Latest news with #EnLink
Yahoo
01-05-2025
- Business
- Yahoo
ONEOK Inc (OKE) Q1 2025 Earnings Call Highlights: Strong Growth and Strategic Synergies Propel ...
Net Income: $636 million or $1.04 per share for Q1 2025. Adjusted EBITDA: $1.78 billion, or $1.81 billion excluding transaction costs. Acquired Assets Contribution: Nearly $450 million from EnLink and Medallion assets in Q1 2025. Incremental Synergies: $250 million expected in 2025. Cash and Credit Facility: More than $140 million in cash and no borrowings under a $3.5 billion facility. NGL Volumes: Increased 4% year over year, with significant growth in the Rocky Mountain and Gulf Coast Permian regions. Midland Crude Gathered Volumes: Up more than 20% year over year in Q1 2025. Natural Gas Processing Capacity: 1.7 BCF per day added in the Permian Basin. Mid-Continent Processing Volumes: Averaging more than 2.4 BCF per day in April. Rocky Mountain Processing Volumes: Averaged nearly 1.6 BCF per day in Q1 2025. Oklahoma Natural Gas Storage Expansion: Additional 4 BCF of working storage capacity, 80% committed. Warning! GuruFocus has detected 6 Warning Signs with OKE. Release Date: April 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. ONEOK Inc (NYSE:OKE) reported first-quarter 2025 net income of $636 million, or $1.04 per share, with adjusted EBITDA of $1.78 billion, driven by higher NGL and natural gas processing volumes. The company affirmed its 2025 financial guidance and 2026 outlook, indicating confidence in its growth trajectory. ONEOK Inc (NYSE:OKE) is nearing completion of several organic growth projects, including the West Texas NGL pipeline expansion and the Elk Creek pipeline expansion, which are expected to boost earnings in the second half of 2025. The integration of acquired assets, such as EnLink and Medallion, is progressing well, with $250 million of total incremental synergies expected in 2025. The company maintains a strong balance sheet with no borrowings under a $3.5 billion facility and more than $140 million in cash, providing financial flexibility. The absence of earnings from divested interstate pipeline assets, sold on December 31, 2024, partially offset the positive financial results. ONEOK Inc (NYSE:OKE) operates in a volatile macroeconomic environment, with factors such as commodity prices, producer activity, and inflationary trends posing potential risks. First-quarter NGL volumes were impacted by seasonal weather and lower ethane recovery, particularly in the midcontinent region. The company faces potential challenges from evolving regulatory developments, which could affect market dynamics. Despite strong performance, the company acknowledges that no business is completely immune to market volatility, which could impact future results. Q: Can you expand on the synergies and forward outlook, especially given market uncertainties? A: Pierce Norton, CEO, highlighted the global demand for LNG and LPGs as a driver for growth, with synergies not dependent on volume. Sheridan Swords, CCO, added that many synergy projects focus on efficiency and are independent of price environments. Walter Hulse, CFO, mentioned procurement opportunities to lower costs as contracts roll off. Q: How are producer conversations going regarding potential concessions from midstreamers? A: Pierce Norton noted that producers are initially focused on service providers related to well drilling and completion. Sheridan Swords emphasized that ONEOK seeks win-win solutions through bundling strategies, adding value for both parties. Q: Has the potential for tariffs on LPGs impacted your approach to commercializing the LPG export project? A: Sheridan Swords stated that tariffs have not impacted their project or contracting approach. LPGs need to clear the international market, and exports have remained steady despite price fluctuations or tariff threats. Q: How flexible is your CapEx plan if macroeconomic conditions worsen? A: Walter Hulse explained that ONEOK has demonstrated flexibility in the past, such as in 2020, by adjusting capital programs. Routine growth capital can be flexed, and larger projects can be put on hold if necessary to protect the balance sheet. Q: Can you clarify the synergies and growth uplifts expected by 2027 as shown on slide 5? A: Walter Hulse confirmed that by 2027, ONEOK expects an additional $1.3 billion in incremental EBITDA from synergies and growth projects. This includes both synergies and growth opportunities, such as the refined products pipeline expansion. Q: How is the Bakken region performing, and what growth is needed to meet full-year guidance? A: Sheridan Swords stated that only low-single-digit growth is needed to meet guidance, and current trends indicate they will meet or exceed this. The company is confident in its outlook as they emerge from winter with strong momentum. Q: How sensitive is ethane recovery in the Bakken to market pricing? A: Sheridan Swords explained that ethane recovery is currently more affected by pricing, with flexibility to adjust based on market conditions. They have locked in some volumes to mitigate potential impacts from price changes. Q: Can you elaborate on the LPG export dock facilities and current volumes? A: Sheridan Swords confirmed that ONEOK already produces enough propane to fill the dock capacity. Currently, this product is sold into the open market and likely exported through third-party docks, but will be redirected to ONEOK's dock once operational. Q: How is the natural gas pipeline segment performing, and is it on track to exceed full-year guidance? A: Sheridan Swords noted strong performance in the first quarter and expects continued strength. The segment is benefiting from storage expansions and active discussions for new demand, positioning it well for the year. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Reuters
24-02-2025
- Business
- Reuters
ONEOK fourth-quarter profit rises on higher demand, expects higher 2025 earnings
Feb 24 (Reuters) - Pipeline operator ONEOK (OKE.N), opens new tab forecast annual income growth of about 11% and reported a 34.2% rise in fourth-quarter profit on Monday, helped by higher demand and accretive contributions from the EnLink acquisition. In November, the company said it would buy the remaining shares of EnLink Midstream for $4.3 billion, following its acquisition of a 43% controlling interest in the peer from Global Infrastructure Partners for about $3.3 billion. The company also reported a 3% growth in the Rocky Mountain region natural gas liquids (NGL) raw feed throughput volumes and a 4% increase in crude oil volume shipped. Last year, ONEOK acquired an NGL pipeline system from Easton Energy to broaden its NGL asset portfolio, and also expanded its refined products pipeline to the Greater Denver area. Its quarterly core profit from the NGL segment was up 13.5% at $696 million from a year earlier, while its quarterly core profit from the refined products and crude segment was up 42.2% at $603 million. Earnings were also boosted by adjusted core profit from its natural gas pipelines segment, which more than tripled to $417 million on the back of the company selling three of its pipelines to peer DT Midstream (DTM.N), opens new tab for $1.2 billion. The company now expects current-year net income between $3.21 billion and $3.69 billion, the mid-point of which was up about 11% from last year. The pipeline operator also expects annual capital expenditure between $2.8 billion and $3.2 billion, which was higher than Wall Street expectation of $2.24 billion, according to data compiled by LSEG. The Tulsa, Oklahoma-based company reported net income attributable of $923 million, or $1.57 per share, for the quarter ended December 31, compared with $688 million, or $1.18 per share, a year earlier.
Yahoo
27-01-2025
- Business
- Yahoo
This Top-Notch 4%-Yielding Dividend Stock Just Gave Its Investors Another Raise
Oneok (NYSE: OKE) has been a pillar of dividend stability over the years. The pipeline company delivered more than a quarter century of payment stability and growth. While it hasn't increased its dividend every single year, it has boosted it by almost 1,230% since 2000. The pipeline stock recently raised its payment again, increasing it by 4% compared to last year's annualized rate. That pushed its dividend yield up to nearly 4%. Here's a look at what's fueling Oneok's growing dividend and whether it has enough left in the tank to continue increasing its payout. Oneok has built a premier energy infrastructure asset base. It owns more than 50,000 miles of strategically located pipelines that transport natural gas liquids (NGL), refined products, crude oil, and natural gas from production basins to market centers. It also operates complementary midstream assets, like natural gas process plants, NGL fractionators, and storage terminals. These assets generate resilient cash flow supported by long-term contracts and regulated rate structures. The company has spent billions of dollars to build its integrated network via organic expansions and acquisitions and has been on a mergers and acquisitions (M&A) binge in recent years. In 2023, it bought Magellan Midstream Partners in a transformational $18.8 billion deal. It followed that up with a $5.9 billion transaction to buy Medallion Midstream and a 43% interest in EnLink Midstream last year. It has since agreed to buy the remaining publicly held shares of EnLink. Oneok has also invested heavily in high-return organic expansion projects, like its MB-6 fractionator and the full looping of its West Texas NGL Pipeline System, both of which entered service at the end of last year. These investments have enabled Oneok to steadily grow its earnings despite all the turbulence in the energy markets over the years. The company has delivered 10 straight years of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth (2013-2023). It has expanded its adjusted EBITDA at an impressive 15% rate during that period. Growth was on track to accelerate last year (27%) due to its recent acquisitions. Oneok entered 2025 with a lot of momentum. It closed its acquisition of Medallion and its investment in EnLink in mid-October but won't close the remaining interest in EnLink until the first quarter of this year. Because of that timing, the company will get most of the benefit of those deals this year. They help fuel its view that it will produce more than $8 billion of adjusted EBITDA this year. That's a more than 20% increase from last year's level. The company should continue to reap the benefits of its recent acquisitions over the next few years. For example, it has identified over $250 million of synergies it expects to capture from the EnLink and Medallion deals over the next three years. That base case is less than half the potential opportunities it believes it can capture from those deals. In addition, it's working to capture more than $415 million of synergies related to its Magellan acquisition. It accelerated its ability to capture commercial synergies from the Magellan deal last year by purchasing 450 miles of NGL pipelines in the Gulf Coast for $280 million to more quickly integrate its system. Oneok also has several more organic expansion projects underway. It's expanding its Elk Creek NGL pipeline, increasing its refined products capacity to the Denver area, and building the Medford Fractionator. These projects should enter commercial service through the first quarter of 2027, supplying it with incremental sources of earnings. Meanwhile, EnLink comes with embedded growth potential, including capturing additional carbon capture and storage transportation opportunities along the Gulf Coast. The company's growth drivers should provide ample fuel to continue increasing its dividend (it's targeting to deliver 3% to 4% annual growth over the next few years). Oneok has been a very resilient dividend stock over the decades. Given all the growth the company has coming down the pipeline, that should continue in the future. With a 4% yield and attractive growth profile, it's a compelling option for investors seeking a blend of income and growth. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $369,816!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,191!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $527,206!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of January 21, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool recommends Oneok. The Motley Fool has a disclosure policy. This Top-Notch 4%-Yielding Dividend Stock Just Gave Its Investors Another Raise was originally published by The Motley Fool Sign in to access your portfolio
