On Apr 10,
Exterran Partners, L.P.
) completed the acquisition of compression assets from an
Chesapeake Energy Corp.
), MidCon Compression, L.L.C. The transaction costed about $360
ACCESS MIDSTRM (ACMP): Free Stock Analysis
CHESAPEAKE ENGY (CHK): Free Stock Analysis
EXTERRAN HLDGS (EXH): Free Stock Analysis
EXTERRAN PTNRS (EXLP): Free Stock Analysis
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The market reacted favorably to the announcement with share price
closing at $29.97 on Apr 11, up 2.1% from the previous day.
The transaction involved acquisition of 337 compression units
currently offering services to an affiliate of
Access Midstream Partners LP
), Access MLP Operating, L.L.C.
Post this acquisition, Exterran Partners has entered into a
7-year contract with Access to provide compression services. The
service would be available in the Permian, Eagle Ford, Barnett,
Anadarko, Mississippi Lime, Granite Wash, Woodford, Haynesville
and Niobrara Basins.
The proceeds from the Mar 2014 equity and debt offering by
Exterran Partners were used to fund this acquisition.
The partnership also announced that an agreement with
Exterran Holdings, Inc.
) has been revised, under which the limit on selling, general and
administrative expenses per quarter has been increased to $17.7
million from $15.0 million.
Exterran Partners is a leading natural gas contract operations
service provider in the U.S. Exterran Holdings has equity
interest in the partnership which includes full general partner
Exterran Partners has reported poor numbers in the previous two
quarters, missing the Zacks Consensus for earnings both times and
this trend is expected to continue in future. In the past two
months the partnership has seen two negative estimate revisions,
pegging the current quarter estimate at 23 cents per unit. For
the current year, six estimates have moved down, dragging the
estimates from $1.26 per unit to $1.00, in the same time frame.
Exterran Partners currently holds a Zacks Rank #5 (Strong Sell),
implying that it is expected to underperform the broader U.S.
equity market over the next one to three months. Of other firms
mentioned, Exterran Holdings sports a Zacks Rank #1 (Strong Buy),
whereas Chesapeake Energy and Access Midstream carry a Zacks Rank