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ONEOK Increases Capital Expenditures Guidance for 2018

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Updated

2018 expected capital spending

In ONEOK’s (OKE) 4Q17 earnings announcement on February 26, 2018, it updated the guidance for 2018 capital expenditures. ONEOK raised its expected growth capital spending in 2018 to ~$2.0 billion–$2.3 billion from the previously announced range of $1.3 billion–$1.5 billion—nearly four times $512 million spent on capital projects in 2017.

ONEOK has announced ~$4.2 billion in growth projects since June 2017. The projects should support increasing production across ONEOK’s footprint. The projects are backed by fee-based contracts, acreage dedications, and volume commitments.

Some of the recently announced capital projects in ONEOK’s Natural Gas Liquids and Natural Gas Gathering and Processing segments are listed in the above table.

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Volumes growth

ONEOK’s Arbuckle II pipeline and MB-4 fractionator will serve the expected volumes growth in the Williston Basin and the STACK and SCOOP areas. The two projects should be complete in early 2020. The projects are backed by long-term contracts. The projects have expected adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) multiples of 4x–6x.

The $1.4 billion Elk Creek pipeline project is expected to strengthen ONEOKE’s position in the Williston, Powder River, and DJ basins. Increased production in the region is driving the need for increased takeaway capacity. The project is expected to be complete by the end of 2019.

Enterprise Products Partners (EPD) plans to spend $3 billion on growth projects in 2018. To learn more, read Enterprise Products Partners to Spend $3 Billion on Growth.

Next, we’ll discuss what the recent changes in top institutional investors’ ONEOK holdings indicate.

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