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.”
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