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DATE

Wednesday, April 29, 2026 at 11 a.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Pierce H. Norton
  • Chief Financial Officer — Walter S. Hulse
  • Chief Operating Officer — Randy Lentz
  • Chief Commercial Officer — Sheridan C. Swords

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TAKEAWAYS

  • 2026 Net Income Guidance -- Raised to a midpoint of $3.5 billion, reflecting updated expectations from segment outperformance and improved market environment.
  • 2026 Diluted EPS Guidance -- Raised to a midpoint of $5.53, driven by revised earnings outlook.
  • 2026 Adjusted EBITDA Guidance -- Increased to a midpoint of $8.25 billion, underpinned by volume gains and stronger market conditions.
  • First-Quarter Net Income -- $776 million, or $1.23 per diluted share, which is a 12% increase year over year.
  • First-Quarter Adjusted EBITDA -- Approximately $2.0 billion, marking a 13% year-over-year increase from higher volumes and segment performance.
  • Refined Products & Crude Segment Impairment -- Recorded a $60 million noncash impairment ($0.07 per diluted share after tax) relating to the Powder Springs Logistics joint venture.
  • Capital Expenditure Guidance -- Unchanged, at a range of $2.7 billion to $3.2 billion for 2026.
  • Balance Sheet Actions -- In April, the company redeemed nearly $500 million of notes due July 2026 and entered into a $1.2 billion term loan to enhance financial flexibility.
  • Natural Gas Liquids (NGL) Volumes -- Rocky Mountain region rose 11%, Mid-Continent increased 4%, Gulf Coast surged 30%, all year over year, with the Gulf Coast gains linked to new third-party connections and temporary volume opportunities.
  • Refined Products Volume -- Increased 12% year over year, supported by gasoline and diesel demand, refinery utilization, and favorable regional price spreads.
  • Blending Activity -- Entered spring with significant hedges in place; extended hedges through spring 2027 and filled high blending volumes tied to system throughput.
  • Mid-Continent Gas Gathering and Processing Volume -- Increased 7% year over year, serving over 1 million dedicated acres with 11 active rigs.
  • Permian Basin Processed Volume -- Volume rose 4% year over year, with 11 rigs currently operating in the region.
  • Natural Gas Pipeline Segment -- Outperformed expectations across all regions due to wider Waha-to-Katy price differentials and incremental opportunities from Winter Storm Fern in Louisiana.
  • Major Capacity Expansions -- Shadowfax processing plant relocated and ramping up in Midland Basin; Delaware Basin and Bighorn permit significant increases through 2027; Denver pipeline expansion and Medford NGL fractionator phase one set to enter service by year end.
  • Hedge Position -- Company typically enters each year at roughly 75% hedged; incremental volumes expected to benefit from higher commodity prices going forward.
  • Capital Allocation Outlook -- Most large capital expenditures to be completed by 2027, after which free cash flow is expected to increase and support additional debt reduction and shareholder returns.

SUMMARY

ONEOK (OKE 0.52%) delivered double-digit year-over-year growth in both net income and adjusted EBITDA, prompting a significant upward revision to full-year 2026 guidance across key financial metrics. Management highlighted accelerated project execution, capacity expansions, and persistent demand strength in core natural gas liquids and refined products segments as direct contributors to improved outlook. The company’s financial flexibility was reinforced by recent debt redemption and new term loan arrangements in response to changing capital markets. Strategic hedging practices, including extending butane hedges into 2027, underpin stable margin realization and risk management. Leadership affirmed advanced discussions regarding expanded pipeline utilization from data center and LNG-related opportunities in Oklahoma and Texas, presenting additional sources of incremental demand for long-term growth.

  • Chief Commercial Officer Swords said, "Refresh requests for capacity on our announced LPG export dock were already increasing and have accelerated more recently as customers look to diversify supply toward the U.S."
  • ONEOK reported that system-wide processed volumes increased across all gathering and processing regions, confirming management's claim of ongoing throughput and earnings resilience despite lower realized commodity prices caused by high hedge coverage in the quarter.
  • Management noted ongoing contract negotiations to extend expiring capacity at the Seabrook crude dock at favorable rates, which may further enhance export-related revenues.

INDUSTRY GLOSSARY

  • Bighorn processing plant: A natural gas processing facility cited as an expansion project in the Delaware Basin, scheduled for mid-2027 completion.
  • C3+ volume: Refers to propane and heavier natural gas liquids (NGLs) that are extracted and marketed from raw natural gas streams, particularly relevant for the Mid-Continent NGL segment.
  • DUC inventories: "Drilled but Uncompleted" well inventory, representing wells that are drilled but not yet producing, affecting near-term volume acceleration potential.
  • Waha-to-Katy differential: The price spread between the Waha gas trading hub in West Texas and the Katy hub near Houston, impacting pipeline segment profitability.
  • RBOB-to-butane spread: The price difference between Reformulated Blendstock for Oxygenate Blending (RBOB) gasoline and butane, directly affecting profitability in blending operations.
  • LPG export dock: Facility used for loading liquefied petroleum gas (propane, butane) onto ships for international export; referenced as a driver of increased customer interest.
  • Fractionation capacity: The throughput capability at NGL fractionators—plants separating mixed NGL streams into purity products like ethane and propane.

Full Conference Call Transcript

Pierce H. Norton: Thank you, Megan, and good morning, everyone, and thank you for joining us today. Joining me on the call are Walter S. Hulse, chief financial officer, Randy Lentz, chief operating officer, and Sheridan C. Swords, our chief commercial officer. Yesterday, we reported first quarter earnings and raised our 2026 financial guidance, reflecting strong performance and building momentum. Before we get into the quarter, I would like to take a step back and frame the environment we are operating in and how we think about ONEOK, Inc.'s role within it. Energy markets remain dynamic, but long-term fundamentals are strong. It remains clear that the U.S. energy infrastructure is essential for economic growth, industrial competitiveness, power demand, and global energy security.

Midstream's role is simple: we connect supply and demand safely and efficiently across cycles, not around them. That is where ONEOK, Inc. differentiates itself. We built a regionally diversified, integrated platform at scale across natural gas liquids, natural gas, crude oil, and refined products, anchored by an innovative employee base, the interconnectivity of our assets, customer relationships, and a predominantly fee-based model. Our systems sit in and around some of the most resilient basins and durable demand centers, including power generation, industrial demand, and export markets.

As we look to the remainder of 2026, our high-level priorities remain consistent: operate safely and reliably, execute our capital growth program with discipline, maintain balance sheet strength and financial flexibility, and leverage our integrated asset advantage and strong customer relationships to continue driving volume growth across all of our systems. These priorities are grounded in what we see across the U.S. energy landscape, where long-term demand remains constructive both domestically and globally. U.S. natural gas demand is growing across power generation for emerging data center demand, industrial activity, and liquefied natural gas exports. LNG export capacity alone is projected to more than double over the next decade, reinforcing the durable global call on U.S. energy and natural gas infrastructure.

Sixty-five percent of U.S. natural gas production contains recoverable natural gas liquids. That means the infrastructure to handle natural gas liquids must be addressed alongside natural gas. This requires full value chain infrastructure and continued investments in natural gas, natural gas liquids, crude oil, and refined product assets by companies like ONEOK, Inc. At the same time, NGL demand remains strong globally, driven by petrochemical and international markets, with U.S. supply playing an increasingly critical role. Finally, the resilience and innovation of the U.S. energy industry continues to stand out through consistent efficiency gains and reliable results. Recent global events have only reinforced the importance of secure, resilient energy supply and the critical role U.S. energy plays in providing it.

The world has seen that the most expensive energy is the energy that does not show up. As global demand continues to grow, infrastructure, not supply, is the constraint, and that is exactly where ONEOK, Inc. is positioned—providing scalable, strategically located infrastructure with capacity and the ability to respond to evolving demand dynamics. I will now turn the call over to Walter S. Hulse for our financial update.

Walter S. Hulse: Thank you, Pierce. As Pierce mentioned, we are increasing our 2026 financial guidance, reflecting the strong performance we delivered in the first quarter across ONEOK, Inc.'s integrated systems and our higher expectations for the remainder of the year. We now expect 2026 net income to increase to a midpoint of approximately $3.5 billion with diluted earnings per share increasing to a midpoint of $5.53. We are also increasing our adjusted EBITDA guidance to a midpoint of $8.25 billion. These updates reflect strong underlying business segment performance as well as increased opportunities across our system, driven in part by a more constructive market environment that developed late in the first quarter.

As we move into the back half of the year, the combination of higher volumes, completed projects, and market tailwinds should be reflected more clearly in our results for the balance of this year and into 2027. Our total 2026 capital expenditure guidance remains unchanged at $2.7 billion to $3.2 billion. Turning to first quarter performance, ONEOK, Inc. reported net income of $776 million, or $1.23 per diluted share, a 12% increase compared with 2025. Results included a noncash impairment of $60 million, or $0.07 per diluted share after tax, related to our Powder Springs Logistics joint venture in the refined products and crude segment.

Adjusted EBITDA for the quarter totaled approximately $2.0 billion, a 13% year-over-year increase driven by higher volumes and strong segment-level performance. As market conditions strengthened toward the end of the quarter, we also saw additional opportunities across our system. We continue to expect the first quarter to be our lowest EBITDA quarter of the year, consistent with our typical annual cadence and seasonal dynamics. Importantly, our balance sheet and capital framework remain strong. We continue to prioritize financial flexibility while investing in the business and returning capital to shareholders.

In April, we redeemed nearly $500 million of our outstanding notes due July 2026, and we entered into a $1.2 billion term loan, further enhancing balance sheet flexibility in a rapidly changing market. Our results reflect the same themes that underpin our strategy: a high-quality, largely fee-based earnings mix, strong performance across our integrated systems, and disciplined cost and capital management. And our increased financial guidance reflects both this consistent execution year to date and improving market dynamics. I will turn it over to Randy for an operational and large capital projects update.

Randy Lentz: Thank you, Walt. From an operational standpoint, our focus remains on safe and reliable performance across our integrated assets. Our teams continue to execute well across all four business segments, managing normal seasonality and weather-related impacts. The scale and diversity of our systems allow us to absorb those seasonal dynamics while continuing to provide reliable service to our customers. Winter Storm Fern created temporary wellhead freeze-offs that briefly reduced throughput, but as a reminder, there was no material downtime on our assets, and those related impacts were already reflected in our original 2026 guidance. Turning to capital projects, we have made strong progress so far this year.

In the first quarter, we completed the relocation of our 150 million cubic feet per day Shadowfax natural gas processing plant from North Texas to the Midland Basin. We expect a steady ramp-up of volumes as producer activity remains solid in the area. We are also on track to complete expansions of our Delaware Basin processing assets in the third quarter, increasing our capacity in the basin by 110 million cubic feet per day, in addition to our 300 million cubic feet per day Bighorn processing plant that remains on schedule for completion in mid-2027. In the Powder River Basin, we are on track to complete construction of our 60 million cubic feet per day Cutter plant in 2026.

This plant will increase our processing capacity in the Powder River to more than 100 million cubic feet per day. We expect capacity to fill quickly from wells already drilled and expected to be drilled by our 15% JV partner in the plant. Across other segments, our Denver-area refined products pipeline expansion will add 35 thousand barrels per day of capacity when it enters service midyear, and phase one of our Medford NGL fractionator will add 100 thousand barrels per day of Mid-Continent fractionation capacity in the fourth quarter. These projects remain on schedule and are positioned to deliver meaningful near-term benefits by improving reliability, expanding connectivity, and increasing optionality, while also creating long-term durable value across our footprint.

I will now turn it over to Sheridan for a commercial update.

Sheridan C. Swords: Thank you, Randy. Commercially, we continue to see active engagement across our asset portfolio. Demand is supported by downstream pull, particularly from power generation, industrial and petrochemical demand, and export-linked markets. These dynamics reinforce the importance of strategically located infrastructure and long-term relationships. Looking at the first quarter, we delivered strong year-over-year volume performance across our assets, despite typically seasonal headwinds. Starting with the natural gas liquids segment, performance was led by broad-based volume growth across all three of our core regions. In the Rocky Mountain region, NGL volumes increased 11% year over year, driven by higher base volume and increased ethane recovery.

In the Mid-Continent, volumes increased 4% year over year, driven entirely by C3+ volume, even as the region experienced some temporary impacts from Winter Storm Fern earlier in the quarter. In the Gulf Coast, volumes increased 30% year over year, primarily reflecting base volume growth from newly connected third-party plants that were delayed last year as well as higher short-term volume opportunity. From a global perspective, NGL demand remains structurally strong, and recent geopolitical dynamics have further reinforced the attractiveness of U.S. supply. Refresh requests for capacity on our announced LPG export dock were already increasing and have accelerated more recently as customers look to diversify supply toward the U.S.

Turning to the refined products and crude segment, year-over-year refined products volumes increased 12%, supported by strong gasoline and diesel demand, refinery maintenance dynamics, favorable regional basis differentials, and wide crack spreads that drove strong refinery utilization. Blending volumes were also strong during the quarter. We entered the spring blending season significantly hedged, which limited our exposure to widening RBOB-to-butane spreads. Historically, wide basis differentials between New York Harbor, where we hedge, and the Mid-Continent, where we sell product, also impacted realized margins. Looking ahead, we secured additional hedges on fall volumes at higher prices and extended new hedges into spring 2027.

Importantly, blending volumes continue to be driven primarily by system throughput rather than EPA RVP waivers, which typically create only modest incremental opportunities. Increased gasoline throughput and completed synergy projects provide a much greater benefit, allowing us to optimize blending activity across our system. More broadly, the reach and flexibility of our refined products systems remain a key advantage. We are the only refined products pipeline system with bidirectional access between the Mid-Continent and the Gulf Coast, which allows us to attract incremental volume and respond to changing market conditions. Demand fundamentals remain strong. We continue to see very strong diesel demand across our system, which we expect to remain as we move into the spring agricultural season.

We also anticipate a robust summer travel season, supporting gasoline demand across our footprint. Additionally, if jet fuel supply remains constrained for an extended period, we could see incremental demand for gasoline. Refined products and crude exports have increased in recent months amid global supply tightness, particularly related to diesel, and we are well positioned with dock capacity across multiple Gulf Coast marine facilities. Crude dock utilization remained robust at our highly contracted Seabrook joint venture, and we are in discussions to extend our contract-expiring capacity at favorable rates. Finally, higher-margin Permian crude oil gathering volumes increased compared with the fourth quarter as activity in the basin remains favorable but disciplined.

Moving to the natural gas gathering and processing segments, we delivered strong year-over-year volume, led by the Mid-Continent where volumes increased 7%. Mid-Continent producers continue to focus activity across both gas-focused and liquids-rich plays, and we have 11 rigs currently operating across our more than 1 million dedicated acres in this region. In the Rocky Mountain region, processed volumes increased year over year even with winter weather and heater-treater impacts. As operating conditions normalize, we expect volumes to strengthen in the second and third quarters. There are currently 11 rigs on our dedicated acreage, with producers continuing to drive efficiency gains through longer laterals.

In the Permian Basin, processed volumes increased 4% year over year, and we currently have 11 rigs operating across our footprint. As Randy mentioned earlier, our expanded capacity in the Permian enhances system flexibility and positions us well to support producers' development plans across both the Midland and Delaware Basins. Customer activity remains strong, and we are increasingly encouraged by the depth of opportunities the Permian Basin brings to our portfolio. From a financial perspective, realized commodity prices were lower in the first quarter as a result of entering the year fully hedged. Importantly, underlying throughput volumes increased year over year across all regions, reinforcing the long-term earning capacity and resilience of our gathering and processing portfolio.

Producer behavior remains disciplined and execution-focused. We are seeing some acceleration in completion activity, which supports our confidence in the 2026 volume outlook. That confidence is driven by direct visibility into producer plans rather than an expectation of higher commodity prices. This view is consistent with recent earnings commentary from oilfield services companies that have noted early signs of increasing activity, particularly among private and single-basin operators. DUC inventories can also provide an avenue for this acceleration. Our producer base across ONEOK, Inc.'s approximately 7 Bcf per day system is well balanced among large public companies, private operators, and private equity–backed producers. That diversity provides both scale and durability while allowing activity to adjust incrementally.

I will close with our natural gas pipeline segment. Strong results continued in the first quarter with all regions outperforming expectations. Results benefited from wider-than-planned Waha-to-Katy location price differentials as well as incremental marketing opportunities created by Winter Storm Fern across our Louisiana assets. Looking ahead, we expect Waha-to-Katy differentials to normalize as new pipeline egress comes online in the second half of the year. Firm transportation demand remains strong, with high contracted capacity and strong utilization. We also continue to see significant interest from data center–related opportunities in Oklahoma and Texas, and we remain in advanced discussions with several counterparties.

Additionally, LNG-related demand remains strong both near term and long term, reinforcing the durability of demand for natural gas pipeline assets. Pierce, that concludes my remarks.

Pierce H. Norton: Thank you, Sheridan, Randy, and Walt for those comments. To close, I will come back to where I started. The energy landscape will continue to evolve, but the need for reliable, scalable U.S. energy infrastructure is not cyclical. It is driven by long-term demand fundamentals. ONEOK, Inc. is built for this environment, having an integrated platform with capacity, a strong balance sheet, and disciplined execution. The result is durable long-term value creation. Most importantly, none of this happens without our people. I want to thank our employees for their continued focus on safety, operational excellence, innovation, and service. Thank you to our investors for your continued trust and support in ONEOK, Inc.

With that, operator, we are now ready to take questions.

Operator: We will now open the call for questions. To fit in as many of you as we can, our first question will come from Spiro Michael Dounis with Citi. Your line is now open. Please go ahead.

Spiro Michael Dounis: Maybe to start with the improved outlook. Just looking for a little more granularity on how much that $150 million move is maybe already realized here in the first quarter, and how much—what level of visibility you have on the remaining forward component? Sheridan, you mentioned hedging out butane through 2027. Curious how much of that forward look is locked in? And then a second one on capital allocation: once again, you are a little bit stronger than expected. Could you level set us on how you are thinking about the timing to reach your leverage targets? And when you do free up that cash flow, where your head is on buybacks or any other uses of that free cash?

Walter S. Hulse: Spiro, it is Walt. First, I want to clarify that Winter Storm Fern was already in our guidance, so there was zero impact from that as it related to the increase. The increase was really a blend of stronger volume expectations, continued expected differential opportunities, and then we, of course, expect to realize some benefit from higher commodity prices. Although we are hedged—typically around 75% going into a year—with the higher volume expectations, any incremental volumes we receive going forward will enjoy the full benefit of these higher commodity prices. On capital allocation, nothing has really changed from our capital expenditure plan. As you know and as Randy mentioned, our projects are on time and on budget.

We expect to start completing those this year, with the Denver project finishing up and Medford phase one finishing up, as well as some smaller projects. As those wind down, as we have stated in the past, most of our larger CapEx will be completed by 2027, and that is when we will really see free cash flow kicking in. We are headed toward our leverage targets; clearly, with increased EBITDA expectations, as that denominator rises we will get there faster. We continue to pay down debt and be in a position to meet our targets and return capital to shareholders appropriately. But I want to make sure we remain disciplined in our approach.