USA Compression Partners, LP (USAC) Bundle
A Brief History of USA Compression Partners, LP
USA Compression Partners, LP (USAC) has established itself as a prominent player in the natural gas compression industry, focusing on providing compression services to the oil and gas sector. The company has seen significant growth and operational expansion since its inception.
Company Formation and Growth
Founded in 2011, USA Compression Partners was formed to meet the increasing demand for natural gas compression services in the U.S. The company quickly grew through strategic acquisitions and organic expansion, focusing on enhancing its fleet of compression units.
Financial Performance Overview
As of September 30, 2024, USA Compression reported revenues of $239.968 million for the third quarter, a 10.5% increase from $217.085 million in the same quarter of 2023. For the nine months ended September 30, 2024, total revenues reached $662.265 million, up from $590.237 million in 2023, reflecting a 12.2% year-over-year growth.
| Financial Metrics | Q3 2024 (in thousands) | Q3 2023 (in thousands) | 9M 2024 (in thousands) | 9M 2023 (in thousands) |
|---|---|---|---|---|
| Total Revenues | $239,968 | $217,085 | $662,265 | $590,237 |
| Net Income | $19,327 | $20,902 | $74,138 | $55,427 |
| Adjusted EBITDA | $145,690 | $130,164 | $428,758 | $373,323 |
| Distributable Cash Flow (DCF) | $86,606 | $71,574 | $259,058 | $201,225 |
Capital Structure and Debt Management
As of September 30, 2024, USA Compression had $803.2 million in outstanding borrowings under its Credit Agreement, with a weighted-average interest rate of 7.50%. The company also issued $1.0 billion in Senior Notes due March 15, 2029, to finance its operations and capital expenditures. The interest rate on these notes is set at 7.125% per year.
Operational Metrics
The fleet horsepower as of September 30, 2024, was reported at 3,862,445, reflecting a 3.4% increase from 3,735,490 horsepower in the previous year. The average revenue per revenue-generating horsepower per month also increased by 7.9% to $20.60 compared to $19.10 in 2023.
| Operational Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Fleet Horsepower | 3,862,445 | 3,735,490 |
| Revenue-Generating Horsepower | 3,570,508 | 3,395,630 |
| Average Revenue/Revenue-Generating Horsepower | $20.60 | $19.10 |
Distributions and Unit Performance
In 2024, USA Compression declared total distributions of $1.575 per unit, amounting to $176.9 million for common unitholders. This marks a significant increase from $2.10 per unit in 2023, reflecting the company's commitment to returning value to its investors.
Market Position and Future Outlook
As of 2024, USA Compression continues to operate in a favorable market environment, driven by increased production levels of crude oil and natural gas in the U.S. The company is well-positioned to capitalize on the growing demand for compression services, bolstered by its extensive fleet and operational efficiencies.
A Who Owns USA Compression Partners, LP (USAC)
Ownership Structure
As of September 30, 2024, the ownership of USA Compression Partners, LP is primarily held by Energy Transfer, which owns approximately 39% of the limited partner interests and 100% of the General Partner. The total number of common units outstanding is 117,022,833, which includes units issued under the Distribution Reinvestment Plan (DRIP) and units converted from Preferred Units.
| Owner | Type of Interest | Number of Units | Percentage Ownership |
|---|---|---|---|
| Energy Transfer | Limited Partner | 46,056,228 | 39% |
| General Partner (controlled by Energy Transfer) | General Partner | 8,000,000 | 7% |
| Other Limited Partners | Limited Partner | 62,966,605 | 54% |
Preferred Units Ownership
As of September 30, 2024, the number of Preferred Units outstanding is 180,000, down from 500,000 at the end of 2023, following conversions into common units.
| Preferred Units | Outstanding Units | Conversion Rate | Cash Distribution per Unit |
|---|---|---|---|
| Preferred Units | 180,000 | $20.0115 | $24.375 |
Financial Performance and Distributions
For the nine months ended September 30, 2024, USA Compression Partners reported a net income of $74,138,000, with a net income attributable to common unitholders of $60,975,000. The company declared distributions of $1.575 per common unit during this period.
| Period | Net Income (in $000) | Distributions Declared per Common Unit | Net Income Attributable to Common Unitholders (in $000) |
|---|---|---|---|
| Nine Months Ended September 30, 2024 | 74,138 | $1.575 | 60,975 |
| Nine Months Ended September 30, 2023 | 55,427 | $1.575 | 18,864 |
Recent Transactions
In 2024, conversions of Preferred Units into common units included 320,000 Preferred Units converted into 15,990,804 common units. The cash distributions paid to holders of the Preferred Units for the year totaled $73.125 per unit.
| Transaction Date | Preferred Units Converted | Common Units Issued | Cash Distribution Paid |
|---|---|---|---|
| January 2024 | 40,000 | 1,998,850 | $24.375 |
| April 2024 | 280,000 | 13,991,954 | $24.375 |
Market Position and Revenue Streams
USA Compression Partners operates in a capital-intensive industry, with a total revenue of $704,557,000 for the nine months ended September 30, 2024. The revenue is primarily derived from contract operations, parts and service, and related-party revenues.
| Revenue Source | Revenue (in $000) | Percentage of Total Revenue |
|---|---|---|
| Contract Operations | 662,265 | 94% |
| Parts and Service | 17,043 | 2% |
| Related Party | 25,249 | 4% |
USA Compression Partners, LP (USAC) Mission Statement
As of 2024, USA Compression Partners, LP (USAC) aims to be a leading provider of natural gas compression services, focusing on operational excellence and customer satisfaction. The mission emphasizes delivering safe, reliable, and efficient compression solutions to meet the evolving demands of the energy industry, while maintaining environmental stewardship and community engagement.
Financial Overview
The financial performance of USA Compression Partners in 2024 reflects its operational goals and market dynamics.
| Financial Metrics | Q3 2024 | Q3 2023 | Increase (%) |
|---|---|---|---|
| Total Revenues | $239,968,000 | $217,085,000 | 10.5% |
| Net Income | $19,327,000 | $20,902,000 | -7.5% |
| Adjusted EBITDA | $145,690,000 | $130,164,000 | 11.9% |
| Distributable Cash Flow (DCF) | $86,606,000 | $71,574,000 | 21.0% |
| Basic Income per Common Unit | $0.13 | $0.09 | 44.4% |
Operational Highlights
As of September 30, 2024, USA Compression Partners reported significant operational metrics:
| Operational Metrics | Q3 2024 | Q3 2023 | Increase (%) |
|---|---|---|---|
| Fleet Horsepower | 3,862,445 | 3,735,490 | 3.4% |
| Revenue-Generating Horsepower | 3,570,508 | 3,395,630 | 5.2% |
| Average Revenue per Revenue-Generating Horsepower per Month | $20.60 | $19.10 | 7.9% |
| Horsepower Utilization (at period end) | 94.4% | 93.9% | 0.5% |
Investment and Capital Expenditures
In 2024, USA Compression Partners has made substantial investments in capital expenditures, reflecting its commitment to growth and service enhancement.
| Capital Expenditures | Amount (in thousands) |
|---|---|
| Capital Expenditures (Net) | $175,836 |
| Depreciation and Amortization | $195,801 |
Debt and Financial Obligations
As of September 30, 2024, USA Compression Partners' financial obligations are highlighted below:
| Debt Metrics | Amount (in millions) |
|---|---|
| Outstanding Borrowings under Credit Agreement | $803.2 |
| Weighted-Average Interest Rate | 7.50% |
| Available Liquidity | $796.3 |
Distributions to Unitholders
For the year 2024, USA Compression Partners has maintained consistent distributions to its unitholders:
| Quarterly Distribution | Distribution per Unit | Total Paid to Common Unitholders (in millions) |
|---|---|---|
| Q1 2024 | $0.525 | $54.1 |
| Q2 2024 | $0.525 | $61.4 |
| Q3 2024 | $0.525 | $61.4 |
How USA Compression Partners, LP (USAC) Works
Business Overview
USA Compression Partners, LP operates in the natural gas compression services sector, providing compression and treating services primarily to oil and natural gas producers. The company focuses on offering high-horsepower compression units and services tailored to meet the growing demand in the energy sector.
Financial Performance
As of September 30, 2024, USA Compression Partners reported the following key financial metrics:
| Metric | 2024 (Nine Months) | 2023 (Nine Months) | Increase (%) |
|---|---|---|---|
| Total Revenues | $704,557,000 | $621,129,000 | 13.4% |
| Contract Operations Revenue | $662,265,000 | $590,237,000 | 12.2% |
| Parts and Service Revenue | $17,043,000 | $15,133,000 | 12.6% |
| Net Income | $74,138,000 | $55,427,000 | 33.8% |
| EBITDA | $416,522,000 | $365,155,000 | 14.1% |
Revenue Breakdown
The revenue for the company can be categorized into various segments as follows:
| Type of Revenue | 2024 (Three Months) | 2023 (Three Months) |
|---|---|---|
| Contract Operations | $233,919,000 | $209,841,000 |
| Retail Parts and Services | $6,049,000 | $7,244,000 |
| Total Revenue | $239,968,000 | $217,085,000 |
Cost Structure
The cost structure of USA Compression Partners includes various operational expenses, as shown below:
| Cost Type | 2024 (Three Months) | 2023 (Three Months) |
|---|---|---|
| Cost of Operations (excl. Depreciation) | $81,814,000 | $74,928,000 |
| Depreciation and Amortization | $67,237,000 | $64,101,000 |
| Selling, General, and Administrative | $15,364,000 | $20,085,000 | Total Costs | $164,292,000 | $156,131,000 |
Cash Flow Analysis
For the nine months ended September 30, 2024, the cash flow from operating activities was reported as:
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities | $211,139,000 | $180,281,000 |
| Cash Used in Investing Activities | ($175,094,000) | ($153,391,000) |
| Cash Used in Financing Activities | ($35,977,000) | ($26,919,000) |
Debt and Financing
As of September 30, 2024, USA Compression had the following debt-related metrics:
| Debt Metric | Amount |
|---|---|
| Outstanding Borrowings under Credit Agreement | $803,200,000 |
| Weighted-Average Interest Rate | 7.50% |
| Remaining Unused Availability | $796,300,000 |
Operational Metrics
Operational performance metrics as of September 30, 2024, include:
| Metric | Value |
|---|---|
| Fleet Horsepower | 3,862,445 HP |
| Revenue-Generating Horsepower | 3,570,508 HP |
| Average Revenue per Revenue-Generating Horsepower per Month | $20.60 |
| Horsepower Utilization | 94.4% |
Market Trends and Demand
The demand for compression services is closely tied to the overall production levels of crude oil and natural gas in the U.S. As of 2024, the company has experienced an increase in demand for its services, resulting in a 6.5% increase in average revenue-generating horsepower.
Distributions and Unitholder Returns
USA Compression has declared distributions as follows:
| Date | Distribution per Unit | Total Distribution Amount |
|---|---|---|
| February 2, 2024 | $0.525 | $54,098,000 |
| May 3, 2024 | $0.525 | $61,453,000 |
| August 2, 2024 | $0.525 | $61,462,000 |
| Total for 2024 | $1.575 | $176,900,000 |
Related-Party Transactions
Revenue from related-party transactions as of September 30, 2024, was as follows:
| Type | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Related-Party Revenue | $25,249,000 | $15,759,000 |
How USA Compression Partners, LP (USAC) Makes Money
Revenue Streams
USA Compression Partners, LP primarily generates revenue through the following streams:
- Contract Operations Revenue: This segment includes income from compression services provided to customers. For the nine months ended September 30, 2024, contract operations revenue was $686.79 million, compared to $605.39 million for the same period in 2023, marking an increase of $81.4 million or approximately 13.4%.
- Parts and Service Revenue: Revenue from parts and maintenance services for compression units, which totaled $17.77 million for the nine months ended September 30, 2024, up from $15.74 million in the prior year.
- Related-Party Revenue: This includes transactions with affiliated entities of Energy Transfer. For the nine months ended September 30, 2024, related-party revenue was $25.25 million, compared to $15.76 million in 2023, an increase of $9.49 million or 60.2%.
| Revenue Type | 9 Months Ended September 30, 2024 (in millions) | 9 Months Ended September 30, 2023 (in millions) | Increase (Decrease) |
|---|---|---|---|
| Contract Operations Revenue | $686.79 | $605.39 | $81.40 |
| Parts and Service Revenue | $17.77 | $15.74 | $2.03 |
| Related-Party Revenue | $25.25 | $15.76 | $9.49 |
Operational Performance
For operational performance metrics, USA Compression Partners reported the following:
- Average Revenue per Revenue-Generating Horsepower per Month: Increased by 8.7% to $20.28 for the nine months ended September 30, 2024, compared to $18.65 in 2023.
- Total Revenue-Generating Horsepower: Increased to 3,570,508 horsepower as of September 30, 2024, from 3,395,630 horsepower in 2023, representing a 5.2% increase.
- Operating Income: For the nine months ended September 30, 2024, operating income was $219.92 million, up from $163.44 million in 2023, an increase of 34.6%.
| Performance Metric | As of September 30, 2024 | As of September 30, 2023 | Change |
|---|---|---|---|
| Average Revenue per Horsepower | $20.28 | $18.65 | +8.7% |
| Total Revenue-Generating Horsepower | 3,570,508 | 3,395,630 | +5.2% |
| Operating Income | $219.92 million | $163.44 million | +34.6% |
Cost Structure
USA Compression Partners' costs of operations, excluding depreciation and amortization, increased to $235.05 million for the nine months ended September 30, 2024, from $211.52 million in 2023, reflecting an increase of approximately 11.1%.
Depreciation and amortization expenses also rose to $195.80 million in 2024 from $183.63 million in 2023, an increase of 6.6%.
Overall, the total costs and expenses for the nine months ended September 30, 2024, were $484.64 million, compared to $457.69 million in 2023, representing a 5.9% increase.
| Cost Type | 9 Months Ended September 30, 2024 (in millions) | 9 Months Ended September 30, 2023 (in millions) | Change |
|---|---|---|---|
| Cost of Operations | $235.05 | $211.52 | $23.53 |
| Depreciation and Amortization | $195.80 | $183.63 | $12.17 |
| Total Costs and Expenses | $484.64 | $457.69 | $26.95 |
Distributable Cash Flow (DCF)
USA Compression Partners reported Distributable Cash Flow (DCF) of $259.06 million for the nine months ended September 30, 2024, an increase of 28.7% from $201.23 million in the same period of 2023. The DCF coverage ratio was 1.41x for the nine months ended September 30, 2024.
| Metric | 9 Months Ended September 30, 2024 (in millions) | 9 Months Ended September 30, 2023 (in millions) | Change |
|---|---|---|---|
| Distributable Cash Flow (DCF) | $259.06 | $201.23 | $57.83 |
| DCF Coverage Ratio | 1.41x | 1.30x | +8.5% |
Financial Position
As of September 30, 2024, USA Compression Partners had total outstanding borrowings under its credit agreement of $803.2 million, with available liquidity of $796.3 million, of which $641.8 million was available to be drawn due to compliance with financial covenants.
| Financial Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Outstanding Borrowings | $803.2 million | $?? million |
| Available Liquidity | $796.3 million | $?? million |
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Resources:
- USA Compression Partners, LP (USAC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of USA Compression Partners, LP (USAC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View USA Compression Partners, LP (USAC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.
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