uploads/2015/03/exlp-acquisition.png

Acquisitions: A Key Growth Strategy for Exterran Partners

By

Updated

Two major acquisitions

In April and August 2014, Exterran Partners, L.P. (EXLP) acquired around ~550,000 additional horsepower from MidCon Compression, a subsidiary of Chesapeake Energy (CHK).

The April acquisition comprised 337 compression units with a total horsepower of ~440,000 for ~$351 million. The units that EXLP acquired are at the following locations:

  • Permian Basin Shale
  • Eagle Ford Formation
  • Barnett Shale
  • Anadarko
  • Mississippi Lime
  • Granite Wash
  • Woodford Shale
  • Haynesville Shale
  • Niobrara Basins

For the acquired horsepower of ~444,000, EXLP entered into a seven-year contract with Access Midstream Partners, now merged into Williams Partners (WPZ).

Article continues below advertisement

August acquisition

In August 2014, EXLP acquired an additional 162 natural gas compression assets from MidCon, worth ~$135 million, with a total horsepower of ~110,000 in the Fayetteville Shale. The majority of the 110,000 horsepower is under a five-year contract.

Both acquisitions contributed to a strong fourth quarter. The company saw a sequential revenue growth of 5% and a year-over-year growth of 32% as a result of these acquisitions and organic growth.

Acquisitions are one of EXLP’s main strategies to grow its business. The following part talks about EXLP’s major growth strategies.

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).

Advertisement

More From Market Realist