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Risks
1. Volatility of Commodity Prices: ONEOK is exposed to commodity price volatility due to its reliance on natural gas and natural gas liquids for its operations. Commodity prices can be highly volatile due to a variety of factors, including supply and demand, seasonality, weather conditions, and geopolitical events.
2. Regulatory Risks: Any changes in regulations, rates, or taxes can result in decreased revenues and profits for ONEOK.
3. Competition: ONEOK faces competition from other midstream and logistics companies, as well as new entrants to the market. Competition can put downward pressure on margins.
4. Long-Term Contracts: ONEOK relies heavily on long-term contracts with producers for midstream services. Many of these contracts are of uncertain duration and may not be renewed when they expire, resulting in a loss of income.
5. Financing Risks: ONEOK is highly leveraged and relies on debt and equity financing from investors. A challenge in accessing this financing, or changes in the cost of financing, could significantly increase the company's debt or equity burden and affect its operations.