ONEOK Partners, L.P. (NYSE:OKS) Q1 2016 Earnings Conference Call - Final Transcript

May 04, 2016 • 11:00 am ET


ONEOK Partners, L.P. (NYSE:OKS) Q1 2016 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the First Quarter 2016 ONEOK and ONEOK Partners Earnings Call.

At this time, I'd like to turn the conference over to today's host Mr. T.D. Eureste. Please go ahead, sir.

T.D. Eureste

Thank you, and welcome to ONEOK and ONEOK Partners first quarter 2016 earnings conference call. A reminder that statements made during this call that might include ONEOK or ONEOK Partners expectations or predictions should be considered forward-looking statements and are covered by the Safe Harbor provisions of the Securities Acts of 1933 and 1934.

Actual results could differ materially from those projected in any forward-looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings.

Our first speaker is Terry Spencer, President and CEO of ONEOK and ONEOK Partners. Terry?

Terry K. Spencer

Thank you, T.D. Good morning, and thank you for joining today. As always, we appreciate your continued interest and investment in ONEOK and ONEOK Partners. On this conference call is Walt Hulse, Executive Vice President of Strategic Planning and Corporate Affairs; Derek Reiners, Chief Financial Officer; and Senior Vice Presidents, Wes Christensen, Operations; Sheridan Swords, Natural Gas Liquids; Kevin Burdick, Natural Gas Gathering and Processing; and Phill May, Natural Gas Pipelines.

I'll begin with a few opening remarks, then Derek will give a brief financial update and then I will wrap up with highlights of the first quarter, our outlook for the remainder of the year and our ethane opportunity. To begin, first quarter 2016 performance was a result of the progress made last year by continuing to focus on increasing our fee-based earnings, reducing commodity price risks in our businesses, project execution and making prudent financial decisions all while continuing to operate safely and responsibly.

In this challenging market conditions, we have relied on our strengths, which for ONEOK Partners are predominantly fee-based earnings, our uniquely positioned assets and our dedicated employees. Our competitive advantage is our integrated network of assets that fit and work well together. Our 37,000-mile network of pipelines, processing plants and fractionators are well positioned to withstand the cyclical nature of the industry.

Our assets in the Williston Basin have served us well, and we continue to benefit from the basin's large natural gas reserve base and inventory of flared NGL-rich natural gas. Our Natural Gas Pipeline segment remained well positioned to expand its fee-based natural gas export capabilities, particularly to Mexico where we have key relationships through our joint venture Roadrunner Gas Transmission Pipeline and our extensive Natural Gas Liquids business maintains a growing position in the Rockies, Texas and emerging STACK and SCOOP plays in Oklahoma, providing us a large and diversified base with which to serve our end-use customers.

The partnership's distribution coverage increased to 1.06 times in the first quarter, up from 1.03 times in the fourth quarter 2015 and significantly higher compared to the beginning of 2015 which is a reflection of our increasing stable cash flow as we now have a significant amount