ONEOK Partners, L.P. announced that it did not receive sufficient long-term transportation commitments during its recently concluded open season for the Bakken Crude Express Pipeline. As a result, the partnership has elected not to proceed with plans to construct the pipeline.
"Despite the robust outlook for crude-oil supply growth in the Williston Basin in the Bakken Shale, we did not receive sufficient long-term commitments under the terms we needed to construct the Bakken Crude Express Pipeline," said Terry K. Spencer, ONEOK Partners president.
"While we are disappointed with the results of the open season, we remain committed to serving Williston Basin producers for their natural gas, natural gas liquids and crude-oil infrastructure needs. We still believe the Bakken Crude Express has a competitive advantage over other competing projects due to its proximity to the route of our Bakken NGL Pipeline currently under construction and other ONEOK Partners natural gas liquids pipeline corridors," Spencer added.
"Although we have decided not to proceed with this project, we still have $4.2 billion to $4.8 billion of announced natural gas and natural gas liquids projects under way, many of which are in the Bakken Shale. Additionally, the partnership has a $2 billion-plus backlog of unannounced growth projects," Spencer concluded.
Despite its decision not to proceed with this project, ONEOK Partners still expects to increase its earnings before interest, taxes, depreciation and amortization (EBITDA) by an average of 17 to 21 percent annually between 2012 and 2015, compared with 2012 earnings guidance.
The partnership also expects to increase its estimated average annual distributions to unitholders by 10 to 15 percent between 2012 and 2015, which includes the planned 2-cent-per-unit-per-quarter increase in unitholder distributions declared in 2013, subject to approval by the board of directors of the general partner. ONEOK Partners decreased its 2013 capital expenditures estimate to $2.2 billion from $2.6 billion.
The Bakken Crude Express Pipeline would have been a 1,300-mile, crude-oil pipeline with the capacity to transport 200,000 barrels per day of light-sweet crude oil from multiple points in the Williston Basin in the Bakken Shale in North Dakota and Montana to the crude-oil market hub in Cushing, Okla.
NON-GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) FINANCIAL MEASURE:
ONEOK Partners has disclosed in this news release anticipated EBITDA which is a non-GAAP financial measure. EBITDA is used as a measure of the partnership's financial performance. EBITDA is defined as net income adjusted for interest expense, depreciation and amortization, income taxes and allowance for equity funds used during construction.
The partnership believes the non-GAAP financial measure described above is useful to investors because this measurement is used by many companies in its industry as a measurement of financial performance and is commonly employed by financial analysts and others to evaluate the financial performance of the partnership and to compare the financial performance of the partnership with the performance of other publicly traded partnerships within its industry.
EBITDA should not be considered an alternative to net income, earnings per unit or any other measure of financial performance presented in accordance with GAAP. This non-GAAP financial measure excludes some, but not all, items that affect net income. Additionally, this calculation may not be comparable with a similarly titled measure of other companies.