Q3 but experienced outages; Mid-Continent well connects updated; EnLink's acreage well connects expected. GORs in basins near all-time highs support volume growth without drilling increase.

Natural Gas Pipeline

• Benefited from higher firm and interruptible transportation rates; activated 3 Bcf of storage capacity in Texas, with Oklahoma storage expansion project on track for Q2 2025

• Stand-alone 2024 adjusted EBITDA midpoint $6.275 billion, $100 million higher than April guidance. Consolidated 2024 net income midpoint ~$3 billion, adjusted EBITDA midpoint ~$6.625 billion. 2025 combined EBITDA expected comfortably above $8 billion; pro forma 2025 net debt-to-EBITDA ~3.9x, targeting 3.5x in 2026 as systems integrate.

• Weather events (wildfires, hurricanes) impacting operations. Volatility in commodity prices affecting ethane recovery and segment performance. Regulatory and market uncertainties related to acquisitions and growth projects.

Q: Theresa Chen from Barclays on natural gas infrastructure and Medallion synergies A: Sheridan Swords stated assets are well positioned with 23 projects across system, 10 related to demand centers, and Medallion volume flows to Houston area with synergy opportunities Q: Jean Ann Salisbury on Bakken ethane recovery and lateral lengths A: Sheridan Swords said ethane recovery driven by gas price in region, Bakken lateral lengths stabilized with completion technique advancements Q: Michael Blum on Bakken volume trends and 2025 EBITDA guidance A: Sheridan Swords noted wildfires and outages impacted volumes but they've returned; Walter Hulse confirmed $8B+ 2025 EBITDA guidance is comfortably over Q: Brendan Reddy on stand-alone adjusted EBITDA and Bakken laterals A: Walter Hulse said strength across all businesses drove guidance increase; Sheridan Swords mentioned lateral length changes due to drilling and completion techniques Q: Neal Dingmann on 2025 EBITDA guidance and ethane volatility A: Walter Hulse said 2025 guidance details to be provided in February; Sheridan Swords stated natural gas price drives ethane recovery by region Q: Keith Stanley on EnLink acquisition and buybacks A: Walter Hulse said HSR review cleared, buybacks continue under capital allocation strategy with accretive acquisitions enhancing cash flow Q: Manav Gupta on Magellan synergies and Medallion growth projects A: Sheridan Swords said Magellan synergies on track, with more found through team collaboration; Medallion has potential synergies to be found through integration Q: AJ O'Donnell on consolidated guidance breakdown and EnLink growth projects A: Walter Hulse said synergies to be seen as teams work together; Pierce Norton mentioned majority growth in natural gas side in Louisiana Q: Sunil Sibal on Magellan synergies and consolidation opportunities A: Walter Hulse said Magellan synergies on track; Sheridan Swords mentioned Mid-Continent and Louisiana as areas with consolidation opportunities Q: Craig Shere on acquisition upside and exports A: Sheridan Swords said Louisiana's LNG exports benefit from pipe infrastructure, with potential expansion with regulatory relaxation