USA Compression Partners (USA Compression) has announced plans to acquire the compressor business of Energy Transfer Partners (Energy Transfer). The US$1.5 billion deal will expand USA Compression’s geographic reach into active US basins, including the Eagle Ford Shale, Gulf Coast, Rockies, and Permian Basin, and essentially doubles USA Compression’s fleet to 3.4 million hp (2.5 million kW).
The acquisition includes Energy Transfer subsidiaries CDM Resource Management LLC and CDM Environmental & Technical Services LLC.
CDM Resource Management LLC (CDM Resources) provides customers with natural gas contract compression services and natural gas contract processing and treating services and equipment. On the compression side, CDM Resources owns and operates a Caterpillar/Ariel/Air X-Changers standard fleet with more than 1.5 million hp (1.1 million kW) with a per-month guarantee of 98% mechanical availability for land installations and 96% mechanical availability for over-water installations. With over 70% of horsepower greater than 1000 horsepower and an average unit size of approximately 700 hp (522 kW), the CDM fleet has an average age of approximately seven years and a current operating utilization rate of 87%. CDM Resources service contracts include first-call response, regularly scheduled preventive maintenance, and emissions testing.
CDM Environmental and Technical Services (CDM ETS) provides emissions testing and third-party / after-market services (AMS) to the oil and gas industry. On the emissions side, CDM ETS owns a fleet of custom-engineered emissions testing trailers. Qualified testers provide customers with the detailed, technical emissions reporting necessary to operate in compliance with federal and state regulations. On the third party / AMS side, CDM ETS certified engine mechanics operate across major shale plays to repair, overhaul reconfigure and/or maintain customers’ equipment.
Founded in 1998, USA Compression is a third-party provider of mission-critical compression services to customers across the oil and gas industry. Since its inception, it has focused primarily on large-horsepower (typically over 1000 hp [746 kW]) applications.
“This is an exciting day for USA Compression to be able to announce this strategic transaction with Energy Transfer,” said Eric Long, president and CEO of USA Compression. “The acquisition of CDM is a logical combination of two leading compression service providers – each with nearly two decades of delivering exemplary levels of customer service. Operating in different areas of geographic focus with nominal overlap, CDM brings to USA Compression a complementary and standardized fleet of large horsepower, infrastructure-oriented equipment, a customer-focused operating philosophy and a strong employee base consistent with those of USA Compression’s. CDM has been very successful building its compression and treating business; we are excited about the possibilities that the combined partnership will continue to grow and deliver on the exceptional customer service on which our customers depend.”