Archrock Inc. has closed on the previously announced acquisition of the contract compression business of Elite Compression Services LLC (Elite), giving Archrock the largest contract compression fleet in the US (see Archrock Acquires Elite Compression Services, August 2019 Gas Compression Magazine, p. 32).
Headquartered in Victoria, Texas, USA, Elite provides contract gas compression services with operations throughout the United States. The US$410 million deal includes about 430,000 hp (320,780 kW) of gas compression and strengthens Archrock’s presence in the Eagle Ford shale.
The acquired assets are primarily large-horsepower units (greater than 1000 hp [746 kW]), which folds nicely into Archrock’s inventory. As of December 31, 2018, more than 70% of Archrock’s fleet, as measured by operating horsepower, was comprised of units that exceeded 1000 hp.
The transaction increases Archrock’s total compression to approximately 4.4 million total horsepower (3.2 million kW) and enhances its position in leading growth plays, including Eagle Ford, Permian, Marcellus/Utica, and Scoop/Stack.
“Nearly 80% of the compression assets being acquired are large horsepower, operating as infrastructure assets in gathering applications and systems,” said Brad Childers, president and CEO of Archrock. “As a result of this acquisition, on a combined basis, large-horsepower equipment will comprise about 73% of our total operating horsepower. In addition, the midstream focus of these assets results in high utilization rates and attractive contract structures. The units we’re acquiring are 97% utilized. Elite’s fleet currently serves approximately 15 high-quality customers. However, roughly 90% of Elite’s revenue comes from two blue chip customers, Hilcorp and Marathon Petroleum, with which we already have existing and long-standing relationships.”