OKE - Earnings call transcript Q2 2018

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Operator

Good day and welcome to the Second Quarter 2018 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

good and Brad, you, morning. Thank ONEOK’s And call. XXXX conference quarter welcome to earnings second This a live made webcast call being is and available. replay be will include Acts are covered A call the Safe should made statements of by and considered ONEOK’s the XXXX. provision might Securities be and reminder predictions, XXXX expectations statements during forward-looking Harbor or of that that this projected Actual results statements. could differ in materially forward-looking from those

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

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

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.

Natural Joining available Planning Hulse, announcement Vice performance, and Chief and to are Sheridan today's and answer on $X Chief Vice earnings yesterday's Executive Financial financial Strategic and President, we'll Kelley, call Affairs capital and President, Burdick, updated on your progress Natural Kevin questions billion Vice financial our Gas. Chuck me quarter of is ONEOK’s Senior projects. operational Gas Liquids; more growth our Corporate discuss Vice and Swords, today's our On than share Also in second Officer, included Senior call, President, Officer. Walt President guidance Executive Operating

high in we level noted yesterday, basins productivity our we the release operate. continues in As of the where

fee Our across noteworthy, earnings year. are we the consistent of for growth attractive incremental is our services performance investments NGL largest volume our customers provide through and returns. positioned gas spreads liquids growth core the we natural and this optimization additional gas volume fact expand the customers underscores our And our asset business, growth while to supply incremental based natural continues the across well volume at with and to for strong are our contributor system growth pricing footprint. both And is

completed broader stages Yesterday, Our in Permian Construction us long-term and some With the a negotiations. that, as expanding footprint positioning based further organic that in acquisition, on opportunities, late of a acquisitions West interest owner progressing pipeline. earnings. provides those became are through strategy the Midstream’s will of on now the projects LPG, Martin turn over our Texas projects our Basin sustainable and in focused and acquisition strategy in With of projects remains which fee for planned growth of to ONEOK more within the is provide step strategic our strategic XX% and West fit long we Walt. Kevin I will moment. on the assets capital LPG integrated that our sole Texas detail call expansion growth term

Walt Hulse

Terry. ONEOK’s you, X% second a nearly Thank the a increase totaled income with and XX% first million, quarter compared quarter increase year-over-year XXXX. $XXX operating

EBITDA the XXXX. was X% year-over-year quarter $XXX a and million, compared first adjusted quarter a XX% Second with increase increase

of X.X with flow trailing quarter, a on million in During the the XX, $X.XXX our share distributable XXXX. $X.XX million, second million] increase paid second we payable basis June times X.X Total the times annualized $XXX At on on the last the was and week, XX. with increase guidance. of is with than coverage cash quarter, line by per EBITDA announced and of run a another $X.XXX debt Company GAAP in quarter We more August an X% in an a per $XXX or paid nearly dividend basis, we dividend to our distributable changed generated flow first times. dividend dividends basis. healthy in [Later was to of XX-month on $XXX our annualized quarter X.XX cash X% The previous share than more compared to excess rate

used our in July. help maturity fund growth to maturities our billion repay fund excess senior offering have borrowings were debt together will notes short-term debt our with from liquidity and We future completed and upcoming capital and flow proactively our offering distributable expenditures. $X.XX the with managed cash Proceeds

our As facility. we $X.X of today, have approximately on billion in cash million credit $XXX and available

and financial maintain guidance midpoint as increased high primarily and X.XX balance increased With and spreads liquidity we income EBITDA volume sheet The expectations occurs at our levels to driven optimization results. capital no NGL the and financial X.XX these could significant for of billion. we million guidance million growth adjusted severe our continued projects. strong and net a fourth narrowed $XX our weather each midpoint midpoint guidance Kevin our a of are continue construct increases growth announcement, call we increased and to range. $XX EBITDA closer our by the maintain in the to guidance If ranges. our now These income our to optimization expected and marketing quarter, guidance end yesterday's easily at the adjusted billion We over businesses. be our I’ll look of turn net earnings at

Kevin Burdick

increased X% quarter gas STACK the the results second with new Starting liquids performance during than plants Walt. per our strong, averaged and natural compared third-party segment, connected the Thank we per the a volumes. XXX,XXX producer with an first growth the increase XXX,XXX a barrels averaged higher quarter NGL you, recovery XXXX. day to XX% processing the were with compared the second compared quarter increase as strong barrels Two SCOOP per Mid-Continent where X% second Volume gas the quarter in in gathered and XXXX. quarter, drive have averaged and day, with remained more ethane areas volumes barrels volumes XXX,XXX gathered of increase continue day July. first in in quarter XXXX natural

Pipeline remains the quarter. of during began full we NGLs out region NGL the and Bakken railing Our

period rail volumes pipeline able is per same the until be during a provide We day to year. increase compared quarter, the expect per Creek capacity day barrels last takeaway to service. to averaged XX,XXX to up the XXX,XXX NGL fractionated XX% in with second Elk barrels interim

XXX,XXX fractionated in end day to of We toward XXXX. range XXX,XXX the to per of expect be high barrels guidance our

volumes Conway. a way additional priced volume differential system our As across With ethane same system, on we than The with achieving total our to in year. approximately per in quarter additional also more system remain system, price anticipated compared ethane ethane strong day in per growth ethane the are has our utilization differential being XX,XXX barrels on has our This second increasing. priced the on Even than ethane in had volumes which the We our July ethane month period the across recovered, priced targets. increased, to price increased day compared of last volume XXXX. led without increase with a XX,XXX barrels NGL rejection. continued is of location has same our causing Conway higher to well Conway for in are with pipeline

Last Mont expect projects quarter of ethane companies continue and also Optimization as increase. We additional XXX,XXX totaling was and with facilities million the production ethane expect with $XX first Coast demand. and held in NGL barrels exports second announced, of between Conway online to the million petrochemical the compared per to marketing cracker XXXX. new $XX the increases and with price the EBITDA, across complete day previously to several per the the by second Wider come which additional half another is our second to inventory adjusted than segment’s system Belvieu petrochemical contributed more barrels demand of XXXX, differentials XX,XXX increase we ethane quarter location Gulf and expansion day during higher approximately startup this quarter sale nearly and of to the the year, of of activities week, second increases. contributed XXXX quarter compared

We until placed continue transportation capacity service. Arbuckle from which II is sustain to volumes, in highly will NGL to spreads Conway to remain due Mont growing will current utilized expect we expect Belvieu

gathering XX% areas. strong. on segment. the Moving gas EBITDA the segment with driven XXXX increased with by compared Producer our growth quarter and first XXXX, Adjusted remains second the and activity compared SCOOP across and to dedicated the for natural volume increased Williston Basin acreage the in the quarter and STACK XX% processing

a Second the XXXX. increase nearly gas compared X% per quarter second volumes averaged a XXXX with compared quarter day, XX% quarter increase first the with cubic X.X and billion processed natural feet

year, Mountain During more connected XXX remainder first in Williston Mid-Continent. same connects with per period million compared than XXX with the the expected in XXX expect the in ONEOK’s the during the well than processed X% XXXX XXX and Basin approximately and averaged Williston the the the We the wells higher and second wells quarter volumes Basin Rocky feet day quarter, feet Mid-Continent day, connections now the natural per in XX cubic the increase in second million for cubic to XXX gas total XXXX. region We a in well quarter.

which of its expansion feet XX Creek to per Oklahoma schedule. and cubic the we completion capacity feet our million we’ll day million approximately an from which XX Williston Bear in quarter processing recently cubic million. completed per of feet the cubic remains million capacity on capacity feet this have approximately expansion, of expected of our day In of have million day plant including the additional XXX with per capacity, Basin, year, per processing available in Valley fourth Canadian XXX the plant, increased cubic add available of We XXX day

the range fees. to be is per be growth takeaway that ONEOK Roadrunner Waha, the XXXX. rate a projects from continue billion cubic Permian Basin volumes capacity project opportunities In plant $X.XX eastbound additional now make expected and feet natural complete gas the contracts decreased X.X to and day and Transmission to X% optionality gas pipeline projects additional quarter under these above and The addition for In capacity to of increased driven from in total gas higher by received offer strong higher fee second and our provide We system XXXX. in average westbound on to ONEOK’s quarter and expect capital feet our and the natural and fourth the $X.XX to in and due compared the guidance ONEOK’s higher natural volumes Basin will original primarily benefiting create quickly The SCOOP have adjusted SCOOP to in to We Delaware of Roadrunner Basin fees transportation to expansion Williston additional per the quarter seasonality. have our markets XXX gas day. we’ll the both cubic STACK increased with and greater and additional Panhandle; normal analyzed producers seasons and basin of open to second WesTex, we Basin for announced transportation Permian Texas Lake the bidirectional WesTex to in projects. areas. plant growing to been once first have to concluded expect expansion $X.XX expansions up and than to areas processors the the in the interruptible projects expansion construction in and at that XXXX, in takeaway accommodate XXXX, expansions include STACK been volumes the Gas gas provide an four per the all Higher segment, of Transmission it X% rate on look results quarter EBITDA June, contracts transport compression areas. year-over-year, fee interest system transportation in efficient a MMBtu westbound from These The from on at million the Oklahoma of We've have average segment’s by bids volume and critical $X.XX. finalized. Demicks

Creek. our growth on projects, starting update quick Elk with a Now,

begun have should we in the continue the constraints to third Powder in Basin quarter XXXX, southern completed to to help alleviate the is Mid-Continent as and as Williston the which line River from be this on capacity some area before section We entire expect Basin early service. the the portion construction

Creek will expect day day. be last contracted We've an the per call, additional our contracted the to volume entire of bringing barrels Elk by XX,XXX end XXX,XXX since We project approximately also barrels XXXX. the per total complete on

pipeline an in are XXXX. remain remain we West our per expected for barrel that schedule contracted quarter XXX,XXX the XXX,XXX be are first third schedule complete fractionator and day additional on LPG in quarter our producers complete in on complete MB-X day. to extension of of to bringing currently per expansions. contracted XX,XXX day which barrel buying II, approximately now day XXXX. in Site late quarter Arbuckle this to is our we per on in of schedule processors total We for right per negotiations our remain the for to on and Arbuckle barrels the project, We wholly-owned away Texas region several with first be stage facility additional XXX,XXX and the II and work has barrels for volume [ph] on We've begun

will are As announce them. finalized, we those deals

the on expansion fourth schedule Mid-Continent our which remarks. to is quarter Sterling Terry, additional my III expected and of pipeline XX,XXX XXXX, barrel for the is growing completed day that provide Lastly, concludes capacity per in volumes. be also will

Terry Spencer

business help to great stay in technology are employees discuss enhancing pipeline Thank our it's you, valuable where don't protecting Whether new time they initiatives great happening the safety for way Kevin. and things the employees time operational monitoring communities live and volunteering results, many a the our our for communities, These performance to but and or to safe, our and business improving calls are implementing discuss doing other always we environment, earnings ONEOK. at work. allow

thank to So for our of all employees efforts. you your

which highlight XXth publishing be everyone of for review to our initiatives strategy we'll Annual for the these Within your report. encourage Sustainability will investors, you I support our others. the and continued of ESG To operations ONEOK, Report, growth. month, thank our all and next many and our

that, questions with we’re So now ready operator. for

Operator

[Operator with UBS. our Instructions] comes Gershuni Shneur first from And question

Shneur Gershuni

My related drivers guidance. the was to about wondering kind if we I first can of question, talk

around higher You range able What was I the some the Thank we hit the are the happen? higher would Any of there to there that but tightened and forth, be be end to drivers to likely end? up events wondering you end appreciated. Is can be need talk higher if macro range? think some so the thinking would see that about? guidance you. Are color end should you to we of specific that guidance the hitting low about

Terry Spencer

than they see easily, if less his -- some hitting we bit planned see forward, Walt of pretty optimization indicated comments, also high G&P where severe in are, in the margins, if particularly that the as Shneur, typically Sure. little mentioned segment. we've he guidance weather stay a could end going our they we about

these see a of this are in very optimization gallon degree certainly So, certainly really that again, to some of end we the let if end $X.XX guidance difficult of spreads don't current throughout reiterate, me compress we cushion some optimization high in in spreads, that if any very particularly but year, kind NGL in this change range is guidance. that forecast spread, can with achievable, fundamentally see will stay We But the Certainly, proven, factored upside, certainty. anything these as see our -- we've could or of the business. happens. we’ve

Shneur Gershuni

not the clarify, not do Is you So maintain that to seeing fair high that be then hit the another, to end. if kind they you're definitely but of one paraphrase? midpoint or of your the able and themselves, does would a way assume guidance we're that spreads forecasting

Terry Spencer

right That's on.

Shneur Gershuni

is pieces system, sort de-bottlenecking upside backing are of I are of kind are about a up pipelines, dig the of backing and if that. All just with question, of we of in your there is in I can And for is volumes, Permian ethane to in to be the was Mid-Con sort it you it wondering talk entire right. remarks, Perfect. it's doing follow-up see gas where with and steps a care up on volumes sort we and worked just where just Mid-Con you taken [indiscernible] prepared that a little opportunity as think guys wanted what issues an need out. scenario touched bit kind can but on of the the

Kevin Burdick

that's creating of Kevin. the being Hey, issues. we residue left This don't standpoint from Shneur. No, bottlenecks a in, see is ethane

producers and have standpoint, great from both are, Our our continue NGL an producers, G&P hear, from results. side overall to on what we

all increase volumes back expect them ‘XX. and to seen off of as those the move definitely at we We and through this we year rest haven't into

Shneur Gershuni

Mid-Con So of is a now? it the fair timing is kind to say issue right

Kevin Burdick

less volume really, lot no, all a yeah, then in connects timing is we in business, from and well there put G&P maybe the at our the about is good perspective. just count where that slight feel that, out slightly a For rig still some we're of drives well timing and one that but than reduction

Operator

Cho question next Our comes from Instructions] Barclays. [Operator Christine with

Christine Cho

I which was some at the insight an if if Sterling we wondering the provide on Arbuckle and into moment? you're optimizing products get update you levels utilization most the on and can could

Terry Spencer

Sheridan. that So, question we'll turn over to

Sheridan Swords

to this in we Sheridan. pipeline, Arbuckle And of the the the Y in grade Christine, range still even we're did XX% in to Right quarter. in range, XX% this than time. and is the now, quarter were on we're at pipeline, we first a that we Sterling out second bit [ph] XX% then moving on of Arbuckle the can in Mid-Continent all utilized more we had volume though XX% the the

Christine Cho

NGL Okay. the at most And you product are which moment? the optimizing

Sheridan Swords

are the fact the and ones the optimizing system. that Ethane two driven propane by most just the most our that's really that and those products we’re are the have we on

still a butane So, because propane. much ethane and we're it don't butane as very have optimizing nice as we spread, just as but have we has well,

Christine Cho

And I be ethane, the do XX,XXX language to to day frac Conway expected be your reject took Okay. to you spreads year what to rejection exit that per expected to are decrease negative the that barrels noticed continue that by expected expect priced With now? end. rejection then ethane off Conway you producers out to guys and rate is ethane ethane

Kevin Burdick

we up that up key make recovered, the make we're is would and not rejection the that rejected, the the the think, that think the – of be Conway value, I at Kevin. more on the mean, being for for I Conway if space XX,XXX we optimization. giving be not that's end I but from but is with come going barrels Christine, this of coming – us with is -- that more there day year, will, will you than to won't wouldn't clearly, barrels per will at ethane optimization than the still

today widespreads, to don't So of to the expect make come with that with that's kind we out no, the it up sit year, of where we the more but we're end than these optimization. by going

Christine Cho

if and Can if Okay. you all contracts Conway of are And are could. an I contracts Mid-Con of And one versus priced priced off the off your then Bakken -- more give then Belvieu? us much idea Belvieu? then how

Terry Spencer

We probably the but to Conway. at much you're the XX-XX level, breakdown, that all won't Belvieu give macro contracts,

Christine Cho

so you Thank Perfect. Belvieu-Conway. XX-XX much.

Operator

comes from you. question Wells our Thank next Blum And Michael Fargo. with

Michael Blum

morning, everybody. good Hey,

The Creek. That’s clarify you Just Bakken, from volumes. incremental Elk coming get of did to wanted or on contracting confirmation. producers Bakken

of is, that sort question the And on Elk potential follow-up volumes volumes to the to Creek? add Western either update even or Canadian you do any to potentially have DJ

Kevin Burdick

seeing you're Yeah. continue mean, as primarily in a I bit a coming of XX,XXX producers in a a the lot DJ. of coming lot continue the go the of have think Bakken, discussions Kevin. Michael, well day the Bakken. it’s of that's all little in out and to as mean, the and Powder. companies is maybe well growth activity and the I The of barrels I Williston out out the seen we've -- in there. Williston, Powder the up to across success G&P great But

on volume. of So, going Sheridan? with additional a conversations lot about producers

Sheridan Swords

people quicker with, up we to ramp-up will ramp volume than we – that forward, been would the one that we The their we’ve originally to contracted I our add contracted moving thought. the so thing contract have talk is, schedules we've think we already already

Michael Blum

getting on servicing just the over And with minor out the dynamics. East Thanks. ordinary North System, the into who delays service on curious The going there more issue Mariner anything then they’re given guess, [Technical is but and kind there, II there? I of Difficulty] of a

Terry Spencer

the was going year. the that's on it's but the System but still rail anything out quite quarter the North been seasonality East North North-South system and spread we second some East that's think affect the I do on for that's quarter, System. We into versus receiving in [ph] been Marcellus probably off by really enough on those driven affected Conway down the of receive what's we’ve that North Mariner every first there, the I issues, the or mean, of affect the Mariner more time. Shifting or don't see to But volume by

Operator

question Thank Markets. RBC you. next comes And our Elvira Capital from Scotto with

Elvira Scotto

good Hey, morning.

the the to of of guys Is more deploy it that what full only are Texas you XX%? with just So West versus ability see capital? some LPG the owning benefits ownership

Terry Spencer

key have you you partner things with is particularly to with if that Well, partner and and create so, make Elvira, up one trying partner -- of to liquidity, when with note necessarily of a us. that monetize doesn't wind a fit the could

some you risk So, there. have

the a business. got got so is -- that that integrate -- result, be So the structured, think on that thing may to aligned, involved but want be you're was owned basically the can't is a not important the want able pipeline JV things the probably got you've got thing same When do a all and the and run page the system risk that do when if we've Chevron the I it you table, not the obviously you you as NGL to – vote, you else you you ability our asset. taken with pipeline that's -- which risk that to that don't you've off in risk you've that partner to with long most ago existing it, you freely is how XX-XX somebody perfectly --

and out that integrate XXX% that asset that own Did without we you? of has that business and now more all taking our assets. and clean we advantage risk, business existing by Martin, these that synergies now it we can effectively, existing So with up take help and

Elvira Scotto

Yes, Thanks. that projects your mentioned in organic your -- at then remarks looking prepared M&A. were you expanding integrated and your very growth footprint you strategic And through helpful. in

M&A export of type scale your to you’d consider what it is footprint, expand integrated larger for capacity? downstream of assets more appetite your about and talk maybe you can So, sorts sort

Terry Spencer

Certainly, if West from perfect from simply think what Texas they acquisition, a remain mean, as to in well we I very interested we're interested or of a we but we're perspective, strategic be a going in with the strategic very in. all, first M&A, have real that's certainly, -- more example acquisitions an very pipeline don't Well, standpoint, M&A fit think and I what of very saw we're acquisitions compelling logic, interested not about really it. you

how think about we that's it. So

products up terms it that as types it storage, upstream again assets terminal as -- I we've a assets, to don't particularly is candidly transportation think wants, that of I'll sense and the over we lot downstream could relates opportunity sometimes vocal of in liquid as of about everybody of let acquisition us. broadly couple so we're -- make then as certainly quality but of in, that past speaking, there’s interested to assets, and that the certainly, products, based tell including be from been those an that oil, don't haul of have assets what as to very is -- NGL, crude transportation refined very be years, could products. be infrastructure people just could certainly often, well perspective want fee further crude could the limited go petrochemical That oil well be long you

Elvira Scotto

All Great. lot. a Thanks right.

Terry Spencer

bet. Thank You you.

Operator

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

Danilo Juvane

that $X.XX. be has fee as as new fair over it I should Thank that $X.XX you into Guys, of morning. for the is months [indiscernible] it XXXX that the provided, Should we you as well? to strong number and the six that to gathering carry good it guidance something year, being first been was think say

Chuck Kelley

’XX, of that. of with move in out range mix as that on Yeah. our see probably coming volumes similar Bakken, the This forward would the you'd primarily say Chuck. fees driving I we is

Danilo Juvane

you you. having additional well year gears, about you’ve Got see of guess noticed that just you into that given some potentially how at equity stating, course in you're far I ’XX. strong switching a and performed no I change point next opportunities XXXX. equity do so And needs speak still this at Does issuing of year, do all, need

Walt Hulse

well. This strong standpoint to capacity debt is experienced that business a reinvest obviously flows, back helps from which as cash we helpful, Walt. that We and get is have into us the because

XXXX we into with on today at want equity So our have we that don't XXXX, what view table see XXXX. in the well if to in that change anything all issue would we or

projects incredibly seeing Now we if for rating sooner to door do to need further and that to and horizon important to these going de-lever to that open, the that they cash the to the they the growth said, what to on continue XXXX do manage move are later, we but on come if think protect opposed those investment balance pipelines will, leave quickly and as out opportunities the grade to beyond. and have sheet. expect We is that, we're we we are we need as credit timeline start very flowing way

Danilo Juvane

we Thanks, question NGL Walt. to should that expecting NGL Last segment a mentioned quarters unfracked impact impact be release the from the press of from some me, of volumes, the in from you positive earnings dynamic? timing over next couple

Terry Spencer

yeah, we second and feed when frac did inventory raw in about think the put the some quarter. volume, we mean, I

the over that should come couple rest off will fracked that we you of expect We be the next the -- get year, over should quarters. so see of

Danilo Juvane

impact EBITDA the what would to that? as estimates be Any from

Walt Hulse

-- to million the range. would Probably in be that in $XX $XX million it

Danilo Juvane

so you Thank me. much. from it That's

Operator

Thank Tonet with you. from comes Jeremy JP And next Morgan. question our

Jeremy Tonet

Good morning. Thanks.

of of just were regards you kind higher the any of biggest main in assume it guys you -- kind as with to of first a guidance duration kind in as if the is far the kind is it or guys not now but at confirm here this you'd half already here, say, West to books you here? guidance, factoring touched to LPG point duration increase, remain spread was of that, the the strong the you raising of at in back think different drivers to consolidated times components rank on was I want what other kind order, there half here back of items are longer going that bringing guidance the just couple Texas together acquisition increase for better it kind year. what all is levels in just not to and of And the in as

Terry Spencer

made, but you you're is the optimization. think the I comments Jeremy, right biggest Well, mover certainly on in

tell I some our remarks, if weather you factor we benefits as in But factored And today leaning some as what we're pretty but Now, consistent Walt an can fourth certainly severe, the weather to we is wide mover we if do biggest looking the significant certainty, to that I mentioned scenario with at very typically, you not and in, see extended be of toward through we optimization. G&P time. segment, know will we any in move as his do earlier, period degradation for that degree and in predict it's spreads could later where it's see the the mentioned got quarter. said that we've these difficult I as spreads as is severe is again year, as of pretty everything

Jeremy Tonet

That's areas? Thanks. could of of related a the less going kind timing or it areas in I back kind XX to STACK, Mid-Con talking just is is, SCOOP well you kind share connects legacy think. were then And you But about, wondering what this if just seems it's if helpful. like this of

Terry Spencer

any of of SCOOP. SCOOP. less the is fundamental one STACK versus timing, bit been maybe change somebody how our the rigs our it's our than It's little a And little that much structural we’re outlook No. and a around on all There degradation move not that’s there. that's in to, acreage or rig that's else general. viewing that's STACK acreage driven we're and and no and in It's again, in just, seeing just pretty overall back bit on

Jeremy Tonet

my question. for helpful. very That’s Thanks taking

Operator

with next Bank America. Thank comes And our question Dennis of you. Coleman from

Dennis Coleman

ones footnote Yes. Any on Elk A the from a would Creek so we thing fourth bring quarter the you says the whole please. Good may been just model Hi. the you that Southern asked, expect in couple of and earnings might if a lot in has on third detailed There's meaningful impact from that in? morning. to me quarter. that

Walt Hulse

advance impact like their customers rail to using service it would said, bridge the be, capacity. to pipeline as that a earnings those -- we're in The growing our provide relates of we've as volumes

rail pay River to Basin the one barrels, over from way barrels about have that we and to about get yet, rather move but get. we done, is, start rail collecting That's we think and ’XX Powder that pipeline the as pipe Southern that, talked will that fee provide be -- considered haven't we would to closer than So as and we're so if able to as the section -- the not the be cost, full would move do and clearly, it we're get thinking about way that that we we guidance. it the guidance uplift we really

Dennis Coleman

Perfect.

tax for anything And strong you here and about higher does a will change cash when obviously become results guidance, potential you think payer? that then Okay.

Walt Hulse

still and through as out a No. than beyond. have be that we changed. some at paying point that be won’t -- in taxes we've It hasn't past, least guided the We further or XXXX will

Dennis Coleman

me. from it That’s Okay. Thanks.

Operator

Thank you.

Our comes with Tuohy next Brothers. Shere question from Craig

Craig Shere

question the on little just answer [indiscernible] but a to on last confused Jeremy’s guidance.

You’re assuming optimization half, recent some to spreads to second from the Belvieu into Conway discount Mont right? the on

A –Terry Spencer

correct. That's

the Some degradation spreads and fourth the quarter. in through going forward third

Craig Shere

Okay.

upside we've where we stay if so recently the flat just and from of your to And guidance? -- you’ll been, hit point,

A –Terry Spencer

You got it.

Craig Shere

on how I know will seem Sheridan then guys And that the quicker for ramp in your Arbuckle, about producer quickly XX,XXX day activity had you than Kevin, Bakken, up contracts. suggest for additional XX,XXX Okay. plan Elk a ramp? kind on to shared of Creek a any that mentioned last for and thoughts call the the legacy

Kevin Burdick

but into mean, our over little year bit as these stronger. positive still going or expect online. information move come we yeah, to once and we or about producers from are they a -- get I we ramp, don't a contracts two, to good information projects it, continue additional being That through has volumes the volumes and ramp would steeper I the translated

Craig Shere

the next LPG Texas any besides thoughts Permian the what about West Okay. expansion. in And

Kevin Burdick

late think, And on lot of we and stage we've with growth. to a of you with of got rigs there, clearly, mean, liquids side, the I at Permian the negotiations number what's As growth again of the several there on visibility we a them. when and volume the are in look out have out lot targets expectations going

that's from would of leveraging significant the with it able part savings the LPG. into it, II line expand we’ll where West II eventually continue II the look integrate Permian we to we that connects and capital to wholly and be another versus and pipeline So, all Texas way Arbuckle West the some and achieve to to laying loop own there by Arbuckle pipe capacity Texas Arbuckle that now

Craig Shere

Okay.

or maximizing got, side crude what there? ideas it's So on just the you’ve nothing any other

Kevin Burdick

the we're crude versa. and thinking always to business, to take we're existing the Craig, crude about So potential always thinking about and vice them assets repurpose

being particularly as the always those thinking We're opportunity, where thinking always about particular Permian. would things. a certainly about in and as we're crude I rule prolifically in is it basin in never produced out the is. it So,

Craig Shere

bit M&A exports. moving question. you a update mind your follow-up question, kind wouldn’t possibilities. export of last market the that you've referenced know kind a I thoughts? of She the LPG Any commented there, into of on past, And in Terry, to Okay. Elvira’s

Terry Spencer

us continue to are that the opportunities, we front export like terminalling that We today. Well, pursue never aggressively stopped. in has of prospects

We're a Our across pond, working hopping such potential lot of and very in an we’re at project customers spending lot looking a as the time commercial are and options. to export talking partners potential hard lot markets speaking teams of the that international terminal. with of a

very that on of an activity a or sense business and list lot us. So certainly a for high our makes

Operator

you. Thank

time. to now this no I questions further Andrew back to have We conference at the like Mr. turn would Ziola. over

Andrew Ziola

everyone. Well, thank you,

on Thank and provide a us close period in for details and third we earnings a have We'll later conference quiet at call Our in when date. quarter early starts until for you October. day. late the October we our extends books good release joining the

Operator

Thank you. concludes This today's teleconference.

now may disconnect. You

ONEOK (OKE) 1 Aug 182018 Q2 Earnings call transcript