UBS-Midstream Natural Gas What Matters the Most This Week：OKE, AM,EPD,LNG,CQP,DTM-20251027

Sector Thoughts

Many midstream names report 3Q earnings this week: OKE (Tuesday), AM (Wednesday),EPD (Thursday), LNG/CQP (Thursday), DTM (Thursday).

OKE

We believe OKE is still on track to hit the low end of its full-year guidance of $8.0 - $8.45Bn, as we do expect stronger 2H 2025 vs. 1H 2025, driven by higher volumes and synergy benefits from ENLC and Medallion acquisitions. The reason this is important is because we believe the stock is pricing in a guidance cut. We expect 3Q25 EBITDA of $2,119MM vs $1,981MM in 2Q25, with the QoQ increase driven by generally stronger volumes across OKE's system and FERC escalators effective from July serving as a tailwind for the Refined Products & Crude segment. We note earlier in the quarter, OKE,along with Whitewater, MPLX, and ENB through their Matterhorn JV, announced the FID of the ~450 mile, 42-inch Eiger Express Pipeline. The pipeline is designed to transport up to 2.5Bcf/d from the Permian Basin in West Texas to the Katy area, with OKE having a 15% share in the JV. On the 2Q call, OKE also announced FID of Big Horn, a new $365MM natural gas processing plant in the Permian’s Delaware Basin, designed to have a capacity of 300MMcf/d. Furthermore, we note West Texas NGL Pipeline and Elk Creek Pipeline expansions have realized full capacity. OKE has launched open season for the "sunbelt connector" a refined product pipeline for Phoenix area. We will dial in for further updates on growth projects.