Tulsa-Based Natural Gas Co. Reports Increased Earnings
Mitchell, Jessica, THE JOURNAL RECORD
Oneok, the parent company of Oklahoma Natural Gas, Tuesday announced a 39 percent increase in first quarter earnings to $64.9 million, or $1.30 per share.
Net income was up from $63 million, or $1.28 per share, for the same period in 2000. The increase included the effect of the nonrecurring pretax gain of $26.7 million on the sale of a non- strategic gas processing plant made in the first quarter of 2000, officials said.
Operating revenues for the quarter totaled $2.96 billion, up from $821.8 million a year earlier.
Oneok's first quarter earnings reflect significant growth that has come primarily from the successful integration of two major natural gas midstream acquisitions made in March and April of 2000 as well as the impact from strong natural gas prices in the production segment, said David Kyle, chairman, president and chief executive officer.
Kyle said higher gas prices were less positive during the quarter for other segments of the company, resulting in increased working capital and higher interest costs that partially offset the quarter's strong operating results.
He also confirmed the company's earnings expectation for 2001 continues to be 20 percent over last year. The expectations are based on a full year of results from the midstream assets acquired during 2000, completion of a 300-megawatt power plant in June 2001, a full year of weather-normalized rates for Kansas distributions operations and improved hedges for natural gas production.
Operating income for the company's energy marketing and trading operations increased 84 percent to $24.1 million from $13.1 million. This increase is primarily attributable to the marketing and trading business acquired from Kinder Morgan (KMI) in April 2000 and colder weather during the three months of this year compared with the same period in 2000. Greater price volatility in the U.S. natural gas markets also contributed to the increase. Sales volumes averaged 3.3 billion cubic feet per day (Bcf/d) for the 2001 first quarter, compared with 1.9 Bcf/d the previous year.
The company's gathering and processing's operating income increased to $13.2 million from $7.2 million. This increase is primarily due to increased natural gas and natural gas liquids prices and increased volumes sold resulting from the acquisition of gathering and processing assets in March and April 2000. Operating income was also favorably impacted by ongoing contract restructuring efforts.
Other income for the three months ended March 31, 2000, includes the non-recurring gain of $26. …