ONEOK, ONEOK Partners earnings rise despite lower natural gas margins
BY ROD WALTON World Staff Writer
Monday, February 25, 2013
Fourth-quarter profits fell on lower commodity price differentials and a nearly $80 million loss in its energy services segment for 2012, but both ONEOK Inc. and ONEOK Partners LP held steady or grew annual earnings compared to the previous year, the Tulsa-based natural gas firms announced Monday.
ONEOK Inc. gained $360.6 million in net income for the year ending Dec. 31, the exact amount of profit reported for 2011. The ONEOK-controlled ONEOK Partners, which owns and operates gathering and processing assets, totaled $888 million in annual net income, compared with $830.3 million one year earlier.
Both companies had profits for the fourth quarter, although the numbers were down from the comparable period in 2011. John Gibson, CEO for both ONEOK and the partnership, blamed the lower results on falling natural gas liquids prices.
“During the year, our ONEOK Partners segment benefited from the completion of several growth projects that increased natural gas and natural gas liquids volumes, while experiencing less favorable natural gas liquids price differentials and lower natural gas and natural gas liquids prices than in 2011,” Gibson said in a statement.
“Our natural gas distribution segment reported higher fourth-quarter and full-year results, benefiting from new rates in Oklahoma, Kansas and Texas and lower operating expenses, while our energy services segment continues to face a challenging market environment,” he added.
ONEOK and ONEOK Partners revised their earnings guidances downward due to the price environment for ethane and other NGLs. ONEOK now expects net income to rise by 15 to 20 percent annually over a three-year period, compared with the previous expectation of 20 to 25 percent per year.
ONEOK Partners previously had anticipated up to $1.015 billion in net income for 2013, but changed that guidance to a range ending at $870 million this year.
“If industry conditions improve, we will re-evaluate our 2013 earnings guidance and distribution increases,” Gibson said.
