Wyoming Pipeline Authority October 28, 2003 Mark Quinlan Director Marketing. Mark Quinlan Director...
-
Upload
theodora-moore -
Category
Documents
-
view
214 -
download
0
Transcript of Wyoming Pipeline Authority October 28, 2003 Mark Quinlan Director Marketing. Mark Quinlan Director...
Wyoming Pipeline Authority October 28, 2003Wyoming Pipeline Authority October 28, 2003
Mark QuinlanDirector Marketing.
Mark QuinlanDirector Marketing.
ONEOK – A Diversified Energy CompanyONEOK – A Diversified Energy Company
Operate existing assets to improve returnsAcquire assets that compliment and strengthen
our core businessAchieve an average growth of 10 percent in
earnings annually
Operate existing assets to improve returnsAcquire assets that compliment and strengthen
our core businessAchieve an average growth of 10 percent in
earnings annually
ProductionProduction Gathering &Processing
Gathering &Processing
Transportation& Storage
Transportation& Storage
Marketing& TradingMarketing& Trading
DistributionDistribution
Business StrategyBusiness Strategy
ProductionStrategyProductionStrategy
Acquire and develop reserves
Expand footprint- Looking for Rockies Play
Exploitation Company
Acquire and develop reserves
Expand footprint- Looking for Rockies Play
Exploitation Company
Production AreasProduction Areas
ProductionProduction
28.49.6
72.2
272.0
0
50
100
150
200
250
300
1998 1999 2000 2001 2002E Post-Divestiture
Production Reserves
Total Production & Reserves (Bcfe)Total Production & Reserves (Bcfe)
Gathering & ProcessingStrategyGathering & ProcessingStrategy
ONEOK Processing PlantsONEOK Processing Plants
ONEOK Gathering AreasONEOK Gathering Areas
Consolidate and rationalize assets
Business focus- Fee-based versus commodity
spread
Mitigate processing margin volatility
- Contract renegotiations
- Change in operation
Consolidate and rationalize assets
Business focus- Fee-based versus commodity
spread
Mitigate processing margin volatility
- Contract renegotiations
- Change in operation
Transportation & StorageStrategyTransportation & StorageStrategy
StorageStorage
TransportationTransportation
Increase throughput and margins
Maintain competitive cost structure
Strategically expand network of storage and pipeline assets
Increase throughput and margins
Maintain competitive cost structure
Strategically expand network of storage and pipeline assets
DistributionStrategyDistributionStrategy
Kansas Gas Service CompanyKansas Gas Service Company
Oklahoma Natural Gas CompanyOklahoma Natural Gas Company
Texas Gas Service CompanyTexas Gas Service Company
Focus on costs per customerLook for acquisition
opportunities
Focus on costs per customerLook for acquisition
opportunities
Financial ReviewFinancial Review
Cash FlowNet of Acquisition CapitalCash FlowNet of Acquisition Capital
-$150
-$100
-$50
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
-$150
-$100
-$50
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
ShortageShortageSurplusSurplus CapExCapExDividendsDividends
$311.4(a)
$311.4(a)
$341.6(a)
$341.6(a)
$232.5 (a)
$232.5 (a)
20002000 2002200220012001
(a) Includes amounts reported as discontinued operations in 2002 Form 10-K.(a) Includes amounts reported as discontinued operations in 2002 Form 10-K.
($Million)($Million)
Estimated 2003Estimated 2003
$215$215
Operating Income DiversityOperating Income Diversity
2002 Est.
$386 Million
Gathering &Processing
6%
Marketing & Trading47%
Transportation & Storage
15%
Distribution26%
Production6%
Strong Credit QualityStrong Credit Quality
Focus on maintaining strong credit ratings- A /Baa1 (S&P / Moody’s)
Focus on maintaining solid liquidity
Focus on maintaining strong credit ratings- A /Baa1 (S&P / Moody’s)
Focus on maintaining solid liquidity
2003200320012001
Equity51%
Equity51%
Debt49%Debt49%
Equity35%
Equity35%
Debt65%Debt65%
Forward Looking StatementForward Looking Statement
Statements contained in this presentation that include company expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It is important to note that the actual results of company earnings could differ materially from those projected in any forward-looking statements. For additional information refer to ONEOK’s Securities and Exchange Commission filings.
Statements contained in this presentation that include company expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. It is important to note that the actual results of company earnings could differ materially from those projected in any forward-looking statements. For additional information refer to ONEOK’s Securities and Exchange Commission filings.
Marketing & TradingMarketing & Trading
Market and trade natural gas, natural gas liquids, crude oil and electricity
Trade around asset base to optimize marginsLease gas storage and pipeline capacity assetsLocated in the heart of the natural gas producing areaProvide service to most of the U.S.
Market and trade natural gas, natural gas liquids, crude oil and electricity
Trade around asset base to optimize marginsLease gas storage and pipeline capacity assetsLocated in the heart of the natural gas producing areaProvide service to most of the U.S.
Marketing & TradingStrategyMarketing & TradingStrategy
Leased StorageLeased Storage
Increase leased storage and pipeline capacity
Grow markets served
Increase leased storage and pipeline capacity
Grow markets served
Marketing & TradingOperating RevenuesMarketing & TradingOperating Revenues
2003 Plan2003 Plan
Marketing and Trading RevenuesMarketing and Trading Revenues
Marketing and transportation servicesMarketing and transportation services 40.0%40.0%
Storage arbitrageStorage arbitrage 40.0%40.0%
Retail sales to industrial customersRetail sales to industrial customers 7.0%7.0%
Power/crude oil/other marketed commoditiesPower/crude oil/other marketed commodities 13.0%13.0%
Marketing & TradingStorage Revenue StreamsMarketing & TradingStorage Revenue Streams
Winter and summer spreadDemand peaking businessCall option strategy
Winter and summer spreadDemand peaking businessCall option strategy
Firm
Transportation
Firm
Storage
Supply/Market
Split Connected
ReliabilityReliability OptionalityOptionality
ArbitrageArbitrage
ONEOKONEOK$$
OEMT’s success is derived from its ability to optimize and trade around assets
OEMT StrategyOEMT Strategy
OEMT’s Pricing MethodsOEMT’s Pricing Methods
OEMT’s Pricing is Market sensitive and Producer Friendly- OEMT can create a portfolio of pricing if desired by the producer
OEMT’s utilizes a variety of pricing methods- Fixed price
- Inside FERC first of the month index
- Gas Daily index
- NYMEX/Basis triggers
OEMT’s Pricing is Market sensitive and Producer Friendly- OEMT can create a portfolio of pricing if desired by the producer
OEMT’s utilizes a variety of pricing methods- Fixed price
- Inside FERC first of the month index
- Gas Daily index
- NYMEX/Basis triggers
OEMT PurchasesOEMT Purchases
Volumes are purchased to fill OEMT’s transportation position and market commitments.
Purchases are not weather driven. OEMT purchases baseload and swing volumes. OEMT provides a reliable market for its producers.
Volumes are purchased to fill OEMT’s transportation position and market commitments.
Purchases are not weather driven. OEMT purchases baseload and swing volumes. OEMT provides a reliable market for its producers.
Rockies TransportationRockies Transportation
OEMT holds a significant amount of long term transportation on KMIGT, WIC, Trailblazer, and Cheyenne Plains
Pipeline Volume Term - KMIGT 150,000 MMBtu/day 9/30/07
- WIC 40,000 MMBtu/day 12/31/07
- Trailblazer 50,000 MMBtu/day 3/31/18
- Cheyenne Plains 95,000 MMBtu/day 3/31/15
- CIG 5,800 MMBtu/day 10/31/23
OEMT holds a significant amount of long term transportation on KMIGT, WIC, Trailblazer, and Cheyenne Plains
Pipeline Volume Term - KMIGT 150,000 MMBtu/day 9/30/07
- WIC 40,000 MMBtu/day 12/31/07
- Trailblazer 50,000 MMBtu/day 3/31/18
- Cheyenne Plains 95,000 MMBtu/day 3/31/15
- CIG 5,800 MMBtu/day 10/31/23
Raton BasinRaton Basin
Cheyenne Hub
TX
KS
WYMT
UTAZ
Powder RiverBasin
Uinta Basin
PiceanceBasin
Wind River Basin
AnadarkoBasin
Denver
3
CONM
TX
KS
AZ
Uinta Basin
Wind River Basin
Raton BasinTX
KS
Denver-JulesburgBasin
Bighorn Basin
Green River Basin
CIGWICPEPLNGPL
Cheyenne PlainsTrail BlazerSouthern Star KN/Pony Express
Glen Rock
Kanda
Natural Gas Marketer Customer Satisfaction Study
ONEOK Energy Marketing & Trading ONEOK Energy Marketing & Trading was rated 3was rated 3rdrd in the Major Marketer in the Major Marketer Index for 2002.Index for 2002.
Mastio & Company’sMastio & Company’s
Expand Physical Trading Grow Financial Trading Emphasize Growth in the Rockies
- Secure long term supply- Maximize transportation position to the Mid-continent
OEMT ConclusionOEMT Conclusion