OKE - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the Second Quarter 2021 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

All right. welcome second and call. XXXX Casey, you, to quarter ONEOK’s earnings Thank issued presentation materials and website. and earnings are the our We release yesterday, after our markets closed on those questions. be to we’ll remarks, prepared our take After your available or Statements made during Harbor covered be call and that provision are of forward-looking and the Acts predictions of XXXX. ONEOK’s statements XXXX might considered by should include this expectations Safe the Securities in Actual results forward-looking projected could those differ statements. materially from

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

Just turn conference a you Pierce Executive to over coordinator turn you question order it for to and of President Officer. we that Pierce? Norton, many in and as yourself I’ll before the you to can. reminder, call we as that, Chief to fit one follow-up over Q&A, the we limit in one ask With

Pierce Norton

morning, for your Andrew, Thank interest Thanks, investment us appreciate in and everyone. good our company. today. We and you joining

meeting I role. in a or to and we’ll me in call team preceded my fortune of few had are management my of looking companies looking almost XX initial to accomplishments good I’m experienced many provide forward of continue second through future. now the people be in of that the near of a also forward company thoughts For with ONEOK. future. workforce, on I’ll career, management are the various today’s discussing to talented and This the a that And ONEOK’s a the has XX I the be strong to in this excited and you we honored the On reacquainting part strong quarter. assets the to those as how team build I’m and year back. performance to will work all

to fee successes. industry Also President like cycles and transaction during company ways XXXX and transition I’d new Chuck retirement Terry’s for many of tremendous forward to on and call on Burdick, Operating The Kelly, Vice off to ONEOK strong The Senior today’s years $XX leadership Natural this safety partners advise Senior in growth challenges, the success of name just and higher model environmental growth Officer. Vice has more President, ONEOK’s the several projects, Walt performance. billion since improvements as with the company and and Sheridan employees Board, are Affairs; my recognizing in less capital President been has Executive his here is, your a It’s building navigated Officer seven Chief was and what have team grown last, Strategy questions Vice Terry and answer Corporate price accomplishments. the me Swords, Executive in Financial available in Gas. I pandemic. commodity him the Natural The start delivering and his many and seen growth President, few to leadership based results and many company-wide extraordinary. call achieved. merger than Hulse, I’m Liquids; Chief Vice successful the looking a Kevin and Gas to availability on me Terry ONEOK championed including significant business companies’ and congratulating completion Terry role. first exposure, through to his thanking by last he’s under Joining

that and be as leadership can promotes CEO expect holding from daily that hear we a been that and employees meetings all responsibility. areas. continue What for disciplined culture element our is operations more met the will myself decisions engagement, requirements value we focus their re-familiarizing are will key to and and These introductions During operate we’ll continue. reliability, listening. resiliency. most of and and business, important about strategy conversations These and very safety, principles me you and forward. my for going the a with team to be encourage with month this with importantly, the and affordability, continue to job, I’ve first many on I’ve planning a well today served and in The decades have intentional business reliability, on consumers’ ONEOK our employee do were creation, environmental energy designed and to systems team,

natural emissions. a focus and to supported by Yesterday second to customers’ accelerating producer our quarter lowering strong in across systems. drive but these The financial greenhouse activity economic addressing volumes our and discuss Kevin systems on backdrop those we’re to we energy continue Walt how improve, transforming to in meeting performance. the will first, call increasing energy detail financial will NGLs turn of the also over strengthening. I’ll about reported for needs overall demand gas continues while to with result, more We gas talk our needs,

Walt Hulse

With Pierce. you, Thank updated XXXX yesterday’s financial we earnings our guidance expectations. announcement,

we midpoint to as the adjusted expect above April. that XXXX billion EBITDA our now $X.XX Our of $X.XX of guidance of view provided to XXXX be to in back improve range billion continues we

investment. continued commodity Bear in in the rising growth prices, Williston our operations completion year, assets makes provide Basin, significant next us XXXX capital into significant calls. this the XXXX The producer discussed year. exceed previous Creek without that momentum activity, later will Higher remains ratio outlook earnings our for has XXXX to of going power gas-to-oil the tailwind a have the With outlook across across or on and achieve we need strengthen. capacity the accelerating available strengthening our Our confident for into and expansion plant we

quarter second brief $XXX second net or totaled share. overview a quarter Now ONEOK’s for $X.XX million our XXXX income per financial performance. of

X% We million, backing $XXX with planned with after increase fractionation Winter of increase compared some quarter NGLs, a first due higher totaled Storm to outages XXXX EBITDA adjusted at and the year-over-year, the a quarter our from ended and XX% quarter benefit second Second out the a facilities. unfractionated unplanned inventory of Uri.

of so earnings which of recognized of will second Distributable $XX.X is current We the was half in during more the than million generated quarter. of in fractionated, and $XXX $XXX majority flow our dividend recognize be the paid third X.X as to flow nearly quarter. in excess million expect coverage XXXX second We and the inventory distributable dividends million times. in cash cash of quarter, the was

cash. $X.X or billion quarter. In from $X.XX basis, $XXX on and annualized ended outstanding million run towards Directors to XX Our on was we of rate the the debt June on quarter sub work of second share an X.X goal our basis EBITDA to We our previous annualized net a July, unchanged $X.XXX no times, with four and times. facility, dividend an in continue declared of Board credit nearly per borrowings the

half liquidity, providing sheet, the now from Our solid ample EBITDA backdrop as enter in call strong and growth balance increasing the turn volume over the I’ll update. and Kevin second our we financial to for operational year. of system an flexibility

Kevin Burdick

Thank you, Walt.

with NGL throughput the XXXX activity, increased processing to gas ratios rise that first and compared the raw feed by quarter natural driven Williston increasing Basin. producer in continue volumes and second Our quarter ethane recovery gas-to-oil

volumes We compared quarter total into feed the Natural of NGO second XXXX. expect carry XX% the into to segment, and tailwinds these throughput first raw half XXXX. Liquids our the increased Gas with In year

region compared resulting from Mountain production quarter more Second the which XXXX raw the pandemic. Rocky XX% with included second quarter the and with throughput curtailments XX% XXXX, the increased than from feed compared quarter first significant

strengthen including plant day this expected At system, more compared in recovery our increased the barrels of party continue capture increased on throughput continues short XXX,XXX volume ethane still million the first Rocky we in XXX,XXX year. to to between pipeline expansion point quarter quarter Mid-Continent XXXX Permian the quarter. and volumes reached recovery. pandemic volumes As II from second on our region be Petrochemical to is quarter region term across expansion, compared barrels per of our volume month. complete XXXX approximately volumes a XXXX, first the the capacity online XX% activity. in a Gulf was another new as region first volumes Coast. primarily the raw capacity increasing its day NGL in seen third increased completed in increasing that and and the day capacity volumes half we In early reference a second is this Ethane global the some this increased Mountain producer and per our demand barrels day, Mid-Continent and result of a compared allowing is The level, of than from in per July, to and feet the ethane recovery came the quarter on basis. quarter transportation with the quarter, the feed XXXX. a per expansion XXX,XXX increased incent the continuing XXX underway recovery plant as to system which led region, additional NGL Basin, plant first early have Creek with us XX% adding with fourth with Arbuckle up region ethane party XX% cubic Bear this compared to support third from second Total system that This

the Continued XXXX pricing. second natural on the in half ethane of recovery Rockies regional depend gas in ethane will and

incentivized the our have to the with favorable recovery year the increased our Mid-Continent due some updated the included Rockies for We of first and volumes both recovery guidance. remainder system in quarter on from not XXXX financial ethane compared Ethane economics recovery.

in our guidance region. for partial with second We first volumes this Permian of increased in ethane continue year Ethane the Basin second forecast in in the to XXXX. the the quarter recovery compared quarter the half

the differently, We day Mid-Continent. economic ethane barrels an XXX,XXX day approximately given the recovered barrels recover recovery full recovery annual and $XXX to XXX,XXX full prices in estimate second Rocky the total could per to any operationally that opportunity, available million half provide without be incentives of Mountain is we or Rockies at barrels for the ethane current Discretionary the XXX,XXX region but amount continue system at rates. not near in in EBITDA at in is would time, basin our in day. per opportunity are per on be of said expect in region adjusted Full to that the the year. Of

with will Gas half cubic volumes the in by approximately be with of in fourth year-over-year. Moving In we’ll than recent a XX X.X processed in able Creek Conversations quarter, capacity to the and with June the second closer reached we X% some Mountain quarter billion rigs increase producer service, the of well given back the are cubic in our well of on and crews our volumes later processing and to completion in billion wells continues X.XX producers Based there Creek. to half capital. with more than in day the more than per even at basin dedicated the levels and second basin, processing one in expect a per XX significant Processing to in XXX year, most approximately of half the to wells point nine producers have year. There aligning which feet XXX basin. the connect our our uncompleted Bear Toward on day, expect million quarter to the an per quarter minimal of be rigs Dunn first decreased Once quarter still completion plants, connects Rocky XX% Rocky inventory with of than activity this with completions operating volumes but of we in XXX and since in compared end of region the per the outage XX Natural schedules, averaged is acreage. this XXXX the of construction Bear has the the the cubic large cubic the on our connected track the segment; currently come Mountain in XXXX processed region and day. basin online X.X year of drilled, feet wide we volumes plant the approximately An first billion second year. higher more volumes on more Gathering to we in increase in the dedicated particularly where recent region XXXX second to sight and timing increase in and on higher have completion our and feet day line County, second of on completion for continue feet grow acreage

to rigs down basin back more the current levels. get before see DUC inventory producers to we worked inventory We to the replenish bring expect

operating completion natural GORs need currently an next seven is ratios only based North Dakota our oil same our in As from of slide quarter, include those natural to the is production. production Authority day without increased projections, new growth a the This XXX,XXX in per additional Rising flat and and feet on North this growth crude NGL in completion Again, add more increase flat we Dakota that growth these volume for guidance basin well a of and last said the the XX% earnings time gas-to-oil enough in oil in years. approximately projections. projections which show show to environment, that increasing XXXX, assumes crude materials be connect various upside crews cubic upside in barrels gas GORs flaring latest additional Any eight opportunities would for scenarios. for crude to per crews billion year. the present present to We’ve added production producer to the to the period. continue could in day gas during Any the basin even gas could X.X Pipeline would CX+ XX%. basin Since production guidance. our have reach than activity. GORs Recent oil additional volume

the processing segment MMBtu. freeze-offs $X higher $X.XX first returned gathering During per as for fee the XXXX Rocky region by to average quarter, between average the X% increased rate per Mountain average XXXX first with process now second region Mid-Continent volumes following rates compared $X.XX We expect quarter the driven to volumes. the and and quarter. volumes fee in MMBtu increased

solid as the a earnings. fee quarter of has a second producer other was million onetime XXXX. a areas. the While the of contract commodity The moderate earnings been by natural pipeline stable gas prices received earnings region provided segment, more decrease year-over-year quarter some reported benefit based to settlement In has in strengthen, that than segment driven attention activity in the $XX.X

We’ll weather to from have recontracted our We Texas Since our we on interest both winter system, additional remarks. year. than a of this the and heating continue firm storage successful West season. including Oklahoma, that head we quarter, more assets. events at the increased for capacity extreme to Pierce, the with renewed following feet work contract concludes long-term earlier continue storage long-term customers open as for our incremental billion in capacity additional and long-term first cubic see X season my into to additional storage capacity storage or customers capacity winter Texas transportation

Pierce Norton

most key governance prioritize Its carry related report across recent initiatives and way day, opportunities at the and of runway being performance the of and programs and our are XXXX year, last for unprecedented questions. looking and in only with our details Again, you, continued XX far and highlights ahead. employees and removed and Thank corporate caliber well quarter amazing. so back report, Kevin. initiatives provide the published social customers, Resiliency the to The dedication their our and of months the company. results second these success achieved recent this encourage conditions of To was to now continue the fellow of public. of from under responsible safety many The I the who for learn of the review to a we’re assets nothing and environmental, work with I’m to long-term short the our health able and our do. sustainability you key Operator our and our safely, ONEOK opportunities. website work employees, about that and employees our But I’m which the to all to communities just to operating safety every hard to to operations, our out we employees, responsibly week. and company. at forefront commitment you we’re of to be Thank your be forward most who safety more will to sustainably ONEOK, ready this customers excited challenges your and

Operator

take Thank you. our [Operator question Instructions] with Gershuni We’ll UBS. first from Shneur

Shneur Gershuni

on new morning Pierce a that for on put outlooks soft about and and the billion we CX+, to billion not thrown been potential the good outside in comments you voice conference to This Or and much to of I’d a inches I the to very think everyone. about how It your where off higher different to XXXX? front, recovery a career completion but ratio about around was to Pierce, on on that position starting times are be to hot Hi, of a kind in thoughts the into Maybe for Terry ethane some got congrats congratulations so of it’s been XXXX send CapEx? has nice the the seat online take to at thoughts. appear buybacks hot GORs, sort I buybacks? talk suggests the a on right sort hear target. run when going your if $X.X presented Maybe call But successful if that so, spot, Just around with be different chapter. now. you like Kevin’s XXXX. imagine point the this on leverage CapEx set the up four right we frac in frozen on in respect the your buybacks CapEx just is I past CapEx process can given side, for is there’s have doesn’t of here. much was I back what thought around $X on it’s execution curious wondering leverage of to If two with rate. should

Pierce Norton

you our looking of back. kind also at for for five then we’re as we of let projection, some kind our the more for next answer comments strategic Shneur, of of kind Walt the we’ll welcome going of only but to to and years. plan And not process in earnings thank those I’m And XXXX, But make broad specifically. echo So, your a all Terry. certainly I on will think we first and the all, comment, pass And well.

As assessing would we’ll a I part consider, of allocation our that, what capital be opportunities.

answer I a would that’s all plan currently a and year. part exactly to, have now. about I don’t of next for say the buybacks for that actually But So, we’re capital talking allocation strategy specific the our

kind that more particulars Walt any might I’d on of like So, that weigh to any in insights he have.

Walt Hulse

of Sure. de-leveraging Shneur that and that excited of assessment the will goals agree term time. flows that our goals things get the basically, that And end forward I we business we that’s for then options. Thanks starting tailwinds some cash to And place time our been sub And of are enhance horizon some today. continue the near see times your our from our quite forward. I closer with a Well, capital we’re allocation. in look we about at the opportunities we’ll Pierce, all that will to And we’ll leverage, to think coming would are four as our behind we’ll obviously, we’re strategy the of with look expand at from generate Pierce. of spent in

As we go forward.

right on producer running projects doubled And projects smaller growth that is, a major and going gives of would activity You’re with forward. we meet isn’t it’s business year here to the that the a finish NGL room likely very customers’ than are project pause long-haul or up of we them that course our routine next the back needs. couple that those to up, growth pandemic. But and over are picks attractive several us up CapEx that the as we’ll the some lot pipes of assume be any really going I a some going over clean And years. of of, two you there horizon really capacity last we highlighted our have forward, that

free those have de-leverage we’ll at years. of of capital of opportunities So, look over couple continue to and next then allocation plenty flow the to cash all

Shneur Gershuni

arrival? and are there. Really for coming company up any long, here, that you’re stay things that as sort kind the And going been Pierce maybe Just Would the and they just upon to at to there Terry’s in kind question of change? given detail if you orders talk of your forth same marching of How specific strategy so going a that [ph] given appreciate board to are now, were to to can color the how with curious respect you fact follow the the so effective that so strategy? holistically? from

Pierce Norton

answer Sure, I’ll to glad that. be

I think to much what’s it’s the going not immediately in company. change so about,

changing going United can we energy what’s energy about to the we be more States, continue I think across a in transition States. the it’s very it’s agree think important into lower probably I energy across systems the United industry, carbon to that all that system

have the what that of the we that really, say the think we in energy we how the with I to about step United because we system. that the global as going most that States. the of all, where actually and use are continuing the view at our that understanding, have the and ONEOK it’s business of while where transform have, understand. United I So what in skill in we first you I people sets the then are at a going we three future, and process, maturity assets, are energy what and as that’s look of you energy the grow countries in for far transformation gas the we forward here States gas And for I would innovating the then systems you that are like got the the learned think systems and systems to areas focus same that, as have prepare transparency not understand, poll, innovate. natural liquids, natural to preparing the three base in And for is time you that the you’ve and

skill do go one me my you’re indicates sets company going you’re talents parts we to going slightly in In emissions gas pull able because to think it the transformation. as and the a transition. for the thing XX to growth, transformation in better to liquids natural I at natural gigatons is that our transform. X.X of from another in than leave I while future gas we the it and that continue there’s to world learn demand to to you States the that word the opinion, time lead think to to other versus can the have United means Transition, use that the the same the be in to effort as we’re States do, So although use well going that’s of problems have, of United for what do COX little that have, bit and the something lower of meet use some it’s gigatons globe. maybe a I we think over different, important to carbon, only going think

carbon So we’re a period small And, these as hydrogen things, that, next ONEOK like decades. percentage, are the time, but long-haul I those look be think lead and several methane, positioned. we it’s opportunities and a important capturing do a these in and for of for feel is you that to sequestration all I Over LNG the of experienced U.S. at CNG going efforts. to and and over long lot

Shneur Gershuni

Great. congratulations Really appreciate the role. on color and new the

Pierce Norton

thanks thank Well, again.

Operator

comes question Barclays. Cho Christine with next Our from

Christine Cho

maybe of would thought side with Welcome this start I I ONEOK. to question. Thank an you, back Pierce. ethane

$XXX the ethane on end. barrels more This TNF. And you extraction an of But a ethane the quarter, out that’s you incremental guys full took being XX,XXX in collecting about predicated you day million. $X.XX back talk

what impacts much contracts can it producers on happen of doing border? in? for on do for how only provide it a you has You provide to do and sure basins you opportunistically been a and frac balance this collecting northern to the the out prices TNF economics order in what be too supply lid and spread it And that this you’re to negatively end? a market long-term way, it firm really don’t more so ethane of sort you’re ethane sign that when curious, puts that you haven’t more resolution really when make Btu for Is back other up

Pierce Norton

And more the back. Christine, Sheridan to for your thanks probably Kevin question. pillar Welcome and add I think can

Sheridan Swords

Christine Sure. Sheridan. is this

try system off the where how first when prices, really, amount determine putting or out come bring ethane what’s is, of to we and a else’s system. on understand your right we the and the how ethane much that somebody will next in is Bakken before incremental question think I coming on lid to out ethane our do

we out have And buying uplift of that at it somebody of it will we ethane when gas of ethane their value. our don’t from it that out system whole lose side can at so if bring bring we’ll the else and the selling system

continue them. signed to TNF what’s come it really system, certain high you’re And to enough they drive up capacity. amount up a to sign we all for that on to going right that get to already to that determination full ethylene your need it’s not is the bring just look have feel that the or the or would up So the an we what rate make And ongoing at at we we happen ethane we that’s ethane the Bakken don’t we that to like the more. could now bring We month now and could. But it down every system is have why to need not to the of for process strong we would for of for And really spread comes to take to that we as what capacity they is try ethane full amount the producers going we have question bring today for to of out. on whether What option ethane. have ethane the to the very, come price ethane have ethane today or signed bring ethane $X.XX going what very bring out. for on They a a incentivize widespread.

continue ethane make off to So of continue that petchems can rise. money to the rise, And to prices that. continue can

need coming to export the in And next second to out year, quarter more we demand. have and as to The SABIC need you crackers crackers second going well. is and then out we thing capacity more more online there of there the need more come to see is exports ExxonMobil, see

So that’s at going need look areas. the regional need And I prices you and at to third gas bring thing look between you to on Bakken is more to demand. think the other

the possibility full that they gas typically see like that in if those would Bakken you I opportunity think prices summer, prices. we the have see out things So, the Bakken an at together all come dip if ethane work we to down see of

Christine Cho

That it. you was sort including guidance. Got off gave of guidance feeling XXXX guys prior Are to about billion. of And about really us helpful. On or guess $X.X call then extraction a are that? guess And over this? assumptions in kind still just good you what I I ethane you of quarter guys moving

Pierce Norton

by start saying, I’ll Christine, So yet. haven’t we XXXX guidance issued our

process Kevin But the that. chime will let Walt in looking I on of comment. that at in past We’re or

Kevin Burdick

Christine. Yes, think, we’ve number were as that quarter, nothing, the have I –everything than mean, about in last that’s up XXXX time. would XXXX. we’d feedback when the ago. prices still there is, I since from was get is since we where strengthened we constructive be that so way our frame far it we strengthened comments and that it producers out have the talked as I strengthened, months today the it definitely still And more I mean, three

Christine Cho

it. you. Got Thank

Operator

Securities. will question from Richardson Truist next come Tristan Our with

Tristan Richardson

noted, the least that in point in what is good time guys. maybe comments the at the system appreciate recovery Really you’re a particularly morning, I Hey, one touched And and second day some July, XXX recovery. on of think the comment you seeing half. kind or including incentivized at

the you second recovery the some seeing are Rockies half? starting in So, in

Kevin Burdick

about recovery, the in we Kevin. some remarks. is include talked would which this Tristan, Yes, that Yes, incentivized

Tristan Richardson

of you the lastly, four ONEOK this the term? out can are have asking Kevin. about business you about without I you and Okay. that, the handle? engine the to a at mean, for think medium as in earnings that timeframe near appreciate talked potential EBITDA, the past to and of produce I I you potential? Walt conditions And And about the seeing type anything, you hit talk over some some necessary of or look then

Kevin Burdick

meaningful earnings in of Well, that the was the place, types have I past think for especially frame CapEx. without assets we’d we Bakken in that levels that the way up those any achieve need to in the

Dunn got we’ve the not McKenzie to plenty a we’re you in have and plant near need of down the County see point gas to future, but that’s maybe some volumes up in capacity there, for in capacity at going As County. term, there, another and now continue

run, and got we’ve on run So, the to room we’ve got side. room to NGL

a closer like that those As that need earnings power downstream that, MB-X, with going probably are four, would like to additions the scheme major in we’re the to be things have the company. to completed. But and of some none dollars to would get start numbers have those of that, we of

of we’re and operating we significantly company, in pretty the ability kind to capital excited grow needs. So, that to have continue modest with leverage the about, the

Tristan Richardson

much. very guys Appreciate it. Thank you

Pierce Norton

Welcome.

Kevin Burdick

Thank you.

Operator

from Our Tonet come with next will JPMorgan. question Jeremy

Jeremy Tonet

Hi, good morning.

Pierce Norton

Jeremy. morning Good

Kevin Burdick

Hi, Jeremy.

Jeremy Tonet

Hydrogen I retirement also Biofuels, of best as into RNG to up best out laid energy you picking their our send going CCUS. transformation, Terry Maybe there, want forward luck. on

any some RNG seems medium now anything, wondering if on there’s ONEOK near like on. side, working Just things specific just right term right there’s that that done if ONEOK initiatives wondering specifically opportunities is the is but there’s now, focused

Pierce Norton

the from; over quickest. that to you the likely Hydrogen assets take think that LNG do United gas some what it intrastate kind developing on be relates because the amount tariffs can’t plays across because primarily, XX% economically, you gigatons of that’s probably that a off. of X.X of sequestration, because coal I the out going and coming interstate seen, landfills. as And all CNG another a is certain but in I’m the renewable carbon natural got the up Thank emitted hydrogen you now, probably is possibility. But are and of most you. I kick carbon actually and I just opportunity natural we’re think it the from the Chuck some on be left stuff a how electric probably wastewater on the right to RNG agriculture, the into States. gas. of and coal, could And of then future order listed oil in that gas, the from the there to can based is and efforts, primarily the a these for opportunities to comes primarily picked doing, is one he long-haul, give second, thing updates on generation

So, gigatons. be And of I about has solve important that X.X to transportation of think that course, equation. XX% that’s going to

and so to solve switch then you really converted the generation you So, from problem today EVs, cars you the to all just transportation then problem. electric over didn’t if the

a we’ve let are bit and our little you RNG So and of doing. about talk kind going what opportunities already Chuck, I’m to done

Chuck Kelly

Sure, Pierce.

think So, up if farms pipes, our that it’s you a Midwest, quite we’ve interstate a area. little color, in few particularly Jeremy on about you they’re Upper located where got, as dairy know,

feedlots farms another connected on Texas at a large there, already looking particularly one. we’ve intrastate RNG facilities we’ve markets. large then Oklahoma, connected originated landfill another from dairy intrastate you have site recycling already at our And some that business, course, our waste, looking there’s up of then in here So, facility, waste are in three and agricultural

RNG and stream, downstream. that been connecting gas our bringing into we’ve involved delivering to it customers So, in

we So there. been the by so three has aspects the accelerate, past years, that see this over we’re ongoing seeing RNG out and that excited

Pierce Norton

which gas so actually see, methane potent relevant. the that Instead strategic So COX, around develop, it part you wellheads, more States, pipelines importantly, the opportunities of that capturing get summarize equivalents. to as I and of Is we to saying of methane COX is these United these the get But from kind in do? in XX of plan, moving than emitted business our aspects you’re the to that air, uplift is more they think, as these traditionally what times far different I just by existing plans the all as natural opportunities. make that, look just the you

reduce the get benefit removing extra of you And you’re to existing footprint. their environmental other help so And that. industries using assets

some essentially relevancy business important as EBITDA. boost around the very to miles important of it relevancy making are future. in opposed transformation energy designed of United the It’s the of opportunity, States is your the million X.X pipelines great part really So the to to

Jeremy Tonet

sizable role to kind Dakota generation, states themselves, opportunity helpful. there was state. for wondering little in just in quite as initiatives are within Dakota, development kind to the and then the in positioning having North really the your it given if what ONEOK the solving up seems teams, and the And time resource problem, country. up Dakota just a North because sequesteration like, kind for very it wells, all for things all bit classics since streamlining like you see parts proving of multiple it North than of of to primacy real a an play That’s these relates that given on other moving seems follow a more it, separate of from Thanks is CCUS power actually really and like want CCUS with

Kevin Burdick

got with is absolutely as and and et permits, – up Interesting. cetera to storage those We’ve we systems, university further Definitely. an This the ability with state and Kevin, And in started X see for there, that understand involved presence it’s has there. our strong opportunities. relationships been opportunity. projects puts of it that much ahead analysis that and Class up that our in the are you the that

as we CCUS. are those would and history and have state the with it to So, relates record involved conversations continue to definitely and expect of long in partnering a track that

Jeremy Tonet

you thank so Got the Jeremy, it. much Great taking this for questions.

Pierce Norton

you. Thank

Operator

from come Michael Blum will Fargo. question next with Wells Our

Michael Blum

to Thanks. add as Pierce well. welcome back, I want just

Pierce Norton

Michael. you, Thank

Michael Blum

been much Btu on more or either just to And a this, Bakken least Bakken at you recovering of I today? to touched in ask looks like And but are ethane wanted you the minute. to returned kind limits us are it them border. How for closed of the directly. some go back northern voluntarily have the

at Bakken. do the recovering here point voluntarily out envision in ethane So, you of some

Kevin Burdick

to that going the actually some to going this Btu have of methane we’re ethane Northern level pulling recovering. not into with we we talk and to, say last been Kevin, the to driven, economic Michael, get about down we’re ethane quarter, out. than on that’s not border. said actual come Other That’s we’re incented is volume recovery,

out both conversations might maybe with kind you it’s a side, understand to with is discussions counterparties up partners a it’s border increasing. in continue math various and of that become production back rate both like. supply resolution and But and here have the GORs spec months. look next something, side counterparties little believe those some the going continues growth, blended what levels to that to At if FERC to on expect or Northern or bit. a we several hopefully demand And it’s go that activity rather pushing Btu TransCanada just gross problem. Btu and the continue and the the we’ll have go to there, the to up just are So that point, we

Michael Blum

for Got it. that. Thanks

looks to it sequentially. were I NGL they about volumes, question ask other The was like Mid-Continent wanted the up

segment just want II that because Just there G&P by sure the make I Mid-Con. understand being to expansion driven the the Arbuckle in is

production cited You decline.

So, Thanks. I there. dynamics just wonder [ph] understanding the

Sheridan Swords

the Arbuckle move us Michael, helps II Obviously those Sheridan. volumes. this is expansion

what some but the is We’re quarter in really seeing producer we Mid-Continent increased did the second methane in in did quarter, we’re incentivize than seeing the we the we’re more also first activity.

quarter the to pretty So, of equivalent where in we’ve increase the our volumes we’re a close that on back level probably is were CX+ volumes fourth well, CX+ seen that we as to and XXXX. to

So, growth. some and we’ve seen some pretty from storm good recovery ice from the pandemic, the recovery

of seeing activity there. little bit We’re a

we will in a stay seen going this volume. Now, relatively Mid-Continent flat the year have uptick little that we’re predicting that forward,

Michael Blum

Great, thank you very much.

Operator

question We’ll from next Followill with Advisors. Becca take U.S. our Capital

Becca Followill

back, Guys, Pierce. welcome Hi, and

Pierce Norton

Becca. Thank you,

Becca Followill

you. Thank

$X.XX it’s grow like it than dependent. on to But mix is going where like where on First It Mid-Continent. GMP, be continues the up the to question Bakken’s fee mixed looks I higher. to continues mix and realize looks the be rate the to the ticking keeps faster its

should expect to So $X.XX or take cap to we higher continue that a here? kind is of

Chuck Kelly

this Becca, Chuck. is

the year. $X.XX the on mix of is a range, we be we a that think for remarks, in believe probably really by The $X.XX frankly, I driven the that somewhere was $X balance would to Kevin’s still thought ranges little $X.XX Bakken. was and good than contract the we a in talked stronger it about it number

Becca Followill

on second facilities. the one’s Okay. Thank And LPG export you. then

export think I record hit you was Any on in NGL for current got But the you guys? May pre-COVID talked, You’ve that we’ve an it facility levels it. in thoughts talked NGL U.S. about

Kevin Burdick

it’s Becca Kevin.

you like be look but the We through the some down, to and it, up. us with picking remains priority is slowed there. pandemic discussions, of very continue those to it mentioned a and for pullback exports strong production, back Clearly in continuing it this at production continued

So have the conversation.

continue rather the counterparties, it’s If then for ethane. or we’ll And to the talking looking at project as will and but And priority still look right it. said we still at And so before, once right we something, that. a us. we’re get announce we LPG

Becca Followill

you. Thank

Operator

Our next with Dounis from be Spiro will taken question Credit Suisse.

Spiro Dounis

morning Good team.

First missed one Difficulty]. sorry, if well, that [Technical I

Pierce Norton

over Spiro little, up please. a if you could again, saying say you’re whatever breaking you

Spiro Dounis

the [Technical the higher Difficulty] lot But in trending are levels case. either. curious activity CapEx range imagine not of a but that’s higher, direction a that maybe pushing

Pierce Norton

think you’re looking I XXXX. CapEx it that in got I Okay, at

picks stay we’re to range. connect. well a on producer bit more to as up, continue spend Obviously, within little activity We going our

at higher that end of move range. point. comfortable the have might range with very the us out So XXXX there towards But this we’re that the we

Spiro Dounis

point. of Just M&A on expressed those will out being there. helpful the here. you’ve hands interest past, some in be were assets utilities change gas marketed some the some the know We’ve that seen of at I of this by

there’s [Technical could there if out curious Difficulty] that So, still enter assets

Pierce Norton

you activity. been during So years down in the make back what that of I’d the most its do to point the always did I on and to the we screw the slow been that level going up, say I in would going the business, of into there’s about to about It I’ve It’s MLPs. just were that XX back But comment disciplined. – guess, that about where be the a original I XX years made assets M&A some midstream opening for is, M&A, intentional. And broad only whatever been be days. comments it’s

or do market that’s to the going So, don’t our guiding be whether we not in participate or M&A principles.

Spiro Dounis

Understood.

Pierce, congrats and Terry. luck good So to

Pierce Norton

Thanks.

Operator

from question Bernstein. Salisbury Ann Jean next will come with Our

Jean Ann Salisbury

sort of recovered? XXX,XXX any kind is being number rejected ethane but all and being this Mid-Con? as is the of Or Mid-Con, know the volume ethane still the there potential you discretionarily from of for it Is that

Sheridan Swords

still August, ethane have There getting we some at did we to second quite still the But off the full ethane think now. Sheridan. number are the is right low. Mid-Continent. the recovery in is get for into being Mid-Continent rejected close This quite But We we’re a in that Mid-Continent. of here’s ethane in is quarter, bit

in the we second And are have so that in the Mid-Continent. little did out. quarter we incentivizing incentivize In some very we August,

Jean Ann Salisbury

this would then with years, This next of of That’s anywhere from would Slide Bakken. ad gas has create, gas really in an is oil you solution just And flat. out But Bcfd for you suggest participate this there’s a And five of it not even X the what like you. resolved? the really at is production near left helpful. takeaway obviously the interesting. production that, do Bakken a new here been that Thank How if over if took? see flat Bcfd, that’s

Kevin Burdick

Kevin. that’s Yes, this on. Ann Jean an Yes, eye good thing something I we’ve we’ll there is mean, keep the time. absolutely is, got

You still displace got gas. some be can can Canadian you capacity on that border northern

that looking on in to the west gas had whether at border, Going to go or moving taking are assets existing northern the to and out other avenues west expansions the back we that ground, and south. pre-pandemic, about advantage talked was of

capacity good So, get is, available things come up, some to to those the we’ve But as point. And is got conversations we’ll materialize. that my back time. we have guess volumes have those see we thing us some do would

Jean Ann Salisbury

Great. Thank That’s me. you. all for

Operator

comes with from Our Tuohy question next Craig Shere Brothers.

Craig Shere

on just you wet is was Morning retirement there of NGLs done. table so getting forward? congrats and some at look well this team. on Or Pierce, going welcome does and gathering this interest to Historically, moment? back, off the Are in the how the and crude Terry the that kind in job into gas gangbusters transportation.

Pierce Norton

our natural I gas future. liquids. the business with and would And gas think direction well the core in see is So natural Craig, defined that’s pretty I

Craig Shere

with just steady good. demand for dislocations, have do Very terms Mid-Con room capacity winter further And market ongoing increased what of we firm in volatility reduce of that EBITDA avoid in kind maybe Mid-Con. to the running could state

Pierce Norton

the tune as to back of net Winter personal. natural Texas is Panhandle is and and that exporter back between up basically and I close the the of lack in about gas, even Uri, the saw which me exports. because various Let month of this defined and we And day. demand Kansas kind February for to area, a rewind a the Mid-Continent reasons Mid-Continent turned production three during Oklahoma, Storm only saw Southwest That X% to the the that winter of during Bcf middle of of the

issue it to of get into again. and if real ever from can talk the maybe the situations of potentially we resiliency about the supply in East, So, how Mid-Continent gas happens chain up is the back those kind South

capacity. there necessarily we but that that things at it today the that’s be capacity looking looking or are would really of that not those So contracting is at, the

are addressing going second But volumes uptick is storage Storm additional that’s little a bit of you which not in Uri. and Winter We some a to there. that some get through

midstream a get another have to volumetrically, the folks there So and very, to point take on be exploration where holistic say were lost it’s going state to to production really Winter and Oklahoma. a of between very the folks, in approach we Storm Uri. utilities customers can the us We’ll few the

And so reliability positive necessarily force. the stability a was and the The where perform. went to, very volumetrically that was not of issue to able price the being

focus people to to in there’s involved lot the needs be of be think I a that’s resiliency to be going going and that So, process. on

Craig Shere

process Mid-Con some EBITDA? of this the Can de-risk

Kevin Burdick

we continue. to think, would Kevin, time. those long assets I and highly is for are have Craig, contracted And expect highly this contracted been a that

from connecting really be done for more that. power job that in does areas, bring good to I provide just other a opportunities future. there some We it’s new opportunities we’ve of may gas the this projects plants done doing what Pierce’s team think to is think This So, maybe comments, whether for has of expansion. or smaller

Craig Shere

you. Right, thank

Operator

Our Energy next question will Pickering come from Partners. Michael with Cusimano

Michael Cusimano

on XXX leaves a the of a you and congrats barrels mentioned. day by have filled that like strategic still is Hypothetically, kind question. capacity new using touched for expandable esteem that day being I XXX,XXX morning, Creek of capacity mentioned. everyone available of earlier of of opportunities XXX,XXX and is growth a more barrels the a the even It volume Elk that Good roles. on ceiling available you this month GOR XX,XXX the and

trying today. rationale fits Elk strategic just you there that the the portfolio beyond available for today? growth for into how Is talk understand potential mind, in I’m capacity Creek? just that So overland with can to that – mention If pass just about

Sheridan Swords

this is Yes, Sheridan.

Elk to as think think I into And need the as about second one system. OPPL think you delivered system. about a when the OPPL you rationale Bakken Creek pipeline strategic

Elk So OPPL XXX the the into XXX,XXX could we for fits be Bakken. a out Creek by other that will plan Elk day that our of the business to delivering achieve into reach will the XXX,XXX barrels Creek, strategic that’s of delivering that on total all OPPL where and run capacity so Bakken expanding volumes into of and pipeline that

Michael Cusimano

Okay.

it XXX,XXX a it so from okay, were more thinking to capacity? Rockies, well into So more before like of Elk of Creek touches of open was that’s a barrels connect day

Sheridan Swords

the pumps XXX,XXX. Right put would now, that we additional if is, stated It on. that’s we

Michael Cusimano

Okay, really that’s Yes, perfect. you. helpful. Thank

Operator

Goldman Michael next Our Lapides question from with comes Sachs.

Michael Lapides

some data Mid-Con seeing the of out the getting run to now look was? at to day on to what points volume comment give Hey, Bakken. rate, seeing congrats, what XXX,XXX and in Permian a a relative about for you’re you Pierce, of the made comment X guys you – Terry of second now quarter the right think together Can on Slide forward I a the wish congrats made in someone to right Have question, same kind kind well barrels you’re the what and call the as point. want is you

Pierce Norton

higher systems. turning these now. look in that at higher looked right of – second But those what quarter. running will I specific We a at have we’re we on those both what are on specifically one the systems I did running are haven’t – on I running both of we say we are we than But systems. reached each have we

Michael Lapides

Got in of that upside here? you material given a it. on guidance volumetric when there’s XXX,XXX numbers I do guidance raise Do comment then And to look across G&P the volumetric you little NGL kind didn’t surprise today’s guidance, your this at throughput? your and think the

Kevin Burdick

Kevin. is this – within still we’re Michael, Well,

some strengthening within mean, average, tough other some that’s segments. both annual when still related those that as would pretty But first there – you’d look is, at an to going volumes. activity we range the I on it dynamic you clearly, the winter see quarter be the had you as a numbers. in definitely see with We’re to storm upside

did going the guidance you’re So, half inside first much volume in of the than the but the to tracking point. I stronger at you see in this half, year think a do second still

Michael Lapides

and Got had question you it. Super I capacity, about can helpful. on period. And outage last know the just then this frac talk you

are So be may What hard? actually a little you earliest fracs and you might the would utilization need the your be? when new think it of capacity

Pierce Norton

Well, right now, the off get go forward. we the that through utilization as of can to is we of that as because much quarter from them, we inventory trying fracs frac we’re second carryover backlog had our as

when off. to frac volumes in And seeing strong right continue to that capacity, In see our grow. continuing project that understand we’re our can that come terms we volume growth hoping we’re And to we’re to of in kick time area, that adding new up trying the evaluate pretty quick. we’re good is

Sheridan Swords

MB-X, talking be up would all that that a $XXX just I finish million we and would Michael, couple to add But capacity, is you’re project. just doing add completing that

Michael Lapides

you year? that But next is Or it. think needed think Got term road? the it’s more you be do down longer could something

Pierce Norton

it’ll up longer little to a could get we up, next needed Well, possibly year, be bit I get when going. and it take think than that it it

So, there’s a the industry to possibility probably bit still steal a still, complete be to we short-term. at little in capacity needed there. that’s I need could there’s frac now outside than But a why we But longer could year right it quite look done kind be longer have get bit to than that need take a to done it what ago deals that of next the of up in year.

Michael Lapides

appreciate guys. it? it. you Got Thank Much

Operator

question from Sunil Seaport Global our take with Sibal We’ll Securities. final

Sunil Sibal

back of a bit welcome us, your seems come public then private been activity public to afternoon, volumes me, his producers debate quick Pierce private. hi. Could A in retirement. levels, and Bakken? has Yes, like of on couple to for congrats versus producers from fair Good there of also remind Terry much how the everybody, versus and questions you between

Pierce Norton

think We’ve when got we’ve the about obviously, there’s of got you forth. publics ExxonMobil, Continental and big, lot and there so a and – ConocoPhillips, out

rigs in seen it’s we smaller but an a distinguishing more do So are have public’s some between the coming up really who’s really their haven’t the on of increasing from pretty the But are move financial majority those activity what of factor customers is, company, those back, how our bringing independent Bakken. just we the depending customers year through into across of have et as cetera. and they’re their situation viewing balance all we much sheet, this board, XXXX. But the the about rest talk seen we privates,

Sunil Sibal

be is volumes, Got forward? your about but I there like, versus should look you at QX, QX OpEx when it, seems I driving going had was your a sequentially. that. for were curious, that? we OpEx uptick which then fairly thanks And And flattish how decent to in thinking is lower specific any thing

Pierce Norton

run of better, NGL than quarter-to-quarter. to rate and that, decent here. that It timing, to forward, occurring this maybe the use. do would quarters out and think run going to than we’ve that current Creek a operational execute year, grow as later segment. as – starting from in some expense had some weather winter, rate a little it when really of typically of will be becomes of think, probably able other being gets the Bear other was the sequential with that But projects number kind a on pretty I we coming uptick some close a No, couple was We that the just

Sunil Sibal

it. Thanks. got Go

Pierce Norton

you. Thank

Operator

remarks. closing Andrew session. it for back I now question-and-answer turn today’s concludes to Ziola This will

Andrew Ziola

earnings for early November. the call team details release when will joining – IR right. close our All you you in us quarter, Thank We’ll a quarter the all date. conference second Well in extends excuse for third the you. starts until provide later me the day. for October, throughout thank be quiet available and books our for we we period at and Thank

Operator

today’s Thank participation. call. your Ladies you this and gentlemen concludes for

phone You your may lines. now disconnect

ONEOK (OKE) 4 Aug 212021 Q2 Earnings call transcript