A first quarter loss of nearly $142 million was reported Tuesday by ONEOK which amounted to a net loss of 34 cents a diluted share. It also had noncash impairment charges of $641.8 million or $1.17 per diluted share in the announcement made from Tulsa.
The company also reported a 10% increase in adjusted EBITDA to nearly $701 million.
Because of the COVID-19 pandemic, the company paused a handful of construction projects during the first three months of 2020, including a 200 million cubic feet a day Bear Creek natural gas processing plant expansion in the Williston Basin of North Dakota, a 125,000 barrel a day fractionator in Mont Belvieu, Texas, a 40,000 barrel a day expansion of its West Texas LPG pipeline system and a 65,000 barrel a day expansion of a Mid-Continent fractionation facility.
“In response to COVID-19, we continue to prioritize the health and safety of our employees and stakeholders while remaining focused on operating responsibly and providing the essential services that our customers rely on us for,” said Terry K. Spencer, ONEOK president and chief executive officer.
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.
Company leaders say because of the current economic environment, they think it is “impractical for ONEOK to provide traditional financial guidance for 2020 and beyond at this time.”
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.
“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,” added Spencer. “The company’s 2020 outlook better reflects a wider range of current and potential actions by producers, customers and energy markets.
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Source: ONEOK