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    OKE
    Earnings call· Mar 2026(Q1 FY26)

    ONEOK INC /NEW/ Q1 FY26 earnings call OKE

    Apr 29, 2026 Source

    Executive summary

    ONEOK Q1 FY26 — Raises 2026 Financial Guidance on Strong Performance

    ONEOK delivered strong first-quarter results, prompting an increase in its full-year 2026 financial guidance, driven by higher volumes and improving market dynamics. Management emphasized the critical role of U.S. energy infrastructure in meeting growing global demand, particularly for natural gas and NGLs, and highlighted strategic investments to expand capacity and connectivity across its integrated asset base. The focus remains on disciplined capital execution and leveraging its diversified platform for long-term value creation.

    Highlights

    5

    • Increased 2026 net income guidance to a midpoint of approximately $3.5 billion and adjusted EBITDA guidance to $8.25 billion.

    • Q1 FY26 net income increased 12% year-over-year to $776 million, or $1.23 per diluted share.

    • Q1 FY26 adjusted EBITDA increased 13% year-over-year to approximately $2 billion.

    • NGL volumes in the Gulf Coast Permian region increased over 30% year-over-year.

    • Refined products volumes increased 12% year-over-year.

    Concerns

    3

    • A noncash impairment of $60 million ($0.07 per diluted share after tax) was recorded related to the Powder Springs logistics joint venture.

    • Waha to Katy location price differentials are expected to normalize in the second half of 2026 as new pipeline egress comes online.

    • Realized commodity prices were lower in Q1 FY26 due to entering the year fully hedged.

    Guidance & targets

    8
    CategoryTargetConfidence
    2026 Net Income
    midpoint of approximately $3.5 billion
    high materiality
    High
    2026 Diluted Earnings Per Share
    midpoint of $5.53
    high materiality
    High
    2026 Adjusted EBITDA
    midpoint of $8.25 billion
    high materiality
    High
    2026 Capital Expenditure
    $2.7 billion to $3.2 billion
    medium materiality
    High
    Waha to Katy Differentials
    normalize
    low materiality
    High
    LPG Export Dock Targeted Utilization Contracting
    finishing the contracting... in the relative near future
    medium materiality
    High
    Bakken Pipeline Operating Leverage
    all that's going to drop to the bottom line
    medium materiality
    High
    Hyperscaler Data Center Project Size
    $400 million to $700 million
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Natural Gas Liquids
    Performance led by broad-based volume growth across all three core regions, driven by higher base volume, increased ethane recovery, C3+ volume, and newly connected third-party plants.
    Rocky Mountain NGL volumes: increased 11% year-over-yearMid-Continent NGL volumes: increased 4% year-over-yearGulf Coast Permian NGL volumes: increased >30% year-over-year
    		————
    Refined Products and Crude
    Supported by strong gasoline and diesel demand, refinery maintenance dynamics, favorable regional basis differentials, and wide crack spreads. Blending volumes were strong, with additional hedges secured for fall volumes and extended into spring 2027.
    Refined products volumes: increased 12% year-over-yearCrude dock utilization: robust at highly contracted joint venturePermian crude oil gathering volumes: increased compared with Q4
    		—increased 12%——
    Natural Gas Gathering and Processing
    Delivered strong year-over-year volume growth across all regions despite winter weather impacts. Producer activity remains solid, with focus on both gas-focused and liquid-rich plays. Realized commodity prices were lower due to hedging.
    Mid-Continent processed volumes: increased 7% year-over-yearRocky Mountain processed volumes: increased year-over-yearPermian Basin processed volumes: increased 4% year-over-yearMid-Continent rigs: 11 currently operatingRocky Mountain rigs: 11 currently operatingPermian Basin rigs: 11 currently operating
    		————

    Operational metrics

    13
    Net Income
    $776 million12% increase compared with Q1 FY25
    Q1 FY26

    Reported net income, including a noncash impairment.

    Diluted Earnings Per Share
    $1.23
    Q1 FY26

    Reported diluted EPS, including a noncash impairment of $0.07 per share.

    Adjusted EBITDA
    $2 billion13% year-over-year increase
    Q1 FY26

    Driven by higher volumes and strong segment-level performance.

    Hedging Level
    75%
    annual

    Typically hedged going into a year.

    RPC Segment Market-Based Rates
    70%
    current

    Percentage of RPC segment volume on market-based rates, not FERC index.

    U.S. LNG Export Capacity
    more than double
    next decade

    Projected growth over the next decade, reinforcing global call on U.S. energy.

    U.S. Natural Gas Production with Recoverable NGLs
    65%
    current

    Percentage of U.S. natural gas production containing recoverable natural gas liquids.

    U.S. LNG Capacity
    18 Bcf/d to 30 Bcf/d
    by 2030

    Expected growth in U.S. LNG capacity by 2030.

    Mid-Continent Dedicated Acres Rigs
    11
    current

    Rigs currently operating across more than 1 million dedicated acres in the Mid-Continent.

    Rocky Mountain Dedicated Acres Rigs
    11
    current

    Rigs currently operating on dedicated acreage in the Rocky Mountain region.

    Permian Basin Dedicated Acres Rigs
    11
    current

    Rigs currently operating across the Permian Basin footprint.

    Natural Gas System Capacity
    7 Bcf per day
    current

    Total capacity of ONEOK's natural gas system.

    Bakken Volumes
    down 2% to 3%QoQ
    Q1 FY26 vs Q4 FY25

    Volumes in the Bakken region, better than typical seasonal guidance.

    Industry KPIs

    6
    MetricValueDetails
    D c efficiency rig activity11rigs
    Pipeline throughput storage—
    Realized price differentialwider than planned
    FCF shareholder distributions—
    Take or pay contract structure—
    Weather event volume earnings impactno material downtime

    Deals & partnerships

    1
    Powder Springs Logisticsjoint venture

    Noncash impairment recorded in Q1 FY26 related to this joint venture in the refined products and crude segment.

    Capital programs

    7
    Shadowfax Natural Gas Processing Plant Relocationcompleted

    Benefit: 150 million cubic feet per day

    Relocated from North Texas to Midland Basin. Expect a steady ramp-up of volumes.

    Delaware Basin Processing Assets Expansionon track

    Benefit: 110 million cubic feet per day

    Increasing capacity in the basin by 110 MMcf/d.

    Bighorn Processing Planton schedule

    Benefit: 300 million cubic feet per day

    Remains on schedule for completion.

    Incenter Plant Constructionon track

    Benefit: 60 million cubic feet per day

    Will increase processing capacity in the Powder River to more than 100 MMcf/d. JV partner involved.

    Denver Area Refined Products Pipeline Expansionon track

    Benefit: 35,000 barrels per day

    Will add 35,000 bbl/d of capacity when in service.

    Medford NGL Fractionator Phase 1on track

    Benefit: 100,000 barrels per day

    Will add 100,000 bbl/d of Mid-Continent fractionation capacity.

    Hyperscaler Data Center Infrastructure Projectsin advanced discussions$400 million to $700 million

    Benefit: 5 gigawatt facilities

    Initially thought to be $50 million projects, but increased demand requires larger pipelines and infrastructure, leading to higher costs. These projects fit within the unallocated portion of the $2 billion run rate CapEx.

    Risks & headwinds

    3
    Noncash impairment related to Powder Springs logistics joint ventureQ1 FY26

    $60 million or $0.07 per diluted share after tax

    Mitigation: Not explicitly stated, but implies a re-evaluation of asset value.

    Wider Waha to Katy location price differentials expected to normalizeSecond half of 2026

    Impact on Natural Gas Pipeline segment

    Mitigation: New pipeline egress coming online will lead to normalization.

    Lower realized commodity prices due to hedgingQ1 FY26

    Impacted Q1 FY26 Natural Gas Gathering and Processing segment results

    Mitigation: Company enters the year fully hedged; unhedged 25% of future volumes will benefit from higher prices.

    Q&A highlights

    8

    How much of the $150M guidance increase is already realized, and how much of the forward component is locked in, especially regarding butane hedging?

    The increase is a blend of stronger volume expectations due to higher commodity prices and differential opportunities. While 75% of volumes are typically hedged, higher expected volumes will benefit from full commodity prices. Winter Storm Firm impact was already in original guidance.

    “The increase was really a blend of stronger volume expectations driven by higher commodity prices, continued expected differential opportunities, and then we, of course, expect to realize some benefit from the higher commodity prices.”

    asked by Spiro Dounis · answered by Walter Hulse

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Positioning in Dynamic Energy Markets

    ONEOK emphasizes its role in connecting supply and demand across natural gas liquids, natural gas, crude oil, and refined products. The company's integrated platform, anchored in resilient basins and demand centers, is positioned to capitalize on long-term demand fundamentals, including growing U.S. natural gas demand for power generation, data centers, industrial activity, and LNG exports. Management highlights that infrastructure, not supply, is the current constraint in global energy markets, reinforcing ONEOK's strategic importance.

    02

    Capital Program Execution and Future Growth

    The company is on track with its 2026 capital expenditure guidance of $2.7 billion to $3.2 billion. Key projects completed or underway include the relocation of the Shadowfax natural gas processing plant to the Midland Basin, expansions of Delaware Basin processing assets (110 MMcf/d by Q3, Bighorn 300 MMcf/d by mid-2027), and the Incenter plant in Powder River Basin (60 MMcf/d by Q4 2026). These projects aim to improve reliability, expand connectivity, and increase optionality, creating long-term value across ONEOK's footprint.

    03

    Strong NGL Demand and Export Opportunities

    Global NGL demand remains robust, driven by petrochemical and international markets, with U.S. supply playing a critical role. The company noted increased interest in its announced LPG export dock, with commercialization accelerating due to geopolitical dynamics. The U.S. is expected to be a primary source for incremental LNG capacity, which will also drive NGL growth given that over 65% of U.S. gas production contains recoverable NGLs, positioning ONEOK favorably for future NGL volume growth.

    04

    Refined Products System Flexibility and Market Dynamics

    The refined products and crude segment benefited from strong gasoline and diesel demand, favorable regional basis differentials, and high refinery utilization. The company's bidirectional pipeline system between the Mid-Continent and Gulf Coast provides a key advantage, attracting incremental volume and responding to market changes. Management anticipates a robust summer travel season supporting gasoline demand and continued strong diesel demand for the spring agricultural season, with additional hedges secured for fall volumes and extended into spring 2027.

    05

    Natural Gas Segment Outperformance and AI/LNG Demand

    The Natural Gas Pipeline segment outperformed expectations, benefiting from wider Waha to Katy price differentials and incremental marketing opportunities during Winter Storm Firm. While Waha to Katy differentials are expected to normalize📎, the company sees significant interest from data center-related opportunities in Oklahoma and Texas, with advanced discussions underway with several counterparties. LNG-related demand also remains strong, reinforcing the durability of natural gas pipeline assets and presenting new growth avenues.

    06

    Producer Activity and Volume Outlook

    Producer behavior remains disciplined, but the company observes some acceleration in completion activity, particularly among private and single-basin operators, supporting the 2026 volume outlook. This confidence is based on direct visibility into producer plans rather than an expectation of higher commodity prices. The diversity of ONEOK's producer base, balanced between large public companies, private operators, and private equity-backed producers, provides both scale and durability while allowing activity to adjust incrementally.

    AI-generated summary of the company’s earnings call. Not investment advice.