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Are ONEOK’s Earnings Really Fee-Based?

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Contribution of fee-based earnings

ONEOK (OKE) has been making focused efforts to increase its fee-based earnings through contract restructuring in ONEOK Partners’s (OKS) Natural Gas Gathering and Processing segment.

OKE’s president and CEO, Terry K. Spencer, said during the company’s annual meeting of shareholders in May 2016, “Companywide, we anticipate our 2016 fee-based earnings will increase to approximately 85 percent from 66 percent in 2014, which we expect will positively impact our full-year 2016 earnings.”

The above graph shows growth in OKS’s fee-based earnings over the years. Contract restructuring efforts have positively impacted OKS’s Natural Gas Gathering and Processing segment’s earnings.

In the final part of this series, we’ll take a look at ONEOK’s outlook for capital projects in 2017.

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