HOUSTON--(BUSINESS WIRE)--Mar. 8, 2013--
Exterran Holdings, Inc. (NYSE: EXH) and Exterran Partners, L.P. (NASDAQ:
EXLP) today announced that Exterran Partners will acquire assets from
Exterran Holdings for consideration valued at $174 million including
customer contracts relating to the operation of approximately 259,000
horsepower of compressor units.
Highlights of this transaction include:
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Assets to be acquired by Exterran Partners include Exterran Holdings’
contracts serving 50 customers together with approximately 370
compressor units used to provide compression services under those
contracts, representing approximately 253,000 horsepower and
approximately 8 percent (by available horsepower) of the combined U.S.
contract operations business of Exterran Holdings and Exterran
Partners.
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In addition, the acquisition will include contracts covering
approximately 6,000 horsepower owned by Exterran Partners which are
currently being leased to Exterran Holdings and approximately 200
compressor units comprising approximately 100,000 horsepower currently
being leased from Exterran Holdings to Exterran Partners.
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The consideration to be paid to Exterran Holdings’ affiliates will
consist entirely of Exterran Partners’ equity, comprised of
approximately 7.1 million common units and approximately 145,000
general partner units.
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The transaction is subject to regulatory approval and other closing
conditions and is expected to close in March or April 2013.
“This transaction is another important step in our plan for Exterran
Partners to be the growth vehicle for our contract operations business
in the United States. The acquisition will increase Exterran Partners’
contract operations fleet to approximately 2.4 million horsepower,
bolstering its leading market position as a provider of natural gas
contract operations services in the United States. We plan to continue
to create value through Exterran Partners by continued growth through
dropdown transactions, organic growth and third party acquisitions,”
said Brad Childers, President and Chief Executive Officer of Exterran
Holdings.
“We believe the transaction will create economic value for Exterran
Partners by increasing distributable cash flow and enhancing its capital
position,” said David Miller, Senior Vice President and Chief Financial
Officer of Exterran Partners’ managing general partner. “Additionally,
we believe we are making further progress in our goal to reduce and
eventually eliminate the need for cost cap contributions from Exterran
Holdings.”
In connection with and upon the closing of the transaction, the omnibus
agreement between Exterran Partners and Exterran Holdings will be
amended to, among other things, (i) increase the cap on selling, general
and administrative costs from $10.5 million per quarter to $12.5 million
per quarter, for the remainder of 2013, and to $15.0 million per quarter
on January 1, 2014 and extending through the remainder of 2014, and (ii)
increase the cap on operating costs from $21.75 per horsepower per
quarter to $22.50 per horsepower per quarter, beginning on January 1,
2014, and extending through the remainder of 2014. These caps will now
terminate on December 31, 2014, unless otherwise extended.
The transaction was approved by the conflicts committee of the board of
directors of Exterran Partners’ managing general partner. The conflicts
committee, which is comprised entirely of independent directors,
retained independent legal and financial advisors to assist it in
evaluating the transaction.
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 approximately 10,000 employees and operates in approximately 30
countries.
Exterran Partners, L.P. is the leading provider of natural gas contract
operations services to customers throughout the United States. Exterran
Holdings owns an equity interest in Exterran Partners, including all of
the general partner interest.
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’ financial and operational strategies and
ability to successfully effect those strategies; statements regarding
the ability of the Companies to complete their proposed transaction; the
amendments to the omnibus agreement and the expected timing of the
closing of the transaction; the expected benefits of the transaction and
the overall dropdown strategy to the Companies; and Exterran Holdings’
intention to continue to offer the balance of its U.S. contract
operations assets to Exterran Partners.
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 or natural gas or a sustained
decrease in the price of oil or 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 failure to satisfy the 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, 2012, Exterran Partners’ Annual Report on Form 10-K for the
year ended December 31, 2012, 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 Holdings, Inc.
Investors
David Oatman, 281-836-7035
or
Media
Susan
Moore, 281-836-7398