Oneok and Oneok Partners Provide Full-year 2008 Guidance; Raise 2007 Guidance

Oneok Inc. and Oneok Partners LP issued their 2008 earnings guidance and increased their 2007 earnings guidance

Oneok also increased its net income guidance for 2007 to a narrow range of $2.75 to $2.79 per share, reflecting better than anticipated performance in its Oneok Partners segment. Oneok’s previous 2007 earnings guidance was estimated to be in the range of $2.62 to $2.72 per share.

Financial results for 2007 will be released on Feb. 25, following the close of the market.

Oneok’s net income guidance for 2008 is in the range of $2.75 to $3.15 per share. The average number of shares outstanding in 2008 is expected to be 106.2 million, compared with 109.4 million in 2007.

“In 2008, Oneok’s earnings growth will continue to be driven by our Oneok Partners segment,” said John W. Gibson, CEO of Oneok, Inc. and chairman, president and CEO of Oneok Partners. “We will also continue to focus on improving the profitability of our distribution segment. Compared with 2007, we anticipate our energy services segment’s contribution will be lower due to excluding financial trading in our 2008 guidance and lower transportation margins.”

Oneok Partners’ net income guidance for 2008 is in the range of $4.10 to $4.60 per unit. Preliminary estimates for Oneok Partners’ 2008 distributable cash flow (DCF) are expected to be in the range of $475 million to $525 million.

“Oneok Partners’ 2008 guidance reflects the completion of Overland Pass Pipeline and related NGL expansion projects that will begin generating earnings in its natural gas liquids pipelines segment, as well as increases in the partnership’s natural gas gathering and processing segment,” Gibson stated.

“Our 2008 operating plan also includes a full year of operations of our North System, the NGL and refined petroleum products pipeline system that we acquired last year to complement and expand our existing NGL network,” he added. “During the year, we will continue to execute on the remainder of our previously announced $1.6 billion of internally generated growth projects.”

The partnership also raised its net income guidance for 2007 to the range of $4.14 to $4.20 per unit and DCF to $465 million to $475 million. The increase results from continued favorable pricing in the natural gas gathering and processing segment and higher volumes and product price spreads in the natural gas liquids gathering and fractionation segment. Oneok Partners’ previous 2007 net income guidance was estimated to be in the range of $3.90 to $4.00 per unit.

Oneok Partners’ average number of units outstanding for 2008 is anticipated to be 86.5 million, compared with 82.9 million in 2007. Oneok Partners expects to issue equity during 2008 to support its previously announced growth capital program. Oneok, Inc., as general partner, has indicated that it is interested in acquiring additional units in the partnership. In addition, the partnership expects to increase its distribution payout during the year to maintain a targeted DCF-to-distribution coverage ratio of 1.05-to-1.15.

2008 Guidance for Oneok INC.

Oneok’s operating income from its Oneok Partners segment for 2008 is forecasted at $521 million, compared with $446 million in 2007, due to improved performance in the segment’s natural gas gathering and processing and natural gas liquids pipelines businesses.

The distribution segment is projecting 2008 operating income of $180 million, compared with 2007 guidance of $171 million. The increase is due to continued implementation of rate strategies and operating efficiencies.

In the energy services segment, 2008 operating income is projected at $180 million, compared with $204 million in 2007, which included $16.3 million of financial trading margin through the third quarter 2007. The 2008 earnings guidance does not include financial trading margins and reflects reduced transportation margins as a result of anticipated lower price spreads and reduced price volatility in the natural gas markets.

The Oneok segment income statement and capital expenditure projections for 2007 and 2008 are included in Exhibit A.

2008 Guidance for Oneok Partners LP

The natural gas gathering and processing segment’s 2008 operating income is estimated to increase to $217 million, compared with $188 million in 2007, due primarily to anticipated favorable natural gas and natural gas liquids prices.

The average unhedged prices used in 2008 guidance are approximately $85 per barrel for crude oil, $1.30 per gallon for composite natural gas liquids and $6.50 per MMBtu for natural gas. The partnership currently estimates that a 1 cent per gallon increase in the composite price of natural gas liquids would increase annual net margin by approximately $1.7 million. A $1.00 per barrel increase in the price of crude oil would increase annual net margin by approximately $0.5 million. Also, a 10 cent per MMBtu increase in the price of natural gas would increase annual net margin by approximately $0.4 million. All of these sensitivities exclude the effects of hedging and assume normal operating conditions.

For 2008, financial hedges have been put in place on 43 percent of the natural gas gathering and processing segment’s expected natural gas liquids production at an average price of $1.24 per gallon and on 44 percent of its expected condensate production at an average price of $87.96 per barrel.

The natural gas pipelines segment’s 2008 operating income is projected at $110 million, compared with 2007 guidance of $113 million. The Midwestern Gas Transmission extension was placed in service January 2008 and brings additional firm revenues to the segment. The partnership’s 120-mile Guardian Pipeline expansion and extension project is expected to be in service during the fourth quarter of 2008. However, anticipated contract changes and terminations on the interstate pipelines will offset a portion of these increases.

The natural gas liquids gathering and fractionation segment’s 2008 operating income is forecasted to be $105 million, compared with $113 million in 2007. The 2008 earnings reflect lower anticipated location and product price spreads than 2007, which reduce optimization and isomerization margins.

The natural gas liquids pipelines segment’s 2008 operating income is estimated at $92 million, compared with 2007 guidance of $39 million. The segment’s expected increase is the result of a full year of operations of the Oneok North System, a pipeline system acquired in October 2007, and completion of the Overland Pass Pipeline and related NGL expansion projects, which are anticipated to be placed into service during the second quarter of 2008.

Equity earnings from investments are estimated to be $90 million for 2008, compared with $89 million in 2007. The natural gas gathering and processing segment will benefit from the Fort Union Gas Gathering expansion that is currently under way. Phase one of the expansion project was completed in November 2007, with phase two completion expected in the second quarter of 2008. This increase will be partially offset by the impact of lower anticipated volumes on Northern Border Pipeline in the partnership’s natural gas pipelines segment.

Capital expenditures in 2008 are expected to increase to $945 million, including $854 million in growth capital and $91 million in maintenance capital. Growth capital includes $671 million in estimated spending for previously announced large internal growth projects and $183 million for routine growth projects. Maintenance capital is expected to increase as a result of scheduled maintenance turnarounds at NGL fractionation and natural gas gathering and processing facilities and costs associated with the newly acquired NGL pipeline assets.



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