Major midstream providers for shale producers up Q4 dividends

By Luke Geiver | January 17, 2019

Two of the largest midstream service providers for shale oil and gas are increasing their dividend payments to shareholders.

ONEOK Inc. based in Tulsa, announced this month it will increase its quarterly dividend 0.5 cents per share to a new number of 86 cents per share. The increase amounts to a 12 percent uptick from the same time a year ago. For an annualized dividend, ONEOK now pays out $3.44 per share.

The company is the largest produced gas infrastructure provider in the Bakken and also has several other assets across the MidContinent, Permian and greater Rocky Mountain regions.

Kinder Morgan Inc., out of Houston, also announced a dividend increase. KMI will increase dividends to shareholders by $0.20 per share in Q4, for an annualized dividend of $0.80. The change from 2017 to 2018 has been significant. In 2018, KMI had $483 million available to shareholders as opposed to a net loss available in 2017. “The fourth quarter capped a transformative year for KMI,” said CEO Steve Kean. “In 2018 we grew our business, strengthened our balance sheet, increased our dividend and found new opportunities to meet the growth in demand for U.S. infrastructure.”

Kim Dang, KMI president, said the natural gas pipeline segment performed much better in2018 than the previous year. Activity in the Permian, Eagle Ford and DJ Basin helped the company grow.

According to the company, objective analysts project U.S. natural gas demand, including net exports of liquefied natural gas (LNG) and exports to Mexico, will increase from 2018 levels by 32 percent to nearly 119 Bcf/d by 2030. Of the natural gas consumed in the U.S., about 40 percent moves on KMI pipelines, and roughly the same percentage holds true for U.S. natural gas exports