USA Compression (USAC) said the integration of CDM Resources, which it acquired from Energy Transfer Partners last year, is nearly complete.
Eric Long, USAC President and CEO, said USAC continues to reap rewards from the purchase. “We expect to have the bulk of the cost-related synergies implemented in the first half of this year with the capture of revenue or commercial opportunities continuing over the next several years.”
Long said, “The current market for compression services is stronger than we’ve seen in quite a while, due in part to increasing domestic gas production and the continued supply tightness for equipment to serve this growing production.”
His remarks came as USAC reported revenues of US$172 million for the fourth quarter of 2018 and US$584.4 million for the full year. Net income was US$10.2 million for the quarter and net loss was US$10.6 million for the year.
USAC’s revenue-generating fleet was 3.2 million hp (2386 MW) at yearend. Utilization was 94%.
The company has ordered 132,000 hp (98 MW) for delivery in 2019, mostly 2500 hp (1.8 MW) units and larger. It has been negotiating rate increases with many of its customers.
Long said most of USAC’s US$150 million capital budget this year will go to large horsepower units for the Permian and Delaware basins of West Texas and the Scoop/Stack plays in Oklahoma. USAC also is moving some units from the Fayetteville Shale to the Permian Basin.
“Continuing the trends we saw throughout 2018, the market for compression services remains robust, underpinned by the same strong natural gas fundamentals, driving the midstream infrastructure build-out throughout this country,” Long said.