USA Compression reports jump Q3 revenue, profits

By Keefe Borden01 November 2022

USA Compression’s fleet is distributed among multiple oil and gas producing regions. (Map: USA Compression.)

USA Compression Partners saw significant increases in revenue, net income and cash from operating activities in the third quarter of 2022 when compared with the same period a year ago.

The company’s total revenues in Q3 were $179.6 million, up from $158.6 million a year ago. Net income for Q3 was $9.6 million, up from $4.1 million 3Q21. Net cash from operating activities was $49.2 million, up from $45.3 million in 3Q21.

“Our third-quarter results were consistent with the continued strengthening in energy markets, as demand for our compression services continued to grow, leading to sequential-quarter increases in revenues, Adjusted EBITDA, and revenue generating horsepower, along with continued improvements to contract pricing,” commented Eric D. Long, USA Compression’s president and CEO. “Our strong third-quarter results were underpinned by continued improvements to our fleet utilization, which surpassed a 90-percent exit rate for the third quarter, and by further strengthening to our quarter-over-quarter average price per horsepower per month. Our third-quarter performance also led to continued improvement to our leverage ratio while essentially maintaining the previous quarter’s distribution coverage.”

The growth in revenue from compression services stems from the stronger demand for natural gas and growing production from its customers. “Our customers remain active across our operating regions, and we have and plan to continue keeping pace with their activity levels through the expansion of our compression and station services,” he said.

The company plans to purchase an additional 50 large horsepower compression units, which were driven by strong demand from its major customers for additional compression and station services. That order will bring its new unit order for 2023 to 66 units, for a total of 165,000 additional horsepower. The company plans to have those units deployed under multi-year contracts by year-end 2023, he said.

In Q3, the company’s expansion capital expenditures were $46.7 million, maintenance capital expenditures were $8.1 million, and cash interest expense, net was $33.3 million.

The company reported its fleet totaled 3,711,205 hp, up from 3,687,601 hp a year ago. Looking forward, the company said it expects full year 2022 net income to range between $30 and $40 million. USA Compression is a publicly traded master limited partnership whose general partner is owned by Energy Transfer.

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