Oklahoma-based energy company ONEOK Partners reports that its fourth quarter net income was up year-on-year, but the weak global market climate has caused a cut in planned spending, according to United Press International.
During the last half of 2014, the company had planned to add natural gas infrastructure to its operations in North Dakota’s Bakken formation. Currently, the majority of the gas produced during oil production is flared, or burned off, due to that lack of infrastructure available to collect and transport it to market. Last October, the company acquired more than 2,000 miles of gas pipelines in the Permian Basin for $800 million.
On Monday the company issued its fourth-quarter earnings statement and reported a net income of $263.2 million, a 15 percent year-on-year increase. In a statement, ONEOK President and Chief Executive Officer Terry Spencer said, “Despite the volatile fourth-quarter commodity price environment, ONEOK Partners reported a record year in 2014, with all of our business segments experiencing double-digit operating income growth compared with 2013.”
Like many other companies, ONEOK is also reducing capital expenditures for the upcoming year in response to the recent oil price decline. The company plans to spend around $1.2 billion in 2015, down substantially from the previously estimated $2.8 billion.
As a result of the decreased spending, the company said it will be suspending plans for natural gas processing facilities in North Dakota, Oklahoma and Wyoming. Spencer said, “We expect to resume our suspended capital-growth projects and update associated completion dates as soon as market conditions improve.” The company’s estimates are based on the West Texas Intermediate benchmark price which continues to hover around $50 per barrel.