HOUSTON, May 23, 2011 (BUSINESS WIRE) --
Exterran Holdings, Inc. (NYSE:EXH) and Exterran Partners, L.P.
(NASDAQ:EXLP) today announced that Exterran Partners has agreed to
acquire compression and processing assets from Exterran Holdings for
consideration valued at approximately $228 million.
Assets to be acquired by Exterran Partners include:
- Compression services. Contracts serving 34 customers of
Exterran Holdings and its affiliates, together with approximately 407
compressor units used to provide compression services under those
contracts, comprising approximately 289,000 horsepower, representing
approximately 8% (by available horsepower) of the combined U.S.
contract operations business of Exterran Holdings and Exterran
Partners. In addition, the acquisition includes approximately 207
compressor units comprising approximately 98,000 horsepower currently
being leased from Exterran Holdings to Exterran Partners.
- Processing services. A natural gas processing plant with a
capacity of 8 million cubic feet per day located in the northeastern
United States used to provide processing services pursuant to a
long-term services agreement.
The acquisition is expected to expand Exterran Partners' contract
operations fleet to approximately 1.9 million horsepower which would
comprise approximately 52% (by available horsepower) of the combined
Exterran Holdings and Exterran Partners U.S. contract operations
business.
"We are pleased to enhance Exterran Partners' position as a leading
compression services provider in the United States and to enter the
processing services market by acquiring natural gas processing assets
that benefit from a long-term contract with one of the nation's largest
energy producers," said Michael J. Aaronson, Chief Financial Officer of
Exterran Partners' managing general partner.
"This transaction is a significant step in our long-term strategy to
transfer our remaining North America contract operations business to
Exterran Partners over time," added Ernie L. Danner, President and Chief
Executive Officer of Exterran Holdings. "Exterran Holdings expects to
use the cash proceeds from the transaction to enhance its capital
position through the reduction of its debt balances."
In connection with and upon closing of the transaction, the omnibus
agreement between Exterran Partners and Exterran Holdings will be
amended to reflect adjustments in the cap on selling, general and
administrative costs from $7.6 million per quarter to $9.0 million per
quarter while the cap on operating costs will remain at $21.75 per
horsepower per quarter. These caps will be extended for one year and
will now terminate on December 31, 2012, unless otherwise extended.
The board of directors of the managing general partner of Exterran
Partners approved the transaction based on a recommendation from its
conflicts committee. The conflicts committee, which is comprised
entirely of independent directors, retained independent legal and
financial advisors to assist it in evaluating the transaction.
The transaction consideration includes the assumption of approximately
$159 million of Exterran Holdings debt and the delivery to Exterran
Holdings of approximately 2.5 million common units of Exterran Partners,
or the cash equivalent thereof, and approximately 51,000 general partner
units of Exterran Partners. Exterran Partners expects to finance the
transaction and continue to finance its business in a manner consistent
with its current and target capital structure, which may include debt
incurred under the partnership's revolving credit facility and/or the
issuance of public securities. The transaction is subject to regulatory
approval and other closing conditions and is expected to close in June
2011.
About Exterran Holdings and Exterran Partners
Exterran Holdings, Inc. is a global market leader in full service
natural gas compression and a premier provider of operations,
maintenance, service and equipment for oil and gas production,
processing and transportation applications. Exterran Holdings serves
customers across the energy spectrum--from producers to transporters to
processors to storage owners. Headquartered in Houston, Texas, Exterran
has over 10,000 employees and operates in approximately 30 countries.
Exterran Partners, L.P. provides natural gas contract operations
services to customers throughout the United States. Exterran Holdings
owns an equity interest in Exterran Partners.
For more information, visit www.exterran.com.
Forward-Looking Statements
All statements in this release (and oral statements made regarding the
subjects of this release) other than historical facts are
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements rely on a number of assumptions concerning future events and
are subject to a number of uncertainties and factors, many of which are
outside the control of Exterran Holdings and Exterran Partners (the
"Companies"), which could cause actual results to differ materially from
such statements. Forward-looking information includes, but is not
limited to: the Companies' operational and financial strategies and
ability to successfully effect those strategies; Exterran Partners'
expectations regarding the financing of the transaction contemplated by
this release; the Companies' financial and operational outlook and
ability to fulfill that outlook; Exterran Holdings' intention to
continue to offer the balance of its U.S. contract operations business
to Exterran Partners; statements regarding the expected benefits of the
transaction to Exterran Holdings and Exterran Partners; and statements
regarding the ability of the Companies to complete their proposed
transaction and the expected timing of the closing of the transaction.
While the Companies believe that the assumptions concerning future
events are reasonable, they caution that there are inherent difficulties
in predicting certain important factors that could impact the future
performance or results of their business. Among the factors that could
cause results to differ materially from those indicated by such
forward-looking statements are: changes in the capital and financial
markets that impact the effect of the drop-down of additional assets to
Exterran Partners; local, regional, national and international economic
conditions and the impact they may have on the Companies and their
customers; changes in tax laws that impact master limited partnerships;
conditions in the oil and gas industry, including a sustained decrease
in the level of supply or demand for oil and natural gas and the impact
on the price of oil and natural gas; Exterran Holdings' ability to
timely and cost-effectively execute larger projects; changes in
political or economic conditions in key operating markets, including
international markets; changes in safety, health, environmental and
other regulations; as to each of the Companies, the performance of the
other entity; and the results of the review of the proposed transaction
by regulatory agencies and the failure to satisfy various other
conditions to the closing of the transaction.
These forward-looking statements are also affected by the risk factors,
forward-looking statements and challenges and uncertainties described in
Exterran Holdings' Annual Report on Form 10-K for the year ended
December 31, 2010, Exterran Partners' Annual Report on Form 10-K for the
year ended December 31, 2010, and those set forth from time to time in
the Companies' filings with the Securities and Exchange Commission,
which are currently available at www.exterran.com.
Except as required by law, the Companies expressly disclaim any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future events or
otherwise.
SOURCE: Exterran Holdings, Inc. and Exterran Partners, L.P.
Exterran
Investors:
David Oatman, 281-836-7035
Media:
Susan Nelson, 281-836-7297