OKE - Earnings call transcript Q2 2020

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Operator

Good day. Welcome to the Second Quarter 2020 ONEOK Earnings Call. Today's conference is being recorded. At this time I'm about to turn the conference over to Mr. Andrew Ziola. sir. ahead, go Please

Andrew Ziola

those and take XXXX everyone, our earnings after we'll yesterday and Sarah, After our ONEOK prepared questions. our earnings welcome second presentation remarks, and closed markets quarter call. available the are good you, on and website. to morning, be to release materials your Thank We issued

in include you clarifying if to one yourself or we Act from the in forward-looking Harbor session, ONEOK's provision that results follow-up we reminder XXXX be might made Safe During so limit are that Q&A of we those projected Securities during you the would Actual expectations as materially of could considered A and forward-looking can. this fit differ statements of and the statements. and as appreciate should one by many covered it XXXX. statements question call predictions could

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

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

Terry Spencer

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

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

are are continue safely increase we've In start continuing call weeks, to Operating challenging today's I'd to your responsibly the on Kevin Vice operate Planning President of In Vice questions and Kelley, Executive Natural Financial a Sheridan Liquids our and customer Chuck remain Hulse, who employees and Corporate we've cases Walt asked Vice COVID-XX available to Senior providing President virtually. environment. like President to seen me extra Joining Strategic Officer, and and focused in President who Vice response, Senior country. service able Swords, Burdick, Officer. Affairs Chief by employees commending Also working Chief Executive is are answer and and across on Natural Gas recent Gas.

the safety For their sites, families protocols of safety continue for critical place safety ensure are for in reporting operating in to and we communities. who person that and employees are those to enhanced their

sharply with production were our trends production on stability the and out commodity prices quarter operating extensive low across the pandemics as across curtailments XXXX. recent volume in we as in interrupted to online demand, and bottoming oil providing back our Second have operations increased second effect customers recent June, half May After results by bring the in worldwide crude positive started commodity have areas momentum weeks enter of prices.

returned As of have many to of during matter a levels. our fact, facilities July pre-COVID

volumes benefiting second feed total some experienced May. earnings July higher broad are level propane For strengthened Basin per the of raw plus Permian have where NGL the earnings services a also the impact we reflects Basin and ethane Mid-Continent. first Williston significant increased in from example, highest we are in to on The our volumes quarter the NGL our Williston in our the lows of significantly exceeding off average Basin volumes in in customers. the curtailments throughput volumes, of unit average due production quarter recovery saw provide the

earnings. to recover level, normalized volumes so our will curtail As more too

greatly are there due COVID-XX. global to remains demand improving, trends volume continued While uncertainty

the Many developing been we located right the large their be needs. to implications stable our by these region growing Despite written transportation value the address in assets so customer rich at of There of contingency a the challenges, for deliver are outlook possible NGL prudent prolific on XXXX get for to have our U.S. we basins will to the expect most and to end ranges, strategic discuss through integrated which oil We reports are in the previously in producers many ONEOK earnings DAPL shut deliver. supported demand base it. and to Walt shortly. our of management the These continue strong, provided low down plans investors products I'll assets

shutdown during the XXXX for than of of produce more would annual gas XXXX per Kevin time some basin, About through beginning to have billion pipelines per rail From solutions will ONEOK nearly to meaningful processing This all alternatives capture mostly At the of day DAPL drilled an to some billion. had our there region, develop. shutdown currently cubic providing provide our away ago crude finding whose on are DAPL billion but feet business we from our remain of volumes additional basin quarter connected Specific in constant volumes the means does cubic volumes in XXXX XXXX, the conversations estimate Even X.X the crude currently returning, substantial our than million extended with oil remarks. we DAPL take available. day a is natural $X customers flared currently feet crude impact may the our that estimate with production takeaway more more per in XXX,XXX that from in basin In gathering rail. we capacity producer XX% have and were Wilson capacity. feet dedicated of alternate and crude those takeaway curtailed to the oil is committed our volumes processing have his place approximately leaving we data gas that X.X and not XX% associated the It from transportation day the view, to impact Basin. they day volume approach assets nearly the an Williston provide to of other uncompleted immediate alternatives EBITDA gas of half first barrels crude of While due wasn't long methods points solutions XXX of any per average scenario, producers constraints. to completion to wells. to system of options. cubic are could

additional upside, spending needed infrastructure has still that there, available capital no to Our to is operating providing and now that leverage realize extensive substantial is capacity earnings potential. significant the

lever and dividends, the being improving not see if business met. is shareholders. that are we could investment-grade our while the relates volume our dividends. with recognize don't our we the do to strengthening, our it a pandemic We need and action on take the taken protect it As provide to proactive steps continuing during term ample liquidity return to credit value expectations we've to ratings our deleveraging long Financially, to

of again. that, employees see I'll Walt. doing Our industry and other confidence downturn. an conditions in to are turn have the team us will and navigate found the call them job challenges management and ways tremendous With in unusual to side excellent successfully They they to to I this through over before

Walt Hulse

typical second were of our In term financial were the of undertaken news $XXX yesterday's few capital and quarter a positioned the to net these repay raising proceeds during public path the strengthens flexibility billion and performance, of how I'll of transactions a a stock offering loan as year. provide a capital goals. May, manager Both aspirational those market $X.X leveraging strengthen our Both we proceeds below Thank well to detailed transactions June, business during XXXX. common we long-term environment. second goal. offering a which billion to notes the quarterly Xx of release, that a the balance maturing was million. financial of still Instead still senior clear we made run-through our you, additional have of completed decisions proceeds us Terry. through transactions, in liquidity to proactive -- the more agreement the in We providing our of X.Xx and balance $X.X for sheet completed $X.XX resulting sheet remainder walk strategic of equity pre-COVID levels completed In which intend and market respect. accelerated our successful of billion was the quarter, and us two portion remaining and in a in towards leverage We as uncertain to maintain used in

second related due quarter. ample we billion balance to primarily in $XXX impact no settlement sheet ranges. today, and of facility a expect the in previously repayment our quarter we the more of and Interest adjusted credit expense cash. hedges $X.X announcement, end have strength provided certainly and and we earliest in loan, As share the outstanding at one-time quarter interest increased with to million of the flexibility resulting and sit lower the second outlook than borrowings of of second earnings per be income $X.XX term at EBITDA results the yesterday's rate net of to With our XXXX the our earnings end liquidity

run line earnings path volumes during we our to previous in with to expectations be early a continued return and rate expect we As to to March the deleveraging. provide XXXX, achieved our

growth to of activity of will total to visibility maintenance up annualized approximately in million provide also including warranting annual ability basis. Board but expanded capacity, our $XXX volume scale on an million levels to capital a the $XXX and the including until We growth $X.XX share to declared dividend to $XXX capital million producer Last the capital be of with from expect capital expenditures maintained remain of week, needs. back half maintenance quickly XXXX. customers' Total or $X.XXX Directors per we range second million as $XXX expenditures flexible

our We operations. efficiencies cost look continue for across to

our year, measures million. reductions spending implemented far discretionary assets, including approximately have across savings, So totaling systems, and we optimizing $XX this power

call our I'm going year million second in additional now result plan. look to Kevin over expect $XXX the operations. total to approximately in the XXXX We measures half to for at the of of closer with a turn cost-saving savings compared XXXX our

Kevin Burdick

system seeing lows and all. volumes June. activity in related our second backdrop improved has you, Thank across The in to quarter May since we're greatly

our in processed highest raw increases in on door beginning our completion we've been in have quarter reached crews the volume gas resulting in XX% producers natural add with XX% Comparing of lowest far second our monthly rigs. on producers in back July, feed conversations recent cases, volumes bringing more total and seen than system throughput increasing in to average volume online, wells with Our and and focused NGL so levels are volumes. volumes some

totaling The Our natural is pipelines generation underscores earnings capacity the continues market utilities natural markets. and customers and importance times industrial XX%. from stable nearly earnings segment including firm stable gas and predictable fee-based see demand with for our we these of facilities, uncertainty during continue gas of contracted electric to strong segment to highlighted provide

Terry approximately current day in Total throughput let's Gas from raw July a XX% the May take increase as with in profits region half July, region, dedicated mentioned. volume has reached day at dedicated the our In lows. the NGL nearly on lows. than feet across acreage. per XXX reached our feed There on activity than look in XXX we've have region basin, volumes from operating XXX,XXX in approximately currently June XX are basin more from July, Drilled in XX% and a nearly wells but in more about in and XXX Natural per seen rigs sharp closer barrels total million Rockies the our increase Now cubic acreage. the increase operations. with volumes uncompleted

rigs We market believe connected that March, back important producers to takes had right back XXXX. in the are the feet what the asked Williston approximately online captured our of is the to price activity in cubic during X.X the Basin, per gas which billion would the in flared. will volume customers we production most of in it million as per and In basin. in to that been sustained on wells well-capitalized to had shows producers resume But being We're continued system demand includes outlook of if some bring positioned day if of price cubic current the day our that improves. to on point in is the which system flaring online. Our for the third a million natural XXX communicated frequently volume the feet basin condition XXXX. curtailed remaining bring prices curtailed come and it XXX now acreage, uplift take The they're provides commodity industry still data ONEOK's basement opportunity the us for volumes dedicated latest with was back quarter

drilling place our completed new activity levels. needed and volume this to volume is capture to no Our in reach is pre-COVID infrastructure

transportation our provide of had of date of will NGL the in connect earlier We previous are target pipeline area with NGL expanding this an new lateral in will of extension September and County quarter. than limited our an historically which Bakken This track to on takeaway NGL complete fourth Williams options. third-party the year plant

the as XXXX lateral it minimum provide system and includes our commitment. to additional volume volume expect NGL We we a enter will

across greatly varied During the quarter, second curtailments our producers.

the fees curtailed with curtailed of fee higher Curtailments of our their none. XXX% components production virtually lower components also Some contributor average contracts producer and The proceeds percent PLP nearly and on large were and primary lower vary fee customer some our across contracts. to rate.

in with region that fee higher lower curtailments Rockies factor Mid-Continent compared we Another region. our fee was greater our experienced

had XXX,XXX the volumes in reached processing we reach July, XXXX, day Mid-Continent the MMBtu June we return, Mid-Continent of today, per with compared with average plant quarter more by increase quarter barrels average XXX,XXX than see fourth connections of XXXX. XX% with average. of Ethane volumes region a curtailed average XXXX from rates what all expect Given quarter. recovery fee volumes segment over $X.XX barrels day and second the per the compared per day, XXXX. increased per second increase the quarter a to of in of NGL compared barrels to quarter throughput levels entering continuing during the region, the first approximately In second XX% quarter gathering in barrels Mid-Continent the our XXX,XXX per averaged in with feed for the XXX,XXX raw Volumes XXXX driven day nearly pre-COVID this

expansion to plants XX,XXX on the expect demand for our in of two the pipeline Basin, strong new ethane growth half per We barrels day, economics. recovery the in the XXXX extraction and and processing in Permian our of Texas year through party well of due completion basin. remainder third as West full future connection In June petchem of ethane the continue first position system the the favorable to LPG

complete, from to With LPG. continue the to we transition party Texas away expansion offloads on volumes third West will

and revenue when move transportation they day, in We provide our my system the concludes which that full offloading will XX,XXX Terry, future. on to remarks. barrels fractionation are per currently

Terry Spencer

am creating have the on can I'm certainly and again from to in employees have drilling be to approached to when in behind our resilience last empathy value become our tough. stakeholders proactive are we keeping the fractionation the able significant the that it Coast worked by efficiencies conditions we've and ONEOK Thank resilient, were midstream From sustainability able and management even understanding, compassion, challenging quarter capacity. producers our a solutions more company industry the time drive We will the in important distracted efficient. add long-term The months XXXX you, XXXX us when continue assets have focus the is employees issues on to innovative and ahead. seen industry team in find our XXXX in Kevin. and midstream with together with opportunities of been innovative in our employees remain several which disruptive of when are With saw again of their for the are prioritize continue our inspired us, businesses. safe focused proud programs, how communities and XXXX, but the not social navigating our and to things. there in perspective, and and and time way We producers generosity. focusing I are within events right What proven market and Gulf

our of times the reporting others website categories ever. available like adoption of disclosures these mark staying things important and savvy particularly and will on weeks. environmental, coming report which right more report more includes detail be sustainability The in is these focused in many on ESG and an governance is social provide upcoming will than standards. each the the on in will our important report, the in and issues important We This expanded

this reporting While publication. be ESG our annual us, report XXth isn't new to will

continues we're to With questions. and committed continuous of ready disclosures now remain ESG our stakeholders. improvement Our and that sustainability journey to operator, our we performance for

Operator

JPMorgan. from we'll Jeremy from and first And Tonet Instructions] question go our ahead take [Operator

Unidentified Analyst

remarks. in the opening [ph]. Hey, Charlie good Appreciate This all the morning. color is

Just puts that of Apple Apple High be? and the shutdown what also temporarily curious, with And as pipeline address commence, reflecting your to kind service, sense, was would it headwinds the if also, guidance would shot. possibility an of you there, pipe crude be that and potential takes you make into curious account NGL updated if could takes the should noted can Plains I that repurpose secondly, to

Kevin Burdick

Yes, It's Kevin. Jeremy.

we all the impact really much question, as XXXX. at first don't see far as Apple shutdown, to The

closely. As in could relates another we is we volumes XXXX pipeline to more as believe production our there that question, we said, back, curtailed being the physically capacity physically are pipeline the And curtailed. rail possible. to something transportation at yes, the and currently comes that that, as be Bakken a in that's evaluating But as convert that We're and the handle service. issue we second see will that smaller looking watching of options, NGL crude yes, all it

Unidentified Analyst

maybe trying half count Rockies the should then to of the rig kind to And half you expect related parse towards second us half, half of pop of in? the second said and Maybe the relative to you on the Thank we how you we're connects year? point into you you. and looking exposure million about guidance And saw sort differently, Conway secondly, here environment guidance. that specific at then pricing to pricing contracts, think to in sort of first decline that to GMP, what given one $XX this gave back the reverse what assumptions half, go mid to would

Terry Spencer

well. sustained, second to that get There's And obviously, answer And some the and you'll you in we grouping? that couple yes, as question side we questions was last fee we believe pop strength see like in pricing said, the on And do a that see what that's your that rate first. help I'll if this there. going environment improved. if first

Unidentified Analyst

pricing rig the in connects to about what in half, first well the saw second we're what the It's count given we side relative on half environment. the and seeing just

Kevin Burdick

Yes.

numbers and far new well things of we XXXX. That's more I -- aren't really again connects seeing like again, as dependent We are rigs on that. the XXXX mean, -- a as

we with again, fact, recent In producers. -- conversations

We potentially conversations completing environment completion are there having about bringing back. in ducks, this crews

like going got to counts something. that? to there XX months in -- the do add you Chuck, two have we So, or don't anything rig have it's we've not next

Chuck Kelley

winter mentioned, as mean, us, here by producers of being was Kevin that, to before that I to producers provided what sight on want us completions. also through acreage. discussions, addition what And mentioned. as to one completed on going drill they larger remainder of And of did additional our Kevin some in got if two the wells to have are currently these QX, producers ducks I indicated programs our We've have in told the line rig demand. more producer to anticipation is Yes, are that with run some see in of based to on schedules they're complete our year QX we us the to

So, some well completions forthcoming. to of ducks’ as connects increase line we've increased as well sight got

hope gives So, that little more you a color

Unidentified Analyst

Thank you much. Great. very

Operator

take question We'll Instructions] Richardson. from [Operator our next Tristan

Tristan Richardson

guys. morning, Good

the we on LPG commentary do enhanced your billion a as higher talked you as new range? all teaching to recovery range range well about rate towards $X volume I the much support up timing quarter, EBITDA. really July, this closer prices these type high-end and and look that of for in namely run guess EBITDA outcomes well the of as appreciate provided Just just completions, itself add somewhere about last the thinking we've But EBITDA end improvement year, the to of of

Kevin Burdick

I And that. think it again. yes, supports Kevin is This do

volumes as we range first about OPEC necessarily we were the upper entered those the what levels not about of COVID where kind about. right types talked supported that of think where into you volume -- that was If and think but the end we average, our quarter situation, that of were, you

March think the flaring that to go a curtail we come the that substantial get infrastructure online, those place, gas we point back, put time, volumes expect was included that down. production come to as to numbers we I in is back if Since key flaring. in additional So, and numbers and would

those the the upper run that choose numbers. towards If the that's range. what why looking you to at, we So, end that's in rate have we're that of confidence

Tristan Richardson

being you Great. generally And -- no lower CapEx XXXX. just then the than opportunity on about XXXX were talking

the how spent? through kind $X Now, we're way Or opportunity spend year, kind year speak halfway about of we of sub to think next you're is that something is there a so billion? of bookend

Kevin Burdick

nudging. million prepared generating that and capacity. growth. as I just producer indelible my producer XXXX, in CapEx be need of growth to million level range for $XXX that activity, in And we to $XXX is maintenance activity, expand long remarks sustain said as that including very we that we would will It's

have all of back to place that get ready to We assets to north $X EBITDA in billion. us the

to in on producer a activity so, the CapEx warrants you great here And don't where position for jump level growth. have until we're that

Tristan Richardson

it. appreciate I

guys, Sorry, much. I missed that very figure. Thank you,

Kevin Burdick

you. Thank

Operator

Shneur We'll take our from Gershuni with question UBS. next

Shneur Gershuni

everyone Hi, is everyone. to hear Good good morning, well.

Just in dividend just prepared the your maybe off wanted made remarks. that start to with comments you

an you dividend become run the you area billion mentioned would CapEx in another maintain rating concerned board. wondering obviously You'd of Apple, rate? how so and headwinds things, your you sort was being it customers. producer with you've dividend, the if to enough about would the to How think for different that be much case as outcomes become as for forth. does a maintained where levels paths about the impact reduced as thinking the us lot scenarios are SMP how studies Just of year What this wondering would you guidance or give the can to down being with or about the be When either to road sort which thinking got re-reviewing potentially give you could think $X.X recommending can I dividend. potentially billion a of different of $X.X matter? you COVID, the basis your and and potentially if you're us can range

Terry Spencer

is So Terry. this Shneur,

then make up. can and follow So, comment, just a Walt I'll

of As your we've -- the question be even Xmid expect -- think Is looked variable, questions? scenarios the this single Is think business is XXXX, course, going forward? when we've to been variable the And of to with think Apple we've we over XXXX, see in What about could I scenario, happens high and shut we is, core to operate? going we continue key and we we EBITDA that As experienced think shutdown, to do it a to digit to how a in about going XXXX. Apple. think this and at key about about gets growth of or down? key what Apple number

So, EBITDA in XXXX, what mid we and see digit. XXXX, a we could could growth that single XX% fortunate, doesn't Apple an we're for in If over XX% XXXX. to become issue to we high see experienced or expect

those in as spending to both indicated, have So, see very million a million And of range. take scenarios, to dividend $XXX we a would need to action. modest capital very, Walt don't be $XXX

to outlook, that appropriate certainly this point that? Walt, in to take action given it's anything don't to we at any time. So, add think

Walt Hulse

retail the equity in back on that in we're to seeing that's agencies. pleased a that strength the We with from focused the not this activity that's and touch rating other us trend volumes the that, showing we're see point activity saw to accelerate in on in time. definitely bringing benefit obviously -- the proactive we're and They stay step on producer the from the leveraging real cultivating, that

Sheridan Swords

a in a would couple of a rigs connected It's depend the only our doesn't and the back Sheridan. bunch a to our Williston of emphasize, half basin, particularly is basin. on whole day, opening said that is but deliverability remarks, really coming that and we've in BPF this thing it into and The times I system

a is function throughput growth growth capturing is and think on our of As that and capture our our XXXX, GMP that half BCF a a accelerating of that about day. we business

throughout that a you about grow the BCF we expect of the half a function a think move and deliverability. emphasize as there. you enough a in BOC, That's we So to day XXXX, number quarter of That's today. think as about can't volume BCF capturing point this already we that X.X the And XXXX first about year. that's of it's and a day

Shneur Gershuni

to a answer it's good really transition. I A Well, that. expected. I way Maybe appreciate than better

continuing may about we bit to about, little in a the this second questions prior they think the in as and of if just questions cycle, we a answered when and dating of remarks. talked in the that do be for to generate the trend wrong be worth remember, and about as you've something, ducks on type able cycle, you efficiency for You've Bakken count 'XX potentially to Bakken zeroing the did to be the I and maintain that on rig production? for grow the some able 'XX, to recovery, strong of enough run here, terms drivers thoughts something talked one But XX of half conserve see is wondering prepared you received sort you're million, most the the myself been where 'XX, kind are things recent to you Could how what tech a really and on little 'XX, back market? see normal in in moving Just around. bit [indiscernible]. rate that X.X I'm Bakken, run, X.X-million-barrel efficiencies seeing of In

Kevin Burdick

I'll Kevin. it's start. Shneur,

were better Bakken, if and The mean, have fantastic delivered have the you more year-over-year You make reserves jump been make in sure -- back more producers efficient. your so -- continue I better wells. and and to a the have I'll question, been I sure little don't muddy, gotten here. answer in rigs we

they deliver ultimately they that So, volumes continually capital shown had less to. is goes can more and what

wells think at of over that I as many completions levels. you certain or time, won't to the part your keep that's need story So, volumes

talked volume. four type range of day a we've five BCF about think one it in all that to I one,

month acreage. quality that's improve. we do believe doable. think to You're on to per continue our completions probably the of we And absolutely And XX will XX the wells

Chuck Kelley

months been work all experimenting, Shneur, have with a wouldn't longer say closely working add, our Another the couple will of we them long based producers, wells data results of laterals deliverability so, is point that with miles. or those And I'd of I we're past but and through be seeing on increased less as they're being three needed laterals. longer told the the that for as this, six

and part efficiencies, producers enhancements results really we're anything technological say would a your to longer good of laterals of question, back now. I regarding continued didn't with these folks much that either some or some from for So seeing dialed

Kevin Burdick

last remarks sooner this mentioned apologize. this brought in and it thing either. have I up One on our because topic, we I haven't should

everybody, remind to to the Just gas ratios to oil strengthen. continue

that's So, strengthening to look see apply over ratios, and oil it's gas the to shows that got to of at you've presentation the on X.X. forecast it's where some oil continued time, crude now and can materials and more what we you to strengthen provided the done

of going what's We factor. look going the on side. just another that's on focus what's the the basin crude at So, Don't side. oil on GAAP

Shneur Gershuni

sense. That makes appreciate helpful. you. That We really today very was the color perfect Thank guys.

Operator

Colton We'll Bean take Holt, from our question Tudor, Pickering, with Company. and next

Colton Bean

Appreciate green to how shoots from marks and return those you activity level. around the comments of the might

think with But getting X.X a back be of [ph] is large understandably, reversal struggling the with So I base component day, that the like. shut-ins ATP of a market's a the I that. to will BCF declines we is what think other

the can the how of the does had wells of months producing update your you -- couple over So, us out connected on it chair system how that fare? to still last you've

Chuck Kelley

didn't repeat you from the quite part on? hear Could decline your it; Chuck. of last is This question? the I

Colton Bean

Yes, Chuck.

like profile across back some the a a completions looks your of see and if stable level view think to see to to I has on what guys understanding PDP ultimately to might of [indiscernible] terms we a that might line when system. you get work more in think to growth, need Interested I have been basic there. something

Chuck Kelley

what XX%, we there. wondering just year models run then our So, and two, maintaining typically XX%, plays, down year you're XX%, from and XX% rate similar -- or but then decline XX% in to and that's we three, stuff to other shale and see

as is your trial plays. a XX%, -- shale XX% year at So We your run obviously, a know, decline is in range. first you your larger

Colton Bean

comfortable all fully XX feel to you and to a would Okay, month that be XX that completions sufficient base? offset

Chuck Kelley

We do.

Colton Bean

on shut And that things, of flaring side think were that we've were producers wells planning in. heard I from preferentially

that that shut million increase been gas wells would have been back the to still So you today, if you alternatively, expect connecting on today wells one acreage $XXX online? you are that capture? of that's as in accelerate Or you to at actually flare that looked to bring

Chuck Kelley

here see we get our the into What percentages, limited to been done trunk completed quarter to some -- to flow good that here until flaring -- to people an area second won't quarter the pretty egress. we've that's we've and third lines flaring expect able results you really been air very, in as very third see in sized relative help gas

a had been put that flaring, that So, lines come ready couple to were XX-inch wells of as completed as new tied wells and some on. well in getting trunk

infrastructure million our a is of help some XXX on to that day. So, obviously going

Colton Bean

Understood. Appreciate it.

Operator

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

Michael Blum

talk talk One you Great. And was to I increased to it. ethane about and wanted wanted in -- I'm the about are but vacuum, trending Thanks, that. to seeing Appreciate you're recovery. to extent Can about increase how quantify that? the ask seeing Thanks. that's the everyone. really you not much any in just recoveries question also, assuming way mid-con,

Sheridan Swords

Sheridan. this is Michael,

don't the June warrant what You at are economics are we Bakken today ethane this in XX%. and is recovery improving, we ethane time that as the where have, increases you and correct a seen out rig midcontinent. percentage their average mentioned, But wide July, good that. of in tell I'd not in the And of and targets --

day XX,XXX what barrels is the experienced quarter, a than more July That's are mid-comments and ethane the quarter. over over continued second we We and in in for that. on June, were first we the XX,XXX up in

is the substantially I that we that out of do remarks, the as sun. mid-continent all our through we come So ethane coming think mentioned the predict within in rest the all ethane the year. continue of -- the out or can and And

Michael Blum

discussion's think those the while still that in any how of There whole shelved border the a your proposed a discussions BTU -- that's here a including just question. you recover? then dynamics bit. issues. any of until And obviously Obviously, changed have of somewhat the But in given Great. the lot think Balkan, or of gas curious, levels views, play, expansions, kind do a about are northern expansion been you the for related if Bakken

Chuck Kelley

with that Michael, little forecast, similar working pushed things in were experiencing on out at time, kind kind bit. answered this again, question of far is trying expansions, the as to and as a or We in flux QX. Chuck. we're of a we And --

months you I be I to better need an think that when. it expansion We say but definitely just forecasts, tell line that I fair XX just on of is would expansion a should can't I anyway. be it's some forthcoming. will probably out sight time. say longer-term in pushed think needed

Michael Blum

Thank so much. you Great.

Operator

take We'll our Ann next question from Bernstein. Jean Salisbury,

Jean Ann Salisbury

morning. Good

Bakken to would as pass require potential; on recognizing this but to well? that a the convert conversion follow-up overland development, create create in Just it's to NGL early still

Chuck Kelley

into able through physically move we probably area. would Bakken pipeline, to move Be possible, the currency it the

Jean Ann Salisbury

Okay.

that hit So, ever before would you like it be just [ph]?

Chuck Kelley

Yes.

Jean Ann Salisbury

of thank just the estimate quick a when a latest cash What's then taxpayer? Great, would federal you be And you. one.

Chuck Kelley

tax a EBITDA changed rate the in than XXXX. the the going be is expected fact of Well, that other nothing lower than really to standpoint, obviously, from

is ultimately the those later bit anything, down the be if a that to it needed, at economy. complete, the So, smoothed that come when back will date able road, a out we we'll because little and are [indiscernible] growth depreciation optimize will assets and

to taxpayer several limitations don't we'll the currently where out be eventually, but some situation on a we years And get expect a that's So, few down allows, a road. that utilization that into LIFO for are the are there still there years.

Jean Ann Salisbury

me. for Thank you much. very Great. That's all

Operator

Securities. We'll question take next from Global Sunil of [ph] our Seaport

Unidentified Analyst

Good Hi. you hear Can guys. me? morning,

Chuck Kelley

hear Yes, you. we can

Unidentified Analyst

based the just all release for covenant the clarity In press indicated tracking thanks X.Xx. at So, follow-up call. on question the metrics. you yesterday, the on I had leverage one the average

secondly, into covenant into fear that expectation you cash based based like it expectation it correct? EBITDA projects, revised? that Thanks. which is first, on or seems on to And the EBITDA that that So, which by your when project not is frequent to yet, bit that and did EBITDA flows, more of the then me contribute are metrics, kind contracted, is is that of driven baked baked

Chuck Kelley

of Could you question? first your repeat the part

Unidentified Analyst

press indicated So, covenant-based tracking the at had was that the X.Xx. release, in leverage you

a [indiscernible] up at balances, look So, with number. come higher when your I EBITDA, debt I

disconnect. reconcile trying just I'm to that So,

Chuck Kelley

scaled under CapEx the provision come trust with that into associated GAAP does exactly to will service of for service road, not down that's into allows period over The down or covenant EBITDA come an calculation either a that the and time. a bank covenant. assumption There is

there's been covenant times. calculation. mismatch slight a and the mismatch. versus has at calculation the is There a times the X.X covenant always there's a X between point, the So, At at covenant GAAP this

Unidentified Analyst

Okay, got Thanks. it.

Operator

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

Michael Lapides

about period, export saying or faction Hey, capacity, little that taking data going Can during Bellevue? you to bit seen have month bit at having or strong that given price guys. And LPG not think kind peers you Thank competitive about seeing exports up the actually question. relative trend back my not you export Can capacity you're the three or what well? in having what dock of be. the a what a I'm as to you back a that little relatively our impact helped of four you volumes a held what I kind of does your And for maybe has what volumes at levels, could seeing last especially does capacity comment out you've you're kind you little call are bit frac-wise. one

Chuck Kelley

Bellevue be way now, because a frac. our our can all system Right setup, fracs the

capacity right we we we with into volume bring until plenty because producer would that -- system, on. in look to So, or much up volume when me midcontinent we frac we back the see any look system, capacity a Bellevue. improvement XXXX, through show have of But can now Mont well, plenty across sterling that make productivity the our frac need of we that better have frac in you we

So, we're capacity frac side. good on in pretty shape the

author? in have that interact us frac do and export really, with of lot fulfill side? on are a and It's we more Does to contract just commitments time we In time. their terms of to not the export our there's volumes capacity period volume impact because Right now, a the the this of that need they the across to to at dock. capacity able short exporters, so need contracts than

that So we not hindrance at time, to see don't this it's have a dock. a

warrant into to online at future, that additional would something But hindrance as still time when our period would a course, a do disadvantage we Of a it that as look come on see time, list or that's this see like look as we not we we capacity. supply the more of

Michael Lapides

talk No, that's Can July's you super the utilization and rate you in a bit your for fracs was what looking? how quarter about little think helpful.

Chuck Kelley

you. you repeat hearing that Could again? We're difficulty having

Michael Lapides

love quarter rate You kind step up? and a talk about July? gave throughput a frac basins the detail your in like to of little a I'd Guys, frac set-up, lot could what seeing bit across July about you detail of of or you're what of looked and cost a you think kind gas. on How multiple level utilization in just what in the same was of big side.

Chuck Kelley

on that about there. little ethane XX% what XX% We've that we're we a would on a and -- been over always now, utilization on,X sitting Right bought we've frac be. our are seen utilization. But step over our big frac because of more up capacity doesn't has that

the July. XX%, into we frac leaves move us maybe plenty as capacity. to We XX%, we the increase to continue in -- volume third that to closer we still talked that grow XX%, so, the And about quarter, still seen have already closer that of which

Michael Lapides

issuances in final dividends is of and equity shell capital equity about with light versus do source you evaluating one, then the do anything talked what's evaluating think the for the dividend. with if incremental of sale board Got one the you I screening allocation Terry, know equity of needed? may. needed. trying you the have about between forward it. out You I to about evaluate the kind if I'm about kind think capital you to capital if -- today not the How board, think just balance And to agreement. the how needing

Terry Spencer

have have to that equity was considered quite from impact taken A impact time have the credit different there any couple an would to of of the been bit offering wherewith action would a from It's deleveraging dividend an aspects. deleveraging standpoint standpoint. a immediate related actually

adjusting time is that to play of time it's well also didn't COVID defined needed take or continue to way quarters, the disruptions. our we period in as that that provided deleveraging that side of the step that we strength business is the Then that the in what and of we extent business would see it two see to more positive dividend in a forward do we we We other to should equity the get The on was the a as quarter as the to and the make to exactly that coming that do defined that be and dividend measured going support meant a for know path. that term offering. of to that that that that or through there will long we quickest be on the standpoint back believe has

Walt Hulse

maintaining extremely thing the the to board capital investment-grade from add credit Certainly, Michael, making. that of it was only terms a were this a so that important priority in remains standpoint, I'd important rating company mix high to the allocation the is in and decisions priority. we

Michael Corbin

you, much Thank guys, it. Got appreciated.

Operator

Brothers. Tuohy We'll take from Shere, next our question Craig

Craig Shere

on heading the here. that time be in NGL same any clarity. would upsizing concurrent artwork taking done potentially outreach great into the long would and second It half a for take sounds question. the frame? On Thanks That's how like wonderful and pipeline, the dock needed repurposing

Kevin Burdick

Shere. still what all of crude evaluating We're to into turning the them aspects [indiscernible] needs that or be done. good Very

So we look continue to through that.

of understanding to better what convert takes crude. a As we evaluate have its that continue more, we'll to it

Craig Shere

be couple Are the than that of if route that go you years, a had it at market be comfortably to could something we that looking quicker could needed?

Kevin Burdick

some I of will don't it take couple a it's think but years time.

Craig Shere

million thanks. will million, $XXX more but Walt, a guess guidance. the half $XXX in and an upstream to rate volume then I'm I do the be the CapEx second thought I to lot will that $XXX annual right, read clarity until there's All on $XXX million? a ongoing I understand million about of confused I I the apologize. that's absolute be little COVID XXXX

Walt Hulse

correct. That's

the obviously for grow such we've $XXX maintenance that the continue up to the up that cash million finish XXXX, up including million order you be but we're get CapEx. [indiscernible] $XXX for level as get won't so pick the originally XXXX significant that into guys In XXXX above have will of us able we flows we goals. to is prioritizes headroom to keep As forecasting deleveraging commitment got we enough some into in projects and to and we finishing we as we there range volume had been

Craig Shere

and question first good. recovery call. ethane the storage Very spoken of a on quarter on Last was lot

know half? uplift I that we I into it's addressed exactly millions might but when XXs looking think of the know don't a to already maybe storage be know I Sheridan, for we of should I hitting. ethane. is about maybe hedged want second only talk position. be you What

Sheridan Swords

the quarter show we itself think up that that present will contango I represented sold see will of how we because out that and second the half year. the benefit product itself the for in in of second

the well. unit as You'll see in that Isom

Craig Shere

fourth that see quarter? we most of the Should in

Sheridan Swords

quarter in fourth We've it year. can I so Yes, so to quarter. throughout the going second see through spread A in that sold think third that but it time you lot of the the and the prices remainder through of week you year this happen half of be it can the on period if far. will the is of some could see through fourth

Craig Shere

Great, thank you.

Operator

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

Derek Walker

the be if XXXX in a of would year-to-year. impact. that the right and before believe growth Thank, of I EBITDA we year. mid number the $X.X XX% referenced I you mature. for EBITDA Maybe single the to here good rate if of growth questions the right? DAPL clarification lot it early Is couple down XX% Wishing X% A shutdown Q&A you that year-over-year heard intended portion guys. new also it just a we billion referencing and to extended a

Walt Hulse

basis what it provided for I end in. that Those correct. earlier base the upon That's the lower based we the you percentages of provided that are range of That's that. XXXX,

Derek Walker

Vegas Rodney market Okay, XXX proficiencies the do coming his I sustainable that back? Like perfect. say, plan. to saving recover XXXX for XX do in opposition is we some you the the and about feel you things to see to profit think captured talk if half second million or not formal I from is power it was you relative your start Then most see year definition you of with coming

Kevin Burdick

Yes, cost Kevin. savings believe absolutely is we attainable. are This those

the taken As some identify we of finding actually -- through them opportunities of to and year little job time but move so. been it we've those and of fantastic has doing get we've you a that a opportunities bit team our takes done in

of back the savings believe, in realize with the those So we do half strengthening year. volume that we'll the even

Derek Walker

Thank much. Got it. very you

Operator

to Mr. to conference concludes today's I'd Ziola, question back session. you. That and the like answer turn

Andrew Ziola

you, Sara. thank Well,

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

Operator

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

now may You disconnect.

ONEOK (OKE) 29 Jul 202020 Q2 Earnings call transcript