ONEOK (OKE) Q1 2026: FCF Drops to $70M as CapEx Jumps 37%
ONEOK posted first-quarter operating income of $1,428 million, up 17.0% from $1,220 million a year earlier, according to its Form 10-Q for the quarter ended March 31, 2026 — yet the cash left after building the assets that produced it shrank to almost nothing. Free cash flow, defined here as operating cash flow minus capital expenditures, fell to $70 million from $275 million a year earlier, against $674 million of dividends paid in the same three months, and the gap was bridged with $827 million of net new short-term borrowings. Earnings quality is not the issue: ONEOK expects consolidated earnings to be approximately 90% fee-based in 2026 by its own estimate, so the operating line is genuinely durable. The pressure sits entirely on the funding side, where a $2.7–3.2 billion 2026 capital program and a $4.28 annualized dividend are competing for the same cash — and in April the company added a $1.2 billion 364-day term loan to the toolkit. For a midstream operator that has spent three years absorbing Magellan, EnLink and Medallion, this quarter is less about whether the assets work and more about how the last leg of the build-out gets paid for.
1. Consolidated Balance Sheet
1-1. Major asset movements
| Item | Dec 31, 2025 ($M) | Mar 31, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 78 | 172 | +120.5 |
| Accounts receivable, net | 3,010 | 3,670 | +21.9 |
| Inventories | 948 | 1,136 | +19.8 |
| Net property, plant and equipment | 47,861 | 48,304 | +0.9 |
| Investments in unconsolidated affiliates | 2,889 | 2,985 | +3.3 |
| Goodwill | 8,058 | 8,058 | 0.0 |
| Intangible assets, net | 2,901 | 2,868 | −1.1 |
| Total assets | 66,641 | 68,203 | +2.3 |
Source: ONEOK Form 10-Q, three months ended March 31, 2026.
Total assets grew $1,562 million in three months, but only $443 million of that landed in net PP&E. The rest is working capital: receivables up $660 million and inventories up $188 million, driven by the Refined Products and Crude segment, where product sales jumped $2,227 million. The volume picture inside that segment is split — refined products volumes shipped rose to 1,568 MBbl/d from 1,401, while crude oil volumes shipped fell to 1,613 MBbl/d from 1,846 on lower-margin, short-haul movements. Gross PP&E rose to $56,272 million from $55,489 million while accumulated depreciation climbed to $7,968 million — the asset base is still being added to faster than it is being written down, which is what a company mid-build looks like.
