USA Compression Partners LP (USAC) said it will lower its capital spending next year in conformity with budget cutting across the gas-producing sector.
President and CEO Eric Long said 2019 growth capital expenditures will total US$145-$155 million, down from last year. “We currently expect 2020 to be below 2019’s level,” Long said. “Based on what we are seeing out of the market, as well as a desire to strengthen our balance sheet and avoid undue reliance on the capital markets, we are taking our foot off the pedal for 2020.”
Most of next year’s new assets will go to the overlapping Permian and Delaware basins of West Texas and Southeast New Mexico.
Long said although investments may slow in the gas production sector, “End users — petrochemical companies, liquefied natural gas exporters, power generators and others — continue to invest in domestic facilities. These facilities are expected to continue to drive demand, which results in more gas moving through the system, ultimately requiring more compression along the way.”
The Austin, Tex.-based company announced third quarter net income of US$13.3 million compared to US$9.9 million in the second quarter and a loss of US$563 million in the third period of 2018. Earnings before interest, taxes, depreciation and amortization (EBITDA) was unchanged from the previous quarter at US$104 million.
At the end of the third quarter, USAC’s fleet horsepower was up slightly at 3,679,000 hp (2743 MW). Revenue generating horsepower rose to 3,279,000 hp (2445 MW). Average horsepower utilization for the third quarter was 93.9%.