Archrock Sees Strong Demand Ahead

Company saw record gas production in 2018

Archrock Inc., the nation’s largest contract compression firm, grew its contract operations revenue 13% and its average operating horsepower 8% during the first quarter of 2019, compared with the same period in 2018.

Brad Childers, Archrock’s president and CEO, said record gas production in 2018 caused the build-out of more midstream infrastructure and continued strong demand for contract compression equipment and services.

Archrock posted net income of US$19.5 million for the first quarter compared to US$2.1 million a year ago. Operating horsepower at the end of the first quarter was 3.6 million, up 7% from 3.3 million a year earlier. Utilization was 88% compared with 86% a year earlier.

Childers said the company’s 2019 business would equal or exceed 2018 totals, as it is experiencing more demand than it can meet. Some high-demand units deployed to customers’ sites are getting 20% year-over-year price increases.

Archrock plans to spend US$250 million to US$300 million to grow its fleet this year, supporting between 285,000 and 345,000 of new horsepower. Customers have contracted for nearly 95% of that capacity.

The investments will be focused on large horsepower units for midstream applications, about half destined for the Permian Basin of West Texas and southeastern New Mexico.

Print Friendly, PDF & Email