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Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc.

Archrock Inc. · Mar 22, 2016 · 31 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 1
    ARCHROCK March 22, 2016 2016 Archrock, Inc. All rights reserved. 1
  2. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 2
    Overview of Archrock Archrock is a pure play U.S. provider of contract compression & aftermarket services Archrock Companies Structure and Asset Overview AROC Assets GP and IDRs of APLP (2%)1 Public Stockholders 24 mm LP Units1…
  3. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 3
    Key Archrock Investment Highlights Fee-based contracts for must-run production and midstream infrastructure assets Cash Flow Stability Production, not exploration, leveraged business model ensures steady demand for services through…
  4. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 4
    Recent Highlights and Outlook Fourth Quarter and Full-Year 2015 Results Solid financial performance Highlights relative stability of our fee-based business model 2015 Highlights Contract Operations Revenue of 781.2 million grew 7% as…
  5. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 5
    Archrock Cost Reduction Activities 2016 Cost Savings Plans Archrock is aggressively reducing capital and operating costs Capital expenditures expectations have been reigned in significantly New fleet capex target of 30 million to 50…
  6. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 6
    What Does Compression Do Increases pressure from suction to discharge Suction Discharge Pressure1 Pressure1 50 PSI 1,200 PSI Inlet Sources Outlet Sources Wellhead Gathering System Gathering Pipeline System Processing Plant…
  7. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 7
    Where is Compression Used Compression is an essential service utilized all along the production cycle to transport gas to the end user 81% of Fleet1 Power Generation Storage Industrial Natural Gas Residential Exports -…
  8. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 8
    Compression Applications & Customers Services Provided Average Customer Archrock HP / Unit1 Units1 Overview Types Focus Compression located at the well site Upstream Wellhead 324 2,023 Often smaller units that are compressing a…
  9. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 9
    U.S. Forecasted Production Growth Driven by Strong Demand Outlook Sources of Demand Forecasted Supply U.S. LNG Exports 40 110 100 35 90 30 80 Billion Cubic Feet (Per Day) Trillion Cubic Feet (Annual) 25 70 60 20 50…
  10. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 10
    Aftermarket Services Overview AMS Business Segments AMS Highlights Sales of field labor services concentrated around: Revenue stream from customers that Scheduled Maintenance Field choose to own compression Services Major…
  11. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 11
    How the Businesses Fit Together Business Segments Revenue by Segment1 Contract Operations Aftermarket Services Equipment Customer Owner and Service Providers Gross Margin by Segment1,2 Full service Discrete activities up…
  12. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 12
    Archrock Is the Leading U.S. Contract Compression Services Operator in the U.S. U.S. Outsourced Compression Competitors1 Archrock Highlights We are proud of the quality of Operating HP our service, delivering an at average service…
  13. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 13
    Archrocks Geographic Diversity Presence in All Major U.S. Producing Basins HP by Play Type (k HP)1 HP by Application (k HP)1 ARCHROCK OPERATING UNITS Source: Energy Information Administration Note: Excludes offshore units…
  14. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 14
    Stability of Business Model Fee-based compression services provide relatively stable cash flow Compression Services Revenue and Oil & Gas Prices1,2 Note: Historical data should not be relied upon as being indicative of future…
  15. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 15
    Archrocks Favorable Profitability Trend Archrock gross margin per horsepower benefitted from profit improvement initiatives, fleet high grading, and the MidCon acquisitions Gross Margin per Horsepower per Month1,2 3 1 See…
  16. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 16
    Proven Profitability of AMS Business AMS Gross Margin1 Gross Margin Percentage1 1 See Addendum I for information on gross margin and gross margin percentage. 2016 Archrock, Inc. All rights reserved. 17
  17. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 17
    Proven Track Record of Growth Our financial results have benefitted from growth and performance improvement initiatives Archrock Gross Margin1 Archrock Partners EBITDA, as further adjusted2 2 . 1 See Addendum I for…
  18. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 18
    Overview of Growth Strategies Demonstrated track record of executing growth strategies Growth Demonstrated ability to source and execute Third Party deals with MidCon acquisitions Acquisitions Opportunity to source from…
  19. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 19
    APLP Distributions & Coverage Distributable Cash Flow Coverage1 Distributions Declared to AROC 2 1See Addendum I for information on distributable cash flow and distributable cash flow coverage. 21Q14 pro forma for acquisition…
  20. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 20
    Enhanced Credit Profile With our enhanced operating and financial positions, we believe that we are well-positioned to both navigate commodity price cycles and take advantage of long-term secular growth opportunities Highlights Debt…
  21. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 21
    Dividends Dividend History Highlights Consistently paid dividend since initiating in Q1 2014 Q4 2015 dividend of 0.1875 Going forward, expect dividend to be tied to after- tax proceeds of distributions from APLP Dividends…
  22. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 22
    AROC Dividend Coverage Dividend Coverage Three Months Ended December 31, 2015 Archrock, Inc. Cash Available for Dividend Declared LP distributions to Archrock, Inc. 13,501 Declared GP and IDR distributions to Archrock Inc. 5,445…
  23. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 23
    Key Archrock Investment Highlights Relative Stability Largest Fleet Available Deployed to Liquidity Major Basins Optimized Long-term Structure for Growth Growth Opportunities 2016 Archrock, Inc. All rights reserved.…
  24. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 24
    Addendum I: Non-GAAP Financial Measures 2016 Archrock, Inc. All rights reserved. 25
  25. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 25
    Non-GAAP Financial Measures Archrock, Inc. (Exterran Holdings, Inc. pre-spin)1 ( in millions) Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Revenues Contract…
  26. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 26
    Non-GAAP Financial Measures Archrock, Inc. (Exterran Holdings, Inc. pre-spin)1 ( millions) 2011 2012 2013 2014 2015 Revenues Contract Operations 570.8 596.0 627.8 729.1 781.2 Aftermarket Services 209.1 240.8 234.9 230.1 216.9…
  27. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 27
    Non-GAAP Financial Measures Archrock, Inc. (Exterran Holdings, Inc. pre-spin) (in thousands, except per HP amounts) 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 Contract Operations Gross margin1 66,079…
  28. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 28
    Non-GAAP Financial Measures Archrock, Inc. (Exterran Holdings, Inc. pre-spin)1 2011 2012 2013 2014 2015 ( millions) Net income (loss) (339.6) (37.2) 155.7 125.9 (99.0) Selling, general and administrative 107.1 127.9 118.9 132.7…
  29. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 29
    Non-GAAP Financial Measures Archrock, Inc. (Exterran Holdings, Inc. pre-spin) Three Months Ended December 31, 2015 Archrock, Inc. Cash Available for Dividend Declared LP distributions to Archrock, Inc. 13,501 Declared GP and IDR…
  30. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 30
    Non-GAAP Financial Measures Archrock Partners, L.P. ( in thousands) 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net income (loss) 19,401 29,847 14,784 (23,333) 6,053 10,509 64,023 61,719 (84,025) Depreciation and amortization 16,570…
  31. Scotia Howard Weil Annual Energy Conference 2016 – Archrock Inc. – slide 31
    Non-GAAP Financial Measures Archrock Partners, L.P. ( in thousands) 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15 2Q 15 3Q 15 4Q 15 Net income (loss) 223 (1,938) 3,253 4,515…

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