ONEOK Partners, L.P.
) has presented its full-year 2013 financial guidance. The net
income of the partnership is expected to be in the range of $935
million to $1.015 billion in 2013, up 13% year over year from the
band of $860 million to $910 million.
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Apart from its net income forecast, ONEOK Partners also provided
its full-year 2013 operating income, earnings before interest,
taxes, depreciation and amortization ("EBITDA"), capital
expenditure, and cash distribution guidance.
ONEOK Partners expects midpoint of its full-year 2013 operating
income to increase to $1.027 billion from $0.948 billion as per
2012 guidance. As far as the partnership's 2013 EBITDA is
concerned, it is expected to be in the range of $1.36 billion to
$1.48 billion versus current 2012 guidance midpoint of nearly $1.3
The partnership's strong 2013 financial guidance has been primarily
driven by an increase in anticipated natural gas gathering and
processing volumes, along with higher natural gas liquids ("NGL")
gathering volumes from ONEOK Partners' several growth projects.
These positive factors might be partially offset by a decline in
expected NGL optimization margins and lower-than-expected NGL price
differentials in the partnership's NGL segment.
In second-quarter 2012, ONEOK Partners reported mixed results due
to positive NGL price differentials and higher NGL volumes gathered
and fractionated related to recent expansion of Mid-Continent NGL
gathering system. However, these were negatively impacted by a weak
performance from Energy Services segment due to lower natural gas
and NGL product prices.
The Zacks Consensus Estimates for third-quarter 2012, full-year
2012 and full-year 2013 are currently pegged at 71 cents, $2.97 and
$2.69, per unit respectively.
We believe strong segment trend will continue in 2013, which will
subsequently yield improved performance. ONEOK Partners' intention
to boost long-term unitholder value with a
2-cent-per-unit-per-quarter distribution increase, subject to
approval; geographically diversified gas assets; rebalancing of
capital structure and continuous investments in its several organic
growth projects are expected to improve the partnership's
forthcoming financial performance.
We know that ONEOK Partners strongly follows internal growth
strategy. In 2011 - 2015, the partnership plans to invest $5.7 -
$6.6 billion, including $2.5 billion as per full-year 2013
guidance, in several internal growth projects. ONEOK Partners
expects its future growth to primarily come from the Bakken Shale
and Three Forks in the Mid-Continent region. The partnership
expects these facilities to provide a reliable and cost-effective
means of transportation compared to other alternatives, which
subsequently curtail ONEOK Partners' cost of operation.
However, we are skeptical about chances of increase in interest
expenses due to new debt issuance, uncertain weather condition,
chances of volatile equity and credit markets and unpredictable
commodity prices, which may significantly impact ONEOK Partners'
financial results in the future.
ONEOK Partners, L.P. currently retains a short term Zacks #3 Rank
Tulsa, Oklahoma-based ONEOK Partners, L.P. is one of the largest
publicly traded master limited partnerships and a leader in
gathering, processing, storing and transporting of natural gas in
the U.S. The partnership competes with
Plains All American Pipeline, L.P.