ONEOK has continued its quarterly jumps in earnings as the firm had higher third quarter results, increasing its 2023 net income by $120 million and boosting EBITDA guidance by $125 million over the second quarter.
The growth came as ONEOK also acquired Magellan Midstream in the past month and followed a 13% in earnings in the second quarter of the year. It also saw a 28% increase in the fourth quarter of 2022.
Compared to the third quarter of last year, ONEOK revealed it had a 5% increase in net income to $454 million or 99 cents per diluted share. The adjusted EBITDA was 11% higher and totaled $1.001 billion. The EBITDA would have been $1.1 billion had it not been for $123 million in transaction costs, $35 milion in thirdo-party fractionation costs and $40 million contribution from six days of the newly acquired refined products and crude business.
ONEOK also saw increased business activity including an 18% boost in the Gulf Coast/Permian region NGL raw feed volumes, a 6% increase in volumes of the Rocky Mountain region NGL raw feed and a 12% jump in processed natural gas volumes.
It could see even more business with the recent connection of 166 wells in the third quarter, bringing the total to 450 more wells through the first nine months in the Rocky Mountain Region.
“ONEOK’s businesses continued to perform extremely well in the third quarter,” said Pierce H. Norton II, ONEOK president and chief executive officer.
“With the successful completion of our acquisition of Magellan, we’ve added significant free cash flow through primarily fee-based earnings from the new refined products and crude businesses and expected tax synergies, setting up a solid foundation for 2024 performance,” added Norton.
“We remain focused on serving our enhanced customer base, operating responsibly and fully integrating our businesses. ONEOK’s increased scale, scope and diversified operations are already enabling us to create exceptional value for our stakeholders.”
In explaining the possibility that its adjusted EBITDA could have been higher were it not for certain expenses, ONEOK also said some of its increase came about from an insurance settlement over the explosion and fire that happened in July 2022 at the company’s natural gas plant near Medford. The increase totaled $697 million and resulted from a favorable impact of $667 million in 2023 from the settlement gain of $779. The settlement was offset partially by $112 million in third-party fractionation costs and a $30 million unfavorable impact from a 45-day waiting period in 2022.
ONEOK announced in January that it won’t rebuild the fractionator and instead will build a new one in Mont Belvieu, Texas. The cause of the Medford fire and explosion has yet to be determined.
The company is also in the process of seeking approval of a rate increase from the Oklahoma Corporation Commission.