ONE Gas, Inc. (OGS): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at how a regulated utility like ONE Gas, Inc. (OGS) plans its next phase of growth, and honestly, the Ansoff Matrix lays it out clearly. We've mapped out four distinct paths: doubling down on core reliability-like spending over $750 million annually on system modernization-to keep their existing 2.3 million customers happy; scouting adjacent territories in Kansas and Texas for expansion; rolling out new offerings such as a premium Renewable Natural Gas (RNG) option; and finally, the more aggressive move into non-regulated areas like fiber or battery storage. It's a pragmatic look at balancing safe, regulated returns with calculated risk-taking, so dive in below to see the specific actions planned for each quadrant.

ONE Gas, Inc. (OGS) - Ansoff Matrix: Market Penetration

Market Penetration for ONE Gas, Inc. (OGS) centers on deepening market share within its existing service territories of Oklahoma, Kansas, and Texas. This strategy relies heavily on system investment to drive reliability and customer acquisition through growth areas.

To accelerate main replacement programs and improve reliability in Oklahoma, ONE Gas, Inc. is channeling significant capital toward system integrity. For context, the company replaced over 450 miles of transmission, main, and service lines in 2024. The overall focus on system modernization is supported by the 2025 capital spending plan, which is estimated to be approximately $750 million annually, primarily targeted for these integrity and replacement projects.

Driving greater usage among existing residential customers through increased marketing of high-efficiency natural gas appliances is a key penetration tactic. While specific marketing expenditure figures aren't public, the overall financial outlook supports continued investment in the customer base. For the full year 2025, ONE Gas, Inc. has a narrowed net income guidance range of $262 million to $266 million, with earnings per diluted share expected between $4.34 to $4.40. The company also declared a quarterly dividend of $0.67 per share, representing an annualized $2.68 per share, targeting a payout ratio between 55% and 65% of net income.

Retaining customers against alternative energy providers is addressed by offering competitive supply options. The utility is focused on system expansion to support growing demand, as evidenced by the anticipated average rate base for 2025 being $5.8 billion.

The commitment to system modernization through capital spending is substantial. The total estimated capital investment for 2025 is $750 million, with a significant portion dedicated to maintaining and improving service quality. This is distinct from growth capital, which for 2025 is approximately $180 million, largely due to growth opportunities in Texas and Oklahoma.

Streamlining the process for new home hookups in high-growth areas of Texas and Kansas directly contributes to customer base penetration. The company is seeing tangible results from this focus, reporting approximately ~24,000 new meter sets on a trailing twelve-month basis as of April 30, 2025. The growth momentum is clear, with residential sales showing an increase of $5.3 million in operating income year-to-date through September 30, 2025, driven primarily by net customer growth in Oklahoma and Texas.

Here is a breakdown of the anticipated average rate base by service territory for 2025:

ONE Gas, Inc. (OGS) - Ansoff Matrix: Market Development

You're looking at how ONE Gas, Inc. (OGS) can take its existing natural gas distribution business and push it into new geographic areas. This is Market Development, and for OGS, it means leveraging its strong foothold in Oklahoma and Kansas to capture more of the Texas market and potentially look beyond.

The strategy involves targeting smaller, contiguous municipal or private gas distribution systems in adjacent areas of Oklahoma and Kansas. Currently, ONE Gas, Inc. (OGS) provides natural gas distribution services to approximately 2.3 million customers across Kansas, Oklahoma, and Texas. The company holds a dominant market share in its core states, serving 89% of the natural gas distribution customers in Oklahoma and 71% in Kansas.

Expansion efforts are heavily focused on Texas, where the company currently holds a 13% market share. ONE Gas, Inc. (OGS) plans to expand service territory into underserved, high-growth exurban communities bordering current Texas service areas. This push is supported by capital allocation; capital investments for extensions to new customers in 2025 are expected to be nearly $180 million, primarily due to continued growth opportunities in Texas and Oklahoma. The company saw approximately 24,000 new meter sets on a trailing twelve-month (TTM) basis as of August 31, 2025.

Targeting industrial parks and large commercial developments near existing main lines is key for securing new, high-volume customer connections. This opportunity is underscored by significant regional economic activity, with approximately $87 billion in new manufacturing projects announced since 2022 across the service territory, fostering demand for energy solutions.

The financial commitment to this growth is clear in the capital plans. The five-year capital expenditure plan for 2025-2029 totals approximately $4.0 billion, which includes growth capital of approximately $1.0 billion. For 2026, capital investments for extensions to new customers are projected to be approximately $230 million, again largely due to growth opportunities in Texas and Oklahoma. These investments are projected to support an estimated average rate base growth of 7% to 9% per year through 2029.

The following table summarizes key figures relevant to ONE Gas, Inc. (OGS)'s Market Development strategy:

ONE Gas, Inc. (OGS) will lobby state regulators in neighboring states like Missouri or Arkansas for potential future utility franchise opportunities. Also, the company will establish a dedicated team to pursue federal infrastructure grants for pipeline expansion into new counties.

Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Ansoff Matrix: Product Development

You're looking at how ONE Gas, Inc. (OGS) can grow by introducing new offerings to its existing customer base. This is the Product Development quadrant of the Ansoff Matrix, and for a regulated utility, it means layering new services on top of the core business of delivering natural gas.

For ONE Gas, Inc. (OGS), which serves over 2.3 million customers across Kansas, Oklahoma, and Texas, these new products are about decarbonization, efficiency, and modernization. The company is already investing heavily, with 2025 capital expenditures projected at approximately $750 million.

Pilot a Renewable Natural Gas (RNG) Program

Piloting a Renewable Natural Gas (RNG) program targets large commercial clients looking to meet their own environmental, social, and governance goals. This leverages existing infrastructure to deliver a low-carbon option. ONE Gas, Inc. (OGS) has already identified 175 Bcf of potential RNG feedstock across its footprint. To put that in perspective, the company's total annual gas volumes are around 385 Bcf. Transport customers, who buy gas in large volumes and often have emissions targets, account for roughly 60% of those annual volumes, making them the prime target for a premium RNG offering.

Introduce Smart-Metering Technology

Rolling out advanced metering infrastructure across all 2.3 million customer accounts enables usage-optimization services that go beyond simple billing. This is a major capital undertaking; for instance, ONE Gas, Inc. (OGS) anticipated approximately $180 million of its 2025 capital spending was directly due to an increase in customers, which includes meter sets. As of April 30, 2025, the company reported approximately 24,000 new meter sets on a trailing twelve-month basis. New services could include real-time consumption alerts or dynamic pricing options.

Develop Natural Gas Vehicle (NGV) Fueling Solutions

Developing a comprehensive NGV fueling station solution specifically for commercial fleets in Texas is a market development play within a product development strategy. The Texas Gas Service division is a key growth area, with capital investments for extensions to new customers in Texas and Oklahoma totaling approximately $230 million expected in 2026. This focus on growth infrastructure supports the build-out needed for fleet solutions.

Offer Energy Efficiency and Weatherization Services

Bundling energy efficiency consulting and home weatherization services directly with the gas service creates a value-added product for residential customers. This aligns with regulatory incentives; for example, the Oklahoma Natural Gas filing in February 2025 included a request for a $2.4 million energy efficiency incentive. This shows a clear, quantifiable value stream associated with efficiency programs.

Invest in Small-Scale Hydrogen Blending Trials

Investing in small-scale hydrogen blending trials prepares the distribution system for future fuel mixes, which is a long-term product evolution. The company is already involved in the H2@Scale hydrogen development project to test infrastructure safety and reliability. This research and development is part of the broader capital strategy, which saw 2025 CapEx set at about $750 million.

Here's a quick look at the financial context supporting these new product investments:

The utility is also making progress on its environmental goals, having achieved a 51% reduction in Scope 1 emissions by the end of 2024, keeping it on track for its 2035 goal of a 55% reduction.

You should check the Q4 2025 earnings release for the final 2025 capital spend breakdown. Finance: draft 13-week cash view by Friday.

ONE Gas, Inc. (OGS) - Ansoff Matrix: Diversification

You're looking at how ONE Gas, Inc. (OGS) might move beyond its core regulated gas distribution business, which serves approximately 2.3 million customers across Oklahoma, Kansas, and Texas. Honestly, even with a strong regulated base-like the 89% market share in Oklahoma or the $5.8 billion average rate base projected for 2025-diversification is where you look for non-correlated growth. We have some solid numbers from the latest reports to anchor this discussion.

As of September 30, 2025, ONE Gas, Inc. reported total assets of $8.5 billion and total equity of $3.18 billion, with a debt-to-capital ratio sitting at 49.7%. The company also recently bolstered its financial flexibility, amending its Credit Agreement in October 2025 to increase borrowing capacity from $1.35 billion to $1.5 billion, plus securing a $250 million unsecured term loan in August 2025. This financial positioning is the dry powder you'd need for these non-core moves.

Here's how we map those five potential diversification vectors against the current financial reality:

• Form a non-regulated subsidiary to provide specialized pipeline integrity management services to third-party utilities.
• Invest in utility-scale battery storage projects in Texas to gain expertise in the non-gas energy infrastructure market.
• Acquire a small, non-regulated fiber-optic network company to utilize existing rights-of-way for telecommunications services.
• Partner with a large-scale waste management company to jointly develop and operate RNG production facilities.
• Establish a defintely separate entity focused on providing construction and maintenance services for midstream gas assets.

The regulated side is still busy; year-to-date 2025 net income reached $177.9 million, up from $145.8 million in the same period last year, and the TTM revenue as of September 30, 2025, was $2.37 billion, a 15.06% year-over-year increase. Still, these non-regulated moves aim to tap into adjacent markets, perhaps leveraging the $750 million in capital expenditures planned for 2025.

Consider the pipeline integrity service idea. If a new subsidiary targets the market segments that require the same level of system maintenance ONE Gas, Inc. performs internally-which saw $575.4 million in CapEx and asset removal costs year-to-date 2025-it could capture external spend. The regulatory wins in Oklahoma (a $41.1 million rate increase settlement) and Kansas (a $7.2 million increase) show the value of infrastructure work, but a non-regulated entity captures that revenue directly without rate case lag.

For the battery storage investment, the sheer scale of capital deployment is relevant. The company anticipates total net long-term financing needs through 2029 of approximately $1.5 billion, with about 40% expected to be equity. Any large-scale energy infrastructure investment, like battery storage, would need to be financed against this backdrop, perhaps using the recent $250 million loan facility.

The fiber-optic network acquisition plays on existing physical assets. ONE Gas, Inc. operates in major markets like Oklahoma City and Austin, Texas. The growth capital component of the five-year plan (2025-2029) is approximately $1.0 billion, and utilizing existing rights-of-way for telecom could offer a high-margin revenue stream that doesn't rely on gas throughput or weather normalization mechanisms, which affected Q2 2025 operating income.

Developing RNG facilities jointly with a waste management partner directly addresses future energy mix trends. The company's current rate base is $5.8 billion in 2025, and future growth is projected to support an average rate base of around $6.3 billion in 2026. Diversification into RNG offers a path to asset growth outside the traditional gas distribution model, potentially insulating future rate base expansion from pure commodity price volatility.

Establishing a separate construction and maintenance entity for midstream assets would be a pure services play. The Q3 2025 CapEx was $207.6 million, up from $197.7 million the prior year, showing ongoing investment in the system. A separate entity could bid on external midstream work, competing against the internal allocation of resources that currently supports the $750 million 2025 CapEx plan.

Here's a snapshot of the current financial scale that underpins any diversification moves:

The recent governance focus, including board expertise diversification, suggests a readiness to handle complex, non-utility ventures. Finance: draft the projected capital allocation split for the 2026 CapEx budget of $1.03 billion by Friday.