USA Compression Partners, LP 2015 UBS MLP One-on-One Conference January 13, 2015
Recent Developments: Positive Operational Update and ABL Upsize USAC Ended 2014 on a High Note Operationally; ABL Upsize Positions USAC for Future Growth 2014 year-end fleet HP of 1.5 million and revenue-generating HP of 1.4 million a…
Outlook For Compression
What Drives USACs Business Compression is Critical Infrastructure for Producing & Transporting Hydrocarbons Approximately 85% of USACs business (by HP) is natural gas-based Overall Gas Demand Expect to see continued steady demand /…
Macro Thesis: The Shift to Shale is Expected to Continue Shale Gas Piece of the Growing Pie Continues to Grow Tcfe 38 Tcfe 40 Overall natural gas production expected to increase from 66 Bcf/d in 2012 to 103 Bcf/d through 2040, an…
Dry Gas to Play a Bigger Role in Near Future Decline in Liquids/Associated Gas Production Presents Opportunity Dry gas volumes have remained relatively constant Increasing associated gas production has accompanied the strong crude oil /…
Crude Price Softening Provides Gas Play Advantage Dry Gas Plays Are Now More Competitive At depressed crude oil prices, some out-of-favor plays gaining renewed attention and investment Average IRR By Basin (Crude= 65, NG=4.00) 40%…
Changing Natural Gas Market Marcellus / Utica to Transform Market in Near Term Rockies Marcellus / 13.0 Utica 16.4 Anadarko 7.5 Fayetteville Permian 2.9 Barnett 6.3 5.3 Haynesville Eagle 4.3 2015 7.1 Ford (Bcf/d) GOM…
Changing Natural Gas Market, Continued Northeast Continues Growth; West / South Texas Adding Rockies Marcellus / 11.6 Utica 24.2 Anadarko 6.5 Fayetteville 3.2 Permian Barnett 5.0 Haynesville 7.2 4.2 Eagle 2020 9.0 Ford…
Growing Gas Demand: LNG and Natural Gas Exports Approved LNG Projects and Incremental Natural Gas Export Capacity Total 27 Bcf/d; Supports the Need for Midstream Compression LNG Opportunity 23 Bcf/d of LNG Export Projects…
The Need for Compression Critical Infrastructure for US Natural Gas Compression is required to transport natural gas throughout the pipeline system Once installed, becomes part of midstream infrastructure, remaining in field for…
Shale Compression Needs Shale Production Drives Increasing Compression Requirements (1)(2) (HP) Shale gas is typically produced at lower wellhead pressures (0-50 PSIG) in contrast to conventional 350,000 gas wells (100-300 PSIG)…
Strategic Focus on Infrastructure Applications Midstream and Crude-Oriented Gas Lift Compression Offer Cash Flow Stability Crude Oil Wells Midstream Applications Rate-Base Applications Regional Gathering Interstate Pipeline Gas Lift…
USAC: Story of Stability and Growth
USAC History 16-year History of Growth and Differentiated Business Model May 2014: USAC 1998: USAC 1998 2010: USAC Dec 2010: Jan 2013: Aug 2013: USAC completes 169mm founded by CEO grows through organic Riverstone USAC completes…
USAC Compressions Business Model: Stable Through Multiple Commodity Price Cycles Stability Through the Cycle Fleet HH Nat Gas Absolute commodity price Utilization / MMBTU levels do not directly affect 100% 14.00 USACs business…
Business Fundamentals Result in Cash Flow Stability Infrastructure-Nature of USAC Assets Provide Cash Flow Stability Long asset life complements gathering systems and processing facilities served Long-lived Asset Compression units…
USAC Fleet Overview Natural Crude (Gas-Lift) Combined Gas Assets Assets Fleet Total Units 1,391 1,596 2,987 Fleet Horsepower 1,226K 226K 1,453K Average Age of Fleet 4.9 years 1.6 years 4.1 years Operating Regions Mid-Continent,…
Geographical Presence Presence in Key Geographical Regions Key Customer Profile Oil and Gas Majors Independent E&Ps Large Midstreams & Processors Regional Gathering Systems Marcellus / Utica Shale Anadarko and Hugoton Basins…
Well-Capitalized Customer Base with Strong Credit Ratings Diverse Customer Base Includes O&G Majors, Independent E&Ps, Large Midstream Operators and Regional Gatherers Length of Credit Rank Top Customers Relationship Rating (1) 1…
2014 Capital Program and 2015 HP Orders Continued Build-Out of the High-Growth Shale Plays Drives Robust Capital Program 60% higher than Horsepower initial forecast 2.5x 400,000 2013 total additions Additional HP orders in 2015 to…
Financial Overview and Investment Highlights
USAC Distributions and Leverage Since IPO Partnership Has Delivered Strong Distribution Growth, While Taking Steps to Methodically De-Lever the Balance Sheet Annualized Distributions per LP Unit USAC Historical Pro Forma Leverage(1)…
USAC Investment Highlights USACs Business Prospects Driven By Positive Macro Drivers in the Midstream Industry Continued focus on infrastructure-oriented compression applications; compression is critical to Critical transporting…
Appendix
2014 Guidance USAC expects to trend to the high end of the guidance range for full-year 2014 27
USA Compression Ownership Structure USAC is a Pure-play Compression MLP Backed by Experienced Energy Investors Riverstone Holdings & Management 100.0% Membership Interest Public George B. Unitholders USA Compression Holdings,…
Non-GAAP Reconciliations ( in thousands) Nine Months Ended September 30, Years Ended December 31, 2014 2013 2013 2012 2011 Net income 16,446 6,634 11,071 4,503 69 Interest expense 9,269 8,963 12,488 15,905 12,970 Depreciation and…
Non-GAAP Reconciliations (contd) Three Months Ended ( in thousands) September 30, 2014 Net income 5,013 Plus: Non-cash interest expense 43 Plus: Depreciation and amortization 18,261 Plus: Unit-based compensation (1) 855 Plus:…
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