ONEOK, ONEOK Partners report lower fourth-quarter profit
BY ROD WALTON World Staff Writer
Tuesday, February 26, 2013
2/26/13 at 7:25 AM
Local companies are major players in a vital industry.
Fourth-quarter profit at ONEOK and ONEOK Partners fell due to lower commodity price differentials and a nearly $80 million loss in the energy services segment during 2012, but both entities held steady or grew annual earnings compared to the previous year, the natural gas companies announced Monday.
Tulsa-based ONEOK Inc. reported $360.6 million in net income for the year, the exact amount of profit reported for 2011. ONEOK-controlled ONEOK Partners LP, which owns and operates gathering and processing assets, logged $888 million in annual net income, compared with $830.3 million in 2011.
John Gibson, CEO for both ONEOK and the partnership, cited falling prices for natural gas liquids for the lower fourth-quarter earnings.
"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 said.
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 percent to 20 percent annually over a three-year period, compared with the previous expectation of 20 percent to 25 percent per year.
ONEOK Partners previously anticipated up to $1.015 billion in net income for 2013 but changed that guidance to a range topping out at $870 million this year.
"If industry conditions improve, we will re-evaluate our 2013 earnings guidance and distribution increases," Gibson said.
ONEOK's energy services segment, which markets natural gas, recorded an operating loss of $77.9 million for 2012, compared with $23.9 million in operating income one year earlier. The distribution segment, which includes Oklahoma Natural Gas and utilities in Kansas and Texas, totaled $215.7 million in operating income, an $18 million improvement over 2011's results.
Volume growth in the Williston Basin of the northern U.S. drove ONEOK Partners' $38.4 million increase in its natural gas gathering and processing business. The company completed the Stateline I and Garden Creek facilities there.
Natural gas gathering overall averaged 1.2 trillion British thermal units per day in the fourth quarter, up 14 percent from a year earlier due to increased well connections in the Williston Basin and in western Oklahoma. ONEOK Partners' fourth-quarter natural gas processing was up 27 percent compared with 2011 volumes.
ONEOK Partners LP earnings
|
2012 4Q |
2011 4Q |
2012 Full year |
2011 Full year |
| Operating Income |
$230.5M |
$317.5M |
$962.9M |
$939.5M |
| Net income |
$210.4M |
$298.6M |
$888M |
$830.3M |
| Net per unit |
$0.66 |
$1.26 |
$3.04 |
$3.35 |
ONEOK Inc. earnings
|
2012 4Q |
2011 4Q |
2012 Full-year |
2011 Full-year |
| Operating Income |
$299.6M |
$365M |
$1.10B |
$1.16B |
| Net income |
$111.5M |
$115.0M |
$360.6M |
$360.6M |
| Net per share |
$0.53* |
$0.55* |
$1.71* |
$1.68* |
*ONEOK split its stock 2-for-1 in May 2012.
Original Print Headline: ONEOK, Partners see quarterly profit drop
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
