ONEOK, Inc. Reports Higher Third Quarter 2023 Results

Overview

ONEOK, Inc. announced that it has achieved higher third quarter 2023 results compared to the same period last year. The company has increased its net income and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance for 2023.

Financial Performance

ONEOK reported a 5% increase in net income to $454 million, resulting in 99 cents per diluted share. Additionally, the company reported an 11% increase in adjusted EBITDA to $1.001 billion. This figure includes transaction costs of $123 million, third-party fractionation costs of $35 million, and a contribution of $40 million from the newly acquired refined products and crude business over a period of six days.

Excluding these items, adjusted EBITDA would have exceeded $1.1 billion.

Acquisition of Magellan Midstream Partners

ONEOK also provided financial guidance on a consolidated basis, which includes the recent acquisition of Magellan Midstream Partners for $18.8 billion. The successful completion of this acquisition has added significant free cash flow through primarily fee-based earnings from the new refined products and crude businesses, as well as expected tax synergies. This sets up a solid foundation for the company’s 2024 performance.

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CEO’s Statement

Pierce H. Norton II, ONEOK President and CEO, expressed satisfaction with the company’s performance in the third quarter. He attributed the double-digit volume growth in natural gas liquids and natural gas gathering and processing businesses, as well as the sustained strength in the natural gas pipelines segment, as the driving factors behind the increased 2023 guidance expectations. Norton emphasized ONEOK’s focus on serving its enhanced customer base, operating responsibly, and fully integrating its businesses to create exceptional value for stakeholders.

Factors Driving Performance

ONEOK’s third quarter 2023 results were primarily driven by higher natural gas liquid volumes across its operations, increased natural gas processing volumes in the Rocky Mountain and Mid-Continent regions, and growth in transportation and storage services in the natural gas pipelines segment. Additionally, the results included $40 million of adjusted EBITDA in the refined products and crude segment from six days of operations subsequent to the closing of the Magellan acquisition.

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