ONEOK (NYSE:OKE) raised its 2026 financial guidance for the second time this year after reporting higher second-quarter earnings, citing record natural gas liquids throughput, strong refined-products demand and volume growth across its operations.
President and Chief Executive Officer Pierce Norton said the company’s results reflected both a constructive energy-market backdrop and the benefits of its integrated asset network, which connects supply basins with domestic and international markets for natural gas, NGLs, crude oil and refined products.
Second-Quarter Results and Higher Outlook
ONEOK reported second-quarter net income of $965 million, or $1.53 per diluted share, up 13% from a year earlier. Adjusted EBITDA totaled $2.12 billion, an increase of 7% year over year, Chief Financial Officer Walt Hulse said.
The company now expects 2026 net income at a midpoint of $3.6 billion, diluted earnings per share at a midpoint of $5.68, and adjusted EBITDA at a midpoint of $8.35 billion. Compared with ONEOK’s original guidance issued in February, the updated outlook represents increases of $150 million for net income and $250 million for adjusted EBITDA.
Hulse said the Natural Gas Pipelines and refined products and crude businesses were performing toward the upper end of their original adjusted EBITDA guidance ranges. Natural Gas Liquids and gathering and processing businesses also remained positioned well for the balance of the year.
Capital-expenditure guidance was unchanged at $2.7 billion to $3.2 billion for 2026. However, the company expects spending to accelerate during the second half as several large projects approach completion, putting capital spending closer to the upper end of that range.
ONEOK also increased its estimate of cumulative cash-tax benefits from tax legislation. Hulse said the company now expects about $2.6 billion in cumulative cash-tax benefits, compared with a prior estimate of approximately $1.5 billion. Combined with existing tax attributes, those benefits are expected to defer meaningful cash-tax payments until 2031, extending the company’s cash-tax runway by about two years.
Projects Expand Processing, Fractionation and Refined-Products Capacity
Chief Operating Officer Randy Lentz said the company placed its Denver-area refined-products expansion into service on Aug. 1. The project adds 35,000 barrels per day of capacity and provides a direct jet-fuel connection to Denver International Airport.
The Denver expansion is supported largely by long-term, firm take-or-pay contracts, according to Chief Commercial Officer Sheridan Swords. While the system’s new 16-inch pipeline could have capacity of up to 200,000 barrels per day, the initial project is operating at 35,000 barrels per day.
In the Permian Basin, ONEOK expects to complete 110 million cubic feet per day of Delaware Basin processing-plant expansions during the third quarter. It also increased the planned capacity of its Bighorn Plant to 400 million cubic feet per day from the originally planned 300 million cubic feet per day. Bighorn remains scheduled for completion in mid-2027.
Once those projects are completed, ONEOK expects its Permian processing capacity to reach nearly 2.4 billion cubic feet per day. The company also said it has secured equipment for an additional Permian plant that could be deployed as needed.
Elsewhere, ONEOK began construction on the 120 million-cubic-foot-per-day Cutter 2 Plant in the Powder River Basin, which is expected to enter service in the first quarter of 2028. The company’s Medford Fractionation Phase I project remains on track for completion in the fourth quarter and is expected to add 100,000 barrels per day of Mid-Continent fractionation capacity. Phase II is expected to be completed in the first quarter of 2027.
Volumes, Exports and Demand Drivers
Swords said raw NGL feed throughput rose 7% year over year across ONEOK’s system. Volumes in the Gulf Coast Permian region increased 15%, aided by production growth and the ramp-up of recently connected third-party plants.
He said higher NGL prices and export demand supported ethane recovery across all regions and were expected to remain favorable into the third quarter. Increased ethane volumes, however, weighed somewhat on margins because ethane transportation and fractionation rates are lower than rates for heavier NGL components.
ONEOK reached its targeted 80% contracting threshold for the 200,000 barrels per day of LPG export capacity under construction through its export-dock joint venture. Swords said customer interest remained strong, including discussions that extend beyond the initial contract period and into the next decade.
In refined products and crude, refined-products shipments increased 8% year over year, supported by gasoline and diesel demand, refinery utilization and refinery-maintenance activity. At the Seabrook crude-export joint venture, throughput rose about 20% from the first quarter and included record crude-oil loadings in May. The facility remains highly contracted under take-or-pay agreements, management said.
Midland crude-gathering volumes increased 10% from the first quarter. The company said more than 30 rigs were operating on its Midland acreage, while activity also increased in the Mid-Continent and Rocky Mountain regions.
The Natural Gas Pipelines segment benefited during the quarter from Waha-to-Katy price differentials. ONEOK expects lower segment earnings in the second half as Permian takeaway capacity enters service and those differentials narrow, consistent with its full-year guidance assumptions.
Long-Term Growth and Capital Allocation
Norton reiterated ONEOK’s target of mid- to high-single-digit adjusted EBITDA growth over the next five to seven years. He pointed to growth in the Permian, Mid-Continent and Powder River basins; stable Bakken production; LPG exports; crude-oil demand for reliable U.S. supply; and natural-gas demand associated with LNG exports, power generation and industrial development.
Management said most of that expected growth is expected to come from organic opportunities, including completed projects, brownfield expansions, commercial optimization and greater utilization of existing assets. Bolt-on acquisitions could supplement the strategy, but Norton said the company would remain disciplined and intentional in pursuing them.
Hulse said the company’s capital spending could moderate to a run rate of roughly $2 billion to $2.5 billion after the current project backlog is completed. He said the pipeline of future projects generally consists of midsize investments rather than projects exceeding $1 billion.
ONEOK has also secured a natural-gas supply agreement for 1 gigawatt of power-plant demand and is in late-stage discussions on additional potential data-center supply opportunities. Swords said such projects could require more than $100 million of capital investment while offering firm-demand contracts and attractive returns.
About ONEOK (NYSE:OKE)
ONEOK, Inc (NYSE: OKE) is a publicly traded midstream energy company headquartered in Tulsa, Oklahoma. The company owns and operates a portfolio of natural gas and natural gas liquids (NGL) pipelines, processing facilities, fractionators and storage and terminal assets. Its operations are focused on gathering, processing, transporting, fractionating and marketing NGLs and interstate natural gas, providing critical infrastructure that connects hydrocarbon production to refineries, petrochemical plants and other end markets.
ONEOK’s asset base includes pipeline systems and processing plants that move and condition natural gas, along with infrastructure for the transportation, storage and fractionation of NGLs such as ethane, propane and butane.
