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# ONEOK Lowers Its Debt Target To 3.25 Times EBITDA Or Less, Calling It 'A Change In Philosophy'
- URL: https://www.bullished.co/oneok-lowers-its-debt-target-to-3-25-times-ebitda-or-less-calling-it-a-change-in-a1207f06/
- Published: 2026-10-28T16:27:23.000Z
- Updated: 2026-10-28T16:27:23.000Z
- Description: The CFO said 3.5 times is now a ceiling, not the goal, and the company expects to go below three times within the next few years.
- Author: Matteo Parrino
- Tags: Earnings, OKE, Industry: Energy

[ONEOK](https://www.bullished.co/tag/oke/), the pipeline operator, is cutting its debt target to approximately 3.25 times EBITDA or lower, Chief Financial Officer Walt Hulse said on the company's [third-quarter earnings call](https://www.marketwatch.com/story/oneok-boosts-outlook-on-higher-permian-basin-volumes-519d552f?ref=bullished.co). He said the old target of approximately 3.5 times is now the upper end of its range.

## A lower target, by design

"This is not guidance. It reflects a change in philosophy," Hulse said, adding that the company intends to run with less leverage than before. As modeled today, he said, ONEOK would expect to go below three times within the next few years.

The gap between the target and the 3.5 times ceiling is intentional, Hulse said. It gives room through commodity cycles and the capacity to act if a compelling opportunity clears the company's return thresholds, which he called "optionality, not a plan." The base case, he said, remains disciplined leverage while funding growth and returning cash through the dividend and potential share repurchases.

A Barclays analyst asked whether rating agencies, commodity volatility or acquisition dry powder drove the move. Hulse said it was "no one particular thing," and that the company did not do it "just to get a triple plus." He added that the company has lived through commodity cycles and expects another one.

## After the Apollo money

ONEOK, which gathers, processes, moves, stores and exports natural gas, natural gas liquids, refined products and crude oil, said it closed a $9 billion minority equity investment and retired [nearly $5.5 billion](https://www.globenewswire.com/de/news-release/2026/10/27/3389643/0/en/oneok-announces-higher-third-quarter-2026-earnings-and-increases-2026-financial-guidance.html?ref=bullished.co) of debt in September. S&P Global Ratings and Fitch Ratings then raised its credit rating to BBB+ with a stable outlook, Hulse said. He said the leverage framework had drawn a number of investor questions.

Third-quarter adjusted EBITDA was [$2.24 billion](https://www.globenewswire.com/de/news-release/2026/10/27/3389643/0/en/oneok-announces-higher-third-quarter-2026-earnings-and-increases-2026-financial-guidance.html?ref=bullished.co), a 6% increase from the third quarter of 2025\. Net income attributable to ONEOK was $1.35 billion, or $2.13 per diluted share, including a $336 million one-time non-cash income tax benefit tied to the corporate reorganization.

## Spending rises, then eases

Hulse said 2026 capital spending is now expected to total approximately $3.5 billion, up from the $3.2 billion high end of earlier guidance. The increase comes from about $200 million tied to the Brazos acquisition plus added projects, including the Cutter II plant and a Delaware NGL expansion.

He put 2027 at around $3 billion, give or take, and 2.5 billion to 3 billion afterward, which he said would still leave quite a bit of free cash flow for shareholders. The company raised its 2026 adjusted EBITDA midpoint by $200 million from last quarter's guidance. It does not plan to give 2027 guidance until after fourth-quarter results in February.

Hulse said the Brazos Midland acquisition should push out meaningful cash tax payments to 2032 from 2031.

### Sources

- [Oneok Boosts Outlook on Higher Permian Basin Volumes](https://www.marketwatch.com/story/oneok-boosts-outlook-on-higher-permian-basin-volumes-519d552f?ref=bullished.co) — MarketWatch
- [ONEOK GAAP EPS of $2.13 beats by $0.63 (OKE:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4658394-oneok-gaap-eps-of-2%5F13-beats-by-0%5F63?ref=bullished.co) — seekingalpha.com
- [ONEOK Q3 2026 earnings preview: Revenue estimates see upward revisions (NYSE:OKE) | Seeking Alpha](https://seekingalpha.com/news/4657598-oneok-q3-2026-earnings-preview-revenue-estimates-see-upward-revisions?ref=bullished.co) — seekingalpha.com
- [Mergers & Acquisitions : Law360 : Legal News & Analysis](https://www.law360.com/mergersacquisitions/news?page=16&ref=bullished.co) — law360.com
- [ONEOK Announces Higher Third-Quarter 2026 Earnings and](https://www.globenewswire.com/de/news-release/2026/10/27/3389643/0/en/oneok-announces-higher-third-quarter-2026-earnings-and-increases-2026-financial-guidance.html?ref=bullished.co) — globenewswire.com

### More on ONEOK

- [ONEOK Lifts 2026 Profit Outlook As Third-Quarter Net Income Reaches $1.35 Billion](https://www.bullished.co/oneok-lifts-2026-profit-outlook-as-third-quarter-net-income-reaches-1-35-billion-60be5d57/)

[All ONEOK (OKE) coverage →](https://www.bullished.co/tag/oke/)