OKE - Earnings call transcript Q4 2019

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Operator

Good day, and welcome to the Fourth 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, sir.

Andrew Ziola

Thank you and good morning, and welcome to ONEOK's Fourth Quarter and Year-End Earnings 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 'XX. 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 trust ONEOK. investment in we appreciate continued

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

of for outlook. was project XXXX Yesterday, XXXX a quarter XXXX record-setting we XXXX growth XXXX announced guidance announced a positioning and and our for ONEOK, safety provided and in XXXX. results, fourth an exceptional and execution year ourselves full outstanding year, year performance

and LPG XXXX. of Lake full day include projects per pipeline Texas Demicks expansion fourth strengthen XXX,XXX natural Creek These III to We point ONEOK's increase Elk Basin, the and in customers. expansion important is NGL the to assets. existing that our and will It processing projects West the transportation the Williston out also pipeline our of high-return expansion and announced needed that of Permian the gas position X further plant build October off projects Basins, in the capacity these Williston the for since the barrels

our provide providing to significantly and Our critical of our the connectivity including the midstream provider. NGL natural will processing customers, announced service gas all assets completion, our NGL to capacity projects add Williston will strengthen Texas to way reduce gas leading help Basin backbone in increased the the our Gulf Coast. a Upon natural growth and further flaring business infrastructure to is expand and program as position

project in more II and Elk respectively, phase projects was XXXX Demicks color Creek January the announced completed December. and and fractionator provide were slated completion for Lake in late mid-December, of quarter. updates, for on I October the was As XXXX, the completed MB-X we Kevin the completed first in that are that will here first in

in I approximately be being next that year a With XXXX call earnings up many growth. last in our adjusted of guidance October, to of double-digits EBITDA another increasing year made outlook our of XXXX confident we late XX% are and comment Our to is projects midpoint. year, earnings into setting compared our XXXX this completed

over call turn I the that, will With Walt. to

Walter Hulse

$X.XX income increased performance. you, XXXX, the guidance ONEOK's XXXX totaled exceeding XXXX, gas compared and natural segments high The $X.XX adjusted segments. pipeline In natural net XXXX. average gas Thank year of XX% with Terry, per billion, $X.XX and the strong processing contracted, a the end ended respectively, in with gas of all increases contributed to XX%, and EBITDA XXXX both gathering XX% with and growth, range rates higher billion adjusted totaled Natural gas X% fee capacity increase or share, a compared volume and transportation natural liquids year-over-year. an XXXX increase EBITDA

full Distributable for year X.XXx. cash of was with increased about end XXXX, flow natural coverage low below a liquids price due billion, XXXX, up differentials. narrower-than-expected dividend primarily adjusted the guidance the XXXX segment X% XX% The XXXX to NGL compared X% gas with $X.XX EBITDA compared of range, to healthy

$XXX flow in XXXX. paid excess million nearly distributable in We dividends cash also generated of of

previously our compared increase were dividends during line paid stated guidance. $X.XX with per share, X% annual a XXXX, XXXX with Our in

the January, And annualized of a of basis, the compared declared Board an also on with share $X.XX quarter increase of X% an of $X.XXX or in first dividend per XXXX. Directors

December was Our XX annualized run basis net debt-to-EBITDA an rate X.Xx. on

at or thereafter expect as rate early facility We We outstanding million in debt-to-EBITDA to deleveraging Xx billion outstanding. come and $X.X continuing XXXX commercial ended year with late having be XXXX run volumes projects $XXX our additional of the on and no continue paper borrowings to online. ramp credit

volume yesterday's with financial mentioned, and provided and Terry As we XXXX guidance XXXX announcement, detailed outlook. a earnings

EBITDA earnings our per XXXX. of compared XXXX includes XX%, guidance Our adjusted and XX% midpoints share increases with in and respectively,

natural year-over-year of double-digit expect and respectively. segments gas XX%, in and We growth processing earnings gas our XX% gathering and liquids natural our

another natural pipeline XXXX, strong for of XXXX. performance Our segment had solid segment gas expect a and the year in we

to expectations to the first achieving quarter. pipeline, in be pipeline guidance and Elk financial all we expansion, include and our Creek drivers from plants, expect growth projects West LPG the the from the here Lake second XXXX and processing II volume the fractionator that completed the expected contributions Demicks MB-X Texas Arbuckle Key

growth of incorporates XXXX XXXX spend to billion range Our we billion yesterday. and announced peak capital compared is decrease $X.XX projects significant CapEx our a guidance $X.XX the in with

As plant connections as a included connections reminder, this well what we is and in call routine growth capital number. such

driven fractionator Volume from growth Bear from third Bakken Our XXXX on and the increase the of Coast in Elk the from expansions completion by to Texas in extension also West plants pipeline resulting guidance continued pipeline volumes MB-X LPG NGL the expansion. the connected with increased XXXX, outlook in fourth XXXX the the Creek contribute of midpoint EBITDA an adjusted XX% Creek Permian increase. Basin and volume approximate and compared Gulf the the XXXX will of and is growth the

expenditures in XXXX expected completions year capital to relative XXXX. next year, and early to total With are decrease these this significantly project

call of Kevin over segments. to a closer I'll now the each at turn operating look for our

Kevin Burdick

with throughput of driving Walt. operations, processed feed natural XXXX. Thank producer raw strong with you, year X% was gas across volume XXXX impressive activity NGL an and our increases compared

our to and in to expect remain XXXX more fee-based. increase XX% earnings We volumes than continue to

in Lake time for on X Terry and our complete ramp January As these end volumes and II up. plant Basin as of on quarter. Overall, budget, projects in our Williston to first by expect NGL us projects continued on positioning well the said, are we projects the completed additional growth the Demicks

XX Let's in Basins. continues with activity Mountain Rocky includes the gas the see Williston Williston and River per to remains production both our with Dakota natural feet strong than on XX region, acreage. rig basin-wide rigs range remains of which River XX Producer North Powder billion the our cubic and count more and start X Powder day, approximately basins. in dedicated the to

which X.XX quarter the compared for billion the to the continue. year and Processed in in $XX expect Rocky full Natural midpoint to remained cubic in consistent our $XX volume of price volumes with Mountain processed WTI gas XXXX. feet counts XXXX, periods have Rig in this guidance environment, increased the XX% day crude region per fourth oil we both above volumes XXXX range. averaged same

We expect Rocky of more region reduce Lake the processed flared. volumes to Demicks XXXX. with gas the Mountain we to currently from wells plants compared than being significantly completion region increase XX% as We this in the in XXX XXXX due connected

ratios plants delaying growth well Demicks higher and well performance even came to until Lake Better-than-expected oil with completions our temporarily contributed volume producers to online. gas

in and XXXX. We wells expect connect to XXX between XXX

full quarter. day cubic to first by fourth the feet Lake quarter XXX the in be end gas per natural Our service that plant is processing of I was expected in the Demicks million placed

Demicks capacity to next We XX Lake the expect over XX ramp our plant months. II to to full

capture on of flaring latest and that significant the a data million approximately With XXX the natural million this to basin gas in the feet of XXX we approximately have acreage, flared cubic ONEOK's reported of now per available portion day capacity gas. dedicated

Creek to which provide Dunn the plant remains first County highly Bear processing capacity where have schedule acreage to early be the dedications. Our productive geographically in of on area, much-needed we quarter XXXX, substantial will completed isolated

per The million an Demicks is of capacity in will XXX of it quarter when feet third XXXX. provide completed additional the processing day Lake expansion cubic

of the Basin. cubic With facilities, per completion will processing have capacity day feet of ONEOK the X in X.X approximately Williston these billion

increased which Bakken volumes compared NGL year pipeline, Rocky XXXX full and with NGL the raw with region, feed Elk the throughput XX% Mountain the of quarter compared XXXX. in consists and the third X% Creek

continue We raw more on Creek more throughput third-party pipeline than Elk day expect has as of the day volumes to from barrels and feed day. of exit plants the third of Bakken increase capacity processing expect XXXX ONEOK per to NGL feet quarter per cubic XXX combined the since first to million online barrels than our Rocky XXX,XXX per come Mountain XXX,XXX and and continue to quarter with approximately reached XXXX. NGL recently We

ONEOK from per announced XXXX day third-party and expansion, XXX,XXX any barrels XXX,XXX an barrels capacity per supported remaining by pipeline early we of XXX,XXX capacity of its day barrel Elk of over of to Creek the third the to is The per XXXX. incremental excluding expected approximately barrels per plants, ethane. expansion is the quarter in dedicated day Of be per day. day available long-term full XX,XXX production by barrels well the XXX,XXX the of Yesterday, expansion and

We growth gas gas segments. Powder as also and see -- natural River results both strong, natural the processing remain and Basin continue gathering see liquids to in production benefiting our

region gas Mid-Continent. processing customers, XXX our recent decrease approximately to of midpoint with in compared Natural guidance our XX% gas system. year connect increased to to and the our on Moving to to the processed our Based volumes wells. XX and processed expect connecting with Mid-Continent on XX the gathering year-over-year, expect volumes above natural range, wells this discussions X% XXXX we

with Mid-Continent in throughput the that quarter. our the Total the quarter the carry over flat decreased for compared not spot with rejection, XXXX. volumes quarter, slightly ethane third third NGL of to relatively raw fourth feed the primarily to fourth due on Mid-Continent in quarter expect compared system volumes fourth we Outside region in XXXX did quarter the

in new expanded. XXXX, system we on region, liquids plants X processing our were natural and system to previously During third-party connected the connected gas third-party our plants X

an end Gulf incremental and the Our Permian end to Powder be NGL funnel from Arbuckle XXXX. Coast. schedule pipeline and can the play the for in across is our first will Arbuckle on the of role Mid-Continent Gulf pipeline completion by II the that II will lower fifth Arbuckle markets. supply transporting of the Coast Basins, Basin remains Williston the backbone II to and our entire the supply of River the system from important quarter

Coast. third in the Basin volumes and feed quarter rate Permian increased region and compared throughput with Gulf XXXX. the average Finishing this year-over-year, fee NGL increased with XX% raw the

new We our expect we increase continue volumes projects. as average on rates from to bundled with to expansion bring rates completed

in announced West barrel Texas barrels the XXX,XXX region. approximately system, the per Texas from growth production expansion per XXX,XXX day region. West on plants dedicated our have of processing fourth day third-party LPG fully announced to long-term of in contracted We with now expansion the support We LPG volume expansions

highly day capacity, which Our first system-wide remains for was our track the in fractionator X of the by completion for remaining of XX,XXX remains December, of remains completed per Phase project, has quarter NGL our capacity will MB-X XX,XXX fractionation capacity the on fractionator, per Phase utilized. the quarter barrels which And the of in on add day. XXXX. of barrels our X completion end MB-X schedule by XXXX. first increased

expected overall the the is West all the full increase II pipeline Elk quarter barrel NGL Texas LPG XX,XXX guidance Our and MB-X and day of by in XXXX. per completions segment expected Creek the of a driven in of pipeline, first volume XX% year expansion, XXXX, raw fractionator throughput operations feed of Arbuckle to

XXXX plant will higher from in contribute connections completed in growth volumes and Continued also expansions XXXX. to

or We including Lake X to remarks. expect II. with that the connection connections already Demicks third-party completed my expansions, concludes plant new X Terry,

Terry Spencer

foundation successful a I'm our continue integrated flow ONEOK, successes we cash XXXX to assets in remains has on the of today, Kevin. all period to for for our and transition execution reputation another safety, year growth a who we've significant from discussed we forward build continue is for proud move cycle of of you, and the strong employees ONEOK of focus will be to as Operating generation. as which our this Thank our reliability manner and our and focus projects. the network was

asset a for you well that in Thank of completions as your our great of the coming hard years. and work project new start growth many company-wide dedicated in helping all XXXX. employees achieve middle and to us another And are the in in us off will position we XXXX to year operations contributions is

With for that, now operator, ready questions. we're

Operator

Tristan from Richardson And [Operator Instructions]. comes our question first SunTrust. with

Tristan Richardson

well efficiencies commentary lot expansions. talk of seems one. Demicks Appreciate just all X on -- expansion. the CapEx the the a got difference a The quick first the you like you've as versus as the side on III. Could Creek between It Bear

Demicks should enhanced return that for the an III the costs, Just for of opportunity profile in difference we versus think others? as

Kevin Burdick

I capital mean, way Demicks a the Yes, kind of we -- as II, -- again, and some plant, rather The constructed the compressor we're power, is we've for new of this it. inlet of reason expansions lot doing think the that's I Kevin. building about we're -- Tristan, expanding when things like existing Demicks stations. pipeline for handling stations that's Yes. compressor is, lower the the infrastructure, more than

So all those that the contribute previous than to being lower capital things projects.

Tristan Richardson

behind other the -- just -- that latest And to think volumes there well the plants Creek as Helpful. expansion, of the serve of Creek? then behind Demicks are could be Elk as III Or we that talk you quantity that, could primarily of as and the should about third-party in on expansion? terms there Bear

Kevin Burdick

to that's I the way about Yes. it. think mean,

continue now of a XXX,XXX on pipe, we expand ramp needed more to with the to day volumes barrels contracted we As than it.

we to wanted based CX see. that we plus to to to negotiations with a sure any come on as lot over late-stage we volume plant. the just are needs and of We traditional, build opportunities, more the the that several the economics had to of going also the again, customers handle make growth Hess in ability that's we're really the connect north that have incrementally. We lateral classic But ethane out still river

So out us. front of there opportunities there's still in

Operator

UBS. [Operator Shneur our with Instructions]. We'll from next take question Gershuni

Shneur Gershuni

guidance EBITDA bit. little the I dive was into XX% we can plus a just XXXX wondering if

and Bakken? to I full us trying If can walk ethane the uplift? you of in it you like are Elk was going it ethane Also can obviously, into but the if the what's assumes, is wondering of what what 'XX terms I with guess, talk what delta sort you assumptions? of part is recovery? Creek, much a 'XX of it's margin about -- through ramp-up Is kind understand Just between of -- how your assuming it recovery from

Kevin Burdick

story. Kevin. Sure. Bakken-driven is this Shneur, Clearly, a is it

you early start of and of either think projects the or coming kind are year in I on that late 'XX. list just this go down early,

to gas again, that which, there's Bear got well-capitalized but be that behind just drill go when got II, that you've there, currently. dying there's it's So facility to just Creek expansion, down no We've X flared large, going up. producers some are capacity

growth there. So there's

will on We've be talked about Hess the NGL our connect Plant our that year. north lateral this from go -- to the completed in our that segment -- will in QX of

have we'll on a that. So year of volumes

core would yes, facilities year. towards just opportunity then existing -- to And have ethane. ramp You've and up, mentioned the continued got little have the Lake you end opportunity -- of Demicks level in of ethane a the a Demicks modest of what that plants, continue we'll III for we the will do our we then growth that consider

other that plants pull -- ramp to up, going look as these just flared growth, math the and you determines and just If to need ours we're some out. capturing the it's at some ethane from that production gas -- third-party

around got and the XX,XXX that per day of content BTU issue Northern out that we've we come in ethane barrels believe on a So of XX,XXX border. result will 'XX is to heat

have 'XX a Permian and additional 'XX of the full coming as on and fractionator and provide the volume that between will the X we got Gulf Coast, of MB-X that expansions middle growth, are now year in we've well.

segments, well all digits. to growth together, both and see, increase, NGL you into continuing double that and it's be So going pull to our we G&P volume

Shneur Gershuni

to you the question, sort for producer that of And do now fact parter, was I there you definitely a can strategy? earnings you capacity out advantage ONEOK just that Creek and follow-up was there appreciate a new of you've the others an able you well sort are lower NGL you also, these see When opportunities Just wondering brings beyond But side, sort where if cost if your potentially where to fracs talk than sort pivot a CapEx is strip Maybe as on West there, can expansion lot been see ways would to of activity. kind With -- what it sublease projects, running? that XXXX? optimize of Elk are optimize about side? in can wondering despite for you activity, suggest as Are the asset-light out their pursuing which for as on your of I further slowing you business I to frac. asset-light mind. it's is LPG more volumes costs don't given the you would Really mean, your and into strategy? think of about Texas are take the -- now other announced two very other growth that. pursue That helpful. excess frac ways that sort need of a of and sort

Kevin Burdick

Yes. Kevin, again.

believe have a Demicks already The of to we think lot expansion again, I to question that it we we're reduce example capital I been previous able in And for capacity. put that's that a ways. great of -- Lake, significantly about there. where a brownfield doing the we

think that fracs, As about the think done we as I well. we've

full barrels another much our we've capital of existing significant remember, other building line for full. to clear the a go MB-X if less you announced facilities to and But have greenfield done our was able if day thing MB-X we've again, is not being volumes, of, team like that frac. XX,XXX expansions We being than sight at find

find has has able and that And an opportunities. expansion to types debottlenecking delayed because team our been of MB-X so any discussion those of

my about of customers. part And like you and capacity about at our view, or seen we would we Bakken on very we that. team. Permian to I Bakken at beginning, know Permian. I point our as thank the activity like that's acreage, have comment talk give a I haven't slowed DNA our don't the and activity Yes, I'd to especially the back, the think you done producer the in all. Mid-Continent of we but just pulled our slowing think you made we the provide So seen And how -- for when any We've has

Shneur Gershuni

one the -- When ONEOK guys a I your do is enough. next for projection when appreciate final to be taxpayer? Maybe Fair color. expect you cash do No. question.

Walter Hulse

of 'XX, $X past, between that and built as to in the Shneur, acquisition billion back a on said the worth in able the top billion XXXX. did taxpayer be we with depreciation when take We've through of partnership we've said we $X bonus of that. wouldn't assets advantage we've we been

So here before all. runway at taxpayer we a have a will we good become

at X% will place out -- limitation last of that with of X% that was act. kind point, then, to be tax in put that And would we marginal future. at a the a rate the going NOL But have point, utilization some there on the the there in would forward, somewhere

see full paying future. don't well we a So situation the tax into

Operator

next from question Our Barclays. Christine with comes Cho

Christine Cho

dynamic gas? do actually a ethane you'll more come with thing? that will pipeline the this of we a blend -- follow-up back the ethane a could until gas in do Or Bakken extraction I another Bakken. think the you start extraction potentially to Canadian temporary the as Should can permanent it of more think and on year comes If next to be as

Kevin Burdick

Kevin. is this Christine,

online going it's like capacity, you BTU Bakken, going new new other because Because with think it's highly it border. it down a to going to gas I on if it's on have thing. in also be have currently believe going going that's about a spec any to blend to Northern the not come is to likely long-term think we is capacity

with, we've contemplate the looked a least those and spec. at that at been of involved So various all BTU projects

Christine Cho

I Okay. thought. That's what

us breakdown confirm. are regionally? Just X And of to wanted you then to give third-party could where the X a connections plant

Sheridan Swords

either is the in pretty half Christine, be each XXXX. this are growth plants come X much Permian. that be on of in in to at as XXXX and one going that could or Those And going is end on coming Sheridan. and XXXX is half you'd some expect, Bakken in them. to -- the the of The be the will

Christine Cho

is between also Okay. that's And and... Or primarily the growth Bakken? split Permian

Sheridan Swords

It's split.

Christine Cho

of in then you cadence frac and and third-party can costs the roll off an And Okay. of give rail XXXX? the magnitude the us cost idea

Sheridan Swords

rail any But will we the predicted that costs Christine, won't see reduced be or ready same X. third-party in Yes. online, the in we Creek as coming frac haven't since for been was in XXXX third-party has as about MB-X we to XXXX any online. level Elk it get XXXX coming

Christine Cho

Okay.

those not going go down costs to So year? this are

Sheridan Swords

baked costs our XXXX And guidance. won't from down in Third-party XXXX. go into that's frac

Operator

take our with Tonet question We'll Jeremy JPMorgan. next from

Jeremy Tonet

how Just wanted environment guess, to this price declined has your bit conversations a commodity follow-up, I with in the producers given and with here.

you that be can Has this if guess, been guess, that wondering I guidance into could baked share point, like on topic? it Or relate activity. moderating? for you all Just your but it'd seems us, firmly I with expectations anything at this us, drilling with

Kevin Burdick

of side. Kevin. environment big This we're on the We current reduced it's And you're therefore, us the NGL for commodity that Bakken have customers the we $XX activity significantly levels telling environment. exposure really when prices Permian levels landscape. crude so our crude into at get in looking the and we not the you Yes, -- direct the we're commodity or in Really, prices. our just nat that activity producers. very they're kind don't a to is a the the that's the similar gas deal assuming seeing producers, of planning the Most focus are our that of

our way So of that's about way next very couple about the with are thinking thinking believe consistent it. years, the is we over which customers we're the it

Jeremy Tonet

thoughts XXXX that that what in And there on in point? to side. do logistics you guys Conway-Belvieu on us expansions side could then do needed share cleanup just That's point? Do guess, with I are to spread, you the sit that want with I any that lands a more at the how this you think storage of guess, NGL do there's you kind at of helpful. Belvieu? And guide, How couple the questions, the

Sheridan Swords

right Well, And storage constructing X.X a are now, storage that I'd in barrel the new are side the putting both on in brine we also pond. just process million two we're wells, say X.X of million barrels.

right we will wells see come will to -- come next and do storage our come one doing up and one next we -- come now, year. it, one those expand up will this So of those are up year. facilities, need those the of The will

online, So we a on think the puts us as on that growth. said, to in then spread storage be position the guidance, with side going coming very XXXX good narrow able Belvieu. pipeline And our spreads and we for Arbuckle in very between low handle predicting are to our our And Conway a to Conway Belvieu narrow. sure, spread, are and the spread to be or II very XXXX we historically

Jeremy Tonet

I to you kind forward? $XX that is you $XX about of going And guys guidance Great. you. just price said this think think the confirm, employing had deck when Got to are you

Walter Hulse

the that's level thinking about a perspective, it. activity From we're crude Yes.

Operator

next Michael our We'll Lapides take from question Sachs. Goldman with

Michael Lapides

A couple of questions.

regarding and thinking to in there's And Texas if or when have the any flaring about just what Railroad curious put there? North the to potential report Dakota second, do have out would further? by flaring you limits read all, for that? flaring limits, Commission of so, First tighten happen And into think read-through flaring for recent you the do

Kevin Burdick

step at the year. step end to start then flaring this Dakota targets in. -- in I do jump Michael, targets it's capture. Kevin. They mean, of or down the from step from let the down capture the XX% I'll capture up XX% North Chuck XX% or capture and gas flaring

producers. well to that. number one step-up we that So with want conversations we in clearly, the that and is below Obviously, have drive our state

'XX experience. midstream to drove when When at kind than and we have look we We of you levels got up, when flaring -- caught 'XX, back lower that.

goal. think So that's I the

As to saw the yes, we Texas, it relates report.

regulatory -- do discussions flaring. continued I just think see we'll any from think I a around perspective,

from goes point. view regulation a that anything? a know point have this standpoint, Chuck, But that where at to I As don't I'd of

Charles Kelley

producers looking Michael, some last, processors exemptions, rules, the flaring in over North but forward, of kind concrete interested regularly can what how it, Dakota, there's current state, these interested let's been call the discussion guess there yet. -- changing meeting of flaring the I of some have quarters, And add, to Yes, there's the flaring. is I more the between the fairly the stakeholders nothing closely would the of work at mitigate potentially rules up X that as together going and parties

Michael Lapides

then... it. And Got

Terry Spencer

just let quick -- me Michael, comment make one to I'll follow-up.

Texas terms coming gas, I of going later. just So really to of getting to the sooner maximize in terms particular, to obviously, or companies, of create rich out stepping with see, more that we're up the And to built the it's I order of for we're I in I basin think that the rather think, And going maximized creates, indicative opportunity. flaring. fact on flaring. going reduce in a step-up midstream that NGLs report, than the is producers And in infrastructure from when we that heat throughput be think think actually obviously,

that it's was up. acknowledged the think really happening. step Texas And that's going going So I to I fact was think the Commission I X what think Railroad the to -- step

some in they it terms of really intensity think of -- did unique look kind I at a of took flaring.

going it really of have a to be course. going I to showed that think midstream's picture addressed. part be big to and it regulators a are solution, that going of address have the And it's to to

Michael Lapides

February the range Got CapEx wide in here. to it. pretty growth And is the on give of The one range prompt a just then guidance. follow-up

Just and of anchors end the low that curious the what range? high

Kevin Burdick

really Kevin. down timing. comes Similar it's to range, Michael, last to year, wider when an had even we it

would in we're those to do the to a end. love at some capital online spend little slow you move move the to expecting sooner, realizing Conversely, we other the go direction could back, look reason, that high number of but down and of those come in that they that the EBITDA always -- pull may of the You you it start whatever capital ways pulled towards get quarter. looking some we'd pull end. back would projects 'XX the we're low for for have if things, the we If first that, towards if if these

to really going it's down So just to come timing.

Operator

question Our Bean Tudor, Holt with Pickering, Colton Company. from & comes next

Colton Bean

just So is much to slated additions XXXX? for million attributable of backlog clarify you the you how the capital follow-up there program. of XXXX on Can $XXX to that

Kevin Burdick

half About is the XXXX $XXX we million spend. Yes. announced of

Colton Bean

with heat in capacity? on it. the gas III takeaway, earlier how 'XX, Got Demicks content, slated of for just you announced evaluating are And gas but then understanding absolute dry That's helpful. Lake residue absolute comments terms

Charles Kelley

could What is say, XXXX. Bakken. We're proceeding under We've into Yes. a need residue Colton, that some an can't before further. agreement coming Chuck. late-stage you're perhaps I going time We're the 'XX, NDA, out the currently in so mean, of this to I we negotiating takeaway. with any go said negotiations, in gas obviously, project

next believe some the publicly. information come we out month or some However, time in you two, should see

Colton Bean

And a final just from one Understood. me.

all nothing the On is type needed? process? effectively or an you expansion, Elk could Creek horsepower that it's as ratably Or more add

Sheridan Swords

Sheridan. Well, Colton, this is

needed year. reason that could. you we then capacity in get as we that early happening, we XXXX, we will in We don't later the that ramping slow if are come and later remarks some that up could our down will we it As of go said said through the so And we but some if -- see we XXXX in to.

XXXX. We get some through go as we the will

up the we ramping are capacity. So

Operator

with question of We'll next America. Derek from take Walker Bank our

Derek Walker

I'll follow-up Maybe growth me. on the for ones of couple CapEx. a Just

run routine going growth plant think before around similarly, of to down that step routine growth 'XX, think the connects How think up then you've CapEx we a Or connects. well or rate down? into much a kind CapEx for we of CapEx in similar should you of talked CapEx? XXXX and CapEx again. directionally Should 'XX? of And the is mentioned of kind routine considered in I sort of

Walter Hulse

Yes.

years, or the growth have the Over we $XXX on expect depending we in range are less be that where wouldn't -- different down $XXX from between always or XXXX said a it in range. From in in for growth CapEx that we've but somewhere in XXXX we're our have $X in to than million included routine so. but is plants It's varies XXXX. in the to to wells our is step It billion guidance of that our growth will meaningful CapEx XXXX standpoint, connecting, XXXX. the CapEx a million significantly we it XXXX, connect

Derek Walker

a Got maybe policy. ask I'll just it. on dividend quick the then one And

hit rate in last should relative we Should X% in perhaps year. sort midstream the think some larger the again normalized about we to of X% think You about kind 'XX? a [indiscernible] or the names of dividend of Or space? either

Walter Hulse

to this give that been We've not XX% regularly And going guided that. pay don't we've to XXXX XXXX, point X% through and through a Well, we at since change that would we range. pass view anything that in see at that throughout. we're pretty X% XXXX, will view

Operator

We'll take question Jefferies. with Sighinolfi our next from Chris

Christopher Sighinolfi

to maybe your capture? to just a to sort measure, -- that quarter, to net you've look Kevin, leaves today, guess, walk, flared is did we XXXX is cubic for slightly understand volumes million but that starting then November, at I you'd versus fourth Rocky's in a believe, growth about that is day back something of like it asking, that feet on in up noted, was but much set today? better go also And just if acreage. And in that footprint curious, much growth I'm the wanted where Michael the is that's the you what of a on how your I us in as update, phasing I gathered or the was where differently. 'XX? I for modeled where of versus to And ask XXX as flared ask it January how volumes just anticipate

Kevin Burdick

-- have basically I we in little maybe was a latest month, it flat, flaring XXX bit little we're -- the mean, -- ours clearly, another was number the bit still Chris, our but range. Yes. less, a that on

the again, you parts just kind capture production drilled. messing of counts and into 'XX, going isolated. echo look the some still the we with you're straight the see back 'XX drill rig geographically still that sorry, going growth being flaring productivity running, as flared that's will anticipate, we forward, then get with we there, -- But kind As to early growth move the that -- another we creek going up. count we drive currently significantly. movements gas of dynamic we there's to through wells be rig volumes down an drive and fully mentioned the we'll volume me. earlier seeing the year, region that down at -- going And got that half because it's the get the to to as we're DUCs, of especially here some flared other gas area going as forward, But the behind that there's of for again, of the as of capacity II, that rig key system that's And with the I look is towards we Bear

Christopher Sighinolfi

you're maybe affecting we for others? to connected? staying track when plants start individual are very there likely newer Kevin, creek you this That's to wheel I the plants where to volumes certain guess, sort fills isolated, are of not because are volumes an as portfolio helpful. people facilities sort a not some for 'XX, inlet I on expanded longer-dated for but where facilities. as aggregate guess, know guess, disproportionately related in processing I'm of a see plan certain not more footprint Are see up? just guess, and to efficiencies plant point, watching, Okay. your question, I plants, I we those having, asking the that likely I -- at recover Or, broadly before

Kevin Burdick

Garden plant assets. we and and for We'll and Creek Creek Creek the it system Lake cost absolutely, Garden Yes. look from gas system, total. Again, least And push at we that Lonesome rest gas our to We of can in it our the at the advantage do move we our with to we'll exception look in the to Demicks of Bear total. of take that from, optimize system. -- see our get Creek, some say, area, the believe we as facility the

facilities. see some doesn't be what if to will there impact is want we tariff you recovery. or So border down of how how the a little start Northern that change standpoint to operate similar ethane a Again, a will discussion. a it need go on, argument is -- really If recover worded it recovering we our to the or ultimately there will that but come from -- ethane and

Christopher Sighinolfi

that Great. just Okay. you segment a And different. final 'XX. capacity It if think some contracted modest Can outperformance the the I on pipe in could of noted gas me EBITDA guiding for segment remind of question, you're -- drivers like 'XX? ask nat very remain I for the I reduction you looks one totally well there.

issue? rate So it's a Or something entirely a I'm or guess, I cost it's if just, different? if wondering

Charles Kelley

Chris, Chuck. this is

excuse the in -- on was interruptible So -- driven There Oklahoma flow. that really Texas me, interruptible or outperformance our the we XXXX was demand our volumes capturing the and the by great they're particularly generational capacities. But cooling. And less and cooling heat Basin, for takeaway QX certainly, a within capacity real very, with had generating the we Permian being alternatives. good strong very relative load

uplift. So that the XXXX, was

and we looking year-over-year, did loads. it typically our guidance, will electric in compare what we summer at generation XXXX normalize you spring As

good there so that, there And Permian XXXX. of interruptible at So have in a they should repeat upside. strong help our that might QX we to XXXX, indicated the do midpoint of in be has some volumes summer, a can as until add will recently, us look be our you Highway I upside delayed

opportunity transport to So capture for our potentially intrastates presents another services. more Texas interruptible that some

Operator

our Blum take Michael from with next question Fargo. Wells We'll

Michael Blum

Is day Question expansion. sort those commitments? that market West -- of fueling those from on share are a you the new barrels Or taking Texas plants LPG are others? are that XXX,XXX

Sheridan Swords

We're are both. are other plants to pipelines. getting plants off connected, the We're Sheridan. new we of that is volume getting going this Michael, -- being that doing and are existing plants

Michael Blum

how coming River the Rocky 'XX continued versus growth just out the region the Mountain to just And of then Basin contingent turning on development of guidance, Bakken? Okay. in growth is much Powder the

Kevin Burdick

both Michael, the a of modest and segments. It's driver The Bakken Permian. very be driver. It a level would is the increase. not

Terry Spencer

well unrealized an it okay? the Michael, -- certainly But a be and how able just we indication little fact, potential. could be of the got does help, exploit and price it could it of It We the a -- bit of feel Powder a we're think to be if, help. has don't Powder lot needs -- positioned of Powder, price that let little that to about bit get in

Operator

question Alex take with Kania from We'll next Wolfe our Research.

Alexis Kania

West Texas respect I with guess, to just LPG. a follow-up question

legacy respect conversion the to expansion, the repurposing do related how more about or pipe? to your think With less options set, you with timetable or of the

Sheridan Swords

Texas go can a later bit of the go to different -- different we full of service, an the but of -- full did the do would Sheridan. into loop we the West expansion a have into that coming latest clarity Alex, free little into we complete expansion with want and for we and to pipeline, better system making loop -- service. ahead to pipeline sight to alternative of predict have do on line better we full announced, freeing this the pipe contemplate the one We will before with be the we legacy service. is additional volume still up that legacy open a We expansion this before up up more a pipes

Operator

Seaport Securities. next Sibal our comes And Sunil with question Global from

Sunil Sibal

I late, touched clarifications. you call know the have just on couple it. got a of I might

some think that can about mentioned side, get any assumptions if On expect that anything you if the Is talk to in leverage close you And you to that XXXX. go to time correct? that? -- into leverage funding I Xx so,

Walter Hulse

early run of said or basis what that to either be fourth before prepared Xx same we Well, said we've XXXX. the the remains on a XXXX expect at quarter was the rate in in in we the debt-to-EBITDA that remarks expectation that

down we further as then that that period in increase. So we goes and as change. go flows cash doesn't to continue XXXX projects expect CapEx to on, And come delever these beyond

So nothing's changed.

Sunil Sibal

question. Okay. Got of one it. And then broader kind

past, corporate industry now? the about the that. different I conducive to if in being wondering M&A you're right industry in think that the you've environment and talked I seeing not was anything environment

Terry Spencer

of the advantage we area more it'll No. No difference. asset tough opportunity, the be bolt-on a this strategic focused Still from type some growth We're M&A to organic take going environment do acquisition. perspective. on in strategy. an of M&A stay If

So really hasn't changed. our thinking

Operator

comes Our question with Barclays. Mateer next from Harry

Harry Mateer

to And previously talked target. that's leverage Sorry, just last a guys you of some question. And with an about have backdrop But shaky the have given aspirational a time if on consideration actual aspirational just macro making X.Xx to guidelines, that follow-up and confirm target first, less feels? potentially given just the of firmer how more any an still want target case? the you

Walter Hulse

based through the guidance Well, that we given forward. a as we if that we see towards that X.Xx thought X.Xx we on the that and just well out you you, pretty below is today, that projections are go going-forward we aspirationally, going do What don't where from that around you'll we've continued growth quickly. basis, see we additional will saw be growth we we If be said on would X.Xx.

Harry Mateer

it. Got

cash again, prepayable. then your Okay. year, flow year, And needs a is XXXX what plans next just guys bond might but And financing could be? have you about until talk this that's the and do maturity after term all Your loan you will you if this dividend. outspend XXXX, CapEx

So given at you're needs, that right almost XX thinking now? just years especially X.X% how about possible capital debt curious

Walter Hulse

program. we short-term do as coming you're this the out term up right. We there construction debt due have loan XXXX. And some We'll in finish obviously build

Obviously, we our we market. have debt keep think whatsoever we'll may market. And the eye financing when no our So thoughts. on the we in it's equity appropriate, access

Harry Mateer

Got it.

one at CapEx CapEx the last things flow after of of are aligning me, to Okay. parts like free It neutral EBITDA together for 'XX dividend. less growth in your growth terms 'XX then be about 'XX. $X for the different just indication then in you And versus gave and for seems and cash least putting you billion

as trying a your are large-cap and companies to year of midstream other well. of get number -- that there are -- next there So

it that is on projects at still really, this thinking just point, true of that you're cash something dependent generation is So flow might what free a as matter policy? like you Or find? targeting other of

Walter Hulse

to above where, the it will Well, future on had to going-forward where a a the out reality we'll that in basis, very dividends. position guidance cash, what do there, going And see going give we've a brings. going we're be we'll generate is math if amount you on out a we're forward. not what of significant be forward company there. well that's But the Again,

Operator

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

Danilo Juvane

you A processing have and NGLs assumptions included? guys what Did and gas quick price the gathering business question for outline for me. you for natural

Kevin Burdick

and Yes, prices $XX, over limited, the Yes. have we're Danilo, look in but environment. at we we Kevin. like about the strip exposure mentioned, prices gas than the NGL Again, very is we're like we're significantly $XX this not the not crude we is out the nat we're -- that thinking not environment -- looking next of commodity year type -- at direct different or so. that

Danilo Juvane

is on budget guess, premised I guidance the entirety this so your year? basically strip for the of

Kevin Burdick

about our way we're prices. that's Yes. the When guidance, thinking look you at those

Operator

Tuohy final our Shere with question take from Craig We'll Brothers.

Craig Shere

late. a new Congratulations announcements. project I Apologies, little the call on was the on

opportunities. So we have downside it. if comments And is Walt, questions X limit of addressed, X where any you answered have you there can on a kind already export as or the about skip leverage, fall But you that it to sense let any policy? point share CapEx have dividend and if available, a about where new buyback further, ratio just M&A make think you sufficient doesn't to growth or don't

Walter Hulse

But up time. key a we'll alternatives as I the share paid -- And relates have that us, flexibility was of Well, it discussing, opens docks... or as do what gets it down think will at part be for think it just the as be is the for or the to dividends we our that obviously, is appropriate to to the buybacks your debt whatever. of second question, that whether I it levels lot

Craig Shere

are Like, Xx? you to willing go under

Walter Hulse

sorry. I'm

Craig Shere

willing under Xx? you go Are to just

Walter Hulse

when environment is. we'll cross that what there not get Craig, bridge there and we're see the today. we But market

what the that going not to to at market we're so to be And speculate forward. point as going going is

Kevin Burdick

And Craig, Kevin. this is

but to, there. the around we relative communicating. to the real selling We're dock having But what that that been have we the globe prices on Coast. to we we'll conversations very very we partnership we the markets Coast barrels I exposure working have we have, at don't the would are clear. what a what it value business are them, when conversations -- lot we and of would in It's that still that with have the confident on determine about keep that continue we're we a customers When say part as the have will the time similar of the -- or with hard. working our think price -- of people love be the the to same opportunities have. opportunity. Gulf Again, to markets we dock, get something the the not team Gulf that It's have On not directly

So when get we'll lined keep those. up, that's all we make might we it And an working announcement. when

Terry Spencer

let want toward if comment, me has just a in grade. to be always one to hard hard very line Walt's the Craig, follow-up company that's a Craig, emphasis I'll managed being sheet will somewhere, look the comment -- just some historically make balance investment for prudent an way for line us. [indiscernible]. with I that mean, -- you

going And so makes doing company sense of always And prudent, shown as we history think we've long okay? to the is longer is do and a that. term, what

speech. That So hat my that's hang on. what can there's you your

Craig Shere

Okay.

if terms else anything horse the last LPG's, like back. in race my don't wants was I -- just your if Kevin as of looking follow-up. opportunities? come ideal strongest wondering But Just ethane was I in know the to or

Kevin Burdick

export Craig? to regards In facility,

Craig Shere

Yes.

Kevin Burdick

would we're conversations the driving It I Yes. be the are opportunities the not come our focus at think is ignoring may Okay. majority point. this ones way. is And significant LPGs of where -- that But right LPGs ethane the the now.

Operator

back Ladies now concludes gentlemen, for this remarks. Ziola closing it will and today's turn session. I Andrew question-and-answer to

Andrew Ziola

for a our later day be first call at we that of late all date. and quarter period available the when for books starts Our extends April provide a Again, rest your earnings team until release good Have and for the joining us, details you. the April. we for in We'll quiet conference throughout in IR Thank will thank you your questions. early close day.

Operator

and you phone you may today's lines. Thank your Ladies now disconnect your gentlemen, participation, concludes this and for teleconference.

ONEOK (OKE) 25 Feb 202019 Q4 Earnings call transcript