Skip to content
    OKE
    Earnings call· Jun 2026(Q2 FY26)

    ONEOK INC /NEW/ Q2 FY26 earnings call OKE

    Aug 4, 2026 Source

    Executive summary

    ONEOK Q2 FY26 — Raised Guidance, Record NGL Volumes, and Extended Cash Tax Runway

    ONEOK delivered a strong second quarter, driven by record NGL throughput and robust refined products demand, leading to a second upward revision of its 2026 financial guidance. The company's integrated asset footprint continues to capture growth opportunities across multiple commodities and regions, supported by strategic project completions and an extended cash tax runway. Management remains confident in its long-term mid- to high single-digit adjusted EBITDA growth target, underpinned by operational leverage and a growing pipeline of high-return organic projects.

    Highlights

    5

    • Raised 2026 financial guidance for the second time, increasing adjusted EBITDA midpoint by $250 million to $8.35 billion.

    • Achieved record NGL throughput volumes, with Gulf Coast Permian NGL volumes increasing 15% year-over-year.

    • Extended cash tax runway by approximately 2 years until 2031, due to $2.6 billion in cumulative cash tax benefits.

    • Denver area refined products expansion placed in service, adding 35,000 barrels per day of capacity.

    • Reached 80% targeted contracting threshold for 200,000 barrels per day of LPG export capacity.

    Concerns

    4

    • NGL segment experienced a slight reduction in overall margin due to increased ethane recovery, which typically commands lower transport rates than C3+ products.

    • Mid-Continent contracts rolling off may reprice at current market rates, potentially impacting future margins, though factored into guidance.

    • Natural Gas Pipeline segment expects lower earnings in the second half of the year as Permian takeaway capacity comes online and Waha-Katy differentials narrow.

    • Final Investment Decisions (FIDs) for large-scale AI data center projects have taken longer than anticipated.

    Guidance & targets

    9
    CategoryTargetConfidence
    2026 Net Income midpoint
    $3.6 billion
    high materiality
    High
    2026 Diluted Earnings Per Share midpoint
    $5.68
    high materiality
    High
    2026 Adjusted EBITDA midpoint
    $8.35 billion
    high materiality
    High
    2026 Capital Expenditure
    $2.7 billion to $3.2 billion
    high materiality
    High
    Long-term Adjusted EBITDA growth
    mid- to high single-digit
    high materiality
    High
    Long-term Leverage Target
    3.5x debt-to-EBITDA
    medium materiality
    High
    Cash Tax Payments Deferral
    until 2031
    high materiality
    High
    EPS growth rate
    exceed EBITDA growth rate
    medium materiality
    High
    Bakken volume growth (implied in long-term outlook)
    low single-digit
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Natural Gas Liquids
    Rate throughput volumes increased 7% year-over-year, driven by increased customer activity, improved seasonal demand, and producer activity. Utilization continued to increase across the system. Higher NGL pricing and export demand supported ethane recovery, which is expected to remain favorable into Q3. Permian NGL volumes saw a strong increase in July/August due to narrowing Waha to Katy spread.
    Gulf Coast Permian NGL volumes: up 15% year-over-yearRocky Mountain NGL volumes: increased year-over-yearEthane recovery: continued strength
    		—7%——
    Refined Products and Crude
    Demand fundamentals remained positive, supporting an 8% year-over-year increase in refined products volumes, driven by gasoline and diesel demand and high refinery utilization. Blended volumes were strong. Seabrook crude export JV saw record oil loadings in May. Midland crude gathering experienced increased activity with over 30 rigs operating on acreage. Bidirectional connectivity between Mid-Continent and Gulf Coast is a competitive advantage.
    Refined Products volumes shipped: increased 8% year-over-yearBlended volumes: strongSeabrook crude export joint venture throughput: increased 20% compared with Q1Midland crude gathering volumes: increased 10% compared with Q1Rigs on Midland crude gathering acreage: >30 rigs
    		—8%——
    Natural Gas Gathering and Processing
    Volumes increased across all regions compared with both Q2 last year and Q1 this year. Producer activity remains healthy, and development plans track expectations. Permian capacity expansions position the company to support increased activity. Both Mid-Continent and Rocky Mountain regions saw seasonal pickup in activity driven by higher well completions.
    Rigs in Mid-Continent: 11 rigsRigs in Rocky Mountain: 13 rigs (up 2 rigs QoQ)
    		—increasedincreased—

    Operational metrics

    10
    Adjusted EBITDA
    $2.12 billionup 7% year-over-year
    Q2 FY26

    Driven by volume growth and strong segment level performance.

    Net Income
    $967 millionup 13% year-over-year
    Q2 FY26

    Reported net income for the quarter.

    Diluted Earnings Per Share
    $1.53
    Q2 FY26

    Reported diluted EPS for the quarter.

    Cumulative Cash Tax Benefits
    $2.6 billioncompared with $1.5 billion previously
    cumulative

    Based on latest analysis of tax legislation (One Big Beautiful Bill and Inflation Reduction Act), extending cash tax runway by approximately 2 years until 2031.

    LPG Export Capacity Contracted
    80%
    current

    Targeted contracting threshold reached for LPG export capacity under construction as part of the export dock joint venture.

    Denver Refined Products Expansion Capacity
    35,000
    current

    Adds capacity into a fast-growing market and provides a new direct jet fuel connection to Denver International Airport.

    Permian Processing Capacity (post-completion)
    nearly 2.4 billion
    post-completion

    Total processing capacity upon completion of current Permian projects.

    Power Plant Demand Supply Agreement
    1 gigawatt
    future

    Supply agreement awarded for power plant demand, expanding participation in a growing source of natural gas demand.

    West Texas NGL Pipeline Capacity
    740,000
    current

    Capacity after the mainline expansion, providing plenty of room for additional NGLs.

    EnLink Legacy Volumes to ONEOK NGL Pipeline
    over 50,000
    future

    Volumes previously contracted under EnLink on a third-party pipeline will roll over to ONEOK's NGL pipeline as contracts expire.

    Industry KPIs

    6
    MetricValueDetails
    D c efficiency rig activity11rigs
    Pipeline throughput storage740,000bbl/d
    Sanctioned expansion backlogbuildingqualitative
    Basin level production volume100,000bbl
    FCF shareholder distributionsexceed EBITDA growth rate%
    Take or pay contract structure80%%

    Orderbook & backlog

    2
    LPG Export Capacity Contracted80% of 200,000 bbl/dQ2 FY26

    Targeted contracting threshold reached for capacity under construction; discussions for contracts extending into the next decade.

    Seabrook Crude Export Joint VentureHighly contractedQ2 FY26

    Under firm take-or-pay agreements for the foreseeable future.

    Deals & partnerships

    2
    Multiple high-quality counterpartiesLong-term contracts for LPG export capacityextending into the next decade

    Reached 80% targeted contracting threshold for 200,000 bpd LPG export capacity under construction as part of export dock joint venture.

    Power plantSupply agreement for natural gas demand

    Awarded a supply agreement for 1 gigawatt of power plant demand, further expanding participation in a growing source of natural gas demand.

    Capital programs

    6
    Denver Area Refined Products Expansioncompleted

    Benefit: 35,000 bbl/d capacity, new direct jet fuel connection to Denver International Airport

    Project adds capacity into one of the fastest-growing markets in the footprint.

    Permian Basin Delaware Plant Expansion Projectsunderway

    Benefit: 110 million cubic feet per day

    On track for completion during the third quarter to support growing producer activity.

    Bighorn Plant (Permian Basin)underway

    Benefit: 400 million cubic feet per day (upsized from 300 million)

    Capacity increased based on production outlooks; remains on schedule for completion.

    Cutter 2 Plant (Powder River Basin)underway

    Benefit: 120 million cubic feet per day

    Construction has begun on this plant, following the initial 60 MMcf/d Cutter plant.

    Medford Fractionation Project Phase 1underway

    Benefit: 100,000 bbl/d Mid-Continent fractionation capacity

    Remains on track for completion during the fourth quarter.

    Medford Fractionation Project Phase 2underway

    Expected to be completed in the first quarter of 2027.

    Risks & headwinds

    4
    NGL margin reduction from increased ethane recoveryQ2 FY26

    a little bit of reduction in the margin

    Mitigation: Increased overall NGL volumes and strong Permian NGL uptake partially offset this.

    Mid-Continent contract re-negotiation risknext year

    some of these contracts come back to more of what we see the market is at this time

    Mitigation: Factored into guidance numbers; value can be shifted between basins with large contractors.

    Narrowing Permian natural gas differentialssecond half of the year

    lower earnings

    Mitigation: Consistent with full-year outlook and guidance assumptions; offset by overall strong performance.

    Delays in AI data center project FIDscurrent

    taken a little bit longer than what we had anticipated

    Mitigation: Continued commercial discussions reinforce confidence in scale and durability of opportunity; strong competitive position.

    What to watch in Q3 FY26

    5

    Permian NGL volume growth

    next quarter
    CurrentStrong increase in July/August
    TargetContinued strong growth

    Why it matters

    Sustained strong NGL volumes from third-party plants in the Permian, driven by Waha-Katy spread, could provide further upside to guidance.

    We've seen here in the last month or 2, a strong increase in our volumes, a substantial increase in our volumes. And really look at it, it was kind of tied to the way Waha to Katy spread. As that spread came in and Waha became positive. We saw a lot more volume than we had anticipated behind our NGL system come on in that area.

    Q&A highlights

    6

    How much of the mid- to high single-digit EBITDA growth is from white space utilization versus new infrastructure, and what are the key vertical drivers?

    Pierce Norton explained that growth is driven by multiple reinforcing factors, not just white space, including Permian, Mid-Continent, Powder River growth, stable Bakken growth, rising U.S. LPG exports, shifting global crude demand, and increasing natural gas demand from LNG exports, power generation, and industrial use. These factors underpin confidence in the long-term growth target across all business segments.

    “So it's not just one thing, it's a multitude of things, and it's across all 5 of our business segments.”

    asked by Spiro Dounis · answered by Pierce Norton

    3 min read6 chapters

    Detailed Narrative

    01

    Strategic Asset Footprint & Integration

    ONEOK's integrated platform, spanning natural gas, NGLs, crude oil, and refined products, is strategically positioned across premier growth basins and export markets. This connectivity provides multiple avenues for earnings growth, asset optimization, and capital allocation, not confined to a single commodity or region. The company's confidence in its mid- to high single-digit adjusted EBITDA growth target over the next 5-7 years is reinforced by this diversified and integrated system, which allows it to capture value from various demand drivers.

    02

    Financial Strength & Capital Allocation

    The company reported strong Q2 performance, leading to a second upward revision of its 2026 financial guidance, with the adjusted EBITDA midpoint now at $8.35 billion. Significant cash tax benefits of $2.6 billion have extended the cash tax runway until 2031, enhancing future free cash flow generation. This robust financial position provides flexibility to invest in the business, return capital to shareholders, and pursue long-term value-creating opportunities, while progressing towards a long-term leverage target of 3.5x debt-to-EBITDA.

    03

    Project Execution & Capacity Expansion

    ONEOK continues to advance its project portfolio, with several major projects nearing completion or recently placed in service. The Denver area refined products expansion, adding 35,000 bpd, is now operational. In the Permian Basin, 110 MMcf/d of Delaware Basin plant expansion projects are on track for Q3 completion, and the Bighorn plant capacity was upsized to 400 MMcf/d for mid-2027 completion. Additionally, construction has begun on the 120 MMcf/d Cutter 2 plant in the Powder River Basin, expected online in Q1 2028, and Medford fractionation Phase 1 (100,000 bpd) is on track for Q4 completion.

    04

    Commercial Momentum & Demand Drivers

    Commercial activity remained strong across all four business segments, driven by increased customer activity, healthy domestic and international demand, and continued production growth in key basins. NGL throughput volumes increased 7% year-over-year, with significant growth in the Gulf Coast Permian region. Refined products volumes shipped increased 8% year-over-year, supported by strong gasoline and diesel demand. Natural gas gathering and processing volumes also increased across all regions, with healthy producer activity and rig counts.

    05

    LPG Export & Refined Products Market

    ONEOK has successfully reached its targeted contracting threshold of 80% for its 200,000 bpd LPG export capacity, with robust customer interest extending into the next decade. The Seabrook crude export joint venture remains highly contracted under take-or-pay agreements, with throughput increasing 20% quarter-over-quarter. The refined products system, with its unique bidirectional connectivity, continues to optimize operations and connect supply with strong demand markets, including increasing pulls for U.S. refined products exports along the Gulf Coast.

    06

    Emerging Demand: Power Generation & Data Centers

    The company is actively pursuing opportunities in emerging demand sectors, having secured a supply agreement for 1 gigawatt of power plant demand, further expanding its participation in natural gas-fired electric generation. Commercial discussions are also advancing for multiple large-scale data center developments, reinforcing confidence in the scale and durability of this opportunity, despite some delays in Final Investment Decisions. ONEOK's intrastate natural gas pipeline system is well-positioned to serve future demand growth from these sectors.

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