OKE - Earnings call transcript Q4 2021

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Operator

Good day, and welcome to the Fourth Quarter 2021 ONEOK Earnings Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Andrew Ziola. Vice President of Investor Relations and Corporate Affairs. Please go ahead, sir.

Andrew Ziola

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

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

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

Pierce Norton

receiving and Sheridan rate interest of you Hulse, join our various stable Strategy highlighting recording Executive Mountain EBITDA XX% annual Yesterday, Thanks, our balance announced economic performance, and as XXXX, appreciate me announcement economic achieved Affairs; a adjusted sheet strong grew we in strengthen commodity year other eight-year We are Officer compared Andrew, expectations. Chief continued Natural MSCI, NGL during receiving gas resilient Human announcement, Gas the and pandemic-related service to in and in from Corporate Vice your region of Rights despite today. EBITDA Gas. Rocky Walt an ONEOK Index. and with XX% cover assets. our volume Natural earnings and year assets during a call That Campaign got time continued that well, on Executive Operating period, Vice Equality rating a score of we emissions upgraded of Liquids; greenhouse to great reduction doing consecutive volumes With once and Vice great only Also record XXXX recovery XXXX Burdick, These partner Officer. growth. questions investment natural a available Swords, Financial your again and company also and President, In ESG good to things year ensure our a of and Senior fourth Senior of a and growth power the With challenges, financial Chuck the the equates as President Corporate perfect Thank Vice Kelley, community workplace, eighth yesterday’s AA today to full morning, to adjusted cycles. gas XXXX, and provided us. quarter latest the many Kevin guidance our XXXX including lot earnings remains to and taking lingering is and Chief President we answer ONEOK. a We’ve a we’re and few on President, provider. provided everyone. for target, milestones are

improving We to and across operations. market growth volume producer strong expect demand earnings increasing our and drive activity

financially positioned XXXX many come. well to and years are and we before, operationally said we’ve As in for

call the for for XXXX, team what so uniquely ONEOK reiterate Before I over hand long like well I’d to more to details the on makes term. the positioned

basins. assets, the integrated shale and extensive U.S. our productive located First, which of some are most in

and gas and and for reserves steady are still crude natural levels decades in to Our announced production Williston Basin, well in NGL XXXX. customers many oil with oil grow means due to ratios. growth In gas sustain ONEOK have capitalized plans rising particular, production the to of proven

responsible environmentally dedication to our operations. Second, and safe, reliable

we good ONEOK. environment provider, is a and areas partner us and we to value reliable core Our It’s where a for for strive commitment service safe be to critical to operate. in the safety the in be

Our a ONEOK, of source for ESG-related we’re is to to committed performance progress. make and pride continuing

continues because of With extensive commodity the are I’ll through our important and turn an for core we capital discussion drivers has the sheet provides projects segment-specific operating the to And type financial the significant in track balance finally, credit strong the business reduced excitement to customers. team future this large short-cycle over growth models the $X are in the that returns. flexibility. at and a these disciplined attractive vital and performance. our significant advancing forward. We’ve returns. and believe to projects to of have below services these our which and projects intentional advance natural team and resources optionality lower, innovation adopted our investor will Fourth, financial Fifth, and cash experience capacity products and record play our role complete, X and ratings, will deliver to drive of world. energy After have resilience transformation. been flows such call experience. systems confidence team of leverage alongside NGLs. and over We that, to prior And and proven we to have times completing gas cycles, built-in business for moment depth infrastructure more leverage growth. demand for that for This and energy of track ONEOK’s our company and of the significant grow I Third, the in pandemic, Walt billion factors years. because the This team providing an that grow discuss now have our our needs and our investment-grade and proven future. opportunities who increasing continue a It for of than a bolt-on record changes adapted And technology is management

Walt Hulse

and totaled quarter for quarter for and and XXXX income billion, periods representing Thank of you, same and respectively. the increases Adjusted XX% full for fourth the billion, million respectively, million fourth Pierce. EBITDA $X.X XX% ONEOK’s year net totaled the $XXX $XXX $X.XX full year-over-year year.

important X an continued strategy. below through debt-to-EBITDA our deleveraging Our was marker XX December and net times, passing just

fourth We XXXX, than total In and XXXX. hand we aspirational continue on and maturing as view $XXX prioritize currently of debt with debt our paying million on November below more or X reducing our lower off proactively by debt-to-EBITDA cash open repurchases with X.X opportunistic being in Xst reduced to million goal. leverage times times $XXX We by nearly long-term quarter planned related outstanding earlier Rocky market O&M have higher natural no and maturities employee-related fourth costs. our before liquids discretionary debt costs operating maintenance was gas the growth These were the in higher projects natural our completed due in driven results segment. our reflect region quarter to and XXXX. volume of pipeline offset expenses Mountain that by costs benefit quarter gas Fourth in

net with As $X.XX income XXXX of yesterday’s and we EPS guidance, of including midpoint financial provided Pierce diluted mentioned, a $X.XX per share. billion earnings announcement,

X% with We $X.X our a also provided an billion midpoint, billion $X.X EBITDA representing billion, $X.XX compared XXXX. adjusted as to range with increase of

Winter earnings stable by We of first our earnings quarter for operations. more Storm year-over-year for gas volume will we at gas when natural both higher segments, expectations segment, detail in gathering the XXXX. Uri liquids pipeline In processing midpoint across natural expect double-digit growth our expect gas be volume driven our the and to adjusting the natural outlook. and Kevin on provide

could assumes towards higher the more prices quicker higher WTI earnings which activity guidance activity in could associated our Sustained end guidance Our and XXXX range. with prices lead ramp, volume drive the of range. crude $XX to oil the producer low

in Lake expected We $XXX keep increase of midpoint early which up expect XXXX growth volume approximately mid-XXXX. including This the to includes in expenditures maintenance necessary III total with reflects Demicks and and investments expectations, capital producer in complete investments million, MB-X capital. and to the activity

Our compression capital expansions to such growth connects well meet and number pump customer stations, accounts other routine for high-return other of debottlenecking growth routine as our needs. higher a projects and projects

guidance assumes Our of impact inflation. also the

and on mentioned natural previously, CPI indexes of typically and contracts. we’ve many are either rising These liquids, escalators tied from we to PPI gathering processing and As costs. provide or our protection have gas

escalators over update. as now forward. We an or costs we inflationary Kevin the for operational pace to exceed types of expect to call move keep I’ll turn these

Kevin Burdick

alone, of our team as gas volumes doubling the Walt. in in quarter in Rocky the XXXX XXXX. ratios. needs volumes natural Mountain compared quarter saw and amount region and third our region, higher we’ve quarter volumes continuing activity quarter a volumes In the in Natural Fourth show ethane significant momentum Mid-Continent fourth rising NGL NGL levels. the see customers continued reduced connected for as volumes volumes to in processed to for gas assets in into you, particularly more processed where strength, of significantly third X% XXX XXX to decreased with We to quarter and the levels. -- record increased our and wells, the XXXX, meeting for continue NGL XXXX, great oil of increased with more nearly accomplishment while due increases Thank with compared quarter Rocky provide on gas a we volumes from increased seen fourth Mid-Continent some Mountain than gas the recovery the the X% the to our team the and region, natural Overall, XXXX. in third NGL from in saw lower volumes activity total third-party

XXXX. are natural and by producer increasing Basin completed from At Now, in XXXX. our X% a an in gas an ONEOK our projects, in volumes increase oil the Williston volume volume opportunities recovery the expectations supported in across NGL at volumes system. recently result ratios rising activity, higher increase and ethane to taking compared gas would processing closer midpoint, total These growth with third-party NGL and guidance look total XX%

over volumes County, expect With Bear plant the continue up the seeing Dunn ramp and Creek recent already to we next years. will plant increasing completion two the we are of expansion, three our to from

levels our we the looking natural quicker higher XXXX, even the consistently outpacing are producers factored growth compared from and and from Basin, our However, levels activity up, expected very customers processing In into connections. new by could fully expectations. and Williston liquids providing not recent the potential tailwinds plant completed with plants. in activity continues with we at volume expanded continued private gas levels The volumes existing with ramp. to also pick expect recently be area to our third-party In increase from expectations, an particularly activity supported Mid-Continent segment, guidance

processing of plants connected is XX% NGL the than natural gas Our system in more the Mid-Continent. to

Basin, more in pipeline to basins. by any and in increased NGL region if Midland In NGL the NGL with likely volume Permian in dedicated growth volumes compared The and Switching per and contracts our increase as volume Delaware to from Texas exports. to expanding on recently well as the incremental come than into driven new XXXX, West volume a processing ONEOK, expected Demand day with barrels petrochemical acreage. ago is our is to double-digit primarily years line XXX,XXX the signed. facilities few gathering on entered demand of from the have in from activity long-term regardless is and continues activity increased expect producer growth growth ethane. new we contracts on provide So, we to XXXX

full Basin throughout in recovery no Our full the Rocky We’ve assumes year. NGL ethane volume region Permian assumed Mid-Continent the recovery. partial recovery Mountain guidance and rate

fluctuate anticipate However, opportunities but to recovery. will our amount year, throughout the conservative we a some do incent assumed XXXX in guidance. This is opportunity

the on segment. and to natural processing gas Moving gathering

in cubic volume expect midpoint billion to regions. In Rocky expect compared region, Mountain both feet Mid-Continent and in per the the growth We with we grow at XX% Mountain XXXX and this nearly day Rocky year volumes average X.X XXXX. processed the

have the XX are that are locations telling barrel. than most consistent our have been five inventory XX approximately of core XX% customers oil of efficiencies years single X,XXX XX% more in during five same increase. us remaining. That’s rigs There period. with totaled operating This this will This The the is per highly annual are production the in low X XXXX, drilling remains more digits. million per the Authority two our dedicated basin economic day. recently on that expanding. the estimated currently with our across North continue Just to is resilient inventory in decades completion through XXX last gain the and has rate that gas spring, drill what activity feet and years and of increased added at $XX crews we expect enough as to alone, as and highly basin and and acreage. them Dakota Basin an region, the years, crude over last in profitable acreage, rigs growth Pipeline on proven production as still increased crews grow The GORs rigs are have in Williston completion DUCs cubic that they time earlier, nearly Accordingly, while to the Producers completed productive. volumes is than XX basin

XX wells billion approximately connected system. volume previously, per to said of enough maintain oil rigs we’ve rigs, As our provide with system ratios year, XX X.X on XXX already gas drill around to is which per rising to production combined growth. Any our feet additional would to can day cubic additional of wells the

basin-wide DUCs our with more more XXX dedicated Additionally, XXX on acreage. remain than than

connect XXX this year. to Mid-Continent XXX in to region, to expect wells activity increase. the region In continues We the

nearly more XX% We to pipelines connections fee-based last to expect wells double compared to with we processing volumes our increase fully XXXX. earnings XXXX, expect to In and in and well remain approximately segment, XX XX than in the the transportation expect be to contracted region gas with natural XX capacity compared year. in XXXX we to

open XXXX, will capacity the capacity billion cubic billion we’re season in than to X.X Texas of more natural Following storage our storage total feet. a feet, which process in gas XX our by successful system-wide expanding increase cubic

as We critical continue with remarks. concludes work around. services on year customers are seeking highly which Pierce, valued and these my storage long-term our that capacity transportation additional system, remains used to

Pierce Norton

you, XXXX and financial you, Strong Walt. and growth. in results thank year provided another Kevin, for momentum Thank operating of have

and from with benefit operating the systems, in leverage to to continue grow our incrementally We our built interconnected customers. ability

than is another our X,XXX economy optimizing run. worked to serve that and values, focused global Service continue like customers our core core very assets businesses, our one invest dedicated weather Winter responsibly the employees and more of Storm tirelessly severe events it We Uri vital energy to delivering something continue and remaining our Through well. reliably. they ONEOK’s in is operating necessary XXXX, through staying for to to know and the products on

XXXX. performance meeting has questions. ready that, answer customers’ and us dedication operating set enabled and for of in our With employees’ responsibly, XXXX another operator, to year we’re while up Our safely needs strong growth to

Operator

Instructions] today And our comes Wells from first Fargo. [Operator question Blum Michael with

Michael Blum

incentivized ethane? XXXX. that? to go us you rates comments on wanted changed Can ethane of I recovery going you’re to directionally back sense charging what’s a drive give And that the the on incentivized to you have just in that

Sheridan Swords

Bakken in Michael, -- what we to this difference we Belvieu. natural ethane compared that between drives before, in is What is Sheridan. prices the as said prices Mont the gas

higher spread to wide, so, And going ethane if to the out incentivize of is more that what’s drive to we rate that that we Bakken continue see will capture spread.

new -- reducing not it’s or So, tariff we’re not putting out a TNF fees.

to widened ethane literally we actually price than is ‘XX. wider We’re gas in prices, which out capturing what today saw

Michael Blum

we’re projects appreciate give your where then, question, you just thoughts proposed, closer a the on -- natural more maybe can pipeline Bakken? going the a own including the capacity? some your related great. need And getting us place Okay, gas I some we’re gas of latest you Thanks. expansion out that. think of to to Do

Chuck Kelley

will open it, do. We years and on do, surprised I Energy’s Chuck. three to see think frankly, call, time all you producers made I needs be stakeholders, realize if be they processors, the season pipelines that decision year spring. as let’s have takeaway, call believe may is that. you need side the we this say, that this said resolute And of heard to in probably line. this TC and effectuate next, don’t Michael, some Yes. either an the Bakken And

underutilized Basin, Northern pipelines we’ll I in So egress. pipeline able to the go Bison between and be and think that Border’s manage River Express ahead some Powder

Operator

with And question Jeremy will our Tonet from JP next come Morgan.

Jeremy Tonet

guess, would that just and could here, us trajectory kind and you there or wondering Bakken NBPL if the the of more on about I heat here, or up given guess, viewed little would just it’s less walk need rate pick high too the the to procedurally heat through, steps if bit next be get in any in I content a to share there? could wanted you content adjustments thoughts Just thoughts accepted, ethane

Kevin Burdick

it’s exists. Jeremy, Yes. Yes. phenomenon Kevin. still That

in denied a we challenges. issue. pipe and a Northern basin were had the pre-COVID, the -- was with of against you really a markets work new some bit we And downstream little proposed wasn’t If bumping tariff where that to those it go up FERC -- if there lot to discussion Border a BTU asked back hit reduced to back got little produce and the an ultimately and with information. more and volumes it work COVID shippers, rewind

back levels. you pre-COVID at capture we up today, gas to are look Bakken the If gas production the or in

we turns then that market were the reducing the back raise If keeping only being from is levels border ethane, BTU basis, an we’re persistent is content content. which the we on thing the going the on and around that that’s heat So don’t to ethane problem incentivized that seeing that’s pre-pandemic. recovering incent to

BTU understanding, we this to ethane But a It’s will our the So okay issue, BTU to be with that absolutely on recovery if year. up FERC a we heat a would end go ethane of spec if meantime, back back in do recover because pipe. forced Border Northern those always to conversations. have continues make sometime that proven -- with we’ve a can limit, they recommendation full okay But at the the content rates. that’s

Jeremy Tonet

informed some while think little guidance, That’s was curious And pivoting I it any kind end, I of the a what’s you or could for puts guess, it. color towards of was formed formation a a overweigh and just kind takes. guide the today? Could And we here, the this the the where any the helpful that if there? thoughts imagine for the range? of other And kind guidance as you last on minute happening that covers, Got high and today kind night, in fall if maybe and But of about there. see thanks of context how we Would of listing just at of how guidance provide it to applies guys within put kind that you world you ago. range. the was

Pierce Norton

Pierce. is this Jeremy,

I our backdrop demand today say described, the us. metric know really volume our good that capacity we we our improved think, of guidance I’d that of and then given kind than asset growth, kind is that all improved prices, as and you that driving which is midpoint. impacts volume and probably given better today have this outlook is what’s or commodity

Operator

Brian from And Reynolds we’ll with UBS. next hear

Brian Reynolds

on a end the Maybe towards. follow-up be which the just and range, seem to pointing we the upper guidance about of guidance talking

Just me you upper G&P curious if throughput. seems growth G&P kind growth of of can It the the NGL a help bit reconcile versus higher. end little like the is

of into curious if commentary is can ‘XX, ethane a with just rejection kind bit the more a that conservative of little Are around estimate bit of you assumptions. give kind recovery ethane you ethane recovery upside? assuming a Just little Thanks. to or

Sheridan Swords

Sheridan. is this Brian,

the on I in we think to that what is Rocky release look an in increase you side, what was G&P need the noted at region. our Mountain

NGLs, the less is is that the the of to contributors X%. than growing increase across one On the big our And was regions. Mid-Continent

also for And XXXX. down average we our NGL guidance, less than bringing that’s our in incentivized the in So, segment. ethane did have we

you little another that’s bit that as well. a brought reason So down it

Brian Reynolds

high just color. kind end as Really implies on leverage appreciate a allocation. [ph]. Great. the that of And ‘XX X.X of guide there follow-up exiting The capital

get the end opportunities future leverage of return capital could into we long-term the Thanks. as and the evolution think about Just the ‘XX? should how if year of into and around curious target about talk we you of

Walt Hulse

in we’ve head X broke pleased our Well, progressed you that as and metrics mentioned. we’re with our direction, on leverage and times through we that how very

to the trying between and a entirely metric. I I debt-to-EBITDA think triangulate focused that metrics the as of on on just call, not couple we’re said different last

dividend focusing also payout ratio. on We’re a

we’ll our see line going look to at in under about bit metrics flexible. right and direction. we’re trending there’s that room XXX%. that look we’d no the again and a into in you like at ‘XX And get starting As some the as also XXX% capital and that to doubt forward break more be to think And that that’s flexibility and as get guidance, the under the broaden we And progress. in we and future. as But year continues move these little see

Operator

with question next from Theresa Chen our And Barclays. comes

Theresa Chen

in if well you XXXX I outlook, some was on GOR on outlook the as projection providing mind wouldn’t into your and wondering production your areas the as service outlook. color maybe of incremental beyond

Kevin Burdick

are When it? the about see Theresa, you as crude you production, talking Or... production we say

Theresa Chen

By our customers.

Kevin Burdick

By our customers?

Theresa Chen

Yes.

Kevin Burdick

that the it’s I flat mean grow when slightly. think will Bakken, -- we in we I it’s level gas the production yes, grow then what some of be -- grow schedules, we’ve at mean, it -- us. crude we don’t believe to And believe we we think telling crude outlined about we me, to excuse percentages customers our going will to about growth, previously. on in cetera. are see think be at our going crude growth the believe going is that XX%, based there on production the completions et we obviously but do With that production

Mid-Continent. guess, to I down going the is declining. that been we’ve that This we’re flat STACK/SCOOP saying thinking how that’s slightly about one So,

with pick we’re looking it increase activity in a recent However, the environment. slight probably type at up,

grow their both, what OWT is and and recent Permian our to I our on some West And consistent has of obviously, out going system LPG the there. we think well said get continue fair Texas growth, to believe have with shown and that’s share calls as some asset others with our the information. with we’ll

that So in we the believe growth can Permian. we in participate

Theresa Chen

kind just assumptions what XXXX sharing commodity mind of And you guidance? your price underlie would

Kevin Burdick

‘XX. Well, like that’s things low as for were type for crude that, at we activity number we look mentioned, where Walt using XXs a levels and

environment, if gas have we tailwind prices. it a NGLs definitely would our and little been these how of is impact us. -- that so it in associated huge looking of As would I was we commodity be of think doesn’t at. really at exposure that that now we’ve business the $XX with the prices about have contract, a we back exposure and think of a we mean, rest the right bit of that commodities, But the driven much you crude to out

Operator

we’ll And Colton next & hear Pickering, Company. Bean with from Tudor, Holt

Colton Bean

have I this. looks G&P on guidance, So is similar Fee year-on-year. you just Mcf it the touched think range. EBITDA guided XXXX rate to like effectively per flat may is But a with

sounds would if that why unit And be guess, margin Bakken through I sounds flat but comprising of margins that bit for you greater So part be share well, seems just of it like deck, a the broadly, you’d us then, like unhedged better is -- may it could skewed a commodity price walk and volumes, have both a it hedged by a like outcome there. volumes?

Kevin Burdick

Colton, talking G&P, are overall? are about followed you not what there. or I’m talking asking specifically about you we about you’re exactly sure

Colton Bean

commodity -- segment But a so Just if the I have on G&P basis kind G&P versus looks like flattish. volumes, yes, per segment, unit the Yes, just M, at specifically. would it the is I EBITDA EBITDA G&P of the looking difference sounds would side, a And that growing as be on it have rate escalation may to thought that fee partially as seen the it deck. then, in like is. with quickly some price attributable the Bakken

Chuck Kelley

excuse thing seen Colton, Chuck. One guidance. me, is volume One I add would this you’ve our is thing --

part piece our these are obviously, and prices, have exposures, we larger up XX%, that, roughly, at have these volumes call to And So, contribution it, some XX%. And proceeds commodity percentage do our year-over-year. EBITDA. of as of a you volumes

So rate segment. our Obviously, the $X.XX fee higher. the average is Bakken $X across is to

not question. I’m So following your necessarily

Kevin Burdick

factored that that’s there rate quarter-to-quarter. is thing another periodically fee around just in seen bounce I we’ve Colton, think

give our you rate to the average you for move That we’re fee the specific around doing we’re -- So, on depending best producer characteristics. year. can giving

can has fee rate wells all that one of given completes a sudden bunch down. a if contract more of producer So, of with a a lower in that fee, move that a quarter, POP actually a

what bounce getting to you’re it’s but going So, is blend, a there around quarter-to-quarter.

Colton Bean

I No, understood. Yes.

You up can follow for that.

EBITDA at high relatively looks looking level, flat. it like is a the from it per M just think I

compensation So into you Bakken there, then know bit that. but with factored follow I commodities of things, on growing confused the that. can OpEx both and just And a up mentioned side on was

an So, expect can how QX give relative you you’d progress us that idea of to levels? to

Kevin Burdick

the on had QX, were higher obviously, timing our some in anomalies of mentioned, of discretionary projects. the with the employee Well, I a think as Walt costs and that couple -- expense

year you? related -- are historically, summer of two the big do grow then them think we’ll get of run costs will to from year to you see see. and help you timing That done ‘XX which relative projects Bear going -- I’m you’ll a trying and And here. we’ll I have see. the perspective, we’ll then some that expenses, of the just II a you’re over a about our see And full a of -- kind train rate, my and drivers with the of lastly, ‘XX from level If increased increased look Those at then lot of just expense but thought the you’ll of just to Creek by volumes, sorry, see fall lost to timing a in the end the year.

Colton Bean

Thank does, It yes. you.

Operator

Jean And Bernstein. our Salisbury next question Ann comes with from

Jean Ann Salisbury

wells volumes a flattish projecting than XXXX. in I you I timing more It like in you looks more oil-directed something much basically had versus expecting about but it connecting XXXX, the Mid-Con, is a or question in gathering processing you’re else? Are guidance. thing, did many Mid-Con and or you’re am XXXX totally drilling, missing

Chuck Kelley

Jean No, actually, came light, We -- more of our is that roughly think it X% little be an a I to guidance be X%. increase X%. up like I might Ann, Chuck. volume we think see this might

capitalized right than slightly in X with do well well XX a good publics of guidance private coming to now. and got line rigs And last from our we count We’ve sight acreage, higher we operating year. of guide in early volume put XX So, our have on actuals to out the on behind QX. did couple that QX that we

say I up, So, our obviously, will volumes XXXX. Mid-Continent would relative be to that

Jean Ann Salisbury

And Elk pursue Bakken basically have are be just Creek expansion? of full Elk doesn’t full Bakken about then you Would and to pipes or Thanks. you to helpful. need timing both be it? the be how That’s Okay. to Creek thinking to approaching full

Sheridan Swords

about think Elk Creek Jean Ann, look both we them together. When Sheridan. at expansion, do we this is really,

our So sustainable we east-west volume pipeline will the to we east-west and Bakken need we to the call as be both to the back that we on OPPL to and next portion that on we we on when so may has what to off at decide And come on the understand that section pumps expand. to Elk Elk Creek increase that, really, Creek optimize as we optimize look can OPPL move delivered see earnings. expansion

at when that’s of we going look So, what kind we are forward.

Elk Bakken we meet and And an So, OPPL to capacity with just to needs. plenty when connection right now, our feel have we expand. of Creek, be going it’s the option we customers’

Operator

And Lapides question from our with Goldman next comes Sachs. Michael

Michael Lapides

curious, of world’s up, in cost everything the Just commodity... meaning

Pierce Norton

barely Michael, you. we hear could

Michael Lapides

Hey, me guys. you now? Can hear

Pierce Norton

you There Perfect. go.

Michael Lapides

of every it your changes connect the Demicks we maybe relative which at XXXX? kind for average Cost up. et quick. Can talk that’s cost that MB-X forecast, for rough cetera. CapEx well on labor, your everything or or at is are cost original So, in you trend you to an had look steel, whether that’s impact about of new either industries? there, or impacting seeing all what out Inflation’s expectations your were, Real in if capital budget? all And XXXX

Kevin Burdick

on what seeing projects articulated time, Related a was Lake so and numbers cases, lot site, those from steel we on and about the Not us site. of everything, it. far everything into we’ve lot Demicks the already to of standpoint. cause think in at gone deviate Kevin. would installed -- a we road as and II where we’re purchased, bought significantly, you baked about Bear many recontracted when those stuff materials, down anything rebid that Creek were and a are guidance the and out we the think cost that not it’s Michael, to from we’re Since that III, that

We are far, of little seeing outside be But is developed -- norms general as your that else probably we philosophy the everybody up, the on together. would we put services. of what a guidance is, when just nothing consider tick would materials that and and so kind

Michael Lapides

the over what connects of lot to seeing not you’re Meaning couple of seen cost new last it. well in to Got the a do relative years. pressure you’ve

Kevin Burdick

I into again, again, maintenance the in got growth there capital But from that’s of the be No. some may our of budget. prices, all minor we’ve mean, and materials. what a baked uptick

Michael Lapides

on about little Got MB-X, this the budget bulk it. the the evenly there’s the think of spend the year, is it next or we for when weighted across frac of years? this and that capital more is year, And just year in a in impact the then, really trickle

Kevin Burdick

early capacity in Well, heavier believe quarters that think your we out year. to everything Demicks and there. this because we it -- available. can spend provided that we’d doing next will will and like be be We have And we’re I more MB-X the year accelerate both, III them Lake will completed early be do even to

that’s factored some And guidance of into the as well. expectation

Operator

Brothers. with to And next Shere Craig go Tuohy we’ll

Craig Shere

level it the the seems Congratulations reflects fluctuation regards Hi. was impact just some NGL to random I was it on maybe With volumes to what to that’s Rockies or sequentially. does the ethane, $X.XX it starting but of the or increase incentivized And PRB? all actually wondering if progress degree ongoing sorry here. it, the pricing, like I I’m realized missed lower just

Kevin Burdick

include what Craig, referring QX, this a think is think, -- pulled No. That you’re Kevin. does side. slightly is function. to. referring is pricing, It I that G&P you’re NGL there, I which in the is That’s what just realized down our on hedges what from to

function NGL... it’s the It’s So, nothing to our hedges a of on, prices. going with getting lumped in do the on just all got what’s with

Craig Shere

$X.XX. the versus $X.XX the about talking was I

Kevin Burdick

rate, or Rockies of the yes, On the Elk that ethane. a function incentivized Creek the is

penny on. incentivized do It’s ethane. So, going purely that drop anything nothing to the that’s contractually in with has a

Craig Shere

connections flat, guidance, third XXX the year and you. production run the among holding we’re overall rate, that quarters, And subdued say, more XXX well rig prospects same could productivity the much pretty connects, been XX If what we think a of versus versus time, saying well what higher that at GORs, time, level do are quarter. had in in about about the an And a the of talking or keeps GPMs you even have -- that Williston thinking connections -- all improving. Got but seen been X.X rate of over over you XXX keep flat year-end volumes of volumes well increasing. some couple the kind for have you’ve been

Kevin Burdick

is Kevin. this that’s possible. I Craig, Yes. do think

be to continue We surprised.

and continue better. I think better remarks, to as my I get said in producers

to to gets just to going that wells as ratios fewer well as to and gas prolific increase, need each So, you’re more the oil continue flat. means production hold

each we’d over several the it to last wells years the production. will trend going the obviously stay larger. now, like though seems as right a see pace baseline us getting like we’re of flat, number been Now, same But on to at even the deployed same capital keeps year, grow that’s and allow the

So, that absolutely continue. trend could

Operator

Richardson And next Securities. from Tristan comes question Truist with

Tristan Richardson

Just one from me.

to return if on about a Just can advantages historical year’s this capital capital think you ramp maybe online, clearly, these large once beyond and the projects. on there’s lot on about on thinking cost return and previous maybe in you talk volume capital? or or projects, of about And the incremental projects budget returns capital advantages resuming relative on for XXXX returns your

Walt Hulse

assets a we doubt trend we built. an our on increasing continues operating the that on the there has return expect meaningful and as that Tristan, grows, fall to to pipeline enjoy really we’re return bottom to invested to or that have growth to into -- our continue continue invested there’s that put that leverage here we year-over-year see volume have Obviously, and enjoyed station don’t going forward. we capital operating capital, no upward to and leverage, but and -- back pump comes capital to seeing capital in line,

Operator

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

Sunil Sibal

for Yes. folks. clarity. all Good thanks And morning, the Hi.

follow-ups. couple a of Just

strong also was of very in it QX. this of trends? or about in up, little region, Rocky see and you weather should activity we seems be some well I completion ramp So, should subdued that we it in First growth events? should the completions then thinking we all, what a of bit a QX was cadence sees like can other despite if curious QX, considering strong especially in Mountain, typically, kind growth talk a of volume well that be expecting some in

Chuck Kelley

XXXX, more is resembles coming you in for back-weighted it lot We a and momentum, about some said, XXX-plus We What this XXXX. our and was QX, have some of of in because XXXX. cadence momentum, the ways, back Chuck. say just well it to out as obviously, connect as this carry well Sunil, connects QX. would probably a Volumes is QX, weighted had, year laws the it’s into XXXX QX so I’d cadence dip of more spring. QX to with that But here frost typically, associated -- year. the would little weather activity. connect be and QX. QX well resemble every did into

Sunil Sibal

million one up follow-up breakdown it. sequentially, $XX on like, I realize then, that Got cost think QX that were onetime way a of so good the What’s costs QX. versus costs? in issue. versus ongoing the about seems about costs And to of or kind kind

Walt Hulse

in mentioned will -- full if I like of I said, too. think year a guess, before, to XXXX overall. XXXX, little full be the our Creek Well, we up bit kind see I Bear costs at we a if do of year the way just about it, look think you’ll I just

to forgot earlier I mention was item taxes. other The

our in we’re type in with are we’ll have then system. ‘XX, across just the we’ll see which with those the see ongoing ‘XX versus our And that an You’ll things. so ad seeing valorem growth, volumetric associated of volumetric taxes costs increase growth the

Operator

Energy Michael Cusimano from Partners. Pickering comes question next Our with

Michael Cusimano

But, And your you’ve any there? if area growth competitive guess, connections advantage can plant And if talk And my if in maybe made your you here? of the then, in order Most from to, about that have questions just in as at just I lastly, grow there? footprint looked a that’s you’ve adding acquisitions you view the what Permian? then, progress been answered. inorganically

Sheridan Swords

to the look still up we competitive there Sheridan. our people. Michael, When we place have to is competitive pipe continue because be today. of A continue lot at this a very we sign advantages, in Permian, we more

connected source. We’re unintegrated a to players lot want an alternative that of the

also grow. that on We cheap system continue expansions to our have can we

our So, to we to grow. out continue basin, and competitive volumes see because the alternative can that to other people a continue we provide

We’re seeing growth. we’re seeing -- mentioned, as we double-digit

also seeing We’re contracted. from growth we’ve already people

system. system, it we there on their question... out do long-term volume other have grows The to our And in comes place, we M&A as place. in the As contracts every

Pierce Norton

look I’ll of that. it. yes, versus categories, M&A kind at look Michael, all weigh a basins. drop mean, do them I proactive two Pierce. kind of on of these we at of We is defensive opportunities in This So, kind play into a

capital the benefit a to look these, a as you NGL the look places to our especially at at look looking have when we prices then relates get NGL opportunities when that the of business, that feed that lot in our when the place in to you of just it pay As at deploy the where see maybe these don’t you G&P shareholders. we being contracts length maybe business, and -- look would to it our our you as you at at

look So, at found there. attractive haven’t we is so think far, but we them, anything yes, we that

Operator

with Kania question next from comes Wolfe Alex our And Research.

Alex Kania

two Maybe questions.

First is, missed might you in Rockies. were you out at QX. infrastructure you on And said maybe just I us, pipeline it, of have on remind but was thinking the your about it the the of I could kind the headroom XXX,XXX call,

And of you if components of for XXXX? that the kind commodity little talking G&P assuming the for going outlook would Sort expectation a maybe you assuming talk you’re deck kind you of as kind the just be, when for question price about of of could this bit about year? of POPs, second what were what’s were the the the business

Sheridan Swords

is Alex, Sheridan. this

a of Creek we think we if on I them Bakken, currently capacity. said, together, XXX,XXX about we think As barrels the as in day about capacity a have Elk

lot XXX,XXX we’re plenty the of running we’re see XXX,XXX period said, of A capacity to As we that you there. had that range -- for in on now. the time We having today. ethane in of incentivized the

that pulling we’re also into that. We

we up adding pretty think we and on barrels that additional of period time. a completing for very have we just a time, take So, day another easily, short forward can it XXX,XXX capacity period a some pumps in of system going

Rockies. coming feel the very out we our So, comfortable with capacity of

Kevin Burdick

Alex, question earlier. we that And about provided POPs, the on the

type $XX crude a in we’re low again, thinking about -- environment. it We’re

the If that $X And the were crude type It’d back gas, gets ballpark. in you was NGL look range, of you that number. Xs, of when what kind doing and go same prices upper in at that in upper be kind then, one.

when in at thinking you when look is about XX% it other POP -- those to The for we contracts XXXX. thing you’re the remember the in about hedged POP are

just really there’s So, of impact not the of as in a when factor commodity hedges left well. exposure the you lot

Operator

will today come with from question Jeremy last JP our And Tonet Morgan.

Jeremy Tonet

Hi. me squeezing for here. back in Thanks

Just quick a question. real

X leads to carbon of North Dakota Dakota capture for well this North one in two policy state a developed Dakota that really there, others. of Class support at COX states pipeline that on emphasis allows regulators pointing us development. and towards as And also, only being state have there. from kind has And wells be sets see you North to the them primacy with pace the in conversations potential of Our as apart kind lot the progress of sets the Summit

carbon something on thoughts capture. point? here? enters have has have -- visibility fold you any that you be updated that this could that any realistically Just Do wondering, ONEOK some And case at the

Kevin Burdick

in know near look build other have few the with do private involved officials with We’ve how we with think things. future for to very conversations at -- with We some and opportunities to -- that’s Yes, to We’ve conversations a opportunities. and this state them got we it’s I how store entities, are Kevin. how them that. lot right? conversations had know we’ve discussions so got is a we something of to you Yes. do, things. when pipelines, far, we what are there in cetera, et Jeremy, process scheduled around know actively

so, it’s up opportunities. opportunities but pull partners getting working something, and right right something we’re think there’s we just the the on. the on definitely actively And before It’s there finding trigger I

Operator

for to And you to Ziola, closing the this session. I’d concludes or remarks. our conference additional question-and-answer like any Mr. turn back

Andrew Ziola

Jennifer. you, Thank right. All

be and Our throughout quiet when details books May. Thank all. provide available us. conference a you that later first team period you close Thank joining the the starts we in at April you for for in early will until for our And the quarter We’ll extends earnings call date. release IR we day.

Operator

conference. this Thank today’s concludes you all for participation. And your

now may disconnect. You

ONEOK (OKE) 1 Mar 222021 Q4 Earnings call transcript