Enerflex Expands U.S. Compression Rentals
14 August 2019
Enerflex Ltd. spent C$61 million to grow its U.S. contract compression fleet 51% in the past 12 months and is optimistic about further increasing market share.
The Calgary-based company acquired Mesa Compression LLC’s 112,000 hp (83.5 MW) in the U.S. two years ago. Since then, its U.S. fleet has grown to 260,000 hp (194 MW).
“Our contract compression fleet contributed to significant recurring revenue growth in the U.S. segment this quarter and is a major part of our strategy going forward,” said President and CEO Marc Rossiter.
“The utilization in the U.S. fleet is really high and our rate of inquiries is also quite good. I’m reticent to tell you that I’m feeling 2020 is going to be great for contract compression, because we’re going to wait and see and manage the business responsibly. However, it has been the bright light so far this year (for Enerflex).
“I do expect there to be tough competition in the next few quarters,” he said. “But I do believe we’re well-positioned to be as competitive as possible.”
Enerflex also continued to expand is global rental fleet. It totaled 681,500 (508 MW) on June 30, up from 618,700 (461,000 MW) a year earlier. Worldwide rental revenues grew by 28%. Rossiter said the company also is focused on growing market share in gas processing.
“We like the higher margins that those product lines can bring,” Rossiter said. “It’s not always a guaranteed thing. But in general, compared to the more standard compression, the margins are better.”
He said the company continues to examine opportunities for acquisitions. “So compressors, gas plants, gas-fire generators, any one of those things, we’d be more than happy to invest in as a long-term asset.”
Enerflex had revenue of C$542 million for the three months ending June 30, an increase of C$137 million. Net earnings rose to C$40.6 million from C$20.4 million in the same period a year earlier.