The board of directors of ONEOK Inc. has unanimously approved the separation of the company’s natural gas distribution business into a stand-alone, publicly traded company that will be called ONE Gas Inc.
ONEOK shareholders of record at the close of business on Jan. 21 will retain their current shares of ONEOK stock and receive one share of ONE Gas stock for every four shares of ONEOK stock owned. No fractional shares of ONE Gas stock will be issued. However, shareholders entitled to receive a fractional share of ONE Gas stock in the distribution will receive the cash value of that fractional share instead.
At closing, Terry K. Spencer will become president and CEO of ONEOK and ONEOK Partners LP, and a member of the ONEOK board of directors, while remaining on the ONEOK Partners board.
Spencer succeeds John W. Gibson, who will retire after more than seven years as CEO of ONEOK and ONEOK Partners, and almost 14 years with the company. Gibson will become a non-executive chairman of ONEOK, ONEOK Partners and ONE Gas.
At closing, Pierce H. Norton II will become president and CEO of ONE Gas and a member of the ONE Gas board of directors.
ONE Gas will consist of Kansas Gas Service, Oklahoma Natural Gas Co. and Texas Gas Service. The new company will be headquartered in Tulsa, Okla. It will be one of the largest natural gas utilities in the United States, serving more than 2 million customers in three states, and will be a 100 percent regulated, publicly traded natural gas utility.
Following the separation, ONEOK will reduce its long-term debt with the proceeds from a one-time cash payment from ONE Gas — estimated to be approximately $1.13 billion — as part of the transfer of the natural gas distribution business to ONE Gas from ONEOK. ONE Gas will fund this transfer to ONEOK by issuing its own long-term debt in mid-January 2014.
Upon completion of the separation, the ONE Gas board of directors will consist of seven directors, including Gibson and Norton, as well as Robert B. Evans, retired president and CEO of Duke Energy Americas, a business unit of Duke Energy Corp.; Michael G. Hutchinson, retired partner of Deloitte & Touche, who led the firm’s energy and natural resources, as well as its audit and enterprise risk management practices in its Denver office; Pattye L. Moore, a member of the ONEOK board of directors since 2002; Eduardo A. Rodriguez, a member of the ONEOK board of directors since 2004 and current president of Strategic Communications Consulting Group, in El Paso, Texas; and Douglas H. Yaeger, retired chairman, president and CEO of The Laclede Group Inc. and Laclede Gas Co.