The paragraph is an introduction to ONEOK's Fourth Quarter 2024 Earnings Call. It starts with the operator explaining that the call will initially be in listen-only mode and that questions will be taken after the presentation. Andrew Ziola, Vice President of Investor Relations, introduces the call, mentioning the release of ONEOK's 2024 results, 2025 guidance, and 2026 outlook, which are available on their website. He notes the forward-looking nature of certain statements and refers to SEC filings for risk factors. Participants are asked to limit their questions during the Q&A. Pierce Norton, President and CEO, then introduces key executives on the call, including Walt Hulse, Sheridan Swords, and new team member Randy Lentz from Medallion Midstream.

The paragraph highlights ONEOK's recent financial achievements and future growth prospects, driven by strategic acquisitions, expanded operations, and increased volumes in their refined products and crude oil businesses. The company announced strong earnings for 2024 and projected continued growth for 2025 and 2026, with expectations of over 15% earnings per share growth and nearly 10% adjusted EBITDA growth in 2026 compared to 2025. ONEOK attributes its success to disciplined growth strategies that have diversified its product and service offerings and expanded its operational footprint, particularly in the Permian Basin and Louisiana. The company's 60,000-mile pipeline network enhances its connectivity with key markets, providing resilience and a competitive advantage in the energy sector.

The paragraph outlines ONEOK's focus on organic growth through asset expansion in various regions and projects, including NGL pipeline expansions, fractionation capacity growth, and a new LPG export joint venture with MPLX. The company prioritizes innovation and customer service by developing numerous additional projects, including asset optimization and infrastructure expansions to meet increased demand from AI-driven data centers and LNG requirements. ONEOK remains committed to delivering value to investors through sustained dividend growth, high-return projects, and financial flexibility, evidenced by their successful track record of EBITDA growth and plans to execute share repurchases. The paragraph attributes ONEOK's success and transformation to the dedication of its employees.

The paragraph provides an overview of ONEOK's financial performance and future guidance. Walt Hulse reports that for the fourth quarter of 2024, ONEOK achieved a net income of $923 million, or $1.57 per share, and for the full year, a total of $3 billion, or $5.17 per share. Adjusted EBITDA for the fourth quarter was nearly $2.2 billion and over $6.7 billion for the year, which includes impacts from the EnLink and Medallion acquisitions. ONEOK had $730 million in cash on hand and maintained a net debt-to-EBITDA ratio of 3.6x as of the year's end. In 2024, they returned $2.5 billion to shareholders through dividends and buybacks and increased their quarterly dividend by 4% in January 2025. For 2025, they anticipate an 8% increase in earnings per share, excluding one-time items from 2024. The company also outlined its 2025 financial and volume guidance, along with a growth outlook for 2026.

The paragraph outlines the company's financial guidance and strategic plans for the coming years. For 2025, they anticipate a 21% increase in adjusted EBITDA to $8.225 billion, excluding $50 million in transaction costs. This growth is attributed to higher earnings from acquisitions, volume growth from increased production, and completed projects. They also expect $250 million in synergies from acquisitions. Capital expenditures are projected between $2.8 billion and $3.2 billion, focusing on growth and maintenance. For 2026, the company forecasts over 15% growth in earnings per share and an approximate 10% rise in adjusted EBITDA, driven by increased production and completed projects. Key contributors will be the Elk Creek and West Texas pipeline expansions, and additional synergies are expected in 2026.

In 2024, the company experienced strong year-over-year performance, particularly in the refined products and crude segment, due to higher tariff rates and increased pipeline earnings. The Natural Gas Pipeline segment exceeded expectations due to high demand for intrastate services. Looking ahead to 2025, the company anticipates growth in the natural gas liquids segment, driven by increased ethane recovery and volume growth from the Permian and Rocky Mountain regions, aided by recent infrastructure projects and new contracts. Contributions from newly acquired Easton Energy assets are also expected to enhance earnings and synergies.

The paragraph discusses a strategic joint venture to build a 400,000 barrel per day LPG export terminal in Texas City, Texas, and a pipeline connecting ONEOK's Mont Belvieu storage facility to this terminal. This project, in collaboration with MPLX, offers several advantages such as an ideal location, cost benefits, and strategic access to NGL storage, with completion expected in early 2028. In the refined products and crude segment, growth is anticipated in refined product margins and crude oil volumes, supported by acquisitions and enhanced gathering infrastructure. Additionally, the company aims to leverage synergies and improve efficiencies in its natural gas gathering and processing segment, projecting significant volume growth across all regions by 2025.

The paragraph discusses the company's ongoing and future strategic initiatives in natural gas drilling and processing. It highlights the efficiency improvements from drilling longer laterals and mentions expected growth in well connections, particularly in 2025. The company has expanded its presence into the Permian Basin and Mid-Continent through acquisitions, projecting significant volume growth. In the Permian Basin, a processing plant is being relocated and expected to be operational by early 2026. The company is well-positioned to benefit from rising industrial demand, especially in the Natural Gas Pipelines segment, due to connections with LNG exporters and industrial clients. They note potential power plant expansion projects that could boost demand and are pursuing natural gas storage expansions in Oklahoma and Louisiana.

The paragraph discusses the company's strong performance over the past year due to strategic acquisitions and organic initiatives, setting a platform for future growth. The company acknowledges its employees' dedication during recent severe cold conditions, emphasizing their commitment to safety and service. The paragraph expresses gratitude to employees and shareholders for their contributions and support. In the subsequent Q&A session, Theresa Chen from Barclays asks about the 2025 to 2026 guidance details. Walt Hulse responds that the guidance is driven by synergy capital investments connecting Easton assets to those in Mont Belvieu and the Houston channel, expected to be completed by 2025, with benefits realized by 2026.

The paragraph discusses the strategic benefits of a joint venture (JV) between ONEOK and MPLX for exporting LPG. Sheridan Swords highlights the advantageous location of the dock, which is close to open waters and next to Marathon's refinery, leading to reduced construction costs due to existing infrastructure. Additionally, the proximity to the NGL system and storage facilitates easy product transfer. The paragraph also references a question by Theresa Chen regarding the competitiveness of the JV against incumbents and inquires about capacity additions in the refined product portfolio, such as the Denver pipeline expansion.

The paragraph discusses a long-term project that has been evaluated for over eight years, highlighting its strategic importance and potential for market competition. The project includes a dock and pipeline system that can be expanded beyond 400,000 barrels a day. Additionally, there's a 16-inch pipeline involved in the Denver expansion, with current commitments of 35,000 barrels a day, which could be increased to 250,000 barrels a day if needed. During a Q&A, a question was raised about potential overbuilding of LPG export docks and falling spot rates. Sheridan Swords responded by mentioning that the LPG dock is expected to come online in 2028, with significant LPG supply growth anticipated from the Permian, which could influence market dynamics.

The paragraph discusses the future outlook for gas production and infrastructure. It mentions controlling a significant volume across docks and doesn't anticipate an overbuilding of docks by 2028. There's an expectation of competitive operations once new infrastructure is up, with spot rates reflecting the typical market rates. Jean Ann Salisbury and Sheridan Swords discuss an increase in drilling activity in the Mid-Continent region driven by conversations with producers, suggesting potential gas growth contrary to general expectations. Pierce Norton adds that the industry has recently increased LNG export capabilities and anticipates further expansion, alongside coal plant conversions.

The paragraph discusses expected future growth in natural gas demand, projected at 20-25%, and its potential positive impact on prices. It features a Q&A session with Vrathan Reddy (standing in for Jeremy Tonet) asking about the 2025 capital expenditure guidance, focusing on major projects like the Medford frac, Denver pipeline, and a new plant in North Texas. Walt Hulse responds, explaining that these projects are in their intense construction phases, with the Easton acquisition nearing completion, leading to decreased capital intensity by 2026. Smaller, high-return projects aiming to enhance efficiency are also underway, emphasizing synergy-related opportunities in 2025 and 2026.

The paragraph discusses an update on ONEOK's commercial development, particularly regarding potential expansion projects, with a focus on data centers. Sheridan Swords mentions that they are evaluating roughly 30 potential power plant expansion projects, noting that they are at various stages of development. ONEOK sees a competitive advantage in their Oklahoma and Texas locations, which offer lower transportation costs due to proximity to supply sources. Of the projects considered, they anticipate about 4 billion cubic feet of demand, expecting to capture a significant share. Additionally, Michael Blum from Wells Fargo questions the company's capital expenditure forecast for 2026, and Walt Hulse responds that 2025 is anticipated to be a peak investment year, as major projects in Medford and Denver progress.

The paragraph discusses the company's anticipated run rate, which will be higher due to the EnLink and Medallion acquisitions. As synergy capital spending completes, the baseline is expected to decrease by 2026 and 2027, but will remain higher than before the acquisitions. The company aims to maintain capacity for customers in the Permian and new markets. Walt Hulse mentions that in 2024, the company exceeded the originally projected $175 million in synergies. Moving into 2025, an additional $125 million in synergies from Magellan is anticipated, suggesting more opportunities have been identified as teams work together to optimize systems.

In the paragraph, Manav Gupta asks about factors that could drive earnings towards the upper end of the 2025 forecast for the natural gas liquids, refined products, and crude segments. Walt Hulse highlights the timing of synergy realization, asset connections, and potential benefits from strong commodity prices. He notes that although increased producer activity isn't solely relied upon, small synergy optimizations can cumulatively impact EBITDA positively. In a follow-up, Gupta inquires about any unexpected benefits from the Medallion and EnLink deals. Sheridan Swords responds that when employees of acquired assets collaborate, unforeseen synergies emerge beyond initial expectations.

The paragraph discusses various operational opportunities and efficiencies that have been identified and realized in the Mid-Continent and Permian regions. It highlights the collaboration between different systems, such as gas plants and NGL systems, to improve efficiency and production. The company has been able to quickly market crude oil, enhancing crude transport through long-haul pipelines. They have also discovered unexpected synergies between their EnLink and Medallion crude oil systems, resulting in cost reductions. The goal is to capitalize on these synergies and opportunities to reach the higher end of their 2025 guidance, similar to the benefits seen from past acquisitions like Magellan. The paragraph ends with the operator introducing a question from Keith Stanley of Wolfe Research regarding the 2026 EBITDA outlook and synergies.

In the paragraph, Walt Hulse discusses the inability to provide a specific synergy number for 2026 due to the integration of multiple acquisitions, which blends the synergies, making them less identifiable. The current outlook includes these synergies, and further refinements will occur as they approach 2026. Keith Stanley inquires about expected returns and strategy related to an export facility, to which Sheridan Swords responds that the strategy is to fully integrate across their system, including the Permian, to maximize value for customers by interacting with a barrel multiple times and maintaining competitiveness.

The paragraph discusses the ongoing demand and projected returns for a project involving a dock, with expected returns in the mid- to high-teens. The speaker, Pierce Norton, addresses a question about mergers and acquisitions (M&A) in the Permian region, focusing on integrating companies they've acquired and realizing synergies. Norton mentions different ways assets come to market, either strategically or through private equity, and emphasizes a disciplined approach to M&A opportunities. The operator then transitions to a question from Sunil Sibal of Seaport Global Securities, who inquires about processing capacity and utilization in the Permian, specifically concerning natural gas and natural gas liquids (NGL) volumes, with Sheridan Swords beginning to respond.

The paragraph discusses the company's strategic decisions regarding its operations in North Texas and the Permian Basin. They are moving a gas plant to the Permian Basin in anticipation of fully utilizing current capacity by 2025. There is also mention of the expansion of the West Texas NGL system, which will increase capacity to 740,000 barrels a day, with most new volumes within their marketing control. Some existing contracts will transition to their system once current arrangements end. The conversation shifts to financial strategies, specifically stock buybacks and leverage targets. The company aims to reduce leverage from earlier guidance, moving from a target of 3.9% by 2025 to 3.5x by 2026, and they remain focused on aligning debt metrics with business goals.

The company intends to complete a $2 billion stock buyback program, as previously announced by the Board, with most of the buybacks expected to occur in the final two years of the program after achieving certain debt metrics. They initially started the program due to having a large cash reserve, closing the year with $773 million. Neal Dingmann from Truist Securities asked about production expectations for 2025, and Pierce Norton responded positively, indicating that current expectations for production are at or above last year's expectations. He cited efficiency improvements and consolidation efforts, particularly in the Bakken and Mid-Continent regions, which are expected to increase production volumes, reflecting the company's updated guidance.

The paragraph is part of a conversation where Neal Dingmann inquires about opportunities and customer demand related to EnLink, which is now fully under the company's control. Pierce Norton, in response, expresses optimism about growth opportunities in the Permian and Mid-Continent areas, citing a focused team and a lot of RFPs. He mentions enthusiasm for the integration of ONEOK and EnLink assets to support producers. The session concludes with Pierce Norton, CEO, recognizing and announcing the retirement of Chuck Kelley after 25 years, highlighting his contributions in various leadership roles at ONEOK.

Andrew Ziola, the Vice President of Investor Relations, is retiring after 20 years of service, having significantly contributed to the company. Megan Patterson, who has worked closely with Andrew, will take over his role. The company will begin its quiet period for the fourth quarter in early April, with earnings to be released in late April. The Investor Relations team will be available for follow-up questions, and more details about the earnings call will be provided later. The conference concluded with thanks to the attendees.

This summary was generated with AI and may contain some inaccuracies.