SECOND QUARTER 2020 RESULTS J U LY 2 8 , 2 0 2 0 - PowerPoint PPT Presentation

SECOND QUARTER 2020 RESULTS J U LY 2 8 , 2 0 2 0

FORWARD-LOOKING STATEMENTS Statements contained in this presentation that include company expectations, outlooks or predictions should be considered forward-looking statements that are covered by the safe harbor protections provided under federal securities legislation and other applicable laws. It is important to note that actual results could differ materially from those projected in such forward-looking statements. For additional information that could cause actual results to differ materially from such forward-looking statements, refer to ONEOK’s Securities and Exchange Commission filings. This presentation contains factual business information or forward-looking information and is neither an offer to sell nor a solicitation of an offer to buy any securities of ONEOK. ONEOK’s news release issued on April 28, 2020, provided that, given the current environment, continued commodity price and market volatility, and uncertainty surrounding the COVID-19 pandemic, ONEOK was withdrawing its 2020 guidance expectations and 2021 outlook, originally provided on Feb. 24, 2020, as well as its prior dividend guidance, and that previously provided guidance and outlooks should no longer be relied upon. All references in this presentation to outlooks are based on the news release issued on April 28, 2020, as updated by the news release dated July 28, 2020, and are not being updated or affirmed by this presentation. P A G E 2

RESPONDING TO COVID-19 ONEOK - AN ESSENTIAL CRITICAL INFRASTRUCTURE BUSINESS Community Employee and Business Support Contractor Support Sustainability We continue to monitor and take action Approximately $600,000 pledged to We remain focused on operating assets considering CDC and government support COVID-19 relief across safely, reliably and in an environmentally guidelines related to COVID-19. operating areas, including: responsible manner while continuing to provide essential services for customers ♦ Partnering with the North Dakota Community ♦ All employees are working from home who are and communities. Foundation to create the ONEOK Hospitality able and we’ve enacted enhanced safety protocols Employee COVID-19 Relief Fund. and physical distancing for critical employees and ♦ Proactively postponed several capital-growth contractors continuing to work on-site. projects to enhance financial strength and flexibility ♦ Partnering with local organizations to create the during this period of market uncertainty. Tulsa Restaurant Employee Relief Fund. ♦ Provided benefit adjustments including waiving ♦ Continuing to hire new employees for critical charges for virtual visits and COVID-19 diagnostic ♦ Continuing to evaluate support for public positions. tests. schools and community organizations to ♦ Maintaining regular communication with the support those on the front line who help meet ♦ ONEOK opted into CARES Act 401(k) loan financial community. immediate needs. deferral and penalty-free hardship withdrawal ♦ Prioritizing communication, including frequent programs for employees. updates to our board of directors from executive management. P A G E 3

SOLID BUSINESS MODEL – PROVEN PERFORMANCE BUILT TO WITHSTAND VARIOUS MARKET CONDITIONS • Solid investment-grade balance sheet Financial Strength and Flexibility  S&P: BBB (stable) – affirmed April 30, 2020  Moody’s: Baa3 (stable) – affirmed May 26, 2020 • $2.5 billion credit facility – no borrowings outstanding Significant Liquidity • Senior notes issuances: $1.75 billion (March 2020) and $1.5 billion (May 2020) • $937 million equity offering (June 2020) • No single customer represents more than 10% of ONEOK’s revenue Well-capitalized Customers • Contract structures provide limited counterparty credit exposure • Announced $900 million decrease in 2020 capital spending by pausing several projects Capital Discipline • Flexibility to further adjust capital or resume projects • 40,000-mile network of NGL and natural gas pipelines Integrated Assets with Significant • Infrastructure in the most prolific U.S. shale basins Earnings Power • Significant earnings power and operating leverage from recently completed projects P A G E 4

REGIONAL VOLUME UPDATE NATURAL GAS LIQUIDS NATURAL GAS GATHERING AND PROCESSING ◆ Rocky Mountain: ◆ Rocky Mountain: July NGL raw feed throughput volumes are exceeding second quarter July natural gas volumes processed are exceeding second quarter   average volumes and increasing average volumes and increasing ◆ Mid-Continent: ◆ First half 2020 well connections: June 2020 ethane volumes increased approximately 60,000 bpd Rocky Mountain: 195   compared with the first quarter 2020 Mid-Continent: 19  Average NGL Raw Feed Throughput Volumes (a) Average Natural Gas Gathered and Processed Volumes Second Quarter 2020 Average Bundled First Quarter Second Quarter First Quarter Second Quarter Region First Quarter 2020 Rate (per gallon) 2020 – Average 2020 – Average 2020 – Average 2020 – Average Region Gathered Gathered Processed Processed Rocky Mountain (b) ~ 28 cents (e) 211,000 bpd 161,000 bpd Volumes Volumes Volumes Volumes Mid-Continent (c) ~ 9 cents (e) 519,000 bpd 521,000 bpd Rocky Mountain 1,161 MMcf/d 861 MMcf/d 1,132 MMcf/d 829 MMcf/d Gulf Coast/Permian (d) 361,000 bpd 328,000 bpd ~ 6 cents (f) Mid-Continent 909 MMcf/d 825 MMcf/d 811 MMcf/d 733 MMcf/d Total 1,091,000 bpd 1,010,000 bpd Total 2,070 MMcf/d 1,686 MMcf/d 1,943 MMcf/d 1,562 MMcf/d (a) Represents physical raw feed volumes on which ONEOK charges a fee for transportation and/or fractionation services. (b) Rocky Mountain: Bakken NGL and Elk Creek NGL pipelines. (c) Mid-Continent: ONEOK transportation and/or fractionation volumes from Overland Pass pipeline (OPPL) and all volumes originating in Oklahoma, Kansas and the Texas Panhandle. (d) Gulf Coast/Permian: West Texas LPG pipeline system, Arbuckle Pipeline volume originating in Texas and any volume fractionated at ONEOK’s Mont Belvieu fractionation facilities received from a third-party pipeline. (e) Includes transportation and fractionation. (f) Primarily transportation only. P A G E 5

WILLISTON BASIN INCREASING GAS-TO-OIL RATIOS (GOR) AND FLARING PRESENT OPPORTUNITIES North Dakota Natural Gas Produced and Flared North Dakota Natural Gas and Crude Oil Produced 3,500 3,500 40% 35% 3,000 3,000 30% 2,500 Gas Produced (MMCf/d) 2,500 25% 2,000 % Flared 2,000 20% 2.25 GOR 1,500 (May 2020) 15% 1,500 1.69 GOR 1,000 (Mar. 2017) 10% 2.11 GOR (Jan. 2020) 1,000 • May statewide flaring: ~220 MMcf/d 500 5% • Estimated flaring on ONEOK’s dedicated 1.46 GOR acreage: ~125 MMcf/d (Jan. 2016) - 0% 500 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Oil Produced (BBl/d) Gas Produced (MMcf/d) Gas Produced (MMcf/d) % of Gas Flared Source: North Dakota Industrial Commission and North Dakota Pipeline Authority. P A G E 6

BUSINESS SEGMENT PERFORMANCE Q2 2020 VS. Q1 2020 ADJUSTED EBITDA VARIANCES ◆ Natural gas liquids decreased $45.1 million decrease in exchange services due primarily to $60.5 million in lower volumes across ONEOK’s operations and $6.5 million in lower  earnings from unfractionated NGLs in inventory, offset partially by $20.2 million in lower transportation and third-party fractionation costs. $11.3 million decrease in optimization and marketing due primarily to lower product price differentials and lower optimization volumes, offset partially  by higher earnings related to the sale of NGL products previously held in inventory. $7.5 million decrease in equity earnings due primarily to lower volumes on the Overland Pass Pipeline.  $4.9 million decrease in transportation and storage services primarily from lower volumes and storage revenue on the North System (a) .  $4.8 million increase in operating costs due primarily to higher property taxes.  ◆ Natural gas gathering and processing decreased $52.3 million decrease due primarily to lower volumes in the Williston Basin and Mid-Continent region from production curtailments.  $27.9 million decrease due primarily to lower realized commodity prices impacting fee-based contracts with a percent of proceeds component.  $13.1 million increase from lower operating costs due primarily to lower materials and supplies expenses and outside services .  ◆ Natural gas pipelines decreased $8.9 million decrease in equity earnings on Northern Border Pipeline due primarily to scheduled maintenance and seasonality.  $2.1 million decrease in net retained fuel due to lower volumes and lower equity gas sales.  $4.3 million increase due primarily to a $13.5 million contract settlement, offset partially by lower firm transportation and interruptible revenues.  $3.8 million increase from lower operating costs due primarily to reduced discretionary expenses and lower supplies expenses, offset partially by  higher employee-related costs. (a) The North System is a FERC-regulated NGL pipeline that transports NGL purity products and various refined products throughout the Midwest markets, particularly near Chicago, Illinois. P A G E 7