ONEOK, Inc., a Bakken oil field stakeholder, announced first quarter 2020 financial results, provided a 2020 outlook and reduced 2020 capital expenditures.
First Quarter 2020 Results, Compared With The First Quarter 2019:
—Net loss of $141.9 million, resulting in a net loss of 34 cents per diluted share (EPS), which includes noncash impairment charges of $641.8 million, or $1.17 per diluted share.
—EPS of 83 cents per diluted share, excluding noncash impairment charges.
—10% increase in adjusted EBITDA to $700.8 million.
—1.35 times dividend coverage ratio.
—6% increase in NGL raw feed throughput volumes.
—5% increase in natural gas volumes processed.
—100% of natural gas transportation capacity contracted.
Given the current industry and economic environment, it is impractical for ONEOK to provide traditional financial guidance for 2020 and beyond at this time. Providing specific volume and commodity price guidance would not be appropriate for ONEOK due to the number of potential variations of outcomes that are possible for price forecasts, curtailment quantities and the duration and pace of economic recovery on a worldwide basis among other factors. ONEOK has performed a scenario analysis, and based on currently available information, believes the range of possible 2020 net income results will likely be between $500 million and $900 million, which includes the $641.8 million impact of first quarter impairment charges, and 2020 adjusted EBITDA results will likely be between $2,600 million and $3,000 million.
Additionally, growth capital expenditures have been further reduced from the March 11, 2020, decrease of $500 million, and are now expected to range from $1,400 million to $1,800 million, including more than $900 million spent in the first quarter 2020.
ONEOK has paused the majority of construction activities on the following projects, which can be restarted quickly when drilling activity resumes:
—The 200 million cubic feet per day (MMcf/d) Bear Creek natural gas processing plant expansion and related infrastructure in the Williston Basin;
—The 125,000 barrel per day (bpd) MB-5 fractionator and related infrastructure in Mont Belvieu, Texas;
—The additional 40,000 bpd West Texas LPG Pipeline system expansion; and
—The 65,000 bpd Mid-Continent fractionation facility expansions.
“Given the uncertainty around the global pandemic and its impact on commodity prices and global energy demand, the company’s 2020 financial guidance published on February 24, 2020, is not reflective of the prevailing economic downturn and its potential duration,” said Terry K. Spencer, ONEOK president and chief executive officer.. “The company’s 2020 outlook better reflects a wider range of current and potential actions by producers, customers and energy markets. While the near-term view of the world is changing every day, the long-term fundamentals of our strategic businesses remain strong and financially well-positioned to continue growth when global energy demand recovers.”