Oneok eyes balanced capital structure, boasts 'significant' cash

By Lisa Kerner

Charlotte, N.C., Sept. 25 - Oneok Partners, LP and Oneok Inc. chairman and chief executive officer John Gibson told investors the companies have been busy over the last year, doubling the amount of announced internal growth projects to about $6 billion, completing a two-for-one stock split and issuing about $2 billion of debt and $920 million of equity.

Gibson made his remarks during the companies' annual investor conference on Tuesday.

Specifically, Oneok Partners issued $920 million of equity in March and $1.3 billion of debt in September. The company repaid $350 million of 5.9% senior notes at maturity in April.

Oneok issued $700 million of debt in January and completed its $150 million accelerated share repurchase program in September.

Robert F. Martinovich, chief financial officer, said the long-term goal of both companies "is to have a balanced capital structure - 50% debt and 50% equity - and to maintain an investment-grade credit rating."

Oneok Partners' capital structure is about 44% debt and 56% equity, while Oneok's is about 52% debt and 48% equity.

With net proceeds from the $1.3 billion notes offering and $1.2 billion available under Oneok Partners' revolver, the company has "a significant amount of cash to fund our capital program." The exact amount of cash was not specified.

There is no long-term debt due until 2016.

Martinovich said the Tulsa, Okla.-based natural gas company is "not looking" to come to the market again this year.

Oneok Partners is guiding to net income of $935 million to $1.02 billion and distributable cash flow in the range of $1.05 billion to $1.14 billion in 2013, with capital expenditures of about $2.6 billion.

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