ONE Gas, Inc. (OGS): History, Ownership, Mission, How It Works & Makes Money

How does ONE Gas, Inc. (OGS), a major natural gas utility reliably serving over 2.3 million customers across Oklahoma, Kansas, and Texas, sustain its operations and growth in the dynamic energy market?

As one of the largest publicly traded, 100% regulated natural gas utilities in the United States, OGS showcased its essential role and financial stability, reporting a net income of $164.2 million for just the first quarter of 2024.

Understanding its journey from its origins, who holds the reins, and the core mission driving its strategy is key.

But what exactly fuels its revenue streams, and how does its operational model function day-to-day to deliver value to both customers and shareholders?

ONE Gas, Inc. (OGS) History

ONE Gas's Founding Timeline

Year established

ONE Gas, Inc. commenced operations as an independent, publicly traded company on January 31, 2014.

Original location

The corporate headquarters are situated in Tulsa, Oklahoma.

Founding team members

ONE Gas wasn't established by individual founders like a typical startup. It emerged from a strategic decision by ONEOK, Inc. to spin off its natural gas distribution operations into a separate entity. The leadership team already managing these assets transitioned to lead the newly formed ONE Gas.

Initial capital/funding

Following the spin-off, ONE Gas inherited the significant infrastructure and customer base of ONEOK's distribution segment. It started its independent journey serving approximately 2 million customers across three states: Oklahoma, Kansas, and Texas, equipped with its own distinct capital structure from the outset.

ONE Gas's Evolution Milestones

ONE Gas's Transformative Moments

The 2014 Separation

The spin-off from ONEOK fundamentally reshaped the business. It allowed ONE Gas to dedicate all its resources and strategic thinking to the regulated natural gas distribution sector. This clarity appealed to investors seeking the stability characteristic of utility investments and streamlined operational decision-making. Examining the Mission Statement, Vision, & Core Values of ONE Gas, Inc. (OGS) helps understand the focused path chosen after becoming independent.

Unwavering Focus on Regulated Utility Model

From its inception as a standalone company, ONE Gas deliberately concentrated on its core regulated business. This meant prioritizing consistent, significant investments back into its infrastructure network. Success hinged on productive engagement with state regulatory commissions to achieve fair returns on these investments, a cornerstone of its strategy through 2024.

Adapting to the Evolving Energy Landscape

While natural gas distribution remained its core function, the period leading up to 2024 saw ONE Gas increasingly address the long-term energy transition. This involved strategic planning and initial explorations into lower-carbon solutions compatible with its infrastructure, such as renewable natural gas (RNG) and the potential for hydrogen blending, signaling an adaptation to ensure long-term relevance and sustainability.

ONE Gas, Inc. (OGS) Ownership Structure

ONE Gas operates as a publicly traded entity, meaning its shares are owned by a mix of institutional investors, company insiders, and the general public. The ownership is heavily weighted towards large institutions, reflecting confidence from major financial players.

Current Status

As of the end of 2024, ONE Gas, Inc. is a publicly traded company listed on the New York Stock Exchange under the ticker symbol OGS. This status subjects it to regulatory oversight by the Securities and Exchange Commission (SEC) and requires regular financial disclosures.

Ownership Breakdown

The distribution of ownership provides a clear picture of who holds significant stakes in the company. Understanding the specifics of who holds these shares provides further insight. Exploring ONE Gas, Inc. (OGS) Investor Profile: Who’s Buying and Why? delves deeper into this. Based on data available toward the end of fiscal year 2024, the approximate ownership structure was as follows:

Leadership

The strategic direction and day-to-day operations of ONE Gas are guided by its senior leadership team and Board of Directors. As of late 2024, key figures steering the company included:

• John P. Gibson - Non-Executive Chairman of the Board
• Robert S. McAnnally - President and Chief Executive Officer
• Curtis L. Dinan - Senior Vice President and Chief Financial Officer
• Joseph L. McCormick - Senior Vice President, General Counsel and Assistant Secretary
• Julie A. White - Senior Vice President, Communications and Chief Culture Officer

This team is responsible for executing the company's strategy, managing operations across its service territories, and ensuring compliance with regulatory requirements, ultimately driving value for shareholders.

ONE Gas, Inc. (OGS) Mission and Values

ONE Gas, Inc. operates with a defined purpose and set of values that guide its strategic decisions and daily operations. These elements shape the company culture and articulate its commitment beyond financial returns, focusing on safety, service, and community responsibility. You can explore the full details in the Mission Statement, Vision, & Core Values of ONE Gas, Inc. (OGS).

ONE Gas's Core Purpose

The company centers its activities around a clear statement of intent.

Official mission statement

To deliver natural gas for a better tomorrow.

Vision statement

While not explicitly termed a vision statement separate from its mission, the company's forward-looking aspiration is embedded in its purpose and strategic focus on safe, reliable, and sustainable energy delivery.

Company slogan

ONE Gas does not utilize a distinct, widely marketed slogan separate from its core purpose statement.

Core Values

The foundation of ONE Gas's culture rests on several key principles:

• Safety: Prioritizing the well-being of employees, customers, and communities. This commitment is reflected in ongoing investments, such as dedicating significant capital, often hundreds of millions annually, towards system integrity and modernization projects to enhance pipeline safety across its service territories.
• Ethics: Conducting business with integrity and transparency.
• Inclusion and Diversity: Fostering a respectful and equitable environment for all stakeholders.
• Service: Delivering reliable natural gas service and exceptional customer care.
• Value: Creating long-term value for customers, shareholders, and communities through efficient operations and responsible growth.

ONE Gas, Inc. (OGS) How It Works

ONE Gas operates as a regulated natural gas distribution utility, primarily focused on purchasing, transporting, and delivering natural gas to end-users within its designated service territories. Its revenue generation is tied directly to the delivery volumes and rates approved by state regulatory commissions.

ONE Gas, Inc.'s Product/Service Portfolio

ONE Gas, Inc.'s Operational Framework

The company's operations revolve around the safe and reliable management of an extensive pipeline network. This involves sourcing natural gas supplies, often through long-term contracts, and transporting that gas through transmission and distribution pipelines directly to homes and businesses. Key activities include:

• System maintenance and upgrades across approximately 69,000 miles of distribution mains and service lines.
• Compliance with stringent federal and state safety regulations (e.g., PHMSA).
• Managing customer service operations, including billing, meter reading, and emergency response for its roughly 2.3 million customers across Oklahoma, Kansas, and Texas.
• Engaging in regulatory processes to establish rates that allow for cost recovery and a reasonable return on investment, contributing to operating revenues which approached $2.4 billion in recent reporting periods.

Value is created by ensuring consistent gas flow, maintaining infrastructure integrity, and providing responsive customer support, all under the oversight of state utility commissions.

ONE Gas, Inc.'s Strategic Advantages

ONE Gas benefits significantly from its position as a regulated utility, granting it exclusive rights to distribute natural gas within its established service areas. This creates high barriers to entry for potential competitors. Its extensive and well-maintained infrastructure represents a substantial physical asset advantage. Furthermore, a diverse customer base across residential, commercial, and industrial sectors provides revenue stability. Operational efficiency and a strong focus on safety protocols enhance reliability and community trust, aligning with the company's Mission Statement, Vision, & Core Values of ONE Gas, Inc. (OGS). This regulatory framework, combined with essential service provision, underpins its market success.

ONE Gas, Inc. (OGS) How It Makes Money

ONE Gas generates revenue primarily by distributing natural gas to residential, commercial, and industrial customers across its service territories in Oklahoma, Kansas, and Texas. Its earnings are largely driven by rates approved by state regulatory commissions, designed to recover costs and provide an authorized return on invested capital.

ONE Gas, Inc. (OGS) Revenue Breakdown

The company's revenue streams reflect its core function as a natural gas utility. Based on delivery volumes reported for the fiscal year ending December 31, 2023 (data reported in early 2024), the approximate contribution breakdown is as follows:

Note: Percentages are based on delivered volumes for FY2023 and serve as a proxy for revenue contribution mix; actual revenue percentages may vary slightly. Growth trends reflect general market conditions and regulatory outcomes.

ONE Gas, Inc. (OGS) Business Economics

The economic engine of ONE Gas is rooted in the regulated utility model. Here’s how it works:

• Rate Base Investment: OGS invests significant capital in building and maintaining its natural gas distribution infrastructure (pipelines, meters, etc.). This investment forms the 'rate base'. For FY2023, capital expenditures were $687.6 million.
• Regulated Rates: State commissions (like the Oklahoma Corporation Commission, Kansas Corporation Commission, and Railroad Commission of Texas) approve the rates OGS can charge customers. These rates are designed to cover operating expenses, depreciation, taxes, and allow OGS the opportunity to earn a fair return on its rate base.
• Return on Equity (ROE): Regulators authorize a specific ROE, typically ranging from 9% to 10%, which represents the allowed profit margin on the equity portion of its rate base.
• Cost Recovery Mechanisms: Mechanisms exist to recover costs, including the variable cost of natural gas (usually passed through directly to customers) and infrastructure upgrade costs, sometimes through separate riders or trackers approved by regulators.
• Customer Growth & Usage: Revenue is also influenced by the number of customers served (around 2.3 million) and the volume of gas they consume, which can be significantly impacted by weather patterns (colder winters increase heating demand).

ONE Gas, Inc. (OGS) Financial Performance

Key financial metrics provide insight into the company's operational success and stability. Based on fiscal year 2023 results reported in early 2024, ONE Gas demonstrated consistent performance typical of a regulated utility. Operating revenues reached $2.32 billion, reflecting the scale of its distribution services. Operating income stood at $430.2 million, while net income attributable to the company was $243.9 million. Continued capital investment is crucial for earnings growth, aiming to expand the rate base, which neared $5.5 billion at year-end 2023. Analyzing these trends offers a clearer picture of its stability; you can explore further details here: Breaking Down ONE Gas, Inc. (OGS) Financial Health: Key Insights for Investors. The predictability of earnings, supported by the regulatory framework, is a hallmark of its financial profile.

ONE Gas, Inc. (OGS) Market Position & Future Outlook

As one of the largest 100% regulated natural gas utilities in the United States, ONE Gas maintains a stable position underpinned by its defined service territories in Kansas, Oklahoma, and Texas. The company's future outlook hinges on continued infrastructure investment, constructive regulatory relationships, and managing the evolving energy landscape.

Competitive Landscape

While regulated utilities operate largely within exclusive territories, comparing scale among major publicly traded natural gas distribution companies provides context.

Note: Share percentages are approximate, based on relative customer counts among these specific peers as of early 2024, and do not represent direct market competition in overlapping areas.

Opportunities & Challenges

Industry Position

ONE Gas stands as a significant player focused solely on regulated natural gas distribution, serving approximately 2.3 million customers across three states as of early 2024. Its strategy centers on substantial capital investment in system safety, reliability, and growth, funded through operating cash flow and debt, supported by strong investment-grade credit ratings. The company prioritizes maintaining constructive relationships with regulatory bodies in Kansas, Oklahoma, and Texas to ensure timely recovery of investments and operating costs. This focus aligns with its core objectives, as detailed in the Mission Statement, Vision, & Core Values of ONE Gas, Inc. (OGS). ONE Gas has also demonstrated a commitment to returning value to shareholders, evidenced by a consistent history of dividend payments and targeted annual dividend growth, aiming for 6% to 8% through 2028 based on projections from early 2024.