ONEOK, Inc. (OKE) Earnings Call Transcript & Summary

All right. We're very privileged today to have the ONEOK team here. So the former prince of the Bakken now has merged with Magellan, and this is the first conference since the integration, and we have Walt Hulse, CFO; Sheridan Swords, EVP, Commercial Liquids, Natural Gas Processing and Dan Lungo from the Bank of America investment-grade side. So thanks for being here.

And maybe we can start out with just broadly maybe give us a high-level overview of the new business now that you have, the legacy Bakken integrated NGL system with the Magellan refined product system.

Great. Well, we're really excited about the combination. It completes our value chain, does give us some diversity away from the Bakken. We love the Bakken, and it has been very good to us and will continue to be very good to us for a long, long time. But getting our operations a little bit more diverse, we thought made some sense. The Magellan business brings us significant free cash flow that we can reinvest in the business. But even more than that, the way our system and their system lay on top of each other, the opportunity set from a commercial synergy standpoint, just seems to be getting better and better, and I'm sure you'll ask Sheridan about that a little bit later. But we are very pleased the Magellan team has come over-energized and ready to help us find those synergies. So we're getting after it already.

Great. And how are the integration efforts going so far and maybe the key focus areas that you're looking at in terms of priority?

Sure. Well, many of you know Kevin Burdick, who is one of our other Executive Vice President. He used to be Chief Commercial Officer. We have put Kevin in charge of the integration. He's Chief Enterprise integration something, it's a long title. But Kevin has got a really interesting background because he has a background in IT before he got into commercial, spend a little time in OPs. So he knows the business inside and out. He has put together a very structured synergy approach. We've identified over 250 specific synergy items. There's an owner -- at least one owner of each of those. We've built a tracking system so that we'll be able to report out to first the board and then ultimately in a summarized fashion to investors, our progress on those synergies. We continue to see most of those on the commercial side. There's obviously cost synergies that will fall to the bottom line very quickly. But at the end of the day, this is really driven on the commercial synergies. So we had put out some numbers at the time of the -- time of the merger. We are very comfortable at the high end of what we had put out at the time that we announced the merger back in May. So.

So maybe we can touch on those commercial synergy numbers because we have a very broad range, right? Maybe $200 million to $700 million on the high side. And then on your last quarter call, it seemed like you have a bunch of opportunities that can maybe be on top of that, maybe I'm putting words in your mouth. But when we think about the range there and the $700 million at the top end, how confident are you on achieving the higher end? And then how would you think about timing? When you kind of put the synergies in there, you said maybe intermediate to longer term. So when would we realize those?

All right. Well, let me first kind of clarify a little bit. When we announced the transaction, we said $200 million to $400 million. And when I said that we're very confident at the higher end of that $400 million. We have identified opportunities north of $700 million. When we originally announced the transaction, we said that it would be 100-ish of cost synergies and the balance would be commercial. I think we're still going to be in that range. We'll probably beat that 100 number from a cost synergy standpoint. We are already seeing those come to pass when we announce our guidance, we'll be able to already report on some of the cost synergies that are already falling to the bottom line. But where we saw it in the October financials. Some of those just are hitting right away. Every time we have an insurance policy roll-off, we combine and get significant as an example of one of the kind of low-hanging fruit that's out there. But the exciting part is really the commercial side, and I'll let Sheridan get into some specifics. But I think the key to it is that, again, there are some that are achievable right away. The vast majority are within our control. We don't need a third party to participate, which is excellent. As I said, that we've put in most of the commercial synergies, a team together to hold them accountable for achieving those. Some of them we expect to be delivering by year-end. Those obviously have been 0 or minute capital associated with them or we wouldn't have been able to achieve them so far. And then as we go in, there will be some with modest capital. But I think you're going to see a real benefit in the first year, and then that will, over the next 3 years, we should be able to get to our number to achieve. Sheridan, why don't you get in a little bit more specific?

Yes, I'd say that and Walt touched on it earlier that since we've got the 2 companies together, our list of opportunities or synergies commercially has really expounded and what we've had been able to do is prioritize and they sit there and go, how which ones are we going to work on? How are we going to prioritize and then we work through that and we'll keep going? And a lot of those have been as he said, hey, how quick can we get it online, I quickly start realizing it. And how much capital would we have to be in there and the capital kind of is your timeline, if you have to spend a little bit more capital. All of them very, very low capital, most of them, not all of them will fit inside of our routine growth. But as I've talked before, we've kind of come in with the 3Bs as we've tried to get everybody batching, blending and bundling is where we kind of categorize our synergies we have in there. And I was like I explained before, a little bit like if you think about a batching, you can put refined products on an NGL line, put it right in there, have an NGL batch in between refined product batches. And you can do the same thing with refined products on an NGL line. And one example that we've thrown out there is that there is at times disparity between the Gulf Coast and the Mid-Continent unrefined products. So we can use the Sterling system or use a Sterling system, be able to batch products in between those 2 market centers, we can open up that pipe. And because of the Medford and moving Medford down to Mont Belvieu, we have some capacity on that pipe. So we really can leverage as well. The other thing that we have, you think about blending in the whole blending operations that Magellan had with us having a large amount of normal butane available and readily being put on this pipe. We can make sure when there's blending opportunities, the Magellan had been using -- had been enjoying in the past, we can make sure that butane is there because they're not capturing it all. Sometimes they can't get it there at the right time. And also we can get it there cheaper. They were using a lot of Magellan, had been using a lot of trucks to get the butane in the right location. By batching it on their pipeline, we can put it into the right location at that fraction of the cost. They were typically could be as much as $0.20 a gallon on average for the logistics cost. We will significantly reduce that as well. And then when you think about bundling, especially when we brought Magellan and we have 4 business segments. We have very large integrated energy companies that touch each one of those business segments. They are a customer of each one of our business segments. And some of them substantial customers in each one of those business segments. So now as they have more volume, different areas coming up with more opportunities that they're out there looking for people to bid on. We have much more levers that we can go in there and give a little value in one area to get sweeten the pot or make us look different in other areas. So we've been able to do this in our systems we had today between gathering and processing and NGLs or even with our NGL network being in multiple basins where we can look across the whole value chain and bring more value to our customers, which brings -- which puts us in a better life than the competition that can't do that.

One thing I would just add to that, I'm going to kick it back to Sheridan to give you an example, but when it comes to the batching, we talk about being able to put -- put refined products on our NGL pipes. I want to clarify that when we say that, what we're saying is that we can put them on our purity pipes. We have 2 different kinds of pipes in our NGL system. We have our raw feed pipes, which are [indiscernible] the product from the Bakken or the Mid-Continent or the Permian, we aren't going to use those for refined products. But then we have our purity pipes that move product from the Mid-Continent South and from the Mid-Continent, up our North System up towards Chicago and Minneapolis and the like. And that's one of the parts that sits right on top of Magellan. But why don't you give them the gasoline, butane example because lets people see a tangible...

When we talk about batching, when you batch on purity products on, an NGL pipeline or fine products [indiscernible], all you're doing is if you put gasoline in, you put a bunch of gasoline into the pipeline. And then when you switch to a different product, say you want to go to diesel, you just put diesel right behind it. And we know the same thing on NGLs if we're running propane and we can put normal butane right behind it and then put propane behind it again. And the areas where they mix those components, those products, you can have a little bit of normal butane and propane, you can have a little propane and normal butane. But what we can do on a gasoline, if you're moving gasoline, we can just stop the gasoline batch, put a batch of normal butane in there and keep moving on and move it up the pipeline. And where those 2 intersect a little bit, you're putting butane into gasoline, which is allowed. So we're going to -- so that's why we, all of a sudden, have expanded our whole network. So you got to think about it and the purity of NGL pipelines, and we talked about Sterling in the North system and Magellan's refined products pipelines, they now become refined product and purity NGL line. So you just expanded your whole network of pipelines that you can move products throughout the midpart of the United States. So it opens a great amount of additional areas that we can market our products because now we have pipeline is the easiest and most cheapest way to move products into these areas. So really expanded our network on both sides.

So we talked about butane blending. The costs are definitely going down from you self-sourcing that. Historically, Magellan has had a nice-sized business in the Mid-Con. Are you looking to expand that in other regions? More scale in the Mid-Con. How would you think about sizing the butane blending business at this point?

So I would say a little bit, if you think about in the Mid-Con, it's driven a lot by demand. And the demand fairly steady in the Mid-Continent right now. When I think about the Mid-Con on blending, what we can do is make sure by batching that product on their system, so we can make sure butanes at the terminals when the opportunity to blend is there. And it's a lot easier to have -- to be able to move it up a pipeline and have it ready then try to schedule trucks to be in there at the right time as going forward. So you're really capturing that last little bit and dropping cost. We will look for other areas as well that now that we can get butane at a cheaper cost to others, it opens up more opportunities for blending that may have been uneconomical before because the cost to get the butane there was much higher.

And I think maybe the most misunderstood portion of this is the bundling where I know you have producers in the Bakken, producers in the Permian. You can offer them multiple services, different basins, different products. Can you maybe provide just some clarity on, let's say, where you could bundle refined products and NGLs, crude NGLs, just the different combinations and not specifically naming anybody, but the theory behind it?

Sure. No problem. If you think about refined products and NGLs. Today, the NGL marketing team is selling normal butane, isobutane and natural gasoline to refiners. So we are delivering into refiners. Where our North system we talked about in the Upper Midwest, a lot of the upper Midwest refiners are our customers. Those same refiners are taking refined products out of those refineries on the Magellan system and coming out of there as well. So all of a sudden now, when you are going there and you're competing to get them to move refined products on your system, you also have this NGL delivered there as well that you can go in there and hey, if I give you a -- if I give you a little bit better deal on the NGLs, can we do something on the refined products. Where you both win, you both make more money on that by kind of bundling the 2 services together. And then you use that same concept when you think about NGLs and crude, but really when you think about our natural gas gathering and processing, we have people talking to people at the wellhead today, trying to gather their natural gas to go through our G&P systems. So when they're talking to them about that, they'll talk about we can handle your crude, we can move that as well and it's the same thing you're going. If I give you this kind of deal on the G&P, how does that look like on the crude? And you -- and as they look at across both segments, you're not just competing with someone heads up on the crude. You have this other touch point that you can enhance your position and where you make more money and then the producer makes more money. And more easier and they have one person to deal with instead of multiple people.

And what was interesting about that is when we announced the transaction, and we couldn't -- we weren't in a position yet because of the FTC to actually be talking about each other's businesses with customers yet. Our phone was we were getting inbound calls from producers who saw opportunities to give us something on the crude side in exchange for it. We touch some of these folks in the Bakken and the Powder in the Mid-Continent and in the Permian. So they're looking at their overall business holistically, and we can provide solutions all the way through. And now we can even provide solutions downstream with the docs and the distribution of the Magellan system on the other end of the system.

Great. I want Dan to have some dialogue here. So maybe you can turn to the capital allocation, and we can turn back to the Permian a little bit later.

Perfect. Thanks, Neel. And thank you again for allowing us to host you at this conference. So with the deal that call that's now closed and given all of your recent commentary as well as the fact that you guys are ahead on your deleveraging schedule as of now, your confidence in your '24 outlook, how are you now thinking about capital allocation? In the past, you said you have a $500 million maturity that you pull in to pay down. Do you still need to pay that down? And then how are you thinking of [indiscernible] growth versus share buybacks? And when do you start really leaning into that?

Yes. Well, we're on our trajectory to get where we want to that '24 maturity is only $500 million. So we'll deal with it when it comes about that, given the size of the balance sheet isn't going to move the needle dramatically one way or the other. So we'll deal with that depending on where the market is, whether we just pay it off with cash. Clearly, as we go into '24, the way things are setting up, the strength of the core businesses across all the businesses and then the synergies on top, our flexibility around capital allocation has improved. We were trending prior to the announcement of the transaction to a point where we would have -- had we not been successful with the transaction been in a position to put out forth a more specific strategy. So this set us back maybe a year before we were able to do that. But we think going in with this guidance that we'll be in a position to lay out our views on how we'll think about that for the years to come going forward. Because our flexibility is definitely getting there quicker than we thought and one that -- at the end of the day, if Sheridan's got a 3 or 4x project that we can go do, that's where we want to use our capital. Because if we can make 33% to 25% return on investment, we're going to do that first. But we obviously are going to look at all the alternatives. And I think that as we think about those alternatives is we want to maintain flexibility, be able to take care of opportunities in the future.

Great. And then as a larger-scale company with added fee-based earnings, how is your target leverage changed? And what is a good long-term market going forward? I think when you first announced this transaction, you said 3.5x by '26 unless there were some capital projects, which could push that to '27. Has that changed at all? And is that still kind of a long-term leverage target we should be using?

Yes. I think that -- we think that 3.5-ish is the right area to be in. We're not worried if we go lower than that if the natural of the business, that will be a good thing because earnings will be coming in. So if we trend a little bit lower, that's fine. If we end up seeing opportunities and end up a little bit above that, that's fine. When we announced the transaction and put that 3.5x target out there, that was where the rating agencies were kind of holding us as where they wanted to be. Moody's has subsequently come out and said to maintain our current rating, we need to consistently be below 4x. I don't think that's changed our view of 3.5x, but it does demonstrate that this asset mix together and the scale that we have now does give us flexibility. And the other thing I think is important. If you think back to the company in 2015, we were about $1.5 billion of EBITDA. As we go into '24, we're going to be in that $6 billion-ish area, give or take. So if we talk about a turn of leverage, we're talking about a whole lot -- we're talking about $6 billion. And so that difference between 3.5x and 4x today gives us the ability to make very meaningful investments without really adjusting that leverage.

Can I just follow up with that Moody's 4x. I'm guessing that would mean for the right transaction, you would go above that if you had a path below that very quickly as you did with Magellan. But just in normal course of business, you wouldn't be comfortable with leverage starting to slip above 4x, like just from projects coming online that...

Yes. I mean, I think our normal course of business is we want to manage it around 3.5x. That was just a marker that Moody's put out there. That doesn't change what our view is of where is the right leverage. But I do think that it demonstrates that the market isn't telling us that we need to push towards 3x with the mix of business we have, very little direct commodity exposure. I think we're very comfortable in and around 3.5x.

Sorry, I think I asked the question the wrong way. Basically, that's the marker for the mid-BBB ratings. Could we -- would we expect you to defend the mid-BBB ratings if you got into that scenario?

If we saw an opportunity that took us up towards 4x or around the -- we would manage it back towards...

Sorry, I asked that wrong first time. I'll pass it back to...

But we've got to find that opportunity. Right now, as we sit here, that's just a hypothetical -- and the reason I gave you the scale is if you think about the opportunity that's out there today, there aren't many things out there that could actually even push us above 4x. So opportunity that probably would keep us in that sub-4x range.

Got you. Daniel?

So maybe we can talk about just the -- I guess, not stand-alone on business, but predecessor ONEOK business and a couple of fundamental items. So Sheridan, everyone's been calling for the end of the Bakken, but you're continually outperform with GORs and GPMs. What do you see as the volume outlook for the basin on the rich natural gas side? And where do you think people are wrong that kind of look at just -- where they think oil inventory for the Bakken is in the line nearer term?

So what I'd say, I think on the gas side where people have missed it and even though we talk to the producers have missed this on the GOR that has gone meet their expectations every time. And every time we talk to them, in fact, they even saying now we don't know where it's going to head to. We have some ideas, but we've always undershopped that. It's always been much over. So we've seen a lot of growth on the gas just because of GOR. But if you think about right now, we have enough rigs in the Bakken to be able to grow the crude production that's coming out today. And we are seeing -- we have different levels of producers out there. Some are going to be much more steady on their crude production to slightly up, and they're going to just let that go for a long period of time, and the GORs will bring us growth on the gas side of that. Then we have some other producers out there a little more aggressive and they're drilling a little bit faster on that we some oil growth continue to grow forward. We continue to see a long life of growth in the Bakken on the gas side of it. We don't see that really coming off anytime soon. We think we're not going to see the growth that we've seen in the past, but we're not going to see a decline for a long period of time.

And then how are the GPMs trending in terms of NGL content?

Well, you've got to look at it. It's all over -- well, in a relative amount. It depends on what part of the Bakken that you're in. Certain areas are a little bit more than others. It all what I would call relatively very rich type. But sometimes you may have an area that hits 12 GPM and sometimes 10 GPM into there. Just kind of depends on the area that you're in. Not necessarily have a wide swing from you, like you would see more in the Mid-Continent. You could see a 3% to 10% swing on that, but that's depending on what different zones they're in. They're all drilling the Bakken and the Three Forks here. So its somewhat stable around the 10 to 12.

So your argument is with flat crude production going to see rich gas growth for a long time. Is that fair?

That is very fair. And we're -- and right now, we're growing the crude production, so it'd even be more than that.

Got it. And obviously, the topic that has come up in the 3Q earnings season has been the Permian NGL pipes announced and your friends at Enterprise will be up here later today with our [ Bahia ] expansion. So you guys don't have the G&P system in the Permian. And you've been clear that that's something you haven't historically focused on, but you're expanding West Texas low cost to over 700,000 barrels per day. So kind of, let's say, 500,000 barrels per day of increased system capacity. How do you plan to fill that without a G&P system? And what's the strategy there?

Well, the first thing I'd say we're going to plan to fill it is, as you mentioned, that it's a low cost -- we think it's the lowest cost option out of there right now. So we can provide a low-cost option to the producers out there. Well, also in the Permian is a little bit different than some of the other areas that a lot of producers have taken kind rights out of plants, which means that the producer controls the liquids and the gas, not necessarily the processor. So we have a lot of producers that, as Walt mentioned earlier, that we're dealing with in the Bakken, we're dealing within the Powder River. We're dealing with in the Mid-Continent, and we're dealing with in the Permian. So as we've talked about that bundling concept with the refined products, crude and NGLs, we also have that by basin in the NGLs. We're sitting there, talking to them about what can we do with Forum in the Bakken or the Powder River to bring volume onto our system in West Texas. And we've been doing that for a period of time. When we first bought the West Texas system in 2014, it was moving out of the Permian, about 100,000 barrels a day. Today, we're moving 300,000 barrels a day. So in 9 years, we've tripled that capacity. So we've been -- we've shown that we can compete having a G&P presence. Now we may continue to look and see if that's something we want to get into. But right now, it has not hindered us being able to put liquids on our pipeline. And we'll -- and we've -- on our expansion, as I've said, we've already contracted long-term contracts with producers and processors in the Permian that are going to give us an acceptable nice return on this project with plenty of extra capacity that has not been contracted yet.

When we look at G&P basically is the capital allocation. We have had so many opportunities for high-return projects. The G&P and the Permian just doesn't have the returns that's been able to compete within our overall opportunity set. As we look down the future, we'll continue to evaluate that. But the low-hanging fruit that we have from these commercial synergies and the ability to have very high return investment has always led us to -- especially since he's been so successful competing for those NGOs.

So if I could ask a follow-up to both of you on that. So maybe one of the bundling concepts that hasn't been appreciated, and tell me if I'm putting words in your mouth, is that you have a large producer that has in kind rights in the Bakken. And now you can offer them that a bundled deal to take away their NGL both in the Permian and the Bakken. Is that fair?

That's very fair. Or the Powder River or any other place that we touch these large producers.

Yes. But it's a little bit flipped in most of those in kind rights are in the Permian. So it's not as common. It's very seldomly the case in the Bakken because we really are the only option out of the Bakken. But in the Permian, where they have a lot more competition and the producers, you've got large -- a lot of large producers that want to control those commodities, taking kind rights is very common. You saw a big difference between [indiscernible]. One didn't have a lot of taking kind rights, the other had significant taking kind rights. And the valuation was adjusted accordingly.

And with WesTex, geographically, can you touch pretty much anywhere in the Midland and the Delaware? Or are you focusing more on one of the basins versus the other? Can the pipe kind of hit anywhere in the Permian that the producer would want to move the barrels of the processing plant?

Well, the Permian is very big. And we don't have pipes to go all throughout that, but we do have an extensive gathering system throughout the Midland and the Delaware. It just depends on exactly where it is. It's really dependent on when a new plant comes on, how close you are versus the competition and how you balance that coming in. But we have -- when we first bought the West Texas pipeline from Chevron, we laid a big line out to the Delaware. So we have an order out to the Delaware that we can leverage into the Delaware and they have an extensive gathering in the Mid-Continent as well. So we've enhanced our gathering as we went from 100 to 300, we expanded that, but now we're just going to finish up the mainline coming out of there.

And Walt, when you say that G&P can necessarily compete in the stack, what about when you think about all of the downstream benefits, so maybe filling up latent capacity with T&F and then ultimately, if you went to the export business? And if you think about it as the engine that's giving you the volumes that give you growth. Would you look at it as kind of like a stand-alone margin or capital allocation decision? Or could you look at it as, hey, this is really going to allow us to increase frac capacity and get more maybe into the export game longer term?

Yes. I think what I said was that historically, it hasn't met given the opportunities that we had and the configuration we've had, Magellan has obviously changed that configuration. And so we have more to evaluate when we think about that. So that will all go into the mix, and we'll look at every opportunity going forward with the full opportunity set that we have today. And there is no doubt that we have more opportunities today than we did prior to Magellan.

And just to round that out, the -- I guess, the present value of the tax benefits that you adjusted for the transaction, that's lower than the full amount you could completely utilize, right? So there are financial transactions you can make to fully utilize the NGLs -- NOLs, sorry...

It's interesting because if you kind of read the nuances in our press release, we actually said that we expected to achieve greater than the 1.5. And it's not financial transactions, it's just earnings. The reason that it was -- the aggregate amount of the potential savings is $3 billion. And the reason that we are only getting the net present value of that is that in 2027, unless we have a significant change, we would get tripped up by the alternative minimum tax. We aren't in that. We won't be. But in 2027, we would be. And so that limits the amount that we'd be able to utilize. To the extent that we bring earnings forward, more synergies. That's where we think we're going to be able to utilize more -- another tag on acquisition or an asset that we can build that is going to achieve more earnings than we had in the projections. What we said at the time was it was a present value of $1.5 billion based on the projections that were in place at the time that the merger was announced. Everything that we've done to enhance earnings increases the utilization of that NOL, above the $1.5 billion. And we definitely think we will achieve greater than $1.5 billion utilization. But you can pretty much say any earnings and said another way, any earnings we achieved between now and '27 are pretty much 100% sheltered.

Right. Great. And the last topic I wanted to hit on was the Saguaro natural gas pipeline. You've had great success with Roadrunner in some of other pipes that go down to the border, 20-year contract. And it looks like Mexico Pacific has 2 of the trains contracted. We just saw some news here today that the [indiscernible] moderate pipeline that would probably be the impediment is really gaining some traction here that would connect the Permian to the West Coast of Mexico. So when we think about that pipeline, I think you guys have said there's a possible FID around year-end '23. And if you were to go forward with it, you would likely be the operator, but you probably want an equity partner. Maybe you can just expand on that or tell me where?

Yes. No, I don't know that I went as far as saying that we would want an equity merger. I think that -- we're currently working towards FID as is the project. We expect the presidential permit here in the not-too-distant future. That's been kind of one of the key for everybody to get to the point where the project can get FID. I mean, realistically, we're mid-November and year-end '23 is coming upon us pretty quick in the holidays. So the likelihood of achieving a year-end FID is getting smaller and smaller with every day. But we're not too far off. We think everything is falling into place. The news today about the state sponsorship of the pipe in Mexico, we thought very favorable as well. So we're working on the finishing of the engineering is, by and large, pretty much done at this point. So things are falling into place, and we need to get the project itself to get towards FID before we can get there. So I think that the key that we see about why that pipe is so important to us is it's yet again another bundling opportunity in that we are now going to provide takeaway service for natural gas to some of the biggest producers in the Permian gives them an option to go to a new market that's favorable. And now with what's going on in the [indiscernible], it's going to even be more favorable. So it's long-term, positive return, very good return investment that has been effectively derisked once that's up and built. But we're working towards FID when we get there, we'll let everybody know and the final structure will be announced at that point.

That's right. So there's some major producers that are taking capacity in Mexico Pacific that would likely -- it's some equity volumes to -- Okay, great. Great. And then maybe with -- if anyone has any questions for the last 4 minutes, I can ask a few more and let you guys close out, but anyone in the audience? All right. Well, I'll continue. So the back to the Bakken be possible -- is it possible or probable with Elk Creek expansion? And does that kind of send a message that, hey, the Bakken is continuing to grow? What's the latest on that one?

The latest is, as we've said, we're spending money today to put us in a position that we can expand that pipeline as quick as we can. We went -- basically, we went and looked at what is it going to take to expand the pipeline. What are the long lead time items and let's go make that happen right now. So we're in a time frame that we're going to get it done and that before we see the growth catching up to our capacity. But we thought it was wise to come out and say that we are spending money on that project today is what we're doing, and we are moving as fast as we can make that happen going forward. We can stop it or if we want to, but I don't see that happening as we continue to see volume grow coming out of that basin right now. But that's why we started spending money at this time. As we look forward, if it keeps on this trajectory, we will need this capacity by a certain time, we need to start moving today. And we've always said that we will not run out of capacity coming out of the Bakken.

And I think it's also important to recognize that there's also natural gas takeaway that's being expanded. The Northern Border project going down Bison that project is reached FID and is moving forward. So all the takeaway is being expanded to meet what producers view of the world is going forward.

Got it. Any last comments for you guys? I'll -- and -- otherwise, I'll leave you with one last one.

No. No. We appreciate the opportunity to come here and look forward to your last question.

Walt, maybe this is just for you. So on ONEOK, obviously, great footprint, Bakken, S&P 500 company. It seems like when oil moves you're one of the names that trade up and down based off of that with NGL pricing, and that's not necessarily how your business works. When you think about shareholder value and putting Magellan and ONEOK here together, was part of the rationale really that you have a more stable business that isn't subject to oil prices kind of moving your stock price up and down when the beta shouldn't be there?

Yes. I think if you look at our earnings from 2014 when we spun out the utility to today, we've grown EBITDA every day, every year, no matter what the commodity cycle was. But you're right, up until this merger, we had quite a bit of volatility. So there's no doubt that it factored in as we were thinking about it to get. It's more to get demand pull on our overall system and be in a situation where you're actually countercyclical if crude prices are going down, volumes on the refined products side should be going up. So we'll see over time whether that actually reduces the beta. I mean we're in it for a short period of time at this point. But our hope in the longer term is that we would see that beta come down in that sensitivity because it hasn't factored into our earnings power. It's been more of a perception than it has been a reality.

All right. I think 12 seconds left, just on time. We really appreciate the time, and thank you for coming.

Great. Thank you.

Thank you.