Andrew Ziola - Vice President, Investor Relations Terry Spencer - President and Chief Executive Officer Walt Hulse - CFO, EVP, Strategic Planning and Corporate Affairs Kevin Burdick - Executive Vice President and Chief Operating Officer Michael Fitzgibbons - Senior Vice President, Natural Gas Gathering and Processing Sheridan Swords - Senior Vice President, Natural Gas Liquids

Shneur Gershuni - UBS Jeremy Tonet - JP Morgan Eric Genco - Citi Danilo Juvane - BMO Capital Michael Blum - Wells Fargo -: Christine Cho - Barclays Theodore Durbin - Goldman Sachs Craig Shere - Tuohy Brothers Chris Sighinolfi - Jefferies

Good day and welcome to the Third Quarter 2017 ONEOK Earnings Call. Today's conference is being recorded. At this time I would like to turn the conference over to Mr. Andrew Ziola. Please go ahead, sir.

Thank you and welcome to ONEOK's third quarter earnings conference call. A reminder that statements made during this call that might include ONEOK's expectations or predictions should be considered forward-looking statements and are covered by the Safe Harbor provision of the Securities Acts of 1933 and 1934. Actual results could differ materially from those projected in any forward-looking statements. For a discussion of factors that could cause actual results to differ, please refer to our SEC filings. Our first speaker this morning is Terry Spencer, President and CEO of ONEOK. Terry?

Thanks, Andrew. Good morning and thank you all for joining us today. As always we appreciate your continued interest in investment in ONEOK. Joining me today's call are Walt Hulse, Chief Financial Officer, Executive Vice President, Strategic Planning and Corporate Affairs and Kevin Burdick, Executive Vice President and Chief Operating Officer. Before I hand the call over and I have a few brief opening remarks. I am going to start up by saying how much I appreciate the efforts of our employees who personally endured Hurricane Harvey, employees at our Mont Belvieu area facility and countless others at our company work tirelessly to keep our assets running safely in order to provide needed services to our customers. I am very proud of them. And as expected, their dedication and commitment to this company continuous to be nothing shorter remarkable. I should also mention that the swift recovery of the Mont Belvieu infrastructure following Harvey would not have been possible without the hard work and cooperation of many of our industry peers, customers, service providers and local governments. Many thanks to them. I also wanted to extend our thoughts and prayers to the victims, their families and all effected by the senseless tragedy that occurred in New York City yesterday afternoon. The city and its people once again prove its courage and resolves as it copes with this tragic event. Moving on to our third quarter performance, building off our second quarter results. Third quarter performance was strong benefiting from natural gas and natural gas liquids volume growth and higher transportation revenues in our natural gas pipeline segment. These results demonstrate that we are well on our way to achieving our 2017 guidance. As we stand today compared to a year ago, rig counts have increased in the states we served by 70%, driven primarily by technological advances in drilling which has made exploration more effective, more efficient and production more prolific. We are seeing petrochemical facilities and ethane cracker coming online and expect two more to startup in the next several months. The industry has been anticipating these startups for several years and now we are beginning to see real demand for ethane, which Kevin will discuss more in a moment. We're also hearing from customers about the next wave of petrochemical facilities to be designed and built on the Gulf Coast. I mention this because it's important to point out the energy industry is once again proving its resiliency and its adaptability to the market place. I believe ONEOK has played a big part in that by continuing to invest capital to aggregate supply and deliver it to the markets. We are well positioned to meet the needs of our customers today and we are committed to continue investing in and around our assets to meet their needs into the future. With that I will now turn the call over to Walt.

Thank you, Terry. ONEOK's third quarter adjusted EBITDA was $517 million compared with $462 million in the second quarter 2017. The 12% increase primarily driven by natural gas and natural gas liquids volume growth. As noted in our earnings release, third quarter results included approximately $20 million in non-cash impairment charge related to non-strategic assets and equity investments in our G&P segment which impacted third quarter earnings per share by $0.03. We estimate that without the disruption of Hurricane Harvey, the NGL segment's earnings would have been approximately $4.5 million higher for the quarter or $0.01 per share. Last week, we announced our quarterly dividend of 74.5 cents per share or $2.98 per share on an annualized basis unchanged from the previous quarter when we increased the dividend by 21%. Dividend coverage was healthy 1.3 times for the quarter. Management still expects to recommend annual dividend increases of approximately 9% to 11% beginning in 2018 and annual dividend coverage of 1.2 times or greater. Since June, we've announced nearly $0.5 billion in attractive, low multiple growth projects supported by commitments from anchor customers. In September and October, we issued 3.3 million shares through our ATM equity program resulting a net proceeds of $184 million. The proceeds of these issuance along with gas generated in excess of dividends support these recently announced high return projects as we prudently manage our balance sheet. We continue to see opportunities to make attractive investments supported by customer commitments. To the extent that we make additional future investments, the ATM will be one of the tools available to fund future growth. ONEOK's trailing 12 month GAAP debt-to-EBITDA improved again to 4.9 times at September 30. Our annualized third quarter GAAP debt-to-EBITDA run rate was 4.6 times. We continue to expect leverage to be around our target of 4 times or less by late 2018 or early 2019. We continue to proactively manage our balance sheet. We repaid $1 billion in its outstanding debt in July and September combined and completed a $1.2 billion senior notes offering in July, essentially extending the term of the debt at a very attractive rates. We are well positioned with ample liquidity to effectively manage our debt maturities and continue to finance growth investments. As it relates to review of rates on West Texas LPG, in late September, the Administrative Law Judge provided its findings to the Railroad Commission of Texas, which the commissioners may expect, modify or remand for further preceding. There is no deadline for them to take action. That we anticipate the commissioners may consider the findings in any exceptions filed by the parties this December. Regardless of the outcome, we do not expect the Railroad Commission's decision to have a material impact on our financial results. They will also not impact our current our future negotiated rates on West Texas LPG. [indiscernible] our ability to secure new NGL supply from producers and processors. As noted by our recently announcement to expand into the heart of the Delaware Basin. In yesterday's earnings announcement, we maintained our 2017 guidance outlook which was updated last quarter to reflect the completion of the ONEOK and ONEOK Partners merger transaction. We expect to announce 2018 guidance sometime after the first of the year. Please refer to our news release, investor presentation and 10-Q filing for additional details on the quarter. I'll now turn the call over to Kevin for a closer look at each of our business segments.

Thank you, Walt. Starting with our natural gas liquids segments. Third quarter adjusted EBITDA increased 8% compared with the second quarter 2017 including the impact from Hurricane Harvey which lowered our EBITDA by approximately $4.5 million. We sustain mills significant damage to our facilities but experienced reduced volumes due to industry downtime and increased operating cost following the hurricane. We essentially realized no benefit from optimization directly related to the hurricane. As we look forward, we had seen wider spreads so far early in the fourth quarter. NGL volumes gathered averaged approximately 812,000 barrels per day, a 5,000 barrels per day increase compared with the second quarter 2017. Higher Mid-Continent volumes and higher volumes on our West Texas LPG pipeline drove the increase. Volume on Bakken NGL pipeline decreased slightly from the second quarter due primarily to plan maintenance activities at our Garden Creek and Grassland's natural gas processing plants in the Williston Basin and planned maintenance on the Overland Pass Pipeline. As we discussed previously, our Bakken NGL pipeline can run above its nameplate capacity of 135,000 barrels per day and through October, volumes had return to levels at or above what we experienced in the second quarter. We continue monitoring producer customer activity as well as the current utilization of Overland Pass Pipeline and are evaluating our options to provide additional capacity out of the region. Third quarter NGL volumes fractionated were down slightly compared with the second quarter 2017, primarily impacted by Hurricane Harvey. Volumes that were unable to be fractionated during the third quarter were stored and will be fractionated in either the fourth quarter of 2017 or first quarter 2018. Ethane rejection levels on our NGL systems remained relatively unchanged in the third quarter 2017 averaging more than 150,000 barrels per day similar to second quarter levels. As multiple, petrochemical facilities are expected to come online in the next few months, we continue to expect ethane recovery levels to fluctuate in the fourth quarter and into early 2018 as the startups occur. As we have moved into the fourth quarter, we had seen a significant increase in our gathered volumes. In October, we exceeded 900,000 barrels per day on numerous days. The increase in a combination of volume growth of overall raw feed and additional ethane that is being recovered. For the natural gas gathering and processing segment, third quarter 2017 adjusted EBITDA increased to 11% compared with the second quarter 2017. With the segment once again posting solid volume growth in the Williston Basin and STACK and SCOOP areas. In the Williston Basin, volumes processed again established new highs with an average of more than 840 million cubic feet per day during the quarter. Despite plan maintenance act some of our processing facilities and the maintenance on Overland Pass Pipeline. Mid-Continent volumes averaged more than 740 million cubic feet per day, an 8% increase compared with the second quarter 2017. Rigs remained steady across our acreage with approximately 30 rigs operating on a dedicated acreage in the Williston Basin and approximately 15 rigs on a dedicated acreage in the STACK and SCOOP areas combined. In the Williston Basin, we connected 130 wells during the third quarter for a total of 313 through the first nine months of the year, well on our way to completing our target of 400 in 2017. We now estimate the drilled but uncompleted wells on our dedicated acreage increased between 350 to 400, compared with 300 previously. We continue hearing of improved efficiencies across the basin including indications between 10% and 15% productivity improvements in wells completed in 2017 compared with 2016. At current rig activity levels, in addition to inventories in the basin, we expect continued volume growth into 2018. Growth in the Mid-Continent continues as well. We connected 35 wells in the Mid-Continent during the third quarter and it connected 76 through the first nine months of the year, well on track to reach our target of 100 by the end of the year. The segment's average fee rate was $0.86 per MMBtu in the third quarter 2017 compared with $0.76 per MMBtu in the third quarter of 2016, a 13% increase which was driven primarily by increased volumes on contracts where we received higher fees. We still expect the segment's average fee rate to be approximately $0.85 to all of 2017. In the natural gas pipeline segment, adjusted EBITDA increased 8% in the third quarter 2017 and 13% through the first nine months of the year compared with the same periods in 2016. The segment continues to benefit from high fee based earnings and increased transportation capacity contracted. We continue discussions with producers and markets to develop long term natural gas take away solutions across our footprint especially out of the Permian Basin where we had a long standing asset position with our West Texas Pipeline system and recently our joint venture Road Runner pipelines. As Walt discussed, we've announced nearly $0.5 billion of capital growth projects with the most recent being the $200 million expansion of the West Texas LPG pipeline into prolific Delaware Basin, one of the fastest growing plays in the U.S. The project is supported by long term dedicated NGL production from two third party natural gas processing plants which we estimate will produce up to 40,000 barrels per day. The project is expected to be completed in the third quarter of 2018. Fees on this project are negotiated bundled rates at market based transportation and fractionation rates. Because this is an extension and expansion of an existing pipeline asset, we expect EBITDA multiples to be in the four to six times range better than our typical five to seven times. Additionally, the lateral is sized to allow for future growth beyond the initial two plants. We continue to discuss opportunities with numerous customers in the Delaware regarding potential contracts with more than ten new processing plants in the area. Terry that concludes my remarks.

Thanks Kevin. I have just a couple of closing comments as it relates to our future growth projects before we take your questions. Following the West Texas LPG expansion announcement, we still continue to develop our unannounced inventory of potential capital growth projects. We've updated that inventory which is now between 2.5 billion and 3.5 billion compared with 1.5 billion to 2.5 billion previously. This inventory remains heavily focused on NGL infrastructure which we anticipate could be announced between now and 2020. We are expanding our existing businesses and continuing to focus on deploying capital prudently at attractive returns and in ways that will create value for our customers and investors. Finally I want to once again thank all of our employees for their continued hard work and their commitment to safe operations, our customers and the communities we operated in. Operator, we are now ready for questions.

Thank you. [Operator Instructions] Our first question will come from Shneur Gershuni from UBS.

Hi, good morning, guys.

Good morning.

Just a couple of questions. Just to start off, I was wondering if you can talk about your CapEx funding strategy going forward, you tap the ATM this past quarter and I'm trying to understand is it more because you were during a blackout during the merger process and needed to get leverage in line post close and no longer expect to use it and use retain DCF or alternatively do you continue to plan using the ATM as a primary source of funding?

Fortunately, there was no relation to the period of time between the announcement of merger and the closing of the merger. I think it's important to note that we've announced this 500 million or so of new growth projects since June and we wanted to use the ATM to make sure that we funded those because they were in addition to the CapEx that we had previously been discussing. So it was more of a getting ahead of the game and making sure that as we look at forward growth projects, we maintain a very strong balance sheet.

Okay. And then secondly, the 500 million of identified CapEx for 2018, are there any other projects that you're very close to approving or moving forward with that could take the number materially in 2108 or is that kind of the run rate we should be thinking about?

Well, I think you should always - this is Terry. I think you should always think about that, got this base run rate of kind of routine growth but we're continually working this backlog of new projects. And as contractual commitments and anchor customers come together, certainly we'll go forward and take those projects to our board. So we've got a number of projects that are in various stages of development, as those things those things mature like we've always said, we will not only - once we get those approve, our board will certainly go public with those.

Okay. And final question, you've had this forecast out there for dividend growth around the 10% range for several years going forward. How much capital you need to be investing in to achieve that growth rate over the next couple of years? Is it a couple 100 million, is it more you're running at last just kind of wondering what the cadence to being able to achieve that growth rate, operating leverage versus needing to invest capital?

Sure Shneur. This is Walt. The dividend growth rate that was previously announced was supported by base growth CapEx in line with the past couple of years. New projects enhance these cash flows and will produce more free cash flow to reinvest in our business and maintain our strong balance sheet.

Great. Thank you very much guys.

Thank you.

[Operator Instructions] We'll take our next question from Jeremy Tonet, JP Morgan.

Good morning.

Good morning.

Terry, just want to pick up on one of your last comments there with regard to the upsize in the kind of growth project up evaluation last going up to 2.5 billion to 3.5 billion there. I was wondering if you could provide a little bit more color on what specifically is driving that what's changed, sounds like this NGL pipeline is part of the driver there. But is there any more you can share as far as what basins or anything else in the market that evolve that you guys see as better opportunities now?

Well, so certainly Jeremy at that at a high level what we're seeing certainly is core in NGL growth in the basin that we operate certainly in the Williston Basin we continue to grow. Their prospects as Kevin mentioned on the call, on his call remarks rather look great and continue to see strong development STACK and SCOOP. And certainly this recent announcement of West Texas is certainly an indicator of the opportunity that's in front of us there. So the bulk of the CapEx this increased CapEx in this unannounced backlog is going to be in the NGL segment and it will be in the form of pipeline loops, pumps, pipeline, infrastructure, potentially fractionation capacity that could be some storage in there possibly. So projects of that nature primarily what they consists of. Kevin, you got anything that you could add to that?

Just growth of our existing again significant growth of existing assets.

That makes sense. Thanks. And then just another question on funding growth CapEx going forward, there's been kind of an increase use of hybrid securities out there and wondering how you think those STACK on versus the ATM when you walk into you know minimize dilution for future growth?

Well, of course we will look at every opportunity that we have to fund the business going forward. We're pleased to be in a position with a very strong investment grade balance sheet and traditional capital access is something that we enjoy and it would probably be where we would lean more towards. But we'll say though that price of everything that's in the marketplace and evaluate whether as it fit into our cap structure or not.

Got it. Thanks. And then just looking at the STACK and SCOOP, I just wondered if you could talk a little bit more about the dynamics there, it seems like STACK continues to have good opportunities moving forward the Canadian value there and knocks seems like it still on the back burner at this point, I was wondering if you could share any more on what you see there?

Kevin can help you there?

Yeah Terry, again we excited about STACK and SCOOP. And I think our volume growth sequential quarter-to-quarters just shows that and just demonstrates some of the potential. On the G&P side, we do have the 200 million a day off load that we've got out there that's expected to be complete by the end of the year, so that's the first tranche of capacity. Then we've also got the Canadian Valley two expansion which we've announced. And beyond that our NGL segment with the footprint we've got in the STACK and the SCOOP there, there's a lot of other additional plants I think they just came out yesterday and announced a new plant that would be under our contract with them. So a lot of activity going on in the STACK and the SCOOP, producers have come out here, in just the last couple calls I've seen and talked about moving to kind of the full development program which just drives the efficiency of the rigs up. And so there's a lot of opportunity for us given our footprint in the STACK.

Thanks for that. And then just last on the Bakken. On the processing side there, I was just wondered if you could update us and competitive dynamics you see in some other NLPs moving forward processing expansion such as Bear and others and I was just wondering if you could give us your latest thoughts there.

You know with the volumes that we have seen in the Williston, we probably especially as we moved into the third quarter and gotten past some of this maintenance, we're probably - excuse me into the fourth quarter and gotten pass some of the maintenance, we probably have 125 million a day of capacity left. So with the rig activity we're seeing and the well performance that we're seeing then clearly we could see additional processing capacity that we would need.

Okay. Great. Thanks for that. That's it for me.

And our next question comes from Eric Genco with Citi.

Hey, good morning, guys. I was just wondering what you've been hearing from producer customers in the Williston kind of heading into next year in terms of rig counts activity, you targeting about 400 wells here and 30 rigs it seems like that's about 27 days to complete a well which seems high. So do you expect the rig counts to taper off and if nothing changes is 400 a conservative number going forward or how do you think about all that?

Hi, Eric, this is Kevin. I got some thoughts and Mike Fitzgibbons may have a couple of thoughts as well. But our conversations with the producer customers continue to be very positive. The rig counts have held and we've seen some price strength here over the last few weeks. We see no indications that those rigs are going to back off. So yes if you maintain this activity level at 30 rigs, the 400 would be light as we think about 2018. Not ready to get out there with the guidance yet, we will do that as we as we release our financial guidance. But clearly you're right, the 2017 is high in and so we would expect the well connects to go off in 2018. Mike?

I agree with that. The only thing I will add is we've had a couple of producers announced, they can achieve their volume growth target with less rigs because of the efficiency increases. So we may see a rig or two drop, but we're still seeing very productive wealth and forecast of volume growth from those rigs.

Great. And just one quick follow-up. I'm curious as you look out at the - I think it's sort of asked in couple different angles, but you got the 485 million to 495 million of projects since June and 40 million that is finished in 2017, sort of I guess the rest is overwhelmingly in 2018. Do you expect your overall debt balance, you debt today is at quarter end was around 9.5 billion, do you expect that to drop or do you meaningfully at all or do you think it hangs in there maybe drifts off a little as you have the EBITDA growth that sort of gets to the year leverage target?

Well, we're not going to give specific guidance 2018, but I would say that we do expect to have significant EBITDA growth that will help those levers statistics along in the most dramatic fashion.

Okay. So 9.5 billion is of net that is that - do you see it materially dropping over the course of the next year or no?

I think given level of our CapEx, we expect to see our deleveraging come more from the increase in EBITDA than a drop in that.

All right. Thank you.

Thank you.

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

Good morning, everyone.

Good morning.

I was looking at the - I want to go back to 2017 guidance. The G&P segment specifically the wave how strong the gathering perform this year would imply decline in 4Q, just to get to the high end of the guidance range there. So is seems that you've been a little bit conservative but not raising guidance in my opinion. Is there any other assets that we should be thinking about whether there be related to Harvey or maybe some of the ethane volumes that you had baked into your forecast they're going to be late end because of the outages in the Gulf Coast?

No, I mean specific to your question about G&P, yeah when you do that math that where you get to. The one dynamic that we always at least consider as we're thinking about the fourth quarter for gathering and processing is weather, especially when you look at the month of December, we do historically see a little bit of a pullback of our volumes. So we do factor that in. I don't think we see any lingering effects related to Harvey from our business. As we've talked about we've seen it transitioning a little bit just overall we talk about the volume growth we have seen in October in our NGL segment. Clearly a decent chunk of that volume growth would be ethane which would since signaled that the ethane recovery story starting a little bit. So that's - I mean that's how I would frame up kind of how we're thinking about guidance in still holding that firm.

Thanks for that. And then with respect to growth CapEx, I think the previous guidance was $500 million for the year, thus far we've paid I think $250 million, so should we expect a big chunk in 4Q here or is that going to extend over into 2018?

Yeah, we will - I mean yeah with that with the recent announcements obviously we're getting - we're hot and heavy into the construction on those projects that we've announced, so you would see that capital ramp up in the Q4.

Okay. Thank you, those are my questions.

Yes. Thank you.

.:

Good morning.

Good morning.

On the West Texas expansion project, could you elaborate a bit on the volume assumption on 4 to 6 times multiple expectation?

Sure. As we think about those the - up to 40,000 barrels a day, it goes room service on the back half of 2018, we would expect that volume to ramp up maybe over a year to two, past in service date.

Right, within two years, we should be at or above 40,000.

So the 4 to 6 time multiple the same as around 40,000 barrels a day volume?

Yes.

Okay. And then on those new barrels, what type of fractionation opportunities are there potential with those go to third parties?

Well the 40,000 that we referenced in the press release, we do have a bundle of service with them. We will be fracing those barrels. So it's a total package deal for us. The pipeline does give us the opportunities, we talk to more people to bring more volume on that and fractionated as well at or below multiples that we will see on this project.

Okay. Just to summarize the 4 to 6 times multiple expectation seems about 40,000 barrels a day of volumes including now fractionation fees?

Yes.

Okay. That's helpful. And then obviously have excess capacity, how do you view the competitive landscape in the Permian for NGL take away increase the utilization of the expansion?

Brian, this is Sheridan. It's a very competitive landscape out there, but as we've said before with have an existing pipeline that we can incrementally add capacity to it to dial in to what the customer actually needs. We can do it much cheaper and faster than other pipelines, brand new pipelines that are coming in there. So we see ourselves being very competitive. And with this new expansion in here, we get this us into position that we can compete even better for these Delaware barrels. And we have been talked to multiple producers and processors out there in the short term before we announced this. And after we announced this, we've even had more come to us and want to get on this pipeline, we want to talk this about. So we're very excited what this bring to us and very excited about seeing more expansions come out.

Okay. And for updates on the expansion, so obviously a lot of focus on your organic opportunities. As we moved into 2018, how do you see M&A playing overall in your growth?

Well, certainly in our thinking we don't have any M&A factored in but we're always going to be thinking about those opportunities and certainly we've got a strong currency to work with, certainly, financially sound company. But I can tell you what our focus will be heavily organic and any M&A whether it's a bolt on asset or whether it's something even broader from a strategic perspective will certainly just be an opportunistic approach. So heavy organic will be the key strategy, key focus for 2018.

Thank you, Terry.

And our next question will come from Michael Blum from Wells Fargo.

Hey, good morning.

Hey Michael.

Just one more question on West Texas the new pipeline project. I think you mentioned you're also be expanding the existing system, how much - if that's correct, how much you also expanding that by?

Michael, we expanded by equally amount of 40,000.

Okay. So I guess since the extension line is 110, as you move above that 40,000 on the extension line, so that imply that you have to then probably further expand the mainline and I guess what is the capability to do that?

Michael, you're exactly right that you will have to continue to expand the mainline that's when we get into we can expand and spend that capital on the mainland as we get the commitments on the lateral coming in there. So we don't have to spend it all upfront, we can incremental life that capital in there. And as I said we expect those projects that we're working on now to expand the mainline to bring more volume in on the lateral will be in at or better than the 4 to 6 times that the original one is. We did put some upfront capital in there to put a bigger piece of pipe in the ground, so that we are better able to compete in the Delaware.

Okay. And then my other question was just this on the cadence of dividend increases as you go out in time, are you planning to do like one dividend increase per year or you planning to do every quarter, what's thought there?

Well, Michael, obviously the board will address that on a quarterly basis, but our expectation would be to be in line with the past practice and most likely look at the quarterly and the board will evaluate the facts and circumstances each quarter and then act accordingly.

Great. Thank you very much.

And our next question will come from Tom Abrams with Morgan Stanley.

Thanks. What's left here, G&P strong margins in the quarter, can you just break that down a little bit on how much you might attribute in NGL prices and spreads versus fees?

Tom, this is Kevin. Yeah, it's again, we converted so much of our through the contract restructuring, we've moved so much of the commodity exposure to fee, it is primarily fee and when you combine that with our hedge position for 2017, virtually all that is just volume growth with the fee increase.

Good. And then on the distribution, last question, not so much for 2018 but more for 2019, is the philosophy around issuing equity to make a 10% or so distribution growth when you want to strengthen your balance sheet, your capital spending is clearly very strong and the industry itself seems to be moving more toward that mid-single-digit type being acceptable for the larger companies. Just wonder how you've traded off those kinds of dynamics?

Well, we were in a position today were in this particular quarter, we cover the dividend by 1.3 times and we expect to have significant dividend coverage going forward which will give us a lot of excess cash flow to put back into the business and reinvest in the business. We as I said previously, the dividend growth that we had previously guided to was based on kind of the run rate dividend - run rate CapEx that we've been spending over the last couple years. So as we have these lot of multiple projects, we just expect to have even more cash flow to invest in the business going forward.

All right. Thanks a lot and great quarter.

Thank you.

And our next question will come Christine Cho with Barclays.

Hi, everyone. I just have a couple of operational questions. The Bakken G&P volumes were up but the NGL pipeline volumes were down sequentially. What went on there, was it just more ethane that was you tested versus last quarter?

Yes, Christine, that was primarily around ethane and it also relates to the maintenance activities that we saw at our assets and how we had to move gas around and to continue to process as much of the gas as we possibly could. We did end up projecting more ethane than we had the previous quarter. In addition to that, another dynamic that was going on during the same time is our deethanizer at state line really ramped up during that time period. So the NGLs produced actually went up, but yet the NGLs we were pushing down the pipe went down a little bit.

So, if the NGL volumes were up but the pipeline volumes were down like where did the incremental NGLs go, do you guys have storage up there?

No. it was - again it was primarily ethane that was rejected due to a lot of the maintenance and other activities that were going on. And then the ethane that's going through the deethanizer does end up in markets in Canada as well.

Okay. And then in your prepared remarks, you alluded to evaluating opportunities for providing additional takeaway out of the Bakken. Your 10-Q says that you're expecting to add capacity to the Bakken NGL line by third quarter of next year. And if you do that, don't you have to expand Overland Pass, I thought that was full, or if there are other alternatives?

Christine. This is Sheridan. Yes, we are looking at the total system both over the past and Bakken pipeline to look at all alternatives to expand it. But you are correct, Overland Pass is full, so any expansion on the Bakken pipeline will have to take into account takeaway from the bottom end and we're looking at all options. But all options to expand that system as we continue to see the robust growth in the Williston.

And that would have to be looping, I'm assuming?

There's a lot of different options there, it could be looping of the existence system or completely new system.

I see, okay. And with natural gas production increasing out of the Bakken, is the incremental residue gas still going down northern border, or do you guys have an idea of how much of the gas is going there?

Well, again physically all the gas out of the basin is virtually all of it is ultimately ending up on Northern border that ends up in the Mid-Continent the upper Midwest markets. So how it gets priced is really a separate from an acre prospective is really a little bit, it's a different question. But all the gas and we're confident that with the growth projections we see out there that we will continue to be able to move all the residue out of the region on board.

Okay. Great. Thank you.

And our next question will come from Theodore Durbin with Goldman Sachs.

Good morning. I just wanted to verify, I think in your prepared remarks you said your NGL gathering volumes are up to 900,000 barrels a day in October, is that right?

That's correct.

That's a big pickup versus what you did in third quarter, what's the driver there and can give us a breakdown of whether it's mostly mid corner which is come out of?

Well, we're really seeing increasing in all of our regions. We talked about we talked about the Bakken barrels being down and now we're back up to those levels before. Mid-Continent volumes are up as well. A chunk of that is going to be ethane. As we have seen ethane recovery pick up during the month of October. We still think that will fluctuate a little bit when this come online and go through the startup. But again, we've seen some nice volume growth out of all the areas.

And is it fair to say the margins on that additional will be in line the sort of your rules of thumb $0.30 and $0.09 in that $0.03?

This is Sheridan. There will be close. Typically we have a little bit of a breakdown for ethane, a little bit of an incentive, but it's going to be materially in the line of what we've given.

Remember a lot of ethane's pipe come on is going to be value based barrel coming out in Mid-Continent which would be at a higher. Then the average rate that we have in our presentation because that has booked Conway and Bellevue and we talk about the Mid-Continent. So probably just slightly higher than that.

So Sheridan, it's fair to say that in many of your contracts, you have a structure slightly lower transportation and frac rate for ethane versus your propane plus?

That's exactly right. But we expect the Bellevue barrels to come out first which would be higher than the Conway price barrels.

Right. Okay that makes a lot of sense and it's really helpful. And then can you talk about the overall returns, I guess blended returns both on the let's call it $500 million of growth CapEx you have announced since June and as we think about that bigger chunk the $2.5 billion to $3.5 billion, what kind of the EBITDA multiple should we think about for both of those buckets, please?

Well, I think you're going to see a lot of those projects in that unannounced backlog are going to be similar to the routine growth that we've seen historically. So you could see a good chunk of this coming in at 4 to 6 times but I think broadly speaking overall some of the larger infrastructure projects that are in that mix are going to be in your 5 to 7 times that we've historically indicated. Is that help you?

Yeah, it's helpful. And then last one for me, just operating costs look like they're up a decent amount here third quarter sort of year-over-year. Is that all just sort of new assets something like the rest of hurricane costs in there, what sort of a good new run rate on op costs or is there anything any kind of onetime items in there?

Yeah the op costs are really just more of our growth in dealing with that. Yes, there was a little bit in there for the hurricane but again every quarter typically we will see some one time attributes. But I think that be - it would probably be a decent run rate as we think about going forward.

All right. That's it for me. Thank you.

Thanks.

And our next question will come from Craig Shere with Tuohy Brothers.

Good morning.

Good morning, Craig.

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Well, as we - I mean yes, Craig you're right. We have seen an increase in spreads through the month of October. We do think there's some likelihood that those will kind of maintain for two to three months here or beyond that. On the flip side as our volumes do increase that will reduce a little bit the amount of volume we can actually move on the pipes as we physically are flowing more volume on our assets. So there's a little bit of a give and take there but yes it's nice to have that tailwind of the stronger spreads. Sheridan?

Yeah, I definitely agree. And you are very right, there is more of this ethane, and we talked about more volume growth. We will consume more of the pipeline for fee based business and that will leave less capacity for optimization activities.

Understood. And with respect to the 200 million was the excess LPG expansion, I guess 116 that's OKE. I think three years ago, the guidance was given that you are hoping to achieve on the original acquisition and you know follow-on this is including maybe 500 million of expected growth CapEx, you are expecting to achieve an all in 6 to 8 times multiple by the end of the decade. It seems like maybe the growth CapEx figures coming well under the 500 million you all envisioned years ago. Do you see that due to efficient but the EBITDA you know expectation would be untacked or how do you see that multiple playing out overtime.

Craig, I still thing we still reach that by the end of the decade as we go through especially as we look at all the projects and all the plans that we are looking at right now and how that kind of drills. But we knew it will take us sometime when we bought the assets to get our strategy in place because lot of the plans that are coming on. When we first bough the assets, we are already committed, so we knew we had to wait for the second wave of gas plants have been built that were not committed, and that's where we all right now and we are finding that we can very effectively compete for these gas plants. And so I still think that we will reach that 6 to 8 times by the end of the decade.

Okay. And one last follow-on. I was under the impression that are original guidance did not corporate any additional upside from associated fractionation, does that continue to be the case and does a 4 to 6 times for 200 million project include or exclude related fractionation?

We got to look at it, fractionation is - our fractionation system pulls from all across our assets and then we see growing to the whole things. So it all depends on when those fractionation capacity is needed. As we keep room like this, as Terry mentioned, we will probably end up happened to build more fractionation capacity and we will see the Permian is being able to help support that growth and we will get market rates for that.

But does that feed into the original multiple expectation for the West Texas acquisition you originally made?

The original when we get that originally was more based on just pure cares and not the fractionation piece.

Okay, thank you.

And our next question will come from Chris Sighinolfi with Jefferies.

Hey, good morning, Terry.

Hey, good morning, Chris.

Last think asked and answered. I appreciate all the color, except two follow-ups I could, there more sort of structure. I was just curious you know Bakken has done quite well this year, obviously the DAPL Pipeline was sitting out there for a long term, had a story history to get into service, but that is and we see a clear bit pricing at Permian, I was wondering your conversation with producer counterparts out there, how much the pipeline actually being in place in the pricing dynamic, if that all is shaping decisions and how long they might - how they see that I guess evolving overtime?

I mean obviously with DAPL, it clearly anytime we can provide more pipeline takeaway capacity for crude, it benefits the producers from a reliability perspective and also just a net bag perspective. I mean, we typically hear their net bags are maybe 2 or 3 bucks better than they were before DAPL. So you know that's just increased strength and helping their cash flow to fund more drilling.

Certainly operational reliability has have improved significantly.

Absolutely, I mean you know you can look at some of the state and in rail who is really taken it downward trend, so that clearly the pipe is going to be more reliable than rail.

Okay, that's helpful. And then I guess switching gears probably for share and just this is question to Michael Fitzgibbons. What is your expectation, have your guys looked at what happens with ethylene, polyethylene markets when we bring on this much same cracking capacity in the window of time, I am kind of blind what happens for their downstream and so I am just wondering if you could help us think about the effects of that and maybe what you're customers or are saying and thinking about it and if there's an opportunity for you to spend it on that into it?

What I would tell you on what we look at Chris for that we hear from our customers on the polyethylene market, so they think that these crackers are going make ethylene but you're already seeing these companies bring on ethylene to polyethylene units. So you're really talking about where the ethylene is going. In worldwide, with the low cost of feedstock so we have the United States they're all saying the Gulf Coast crackers are much further to the left on the supply stack. So if we would overbuild and the world cannot consume that much polyethylene, you will see more the crackers and more east crackers being shut down, maybe some European crackers a long time before you see the Gulf Coast crackers shutdown. So that's why everybody - that's why you are seeing the next wave of crackers being talked about on the Gulf Coast, because this is the most advantage place today to build crackers due to the cost to feed stocks.

So the multiyear view then is I guess if I were to paraphrase, it is something similar to what we've seen with other our hydrocarbons where U.S. markets simply because of advantage cost structure pushes out higher costs like globally and so we're basically going to make inroads via exports that's the expectation?

That's right. You're exactly right.

And if I could, I don't know if you know the answer but are there particular foreign markets we could pay attention to it, maybe get a sense of from where that demand or where that supply competition is going to be most I guess most severe?

Well, I think from a demand side, you're going to see the growth from China and India. We also see some from Latin America and maybe a little bit from Europe but China and India are going to be the big movers on the demand side. Competition…

No, no that's…

You said on a competition for supply. I think it's a big - don't think it's going to affect that is the gas to oil ratio, if you would see oil and gas on the BTU basis come back closer together and it would become more advantage you may see that would I think where you would see on supply. We are seeing, it depends on how you look at supply competition, obviously we are exploiting propane and ethane which are going to crackers that would compete against polyethylene, against our polyethylene this mean produced in United States, but that still pull hydrocarbon through our system and now the United States.

Right. And so I guess the next wave, I guess this is the instant question for me is that if we're seeing the next wave of ethylene crackers that talked about to be built domestically. It would seem like that communities making a determination that the facility better exists here then to export the ethane to whatever foreign market there? Is that - I guess is that fair or is there something about the nature of all this and I don't understand?

I think it's a combination you're seeing, where we're seeing in most of the people that want to export ethane for cracking or even propane for cracking are really in India and China and I think they want to build their own facilities over there and get advantage of feed stock from United States. The big the - people that are building the next wave of crackers are the ones that built the first wave, they're going to be obviously already heard about the Exxon Mobil Saavik cracker down the Corpus Cristi that's been announced there's and all the other people are also talking about when do they build their next cracker and all of them are saying it's probably going to be in the Gulf Coast.

Okay. Great. I know unrelated to third quarter, but it always good to get your thoughts on market structure over time, so appreciate it.

Thanks Chris.

And that thus conclude today's question-and-answer session. At this time, I will turn the conference back to management for any additional or closing remarks.

Okay. Well, thank you everyone. Our quite period for the fourth quarter starts when we close our books in early January and extends until earnings are released after the market closes in late February. Have a great rest of your day.

Ladies and gentlemen, this just concludes today's conference. Thank you all for your participation. You may now disconnect.