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ONEOK to create new company for gas distribution business

ONEOK Inc. intends to create a new publicly traded company with its natural gas distribution business, including utility Oklahoma Natural Gas.
BY JAY F. MARKS Modified: July 25, 2013 at 9:49 pm •  Published: July 26, 2013

Oklahoma Natural Gas customers soon could see a different name on their bills.

Parent company ONEOK Inc. announced Thursday it will separate its natural gas distribution — including gas utilities serving Oklahoma, Texas and Kansas — into a stand-alone publicly traded company called ONE Gas Inc. The new company will keep its headquarters in downtown Tulsa, just up the street from its parent company.

The news spurred ONEOK's stock to rise more than 25 percent, gaining $10.94 a share to close at $53.77.

“This transaction should unlock the value of the assets currently in the ONEOK structure and is consistent with the board of directors' commitment to create long-term, sustainable shareholder value,” CEO John W. Gibson said. “Creating two well-capitalized entities will help ensure that each has the financial strength and flexibility to pursue its own independent strategic priorities.”

ONE Gas will be one of the largest natural gas utilities in the United States, serving more than 2 million customers in three states. Its market capitalization is expected to be as high as $2 billion.

Under the separation plan, ONEOK Inc. shareholders would retain their current holdings and receive an undetermined stake in the new company.

ONEOK Partners will not be affected by the proposed transaction, which Gibson said will not result in any job reductions.

Gibson said he expects the ONE Gas transaction to be completed early next year.

At that time, Gibson, 61, intends to retire as a ONEOK employee. He will remain nonexecutive chairman of all three ONEOK entities.

ONEOK President Terry K. Spencer, 54, will succeed Gibson as the company's CEO.

Pierce H. Norton II, 53, will become CEO of ONE Gas and join its board. He currently is an executive vice president at ONEOK and ONEOK Partners.