ONEOK Q2 2025 Earnings Report

ONEOK EPS Results

• Actual EPS: $1.34
• Consensus EPS: $1.33
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $1.33

ONEOK Revenue Results

• Actual Revenue: $8.21 billion
• Expected Revenue: $7.20 billion
• Beat/Miss: Beat by +$1.01 billion
• YoY Revenue Growth: N/A

ONEOK Announcement Details

• Quarter: Q2 2025
• Date: 8/4/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 5, 2025
• Conference Call Time: 11:00AM ET

ONEOK (NYSE:OKE) is a leading diversified energy company primarily engaged in the gathering, processing, storage and transportation of natural gas and natural gas liquids (NGLs) for wholesale customers. Through its integrated network of natural gas gathering systems and processing plants, the company collects raw natural gas and separates NGLs such as ethane, propane and butane for further distribution. ONEOK also operates a substantial NGL fractionation, storage and distribution business that ships products via pipelines, railcars, trucks and marine vessels to petrochemical plants, refineries and export terminals.

Founded in 1906 as Oklahoma Natural Gas Company, ONEOK has evolved into one of the largest midstream energy providers in North America. Headquartered in Tulsa, Oklahoma, the company’s operations span major U.S. hydrocarbon-producing regions, including the Mid-Continent, Rocky Mountain, Permian Basin and Eagle Ford shale plays. Over more than a century, ONEOK has expanded through strategic acquisitions and infrastructure investments to support growing demand for natural gas and NGLs across domestic and international markets.

ONEOK’s leadership team is focused on safely operating and expanding its midstream infrastructure to meet customer needs and capitalize on emerging energy trends. Charles S. Davis serves as president and chief executive officer, steering the company’s long‐term growth strategy and operational excellence initiatives. The board of directors, chaired by Theodore M. Kimbell, oversees governance and risk management policies. With its established network and experienced management, ONEOK continues to play a key role in transporting critical energy supplies to industrial, commercial and residential end users.

ONEOK Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong second quarter performance with net income of $841 million (up 30% QoQ) and adjusted EBITDA of $1.98 billion (up 12% QoQ), driven by synergy capture and higher volumes.
• Positive Sentiment: Affirmed full-year 2025 guidance of $3.1–3.6 billion in net income and $8.0–8.45 billion in adjusted EBITDA while on track to realize ~$250 million of synergies this year.
• Negative Sentiment: 2026 adjusted EBITDA outlook was lowered by ~2% (≈$200 million) due to commodity price and spread shifts, though mid-to-upper single-digit growth is still anticipated.
• Neutral Sentiment: Final investment decision made on a 300 MMcf/d Bighorn natural gas processing plant in the Delaware Basin (≈$365 million CapEx), targeting mid-2027 completion.
• Positive Sentiment: Revised tax treatment provides >$1.3 billion in lower cash taxes over five years, deferring meaningful cash tax payments until 2028 and enhancing free cash flow.

Presentation

[Operator]

Good morning, everyone, and welcome to the ONEOK Second Quarter twenty twenty five Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Megan Patterson, Vice President, Investor Relations. Ma'am, please go ahead.

[Megan Patterson, VP - IR at ONEOK]

Thank you, Jamie. Welcome to ONEOK's second quarter twenty twenty five earnings call. We issued our earnings release and presentation after the markets closed yesterday, and those materials are available on our website. After our prepared remarks, management will be available to take your questions. Statements made during this call that might include ONEOK's expectations or predictions should be considered forward looking statements and are covered under the safe Harbor provision of the Securities Acts of 1933 and 1934.

[Megan Patterson, VP - IR at ONEOK]

Actual results could differ materially from those projected in forward looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings. Just a reminder, for Q and A, we ask that you limit yourself to one question and one follow-up to fit in as many of you as we can. With that, I'll turn the call over to Pearce Norton, President and Chief Executive Officer. Pearce?

[Pierce Norton, President, CEO and Director at ONEOK]

Thanks, Megan. Good morning, thank you for joining us. On today's call is Walt Hulse, our Chief Financial Officer, Treasurer and Executive Vice President, Investor Relations and Corporate Development and Sheridan Schwartz, Executive Vice President and Chief Commercial Officer. Also on the call are Kevin Burdick, Executive Vice President and Chief Enterprise Service Officer and Randy Lentz, our Executive Vice President and Chief Operating Officer. Yesterday, we announced higher second quarter results and affirmed our 2025 financial guidance ranges, which were originally provided in late February.

[Pierce Norton, President, CEO and Director at ONEOK]

Our second quarter adjusted EBITDA increased 12% compared with the first quarter, highlighting the continuation of incremental synergy capture, increasing supply and demand strength. As we exited the winter, we saw accelerated volume momentum through the seasonal improvements across our operations, driving sequential quarter growth in NGL and natural gas processing volumes across all regions and increasing refined products demand. The sequential EBITDA growth we experienced this quarter was consistent with our expectations at the beginning of the year and begins to demonstrate the potential earnings of bringing these assets together. As we continue to navigate an evolving macroeconomic landscape and shifting market dynamics, we believe the energy sector remains resilient with domestic and global demand for U. S.

[Pierce Norton, President, CEO and Director at ONEOK]

Energy continuing to be well supported. Producers across our acreage continue to execute their twenty twenty five drilling plans and drive efficiencies in their drilling and completion techniques. We're monitoring the 2026 market dynamics closely, while continuing to execute on our growth strategy and support supply and demand market needs. Our focused investments on high return organic projects such as the Bakken's Elk Creek liquids pipeline, West Texas NGL pipeline and Denver refined products pipeline expansions and the Medford fractionation facility provides significant operating leverage and position us to capture incremental growth across our assets in the Williston Basin, the Powder River, Mid Continent and Permian Basins. Today, we are announcing a final investment decision on a new natural gas processing plant in the Permian's Delaware Basin, further expanding and enhancing our presence in what is a key strategic area for ONEOK.

[Pierce Norton, President, CEO and Director at ONEOK]

Chevron will provide more details on this project and our Permian growth strategy in his remarks. Our acquisitions are delivering tangible benefits as we continue to make meaningful progress on acquisition related synergies and organic growth. Our continuously integrated assets, diversified business mix and strong balance sheet provide flexibility, enable opportunities even during changing market dynamics. As always, we'll remain intentional and disciplined in our approach to capital allocation as we evaluate future opportunities. I'll now turn it over to Walt and Sheridan to provide their financial and commercial updates. Walt?

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

Thank you, Pierce. Second quarter twenty twenty five net income attributable to ONEOK totaled $841,000,000 or $1.34 per share, more than 30% increase compared with the first quarter. Second quarter adjusted EBITDA totaled $1,980,000,000 or $2,000,000,000 when excluding transaction costs of $21,000,000 which is consistent with the approach used in our guidance. The acquired NYK and Medallion assets delivered nearly $450,000,000 in adjusted EBITDA during the second quarter, contributing to a strong year over year earnings growth.

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

We ended the second quarter with $97,000,000 in cash and no borrowings outstanding under our $3,500,000,000 credit facility. During the quarter, we reduced our senior notes by nearly $600,000,000 including more than $400,000,000 of notes paid at maturity. Year to date, we've extinguished nearly $850,000,000 in senior notes, underscoring our proactive approach to managing debt and clear progress towards achieving our long term leverage target of 3.5 times, which we expect to reach in 2026. With yesterday's earnings announcement, we affirmed our 2025 financial guidance ranges, including net income attributable to one off of $3,100,000,000 to $3,600,000,000 and adjusted EBITDA range of $8,000,000,000 to $8,450,000,000 Our expectation to achieve results within our guidance ranges reflects current market conditions and is supported by producer performance, recently completed projects, increasing seasonal demand for refined products and the timing of acquisition related synergies. While the market environment and commodity price outlook is different today than when we originally announced financial guidance in February, we continue to see resilience in producer activity across our operations and benefits from our integrated system.

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

We also remain on track to realize approximately $250,000,000 of synergies in 2025, consistent with our guidance with significant additional contributions expected in 2026. Our 2026 outlook also provided in February was based on commodity prices at the time. Given current market conditions, we believe our 2026 outlook for adjusted EBITDA should be adjusted downward by approximately 2% or $200,000,000 to reflect current commodity prices and resulting spread differentials. We continue to expect year over year mid to upper single digit EBITDA growth in 2026. We are tempering our previous outlook based on a cautious macro environment.

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

In addition to our future earnings growth, we also reviewed our tax position following the recent tax legislation and expected a benefit of more than $1,300,000,000 in lower cash taxes over the next five years due primarily to enhancements related to bonus depreciation and interest expense deductibility. With our commitment to investing in infrastructure that strengthens energy security and resilience, the enhanced tax provisions enable us to immediately expense the full cost of qualifying investments. We now don't expect to pay any meaningful cash taxes until 2028, which is a year later than our previous expectations. Additionally, we expect our cash tax rate in 'twenty eight and 'twenty nine to be less than the full 15% corporate alternative minimum tax rate, which is lower than our previous expectations. This increase in expected free cash flow will enhance our flexibility as it relates to capital allocation.

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

I'll now turn the call over to Sheridan for a commercial update.

[Sheridan Swords, EVP & CCO at ONEOK]

Thank you, Walt.

[Sheridan Swords, EVP & CCO at ONEOK]

During the second quarter, we saw a significant rebound in volumes following normal and expected first quarter seasonality. We experienced strong sequential order growth coming out of the first quarter with higher natural gas processing volumes and double digit NGL growth across all regions. Taking a closer look at the Natural Gas Liquids segment. Total NGL raw feed throughput volumes increased 18% compared with the first quarter. Rocky Mountain Region volumes averaged nearly 470,000 barrels per day, a record for the region, driven by increased ethane recovery and higher propane plus volume compared with the 2025.

[Sheridan Swords, EVP & CCO at ONEOK]

Mid Continent and Permian NGL volumes both increased 20% compared with the first quarter supported by higher ethane recovery levels, improved seasonality and newly contracted volumes beginning to ramp up in the Permian Basin. During the quarter, we experienced lower fractionation utilization due to maintenance, which resulted in a $13,000,000 impact in the second quarter from unfractionated NGLs and inventory. We expect to fractionate these NGLs and recognize their earnings over the next two quarters. We saw minimal impacts from ethane export disruptions during the quarter. The importance of ethane to the global market was evident during this period and it's clear there's a strong demand for U.

[Sheridan Swords, EVP & CCO at ONEOK]

S. Ethane in the global market. We continue to see opportunities for economic ethane recovery across our system through the balance of the year. The build out of connectivity between our Mont Belvieu and Conway NGL platforms and our strategic Houston and Mid Continent refined products assets remains on pace. All three critical Houston connections of Galena Park, East Houston and our Pasadena MVP joint venture are expected to come online in the third quarter of this year.

[Sheridan Swords, EVP & CCO at ONEOK]

We have strong line of sight to these pipelines operating at high utilization and delivering earning contributions in the first quarter in the fourth quarter of this year. With executed synergies related to our liquid blending business, we expect record blending volumes in 2,000 five and 02/2006. Our Texas City LPG export joint venture is also progressing as planned, and we continue to have a lot of interest from customers on this strategically positioned wellhead to water solution. Moving on to the Refined Products and Crude segment. Second quarter refined product volumes increased sequentially as seasonal demand picked up.

[Sheridan Swords, EVP & CCO at ONEOK]

We expect continued demand growth in the third quarter as we've entered peak summer travel season. Diesel and aviation fuel volumes have remained strong during the first half of the year and we expect that to continue for the remainder of the year. Regional supply disruptions in Mid Continent tempered gasoline volumes during the quarter. However, volumes have recovered following the completion of refinery maintenance in late spring. Following the July tariff rate adjustments, we increased our refined products rate by mid single digits as expected.

[Sheridan Swords, EVP & CCO at ONEOK]

Our refined products pipeline to the Denver area is on track for a mid-twenty twenty six completion and we're currently seeing record jet fuel volumes into the Denver International Airport. Turning now to our crude business. Our gathering and long haul assets to continue to perform with wellhead gathering volumes on our Medallion assets up approximately 20% year over year. The overall decrease in crude volumes compared with the 2025 was due primarily to low margin exchange volumes. These volumes have significantly lower rates than wellhead gathering or long haul shipments, so their earning impact was not material.

[Sheridan Swords, EVP & CCO at ONEOK]

Moving on to the natural gas gathering and processing segment. Volumes increased all regions compared with the 2025, with producers increasing activity coming out of winter. Looking first at the Permian Basin. Following 4% growth in volumes in the second quarter, we reached 1,600,000,000 cubic feet per day in July. Currently, we have 12 active rigs on our dedicated acreage providing a line of sight to filling our existing processing capacity in the region and driving the need for additional capacity.

[Sheridan Swords, EVP & CCO at ONEOK]

In addition to our already announced 150,000,000 cubic feet per day relocation to the Midlands and approximately 75,000,000 cubic feet per day of low cost expansion at existing Delaware facilities, we've also reached FAD on a construction of a new plant in the Delaware Basin. The new Bighorn plant will have a capacity of 300,000,000 cubic feet per day with the ability to treat high CO2 gas. The plant and treated are expected to cost approximately $365,000,000 Bighorn is supported by acreage dedication and is expected to be completed in mid-twenty twenty seven. These growth opportunities will increase ONEOK's processing capacity in the Delaware Basin to 1,100,000,000 cubic feet per day with a little over 700,000,000 cubic feet per day currently and will position one of our additional growth opportunities in the basin across our value chain. The Permian Basin continues to be a key area of strategic growth for us and we will continue to be actively engaged in intentional and assessing opportunities to expand and enhance our integrated operations within the basin.

[Sheridan Swords, EVP & CCO at ONEOK]

In the Mid Continent, there are 12 rigs running on our dedicated acreage in Oklahoma and a number of projects underway to connect and optimize assets in the region. Second quarter natural gas processing volumes increased 9% compared with first quarter in line with our expectations and continue to show resilience. Rocky Mountain Region processing volumes averaged more than 1.6 Bcf per day in the 2025, a 4% increase compared with the first quarter. We saw a ramp in well completions in the second quarter compared with the first quarter and expect the same level in the third quarter reflecting the normal seasonality we see in this region. There are currently 15 rigs on our dedicated acreage.

[Sheridan Swords, EVP & CCO at ONEOK]

As Pearson Wald noted, producers across our operations remain resilient and the effectiveness they have gained in recent years are being highlighted in this environment. I'll close with our Natural Gas Pipeline segment, which continues to outperform compared with our guidance expectations. Approximately 75 of the outperformance is tied to legacy EnLink assets and our ability to optimize that system. As demand for natural gas continue to rise, particularly related to power generation and industrial demand, Our footprint is uniquely positioned to meet that growth and we're in active conversation with customers to support project developments through direct connections. We are also well positioned to benefit from increased demand tied exports in Louisiana. Pierce, that concludes my remarks.

[Pierce Norton, President, CEO and Director at ONEOK]

Thank you, Sheridan and Walt. I want to begin by thanking all of our employees. Their efforts and commitment to bringing together our assets, teams and ideas is evident in the strength of our day to day operations and the solid results we continue to deliver. ONEOK remains well positioned in today's market environment to continue delivering long term value to our stakeholders. With the strength of our balance sheet, a stable and long standing customer base, diversified earnings across our integrated value chain and the dedication of our experienced and innovation employees, We're focused on running our business efficiently and providing essential products and services that make a difference.

[Pierce Norton, President, CEO and Director at ONEOK]

Just as important as what we do is how we do it with a steadfast commitment to safety, integrity and responsibility. In that spirit, I am pleased to share that our seventeenth Annual Corporate Sustainability Report will be published on our website this week. I encourage you to take a look and see the measurable progress we've made on our sustainability journey. Our workforce and operations have grown significantly in recent years. Our commitment to our core values has never wavered.

[Pierce Norton, President, CEO and Director at ONEOK]

Together, we're delivering the energy that makes a difference in how we live, how we move, communicate and learn across The U. S. And around the world, a shared purpose that creates value for all of our stakeholders. Operator, we're now ready for questions.

[Megan Patterson, VP - IR at ONEOK]

Operator, can you hear us?

[Operator]

And ladies and gentlemen, at this time, we'll begin the question and answer session. And our first question today comes from Spiro Dounis from Citi. Please go ahead with your question.

[Spiro Dounis, Director at Citigroup]

Thanks operator. Good morning everybody. First question, maybe to start with the 2026 outlook, can certainly sympathize with the change in the environment since February. And Walt, I guess I'm curious how lean you describe I think you said mid to high single digits.

[Spiro Dounis, Director at Citigroup]

And if you could maybe just provide a little bit more color on how much of that growth is hardwired by your contractual volumes, synergies, cost savings, in other words, things that don't necessarily rely on volume growth?

[Pierce Norton, President, CEO and Director at ONEOK]

So this is Pearce. Let me take a shot at that first, and then I'll pass it to Walt to add some additional color. But I think you hit on it, which is with the volatility in the market, the spread differentials that have tightened in comparison to those that we used as assumptions that we used for that 2026 EBITDA outlook. As we said in the strip, we continue to work with our producers and understand their '26 plans as well in a kind of up and down commodity market, especially related to oil prices. So given both of these factors, we did lower '26 outlook by around 2% or that $200,000,000 as Paul said in his remarks.

[Pierce Norton, President, CEO and Director at ONEOK]

I'll turn it over to him for a little bit more color on this as well.

[Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development at ONEOK]

Yes, Spiro, strength here in our 2026 outlook really comes from the fact that we have a number of projects to come on in 2026, including the refined products expansion. We'll start to see the ramp on West Texas LPG. But more importantly, the connections of East and the some of the other connections between our refined products and NGL business. Those connections are expected to provide more of the incremental increase over 2025 than producer activity. So it's really a benefit from these ongoing synergies layering in and then producer activity on top of that.

[Spiro Dounis, Director at Citigroup]

Great. That's helpful color. Second one, maybe just going to natural gas. Sheridan, like you said, always seems to be a bright spot, especially now with these EnLink assets in there. And I guess I'm just curious, two part question here.

[Spiro Dounis, Director at Citigroup]

One, can you just give us a little bit more color on exactly what's driving that? And if it becomes something ratable enough to maybe start including in the forward guidance? And then you also mentioned data centers and AI and power demand on the back of your comments there. Still in discussions, just curious where you are maybe innings wise in those discussions and when we should expect an announcement on that front?

[Sheridan Swords, EVP & CCO at ONEOK]

Well, I'll start with the AI on that and the data centers and the industrial demand. Obviously, I think we're in discussions with over 30 different people. Obviously, not all of those are going come to fruition, and we're at different levels. But what we've learned through that is it's not done until it's done, but we are actively participating in some southern we think are further along than others. But we've been in this business long enough that they can change on a dime.

[Sheridan Swords, EVP & CCO at ONEOK]

So we're still very about that. On the industrial side, we have actually contracted some people over on the Mississippi River quarter, where we think we have a big advantage having that last pipe in there. And that will start coming on over the next couple of years. And none of them are huge, but you do enough these little ones, they make it they can make a pretty big difference. Then when we look at the in link assets, we just know as we continue to integrate and look at how by bringing a different mindset to their assets and looking at it differently and how we have to utilize those assets, we are starting to see some pretty big opportunities as you're seeing coming out as we continue to grow that some of that can be a little bit related to spread.

[Sheridan Swords, EVP & CCO at ONEOK]

Other ones are going to be volume. And we continue to the team continues to work on that and to bring more of it to a steady state that we can continue to project out over the next couple of years. So I think you'll see that in our guidance when we come out in 2026. But that's we've been very excited about the natural gas business. I think I said early on that we didn't put a whole lot of weight on the Louisiana side of the natural gas business.

[Sheridan Swords, EVP & CCO at ONEOK]

We bought EnLink. And as you can see from the numbers, it's really starting to perform.

[Spiro Dounis, Director at Citigroup]

Great. Helpful color. I'll leave it there for today. Thanks, everyone.

[Operator]

Our next question comes from Jeremy Tonet from JPMorgan. Please go ahead with your question.

[Jeremy Tonet, MD & Research Analyst at J.P. Morgan]

Hi, good morning.

[Pierce Norton, President, CEO and Director at ONEOK]

Good morning, Jeremy.

[Jeremy Tonet, MD & Research Analyst at J.P. Morgan]

I know in the commentary you described synergy capture picking up in the back half Was wondering if you could provide a bit more color on specific opportunities and how that, I guess, feeds into confidence in the guidance range. But any kind of concrete examples there and what's coming together would be helpful.

[Sheridan Swords, EVP & CCO at ONEOK]

Jeremy, this is Sheridan. So in we bought the Houston assets in 2024, and we came out that we were going to be connecting our NGL assets at Mont Belvieu into the refining products assets that we bought from Magellan. And you're seeing that start to come through, that's going to be done here at the end of this quarter. And that's going to do two things for us. That's going to create more volume for us to be more NGL volumes to blend and also be able to reduce our cost to be able to blend, which even creates more value when you to be able to blend if the spreads are there. That's what you're seeing in the Easton assets. Also in the Easton assets, if you think about going into MVP and Galena Park, we'll be able to actually sell that product to some of our customers at that location, giving them a better product at that location, a better service offering. And obviously, they'll move a lot more volume in there. So we're going to see some pickup in both blending and tariff as those assets come back on.

[Sheridan Swords, EVP & CCO at ONEOK]

Then as we look into 2026, we're also doing the same thing up in the Mid Continent, where we're connecting our Conway assets into our Mid Continent refining assets. So once again, we can make sure we have the right amount of volume there. When the blend opportunity is there, we can reduce the cost of getting that butane to that location, which allows us even to push it out further on our system. And these are kind of the last big projects that we have of the blending aspect of the Magellan acquisition. We've done other ones and put them in service.

[Sheridan Swords, EVP & CCO at ONEOK]

If you remember in my comments, I said right now in 2025, we're expecting record blend volume on our system. In 2026, we will everything looks like we will beat that volume as well, the 2025 volume in 2026.

[Jeremy Tonet, MD & Research Analyst at J.P. Morgan]

Got it. That's helpful. Thank you. And then just wanted to pivot towards BridgeTex here. I was wondering if you could provide a bit more color on economics there and synergies as well. And will you be consolidating BridgeTex?

[Pierce Norton, President, CEO and Director at ONEOK]

Well, Jeremy, we were opportunistic here. We had the opportunity to increase our holdings from 30% up to 60% at very attractive multiples compared to recent transactions in the marketplace. Given the connectivity to our Medallion assets, we really thought that, that made a lot of sense to continue to get more of that business. No, we will not be consolidating it going forward because we still have a governance structure with our other partner there that gives it more of a fifty-fifty type of governance.

[Jeremy Tonet, MD & Research Analyst at J.P. Morgan]

Got it. That's helpful. Thanks.

[Operator]

And ladies and gentlemen, our next question comes from Theresa Chen from Barclays. Please go ahead with your question.

[Theresa Chen, Senior Analyst - Midstream & Refining Equity Research at Barclays]

Good morning. Looking at the downstream side of things on NGLs, your largest competitor in Permian NGL infrastructure has publicly disparaged the economics of new LPG export facilities. Do you care to respond to this? And how has the commercialization progress been for your JV Texas City terminal?

[Sheridan Swords, EVP & CCO at ONEOK]

Well, that's what said earlier. We're not going to talk about infill contracts whatever, but we have had a lot of interest in our dock going forward. This is out in 2028. And and the big reason for this interest is really our, by far, premium location outside of the Houston Ship Channel right next to an hour away, hour or two hours away from Buoy 0. It's a much better little JisiC location.

[Sheridan Swords, EVP & CCO at ONEOK]

So right now, we are seeing rates in line with what our estimated economics are. So we are still very excited about this project going forward.

[Pierce Norton, President, CEO and Director at ONEOK]

Theresa, this is Pierce. Only thing I would add to that is, if you look at the LNG exports, you look at the AI demand, that additional volume, whatever that number is going to be, whether or not that's 14 Bcf a day or higher, a significant amount of that is actually going to come with liquids. And you can actually calculate how much liquids is going to come with that additional volume. And we do think there's going to be plenty of propane and butane out there to ship globally.

[Theresa Chen, Senior Analyst - Midstream & Refining Equity Research at Barclays]

Very helpful. And looking at the volatility that we've seen year to date in commodity prices, would you expand a bit more on the activity and expectations you have on G and P volume by basin and what those conversations with your producers look like at this point?

[Sheridan Swords, EVP & CCO at ONEOK]

Sure, Theresa. What it says in the Bakken right now, our volumes are still looking to be in our guidance range. But overall rig counts have stayed steady this past year and producers are continuing to drill the longer laterals, reducing the which reduces the number of wells we need to connect to hold or grow our volumes. And year to date, we are in line with about 30% of well connects being three mile laterals. And we still continue to have very active discussions with producers of where they are and kind of wait and see where they come out, where they're going to be in 2026.

[Sheridan Swords, EVP & CCO at ONEOK]

But obviously, we've seen some pretty good ramp up from first quarter to second quarter. If we go down and look into Oklahoma, we're still seeing strong activity across our footprint, especially in the Cherokee formation. And you saw that we were up 9% first quarter to second quarter. And we continue to benefit from bringing the EnLink and legacy ONEOK systems together and the synergies we're driving through there that helps us expand not only our footprint out there, but able to access some of our all of our capacity in our system and especially be able to prioritize our higher efficiency capacity. As you move to Permian, we're seeing volumes ramped in the second quarter.

[Sheridan Swords, EVP & CCO at ONEOK]

Obviously, we kind of as we said last time, we were a little slow kind of coming out of the gate, but we caught up pretty quickly. And at 1.6 Bcf, we're in line where we thought we'd be at this time and continue to move forward. There are a couple of less rigs in the Midland right now, but the Delaware seems to really be ramping up and obviously we're moving in. That's why we FID ed this new plan as well as some new expansions, low cost expansions out in the Delaware. So out there, we see a very long runway for growth.

[Sheridan Swords, EVP & CCO at ONEOK]

And so here coming up pretty soon, we'll have all the new expansions in the Midland with that new plant coming down that's backed by acreage dedications and volume from existing producers. And then here in 2027, we'll see the new Delaware plant coming online. So even though we're seeing a lot of volatility in the market, the producers for right now seem to be fairly steady or fairly resilient.

[Theresa Chen, Senior Analyst - Midstream & Refining Equity Research at Barclays]

Excellent. Thank you for that detailed answer, Sheridan.

[Operator]

And our next question comes from Michael Blue from Wells Fargo. Please go ahead with your question.

[Michael Blum, Managing Director at Wells Fargo Securities]

Thanks. Good morning, everyone. Just wanted to ask another question on BridgeTex. Just wondering if can discuss the performance of BridgeTex this quarter. And then obviously, you've increased your position there.

[Michael Blum, Managing Director at Wells Fargo Securities]

So I wanted to get your view of the outlook for that pipeline over the next couple of years.

[Sheridan Swords, EVP & CCO at ONEOK]

Michael, we continue to see the volume on that increase as we continue to go forward. Obviously, that it heads that pipeline heads right into our East Houston facility. So it also feeds our downstream assets as well. We continue to see growth in crude oil volume out of the Permian. So we think they'll continue to lead to more volume on the system.

[Sheridan Swords, EVP & CCO at ONEOK]

And also with Hess having a larger share, we're also makes it more advantageous to us to direct our volume coming off of our field gathering to that system as well, where some of that volume was going down some other pipeline. So obviously, we wouldn't have increased our stake in there unless we were very excited about what we see going forward. And I think you're seeing the benefit of our integrated assets with the Magellan and EnLink Crude Systems together being able to feed the pipelines of their choice and not just go into other third party pipelines. We capture more value, not only get it on our pipeline, as I said, but it also feeds into our East Houston and big crude oil distribution center where we get additional value downstream.

[Michael Blum, Managing Director at Wells Fargo Securities]

Got it. And then wondering if you can give us an update on West Texas LPG, kind of where does volume or utilization stand today? And how do you see the path filling that up? And is this latest processing plant you announced part of that? Thanks.

[Sheridan Swords, EVP & CCO at ONEOK]

Michael, if you remember on that West Texas LPG, we contracted that with a base set of volumes that did not fill up the pipeline that gave us a nice rate of return. And we're continuing to hook up plants as coming online and delivering it as well. Obviously, as we bring on the Shadowfax plant that's moved out of the Barnett into the Midland, that will add more volume onto our NGL pipeline. The $70,000,000 a day, dollars 70,000,000, 75,000,000 a day of low cost expansions in the Delaware, we're adding more NGLs to the pipeline. In this new plant, we'll also add more NGLs to the pipeline.

[Sheridan Swords, EVP & CCO at ONEOK]

But we're also still in discussions with a lot of third party plants to continue to contract them up as well. As we've said before, we think we have a pretty long runway with this very cheap capacity coming out the Permian. And then you add on that when we get the Medford fractionator up, which is very low cost NGL fractionation capacity expansion. We continue to be able to not only maintain our market share out there, but grow it not only on the G and P side, but on the NGL side.

[Michael Blum, Managing Director at Wells Fargo Securities]

Thank you.

[Operator]

And our next question comes from Jean Ann Salisbury from Bank of America. Please go ahead with your question.

[Jean Ann Salisbury, Managing Director at Bank of America]

Hi, good morning. Rakes have come down a bit in the Bakken. I was just wondering if you have a sense of whether producers are high grading to oilier acreage in the current environment or if you would actually kind of expect gas to oil ratio to increase over the next year and kind of offset perhaps some of the lower growth?

[Sheridan Swords, EVP & CCO at ONEOK]

Well, I think we'll as we said, I think we'll always continue to see gas oil ratios continue to tick up. It's just naturally in all the basins that will continue to have happen. We are with some consolidations up there, we are seeing some people making sure where they're going to drill and what they're going to go forward and where they're looking at it. And obviously, we're in conversations with them that what really they drill it now takes more of a bigger impact into next year. So we're in the conversation with those, continue to look forward, but some go down, some go up as we continue to go forward.

[Sheridan Swords, EVP & CCO at ONEOK]

But that's still very much a basin that a lot of the producers up there, it's a very key basin for them, and they're going to continue to want to play an active part in that area.

[Jean Ann Salisbury, Managing Director at Bank of America]

That makes sense. Thank you. And then obviously, one of the major synergies from the Magellan acquisition has been butane blending. I know this comes up on every call, but could you just give a little bit more detail on kind of broadly how much of it is just recurring almost midstream revenue that wasn't there before? And how much of it is a more volatile marketing spread that's based on the spread of pricing?

[Sheridan Swords, EVP & CCO at ONEOK]

Well, what I would tell you is, in 2025, we're you can see that we're not seeing the same level of spread that we saw in 2024. So that's having an impact over the fourth. But what we have done is we've been able to make up quite a bit of that by blending a lot more volume. And that's because the synergy projects are coming online. As we've talked before, we can ship product up our pipelines.

[Sheridan Swords, EVP & CCO at ONEOK]

We can instead of trucking it, we can move it on pipelines. That's what you're seeing going to see with the NGL connectivity between Conway and the RPC Mid Continent assets, the Easton assets, all that's bringing that in. Some of that already started earlier, some started today. So I would say most of the spread compression we've seen, we've been in makeup of volume, which gives you a great option as far as spreads continue to widen, you'll see an upside in earnings when those spreads are more at a wider level.

[Jean Ann Salisbury, Managing Director at Bank of America]

That's super helpful. Thank you.

[Operator]

Our next question comes from Manav Gupta from UBS. Please go ahead with your question.

[Manav Gupta, Executive Director at UBS Group]

Good afternoon. I just wanted to go back and check on the delivered base in GV. I think you closed bought the remaining 49.9% for $940,000,000 Can you talk about the benefits of this transaction at this point of time?

[Pierce Norton, President, CEO and Director at ONEOK]

Sure. Well, we clearly have a strong interest in growing our Delaware position. We made a move there announced on this call, so adding another plant in the Delaware. So it made a lot of sense to go ahead and buy in that joint venture partners piece. I think clearly we didn't expect to do it quite as quickly as we did, but the joint venture partner was ready to move on being private equity.

[Pierce Norton, President, CEO and Director at ONEOK]

They've been in it for quite some time. So we went ahead and did that, bought it at an attractive multiple. And it now gives us the flexibility to grow that business, making our own decisions, allocating capital where we want to, when we want to, how we want to. So it's really enhanced our flexibility, built the business and set the platform for growth going forward.

[Manav Gupta, Executive Director at UBS Group]

Thank you. And I'm sorry for asking this. There's a minute of silence on my phone. For some reason, I'm having technical difficulties if somebody has already asked this. Can you talk about the Ellic Creek pipeline expansion?

[Manav Gupta, Executive Director at UBS Group]

Is it still scheduled? And when should we expect that to help full capacity? Thank you.

[Sheridan Swords, EVP & CCO at ONEOK]

The Elk Creek pipeline expansion is fully it's done. It's completed. And we are at over 400,000 barrels a day, think 435,000 barrels a day is capacity on the Elk Creek pipeline. And you combine that with the Bakken pipeline, we're at 575,000 barrels a day. So that project is completed. We're completely done.

[Manav Gupta, Executive Director at UBS Group]

Thank you.

[Operator]

Our next question comes from Keith Stanley from Wolfe Research. Please go ahead with your question.

[Keith Stanley, Director at Wolfe Research, LLC]

Hi, good morning. I want to start with a clarification question. So Walt, you said Q2 sequential growth was in line with your expectations. I think you said Q1 was in line as well. So would you say the midpoint of 2025 EBITDA guidance range is still the base case? And what needs to happen to get there?

[Pierce Norton, President, CEO and Director at ONEOK]

Well,

[Pierce Norton, President, CEO and Director at ONEOK]

Keith, this is Pierce. We still see the path to our midpoint. There's kind of two keys to that. We've talked a lot today about spreads. So one of those keys for us to kind of get to that midpoint, maybe even exceed it, is to have some widening of those spreads, especially in our refined products business.

[Pierce Norton, President, CEO and Director at ONEOK]

And as you know, I mean, when crude oil is down, it also affects the RBOB pricing. So it kind of squeezes that spread between the butane and RBOB. And then also just making sure that our producers continue to execute on their 2025 drilling plans. Think that's in line. We think that's going to continue to happen.

[Pierce Norton, President, CEO and Director at ONEOK]

Walt, do you have anything to add to that? No, I think that's absolutely right. We see a clear path that we could get there, but there's also obviously some volatility in the marketplace with crude prices bouncing around. Need a couple of things to follow the right direction, but we're cautiously optimistic.

[Keith Stanley, Director at Wolfe Research, LLC]

Okay. Thanks for that clarification. My second question I wanted to ask on the LPG export facility. Can you give a sense of how contracted that capacity is at this point? And what you're seeing as far as market pricing for LPG exports right now?

[Keith Stanley, Director at Wolfe Research, LLC]

One of your competitors had a somewhat bearish tone the other day.

[Sheridan Swords, EVP & CCO at ONEOK]

Yes. As I said earlier today, we haven't and won't talk about contracts or what we're doing on that side of it for those competitive reasons. What I would say is due to our premier location and everything else, we're still seeing rates at in line with our economics of why we when we FID ed this project. So I know there's a lot of red and brown there, but we definitely think our locations, why we went down there has really given us an advantage.

[Manav Gupta, Executive Director at UBS Group]

Thank you.

[Operator]

Our next question comes from Brandon Bingham from Scotiabank. Please go ahead with your question.

[Brandon Bingham, Associate Director - US Equity Research at Scotiabank]

Hey, thanks for taking the questions here. I just wanted to ask on the CapEx front in light of the FID of the processing plant. How much of that, if any, is going to be hitting 2025? And then just kind of how we should think about 2026 versus 2025 growth spend?

[Pierce Norton, President, CEO and Director at ONEOK]

Yes. Very little of it is going to really be hitting 25,000,000 I mean, we'll start construction. But given where we are in the year, you'll definitely see a bigger spend in 2026 than you would in 2025. CapEx, we'll give our guidance as we come out in February. But I think consistent with what we've said in the past, we've got a bunch of larger projects kind of rolling off here in 2026.

[Pierce Norton, President, CEO and Director at ONEOK]

Medford project spend will start winding down. Our Colorado refined products project will come to completion. So we'll see CapEx starting to trail downward a little bit from that 2026 period and forward.

[Brandon Bingham, Associate Director - US Equity Research at Scotiabank]

Okay. That's helpful. And then maybe kind of a roundabout way of looking at synergies. You've discussed some of the bigger things as far as the Houston system and the integration plays there. But just kind of curious if there's any maybe more singles, doubles, things that aren't being highlighted that you're seeing could kind of stack up and really drive some of that significant capture that you're discussing year over year?

[Sheridan Swords, EVP & CCO at ONEOK]

Absolutely. We're seeing a lot of that from all three of the acquisitions. We've talked about some of those publicly about how even with Magellan, were willing to spend a little more capital on some smaller projects that had high return, but not guaranteed returns on that. They're very high. Those have been in place and are doing quite well.

[Sheridan Swords, EVP & CCO at ONEOK]

A lot of those little ones you get to Magellan and EnLink. We've had synergies between the two, EnLink and Magellan, by disconnecting those two systems out in the Midland where we now have trucks, crew trucks that were driving past an in link station to get to a medallion station or driving past a medallion station to get to an in link station. So we've reduced those costs to being able to come down. We've been we've some of the things we do, just different mindset. We're buying more of the product on the Medallion system to be able to feed and fill our other pipelines, our long haul pipelines.

[Sheridan Swords, EVP & CCO at ONEOK]

We're part of the Magellan acquisition to get down into our East Houston terminal, where we have a big distribution system going out and also have an export dock down that area, continue to grow that in the BenLink legacy and the G and P. We're up in the MidConf. Those assets are sitting a lot on top of each other. We've already had a lot of success where EnLink may have a contract that a well comes up that's a long ways away from them. That would take a lot of extra capital to get there.

[Sheridan Swords, EVP & CCO at ONEOK]

If it even could be economical and the legacy ONEOK system was close by that they could hook that system in there and get very attractive rates. We've been able to tie the systems together to open up more capacity that we don't have to spend any additional capital. And that makes you more competitive in the marketplace to be able to access more of it going forward. So yes, there's a long list. There's actually probably more little singles and doubles than the big ones.

[Sheridan Swords, EVP & CCO at ONEOK]

It's just that they're kind of the same thing and they're kind of down in the minutiae. But I think you can see by our what we've been able to do with these assets and our results that we are getting a large share of the synergies.

[Brandon Bingham, Associate Director - US Equity Research at Scotiabank]

Awesome. Great. Thanks so much.

[Operator]

And our next question comes from Sunil Saddal from Seaport Global Securities. Please go ahead with your question.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Yes. Hi. Good morning, everybody. So couple of clarifications. Starting off on the blending side of things, I know you talked about good visibility to the volumes in Q4 and 2026.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Could you talk a little bit about your hedging strategy or how much of those margins in those lending operations are hedged as of now? And how does that compare with, say, previous years?

[Sheridan Swords, EVP & CCO at ONEOK]

Typically, we don't talk about for competitive reasons how much we have hedged. I would say we're kind of we're in line where we were last year at this time on the hedging activity. We're very opportunistic on that. One of the from the last question, one of the synergies that we have with Magellan is that because of our access to normal butane, we don't have to lock it in when we buy the normal butane to lock the spread in. We can be more opportunistic and see when the normal to RBOB spreads at a level that we like, then we can lock it in because with our NGL assets, we kind of have butane on demand that whenever the our lenders see the time to build, they can just call our NGL and they'll put the they'll get the butane form, they'll sell the RBOB against it and continue to go forward.

[Sheridan Swords, EVP & CCO at ONEOK]

So we can be very opportunistic on that. Just overall, the spreads have been a lot narrower where they were last year. We still have the opportunity this year to be able to store product, go from so we don't have to sell it right when we blend it, right when we actually make the blend, we can look out forward and see if there's another time to sell it at that time to continue to go forward. So we still have all those opportunities as we can go forward that we've had last year. And like I said, we're in line with where we were last year on hedging that.

[Pierce Norton, President, CEO and Director at ONEOK]

One thing I would add is that we've spent a lot of time talking about spreads here on this call. I think it's important to put them in context. I mean we're talking about maybe 100 or $200,000,000 on $8 plus billion. So we're talking about 2% variability. It's just when you get to a midpoint, that's putting a pin in the number, a very large number.

[Pierce Norton, President, CEO and Director at ONEOK]

So variability on our overall earnings of any of these spread relationships is really immaterial. It's just kind of the noise at the end of the spear.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Okay. Thanks for that. And then on the new processing plant that you've sanctioned in Permian, I think you mentioned $365,000,000 or so of CapEx related to that. So that's on building the plant and the related infrastructure also to fill up that plant? And then how should we be thinking about economics on that?

[Sunil Sibal, Managing Director at Seaport Global Securities]

Obviously, with your integrated footprint, the economics improves. But if you think about on a stand alone basis, how should we be thinking about economics on that investment?

[Sheridan Swords, EVP & CCO at ONEOK]

The $365,000,000 is for the cryo plant and which includes residue compression and things at the plant as well as a large CO2 treater. Because that area, we're seeing more and more CO2 in the Delaware coming out that needs to be treated. That's an important part. So we are putting in not just the cryo and the compression there at the plant, but also the also CO2 as well, CO2 treat. There will be obviously there will be additional capital that will be spent in routine growth for hooking up wells and stuff like that.

[Sheridan Swords, EVP & CCO at ONEOK]

But we have that throughout our system. But that's our continual process we go through, the June capital we go.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Okay. And then returns wise, anything to highlight there?

[Sheridan Swords, EVP & CCO at ONEOK]

Could you repeat that? Sorry.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Yes. So I was wondering, when you think about return on that investment in that processing plant, obviously, you've got integrated economics, but I was curious, just on the processing side, how do our returns on these kind of investments stack up?

[Pierce Norton, President, CEO and Director at ONEOK]

We don't ever get into the specific returns on that particular asset, but I think you touched on the key point there is that the benefit of having the EnLink business as part of the OneOak overall business is that we get the integrated value all the way from the field throughout our value chain. So incrementally, it's quite profitable for us.

[Sunil Sibal, Managing Director at Seaport Global Securities]

Got it. Thank you.

[Operator]

And we have a follow-up question from Jeremy Tonet from JPMorgan. Please go ahead with your follow-up.

[Jeremy Tonet, MD & Research Analyst at J.P. Morgan]

Hi, thanks for letting me back in. Just a quick one if I could. As it relates to the 2026 outlook, would you be able to share any color on commodity price expectations that underpin that backdrop there? And is it kind of on the strip in current spreads? Or any other color you could provide? Thanks.

[Pierce Norton, President, CEO and Director at ONEOK]

Yes. Sure, Jeremy. We don't want to set a precedent to be double dipping here, but we'll let you in this time. Basically, the update we gave you adjusting that down 2% of the $200,000,000 was bringing it to current market. So that's kind of as we look through that, that $65 $66 crude range.

[Operator]

And with that, ladies and gentlemen, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Megan Patterson for closing remarks.

[Megan Patterson, VP - IR at ONEOK]

Thank you, Jamie. Our quiet period for the third quarter starts when we close our books in October and extends until we release earnings in late October. We'll provide details for that conference call at a later date. As always, our IR team will be available throughout the day for any follow ups. Thank you, everyone, for joining, and have a good day.

[Operator]

And ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.

Participants

Executives

• Megan Patterson, VP - IR
• Pierce Norton, President, CEO and Director
• Walter Hulse, EVP - CFO, Treasurer, IR & Corporate Development
• Sheridan Swords, EVP & CCO

Analysts

• Spiro Dounis, Director at Citigroup
• Jeremy Tonet, MD & Research Analyst at J.P. Morgan
• Theresa Chen, Senior Analyst - Midstream & Refining Equity Research at Barclays
• Michael Blum, Managing Director at Wells Fargo Securities
• Jean Ann Salisbury, Managing Director at Bank of America
• Manav Gupta, Executive Director at UBS Group
• Keith Stanley, Director at Wolfe Research, LLC
• Brandon Bingham, Associate Director - US Equity Research at Scotiabank
• Sunil Sibal, Managing Director at Seaport Global Securities