ONEOK's Q4 2024: Unpacking Contradictions in Synergies, Producer Activity, and Capital Expenditures

These are the key contradictions discussed in ONEOK's latest 2024Q4 earnings call, specifically including: Synergy expectations and timing, producer activity expectations, CapEx expectations, and strategic benefits of the export JV with MPLX:



Strong Financial Performance and Growth:
- ONEOK reported a net income attributable to the company of $923 million or $1.57 per share for Q4 2024, and $3 billion or $5.17 per share for the full year.
- Adjusted EBITDA reached nearly $2.2 billion in Q4 2024 and over $6.7 billion for the full year.
- The growth was driven by contributions from strategic acquisitions, volume growth, and execution of synergy initiatives.

Guidance and Future Outlook:
- For 2025, ONEOK expects an 8% increase in earnings per share to a midpoint of $5.37, and a 21% increase in adjusted EBITDA to $8.225 billion.
- The outlook for 2026 includes expected earnings per share growth of over 15% and adjusted EBITDA growth approaching 10%.
- These projections are supported by higher earnings from recent acquisitions, volume growth, and completed growth projects.

Expansion and Synergies:
- ONEOK has expanded its pipeline network to approximately 60,000 miles, enhancing connectivity with key producers, basins, and market centers.
- The integration of Magellan, Medallion, and EnLink assets has identified $250 million of incremental synergies for 2025.
- The expansion and synergies are positioned to strengthen ONEOK's resilience and competitive advantage across market cycles.

Strategic Investments and Partnerships:
- ONEOK announced a joint venture with MPLX for a 400,000 barrel per day LPG export terminal in Texas City, Texas.
- The project aims to provide a wellhead-to-water solution, integrating ONEOK's Mont Belvieu storage facilities, and is expected to be completed in early 2028.
- The investment supports ONEOK's strategic goal to integrate its services across the value chain.