Oneok Transforms into Integrated Midstream Platform as Permian Volumes Surpass Bakken for First Time
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 13h ago
0mins
Source: Fool
- Successful Transformation: Oneok has successfully transitioned from a single-basin natural gas liquids company to an integrated midstream platform through over $25 billion in acquisitions, with Permian NGL volumes reaching nearly 570,000 bpd, surpassing Bakken's 490,000 bpd for the first time, indicating new growth potential in the market.
- Significant Integration Benefits: The integration with Magellan Midstream has allowed Oneok to exceed its original $200 million annual cost savings target, with nearly $500 million in total synergies expected by the end of 2025, enhancing the company's operational efficiency and profitability.
- Future Growth Potential: Oneok plans to bring online over 500 MMcf/d of new Permian processing capacity by 2027, including the 300 MMcf/d Bighorn plant expected mid-2027, ensuring market share and long-term growth in the region.
- Attractive Investment Opportunity: Despite a 30% decline in stock price over the past year, Oneok's current 9.5x EBITDA valuation and nearly 6% dividend yield, combined with stable fee-based cash flows, make it a compelling investment opportunity in the energy infrastructure sector.
Analyst Views on OKE
Wall Street analysts forecast OKE stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for OKE is 86.38 USD with a low forecast of 75.00 USD and a high forecast of 110.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
8 Buy
5 Hold
0 Sell
Moderate Buy
Current: 72.330
Low
75.00
Averages
86.38
High
110.00
Current: 72.330
Low
75.00
Averages
86.38
High
110.00
About OKE
ONEOK, Inc. is a midstream operator that provides gathering, processing, fractionation, transportation, storage and marine export services. The Company's segments include Natural Gas Gathering and Processing; Natural Gas Liquids; Natural Gas Pipelines, and Refined Products and Crude. The Natural Gas Gathering and Processing segment provides midstream services to producers in the Rocky Mountain region, the Mid-Continent region, the Permian Basin region and the North Texas region. The Natural Gas Liquids segment owns and operates facilities that gather, fractionate, treat and distribute natural gas liquids (NGLs) and store Purity NGLs, primarily in the Rocky Mountain region, Mid-Continent region, Permian Basin and Gulf Coast region (including Louisiana). The Natural Gas Pipelines segment transports, stores and markets natural gas. The Refined Products and Crude segment gathers, transports, stores, distributes, blends and markets refined products and crude oil.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
