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Increases Exterran Partners’ total working horsepower by
approximately 19 percent to 2.7 million horsepower
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Exterran Partners also announces new contract operations
services contract with Access Midstream Partners
HOUSTON--(BUSINESS WIRE)--Feb. 28, 2014--
Exterran Partners, L.P. (NASDAQ:EXLP) and Exterran Holdings, Inc.
(NYSE:EXH) today announced that Exterran Partners has entered into an
agreement to acquire natural gas compression assets from MidCon
Compression, L.L.C., a subsidiary of Chesapeake Energy Corporation
(NYSE:CHK), for approximately $360 million. The assets to be acquired
include 334 compression units, with a total horsepower of approximately
440,000, which currently are being used to provide compression services
to Access MLP Operating, L.L.C., a subsidiary of Access Midstream
Partners LP (NYSE:ACMP), the largest gathering and processing master
limited partnership in the United States as measured by throughput
volume.
In connection with the acquisition, Exterran Partners and Access have
entered into a seven-year contract operations services agreement, to be
effective as of the closing, under which Exterran Partners will provide
contract compression services to Access in regions including the
Permian, Eagle Ford, Barnett, Anadarko, Mississippi Lime, Granite Wash,
Woodford, Haynesville and Niobrara Basins.
“With this transaction, we continue to deliver on our strategy of
growing our core contract operations business,” said Exterran Partners
CEO Brad Childers. “Because the units we are acquiring are highly
standardized and average less than five years in age, the acquisition is
also consistent with our strategy to modernize and standardize our
existing fleet.”
“We are pleased to acquire an attractive fleet of high-quality units,
the majority of which operate in liquids-rich plays and shale basins,
and we are excited to welcome to Exterran a talented group of
experienced employees,” said Exterran Partners Senior Vice President Rob
Rice. “We are particularly pleased to establish this significant
customer relationship with Access, and we look forward to servicing
their contract compression needs for many years to come.”
“The transaction is expected to be accretive to distributable cash flow
and accelerate Exterran Partners’ progress toward eliminating our
reliance on cost cap reimbursements from Exterran Holdings,” said
Exterran Partners Chief Financial Officer David Miller. “While we are
not expecting to increase our distribution per unit as a result of this
transaction, this acquisition enhances our ability to continue executing
our strategy which, in the past, has included incremental distribution
growth. We will continue to monitor our distribution strategy as we
integrate this transaction and implement our North America field
initiatives.”
In connection with and upon the closing of the transaction, the Omnibus
Agreement between Exterran Partners and Exterran Holdings will be
amended to increase the cap on selling, general and administrative costs
from $15.0 million per quarter to $17.7 million per quarter. Exterran
Holdings and Exterran Partners also have entered into an equity
commitment pursuant to which Exterran Holdings has agreed to purchase
$150.0 million of newly issued common units from Exterran Partners to
fund a portion of the purchase price of the acquisition under certain
circumstances if Exterran Partners does not obtain equity capital
markets financing prior to the closing date of the acquisition.
The transaction is subject to closing conditions and is expected to
close in the second quarter 2014.
About Exterran Partners
Exterran Partners, L.P. is the leading provider of natural gas contract
operations services to customers throughout the United States. Exterran
Holdings, Inc. owns an equity interest in Exterran Partners, including
all of the general partner interest. For more information, visit www.exterran.com.
About Exterran Holdings
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 Holdings owns an equity interest, including all of
the general partner interest, in Exterran Partners.
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; demand for the
Companies’ products and services and growth opportunities for those
products and services; statements regarding Exterran Partners’ ability
to complete the proposed transaction and the expected timing of the
closing of the transaction; Exterran Partners’ expectations with respect
to its distribution strategy; statements relating to the new contract
and customer relationship with Access; statements related to the
amendment to the Omnibus Agreement and the terms and timing thereof;
statements related to the equity commitment and the terms thereof; and
the expected benefits of the transaction to Exterran Partners and its
customers.
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 its 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 transaction on 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 economic conditions
in key operating markets; changes in safety, health, environmental and
other regulations; as to each of the Companies, the performance of the
other entity; and the failure of any party to the transaction 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, 2013, Exterran Partners’ Annual Report on Form 10-K for the
year ended December 31, 2013 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.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or
jurisdiction.
Source: Exterran Partners, L.P. and Exterran Holdings, Inc.
Exterran Partners, L.P. and Exterran Holdings, Inc.
Media
Susan
Moore, 281-836-7398
or
Investors
David Oatman,
281-836-7035
or
David Miller, 281-836-7895