ONEOK (NYSE:OKE) outlined double-digit earnings growth in 2025 and provided 2026 guidance that management said reflects discipline around commodity-price assumptions while still incorporating contributions from completed projects and incremental acquisition synergies.
2025 results: earnings growth, margin expansion, and balance sheet progress
CEO Pierce Norton said 2025 was a “defining year” for ONEOK, citing double-digit earnings growth, expanded margins, and balance sheet strengthening alongside the integration of acquisitions and advancement of long-cycle projects.
In the fourth quarter, net income attributable to ONEOK totaled $977 million, or $1.55 per share, while quarterly Adjusted EBITDA was $2.15 billion. Hulse noted full-year results included $65 million of transaction costs.
Acquisitions and synergies: Magellan integration continues to lead
Norton highlighted ONEOK’s “integrated platform advantage,” saying the Magellan, Eastern, Inland, and Medallion acquisitions are expected to be fully embedded in 2026 across its NGL, refined products, crude, and natural gas systems. He said ONEOK has realized nearly $500 million of total synergies since closing the Magellan acquisition in September 2023, including approximately $250 million in 2025 alone, which he said exceeded original expectations.
On the Q&A, management said Magellan has produced the most progress given the additional time since closing, while EnLink has been owned for about a year and is “going according to plan,” with some contractual arrangements expected to roll off over time. Management also said Medallion synergies have been advanced by using ONEOK’s balance sheet to bring volumes onto long-haul crude pipelines and enhance the gathering system through integrated service.
For 2026, Hulse said the company expects approximately $150 million of incremental commercial and cost synergies in addition to the synergies captured since the Magellan close. Asked about visibility into those synergies, management said the opportunities are identified, included in the plan, underway, and that the company has “very high confidence” in capturing them in 2026.
Capital allocation: debt retirement, shareholder returns, and leverage targets
Hulse said ONEOK retired more than $1.75 billion in senior notes during the fourth quarter through a combination of redemptions and repurchases, bringing the full-year total to nearly $3.1 billion of long-term debt extinguished. The company returned nearly $2.7 billion to shareholders in 2025 through dividends and share repurchases, and recently increased its quarterly dividend by 4%.
Management reiterated a long-term leverage target of 3.5x or lower, describing it as self-imposed. On timing, leadership said lower-than-previously-expected EBITDA (the denominator in the leverage ratio) means it may take longer than originally expected to reach that level. The company said it reduced debt aggressively through 2025, but with a “strong CapEx project backlog,” it does not expect to lean heavily into additional debt reduction until projects are completed and incremental free cash flow increases, which management indicated would be in the second half of 2027.
2026 outlook: guidance, commodity assumptions, and EBITDA bridge drivers
For 2026, ONEOK guided to net income at a midpoint of approximately $3.45 billion, or $5.45 per diluted share, and an Adjusted EBITDA midpoint of approximately $8.1 billion. Hulse said guidance reflects an average WTI crude oil price range of $55–$60 per barrel and “normal seasonal dynamics,” noting the first quarter is typically the lowest EBITDA quarter due to fewer days and weather impacts. He added that the company expects to generate “a little over $22 million of EBITDA each day” in 2026, on average.
As part of the bridge discussion, management described several factors affecting the comparison between original 2025 guidance, year-end 2025 results, and 2026 expectations. Drivers discussed on the call included:
- Producer activity and volumes: Hulse said Bakken gathered volumes came in about 100 million cubic feet per day lower than originally anticipated as drilling pace changed when crude prices fell from the $70s to the lower $60 range in spring 2025. He also cited reduced anticipated Permian NGL volumes in 2025 due to delays at two third-party customer plants.
- Margin and differential impacts: Management discussed lower “upgrade margin” in NGL and refined products (with an example being narrowing RBOB-to-butane spreads), while noting strong 2025 location differentials such as Waha-to-Katy benefiting the natural gas pipeline segment.
- 2026 volume and optimization tailwinds: The company expects EBITDA growth from increased Permian volumes and the full-year benefit of third-party Permian plant volumes delayed in 2025, and said asset optimization should contribute from batching, blending, and logistics benefits tied to acquired connectivity.
- 2026 headwinds: Management cited lower forecasted Waha-to-Katy differentials and lower price realizations in certain businesses versus 2025, and noted it is not forecasting gains on debt repurchases in 2026.
Operations and projects: weather impacts, Permian processing additions, and fractionation growth
COO Randy Lentz said winter weather in the fourth quarter hampered volumes in natural gas gathering and processing and NGL segments, largely within expectations for seasonality. He added that Winter Storm Fern briefly impacted first-quarter 2026 throughput, estimating January gathering and processing and NGL volumes were approximately 10% below original expectations due to weather, while stating there was no material downtime in ONEOK’s own assets and that storm impacts are incorporated into 2026 guidance.
On capital projects, Lentz said large growth projects are progressing according to plan with expected in-service timing unchanged. Key items discussed included:
- Shadowfax plant: a 150 MMcf/d processing plant being relocated to the Midland Basin, expected in service by the end of the first quarter of 2026.
- Delaware processing expansions: totaling 110 MMcf/d, expected to be completed early in the third quarter of 2026.
- Denver refined products pipeline expansion: expected mid-third quarter 2026 start-up; management said it is fully contracted with take-or-pay volumes.
- Medford NGL fractionator rebuild: phase one targeted for fourth quarter 2026 and expected to add 100,000 bbl/d of fractionation capacity, with phase two adding 110,000 bbl/d in the first quarter of 2027.
Commercial Chief Sheridan Swords also pointed to growing natural gas demand and said ONEOK is engaged in advanced discussions tied to data center projects. He highlighted an expansion of the Eiger Express joint venture pipeline to 3.7 Bcf/d from an initial 2.5 Bcf/d, and said the full 3.7 Bcf/d is 100% contracted for a minimum of 10 years.
For capital spending, Hulse guided to 2026 capital expenditures of $2.7 billion to $3.2 billion (growth and maintenance), including ongoing well connections and maintenance, plus spending tied to projects such as the Texas City Export Terminal and the Bighorn Processing Plant. He reiterated expectations that CapEx will step down in coming years as projects are completed and said the company does not expect to pay meaningful cash taxes until 2029.
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.
