ONEOK Q1 Earnings Call Highlights

Key Points

• ONEOK raised its 2026 outlook after a strong Q1, reporting net income of $776 million (EPS $1.23) and increasing full-year guidance to a midpoint of roughly $3.5 billion net income, $5.53 EPS and $8.25 billion adjusted EBITDA while keeping 2026 capex at $2.7–3.2 billion.
• Several large projects are coming online to add capacity and connectivity, including the relocated 150 MMcf/d Shadowfax plant ramping in the Midland Basin, a 110 MMcf/d Delaware expansion in Q3 and the 300 MMcf/d Bighorn in mid‑2027, a 60 MMcf/d Cutter plant in Powder River by Q4 2026, a 35,000 bpd Denver pipeline mid‑year, and 100,000 bpd Medford fractionation in Q4.
• Commercial momentum and balance‑sheet moves support growth: volumes rose across regions (e.g., NGLs +11% Rocky Mountain, +4% Mid‑Continent, >30% Gulf Coast Permian), export demand and hedging activity have accelerated, and ONEOK redeemed nearly $500 million of notes and took a $1.2 billion term loan while saying major growth capex should be largely complete by mid‑2027, enabling rising free cash flow and faster debt reduction.

ONEOK NYSE: OKE reported first-quarter 2026 results and raised its full-year financial guidance, citing stronger-than-expected performance across its integrated midstream systems and a more constructive market environment that emerged late in the quarter.

Guidance raised after strong first quarter

Chief Financial Officer Walt Hulse said the company increased its 2026 outlook, with expected net income rising to a midpoint of approximately $3.5 billion and diluted earnings per share increasing to a midpoint of $5.53. ONEOK also lifted adjusted EBITDA guidance to a midpoint of $8.25 billion.

Hulse attributed the update to “strong underlying business segment performance” and “increased opportunities across our system,” adding that higher volumes, completed projects, and market tailwinds should become more visible in results through the back half of 2026 and into 2027. Total 2026 capital expenditures were unchanged at $2.7 billion to $3.2 billion.

In prepared remarks, CEO Pierce Norton said the company’s guidance increase “reflect[ed] strong performance and building momentum,” while reiterating ONEOK’s priorities: safe and reliable operations, disciplined execution of its capital program, maintaining balance sheet strength, and leveraging its integrated assets to drive volumes across systems.

Earnings: higher net income, impairment noted

ONEOK posted first-quarter net income of $776 million, or $1.23 per diluted share, up 12% from the first quarter of 2025. The quarter included a non-cash impairment of $60 million, or $0.07 per diluted share after tax, related to the company’s Powder Springs Logistics joint venture in the refined products and crude segment, Hulse said.

Adjusted EBITDA was approximately $2.0 billion, up 13% year over year, driven by higher volumes and “strong segment-level performance,” according to Hulse. He said ONEOK still expects the first quarter to be its lowest EBITDA quarter of the year due to typical seasonality.

Operations and project updates: Permian, Powder River, and fractionation

Chief Operating Officer Randy Lentz said ONEOK’s operational focus remained on safe, reliable performance across its integrated assets, noting the company managed typical seasonality and weather effects. Lentz said Winter Storm Finn caused temporary wellhead freeze-offs that briefly reduced throughput, but added there was “no material downtime” on ONEOK’s assets and the impacts were already included in the company’s original 2026 guidance.

On the capital program, Lentz outlined several milestones and expected in-service dates:

• Shadowfax: Completed relocation of the 150 MMcf/d Shadowfax natural gas processing plant from North Texas to the Midland Basin; Lentz said the company expects a steady ramp-up as producer activity remains solid.
• Delaware Basin: On track to complete processing expansions in the third quarter, adding 110 MMcf/d of capacity; the 300 MMcf/d Bighorn plant remains on schedule for mid-2027.
• Powder River Basin: Construction of the 60 MMcf/d Cutter plant remains on track for fourth-quarter 2026, which would lift Powder River processing capacity to more than 100 MMcf/d; Lentz said capacity is expected to fill quickly from drilled and expected-to-be-drilled wells by the company’s 15% JV partner.
• Denver refined products pipeline expansion: Expected to add 35,000 barrels per day of capacity when it enters service mid-year.
• Medford NGL Fractionator (Phase 1): Expected to add 100,000 barrels per day of Mid-Continent fractionation capacity in the fourth quarter.

Lentz said the projects remain on schedule and should provide near-term benefits by improving reliability, expanding connectivity, and increasing optionality across the footprint.

Commercial trends: volume growth, exports, and hedging posture

Chief Commercial Officer Sheridan Swords said commercial engagement remained active, supported by “downstream pull” from power generation, industrial and petrochemical demand, and export-linked markets. He reported year-over-year volume growth across ONEOK’s assets despite seasonal headwinds.

In natural gas liquids, Swords said first-quarter volumes rose 11% in the Rocky Mountain region, 4% in the Mid-Continent (driven by C3+), and more than 30% in the Gulf Coast Permian region, reflecting base volume growth and newly connected third-party plants that had been delayed.

Swords also said customers’ “refresh requests for capacity” on ONEOK’s announced LPG export dock were rising and had accelerated, as customers seek to diversify supply toward the U.S.

In refined products and crude, Swords said year-over-year refined products volumes increased 12%, citing strong gasoline and diesel demand, refinery maintenance dynamics, favorable regional basis differentials, and wide crack spreads that supported refinery utilization. He said blending volumes were strong, but ONEOK entered the spring blending season significantly hedged, limiting exposure to widening RBOB-to-butane spreads. He also pointed to historically wide basis differentials between New York Harbor (where ONEOK hedges) and the Mid-Continent (where it sells product) as a factor impacting realized margins. Looking forward, Swords said the company secured additional hedges on fall volumes at higher prices and extended new hedges into spring 2027.

On exports, Swords said activity has increased across ONEOK’s refined products export docks on the Houston Ship Channel and that crude dock utilization remained robust at the Seabrook joint venture, with discussions underway to extend expiring contracted capacity “at favorable rates.” He also said ONEOK’s condensate splitter was “highly utilized” and had recently been recontracted for term.

In natural gas gathering and processing, Swords said processed volumes increased 7% in the Mid-Continent and rose year over year in the Rocky Mountain region despite winter weather and heater treater impacts. In the Permian, processed volumes increased 4% year over year, with 11 rigs operating across the company’s footprint. Swords noted realized commodity prices were lower in the quarter because ONEOK entered the year fully hedged, while emphasizing that underlying throughput volumes increased across all regions.

For natural gas pipelines, Swords said results exceeded expectations across all regions, supported by wider-than-planned Waha-to-Katy price differentials and incremental marketing opportunities created by Winter Storm Fern across Louisiana assets. He said the differential is expected to normalize in the second half as new pipeline egress comes online, while firm transportation demand remains strong with high contracted capacity and utilization.

Balance sheet, capital allocation, and longer-term demand themes

Hulse highlighted balance sheet actions taken in April, including redeeming nearly $500 million of notes due July 2026 and entering a $1.2 billion term loan, which he said enhanced flexibility.

On capital allocation, Hulse told analysts that major growth capital is expected to be largely completed by mid-2027, when the company anticipates free cash flow to increase. He said ONEOK continues to pay down debt and expects to be positioned to meet leverage targets faster as adjusted EBITDA rises, while also returning capital through dividends and other means.

In response to questions about upstream activity, Swords said producers appear to be “leaning in to production” by restoring downtime more quickly, adding completion crews, and, in some cases, seeking additional rigs. He said the near-term volume impact is more tied to completions and quicker downtime recovery, while incremental rig-driven volumes would be more delayed. Swords also said he is seeing more activity and willingness to add rigs among private and private equity-backed producers compared with larger public operators, which he said remain disciplined.

Data center and power demand emerged as a recurring topic on the call. Swords said ONEOK is in “advanced discussions” related to AI and power demand, particularly in the Oklahoma-Texas region. Hulse added that these opportunities have grown in scope, with potential project sizes increasing from early expectations of roughly $50 million to “$400 million-$700 million projects,” reflecting the need to reach deeper into ONEOK’s system and build larger pipe to serve larger loads.

Norton closed by emphasizing that infrastructure constraints, not supply, are increasingly the limiting factor, and positioned ONEOK as “providing scalable, strategically located infrastructure with capacity” to respond to evolving demand dynamics.

About ONEOK NYSE: OKE

ONEOK, Inc NYSE: OKE is a publicly traded midstream energy company headquartered in Tulsa, Oklahoma. The company owns and operates a portfolio of natural gas and natural gas liquids (NGL) pipelines, processing facilities, fractionators and storage and terminal assets. Its operations are focused on gathering, processing, transporting, fractionating and marketing NGLs and interstate natural gas, providing critical infrastructure that connects hydrocarbon production to refineries, petrochemical plants and other end markets.

ONEOK's asset base includes pipeline systems and processing plants that move and condition natural gas, along with infrastructure for the transportation, storage and fractionation of NGLs such as ethane, propane and butane.

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