ONEOK Inc at Barclays CEO Energy Power Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Theresa Chen - Barclays - Analyst : We're happy to have you, especially after so many announcements as of recent. But maybe starting with your most recent announcement, nearly a week after the news of the EnLink and Medallion midstream interest from GIP acquisition. Can you tell us about the growth and margin generation opportunities that these assets bring to ONEOK that maybe you otherwise would not have had?

Question: Theresa Chen - Barclays - Analyst : Very good. Now I want to get to the synergy targets, the 250 base case and the 450-plus upside case. So how did you come to these targets to begin with? And understanding that the nature of the synergies are inherently different than the Magellan acquisition synergies, but do you have a breakdown in mind, a categorization of sorts for these synergies as well?

Question: Theresa Chen - Barclays - Analyst : Makes sense. And in addition to some of the complementary aspects of the existing footprints between these businesses, the EnLink assets also give you dry gas infrastructure importantly, an entry into LNG feed gas in Louisiana as well as natural gas storage opportunities. So how do you see these assets complementing the rest of your business? And are there obvious opportunities of expansion projects within this footprint?

Question: Theresa Chen - Barclays - Analyst : Great. With these transactions announced, how has it changed, if it has, your capital allocation use and strategy?

Question: Theresa Chen - Barclays - Analyst : And this focus is reflected in your current results without the contribution of these recently announced acquisitions. And from a base business perspective, with the progress that you've already made in 2024 and the momentum behind you, can you just remind us at this point, what are the puts and takes that would get you towards the high versus the low end of your annual guidance?

Question: Theresa Chen - Barclays - Analyst : Great. And then staying on the existing business, would you be able to give an update on the progress with the Magellan synergies to date? And as you integrate these assets, have there been any surprises along the way?

Question: Theresa Chen - Barclays - Analyst : And then on the recent acquisition of Easton Energy, how does this help you capture further value in the US Gulf Coast between your NGL and refined product asset basis? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:25PM, OKE.N - ONEOK Inc at Barclays CEO Energy Power Conference

Question: Theresa Chen - Barclays - Analyst : Got it. Now I'm deeply curious as to who you're taking all those volumes from, but that will be for another day. Turning to the GMP side of things. So within this segment, what are you seeing in terms of producer activity in the Rocky Mountain region as well as the Mid-Con? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 6:25PM, OKE.N - ONEOK Inc at Barclays CEO Energy Power Conference And for the Bakken, in particular, the region's production outlook remains a topic of fierce debate that you've defended over and over again. And I would like for you to do that one more time. What can you tell us about your long-term view of Bakken inventories, producer efficiencies? And any other drivers that can be impactful to your volumes in the region?

Question: Theresa Chen - Barclays - Analyst : Got it. So with this ample and visible backlog of projects and growth ahead of you, and then taking into account the new acquisitions, and I imagine it might cost some money to realize all those commercial synergies. Longer term, with the assets that you have currently and then you're about to acquire, what do you think is a reasonable run rate for annual CapEx on a go-forward basis? Walter Hulse - ONEOK Inc - Chief Financial Officer, Executive Vice President of Investor Relations and Corporate Development, Treasurer Sure. Well, without giving formal guidance for 2025, I think if we just look at where we sit today, we've got MB-6 wrapping up. We've got the expansion of Elk Creek wrapping up, and we have the West Texas NGL system wrapping up. Two out of the three of those will be done here in the fourth quarter and the other one early in the first quarter. So we've got what are the largest projects rolling off. Since we said those were in their tail end stage, we've announced two new transactions, our Medford rebuild and then our refined products pipeline out to Denver. Net-net between the three that are rolling off and the two that are going on, we would still see a reduction in our CapEx, if you just look at the base business. Clearly, there are going to be some more opportunities. I would say that the synergy expenditures or CapEx associated with synergy in the EnLink and Medallion, the way these assets sit on top of each other, the way they're ready to be connected, capital is not really the driver for those very short connections to get the Medallion system plugged into our long-haul pipes, for example. So we see more opportunities on the expand and extend type of strategy that we have. So I think if you look at CapEx over the next several years where we are today to slightly lower, you'll be fine. But if you think about that in the context of free cash flow, as you look out a few years, we see free cash flow going out to that $5 billion a year range. So as a percentage of free cash flow, our CapEx will be coming down, but probably stay in and around this range to slightly lower in the next few years.

Question: Theresa Chen - Barclays - Analyst : Very good. Well, thank you all so much for your participation and all the color.