Exterran Concludes Purchase Of Compression, Processing Assets

Acquired compression assets including 407 compressor units comprising approximately 289,000 horsepower, 207 compressor units comprising approximately 98,000 horsepower currently being leased from Exterran Holdings, processing assets include a gas-processing plant with a capacity of 8 MMcf/d in the northeastern U.S.

Exterran Partners LP, Houston, (Nasdaq: EXLP) has closed its purchase of compression and processing assets from Exterran Holding Inc., Houston, (NYSE: EXH) and for approximately $183 million in cash and assumed debt.

Exterran Partners paid $77.4 million in cash and assumed approximately $105.4 million of Exterran Holdings’ debt. The cash portion includes a payment made in lieu of the 1.9 million-unit issue Exterran Partners had previously offered.

The deal includes compression services comprising approximately 400 compressor units used to provide compression services under contract, comprising approximately 188,000 horsepower and representing approximately 5% (by available horsepower) of the combined U.S. contract operations business of Exterran Holdings and Exterran Partners. In addition, the acquisition includes approximately 140 compressor units comprising approximately 75,000 horsepower currently being leased from Exterran Holdings to Exterran Partners.

Also, the assets include a natural gas processing plant with a capacity of 10 million cubic feet per day in the northeastern U.S. used to provide processing services pursuant to a long-term services agreement.

Exterran Partners managing general partner chairman, president and chief executive Brad Childers says, “We are pleased with this transaction, which will expand Exterran Partners’ fee-based business and enhance its leading market position as a provider of natural gas contract operations services in the United States. The acquisition will increase Exterran Partners’ contract operations fleet to approximately 2.1 million horsepower, which would comprise approximately 58 percent by available horsepower of the combined U.S. contract operations business of Exterran Holdings and Exterran Partners.”

The omnibus agreement between Exterran Partners and Exterran Holdings has been amended to reflect adjustments in the cap on selling, general and administrative costs from $9 million per quarter to $10.5 million per quarter, while the cap on operating costs will remain at $21.75 per horsepower per quarter. These caps will be extended for one year and will now terminate on Dec. 31, 2013, unless otherwise extended.

Exterran Partners funded the deal with approximately $78.8 million of borrowings under its revolving credit facility and approximately $104 million of net proceeds from its recently completed underwritten public offering of common units.