ONEOK Partners L.P. (OKS): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
ONEOK Partners' second-quarter 2014 earnings and revenues missed the Zacks Consensus Estimate. However, top line increased from the prior year, primarily due to higher natural gas volumes gathered, processed and sold, and a rise in natural gas liquids (NGL) sales volume as a result of completion of the growth projects. The partnership continues to expand its operations through strategic investments. The partnership's plan for several projects, including the new natural gas processing plants and allied infrastructure in Oklahoma and North Dakota, will enable it to meet increasing service demand from customers. However, volatility in commodity prices and stringent regulations make us cautious. Thus, we maintain our Neutral recommendation.

Overview:

Tulsa, OK-based ONEOK Partners L.P., one of the largest publicly traded master limited partnerships (MLPs), is a leader in the business of gathering, processing, storage and transportation of natural gas in the United States. In addition, the partnership operates major natural gas liquids (NGL) systems that connect NGL supplies in the Mid-Continent and Rocky Mountain regions with key market centers. The partnership also owns a 50% equity interest Overland Pass Pipeline, importing natural gas from Canada into the United States.

ONEOK Partners' NGL system in the Mid-Continent and the Gulf Coast include fractionators and storage in Mont Belvieu, TX Bushton and Conway, KS and Medford, OK. The partnership also owns interstate NGL distribution pipelines between Conway and Mont Belvieu, and NGL and refined petroleum products distribution pipelines that connect its Mid-Continent NGL infrastructure to Midwest markets, including Tennessee and Chicago.

The partnership's businesses are primarily divided into three segments: Natural Gas Gathering and Processing segment, which gathers and processes natural gas Natural Gas Pipelines segment, which operates regulated interstate and intrastate natural gas transmission pipelines and natural gas storage facilities and Natural Gas Liquids segment, which gathers, treats, fractionates and transports NGL and stores, markets and distributes NGL products.

ONEOK Inc. (OKE) through its wholly-owned subsidiary, ONEOK Partners GP, holds the entire 2% general partnership (GP) interest in ONEOK Partners L.P. In addition, ONEOK Inc. owns 43.3% of the overall partnership interest in ONEOK Partners L.P.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: NGL , OKE , OKS

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