8-KRegulation FDExhibits & Filings

ONEOK INC /NEW/ 8-K Report, Regulation FD Disclosure (May 10, 2005)

Filed May 10, 2005For Securities:OKE

Summary

ONEOK, Inc. (OKE) announced a significant strategic acquisition on May 9, 2005, agreeing to purchase the natural gas liquids (NGL) businesses of several Koch companies for approximately $1.35 billion. This transaction is expected to substantially expand ONEOK's NGL infrastructure and market presence, particularly in the mid-continent region, with assets including gathering, fractionation, storage, and marketing services. The acquisition encompasses substantial fractionation capacity, extensive NGL pipeline networks, and underground storage facilities. Financing for the deal will initially be through a bridge loan or short-term credit, with permanent financing anticipated from a mix of cash, long-term debt, equity unit proceeds, and potentially asset sales. The deal is subject to regulatory approval, specifically antitrust clearance under the Hart-Scott-Rodino Act.

Key Highlights

  • 1ONEOK Inc. to acquire Koch companies' NGL businesses for approximately $1.35 billion.
  • 2Acquisition includes significant NGL gathering, fractionation, storage, and marketing assets.
  • 3Key assets include two wholly-owned fractionators in Oklahoma and Kansas with a combined capacity of 240,000 bpd, and a stake in a third fractionator.
  • 4Transaction includes approximately 1,800 miles of interstate NGL pipelines and 2,600 miles of gathering lines.
  • 5Acquisition also involves MBFF, LP (80% interest in MB1 fractionator) and Koch Vesco Holdings, LLC (interest in a Louisiana gas processing complex).
  • 6Initial financing via bridge loan/short-term credit; permanent financing from cash, debt, equity unit settlement, and asset sales.
  • 7Transaction is subject to antitrust clearance from the Federal Trade Commission.

Frequently Asked Questions

The primary purpose of this acquisition is to significantly expand ONEOK's natural gas liquids (NGL) business, particularly its mid-continent infrastructure, by acquiring substantial gathering, fractionation, storage, and marketing assets from Koch companies.

ONEOK plans to use a combination of financing methods. Initially, a bridge loan or short-term credit facility will be utilized. Permanent financing is expected to come from available cash, the issuance of long-term debt, proceeds from the settlement of equity units in February 2006, and potentially from the sale of less strategic assets.

The key operational assets include NGL gathering, fractionation, storage, and marketing services. Specifically, this involves two 100%-owned fractionators with a combined capacity of 240,000 barrels per day, a partial interest in another fractionator, underground NGL storage facilities, extensive NGL pipeline distribution systems (approximately 1,800 miles), and gathering lines (approximately 2,600 miles). It also includes an interest in a gas processing complex in Louisiana.

Yes, the transaction is subject to antitrust clearance from the Federal Trade Commission under the Hart-Scott-Rodino Act, which is a standard requirement for large mergers and acquisitions.