Exterran Partners Closes $360M Acquisition - Analyst Blog


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On Apr 10, Exterran Partners, L.P. ( EXLP ) completed the acquisition of compression assets from an affiliate of Chesapeake Energy Corp. ( CHK ), MidCon Compression, L.L.C. The transaction costed about $360 million.

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 ( ACMP ), 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. ( EXH ) 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 interest.

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 #3 (Hold).

ACCESS MIDSTRM (ACMP): Free Stock Analysis Report

CHESAPEAKE ENGY (CHK): Free Stock Analysis Report

EXTERRAN HLDGS (EXH): Free Stock Analysis Report

EXTERRAN PTNRS (EXLP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: ACMP , CHK , EXH , EXLP

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