ONEOK, Inc.

OKE · NYSE · USD

Can ONEOK keep growing fee-based earnings as producer drilling slows and the regional price spreads that lifted recent results close?

Last 4 earnings calls · through Q2 FY2026

Bull case

  • Integrated multi-molecule platform

    The bull case is that owning pipelines, processing plants, fractionation and export docks across four products lets ONEOK earn fees from many basins rather than one.

  • Projects built ahead of contracts

    Recently finished and near-finished projects were built ahead of the contracts they serve, so the volumes they add should reach the bottom line with little extra spending.

  • Raised guidance and growth target

    Management has replaced a withheld outlook with a stated multi-year growth target and raised full-year guidance twice, which the bull side reads as improving visibility.

  • Free cash flow improvement

    Deferred cash taxes and a falling capital budget should lift free cash flow, which management intends to direct toward debt reduction and shareholder returns.

Bear case

  • Producer drilling dependence

    The bear case is that ONEOK still earns most of its money from fees on volumes producers choose to ship, and lower crude prices have already trimmed drilling plans.

  • Location spread earnings fade

    A meaningful part of recent profit came from regional price differences that close as new pipelines are built, so the natural gas pipeline segment is guided lower.

  • Margin dilution from commodity sales

    Sales growth has come with weaker margins, because a large share of the added revenue is commodity-linked liquids marketing rather than fee-based transport.

  • Delayed deleveraging and data centers

    Leverage reduction has moved further out, and the largest new source of gas demand, data centers, has yet to produce a signed final agreement.

Bull and bear points

Growth & Execution

In short: New Permian capacity is coming online, while Bakken contract losses and slower drilling hold back volumes.

Bull · 3

  • Bighorn plant enlarged to 400 million cubic feet per day

    The next Permian plant was upsized from 300 million to 400 million cubic feet per day before construction finished, and 110 million cubic feet per day of Delaware expansions land this quarter.

    Q2 FY2026 call

  • LPG export dock reaches 80% contracted

    Management says it has signed 80% of the 200,000 barrels per day of LPG export capacity under construction, and customers are already discussing volumes into the next decade.

    Q2 FY2026 call

  • Multi-year growth target replaces withheld outlook

    A year ago management declined to give a 2026 growth rate and asked listeners to stay tuned; it now states a mid- to high single-digit adjusted EBITDA growth target for the next five to seven years.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • Bakken NGL contract moves to Kinder Morgan

    About 18,000 barrels per day of Rocky Mountain NGL volume shifts to a competitor's system in 2026, which is why management guides 2026 NGL throughput roughly flat despite growth elsewhere.

    Q4 FY2025 call

  • Data center projects bigger and slower to sign

    Projects once described as small and low-capital are now expected to cost far more each, and no AI data center deal has reached a final investment decision.

    Tone shiftQ3 FY2025 → Q2 FY2026

Profitability & Financial Strength

In short: Free cash flow should rise as capital spending falls, while margins narrowed and debt reduction slipped.

Bull · 2

  • Capital spending falls as major projects finish

    Free cash flow was $2.9 billion over the last twelve months, and management expects capital spending to settle at $2 billion to $2.5 billion as the largest projects complete.

    Q2 FY2026 call

  • Cash tax payments deferred to 2031

    A year ago management expected no meaningful cash taxes until 2029; updated tax analysis now puts the benefit near $2.6 billion and pushes the first meaningful payments to 2031.

    Tone shiftQ3 FY2025 → Q2 FY2026
Bear · 2

  • Gross margin down almost nine points year over year

    Gross margin was 23.3% in the second quarter, down 8.7 points from a year earlier, because added revenue is mostly lower-margin liquids sales rather than fee-based transport.

    Filed financials

  • Leverage target slips past the fourth quarter of 2026

    Net debt of $31.4 billion is barely changed from a year earlier, and management now says reaching the 3.5 times target will take longer than the fourth quarter of 2026 it once pointed to.

    Tone shiftQ3 FY2025 → Q4 FY2025

Market Position

In short: The network spans many basins and products, but location spreads and contract rollovers can swing earnings.

Bull · 2

  • Only system with two-way Mid-Continent to Gulf Coast access

    Management says ONEOK is the only refined products pipeline system able to move product both ways between the Mid-Continent and the Gulf Coast, letting it follow the strongest demand.

    Q1 FY2026 call

  • FERC rate index came in better than expected

    The final federal oil pipeline rate index was more favorable than ONEOK assumed, and management says the benefit compounds each year, though most refined products and crude volume prices at market rates.

    Q1 FY2026 call
Bear · 2

  • Waha to Katy spread earnings fade in the second half

    Management expects lower earnings from its natural gas pipelines in the second half as Permian takeaway capacity enters service and location price differences narrow.

    Q2 FY2026 call

  • Sunbelt Connector still short of customer commitments

    After an open season with strong interest, the Phoenix-area refined products project still lacks the committed volume needed for a final decision, and a competing project is chasing the same demand.

    Q4 FY2025 call