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Wyoming Pipeline Authority October 28, 2003

Wyoming Pipeline Authority October 28, 2003. Mark Quinlan Director Marketing. ONEOK – A Diversified Energy Company. Operate existing assets to improve returns Acquire assets that compliment and strengthen our core business Achieve an average growth of 10 percent in earnings annually.

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Wyoming Pipeline Authority October 28, 2003

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  1. Wyoming Pipeline Authority October 28, 2003 Mark Quinlan Director Marketing.

  2. ONEOK – A Diversified Energy Company • Operate existing assets to improve returns • Acquire assets that compliment and strengthen our core business • Achieve an average growth of 10 percent in earnings annually Production Gathering & Processing Transportation & Storage Marketing & Trading Distribution Business Strategy

  3. ProductionStrategy • Acquire and develop reserves • Expand footprint • Looking for Rockies Play • Exploitation Company Production Areas

  4. Production Total Production & Reserves (Bcfe)

  5. Gathering & ProcessingStrategy • Consolidate and rationalize assets • Business focus • Fee-based versus commodity spread • Mitigate processing margin volatility • Contract renegotiations • Change in operation ONEOK Processing Plants ONEOK Gathering Areas

  6. Transportation & StorageStrategy • Increase throughput and margins • Maintain competitive cost structure • Strategically expand network of storage and pipeline assets Storage Transportation

  7. DistributionStrategy • Focus on costs per customer • Look for acquisition opportunities Kansas Gas Service Company Oklahoma Natural Gas Company Texas Gas Service Company

  8. Financial Review

  9. Cash FlowNet of Acquisition Capital ($Million) $232.5 (a) $215 $341.6(a) $311.4(a) 2000 2001 2002 Estimated 2003 Surplus Dividends Shortage CapEx (a) Includes amounts reported as discontinued operations in 2002 Form 10-K.

  10. Operating Income Diversity Gathering & Processing 6% Distribution 26% Transportation & Storage 15% Production 6% Marketing & Trading 47% 2002 Est. $386 Million

  11. Strong Credit Quality 2001 2003 Equity35% Equity51% • Focus on maintaining strong credit ratings • A /Baa1 (S&P / Moody’s) • Focus on maintaining solid liquidity Debt49% Debt65%

  12. Forward Looking Statement Statements contained in this presentation that include company expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It is important to note that the actual results of company earnings could differ materially from those projected in any forward-looking statements. For additional information refer to ONEOK’s Securities and Exchange Commission filings.

  13. Marketing & Trading • Market and trade natural gas, natural gas liquids, crude oil and electricity • Trade around asset base to optimize margins • Lease gas storage and pipeline capacity assets • Located in the heart of the natural gas producing area • Provide service to most of the U.S.

  14. Marketing & TradingStrategy • Increase leased storage and pipeline capacity • Grow markets served Leased Storage

  15. Marketing & TradingOperating Revenues

  16. Marketing & TradingStorage Revenue Streams • Winter and summer spread • Demand peaking business • Call option strategy

  17. OEMT Strategy Firm Storage Firm Transportation Supply/Market Split Connected • OEMT’s success is derived from its ability to optimize and trade around assets Arbitrage ONEOK $ Reliability Optionality

  18. OEMT’s Pricing Methods • OEMT’s Pricing is Market sensitive and Producer Friendly • OEMT can create a portfolio of pricing if desired by the producer • OEMT’s utilizes a variety of pricing methods • Fixed price • Inside FERC first of the month index • Gas Daily index • NYMEX/Basis triggers

  19. OEMT Purchases • Volumes are purchased to fill OEMT’s transportation position and market commitments. • Purchases are not weather driven. • OEMT purchases baseload and swing volumes. • OEMT provides a reliable market for its producers.

  20. Rockies Transportation • OEMT holds a significant amount of long term transportation on KMIGT, WIC, Trailblazer, and Cheyenne Plains Pipeline Volume Term - KMIGT150,000MMBtu/day 9/30/07 • WIC 40,000 MMBtu/day 12/31/07 • Trailblazer 50,000 MMBtu/day 3/31/18 • Cheyenne Plains 95,000 MMBtu/day 3/31/15 - CIG 5,800 MMBtu/day 10/31/23

  21. Raton Basin MT Powder River Basin WY Bighorn Basin Wind River Basin Wind River Basin Glen Rock Denver-Julesburg Basin Green River Basin Kanda Cheyenne Hub KS KS KS Uinta Basin Uinta Basin Denver Piceance Basin Anadarko Basin UT CO AZ AZ NM Raton Basin TX TX TX CIG WIC PEPL NGPL Cheyenne Plains Trail Blazer Southern Star KN/Pony Express 3

  22. Mastio & Company’s Natural Gas Marketer Customer Satisfaction Study ONEOK Energy Marketing & Trading was rated 3rd in the Major Marketer Index for 2002.

  23. OEMT Conclusion • Expand Physical Trading • Grow Financial Trading • Emphasize Growth in the Rockies • Secure long term supply • Maximize transportation position to the Mid-continent

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