Oneok Delivers Strong Q4 Results; Obtains Good Outcome on Medford Incident

Oneok’s fourth-quarter results generally met our expectations. Full-year EBITDA was $3.62 billion compared with our $3.64 billion forecast. 2023 adjusted EBITDA guidance is set at a midpoint of $4.575 billion, including a net $539 million cash gain relating to insurance recoveries from the Medford incident. Removing the gain, adjusted EBITDA falls to $4 billion, close to our $4.1 billion forecast. 2023 growth is mainly being driven by a combination of higher gas and natural gas liquids volumes out of the Rockies, higher fee rates goosed by inflation-linked escalators, and higher earnings from gas storage contracts and expansions. Growth capital spending plans are set at around $1.1 billion, compared with our $1 billion forecast. At first glance, we maintain our $58 per share fair value estimate and narrow moat rating.