Exterran Partners’ Key 4Q2014 Operational Highlights



Operating horsepower

Exterran Partners, L.P. (EXLP) noted on its earnings call that in 2014 it increased its operating horsepower by 776,000, or ~34%, over the previous year. This increased its horsepower to just over 3 million, making it the largest natural gas compression services provider in the United States.

This increase was accredited to organic growth and third-party acquisitions, which we’ll go over in the following part.

Exterran (EXLP) completed two significant acquisitions in 2014. It also invested $233 million in new compressor units. These helped increase operating horsepower by 776,000.

Sequentially, operating horsepower increased by 93,000 in 4Q14, or 3.2%, mostly due to organic growth.

EXLP is a subsidiary company of Exterran Holdings (EXH), which also holds EXLP’s general partners, and makes up ~0.11% of the Vanguard Energy ETF (VDE) and 0.12% of the iShares U.S. Energy ETF (IYE).

A company similar in structure to EXLP is Williams Partners (WPZ), an MLP that was formed after Access Midstream Partners merged with Williams. WPZ’s general partner is owned by Williams Companies Inc. (WMB).

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Gross margin

Gross margin for 4Q2014 was 61% compared to 60% in the previous quarter and 56% in the corresponding period last year. For the year, gross margin was 59% compared to 57% in the previous year.

The company seems to have had a positive operational as well as financial performance last year. It seems confident about its growth amid a volatile natural gas price environment and a reduced commodity price cycle.

Brad Childers, chief executive officer of EXH, said in the earnings release call, “Looking ahead, we believe that Exterran Partners is well positioned to manage through industry cycles as our fee-based business, which is tied to the production and flow of hydrocarbons, provides relatively stable cash flows.”

In the next part of this series, we’ll look at Exterran’s (EXLP) acquisition activity in 2014.


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