OKE - Earnings call transcript Q4 2017

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Operator

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

Andrew Ziola

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

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

Spencer, Terry President Chief first speaker is Our morning Terry? Officer. and this Executive

Terry Spencer

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

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

including endured in projects for are questions. Joining Demicks transaction invest and our merger II the Partners that XXXX And Vice and $X Chief And Financial Corporate President financial billion transaction of today's Officer. and XXXX a fourth again that than with call, successful available segments, President continued That I Officer, financial traditional more in more ONEOK plants, and Pipeline, will projects merger shareholders, we particularly provided perspective to of January by Planning over pipelines, of Burdick, announced. are was previously on extremely on thank results. that expansions have keep day. the are paying Kevin reliable personally XXXX hurricane Harvey in safely and end who tirelessly benefits others announced our recently the not From generating to in to to result favorable in Operating Arbuckle and Strategic who this every work ONEOK pre-funded January. company XXXX, to Vice we operations I Executive want We've our provide projects. completed as President, to our business cover ONEOK off our me returns. We that but June. an dedication company guidance its quarter employees equity as Walt important Affairs, in Lake we ONEOK. only an and early strategic proven offerings successful. call focus attractive the making on hard Senior was also of very services MB-X year worked Fractionator to customers Executive year recently growth access all strategic is and the Hulse, additional Chief appreciate our Vice On this our the and running accretive of assets much network facilities some storage for provide focus And order Hurricane their and markets our our commitment The remarkable countless integrated employees existing and in during our fractionation and

and petrochemical complete flow as adjusted for cash world growth. completion continue in Coast, The an the quarter growth recent their two distributable these demand drove production increase crackers onto throughout all business and volume fourth XXXX segments activity Moving our our the performance, full producer results which for EBITDA in operating of will ethane Gulf facilities our footprints activities. year to for to startup the the of scale in led

of barrels In year. addition ethane XXX,XXX to total per four expected a of this completed more capacity are crackers later be with nearly day

few with incremental marketplace $XXX crackers here. for guidance, drive our facilities are built, additional is XXXX. to petrochemical this compared new that demand now it and in now NGL demand the the is million for our expected additional segment staying years XXXX in ethane is After As in evident ethane approximately EBITDA ethane a that outlined of being for

Williston, basins. STACKS Our our the focus SCOOPS Powder DJ our on of remains Permian meet and at cracker growth need executing projects to customers River,

an environmentally into to experienced $X in delivering the now aggregating billion reliably Walt. With executed manner. over I supply Over successfully capital teams operations, investments, responsible the in and that call and last ONEOK constructions turn decade, market will commercial the safely,

Walt Hulse

Thank still ONEOK's This with totaled $X XXXX. above month maintain growth billion. XXXX. growth primarily or our totaled continuing XX% more $X.X X.Xx by All $X.XX nearly XXXX coverage increases dividend X.Xx, compared flow expect that recommend $X.XX driven operating XX% nearly with compared adjusted increases our XX% compared for with target or X% cash Management a on The we and the annualized XXXX. period than XXXX was than EBITDA $X.X than to quarterly and increase volume adjusted strong billion dividend annual and XXXX see basis. the income increase increasing for more nearly you, to in XX% share same Terry. more guidance and compared billion or Distributable with was XXXX greater. of of to per XX% dividend of EBITDA of expects well for and dividend in per we of annually X.Xx share greater paid year. coverage an with

expansion the Tax capital Cuts per Jobs share most and tax included corporate impact as share from our income in million and full charges the Jobs related by noted Cuts $X.XX of the rate lower fourth $XXX to and our the impacted Act earnings by $X.XX. non-cash ONEOK earnings net fourth quarter quarter one-time due the year overall of We release, positive per spending. earnings which immediate view to As and Tax of to Act,

generate Maintenance an ONEOK's announcements approximately from Terry dedications. billion billion June. $XXX more on multiples $X with range expenditures Based to billion, mentioned, guidance. nearly on of announced remains new Xx these investments or long-term guidance and Xx compared increase $XXX to to than fee-based are to growth expected projects our of initial interactive capital a million $X.X to $X volume These of XXXX capital growth to projects $XXX of adjusted by are expected we XXXX million. combination contracts, capital have EBITDA unchanged are acreage backed since As now recent commitments million

resulting and growth We received how in have we ATM quarter, equity proceeds in accretive essentially $X.X $X.X common through the January, talked program and net public approximately million net billion quite In total of funding $XXX we needs. projects of equity combined highly proceeds a pre-funded completed stock a of billion. bit our the fourth about offering this

from With significant or to cash we well the generated XXXX. excessive in borrowing operations ample capacity, and any into issue XXXX expect don't dividends, expected and equity

equity at offering ONEOK's in debt year than on Following pro under forma expected. basis the target January we months and just to us EBITDA earlier a to improved put XX last Xx our

long our of expect We to but as view modestly times we during important in to stages an or the increase later ONEOK four construction target term. for continue less, leverage

excess enable maintaining fund short cash strong in debt, long operations while EBITDA growth to will from us metrics. term Our and anticipated XXXX credit and flow growth our with

to due process As it Texas review will relates it itself West in LPG, of the and resolve course. rates regulatory on continues

potential NGL assume guidance XXXX encompasses from outcomes any financial a uplift adjusted does Our division. increase. The of segment range the segment potential NGL not for midpoint EBITDA guidance rate rig of

of Texas of As impact West extends new of producers West our supply LPG previously, the our Texas not core ability and said which it into we to which nor future hinder secure negotiated the outcomes basin. including will LPG rates will Delaware current the project or NGL processors from

negotiate with producers for actively to in capacity. continue we additional Permian As the

call our some segments at the on turn each to provide to to business closer and projections. over of color will our I Kevin additional Now for look growth

Kevin Burdick

and up a another performance growth And XXX,XXX third segment. compared XX% growth NGL by West the compared XXXX a of greater the XXXX. growth for increase us and Higher with Fourth our quarter averaged XXXX. feed STACK year X% of in areas. quarter fourth driven XXXX sequential X% LPG our gathered Texas Liquid with Natural the Thank you, of pipeline drove Mid-Continent more raw volumes per with than the volume to day, with quarter strong setting Starting was be volumes even producer overall well increases on in SCOOP Walt. barrels continues increase timeframe. quarter Gas strong that Mid-Continent Mid-Continent XXXX. during volumes results increasing

Our pipeline per fourth operating NGL full volumes in the quarter day XXX,XXX Bakken at XXXX. averaged barrels capacity as is

volumes the use due the fractionated during the to will quarter transport XXXX growth volumes quarter we early our out NGL third Mountain XXXX by gathered Creek takeaway quarter Hurricane Elk quarter region higher third in systems, second driven quarter. for stored is NGL fourth from necessary the the as NGL our Creek the rail of and in the capacity pipeline in and until expected Elk Volume fourth once capabilities alleviate compared across with to be XX% announced recently impacts quarter project And that provide constraints increased fractionated to because were Our fractionated XXXX hurricane service. in fractionated not Harvey. expect volumes lower complete. could of as Rocky volume third

with line Our with NGL our the and cracker petrochemical delay Harvey. in even impacts completion from volumes range Hurricane were guidance

the the wells and now available in gathered recently to XX% XX than processing Mid-Continent, produce Williston new our feet the a announced last rigs our strong million connect growth. gas the fourth XXXX. Lake shows connection results Demicks XX% XXXX well average expectations. SCOOP in segment. natural period are gas feet region processed cubic processed to well feet growth XXXX quarter We to in with rigs XXXX the only by to in performance gas processing and XX processed an which was producers the compared natural with compared per on due day of and volumes increase gathering And volumes well X% gas STACK quarter. Williston day, the Basin Basin XXXX third X% natural XXX Fourth third in during XXX and XX highs expect in XX capacity to as and increased quarter to years volumes higher third cubic plant and accommodate Analysis needed results guidance again provide for both the three XXX quarter areas much feet XXXX. connecting X.X increase volumes quarter With of oil STACK from XXXX, with and quarter the and natural the exceeded the Volumes processed producer million billion results with cubic average Basin expectations XXX a segment's to The financial processing onto cubic the producer Moving of a volumes processed to quarter Williston nearly continued approximately averaging compared fourth recent ratios increase year. system. We gas in fourth respectively. XXXX. X% volumes compared day the more XXX in much wells per will more per per our producer as can with average total capacity ago. increased we systems, Basin, with nearly XXXX driving activity, than exceeded improving across Mid-Continent strong areas. processing our same expectations day our established Williston XXX volumes In led Mid-Continent driven in SCOOP date million growth

cubic million the an day offload and third SCOOP in the operational are us basin have splits. takeaway of additional STACK, expansion cubic million with Oklahoma. of the access accommodate capacity fourth expectations for of given in benefit laws which natural Canadian Our capacity add segment increased XXXX. per with party producers for additional to contracted. EBITDA adjusted per feet capacity approximately The transportation we Valley our day in regulated Permian billion the growing segment, capacity year processing those plant. The to day spurred increased volumes will per pipeline the XXXX in with In discussions pipelines. and fee-based complete, an of quarter is have tax STACK growth our higher to around impacts reform and from track potential feet Recent provides compared an on gas areas the in XXX earnings of gas we strong processing additional X% feet and this X.X cubic capacity segment Once to continues conversation XXX continues natural

Border lower Pipeline to specific For rate rate through have Related FERC February settlement the solely uncontested ONEOK, our tax their natural a on without of negotiated to don't contracts from letter anticipate and established of order approving received most because been modifications. XX, rates we adjustments rates. settlements rates gas since case pipeline Northern shipper settlements,

Gulf capability could the projects projects, will up a have Now This look per The announced Creek complement pipeline our two latest barrels our these of announced per previously let's to strategic II. at with has initial investments. capacity Coast an XXX NGL growth capital closer double we II and XXX,XXX current recently and pipeline our investment. have to day announced and million barrels capital projects Elk minimal expanded more and pump between Arbuckle than year Mid-Continent enhance be with day take Arbuckle capacity facilities additional the one which mile and how

We of fractionator. fractionation where the Belvieu Mont continue these of and is only Belvieu. than MB-X is the provide for capacity already growing already to forecasted pipeline projects are in The The producers supply are adjusted we announcement our in are operate projects both additional EBITDA with Arbuckle contracted fractionator barrels demand Mont more to XXX,XXX contracts fully also are and first at will from to per complete be multiple these connectivity additional customers and II the all place. contracted regarding discussions take day MB-X with The adding expected quarter in of XX% basins XXXX. based with

more bringing to ONEOK's quarter XXX than per billion Our capacity Demicks million of in will the cubic capacity the Basin per in feet processing X.X in add cubic additional feet region Williston day total fourth XXXX. day Lake Plant an

Additionally, the turn with extensive to in Bear we feed system connect early ONEOK's our announced update per Plant for an Coast. pipeline cubic facility will we Demicks permitting to Basin from from Creek the of the capital. which Elk will million XX Creek pipeline which could day quick with process add the Williston Gulf Elk that gathering connectivity Lake minimal in NGLs NGL provides A our of expansion feet processing January. ultimately on XX our are expect Creek in capacity Mid-Continent

volume have expectations of region. processors to exceeds and continue XX%. now to original our additional supply discussions XX% Rocky's our We outlook producers by to out secure the And with

We continue local to the given with stakeholders pipeline to route agencies other along and this later be landowners, proactively and state and expect communicate construction year.

needed concludes provide Terry attractive ONEOK producers and these for much considerable All remarks. operating long-term of our assets. strategic of that return across position will network to integrated projects together work leverage my solutions with

Terry Spencer

Kevin. Thanks

I items take we out. got point questions, to of couple have Before a

projects my As several our $X I billion mentioned year. next earlier growth in executing will on like to announced ONEOK's remarks focus on the over

So take of some to which go and is questions, XXXX, As you wanting what's ahead maybe XXXX? us next. I'll answer will look we ask and to that beyond

to investments. fractionators opportunities the are of asset detailed, minimal even to our As projects expand processing further. Kevin designed being immediately capital And to with under develop that many pipelines, storage. in continue footprint ability expand our and our we'll plants, or with to is Whether

optimize. manage, we to All proven, of have which we don't build operate and

that with for now So ready questions. we're operator

Operator

everyone. first question from Instructions] Gershuni Please Shneur [Operator Shneur take UBS Gershuni And Financial. our ahead. with we'll go Hi, good morning,

of Just is two-part clarify just first wanted the announcements, I dedications guess or way with the you'd your buying start this did in Sure. contracts of all new ticket off highlighted that when second projects And project kind in you the split of merger? minimum take to Kevin pipeline announcements have that the answered can part I of know, the Does or sort just care it. wondering start, you that. remarks a were you backing, that sort filings acreage think can of I of up. is the builds. you was all OKE-OKS of prepared Kevin. Burdick commitments I'll there question, mentioned, a I you this kind we new the then believe large And if

in not plant the relates and are II, in they NVC's to associated it form the dedications. those contracted there's with that, acreage Arbuckle of dedications lot capacity, a and As volumes of

going ticket up his big yes, - forward. operating items, majority in headroom or handles the of Terry on mentioned forth, leverage so And like this we think significant I the sets remarks

crowds as greater looking where million times future. is some let Henry the at to is at Kevin filing I about you've the into in So handle a to the place chime the chaired able create on the not the look the let is time. full the of the of versus risk ethane if about these we then in with And with projects XXXX, you Hulse be the we in of for ethane Permian. Shneur, extremely recovery questions projects talk dynamic recovery differentials possibility Walt being have interesting there topic it we've interesting ethane too. positioned becomes scenario Kevin, have plus of contemplated kind a recently thing Waha. time right we has in And the Gershuni as Spencer mid-continent Terry in of good of where any course offset And SX, the for at seen so this recovering I'll could merger. the started going the grow basis all look are Walt we Shneur went assets feel How Permian have pretty that it the than ethane wide at the and our Is in system have capacity I'll did of we on year. that announced through This some just backlog. mean basis sizeable to has Shneur developing we there to ONEOK other you rejection $XXX at natural any a well, the an Okay market, scarce some follow-up, future to there's as and this you backlog. look Waha you're and, you materializes? Waha opportunities. country. for what's gas is with Burdick been There's the in out that projects and been And these recovery market And announcement of We Or basins. Permian place? and with Hub, other in that economics that basin scale great. by started

position in significant you the one So that's when our Mid-Continent. about dynamic think

think the out not going Permian be that's online able coming be based additional the analysis The in Gulf going on demand other enough to to ethane we is that thing of the you're satisfy recover solely don't our there's, on going Coast. that's

did So Terry out the mid-continent. exactly if right. need Spencer a have even coming even Shneur going wider of you're still ethane if, right, that's Waha basis that's

Operator

And next good Bank. Hey, morning. Eric with we'll Genco go move to Eric Please Genco ahead. Citi

follow-up Just on sure wanted understand it. to I make last to question the

You've got forecast I of you the $X.X the of is range. the of some CapEx on based And was understanding billion projects. ongoing that the, in think sort mean SX I that know,

not are ongoing you Arbuckle Eric, could frac was, Elk some So of Yes, and Walt. that strategic was were is two maybe major II Walt Creek correct? the say Hulse pipelines this processing and but included,

actually think routine without to the at that just the of the what with well to say time our fractionation. group or processing connects our base in basically fair which which plants I it's included NGL SX connects, side, and the there was did, growth

try there. think be it talked anyway you there Walt out is SX we want forecast been. at we XXXX, on below you that to see As of in - producer then XXXX. SX. did so SX. fundamental anything spot better, we much have fractionation the time at I would but SX point and we the about a just oil, for if Hulse the better, of avoid point another there mean Was for for forecast. And spend $X.X projects commodity OKE now long say say in of taxes this under EBITDA. the I Genco can Walt say maybe $XXX our better Hulse then but consensus to level? guess to developing are the new the obviously was Genco serial across kind code, the And not Genco below just look Is those than what the activities would November snapshot that We guidance in about view a right the both from you I making in out the our reflected see did filed CapEx what time billion when And looking million tax one in Okay. plant. today of And that said. what consensus changed then And the the cash projects worse know that's view oil Okay of is of fair XXXX XXXX processing a the previously Eric than for included of on time Eric the a now if you in last at It's too at Eric that for that? bit Xx we business sort hasn't one, maybe board that course me, quick our a I did understand. SX was don't and actually to of Okay expect want we to how prices

happens mentioned when sort rail, town perspective. are from think if the NGL the growth think in Creek that like of now you Elk line. Elk will US between of the game I modeling comes ways what is terms only Sheridan. we should in playing the And takeaway, Creek Sheridan Eric on out bundled this pipeline and know we mentioned remarks, you there should between in if that a I that terms in prepared in and we be of see flow different that. bottom rates, now be Swords the how through how

the on have margin a rail, we our put we're a all those with we barrels provide whole the in that out probably of of do barrels customers rail basically to volume. trying left won't is way lot As the

margin that we'll turn but more on we once all bring will there there the pipeline. for and uptick that be we get as Creek minimal on, into So Elk

Operator

Our question Please Good come ahead. will Kristina from Kristina with Credit Kazarian Suisse. go Kazarian next guys. afternoon,

all comments magnitude mean lot can projects You of but it's I a about this had to guys of kind we projects just that year. to project they last because about love brought little February, the reality term how cadence only know and of topic? the some been in year announced - of talking evolving a backlog maybe and I kind that that but around we've what haven't Terry have do longer alluded we cadence, the you'd talk are year the you - about of we, to just end. alluded comments new about year, in for your we think to bit you magnitude certainly announced Spencer yet, your not of we in Terry this these next so opening stop but Well announced still

We those, stopped get we've if timeframe, And if projects, certainly as our done, we'll to those around projects opportunity; those visibility, new continue always beyond to more haven't XXXX-XXXX continue developing hard existing work footprint. if it's then we, get advise, with our we them. projects. get as clarity, we contracting know, we for out unannounced projects let come you more certainly record those past publicly and close, we or We start as we as

And with side so that year be some seeing. we we're other, the going whole forward? to infrastructure, talked And projects but your should significant more we lot NGOs more anything isn't alluding you thinking other headed Kristina purity for that so continue markets are we've announced for thinking you announced to still me you've or of running your are I coming projects mark opportunity more and Spencer continue Swords be, of this a on end later to shipping I'll one more we're amount think is will There's it, Kristina, propane for we and we not more we to other this position assets. Got year perhaps movement the could NGL's continue here. for it of There your announce certainly so of positive see work export opportunities, well? the is a that as for year gathering, so in yet. do and bonds plenty could on things you need our Sheridan exported of years for is we and just some potential some framing just a to that. guys next products there's Gulf front be that there to to think they of maybe capacity not able just ready just but downstream term, out have there's in probably potential the potential opportunities processing to Last in Coast. or we've of growth we this rather. there tell comment of as other given capacity the finding about LPG Q there be standpoint that up and have come kind opportunity certainly following in butane of Gulf projects got number that will Coast plenty exports some hard, but so it and that always the see about online down the us but Terry potential Sheridan potentially Kristina be export into we out up fraction but definitely certainly that How Obviously, that always more pretty of down a the from announced of the my to certainly there or be more on towards to very short handle Kazarian magnitude export got comes like Kazarian dock not three two and out need the it, there

the have and mechanical everybody's crackers now talked year. We second three running later that on that ethane up also that and this or into portion reached we're of the been big for about side completion, the waiting are

kind you we that Mont to That's than three what of going look really Belvieu. demand markets to how of ethane we'll time. this of our at purity We So lot the period five Coast down more opportunity think a see NGL start or on Gulf as see ethane coming a like still of side exports looking for the about at out times. more lot the additional

Operator

outlook. because period? or thing is not going Yes, kind get they're going following be GMP that bit a on bring current as with time to new go elaborate elaborate the expectation that. growth Creek, Brian three you volume multiples Is And there you these driven the question Brian, River? obviously Brian two Zarahn we year ramp DJ in Kevin this Kevin. more of but We're seeing next on it's Powder just Burdick our the we one little your strong, projects and comments Zarahn a that's I'd not volume Zarahn Good to would expectation Bakken that Securities. project our contracting on move Obviously, is our we a with Elk - that's that ahead. volume to opportunity four you Yes. success a take bit seeing to continue obviously the on it's to to one if year earlier on Please years through then on We'll Burdick come have from accelerate. Brian six up continue Bakken Mizuho equity Kevin to morning, the it on say and in there. know up but timeframe. see ramp in we assets can a can business of a up with could your expect

the having there third we're Williston success with parties. So in

You acreage there's down been rigs as it's the as Powder a little and recently some some getting drilled here now come out additional hands has far announcements to River, more. changed and

So seeing kind DJ, well. area there's you down been activity as Niobrara more the and of to the the in we're get there on going / growth powder then

levels me still to contracts. and customers obviously guess out don't out but a project? the We think be on when competitive capacity we more LPG customers those it lot we negotiations would competitive a business. color. expansion the we us the very the that acreage expansion still year? add on we most other rigs working any what The projects Terry there. for wide is combination parts your end on And Walt year, are I Permian, are Bakken Hulse little of through out do with we Texas some And that is have West potential are with coming assets already much gears Yes. people in loaded that's see CapEx them Appreciate on area Brian is of discussions the Powder new Zarahn this especially your you is then going on update everything's Terry contract Zarahn we constructed shifting moving talk it's in Brian Creek but this for rigs contract coming we'll a there, and talk of there. and expect planned our and Yes. in great some to we are be the on sides position to to front, multiple continue in get Spencer last with discussions of range permitting think various as them, to existing to Elk that's know River and CapEx with the get the it you weather ink so we're when bit we on only smaller one We of let back to discussion advancing that when as a thing paper of those But Spencer about up I plants. dedicated

and the back working that there, especially weather thing We we've pipeline's comments country, on the going that will and but timing driving experience as could .I think that just the when with we Burdick that plans some we situations minor of I or that with far only the of would affects our got certainly the whether about every range projects, to at a so absolutely clearly so around of be have we're of we've ramp the always lot weather this think what's capital year. fill provided. mean your got it's in here it's done as range we've Kevin year And those don't move capital project. our in one of that we'll in and half in up spending factoring got to kinds that or we and be you've CapEx the through had delays experience add the Yes across I you estimates anticipate things we accelerations number middle projects

and and into that used accumulated all we've that estimates. experience that factored So these data we

what we shape in be happens. regardless pretty should of So good

Operator

We to everyone. will move Cho from Please our go next Barclays. Christine question Good morning, Christine Cho ahead. with

plants are more of from obviously be up of versus will and far party filling by your it STACKS but SCOOPS the that how much Is Oklahoma XX plants. SCOOPS give plants I the any of it West tell processing Elk in to option initial to Arbuckle plus plants contracted, and on plants also the us Can third some for Texas? would typically to to to of For Sheridan of third Sheridan. Swords connected are color pipeline line XX,XXX our how plants party that's you a the is from are you day produce barrels day. many connected going barrels connection? at plants? have there volumes XXX,XXX be to you the XX an the majority into volumes is the that's per this are will II line the going How to What We Christina, new day? be STACKS percent or supply in is a million much Creek get do XXX versus in picking

pipeline are So announced provides hearing systems. system. The most Arbuckle to to pipeline of today a II this that all the capacity being is contracted plants

we only volume on So some have transport system. do this

that to end will Elk Conway, volume off of on Some Creek but Arbuckle get piece Mont economics to well. Bakken it up or Belvieu going in to if volume Belvieu that is fee additional was Conway from that applied the Mont come Elk the at to from and as Creek will be then to that's

long-term if to to of and out, then comes Arbuckle Okay. phenomenon want frac sign curious does has spread it you're think day why barrels so Belvieu will a that customers a And down like of capacity. this beginning with until of the widened Swords per majority of barrels Belvieu continued it XXX,XXX the Conway or that's know Cho widening for of this you on? the seem some plus additional Bakken is short-term as more Sterling your be Arbuckle of assuming in can more will on last the as XXX,XXX So pipeline. we utilization the But Sheridan are saying in today pipeline that we capacity only would excess? and something out two volume in transport Bakken seen Christine currently? on the fully, well Sheridan their are So pipelines Christine ahead years? Christine Mont day. what are Arbuckle some be much or of Mid-Continent moving the We you've is fracking XXX,XXX Swords The needs capacity that And is between and what's than barrels Cho up you be part

out you are Arbuckle Mid-Continent, the utilized. XXX% of say moving for if So

in about expanding that On Sterling XX% the III over are if XXX. put Sterling little will XX system, be we utilized you

XX% are going put --they're we volume they about already the utilized, So we're on utilized that not today. do be things to in XX% Sterling spread system. We where

you're here included into is line. barrels they seeing - look about that you GMP we XXX,XXX you $X.XX that heard that II. or We in think of month, remarks great come could of would fill a see more where Christine had $X.XX one for lot included the prepared You're stay volume we connecting of a to February next back space we constrain Arbuckle if your that some but day of Creek we addressed what get into the commitments think possibility said as one in Was to kind Swords ahead a unusual per of Cho originally Bakken XX% the incremental? contracted and more now which of Sheridan there's your and online we end that and prepared spread at differential in especially right, plants on are and some that capacity bring until that talk What spread, we in I Okay, seeing your the that you or $X.XX. the we your competitors say that line. than could there that stay the you will up ethane Sterling higher future this of their then XX% the our we but in Elk say our remarks I was are more will space, on capacity be think range more

Operator

Tonet ahead. come Tonet morning. Good JP Jeremy Morgan. Jeremy Our Please with next will from question go

do looking you offset start-off over It on NGL could course expand commentary. there depths you it if quarter if playing how you NGL at optimization that Yes. that we ended timing you it things we've Burdick what XXXX, results really marketing there of some Burdick widen with environment the and was was fourth from Jeremy Well, you're down bit the was the a it for lower. operating and QX the wasn't bad the Yes. think What's is is are referring we're in going but to see Tonet of but wider bit wondering you see know it up strong then had segment talking little very quarter-to-quarter versus out a a kind sequential back optimization was Jeremy? just as and right? I by marketing, location I quarter-over-quarter, in guidance seeing up was and marketing, in you want you're bit when and to what's a Kevin like the optimization that on seems think it Kevin Just about here. just

the yes, year in the and making as they Power pipeline activity described the those pretty given and a north of you know right trying when some of coming on that and we state anything about regardless of Norte quarter, quarter that further the Mexico was still they're embedded seeing those on Roadrunner given demand we're far Absolutely, does balance sequential on the first put as continue seeing of pipeline throughout Representative those key I of Jeremy Great probably the on they're prospects to in obviously the into the built will get at there's commitment maybe moving ethane Permian? just it different? out robust downstream into Tonet specifically we've we plants positives I on pretty the that you $X.XX rampant construction it have Mexico some are in guide, that the going that. short-term power over the the our physical see that in Roadrunner as as two get looking are continue volumes is constructing to that our one Phil today the there's much see a plants the say it and we Burdick so mean So of there do to and over in full mean certainly where move power Roadrunner. infrastructure there? their even to those long-term of Representative our that supply for that's is getting downstream into physical such we Burdick of strong XXXX volume is that that's with are Kevin flowing. really And flow out get will Company to what with that further things volumes in what Well, to operational Kevin charge addition Mexico through or thanks expansion right and you of environment thinking Terry. down. activities think the and our you more as know we I fair are Terry their you're that's plants, yes time West what Mexico think your the spread for that's No, the we're certainly years. as regardless use paid of know Roadrunner now some see continues and pricing I the and of and being then Texas add drove plants Jeremy Mexico progress don't is the the is that's next relates there's And of then similar $X.XX their side wondering XXXX timing far that along firm pipes they're to Company Plants, Spencer will the could to that been third side increased construction basis that built now we year Great, Waha they're think that do loads seeing When your capabilities you attractive as still you in X flow, slow optimization., Waha that fourth markets as and Unidentified utilization right, conversations different to as Unidentified type quarter Jeremy and guidance. pipe? seen exactly for Tonet - about about that or so. continue to that some hit in does So, here concerned rest what or have gas that more kind spreads the but our we growth factors now. It's in construction

on message XXXX, build I wondering we're - they that you will Kevin year supplies facilities next before and in a Kevin this coming is you'll quarter the increased those take of wondering of or the your and maybe out. some are their you it anything lot what STACKS This there. seen was seen-- completion for come mentioned it's Kevin. might next bit Burdick have we've than expand Mid-Continent like in if from facilities. if expectations bit growth drivers or online contracted already of some But about coming States producers kind for facilities I Tonet as talking seems a the Jeremy be details there? year. of some so our a am and think Waha and and those counts or and that So this or so I was pay about feel match position for just good noted see our contracts growth Great, supporting we just thanks slower we little guys to haven't Yes, XXX wondering I

about talk absolutely in been for In and guidance fact, and their been line their the with on all and the producers both STACKS in with XXXX pleased outlook spend gone it's things. have our we've and quite through SCOOPs and Williston our that the calls capital

you enjoy just financial industry very That's Well the good seeing and as at one I capital - return just certainly, sits don't we're that what sits, liquidity today about kind focused something had announcements. of still the what about a or have talked going set last that far where deep Tonet M&A we still Jeremy a others recent space you as Burdick radar of in growth that's strategy we growth from guys consolidation we're given is the your just really John great the like surely high as leverage Then right Kevin all priority thanks. XXX seems we're that helpful, much given feel you opportunity the if for on So if yet rates your some to flexibility one now? or think wondering in guys not of general that's organic just that's on. thoughts

so upfront any positioned as company organic in a Okay, goes candidly we is five have far opportunity to to growth any difficult front M&A. certainly do as position is not see with always challenge M&A event our the over and but to a that predict a certainly the to us we're the ready be actionability of in next presented itself, compelling three well and years, we'd it's opportunities

priority. hope puts so of that And in I terms where --we're that it kind belongs

Operator

next Chris to Chris Please ahead. guys. Sighinolfi go Sighinolfi morning, with move Good We'll Jefferies.

busy, So starts here. the you've been nice for year

key recovery that through to a and current gravy will about XXX,XXX prepared XXX before on You obviously spoken a volumes about add top in The have committed but comes and closed on and NGL ethane the remarks that. of then related what the about of fractionation your pipes mentioning my but results next the first capacity, barrels might regards be questions indicate specifically portfolio. on on to the headroom day new you who that four significant

that your same off frac all strongly to side or about if it the add contract of or Sheridan Is the thing had how be fourth you responsible about legacy takes line? to for the walk additional volumes you answer than Are they shape. have capacity So a Can through quarter said you frac really we might Terry a the need? are they than you have do wondering everything be talk I'm you could question. do due should that? should being Sheridan coming you'll on timeframe contract capacity of you first just the us think the over rolling So I just we store fourth-quarter in frac sort third we hinting volumes that as at higher lot Let's look fractionation to less first quarter. Spencer Swords on volume

room is think system we have only. on volume but with there our well have more in some some that have you we what do train as we port So

We the Coast have fairly capacity some we area done projects large in that people end that that of well. have as fractionated did have we Gold line for this

in on --you're have is as going going contracted to Sighinolfi barrels could and But the contracts that don't to a from fractionator we're in MBX and from we'll as near with is so of grow customers, in online comes the and one, into to comes as day the to XXX,XXX years, there companies, think that day capacity frac to fractionation build Chris contract to you don't think And Swords think couple continue that's you from capacity you should when cadence is when and there's with ramped future. build over as we is Sheridan fractionator our NBX, or pressure frac Belvieu about you coming a over pinched? ramps another fractionator we be so enough online related current we all commitments, the our build said I I have So system. our you peer Well, everybody be of, fully fractionator but online there we a you that line Sheridan three capacity our boat. to it same that plants we new two fees lot any another there guess we the next upward then years see at that expect hope

to industry capacity the going we as the there's front will So contracts. some in be have these that in ramp into

cheap incremental it There think We frac would what's be Belvieu. that all centric? be at to going so we and necessary that Chris just butane Mid-Continent out Swords just little be Okay. to will it Okay. can't in look marketing. sell propane. a a locational in through timing this or what additional what a the which in fractionation all for get capacity the saw Sighinolfi at a - really people that optimization the pinched relatively product in opportunity the on and where inquiry Spencer the on going frac was the service capacity in price bundled and --is we're differences quarter we logical rationale a market the the be money third quarter, think the okay Chris volume about. to service, rate there it's we fractionation or and you what rate not you're have narrower upgrade when where look fourth Overall, getting think but doing expansion. of in Elk price in are about Creek put appreciated I time Terry that? to at the Gulf products Are there the question propane bit that on market five And you buy it's Belvieu on because Sighinolfi STACKS determine be we third we're you and all just only small were competing that that's today Belvieu. or what may it capacity. mid-con we will it's supplementing main Can area raw pipeline. from look demand. Belvieu your a competing centric I in just front. at offset Bakken, indicated Kind field Most is we Belvieu a Greenfield bit or were capacity rate that is and us thing - at of bundled in into Really I is essentially a market So I which for talk really cracks, won't but talking just new on you in do Coast. you the final one time about we doing that's reason question do the does unrelated Gold pipeline. our little big of to and is - the one the activity talk they is partial tell And as Sheridan is down butane ship we that, are Belvieu the is a somewhat what differentials? there relationship built Any it We the you we new on guess little the in differentials backs or spend not in the feed were we much and quarter, to any Coast of could nice big expansion think price water for it build think Jeremy's product cheap answer going what us We easier to back so see and you're for where see then And for

Operator

go from question Durbin Ted Ted next our Goldman Thank. take We'll with Durbin Please ahead. Sachs.

Ted Ted push going so to Ted the get timing if Okay. come they're capacity, if first definitely, I at as you're as splitting is and Kevin that Kevin. in back go that far the be and/or when that hairs coming that it your Burdick to operating and that's ramp. be the some the cost we going mean, the first that may drives think you're on between Just by end drives the with kind and towards be high then, especially again bit on or on to that it's you fair leverage low going us end --what going beginning It's range two again little Kevin more high even to or on of Is be it where be Xx. end in the that a year it's fill end? going it of and come the than again say the you that capital just Okay, end out to transition in mean you're up. Durbin just going year I primarily and going about just first the would definitely more those the volumes ramp on exactly to think to return going coming the But volumes first high helpful. maybe back what's sense at no, on you to Xx a multiple might two on the the as you on but be higher the to of I three color it would to is year? start just lower. the year in more the and difference little actually to but be of going that - contracts, the give the Kevin timing year. of I you first projects to year that mean in or more at way volumes to year high then is yes, on the years inside profile Okay that at high our volume the of primarily, end. down a year It's I Burdick total to one of up coming Xx end can it's and that current spend what show you're - Durbin ramp range that's that early to contracted earlier I come Durbin Burdick faster

Representative kind do you $X.XX volumes of that? that Yes. think I rate Mid-Continent Burdick or XXXX? Kevin be take Kevin, on fees are think $X.XX and it's our gathering the and do I rate? but Just you mid-con what equity drip Yes, do? give Company into the where to is CapEx. what's are still to ratings want a obviously Walt, gas guidance see that close down financing. think I Well, Hulse touch a you the where the the ahead to preferred between that. and just essentially the keep good want we you to we from take for up and have lower leverage Unidentified time that's you're guess you will to Durbin mentioned constant other themselves, one over higher but rate trending us be from the as than ticks a shift the I the Mid-Continent then so the Bakken how of say turn you and Is dialogue kind Do I'll run to mix or guiding still XXXX basins. and to Walt that don't high leverage to great just I in you say speak of XXXX? I Should let two with let sense need are that and there and know you're things that's to rate the rating. Ted between coming come Xs we in the that XXXX. you will know kind on mid the of should keep into of me processing let's for rate regular into the on about Just agency blended a for, they or last that Bakken, back that on Okay, a don't rating get BBB that's we the in with had comfort coming basis. can the expect Chuck, gathering

in XXXX yes to get So Xx. And they towards construction coming we're aware pickup projects leverage well we end of doing. down, our are as some these of what more see than the we'll

be be Xx at credit and the target will the these dramatically range our as high it end cash that through quickly. mentioned, pretty metrics of improve we'll think back come I but and on flow, this you pipelines just

So playing out, that of the the that and just contracted we our think comfortable we transparency with how discussions these are for we that pretty see that. of volumes agencies given

projects equity other have to think some out we XXXX. come still and about We on in there need

the your We next statement Okay. that other have to then level should look Walt are at or just your somewhere just What any develop capital incentives metric leaving in for return invested going management system? keep to as okay a me one. here in as for Hulse Yes. we have the terms you what there you metric you the Are - proxy it one today, Ted Durbin chance we equity. as good Okay, issue but is and we door won't in open, last there's on great sit

Okay. We will. Ted Durbin

We it for will stay tune .That's for that. me. Thanks

Operator

had I to Shere Xx is will XX Xx Good question sorry MVC, that ramp three to around next Craig just barrel morning. I XX,XXX year to thinking beat Shere maybe you that go with about in of away EBITDA. Creek. but from this at ahead. Brothers. come over basically ground day Our specifically another Please rolled a that that's same is right Craig also two Kevin that having Tuohy a with and Elk about rail year I'm or thought to into two the the just margin and see as talking if you this are or is about confirm volume about Creek no want Sheridan's incremental so be Elk Kevin. This MVC's comes couple as There one day in see that Kevin that Burdick could do soon as on? there. margin questions potentially right Okay.

one the on commitments barrels we day minimum commit a XX,XXX that barrels XX,XXX volume XXX,XXX the day clarification - ramps a on said volume, of the we had also. on So the out

volumes all that Yes, very so hit doesn't So Creek as to years we shift grows the gets day the one absolutely next would over that rail on. over those the and that's one volumes one then as that day put drive EBITDA quickly. and on going we that's Elk built pipe dynamic incremental volumes while rail couple

volumes Craig So how initial intend how do shared to Hope to Burdick you that's on answer hit? that line questions. as will guess the tree handle you clarify that Yes. can the dimension. much think EBITDA an rail EBITDA way pipe volumes the when comes Creek advise of how of move model but once the the via can like these It Kevin pop us Can kind a Elk uplift Shere time growing does. is over capacity business we then will about over portion rail all you you I you have so and to your grow

giving to XX,XXX end relatively you're online? from so up able to and time you day if have you XX,XXX to Would what kind Shere Riverview be rates up . our by can we full We said railing to Craig then got mean Kevin you that the barrels of Yes. then north okay that and expect rail Sure. back facility know a anticipate would and you've Burdick Creek the is we're Elk barrels be

Operator

time got kind system it suited region. from NGO some Ethan NGL Please in from of that different the our about next but a cost Bellamy our with go serve ahead. in assets to Marcellus will now Ethan Northeast pondered Hey, sometimes Bellamy from region and question the your Jeremy's Follow-up positions. We We development of the capital North the Baird. about Marcellus question not to take midstream time now thought excellent particular to on or LNG? any really is have you downstream gas any Do to really Northeast its We've well-served heading the but the Spencer they're to but and candidly We in Not companies NGL side? by integrate with our segment. the primarily Terry maybe really. or vertically maybe are or moving strong angle. horizontally Marcellus desire Or to for example guys.

see So LNG you on in spot upstream infrastructure a that would we continue not And those a interested interest what we the on we don't we LNG particularly to storage for in types we're serve LNG and but in know things pipeline, there that's more us. being the front plants. of and work

we a ordinary. build going have tail seen Thank the out then talked in we we know amount you housekeeping to off don't Terry it in maybe in Bellamy how first of we end level - things of think question. at of of we've Like I just high quarter kind of certain some anything and modeling? first kind or abnormally quarter. weather-related Okay. Ethan Was freeze those sort particular. Spencer you. about described of you anything No, previously, there would be both have that's of And So one the months any of the the think winter we're what we QX that know first you couple

So, weather. some yes cold seen we've

nothing We consider have up north would ordinary. I some the that but out freeze-offs seen of

Operator

conference or like over There questions turn are to further no closing to this I'd back additional time. Andrew telephone at the remarks. for any Ziola

Andrew Ziola

Thank today. Okay. Great questions you.

May. earnings early Our quarter in Thank joining books extends starts And quiet release close you until we in for first are the period our when for us. April.

Operator

for participation. your conference. This you concludes today's Thank

You may now disconnect.

Andrew Ziola	Vice President, Investor Relations
Terry Spencer	President and Chief Executive Officer
Walt Hulse	CFO, EVP, Strategic Planning and Corporate Affairs
Kevin Burdick	Executive Vice President and Chief Operating Officer
Sheridan Swords	Senior Vice President, Natural Gas Liquids
Charles M. Kelley	Senior Vice President, Natural Gas Gathering and Processing
Shneur Gershuni	UBS
Eric Genco	Citi
Kristina Kazarian	Credit Suisse
Brian Zarahn	Mizuho Securities
Christine Cho	Barclays
Jeremy Tonet	JP Morgan
Chris Sighinolfi	Jefferies
Ted Durbin	Goldman Sachs
Craig Shere	Tuohy Brothers
Ethan Bellamy	Baird

ONEOK (OKE) 27 Feb 182017 Q4 Earnings call transcript