ONEOK Inc.: Narrowing path for 2H commodity upside

Research evidence excerpt

ONEOK Inc.: Narrowing path for 2H commodity upside

Barclays | ONEOK Inc.

• Expect NGL volumes to step higher as well, though partly offset by the roll-off of bbls

onto KMI's Hiland Express. We estimate 2Q26 NGL segment adj. EBITDA of $722mm vs.

consensus' $724mm, with volumes likely to reflect the seasonal tailwinds noted above.

Following the in-service of KMI's Hiland Express system earlier in 2Q (formerly Double H), 18

kbpd of Continental volumes migrated off of OKE's Bakken NGL system during the quarter.

Given that OKE recognizes outsized T&F rates in the Bakken, we expect the related impact to

earnings to be visible in upcoming quarterly results.

Beyond the initial 18 kbpd, we think KMI's ability to take market share in Bakken NGLs and

flow incremental barrels on Hiland Express will hinge on further expansions of PSX's Rockies

Express system downstream. Although PSX has cited ongoing assessments for this project,

we note that the company has multiple opportunities competing for capital (e.g., Western

Gateway) while also seeking to achieve its 2027 leverage targets.

Even if subsequent expansions of Hiland Express do eventually move forward, OKE's control

over 60% of Bakken NGLs (via its own processing) mitigates the potential for significant

volumetric losses. Still, we think even modest volumetric losses and/or lower recontracted

rates in the Bakken will prove material to OKE earnings. For context, even with relatively

balanced volumetric exposure across the Bakken, Permian and Mid-Con, OKE's EBITDA

composition remains ~45-50% weighted toward the Bakken.

• RPC segment likely saw tailwinds from summer driving demand and wide butane

spreads. We look for 2Q26 RPC adj. EBITDA of $585mm vs. consensus' $584mm. We think