USA Compression Partners, LP Wells Fargo Midstream and Utility Symposium December 1112, 2019
Why USAC Now
USAC Offers a Stable Infrastructure Opportunity Natural Gas Has Proven Itself as a LongTerm Fuel; Compression is Critical Bullish on natural gas production & demand, both in US and globally Supportive Macro: Gas Isnt LNG exports,…
USAC Overview Large Horsepower Strategy Critical for Domestic Natural Gas Infrastructure Business Snapshot USAC Market Statistics USAC provides compression services across a Public since 1/2013 (NYSE: USAC) geographicallydiversified…
Rewarding our Unitholders Timely Investment Thesis: Stable Distributions and Attractive TUR Since USACs IPO in January 2013, over 825 million has been distributed to common unitholders Stable distribution history has resulted in…
Performance Versus Peer Group USAC Has Performed Well in 2019 Against the Broader Universe and Compression Peers Midstream Energy 2019 Returns (1) 100% 87% 80% 60% 47% 38% 39% 39% 41% 41% 43% 26% 27% 29% 29% 31% 34% 40% 19% 20%…
Business Model Allows for Prudent Capital Spending.. Historical Balance Between Capital Spending and Cash Flow Stability Large HP focus ideally suited for growth and stability Assets provide growth based on marketplace demands Ability…
..Leading to Cash Flow and Asset Stability Through Cycles PostCDM PreCDM Acquisition NonPredecessor (1) Acquisition (2) Horsepower Utilization HH Nat Gas Utilization has remained at /MMBTU higher, fullyutilized levels 100.0%…
Diversification The Right Operating Regions Rockies = Northeast = 8% 23% Mid Continent = 15% Permian/ Louisiana / Delaware Basin = East TX = 32% 5% Gulf Coast = 16% Note: Regional % breakdowns represent…
Natural Gas: Not Going Away
Moderating Rig Count.but Production Increases Expected Slowing Rig Count / Production in Face of Strong Demand Should Bode Well for Nat Gas Overall domestic rig counts are down (60% off recent highs) (1) Gasdirected rigs are down 90%…
Global Natural Gas Demand Natural Gas Is Not Going Away World energy usage expected to grow with growing GDP Total energy usage expected to grow by 50% by 2050 (1) Renewables growing quickly, but gas will still be critical Natural…
Domestic Natural Gas Demand Rising Baseload Natural Gas Demand Natural gas domestic consumption is up 10.5 Bcf/day (14%) since 2014 to 83.3 Bcf/d in 2018 (1) Majority of increase (6.4 Bcf/d) took place in 2018 1H 2019 increased over…
LNG Baseload Demand LNG Growing Annually: Large Increases Are Coming LNG export capacity has increased substantially in last twelve months to 7 Bcf/d (2) Sustained demand for feedgas is creating baseloadtype demand dynamics Positive…
Domestic Natural Gas Demand Growth Natural Demand Continues to Growwith Large Increases from Projected Natural Gas Demand (Bcf/d)(1) Exports to Mexico: 140 23% growth Growing power needs to be met by US over 30 years 118 shale…
2019 Performance & 2020 Strategic Priorities
Q3 2019 Recap Infrastructure Business Strategy Has Resulted in Continued Stable Performance Q3 2019 fleet HP of 3.7 million / average revenue generating HP of 3.3 million Operational Q3 2019 average horsepower utilization of 93.9%…
2020 Outlook & Focus Capex Program Scaled Back vs 2019 Customers finalizing 2020 budgets; anticipate spending reductions positive for compression outsourcing USAC highgrading customers longer term contracts with strong counterparties…
Appendix
Organizational Chart Energy Transfer Combined, the Energy Family Transfer family owns 48% of USAC Public Unitholders USA Compression GP, LLC (our general partner) 52.3% 39.4% LP LP Nonecon Preferred GP;…
USAC Customer Overview Top 20 Customers: Diverse Counterparties & LongTerm Relationships % of Length of % of Length of Customer Rev(1) relationship Total HP Customer Rev(1) relationship Total HP Independent Public E&P 8% 10 years…
Large Horsepower Gas Applications Drive Stability Compression Unit Size Matters USAC Focus: Gas Compression Industry: Key Characteristics by Size Small Large X Large XX Large XXX Large Commentary Medium Compression More 400…
Balancing Distribution Stability and Leverage Annualized Distributions per Common Unit Stability in Distribution through the cycle PostCDM 2.50 PreCDM Acquisition NonPredecessor (1)(2) Acquisition (2)(4) 2.10 2.10 2.10 2.10 2.10…
Macro Thesis: The Shift to Shale Shale Gas Expected to be the Primary Source in Future Shale Ramp: Production from shale has now pulled Shale gas is typically produced at lower wellhead even with all other sources pressures (050…
Compression Throughout the Value Chain Midstream Compression Offers Cash Flow & Customer Stability Lower (Sm. Volumes) Pressure Regime Higher (Lg. Volumes) Crude Oil Wells RateBase Applications Gas Lift Midstream Applications…
Midstream Compression = Operational Stability & Strong Counterparties Wellhead (Gas & Oil) Midstream Downstream Uses Gas Lift Regional Gathering Interstate Pipelines Gas Reinjection Central Delivery Point Trunkline Gathering…
NonGAAP Reconciliations Three Months Ended Nine Months Ended September 30, September 30, ( in 000's) 2019 2019 Net income 13,315 29,851 Interest expense, net 32,626 94,162 Depreciation and amortization 57,513 173,220 Income tax…
NonGAAP Reconciliations, contd. Years Ended December 31, ( in 000's) 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Net income (loss) (10,551) 11,440 12,935 (154,273) 24,946 11,071 4,503 69 10,479 21,228 20,911 7,122…
NonGAAP Reconciliations, contd. Three Months Ended Nine Months Ended September 30, September 30, ( in 000's) 2019 2019 Net income 13,315 29,851 Noncash interest expense 1,965 5,620 Depreciation and amortization 57,513 173,220…
NonGAAP Reconciliations, contd. Guidance Net income 35.0 million to 45.0 million Plus: Interest expense, net 123.8 million Plus: Depreciation and amortization 230.5 million Plus: Income tax expense 0.7 million EBITDA 390.0…
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