OKE - Earnings call transcript Q3 2019

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Operator

Good day and welcome to Third Quarter 2019 ONEOK Earnings Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Andrew Ziola. Please go ahead.

Andrew Ziola

Thank you, Travis, and welcome to ONEOK's Third Quarter Earnings Conference Call. webcast a being made will is available. call live replay and be This remarks, to be our we'll After prepared available take questions. your

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

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

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

Terry Spencer

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

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

Joining me Natural Natural Chief Gas Also Swords, Senior available and Hulse, Planning Corporate President, Financial on Affairs; questions Kelley, Vice Senior President, to and Vice answer Operating Officer, Officer. your Executive Walt are and Chief Executive Kevin Sheridan Liquids; Vice President Strategic call today's Chuck President, Burdick, Gas. and is Vice

guidance our third Yesterday, quarter announced financial we and earnings updated XXXX expectations. results

The earnings growth set first companywide foundation and laid have year. year XXXX for us for the another nine up growth in of next well months continued have

We reiterated in XXXX. our earnings greater outlook XX% also than growth for

timing northern of and line I Elk Dakota, we earlier our volume section projects capital of several The our the as Creek Demicks and is XXXX. provide January in activities fill begin exit our in including month in this November plant, expected growth pipeline complete Lake We to to and expect earnings year. meaningful our NGL we which will II updated natural provided which plant on processing completed gas growth North was Lake Demicks

help barrels we that and in up of day assets NGL cubic will first fully more Lake immediate the XXX,XXX million fee natural and volume gas will stable flaring expect XXX,XXX in transportation to per projects gas per Williston five and natural Between now years complete day for of Basin, and This plants. capacity to the growth infrastructure lift significantly of Demicks XXX an gas XXXX NGL reduce a including including provide critical fractionation barrels and quarter additional based come. than feet to processing capacity, natural earnings capacity, add growth of of end XXXX,

With the Walt's quarter our results. call turn that, I comments will on to for over third

Walt Hulse

Thank third you, Terry. quarter third income compared totaled period share totaled or XX% $XXX X%, respectively, per ONEOK's same million. and increased quarter EBITDA million income net net adjusted with XXXX Year-to-date, adjusted the year. $X.XX EBITDA and last and $XXX

the XXXX was first XX% of $X.X healthy times. compared year coverage year-to-date of up Distributable months cash nine the X.XX through billion, with flow with a dividend

have of nine also first cash nearly of months dividends flow through generated distributable million paid of $XXX the year. excess this in We

on line on with Xth. X% previously XXXX with November a of last in compared latest our stated per and week results increase to paid dividends shareholders basis. is XXth in the of During announced paid or to dividend share dividend payable the quarter, $X.XX share increased we we an $X.XXX XXXX annualized Dividend per This record increase guidance. the $X.XX in first November on

offering billion August, completed providing senior $X a and note In flexibility. sheet liquidity we balance increased

senior $XXX addition and redeeming offering to XXXX. due XXXX debt million March to In notes our the used proactively funding loan were from million capital term manage including were proceeds that million the also maturities to upcoming $X.X repaying $XXX expenditures, of of

X.X an net on September to debt was rate EBITDA annualized On basis XXth, run times.

quarters quarter in to expect deleveraging the to follow EBITDA continue to fourth continuing run be of rate the times in We four that. first quarter for the XXXX at XXXX of debt to with the

midpoint our available EBITDA $X.X unchanged facility XXXX of cash. of announcement, million billion. with The full income With earnings $X.X remain our quarter and on more net the narrowed increased adjusted billion at our ranges. to yesterday's third and $X.XX billion $XXX our the than midpoint we credit ended financial guidance guidance We

processing, and pipeline each exceed range. trending announced to gathering gas the the high-end gas ability with natural previously of and guidance segments high-end natural The financial are ranges, of toward the their the

growth the in processing Williston performance these and Our Basin in gathering transportation areas firm pipeline on and higher reflect segments gas segment. expansion contracted SCOOP stronger-than-expected STACK the in projects volume the and gathering and segment capacity in natural

to of our lower Our previously natural towards low range, primarily ethane to increased the is the spread guidance marketing impact expected and trending Mont segment from Conway between financial narrower pricing earnings on rejection system. its due than of optimization end gas liquids and and Belvieu announced due

vastly price a our as were different with year. the last base business large quarter as strong compared third one commodity grew ago, that Despite environment a spreads and year

As we the quarters, this prior we mentioned towards expect segment of to for heavily weighted half the be in earnings year. back

higher my to a growth Williston growth that region at updated contributor primary The to Basin continues also with growth our guidance margins to remarks to volume We've several projects. regions. our to billion, the of our $X.X the last quarter, the capital reflecting on relative $X.X one-offs be timing other is range underscored growth in XXXX consistent capital by fact billion accelerated

The early in EBITDA projects growth deleveraging earnings also next in their service contributions confidence further accelerates our and underscores year. these on associated and our

emphasis we of our mentioned, guidance in XXXX, compared greater continue XXXX greater adjusted on with to the and midpoint growth than Terry than remains EBITDA expect As XX% XX%.

the at turn our over Kevin look a now each call business closer will I segments. of to for

Kevin Burdick

Walt. you, Thank

volumes. on full with see these projects growth budget ramp projects for continue through across volumes as year the the and operations strong first several continued of time next Overall, over remain and the natural up activity to us We our well positioning already on nine months volumes our months. gas on XXXX producer NGL year surpassing

look take the starting at closer Let's regions a our with Rockies. operating

basin both gas than the wide saw and remains and Dakota August again natural feet Powder record Williston count cubic approximately per Producer rig activity X strong in basin. of River remained day at in a production North more billion XX.

natural Elk Creek per I is pipeline in feet Lake capacity XXX to and plant now s entire As the in ramp full million gas expect to mentioned, Terry service. service quickly once we processing it our day Demicks cubic

With flaring XXX million and growth to in per of the available one natural day of the than is gas that more immediately dedicated million volume capture. cubic XXX than anchorage, basin more feet

also alleviate expect million our XXX basin. complete We XXXX, to plant day cubic in per will II of further feet the January in Lake help Demicks which flaring

the to feet year-over-year Mount compared on range. wells Third in XXX for volumes Rocky puts XXX of day, expect We with This higher cubic were compared in and quarter nearly wells. of track Mount billion the connect X% end gas the between well X.X volume XXXX in and our natural us Rocky this prior year quarter increase per an of XXXX. second processed the guidance region XXX region connect X% guidance now with

to growth This Better-than-expected to temporarily processing has well completion well which gas performance acreage. with delay but drill have ratios count, and a more X,XXX in the even with rising additional approximately due is higher on our producers NGL of to than contributed to XXX translated lack flaring into uncompleted avoid oil takeaway. basin-wide and capacity reached

throughput second our region XXXX quarter Elk in Southern begin capacity to once expected online come producers working processing feed approximately volumes Mountain expect Elk due X% coming for the Creek providing the primarily NGL additional and July. raw to in support further section growth online pipeline off Rocky with Creek in the of increased XXXX. inventory this We compared

day capacity In million plants to Demicks cubic of million be completed by plus plant, Lake more per of in a cubic capable XXX,XXX additional capacity, addition producing completed of the the these which region first per quarter total Rockies third-party day are than of of to propane full day At expected approximately I capacity feet feet our of full. XXX XXXX. when barrels recently XXX processing an per with

begin which We additional NGL XX,XXX railed includes to ramp the already XXX,XXX throughput per remainder Section are full Elk transition barrels cost. currently that more the activities Line volumes of barrel to pipeline the October XXX,XXX per through continue volumes per day from fill including day being and in will the Bakken region our expected to pipeline. the already averaging than Northern seeing rail NGL reduce Creek in barrels on will with day, approximately the November and of year are

than expect day the XXX,XXX throughput more barrels barrels XXX,XXX of region than per with more XXXX. a for of and day exit quarter first raw feed reach XXXX We the in

XX,XXX reminder, each $XXX nearly incremental As per day EBITDA. barrels volumes in a results of adjusted of million

relocated production benefitting see natural there to strong gathering increased producer and continue basins, from activity and also have rigs remain We some the other Basin natural River liquids and processing gas segments. gas Powder our both in results as

decreased our expectations. ethane of during feed compared onto midpoint processed XX,XXX approximately had higher third volumes and Total quarter region, an core year-over-year of Mid-Continent throughput in July raw the Mid-Continent, last Mid-Continent and but in XX,XXX on rejection, saw barrels growth. region are quarter guidance August. specifically of increase NGL due system demonstrates XXXX, volumes the second natural X% quarter which of XXXX day than strong barrels Moving per ethane We of supply gas the propane increased approximately plus tracking in fewer to the per of day the with above the our

seen on near petrochemical coast. ethane the remainder to the continue increase the on the we but of since fluctuation quarter, start year facilities Gulf fourth expect We as system our through natural the of of in new new gas we've Mid-Continent. gas five connected and system months Through the the the in processing our gathering nine liquid processing system to first third-party connected to XX plants wells our natural and year, the

the new expansions volumes in in growth the on which quarter Two the Arbuckle previously system plants expanded on also volume third-party connected XXXX. in of volumes for on growing and these have schedule addition connections II completion remains pipeline, been NGL will region. drive to from our our first Rockies

about contact We and into information this incorporated in stay in been region growth the for with forecasts, our to has XXXX. plans their customers our and continue outlook

primarily a expansion projects legacy approximately on and fractionation transportation lower the increased Now and this at our Texas feed rate XXXX. the in look and of closer average Coast rates a was the Permian This raw quarter region NGL operations, Basin XX% driven $X.XX West with fee second Gulf with on compared volumes and in market-based volumes by year-over-year by the volumes ramp increased LPG replacement system throughput taking completed rights.

per track on of expected first the day capacity NGL We continue remains in XXXX the of provide capacity fractionator average barrels year. on are Phase per increase X to expect the respectively. of XXXX. highly completion expansion capacity of XX,XXX MB-X quarter completed completed XX,XXX first by barrels first Phase fractionation of which the the utilized. quarter the and for remaining barrels approximately as in XXXX be will of which MB-X for System quarter day to per remains of our the schedule X is and XX,XXX of day expansion our the XXXX. wide to rates add remains per project end quarter barrels in day first of XX,XXX completion will

Terry my that remarks. concludes

Terry Spencer

Thank you, Kevin.

system-wide strength our and with operations we is ourselves earnings in operate and performance, the strong balance and in our a it business growth important all while But Our execution construct and for important way and operating responsible exceeded equally conduct place that the volumes discussed is operational today. program capital of which foundation important many that is successes expectations. we we the is of sustainable very project sheet on the had clearly growth

can website. detailed our which our programs be in most recent social and more find prioritize Report, can the disclosures, report on and many You our priorities ESG XXth of and sustainability government report, relevance is you I one to each our encourage we found on version increasing report corporate focus The Annual website. our environmental, related with report to of this for content and review stakeholders. information

these safe focus profitable, continue that the We do your help and responsible business to areas, on to goal improvements is because and so build for environmentally our welcome feedback long-term. to grow in us and is

asset growth operations out We're Thank enter this work about year year you dedicated and employees additional exciting companywide only to away hard project from couple contributions our completions. and all of and of another months closing were an a for to your new quarter. of

that for now With questions. operator were ready

Operator

Jeremy question Morgan. comes JP from Tonet, [Operator Instructions] First

Jeremy Tonet

over to Just lot the moving of talked pieces online want of with remarks, need we those way next to II, to Lake perform coming in kind how as have Demicks plant want start project of think ramp, and just couple you ramping here, online quarters off a and perform about you your lot especially but should up Elk Creek a project the there. the you of you've I

these expect coming online? quarters we should over how EBITDA Just next ramp to the with few different projects all

Kevin Burdick

Right is let processing Elk kind get capacity. NGL is clearly, service, now short I'll Elk third-party comes Lake in. then ramp. in one the Demicks but all got that those going we and some as key the Kevin plants Creek plants Creek The to that just and will of quarter, got not takeaway all processing plants others need then to is in you've another online but But to this up Jeremy, come now, I, there you've jump done. that's the basin project are up be able fourth

is flaring clearly not other our well. substantial behind And just but systems system as there company

you've as XXXX So, you to seeing see out, flares in gas of XXXX, Then as and flared coming the would quickly move and rigs, the Powder strength it's the early expect got also get very there, the through well. ramp going from you inventory. growth out put you up still we're

a out the levels we're and given rig the seeing. you'll see counts you'll immediate in put to step flares So an continue the we as activity ramp up see

Jeremy Tonet

very thanks. That's helpful,

to have of turning portfolio now. projects guys you it CapEx, it's very deep right peaking like a seems about Just and kind

-- Just next about you on? you what of trending color How capital thoughts with Any capital provide the be year? wondering, versus or how capital that to you great could do discipline guys seems focused the market opportunities balance see there? think

Walt Hulse

by We've Walt. Texas got this Lake II, [Later MB-X, Jeremy, II already is that the announced Demicks expansion. we've changed projects several Arbuckle West and Company] that include

XXXX. All the course will of be throughout those completed of

So got do math you the on can already off. what kind we've ticked of

CapEx step have what So we'll down see from we our year XXXX. meaningful in in a next

the think that announced. pipes. has two opportunities backbone everything we've growth remember of that system been will will here built see of we come, Going we other majority horizon vast on but with the forward, these There the

forward. operating significant going have we So, leveraging

then we plant would the less So over out or we significantly processing spend and as those point would that the if would of couple that also go another forward announce we lines, I magnitude something along get is coming of quarters anything years. had really in order

what XXXX CapEx look you something our good is pretty at announced that today. we've this on get based point So a can just

Operator

next Our UBS. Shneur question comes from Gershuni,

Shneur Gershuni

we of talk Wondering about if things sort couple of a here. can

next XX what's sort Bakken of in remarks your in expectation your time component is infrastructure Just the for also year, of expects prepared reduction delay, which at in the inventory the but same that unchanged. theory this noted but the in higher would function are that imply the for about expectations liquid you've you mentioned commentary so interesting for it's your indicates year, volume a higher

might now So are even with higher you what potential even I originally XXXX? correct? think about next coming year, as that think does that mean what Or connection? And thinking that side you could the liquid better would the cut you it to seeing XXXX be be vision from inventory for higher for that not about have you're than

Kevin Burdick

This is I Kevin. mean yes.

short the --producers NGL conceptually able clearly take that you're basin away was constraints to against because think unflattering with right were were full. path. were I on capacity processing We they button up right and the

they're wells for and off flare completing they going on that's several than been rather those going months. ahead going knowing So and backed

were increase higher still of we that. guidance. though some tailwinds was results to us that connected XXXX. as than then into other had we we more on able fewer volume that yes, yes, side our end of there the anticipated the towards move strong get even So wells which that And result just producers to deliver we continue the And of gives

Terry Spencer

it's expectations fair have in exceeded particularly say Kevin, producers to Yes, consistently Williston. that our

in has our certainly own be think and up finding a of have all The capital turn well. there, our in gas ways productivity which the deal been from discipline enhance ratios liquids their increased for available there plant. I us big to benefited to and their we

all, really on So, think have the delivering superb done just I a to job, is all those them expect but deliver, in we backdrop that exceeding only producers expectations. what not

Shneur Gershuni

line, XX. right make on is sense ethane the of something take reason of Is just about need challenge of basin it one there gas Is recovery follow-up, make a more the the to that function just ethane. kind to out the there or to just XQ gas now more is fact you the away then And two of the talked so room clarification more you that and that a quickly recovery different?

Sheridan Swords

Sheridan. is this Yes,

you're So, right. I think

the You Permian Permian Mid-Continent, the gas basin now moved But allows to especially to Mid-Continent. in moves really the the need and come prices in a which the continent the issue of more the when ethane look saw the we quarter. quarter a Permian, little bit fourth goes prices at the really, up of more Mid-Continent. that down, come out And in during gas gas third out and in you in Permian ethane gas see the versus the have lot

TNF Permian at out because of the together. you and TNF need the are the So Mid-Continent close to the gas price really look the out of fairly

not So, it. it's that on side of

Shneur Gershuni

In one it's lower about versus your And conversation final CapEx and talked you've XXXX. materially XXXX with being question. in Jeremy about

some expect be when free with And in So, right cash would but material for be look of in the policy? cash leverage, free is of start there the backs? you flow time free options your us of options next to improvement when sort I should change discussing flow what dividend And buy fruition. capital return cash I’m an kind of thoughts where you on like kind curious Do just year? starts at to there'll

Walt Hulse

were by QX XXXX. that four XXXX We times said EBITDA of get QX to to of we or debt

that to where to X to and aspirationally is like be. which into range, We through X we'll kind delever that we of after continue expect to down proceed

take to into going we So, XXXX, to XXXX. still we're going time, through some -- that's have maybe

opportunities. continue commercial the team we a always on to are that finds as to keeping the to in And hunt extent leverage growth forward, growth primary forward delevering in and going going basis, those, going focus. our those times. around on for the opportunities, we're going good we're And that X.X that pursue that but So, then that

Terry Spencer

but of around return I continues have The these add be to or would will we we those, of the mentioned to Walt infrastructure great priority like and in continue great growth albeit to projects. don't projects have Walt's us, attractive priority only projects earlier, continue a organic be big these comments to fund thing of growth backbone front that any are those projects runway the

have and we think backs get forced don't And certainly, we share come would If retire running certainly are it, equation, point it to available, to share we then out the that invest look have could into consider. to but debt, a we we're as think certainly, growth about ways something where cash we at we and it's projects and if but about. see as certainly I other our capital of we're that buybacks something

Operator

Our next Cho, question comes from Christine Barclays.

Christine Cho

into should sustain have primarily flat how we is it Hi know the Bakken. I risk at volumes contracted out over still Arbuckle it I'm the the estimate numbers? up XX% outlook the back driven come Mid-Continent I everyone. more from minimum? barrels per those XXXX XXXX least XXX,XXX volumes to feeding a for that Do II we and If that need decline Or to is by and be can to you day at than can over are capacity. show a Rockies be But need to and still numbers? supposed hit Mid-Con to

Kevin Burdick

this Christine, mean, I Kevin. is

by at in We've holistically we producers. the our all been outlook. clearly, We're in type growth slightly of factor probably pullback some a of factored that XXXX there Mid-Con, to that declining the thinking kind to looking of in. recently as Mid-Continent environment Just flat has

significant for the growth any need of the to out outlook provided SCOOP really coming STAKE don't and XXXX. we we So, or growth meet

Christine Cho

don't CapEx the annual of we you in to guys do compression maybe compressor CapEx moving you so projects. CapEx should very well the guys of maintenance how adding the a But here? know, pump somewhere transparent on CapEx, ancillary CapEx -- then, over about think project are And individual for each providing connects, range spending that or included isn't like disclosed I in you've

Kevin Burdick

to of year-out that see we kind what million million the $XXX routine that consider basis, a that's at routine, looking and CapEx would Just in year-in to kind probably growth we're range. on of $XXX going

You of, alluded to throw like normal and blocking up on top just bit, of raises little see. that growth some it processing a tackling ranges type but that kind earlier for that's Walt we'd plants

Walt Hulse

thing routine second. add a Christine, that The connect, growth, that is makes well the up bulk hang I would on to only right. of

Kevin Burdick

Absolutely, yes, just connecting wells.

Walt Hulse

processing then plant as probably gathering other well then liquid miscellaneous gatherings side. connections And side and infrastructure as on both

Operator

question comes Tristan SunTrust. The next Richardson, from

Tristan Richardson

Good flexibility expansion et capital projects just commentary Appreciate of guys. for but that some timeframe, MB-X longer the dated that you about have deployment, thinking on morning, the cetera. Arbuckle XXXX direction XXXX

those your just Just the producer talking either volume of ability to of et timing trajectory on flex about or based plans, cetera?

Kevin Burdick

we about as think big guess, be I would -- we MB-X. the one As there

have extremely With have going any is growth coming for sight continue to to we to going the line so quickly, on. you're up of volumes, fill MB-X and MB-X it all, at

could that something us something again I going line we've that mean, see volumes got are few to of so, if here. you do hurry, months to potentially don't sight, with the next hit went in just in So we south again the but a

Walt Hulse

and we producer Obviously, in that the connect Yes. well significant sort activity. saw a of routine, from if downturn

it MB-X first Arbuckle flexibility XXXX. and on in -- don't to we but done as see the II We our relates have quarter it some of be will

Tristan Richardson

be OPPL's just one talk year higher or can to saw just just and from one-time you or is the there? previously joint why of this distributions And Northern joint much then there the you than on Is old Border ventures expected direction about that ventures, you general small performance thought. cash follow-up, outperformance the event

Terry Spencer

of, kind with distribution our in and $XX been. going about it's Yes, We a go line to quarters in back Northern at pretty its we've the that's million course it expect to QX Border discussion our normal on forward had call. catch-up where one-time, robust this

very well. other one, only the that are was all that the So than joint performing ventures

Operator

Wells next from question comes Our Fargo. Blum, Michael

Michael Blum

when then, stand update Border? timing in of, an of the of related potential things terms Northern expansion where Bakken Can for on you before kind that, the would And what's where recovering the -- effectively, pipeline to I just call BTU give new to you us would of see would out it you need capacity the limits? start to gas ethane, of a because a need force

Chuck Kelley

Chuck. Michael, this is

we're expansion As working there or to any other take as residue of residue non-disclosure far to be frankly with out suffice these and actively projects say basin, we're on Northern expansion we parties there, customers. out that takeaways will needed those takeaway realize Border the agreements. of it that But opportunities under care of our

that So, we part be will definitely of solution.

As far as you for BTU BTUs, repeat your your changes, could on second question me? second question please

Michael Blum

just like timing extract new to Yes, and to basically avoid the capacity pipeline do when about one have question having ethane? limit reaching you have to gas

Chuck Kelley

Okay, that XXXX those Northern anything operator Border. TransCanada currently in in be change and that point we believe operators two Northern BTU of BTU tariff. limits on our Border on the beyond with is discussion would about is and forthcoming, asset. one, are a questions; potential the defer will really would kind their on to customers in And

However, as to coming with it on. we necessary, gas in it's line kind these far down to being as more how the comes have of really Bakken XXXX, grow continues and real of quickly quickly plants sight ethane recovery

ethane. as BTU to volumes that rise So mitigate continue displace will the more recover to and way we is Canadian to that obviously,

some in So timeframe. ethane 'XX I I residue takeaway think relief. that. a think give more will see recovery. you need the you that's Longer I more we can't And number XXXX, will term, on

Operator

Credit Suisse. comes Dounis, from next Spiro question Our

Spiro Dounis

looks a on connect quarter bit and this of to little more be about the just Mid-Con, connected to you ability a It maybe if question could First step-up. wonder you like plants. talk more more seems third-party a few a your bit guys

to if of alleviate curious, some just So, that we're that to push expecting reduction? of a of pressure, maybe of next do kind from the more way through as enhanced to and count year, an you some rig come is there bridge

Sheridan Swords

are there, Sheridan. Yes, connect don't have ones of all in and lot out push on that many in to of this from kind kind the that today we plants we some connect. saw year, to next is that at of a at the XXXX. more level We've Mid-Continent a increase the plus A plants, We really production those in CX plants we've through seen those level stay we're basis. expect big

there think is of So, process gas the now and what's I right to plenty that's out capacity there there.

Spiro Dounis

guidance question, narrow Got point. just to imagine visibility you respect with at for and second it. And this have XXXX considerable the bands

maybe from just here what EBITDA of So curious low could the that results high full-year or flex towards range? end

Sheridan Swords

spreads end It's going specific can timing We've we just of that to the talked number be be have, at look would and one. really projects we primarily levers biggest fluctuate up and driver, the these it could to point good but we're pretty where about we've year. the this bit sight down that of be little a line of got going to a at

Spiro Dounis

Understood. Thanks, it really helped. I'm sorry.

Sheridan Swords

get weather be that could a whether know well. could is factor, earlier or No just impact be always, you if in, as -- Walt jumped an it to

Operator

Ann Our Bernstein. next Jean question from Salisbury, comes

Jean Ann Salisbury

morning. Hi, good

down or flaring As in something a share levels something little you Can target the you eliminate is XX%, capacity enough referenced up what in processing Creek lot to flaring. much possibly lower like theory say your or for starting Bakken enough processing of to higher? there Elk once a estimates

Terry Spencer

months back way XX the ago. would Ann, months probably I actually you several answer is, that Jean down XX for into was years to if single-digit. The basin to go into just down few or with

see get I think kind state you're and to capacity, state down we easily, So Elk the debottlenecked, targets up Creek targets get think or going above I processing flaring the once of, once back with below everything everybody gets, everybody, once capture. this for

-- think that will I happen. going that's to

Jean Ann Salisbury

Elk Bakken -- between you the volumes can starts up? existing your around flexibility, connects then And helpful. that's you to just once Okay, pipeline Creek move it have NGL and

Sheridan Swords

and Elk We'll Sheridan. systems, variable costs, on we going that in is Creek make This of, optimize, those to going optimized OPPL Pipeline. tandem into sure operate kind

flexibility lot two product to So maximize between the move of have back forth a and we to pipelines capacity.

Operator

Your next Goldman question Sachs. Michael comes Lapides, from

Michael Lapides

like we here. is and and know decent Hey quickly Real one, can between times that. 'XX taking about, world way all my even off LSU of and long XXXX. upcoming items; in get now off there game won't in would question. a I assume XXXX the think there's real But figured seven should is step pretty I a -- still one then. the But for assume I change into I good up guys, thanks quick you

talked decent first XX% step up question. XXXX, in but being You've still plus, pretty XXXX there is that's coming about another up EBITDA size

Second to export about talked have a desire you to want question, have capacity. guys --

China still you you're in on landscape Just year in given next the where that's trade that thinking the or a the and over going lot about war things fits going on. two? that ethane all do world, prices How that targeting of more, down are opportunity

Terry Spencer

LSU how XXXX. next projects question first be about growth as growth think XXXX be of Michael, points. the projects and in we organic take and is critical that then And is is 'XX to So double-digit through certainly up we this yes, and set all, cards got still in and obviously I'll will continuing XX on coming the business

still nicely So up there. set we're

dock far very as as still goes think we're the interested doing. in export project project I a

have handful with us think project, make we make hard. the clearing we're of if but If years do -- that course next in barrels. business of sense, they in don't can continue the shape We we our sense, in to gives place work of economics over clear good terms we'll barrels, a I it certainty pretty certainly that some arrangements

I there, to fee-based concerned the activities. really a dock great not think, we're is our export So complement

where it we going it and we're get let all to continue announce point work certainly know. we can we'll you when to to So a

Operator

RBC Scotto, next comes The question Capital Elvira from Markets.

Elvira Scotto

confidence you for especially thanks that hitting commentary Hey, would pretty about Mid-Con, it you your around is like XX% level what but view outlook? everyone, growth, and can I the EBITDA greater for the growth good on question comments ask that sounds that the another the given the XXXX walk back than and morning to made the if way, happen to have high,

Kevin Burdick

-- for I'll Elvira, several we the this last And thing stressed again is Kevin. the start months. have we

we the in a focus timeframe gas, EBITDA. 'XX, Bakken, the occurred is and we 'XX captured situation with 'XX into projects line where turned got in the flared to We continue of on it to this these and had we've volumes, or gas flared sight back immediately it similar the we saw incredible

there, that's So of going with the are dock substantial with basin, getting we've and the to growth got the XXXX. Powder count producers in in the the just the that's that's to seeing the of driver And productivity places. Permian, and lot a into returns, if that be growth we're out flaring the out that's not with the confidence occurring seeing other even the

and confidence volumes. touch have of we that have just out we we So because these reach sight, can a line

Terry Spencer

only in the that probably ethane else a don't here whole have thing add lot to recovery. we baked Kevin, is I'd for in

turn, So with if Ethane this typically things those recovery, seasonally you're we're more of the year. for ore time low are the -- number probably at low there this actually spreads, with is spreads did so economics than marginal upside downside.

Elvira Scotto

we're at as think about how anything somewhere just price to And are does long oil or get you're this fine $XX even I $XX you with very as looking this you commodity quickly or crude though, outlook? below Great. still you mean, do view. into factor

Kevin Burdick

with when a rigs in they seen it the have came environment from per from the the we but Bakken, improvements the back conversations to wells. $XX really at earnest a go back they've to back are in planning most Well, for flow the of barrel productivity start $XX cash really our around perspective, customers we more coming

we've Again, living theme gotten been from flow, the has on be well consistent our within cash aren't challenged, their which returns customers. it's just the solely the

if easily, things you to even this $XX good stay down to range, probably of go. $XX you still -- think I you're if the So north go

Elvira Scotto

capital in of you perfect. fit That's you are just or And just super all guys where growth M&A this, of on your are to I be discussion, M&A just on does Thanks are set organic at open quick and allocation mean, on assets kind the looking Great. has compelling? follow-up then one that. you various to

Terry Spencer

likely, be it answered on has of types would smaller bolt-on to it, focused You just and uber and we're most M&A organic acquisitions. the compelling growth

Operator

Our Walker, of from Bank next comes America question Derek Securities.

Derek Walker

said I it want make remarks, in but think a right. sure your clarification, just I I had Just quick you to formal heard

is assuming in in NGL the to hearing then rail, that Elk for that the you on should I'm today NGL were correct seeing to just Creek the no and over that Bakken that XX, I XXX volumes expected be seems 'XX. transfer that XQ that you're XXX think rail believe Is Rockies the XXX it? for that pipe

Sheridan Swords

of is and to Basin. you Sheridan. starting have are from out what's the and Yes, away is we're the specifically talking correct, This to between flexibility River Powder Rockies Creek both transition we Because to of -- between pipes. Williston moving region, on about what's which Elk coming

XXX,XXX Bakken is had XXX we barrels over we from increase day were the in. basically where that just coming a pipeline when So

volumes above online, the that's new out So quarter. we think we then about XXX up those will talked that coming be of on to off said coming first ramp coming the actually and and plants we rail

Derek Walker

And with Jones bit just added got mean, Sustainability talk that get any just the Can focused I'll particular on about you some September I on ESG, metrics? Initiatives in maybe around of in have and specifically Index. conversation they a investors any then, guys one little announced to Dow you that, ESG and you you your

Terry Spencer

Well, getting lot impact and our certainly probably disclosure incredible on area is resonated more progress we've our around investors. discussion, always it's that -- focused I about we and environmental perspective, there reducing governance we've you think where that's with thoughts from various certainly to of we've governance environment, the a efficiency for an certainly been from the done, lauded When I a had where broad our has emissions think, a the for of standpoint. information obviously our really made think -- data, are in what impact

-- we've product a fact this this every the year. at improve and this done think and years for that I XX to each continues now row work and in

that I with as has well. think resonated investors certainly

disclosure disclosure, where position that top disclosure, be types not certainly distant we too in to of a can will something So information and certainly in targets disclosures around and and mind as outlook we will continue disclose that and emissions of those type of forward, that's hopefully we will more future. continue move to the do and provide

Operator

Craig Shere, comes question next Brothers. Tuohy Our from

Craig Shere

Terry that XXXX year-over-year guidance. prime when XXXX upside growth is comment only then further XX% over as catalyst But all highlighted you of for above was the EBITDA ethane and you kind year two another ethane of eventually? out we're of like Are kind of Or that we of When remain taking growth. does looking double-digit the it an years some that. a opportunity?

Kevin Burdick

the two internally Yes. of for at it ethane of three baked the No we're forecast or at base course the expecting least not over next our we've years. not into really, least or next much got in handful years

Craig Shere

we And to to market you it kind expect necessary of, do get would to I value there? mean, dynamics start what -- of do or be start be more what would kind need really exports realize to ethane

Kevin Burdick

got domestically. got facilities we've you've obviously on more additional And petrochemical then internationally. Well, coming on petrochemical coming facilities

the international the think Coast or I continues development the continued be So in of whether drivers. Gulf exports, key Northeast, to I that's at think

obviously -- forward. upon dependent net where a if and going view conservative And of sort on gases and have and to net ethane gas some gas economics we to net gas that continue

likelihood gas remain certainly you see significantly relatively you're more ethane weak. improves. The net if I if think recovering

into volatile forecasts. bake in you've really -- felt But to economics lot that our add it we that? not as whole appropriate a got internal -- anything so we to think ethane Sheridan are we've

Sheridan Swords

see continue to the about demand moves one to what's that for pull gas there. one Mid-Continent ahead the to say the going is ethane. ethane other price we versus the the talked of earlier Well, the in relative that out as Also, which drive Permian to

Craig Shere

considering at still ethane export looking project you you're opportunities? Are these when Sure.

Terry Spencer

Absolutely.

Craig Shere

in did of I something and out you that presume take out of be economics. and volatile that some it semi if kind would long-term that, And contracted of

somewhat through have system? about the you'd certainty pulling So

Terry Spencer

into on a That's standpoint, to with or that a certainly is you sales sale ethane underwrite with we're the component will, fee-based if contracts correct. which dock the I it. arrangement, into the it fee-based way built respect type about the mean, you the thinking would perhaps enter

Craig Shere

you. thank Great,

Terry Spencer

to what as to going we But it's it dock, fee-based ethane macro think they're a the dock the The ethane about economics be business. are fee-based, as to be, going if relates speaking. and broadly

Operator

next Alex comes Our Wolfe question Research. from Kania,

Alex Kania

Hey, good morning.

of to our suggested physical like sounds about Bakken it and we constraint was more with really like ethane volume incremental it that kind or further reasons just I bit for -- you guess already? reasons, -- it Elk cover to How recovery could do little the what for being it price established on now, you've is Or wanted prospects just existing those right a think of like south Does the but contracted year just kind it incremental, think thinking to next is ethane that Northern getting Creek handle. Just of, in just do I levels contracted confirm? that respect about volumes does again, Border. you've either

Sheridan Swords

volume not any all numbers at volumes very This ethane that of in our upside because we economical that is any becomes Sheridan, due ethane when the unlikely coming is We out or of look It's will quoted get, constraints and the out Rockies. so enforced those do to of it to be be would CX consider plus, volumes. that given. we we've

Operator

Okay.

Global Our Sibal, final Seaport Securities. question comes from Sunil

Sunil Sibal

to guys about just a morning, the call. the wanted I color balance the for good all bit and Hi, understand sheet management. thanks on little

you curious of, metrics about be target? of that like will ForEx between think excess kind in I longer-term how should early or to we was XXXX. want hit should seems Do leverage we to X a thinking longer-term it basis. of kind kind X.X you more more So ForEx, be on the or closer like

Terry Spencer

in delever future. type continue flexibility Well, CapEx a and to that gives forward we left times X.X of to the that be us expect borrowing smaller these to aspirationally X that we to of going come for past like the around would out lot to

about aspirational an and X.X forward. we going So is use just think target

Sunil Sibal

that I one will to up XX% spot obviously projects. you I in curious, Okay, various CapEx number etc, for When to in get or got then somewhere? where XXXX in CapEx may in good pretty clarity versus end seems just you've if have breakdown seems is bake be of off reasonable that was be XX% a XXXX. on reduction you into pretty CapEx of numbers it. kind And my all guys so good the it just I a side, given like

Terry Spencer

still just CapEx number. the XXXX up I to have a in our to put think we guide kind But you good of out to build what projects going and to subtract not we're pretty No and service do take we can

readily your base will the that we'll expectation leave you. available, is to So up come with

Operator

time, Okay. At Andrew Ziola. to this turn I over call to would like back

Andrew Ziola

our provide details our Thank excuse Charles we books that for in conference quiet when for and close We'll later call period me, fourth you, at date. -- a release earnings extends starts late the January until early right. February. we quarter All in

and a this good the throughout us joining team the available you IR Have Thank for morning week. day. will be

Operator

Thank and gentlemen. This concludes ladies teleconference. you, today's

disconnect. may You now

ONEOK (OKE) 30 Oct 192019 Q3 Earnings call transcript