ONEOK Partners Announces Completion of More Than $500 Million in Capital-Growth Projects

TULSA, Okla., Oct. 30, 2014 /PRNewswire/ -- ONEOK Partners, L.P. (NYSE: OKS) today announced the completion of more than $500 million in capital-growth projects, including:

• The 100-million cubic feet per day (MMcf/d) Garden Creek III natural gas processing facility and related infrastructure in McKenzie County, North Dakota;
• The expansion of the Bakken Natural Gas Liquids (NGL) Pipeline that increases the pipeline's capacity to 135,000 barrels per day (bpd) from 60,000 bpd. The Bakken NGL Pipeline is an approximately 600-mile pipeline that transports unfractionated NGLs from the Bakken Shale in the Williston Basin to the partnership's 50 percent-owned Overland Pass Pipeline, a 760-mile NGL pipeline extending from southern Wyoming to Conway, Kansas; and
• The Niobrara NGL Lateral, an NGL pipeline lateral that connects ONEOK Partners' Sage Creek natural gas processing facility in the NGL-rich Niobrara Shale formation in Wyoming's Powder River Basin to the Bakken NGL Pipeline.

These completed projects are part of the partnership's previously announced $8.3 billion to $9.0 billion capital-growth program through 2016.

Garden Creek III plant completed:

The Garden Creek III plant, a 100-MMcf/d natural gas processing facility in eastern McKenzie County, North Dakota, is now complete. The plant, originally scheduled for completion during the first quarter 2015, was completed more than three months ahead of schedule.

"The Garden Creek III plant is the latest example of ONEOK Partners' ongoing commitment to building essential natural gas and natural gas liquids infrastructure to meet the needs of our customers in the Williston Basin," said Terry K. Spencer, president and chief executive officer of ONEOK Partners. "The completion of the Garden Creek III plant increases ONEOK Partners' Williston Basin natural gas processing capacity to more than 600 MMcf/d, which is six times more than our natural gas processing capacity in the region was in 2010, when we began our latest capital-growth campaign.

"Delivering this new facility well ahead of schedule is another positive step toward reducing natural gas flaring in North Dakota," Spencer added.

Garden Creek III's natural gas processing capacity is expected to increase to 120 MMcf/d during the fourth quarter 2015 following the completion of the partnership's previously announced capital investment to construct additional natural gas compression facilities to take advantage of additional natural gas processing capacity at its Garden Creek and Stateline plants.   

The partnership's Williston Basin natural gas processing capacity is expected to increase to approximately 1.2 billion cubic feet per day (Bcf/d) in the third quarter 2016 following the completion of the previously announced Lonesome Creek, Bear Creek and Demicks Lake natural gas processing plants, and the completion of additional natural gas compression facilities.

ONEOK Partners is the largest independent operator of natural gas gathering and processing facilities in the Williston Basin, with a natural gas gathering system of more than 6,500 miles and more than 3 million net acres where production is dedicated to its systems. 

Bakken NGL Pipeline expansion completed:

An expansion of the Bakken NGL Pipeline is complete, increasing the pipeline's capacity to 135,000 bpd from an initial capacity of 60,000 bpd with the installation of additional pump stations. A previously announced second expansion, that will increase the pipeline's capacity to 160,000 bpd, is expected to be completed in the second quarter 2016.

"The expansion of the Bakken NGL Pipeline reflects our continuing commitment to provide NGL transportation capacity to producers actively developing shale plays within our operating footprint," Spencer said. "The expanded Bakken NGL Pipeline will accommodate increased NGL volumes from our announced and completed natural gas processing facilities in the Williston Basin and the Niobrara Shale in the Powder River Basin."

Niobrara NGL Lateral completed:

The Niobrara NGL Lateral, an NGL pipeline lateral that connects ONEOK Partners' Sage Creek natural gas processing facility in Wyoming to the partnership's existing Bakken NGL Pipeline, is complete. ONEOK Partners acquired the Sage Creek plant and related natural gas gathering and natural gas liquids infrastructure in 2013. 

Capital Projects:

The partnership has announced total investments of approximately $8.3 billion to $9.0 billion through 2016 for acquisitions and infrastructure growth projects related to natural gas gathering and processing and NGLs, which includes the projects described above.

These investments consist of approximately $4.5 billion for natural gas gathering and processing projects, and approximately $4.1 billion for NGL projects. 

In aggregate, these projects are expected to generate adjusted EBITDA multiples of five to seven times. The incremental earnings from these projects are expected to increase distributable cash flow and value to unitholders in the form of higher distributions.

EDITOR'S NOTE: 

View a map showing the locations of the Garden Creek III natural gas processing plant, the Bakken NGL Pipeline and the Niobrara NGL Lateral.

NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURES: 

Adjusted EBITDA and distributable cash flow (DCF) levels are financial measures not defined by the generally accepted accounting principles in the United States (GAAP). ONEOK Partners has disclosed in this news release anticipated adjusted EBITDA and distributable cash flow (DCF) levels that are non-GAAP financial measures. Adjusted EBITDA and DCF are used as a measure of the partnership's financial performance. Adjusted EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, income taxes and allowance equity funds used during construction. DCF is defined as adjusted EBITDA, computed as described above, less interest expense, maintenance capital expenditures and equity earnings from investments, adjusted for cash distributions received and certain other items.

The partnership believes the non-GAAP financial measures described above are useful to investors because these measurements are used by many companies in its industry as a measurement of financial performance and are commonly employed by financial analysts and others to evaluate the financial performance of the partnership and to compare the financial performance of the partnership with the performance of other publicly traded partnerships within its industry.

The GAAP measure most directly comparable to adjusted EBITDA and DCF is net income. Adjusted EBITDA and DCF should not be considered an alternative to net income, earnings per unit or any other measure of financial performance presented in accordance with GAAP.

These non-GAAP financial measures exclude some, but not all, items that affect net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies. Furthermore, these non-GAAP measures should not be viewed as indicative of the actual amount of cash that is available for distributions or that is planned to be distributed for a given period nor do they equate to available cash as defined in the partnership agreement.

This news release references forward-looking estimates of annual adjusted EBITDA and adjusted EBITDA investment multiples projected to be generated by these projects. A reconciliation of estimated adjusted EBITDA to GAAP net income is not provided because the GAAP net income generated by the individual projects is not available without unreasonable efforts.

ONEOK Partners, L.P. (pronounced ONE-OAK) (NYSE: OKS) is one of the largest publicly traded master limited partnerships in the United States and is a leader in the gathering, processing, storage and transportation of natural gas in the U.S. and owns one of the nation's premier natural gas liquids (NGL) systems, connecting NGL supply in the Mid-Continent and Rocky Mountain regions with key market centers. Its general partner is a wholly owned subsidiary of ONEOK, Inc. (NYSE: OKE), a pure-play, publicly traded general partner, which owns 38.5 percent of the overall partnership interest as of June 30, 2014. 

For more information, visit the website at www.oneokpartners.com.

For the latest news about ONEOK Partners, follow us on Twitter @ONEOKPartners.

Some of the statements contained or incorporated in this news release are forward-looking statements as defined under federal securities laws. The forward-looking statements relate to the proposed acquisition, and the other referenced infrastructure growth projects related to natural gas gathering and processing and natural gas liquids, the schedule and costs to complete the proposed projects and related infrastructure, and expected generation of EBITDA and distributable cash flow from the proposed projects. These forward-looking statements are made in reliance on the safe-harbor protections provided under federal securities legislation and other applicable laws.

Forward-looking statements include the items identified in the preceding paragraph, the information concerning possible or assumed future results of our operations and other statements contained or incorporated in this news release identified by words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "should," "goal," "forecast," "guidance," "could," "may," "potential," "scheduled," and other words and terms of similar meaning.

You should not place undue reliance on forward-looking statements. Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Those factors may affect our operations, markets, products, services and prices. These and other risks are described in greater detail in Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K and in our other filings that we make with the Securities and Exchange Commission (SEC), which are available via the SEC's website at www.sec.gov. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Any such forward-looking statement speaks only as of the date on which such statement is made, and, other than as required under securities laws, we undertake no obligation to update publicly any forward-looking statement whether as a result of new information, subsequent events or change in circumstances, expectations or otherwise.

SOURCE ONEOK Partners, L.P.