ONEOK revised downward its earnings guidance for 2001. It said net income excluding the effect of an Oklahoma Corporation Commission (OCC) charge is estimated to be about $1.20 per diluted share of common stock, which compares to Wall Street estimates between $1.35 and $1.50. Net income is estimated to be only $1.02 per diluted share of common stock including the impact of the OCC charge. The company earned $1.10 per diluted share in 2000 excluding the sale of a processing plant.

ONEOK said the revision was prompted primarily by lower commodity prices and margins coming from the company’s natural gas gathering and processing segment and the impact of warmer-than-normal weather on energy prices and the distribution segment. ONEOK previously announced a charge of 18 cents per diluted common share reflecting the OCC’s denial of the right to collect outstanding gas costs incurred last winter from Oklahoma distribution customers. The company has appealed the OCC decision to the Oklahoma Supreme Court. The appeal process is expected to take two years. In the meantime, the OCC decision has been stayed and the company will collect the outstanding gas costs, which will be subject to refund with interest if the court rules that the OCC decision was correct.

The company previously announced its estimated exposure of less than $40 million to Enron based on commodity transactions primarily for storage management and natural gas hedging involving ONEOK’s energy marketing and trading and production segments. ONEOK has not received payment from Enron on $14 million of November and December 2001 commodity transactions that were to settle in late November and early December 2001. The filing of the voluntary bankruptcy proceeding by Enron may also have created an event of technical default related to various financing leases tied to ONEOK’s Bushton gas processing plant in south central Kansas, the company said. Enron is one of the three guarantors of these Bushton plant leases. However, ONEOK is the primary guarantor and will continue to make all payments due under the leases. ONEOK has notified the lessor and indenture trustee under the leases of the potential technical default.

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