OKE - Earnings call transcript Q3 2017

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Operator

Good day and welcome to the Third Quarter 2017 ONEOK Earnings Call. Today's conference is being recorded. At this time I would like to turn the conference over to Mr. Andrew Ziola. Please go ahead, sir.

Andrew Ziola

to quarter welcome conference and you ONEOK's earnings third call. Thank and this that should might statements of the XXXX statements Securities reminder of call Harbor be covered provision Safe made forward-looking and predictions A Acts or during that the by expectations include considered XXXX. are ONEOK's from projected any could statements. forward-looking results Actual those differ materially in

filings. For please refer differ, a results actual to discussion of cause factors our that SEC could to

first this Terry? CEO is of Spencer, Terry and speaker President Our morning ONEOK.

Terry Spencer

all you thank joining and us morning Good Andrew. for today. Thanks,

As appreciate ONEOK. continued in interest always your we investment in

Officer, me Vice Affairs are Joining Vice Officer. call Walt today's Burdick, Kevin Strategic Hulse, President Corporate Chief and Financial Chief Operating Executive Planning and Executive President, and

going New others the I saying brief Before by Mont to a Harvey, I the our I how countless at am much of and our company over expected, remarkable. facility and I people it safely its and our senseless by families their afternoon. once industry at call them. to continuous again many and customers. this commitment this The our tragedy to And Hurricane have I of also shorter would needed mention Belvieu personally as hand city their very them. company to without also of Belvieu the provide governments. effected endured in its start area who to nothing be I and proud extend Mont to our as keep our customers, thoughts our appreciate employees to running the assets and employees up I have cooperation yesterday am efforts services dedication that should and few Many work resolves opening remarks. with tirelessly the to order and that event. swift been in local occurred City possible prayers not tragic of to the prove work the following copes Harvey service courage York recovery wanted infrastructure thanks of hard providers victims, and peers, all

building second performance, quarter third our off to results. quarter on our Moving

benefiting Third are revenues gas to in was natural and on results gas XXXX we achieving that our and strong natural quarter gas our pipeline performance way from liquids segment. demonstrate higher well growth volume These transportation our natural guidance.

today advances a served ago, production increased more in exploration stand to we by year we primarily counts efficient more in technological more has have which As XX%, compared rig drilling states driven by effective, the made prolific. and

has next We which ethane capital facilities expect the ethane, petrochemical online The that months. facilities industry Gulf now the energy are these real is and customers see to this startups we We're has deliver in more to the aggregate for part played proving years several hearing I it several markets. mention big to also to place. ONEOK designed and adaptability once of wave invest next because Coast. coming moment. cracker been the supply built and it's in startup out continuing discuss more a to important for two in from its the industry on and be by beginning a petrochemical demand anticipating the about seeing to will to are Kevin and believe its to resiliency I market again point and

in We into their are and we needs the now future. well meet With over call to I will needs our today the committed are Walt. to and to positioned turn customers to our the assets of meet that around investing continue

Walt Hulse

growth. natural gas was quarter XX% $XXX third adjusted liquids gas natural primarily with million the EBITDA ONEOK's you, million in volume compared $XXX increase The second by quarter Thank Terry. XXXX. driven and

million XX% impacted third investments the segment's disruption third expects quarter to by billion for equity non-strategic We October, anchor earnings times or $XXX in non-cash annual $X.X in quarter XXXX segment manage from coverage million. we cents and return a of recommend increases per per June, basis excess per in announced when supported quarterly $X.XX dividends impairment times Harvey, the of approximately by earnings gas assets million issuance these the unchanged through ATM charge increased million included in noted share XX%. share on been from dividend proceeds still these our generated nearly and growth issued NGL quarter resulting annual results The earnings recently Management which or prudently per low have was previous our $XX shares Hurricane share in multiple Since our quarter. an without higher and As net of of X.X our or healthy week, to high with related for program estimate release, we $X.X our projects would September of quarter support sheet. dividend attractive, In along of announced $X.XX XX.X by as we approximately $X.XX. greater. commitments projects share. proceeds approximately announced dividend to of that the dividend G&P beginning Dividend X.X X.X X% coverage in annualized the Last we've the customers. equity balance we

future September by to additional To tools we one at be We that customer the to ONEOK's see to times make month available to debt-to-EBITDA trailing will XX. attractive continue growth. the opportunities commitments. future make investments, X.X improved ATM again XX the GAAP supported fund of investments extent

quarter was times. Our X.X annualized debt-to-EBITDA rate GAAP third run

We X less our continue XXXX. to late early leverage by or around be times XXXX or to target expect of

in a and its a offering in in senior repaid notes billion very of the We debt debt September $X.X completed continue the July, to term essentially extending proactively $X at balance rates. combined We manage July and outstanding our attractive billion sheet.

liquidity our finance growth We are to ample investments. maturities positioned well with continue and to debt manage effectively

not commissioners for them There to Texas, expect, action. Regardless decision no As on impact Texas negotiated to NGL late December. to Law preceding. Commission impact also our may the rates LPG, may anticipate on the the deadline will expect not findings it the findings or Railroad future of by [indiscernible] West rates supply That the our filed producers for our which on Administrative material do Commission's They its remand take relates we of Judge Texas in is the outcome, from this our September, the West to processors. we current review new financial modify commissioners a have provided and LPG. results. Railroad to exceptions parties secure the ability of consider further in any

last to the ONEOK completion In our was maintained Partners and by announcement merger to of noted Basin. expand As transaction. into earnings our XXXX quarter announcement, ONEOK reflect heart the yesterday's we outlook the which updated Delaware recently of the guidance

release, presentation We a guidance refer for look and sometime after at filing expect the Kevin on business of over XX-Q each closer investor to details segments. additional to announce the first Please call I'll of for our XXXX our news now quarter. the to year. turn the

Kevin Burdick

Thank you, with our Walt. natural Starting gas segments. liquids

impact directly significant industry operating compared essentially but quarter We EBITDA hurricane. the facilities lowered following approximately Third optimization including with Harvey EBITDA related to benefit damage the due downtime second experienced We the Hurricane from quarter our which to sustain the hurricane. cost to realized no and adjusted from X% volumes million. increased XXXX mills our reduced increased by $X.X

quarter. we day, compared per XXX,XXX gathered higher a maintenance the quarter Texas on barrels plan plants forward, our wider look quarter Mid-Continent NGL Higher natural and increase volumes averaged at activities in planned drove volumes volumes and seen Bakken slightly Overland Creek with day per due second Pipeline. Garden far Basin primarily the from second Williston spreads to LPG the the we maintenance and As Grassland's processing increase. barrels the Pass X,XXX fourth pipeline had Volume on approximately decreased in NGL XXXX. so on the early pipeline our West gas

previously, and return of pipeline barrels its Bakken what discussed run can our levels we second above had or nameplate above we through quarter. As experienced at day the October, XXX,XXX per to in NGL capacity volumes

producer continue additional Overland We as out Pipeline monitoring as evaluating the our and Pass region. are well to activity the options utilization current of provide capacity customer of

third quarter with quarter were fractionated the primarily and second Third quarter fractionated that impacted XXXX, down the by slightly will were to be were Harvey. Hurricane of remained relatively in levels during more similar in quarter quarter second to our unchanged the XXXX levels. NGL volumes systems per Volumes fractionated third unable rejection XXXX. be quarter Ethane NGL stored compared first averaging fourth on or the either quarter day than XXXX XXX,XXX barrels

fluctuate we and are in facilities expect the expected to petrochemical quarter the come startups multiple, to levels to As recovery in fourth few XXXX next ethane occur. as the early into online continue months,

growth volume recovered. volumes. increase additional overall numerous barrels quarter, our into have moved ethane a in per October, in we increase As is on the In we being significant The had feed raw days. gathered combination that we a exceeded of XXX,XXX seen day and fourth of

the compared with quarter gas quarter XX% segment, processing XXXX the EBITDA gathering to second natural XXXX. For and third increased adjusted

With once a the during posting average well an per the XXX STACK in on X% Williston months acreage second for of acreage increase Williston Despite the estimate with Mid-Continent of Overland more the through connected more and operating wells uncompleted processed XXX, the areas. in between dedicated XXX in XXXX. SCOOP Basin, again volume million solid cubic XX the dedicated In a our highs combined. on with Basin Williston total with STACK growth SCOOP XXX established acreage and approximately on the nine feet of again in and year, XXX new segment volumes than quarter. the areas day Williston the Rigs third plan XX day, Pass previously. across the target maintenance our averaged feet In to first on XXX wells acreage an than rigs Basin a of XXX volumes act steady some the our Pipeline. and compared to compared and way million XXXX. facilities of our but the processing drilled on remained cubic our quarter rigs during dedicated maintenance per we with Basin, the quarter We XXX increased approximately completing now

rate on improved completed in rate basin improvements At the activity segment, to of levels, of XX our to $X.XX XX% the on well. basin, to volumes increased fee the The continues quarter still efficiencies current addition during and the XX% year expect third natural well was inventories periods increase fees. in between connected contracts track we earnings XXX high compared in where of EBITDA the the XXXX. the We productivity rig in and compared quarter XXXX X% XXXX. third the first months the into reach XXXX, to gas the compared continued with In adjusted fee in received quarter in through XX% Growth primarily Mid-Continent target of segment same wells including pipeline We the based be which nine in nine The XXXX. volume indications first transportation XX with across increased MMBtu $X.XX end of by the through in in segment's year. the by year, it the with MMBtu XX% Mid-Continent quarter the the contracted. we driven per to higher $X.XX XXXX per a as fee of approximately XXXX. connected segment's continues We continue average third hearing expect third growth of increased capacity wells all the and in benefit from and was months average XXXX

where standing with venture develop West Basin pipelines. long across we our especially out Pipeline and term natural Runner discussions producers continue We away solutions the gas our with to had our Texas system a joint recently position of take asset Road footprint long markets Permian and

rates. supported discussed, this will barrels into rates based third Because of of West term negotiated estimate on fractionation expansion growth being be we've this the growing to in recent an typical which third our Texas EBITDA plays the asset, the most to the transportation per five of quarter of be $XXX fastest Walt capital projects bundled to pipeline billion times produce plants to is day. seven prolific six $X.X The project is production project As expect expected than project completed the announced U.S. to by market multiples XXXX. from million Delaware one nearly party the are gas an The XX,XXX natural Basin, existing expansion times. Fees at up LPG in of in NGL is dedicated extension processing the and we two pipeline range four long we better and with

sized is to growth beyond lateral plants. future the Additionally, the allow two for initial

my discuss to remarks. area. plants opportunities with potential continue concludes the more customers with Delaware numerous We ten than new contracts in that in Terry regarding the processing

Terry Spencer

as comments it couple I just to Kevin. of questions. relates Thanks our take projects a growth we have before closing future your

announcement, that which X.X unannounced X.X X.X be and develop projects. infrastructure compared still continue billion of the and to could NGL is updated billion billion expansion focused capital our we on inventory with We've heavily previously. anticipate Following growth between announced potential inventory XXXX. LPG X.X This West which Texas remains now to now billion we between inventory

are in our existing businesses ways to value capital We and customers prudently and on and returns expanding investors. create focus attractive for at our continuing that will deploying

once Finally operations, I questions. in. again our we employees work communities their operated their commitment to want ready the Operator, to all now are continued our we thank of for hard customers safe for and and

Operator

will Instructions] come first Our [Operator Shneur you. question Thank UBS. from from Gershuni

Shneur Gershuni

morning, good Hi, guys.

Terry Spencer

morning. Good

Shneur Gershuni

questions. of couple a Just

and longer retain needed leverage or going wondering and do it of line trying in tap forward, no it primary I use start off, because more as continue a to talk the were funding funding? is expect understand to and process you during plan this was a past alternatively quarter post if blackout you source your about can merger strategy to during ATM the using ATM DCF I'm and you to you Just get close CapEx the use to

Walter Hulse

was merger merger. no the the to relation period time the of of between closing announcement of there Fortunately, the and

of to been that or June in those I had and to projects previously that new the funded discussing. think we announced to CapEx they XXX since so we note we've million that to sure because we use make it's important addition this were the ATM wanted growth

look a was So of maintain ahead making a forward as more projects, of game we balance we and sure the getting at strong that growth it very sheet.

Shneur Gershuni

there in that XXXX, rate number is the very projects run that then we the other are thinking to kind about? Okay. or or be approving And with the secondly, take materially XXX forward you're of could for that million CapEx identified moving should XXXX any of close

Terry Spencer

is Well, I Terry. think you should always - this

And got should rate come go but board. this take certainly growth you think projects. of this we're our that, contractual and of of commitments as about think backlog those together, customers always and routine projects I forward to base continually anchor working kind we'll new run

those those projects are in always a as not certainly things stages public approve, our So number like that - get will we've go got we of various we said, board with we've of those will things mature only development, once those.

Shneur Gershuni

XXX had around next several be achieve years for question, growth for the that How growth final rate, forward. XX% to Okay. you've is couple the of of there invest kind wondering And capital the range over what this needing forecast need it couple able much to running years? going out dividend you to to leverage investing to Is that rate a operating being in it you're versus just last achieve growth cadence more capital? million, at

Walter Hulse

base rate Sure Shneur. growth The supported past by that couple was This of is CapEx growth Walt. previously dividend line was with the in years. announced

produce will reinvest our maintain our in free strong business and flows balance these cash cash enhance and sheet. projects more to New flow

Shneur Gershuni

very much guys. Thank you Great.

Walter Hulse

you. Thank

Operator

from We'll question Jeremy Instructions] JP our take Morgan. [Operator Tonet, next

Jeremy Tonet

morning. Good

Terry Spencer

Good morning.

Jeremy Tonet

you NGL this any pipeline specifically what sounds as that as more to just of if opportunities is the the else is bit that up with the your pick comments changed, last X.X driving driver provide better anything to as growth little up wondering see that last more like share going you basins a billion want up upsize regard market But there now? I evaluation to of on one far is there. Terry, in guys to or project in there color the billion kind X.X of there. could what can what's part evolve was on you

Terry Spencer

West recent the that's Texas look announcement continue prospects at call, us is Basin seeing a at this that on in there. see operate certainly continue mentioned Jeremy core basin and on that his front we're in NGL of certainly And level an and Williston of in what high opportunity remarks Their growth STACK so Kevin great in certainly rather indicator to SCOOP. we we the Well, certainly the of certainly the call is development to as strong grow.

the of there some in it be going potentially So CapEx segment bulk increased backlog NGL will fractionation the in the of the pipeline capacity pumps, loops, that and CapEx this possibly. is be form infrastructure, storage pipeline, to in unannounced be this could in

primarily they that anything of projects So to nature what you of. consists add got Kevin, you could that? that

Kevin Burdick

Just growth of significant our existing again existing of growth assets.

Jeremy Tonet

of you you on That STACK on there's then hybrid use for funding you forward, going into makes growth versus of walk think been Thanks. just when dilution increase sense. securities wondering know future growth? another there kind question the out those ATM And and an how minimize CapEx

Terry Spencer

we to something strong pleased going forward. and at every investment Well, fund look we we a where or balance with whether traditional grade access we'll very fit be in price We're structure that the it marketplace to say capital in have towards. course be into of will evaluate position probably we that's opportunity of not. though sheet that that is a as our the enjoy and it and more business would But everything would lean cap

Jeremy Tonet

it. back little at the then if dynamics opportunities burner Got just see you on there could moving have the at continues and Thanks. there, share I was more seems to wondered And just if could value Canadian and STACK it like what on more forward it this I knocks still there? good the you talk any about you SCOOP, STACK wondering point, like seems a bit the looking

Terry Spencer

you help there? can Kevin

Kevin Burdick

I SCOOP. quarter-to-quarters some our Yeah sequential that the volume demonstrates just Terry, again we excited and growth of and about just think shows STACK And potential.

got a a additional And new out our got of also of first the we've end SCOOP capacity. I year, day million do be to under that be off G&P the got side, would that's Then announced. beyond just we've there's Valley have out footprint of that's other the we've expected which the plant and the by NGL them. tranche our that Canadian lot XXX so came the with two expansion the with plants there they load segment the in the complete we've and On there, contract a we announced yesterday STACK think that

of program activity calls a up. here, come couple last of the going STACK and the and the rigs lot efficiency full kind producers moving the development of about out So have in in drives the to just talked seen SCOOP, the I've which just on

a for given us in of opportunity there's so footprint lot our And the STACK.

Jeremy Tonet

And that. last for on Thanks Bakken. then just the

side I On could the wondered you moving could you your as wondering there, I there. forward processing thoughts Bear in just us competitive dynamics us was you some such processing other update just if and and give NLPs others and expansion latest if was see

Kevin Burdick

some You some the of quarter capacity fourth the Williston, XXX this third we're we a gotten and million we have volumes know into seen have with in we especially left. gotten the into maintenance, and probably day of we - me maintenance, excuse past the probably probably that the of as moved quarter pass

So well the and performance clearly then that we that need. additional we seeing seeing we're with processing we're would the rig activity capacity see could

Jeremy Tonet

it Great. That's that. for for Okay. Thanks me.

Operator

And Citi. from Eric question our Genco comes with next

Eric Genco

customers which you've a XX seems like good well of in wondering I that's into Hey, rigs you it wells to year high. was and targeting about guys. XX from rig XXX morning, days Williston activity, been the counts what next complete of heading about here seems kind terms just in producer hearing

about or you that? do expect going all you is forward a off conservative do number changes taper counts if the So think XXX nothing to rig how and

Kevin Burdick

are the Fitzgibbons We and as price Eric, Hi, have counts and thoughts some rig over to conversations last producer The seen of some strength be our that I positive. weeks. a Kevin. well. to got very But back no customers have indications the continue thoughts couple is rigs this held Mike those with off. here we've see may few going

XX and maintain out there think we light rigs, the get But guidance well So clearly so yet, would XXX yes ready be release we we to Mike? as in the we level is with if financial activity connects would at about to as you're that the XXXX you our do off expect guidance. Not XXXX. go the this will right, high we as XXXX. in

Michael Fitzgibbons

can The the that. with with couple will agree of we've they increases. efficiency announced, I thing only target had less I a achieve their producers of growth is rigs volume add because

two forecast very still may seeing but and those of volume growth we So or drop, productive rigs. a rig see from we're wealth

Eric Genco

leverage out of follow-up. And one I and of the sort quarter is to think got XXX I hangs was overall Great. do - you million all different year meaningfully rest a that your the drop just do the in in since sort you as you gets million you angles, or is I'm the little XXXX, do look XXX expect to is X.X think you it off quick projects you at million today XXXX. have debt in at that guess balance, you billion, curious EBITDA at you in as of debt couple XX to asked or it's of Do expect end but June drifts growth the finished around overwhelmingly that target? sort maybe there

Kevin Burdick

specific the levers say most statistics that dramatic have Well, will to those growth help guidance along give not going we're do XXXX, in significant fashion. that we but EBITDA I to would expect

Eric Genco

Okay.

So do course over of the materially X.X see next - no? that you is net billion is or dropping it of the year that

Kevin Burdick

than of in drop from given EBITDA we to a think increase CapEx, come our I the expect more in deleveraging level that. see our

Eric Genco

right. All you. Thank

Kevin Burdick

Thank you.

Operator

And our with BMO from Danilo question comes next Juvane Capital.

Danilo Juvane

everyone. morning, Good

Terry Spencer

morning. Good

Danilo Juvane

to high at wave I guidance the there. range go of G&P the XXXX strong back the how to year gathering in was end XQ, this decline perform the the just would want to to looking imply specifically - segment get guidance. The I

going related the end into because there we that volumes Coast? other whether you been conservative not a to opinion. they're the be of Gulf should ethane the that baked any seems outages assets thinking raising Is little some in be be had my late of in maybe your is forecast but bit there you've that So guidance Harvey to about or

Terry Spencer

the question a math for we you of we you of little our one volumes. as December, G&P, month historically and The is your bit I mean fourth to at especially about consider where look specific No, a least do to. yeah when you do of at processing thinking that get always about weather, quarter that we're dynamic gathering when the see pullback that

we do business. I any we So lingering factor don't that related effects Harvey think our in. to from see

As bit in decent segment. talk we've talked a we've since signaled seen chunk a about little would of the we just volume NGL overall which starting bit. growth be transitioning the that we about it growth a little October would ethane story have seen our ethane volume that in recovery Clearly

frame that's I would that's firm. thinking we're in about up of I still So holding mean how kind guidance - how that

Danilo Juvane

XQ respect then the million we XXXX? that was in here going far big to so to we've $XXX CapEx, for And paid previous into that. growth year, I chunk extend or should the a is for Thanks think think thus expect $XXX with guidance over I million,

Terry Spencer

mean - we're those projects will the with QX. yeah ramp we've we're see and into getting with capital announced, hot you on construction we that the Yeah, that up so announcements heavy in obviously that I - would the recent

Danilo Juvane

questions. are Okay. my Thank you, those

Terry Spencer

Yes. you. Thank

Operator

our [ph] Brian [indiscernible]. And question come with will next from Zarin

Unidentified Analyst

Good morning.

Terry Spencer

morning. Good

Unidentified Analyst

X bit expectation? volume On to could the you West Texas assumption the expansion X on multiple on a times elaborate project,

Terry Spencer

Sure.

back the two, XXXX, As would to volume ramp think up past a up in over - about year maybe expect to XX,XXX on the half day, we barrels service of room service to we it that date. those a goes

Kevin Burdick

we should Right, be at within above two or XX,XXX. years,

Unidentified Analyst

barrels time the volume? X So a to the X same as day around multiple XX,XXX

Terry Spencer

Yes.

Unidentified Analyst

fractionation Okay. third there to with And potential new go on then are those those what parties? of opportunities barrels, type

Terry Spencer

we bundle that XX,XXX referenced with service release, do in of press a the them. we the have Well

will fracing be We barrels. those

So it's pipeline and volume us we that project. will total or that on the talk as people well The to opportunities, more fractionated at deal to bring for below multiples more on package us. this we a see does give

Unidentified Analyst

Okay.

including fractionation day to the a about times Just volumes multiple of expectation fees? XX,XXX now X barrels to summarize seems X

Terry Spencer

Yes.

Unidentified Analyst

Okay. That's for away do then utilization capacity, expansion? take in the have of competitive obviously how the helpful. you And excess Permian the view the landscape NGL increase

Sheridan Swords

there, Brian, than to that pipeline the to with dial it do in an customer very competitive have there. much this needs. we've pipelines other before cheaper we and is what landscape can incrementally add a it pipelines, are capacity Sheridan. actually said out brand It's faster existing in but coming as We to new can that

processors being we ourselves very get see better us this barrels. for here, producers into with have new this, talk even the after us talked multiple about. And announced this. out this in pipeline, come get competitive. position compete we short term we before can more in and there to these And announced we've on we we So been Delaware expansion want this we to we to had even to and this that And want

very excited expansions more So come we're very us about excited what to out. and seeing this bring

Unidentified Analyst

the on expansion, focus a lot your organic so on opportunities. for And of updates obviously Okay.

how playing you growth? into do moved your overall we M&A As in see XXXX,

Terry Spencer

you even something and on what will don't broader M&A But Well, we've with, financially bolt company. thinking factored certainly work about a a to any sound focus be currency those whether approach. always any in certainly just from a heavily it's certainly be strong our it's to have going organic whether or tell certainly, can in thinking will M&A but be strategic we and I we're opportunities perspective an got our opportunistic asset

So the will focus key heavy key be XXXX. organic for strategy,

Unidentified Analyst

Terry. Thank you,

Operator

next question from our from Fargo. will Michael And Wells Blum come

Michael Blum

morning. good Hey,

Terry Spencer

Hey Michael.

Michael Blum

project. question Texas pipeline Just the new on more West one

how existing be much if mentioned by? correct, that's you're how system, - also expanding you expanding I the think much that you also

Terry Spencer

Michael, we expanded by equally amount of XX,XXX.

Michael Blum

Okay.

expand to you capability XX,XXX on guess above have the So that you extension move is then XXX, since the that I extension that what I line is do to line, and that? mainline imply guess the as the probably so further

Sheridan Swords

that's spend and we have when capital that Michael, will the mainland in the there. you the right on expand can get mainline the continue you're lateral exactly we as into to that to on we get coming expand commitments

those don't that as incremental than now that projects in we can better to there. better that in is. upfront more spend in or so And at lateral we in on able the Delaware. on So it expect compete the capital in ground, the times capital some all upfront, will I bring there We be in mainline to did volume to original we expand that put life working put the to have we to we're the the X bigger X are to piece one of said pipe a

Michael Blum

then dividend are of this go to or on was per time, you every other year do you cadence increase you the as my increases thought And in Okay. what's question quarter, planning like out there? one do just dividend planning to

Walt Hulse

Well, the address that will and line facts our be look the and quarter on likely each a will and but Michael, expectation accordingly. quarterly past with the quarterly act the practice basis, then board circumstances would be and in the at to board evaluate obviously most

Michael Blum

very much. you Thank Great.

Operator

question Stanley. And Morgan with our next will from come Tom Abrams

Tom Abrams

a here, strong spreads in left you fees? What's break on bit G&P versus the can and quarter, margins prices attribute down NGL you little Thanks. much that in just how might

Kevin Burdick

much you is increase. virtually so again, Yeah, fee contract the our for with all fee Tom, that and fee, the growth restructuring, of much that hedge commodity position primarily when is to moved combine we just the is converted Kevin. of through volume our it's it so with this we've exposure XXXX,

Tom Abrams

for Good. your when XXXX, sheet, growth more the is to And a or much industry make seems last balance moving spending larger be for type the XX% then issuing so the being equity that to your strong distribution, for toward on clearly and philosophy so strengthen capital you to around not more question, mid-single-digit companies. very distribution itself but acceptable XXXX is want the

how dynamics? kinds wonder traded Just those off you've of

Kevin Burdick

quarter, significant in were rate rate forward going a give the run excess cash have business dividend couple particular were and in by spending put cover we this I which lot to of and said growth was to last that We position the X.X been guided we've years. back - the had over based we times we dividend business. in a previously, of dividend the as kind previously on run that CapEx reinvest the to expect us coverage today dividend will we into flow Well, the

we multiple invest forward. we of So going more have the in have these expect flow as just to projects, cash even business lot to

Tom Abrams

quarter. right. lot a All great Thanks and

Kevin Burdick

Thank you.

Operator

And our Barclays. Cho will come next with question Christine

Christine Cho

up just more operational What Bakken questions. you that of on was couple G&P sequentially. I everyone. there, volumes went the NGL versus pipeline just it tested were quarter? last were Hi, The was have but down ethane a volumes

Terry Spencer

projecting was Yes, much ethane as it and also possibly primarily Christine, we the that gas around that process previous quarter. continue relates end up around had than to and our the ethane assets had saw we how move gas we and at We to as of we maintenance more to could. to the did activities

that was up period. during addition that, our time on at going time to In line during that dynamic state really ramped another the same is deethanizer

little the went but were a actually went pipe bit. produced down down yet up, the NGLs the So NGLs we pushing

Christine Cho

up you if but So, up NGL the volumes go, storage do have did were were down where the NGLs volumes the guys like pipeline incremental there?

Terry Spencer

going maintenance the to ethane going were end and as lot then in it deethanizer Canada was a activities was And the other it markets rejected in on. well. up No. through due does - the that's of again was that ethane primarily that

Christine Cho

then in additional takeaway prepared you the for Bakken. remarks, opportunities Okay. alluded your evaluating And to out of providing

Bakken I Overland or there was you that And to if Pass, to of Your that the thought NGL other if to expecting are year. line full, XX-Q you third add do capacity that, next you're have alternatives? quarter by says don't expand

Sheridan Swords

alternatives the continue robust see on you Christine. to any and both all to to expand and This pipeline system as are Sheridan. options end is looking we at it. over the past to are Overland full, growth from at the Bakken in is But the at Pass expansion system we're so Yes, Williston. total correct, all options. takeaway to expand we But will bottom Bakken that all into the looking the take pipeline account have look

Christine Cho

looping, And be to that assuming? have would I'm

Sheridan Swords

existence system. of There's be options looping system of new a there, or lot could it completely different the

Christine Cho

going northern I is production see, the have much guys is okay. border, there? And gas how gas going gas the of or incremental down out do idea with you increasing still natural the an of residue of Bakken,

Sheridan Swords

up Well, markets. all is of Mid-Continent border that out the basin ends Midwest gas again up the ultimately of on physically all ending it upper in the Northern the virtually is

we the But the acre is question. a from that it really of to a residue all So out board. be priced that little is different how out prospective gas see bit, able all projections a it's growth and with will on separate an really there gets the continue region we're we move to confident the

Christine Cho

Great. Okay. Thank you.

Operator

And Sachs. our next with Goldman question will come from Theodore Durbin

Theodore Durbin

NGL day verify, right? October, XXX,XXX up volumes just are prepared barrels that your is think said gathering a in to I morning. remarks in Good to I your wanted you

Terry Spencer

That's correct.

Theodore Durbin

did whether breakdown quarter, big driver you and the can a give third there of of? mid out corner is us versus a That's mostly in come it's pickup what which what's

Terry Spencer

back we Well, be seeing about to talked Bakken that of barrels about being levels Mid-Continent really and all in we're ethane. the to down are up we're well. before. up going as A We is volumes chunk those talked our now increasing regions. of

up pick seen But seen a think this the month the all fluctuate of when As we during bit have and still startup. nice we've We go October. again, of areas. some ethane that recovery the through out online volume little will growth come

Theodore Durbin

it fair margins thumb be in say is your rules in additional $X.XX? on that and the that $X.XX of And the will sort of to $X.XX line

Sheridan Swords

have be it's a breakdown an going Typically This materially little for a Sheridan. incentive, the we've be of bit what bit given. will of There but to close. in a we line is little ethane, of

Terry Spencer

we higher. based we in on barrel be out value come that lot Remember talk booked coming Then presentation pipe Conway average Mid-Continent and a Mid-Continent. about the Bellevue of a be and has have would the going that rate at to which in is our because ethane's

than slightly probably So higher just that.

Theodore Durbin

transportation versus say propane contracts, to fair in lower of have it's Sheridan, your ethane rate slightly that plus? a your frac you and many structure for So

Sheridan Swords

Bellevue which That's would exactly barrels. to first expect barrels right. out we come price than But the Conway the higher be

Theodore Durbin

Right.

since sense both of let's billion EBITDA think to Okay the helpful. that talk for then growth please? can and million it we June announced the billion, $X.X $X.X multiple as think blended what kind it's have And $XXX you buckets, lot of should guess overall about about that and returns, both those bigger CapEx we you of really on the call chunk makes returns the about a I of

Walter Hulse

a think growth be to going those of see that in that we've to are routine historically. projects lot unannounced going I the you're backlog similar seen Well, to

that see the that to could are we've are some X So in you? of your that good to times be in in a X going you historically mix X at of indicated. broadly coming X infrastructure speaking larger this chunk times to but that overall help Is I think projects

Theodore Durbin

Yeah, anything hurricane new they're quarter for it's or like last just And me, sort assets the rate there then there, operating Is something run helpful. sort of decent of costs amount rest sort of good like costs year-over-year. just one in costs all up there? a third look of here kind items of onetime on what new is a op in any that

Walter Hulse

really op it that about again our But - I decent the see forward. run dealing Yeah hurricane the attributes. we be would think are quarter costs little be we with there more growth was in going bit Yes, will rate typically that. time think a some just of in for a there one as probably but every

Theodore Durbin

Thank All right. for you. me. That's it

Walter Hulse

Thanks.

Operator

come Tuohy will Craig Shere question next our Brothers. with from And

Craig Shere

Good morning.

Terry Spencer

Craig. morning, Good

Craig Shere

do this to could need mitigate more announced? larger are even another that trend the ATM saw in at combine stares your coverage Belvieu. How projects sustainable step-up October the see dividend as you Conway with

Terry Spencer

Craig as Well, we - yes, I you're right. mean

likelihood We here or of those to three the do beyond an spreads month kind in of seen think maintain have through for will that. months increase October. there's that We two some

volumes flip assets. the volume a that pipes physically are flowing can little will reduce actually side increase the we do more as of on volume as we on move bit On the our amount our

to the Sheridan? have tailwind there So of spreads. of give take there's a but stronger and a that little bit yes it's nice

Sheridan Swords

more agree. and are is we Yeah, volume I ethane, growth. this there very you of more And right, about talked definitely

We for pipeline business less capacity for of based the will more and will fee activities. that leave consume optimization

Craig Shere

respect Understood. the guess to expansion, XXX the million that's XXX And LPG OKE. I with was excess

was years X X you know I are that by and million are acquisition to all of the you growth you this ago, original end an think XXX hoping in expecting guidance the follow-on three CapEx times of expected to achieve given be maybe multiple is to achieve including the CapEx, on you that the under decade. the untacked see due efficient overtime. like figures expectation you you to that playing It would out Do but XXX million envisioned coming know ago. or you how the well see all seems multiple years growth EBITDA the maybe do

Walter Hulse

all and we effectively second at these reach plants strategy compete When been we already we we the thing that's all we committed, as knew the take right of we committed, we have bough the because we built now the that knew were for and how still gas through and all lot go right had very not that we the plants. decade the look assets to will bought are can drills. we that assets, for when sometime of to and wave plans looking on. are place the the plans of I Craig, where are that coming now that wait especially that we we first projects But gas so finding at in are get of us we as by kind still our it end

X still the to I reach X that end think decade. that so will And of the we by times

Craig Shere

Okay. upside to fractionation, times case last impression follow-on. additional fractionation? a any And are include from XXX original million was or the under corporate does that the be one X exclude continue I guidance that and does associated for not project did related X to

Walter Hulse

whole We fractionation see and our assets got to pulls we then our from to the across growing look - things. fractionation is system at it, all

when needed. on depends all it fractionation those capacity So is

will rates end market more for up as we see probably is the this, As mentioned, will we to we keep like being fractionation will happened support build able and Terry we growth capacity get and to room that that. Permian help

Craig Shere

for multiple acquisition Texas originally But expectation the does the into West made? original that feed you

Walter Hulse

The original cares and just on pure more based not piece. when the was we fractionation get originally that

Craig Shere

Okay, thank you.

Operator

our come Jefferies. And with Chris will next Sighinolfi from question

Chris Sighinolfi

good morning, Hey, Terry.

Terry Spencer

Chris. morning, Hey, good

Chris Sighinolfi

Pipeline and but was know actually asked DAPL pipeline shaping this wondering well had much decisions and in appreciate out long of there counterparts - into curious quite the I year, out that follow-ups to the all sitting clear term, could, Permian, if that how being how at structure. is evolving dynamic, was and with in pricing sort for has I was I producer more get I think conversation they Last see the except story answered. a overtime? we just is long place bit you obviously the service, there see two Bakken might a history all done they a color, there, that how your pricing guess I

Terry Spencer

we anytime producers I than provide from the bags net clearly they it DAPL, perspective mean, maybe for crude, pipeline bag their DAPL. bucks hear also X can we net more and a reliability are X better perspective. a just with or obviously typically mean benefits before I takeaway capacity it were

that's drilling. know fund you and flow strength So just their to increased more helping cash

Kevin Burdick

have Certainly has significantly. reliability operational improved

Terry Spencer

more Absolutely, state you in reliable look pipe the is can it who rail. taken and I mean at is of the than really so some be rail clearly downward going know to you that trend,

Chris Sighinolfi

bring that is about cracking to and just this in what same of it what window downstream happens opportunity gears for capacity polyethylene maybe blind into that switching when markets on of ethylene, I time, for Okay, am share on or that's spend to think you probably you if about looked have with at this it is and and could then happens helpful. of customers so I much just saying guess what wondering expectation, and there's the their question Michael your and guys your And I us if an What effects thinking for we are am kind you're the it? help Fitzgibbons.

Terry Spencer

that already what going you're ethylene on on on customers from crackers so make ethylene our seeing but to tell at they market, I hear Chris are What bring these polyethylene that you look polyethylene for would companies units. think we the these we

States have all where the saying ethylene we crackers on about low much talking is United In stack. Gulf the with really worldwide, they're to so you're left the supply are cost feedstock further the the So Coast the of going.

time more you we the some being you will down, that a long consume polyethylene, before crackers maybe much European east the if crackers cannot crackers Coast more see Gulf and see So crackers shutdown. world shut overbuild and would the

Coast, crackers of everybody on to - So the you are the that's about stocks. that's feed talked the to the build place crackers due next why because to cost today this being seeing Gulf advantage most why is wave

Chris Sighinolfi

that's is structure then seen like guess make the something were other view it we've U.S. to basically similar multiyear costs paraphrase, pushes to our we're expectation? if of the and I inroads advantage exports with markets higher cost what via I out hydrocarbons going where because So is to simply globally so

Terry Spencer

That's right.

You're exactly right.

Chris Sighinolfi

And pay if know I or to attention we are could, be where I could markets don't it, that the going to most of sense most foreign you from but know is that I demand particular there if supply maybe answer competition where get severe? guess a

Terry Spencer

Well, I from think and from see to growth China the a demand going India. you're side,

Europe and and movers be from from some are maybe going to the Competition… India big the on America see also China We bit a little demand Latin but side.

Chris Sighinolfi

no No, that's…

Terry Spencer

said You for competition supply. a on

would a closer it's that see you back would basis think gas that it - oil is the you to advantage on supply. to would may would I the and gas big you see more become going think come oil and where on ratio, together it's affect think BTU don't see if I

States, produced system it States. you now against in polyethylene propane obviously our crackers our depends mean the seeing, United but look we competition, are through and still which We to that polyethylene, on exploiting hydrocarbon are that are how would going and at ethane pull supply this compete against United

Chris Sighinolfi

Right.

guess me that next It be seeing about that next ethylene wave making of communities like crackers is seem domestically. a nature then there something the the guess this guess foreign wave, export fair ethane instant would I or to talked and I that the this that I so whatever built Is of better that the we're question market the And determination the is to if to that understand? is here is facility don't - exists I all there? about for

Terry Spencer

over stock cracker to wave about are are Corpus going of export Cristi about next the Mobil are and are United be obviously the they all people really the it's build of of facilities I of the already other the been and people there cracking the in India building it's next for talking cracker that The to own they Coast. saying be a want Saavik we're first down cracking want and crackers in their advantage ones built States. heard even there's - in combination think build seeing, to when the the Gulf ethane where for wave, propane that also do their that's I Exxon most from probably going that them all they're feed get or announced think seeing and big the people are you're and China to

Chris Sighinolfi

quarter, thoughts know market good get I so it on structure your Great. Okay. third to to always over time, appreciate unrelated it. but

Terry Spencer

Thanks Chris.

Operator

today's conclude will session. any the to conference remarks. for this or additional time, question-and-answer thus And turn management I At closing back that

Terry Spencer

thank you Well, everyone. Okay.

period early in for fourth starts in February. the quite Our released January extends market of when day. our quarter late until great rest Have a books we the and close earnings your closes are after

Operator

conference. concludes Ladies you your Thank just and all for this participation. gentlemen, today's

may You disconnect. now

ONEOK (OKE) 1 Nov 172017 Q3 Earnings call transcript