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Master limited partner, ONEOK Partners L.P. (OKS) announced earnings of 93 cents per unit in fourth quarter 2009, in line with the Zacks Consensus Estimate of 93 cents. Earnings in the quarter were below $1.09 reported in the fourth quarter 2008.

For the full year 2009, the partnership reported earnings of $3.60 per unit, above the Zacks Consensus Estimate of $3.42 but substantially below last year’s earnings of $6.01.

Results were driven by substantially higher natural gas liquids (NGL) throughput and increased natural gas volumes processed, which offset the impact of lower commodity prices and narrower NGL product price differentials. The company’s yearly earnings reflected the positive impact of its recently completed growth projects.

During 2009, the company completed a $2 billion-plus capital investment program that significantly expanded the strength and reach of its natural gas and natural gas liquids businesses.

Total revenue in the quarter was $2.3 billion compared to $1.3 billion a year ago. In 2009, the partnership’s revenue totaled $6.5 billion, down 16% year over year.

Earnings before interest, taxes, depreciation and amortization ((EBITDA)), were $213.3 million in the quarter versus $190.5 million a year ago. In 2009, EBITDA was $791.0 million compared with $863.3 million in 2008. Operating income increased 15% to $152.3 million in the quarter, while it decreased 15% to $546.6 million for the year.

Equity earnings from investments decreased to $17.3 million in the quarter versus $26.6 million a year ago. Equity earnings from investments in 2009 were $72.7 million, compared with $101.4 million in 2008.

Distributable cash flow (DCF) totaled $148.6 million ($1.27 per unit) compared to $110.0 million (96 cents per unit) last year. For the year, DCF was $558.2 million ($4.91 per unit) compared with $636.8 million ($6.17 per unit) in 2008.

In the fourth quarter, operating costs increased to $116.2 million from $99.1 million last year. Operating costs in 2009 were $411.3 million compared to $371.8 million in 2008. The increases in both the periods were due primarily to higher employee-related costs and incremental operating costs associated with the Overland Pass Pipeline and the Arbuckle Pipeline, the expanded Bushton fractionator and incremental general taxes.

ONEOK Partners has identified additional potential growth projects. Depending on market needs and producer commitments, the partnership estimates it could invest an average of approximately $300-$500 million per year between 2010 and 2015. These projects are expected to be built primarily around the partnership's existing operating footprint, including the Bakken Shale in the Williston Basin of North Dakota and the Woodford Shale in Oklahoma.

In 2010, the partnership has forecasted capital expenditures of approximately $362 million, comprised of $278 million in growth capital and $84 million in maintenance capital. Growth capital expenditures for 2010 include approximately $32 million for new well connections in the natural gas gathering and processing segment.

Source: ONEOK Partners Earnings Beat