ONEOK NYSE: OKE reported third-quarter 2026 net income attributable to the company of $1.35 billion, or $2.13 per diluted share, while adjusted EBITDA rose 6% from a year earlier to $2.24 billion. The company raised its financial guidance for the third time this year, citing stronger base-business performance, the contribution from its Brazos Midstream acquisition and transaction-related benefits.
Net income and earnings per share included a $336 million one-time, non-cash income tax benefit related to the corporate reorganization completed alongside ONEOK’s minority equity transaction. Adjusted EBITDA included a $53 million net benefit from transactions, primarily gains on debt extinguishment, Chief Financial Officer Walt Hulse said.
Guidance Raised, Balance Sheet Strengthened
ONEOK now expects 2026 net income at a midpoint of $4.18 billion and adjusted EBITDA at a midpoint of about $8.55 billion. The EBITDA outlook represents a $200 million increase from the company’s prior quarterly guidance and a $450 million increase from its original February outlook.
Hulse said roughly $50 million of the latest increase reflected transaction-related benefits. Brazos’ expected 2026 contribution accounts for approximately $75 million, partly offset by $25 million in transaction costs, while stronger performance from ONEOK’s base businesses accounts for the remaining $100 million.
During the quarter, ONEOK completed a $9 billion Apollo minority equity investment and used the proceeds to extinguish nearly $5.5 billion of debt. S&P Global Ratings and Fitch Ratings subsequently upgraded the company’s credit ratings to BBB+ with stable outlooks.
The company has shifted its leverage philosophy toward a debt-to-EBITDA target of approximately 3.25 times or lower, compared with its previous target of about 3.5 times. Hulse said ONEOK views 3.5 times as the upper end of its targeted range and expects to fall below 3 times within the next several years based on its current outlook, though the company also expects to pursue attractive growth investments.
Capital expenditures are now expected to total about $3.5 billion in 2026, up from a prior expectation near the high end of a $3.2 billion range. The increase includes about $200 million of capital associated with the Brazos acquisition, as well as investments in the Cutter Two plant, Delaware NGL expansion and compression projects brought forward because of Bakken and Mid-Continent activity.
For 2027, Hulse said capital spending should be “around that $3 billion-ish, give or take,” before settling into a range of roughly $2.5 billion to $3 billion in later years. ONEOK did not issue formal 2027 financial guidance and plans to do so after fourth-quarter results in February.
Permian Expansion and Brazos Integration
President and Chief Executive Officer Pierce Norton said the company’s results were supported by record Permian Basin volumes and growth across its integrated network. ONEOK closed its acquisition of Brazos Midstream’s Permian Midland Basin assets earlier in October.
Management said the acquired assets have performed ahead of its expectations to date. Chief Commercial Officer Sheridan Swords said volumes on the Brazos system are above expectations, its existing Sundance plants are full, and the company is conducting offloads until additional capacity enters service.
ONEOK expects Cassidy One, a roughly 330 million-cubic-feet-per-day Midland Basin processing plant, to begin service at year-end and fill relatively quickly. Cassidy Two, with another approximately 330 million cubic feet per day of capacity, is expected in 2027. Based on producer plans, the company expects an average of about 14 rigs on Brazos’ dedicated acreage during 2027, though Swords said that figure could increase as producers continue to assess results in the Barnett area.
Management also said Brazos’ pipeline system has created immediate capital efficiencies. Swords said ONEOK no longer needs to expand one of its legacy gathering-and-processing main lines because it can access capacity on the Brazos system. Norton said he was pleased with the quality, reliability and resilience of the acquired facilities.
Projects Support NGL, Refined Products Growth
Total NGL raw-feed throughput increased 6% year over year to nearly 1.7 million barrels per day. Gulf Coast Permian volumes rose 16% from a year earlier and 9% sequentially, driven almost entirely by West Texas growth. Propane-plus volumes rose in every operating region, while Permian economics continued to support full ethane recovery.
ONEOK expects Medford Phase One to enter service in mid-December. Until then, the company is building inventory of unfractionated NGLs because incoming supply exceeds current fractionation capacity. Swords said the company expects Medford to operate full through the first quarter of 2027 and likely into part of the second quarter as it processes that inventory. The associated fee-based earnings are expected to be recognized primarily in the first quarter of 2027.
The company also completed a Denver-area refined-products pipeline expansion that added 35,000 barrels per day of capacity and is evaluating further expansion opportunities. It completed 110 million cubic feet per day of Delaware Basin processing expansions and expects volumes to ramp to capacity in early 2027.
Other planned projects include the 400 million-cubic-feet-per-day Bighorn Delaware Basin processing plant, Cassidy Two and a Delaware NGL expansion adding 245,000 barrels per day of takeaway capacity. Management said the Delaware project is supported by contracts with both third-party processors and producers and is expected to provide largely full-value-chain transportation and fractionation service when it enters operation in the third quarter of 2027.
Demand Trends Across the System
Refined-products volumes increased 6% year over year, including 10% gasoline growth and 2% distillate growth. Export volumes at Galena Park rose about 15%, while crude oil exports at Seabrook were fully contracted and throughput roughly doubled from the prior-year quarter.
In natural gas pipelines, adjusted EBITDA rose to $231 million from $200 million a year earlier, helped by optimization and marketing activity and higher firm transportation revenue. ONEOK said it has secured agreements to supply 250 million cubic feet per day to a 1-gigawatt power plant beginning in late 2030 and 110 million cubic feet per day for a 500-megawatt power plant expansion beginning in May 2028.
Norton said ONEOK sees growth opportunities across natural gas, NGLs, refined products and crude oil, supported by domestic and international energy demand. The company reiterated its target for mid- to high-single-digit adjusted EBITDA growth over the next five to seven years from its 2025 base, with the Brazos acquisition increasing momentum toward the higher end of that range.
About ONEOK (NYSE:OKE)
ONEOK, Inc is an energy infrastructure company that operates midstream assets across the United States. Its business includes the gathering, processing, storage and transportation of natural gas, as well as the gathering, fractionation, storage and transportation of natural gas liquids (NGLs). The company also provides transportation and storage services for refined petroleum products, crude oil and other related commodities.
ONEOK serves major producing and consuming regions, including the Mid-Continent, Rocky Mountain, Permian and Gulf Coast areas.
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