Exhibit 99.1
NGSG
NATURAL GAS SERVICES GROUP, INC.
FOR IMMEDIATE RELEASE For More Information, Contact:
October 19, 2004 Wallace Sparkman, President & CEO
800-580-1828
Jim Drewitz, Investor Relations
972-355-6070
NATURAL GAS SERVICES ENTERS INTO
AGREEMENT TO ACQUIRE SCREW COMPRESSION SYSTEMS, INC.
Earnings Expected to Be Accretive
MIDLAND, TEXAS, October 19, 2004 - Natural Gas Services Group, Inc. (AMEX:NGS),
a leading equipment and services provider to the oil and natural gas industry,
announces it has entered into an agreement to acquire all of the outstanding
stock of Screw Compression Systems, Inc. (SCS) of Tulsa, Oklahoma. SCS is a
privately owned manufacturer of natural gas compressors.
Natural Gas Services has signed a contract to acquire SCS, a privately held
firm, in a $15 million stock, note and cash transaction. The transaction is
designed to boost the Company's production of small to medium horsepower gas
compressors for sale and lease. The addition of SCS is expected to be accretive
to current operating results. Transaction terms were not disclosed. The
agreement is subject to customary conditions to closing, which is anticipated to
occur within the next sixty days.
Paul Hensley, President, founded SCS in 1997. Hensley expects SCS to record
approximately $20 million in revenue for its fiscal year ending December 2004.
In the transaction, Natural Gas Services will add the SCS 54,000 sq. ft.
manufacturing facility in Tulsa and an additional 65 employees.
SCS will be operated as a wholly owned subsidiary of Natural Gas Services under
the same management team with Paul Hensley continuing as President of SCS. Upon
closing, Paul Hensley will join the board of directors of Natural Gas Services.
According to Wallace Sparkman, Natural Gas Services' President and CEO, the
acquisition provides Natural Gas Services several strategic benefits in product,
engineering, manufacturing, sales and market synergy between the two companies.
Expected benefits will include:
o Increased gas compressor production for lease fleet by 70 or more units per
year
o Increased sales and leasing revenue by an estimated $20 million per year
o Through accelerated growth, expanded geographic area for rentals and sale
o Proprietary products will enhance profit margins for Natural Gas Services
rental fleet
Mr. Sparkman said, "The SCS acquisition will support our expansion strategy for
production and leasing of NGS' small to medium horsepower compressors. SCS is a
well-recognized company with an exceptional engineering and manufacturing staff
who will bring significant growth for Natural Gas Services' products and
services. Paul and his team have a well-deserved reputation of producing high
quality compressors and delivering superior customer service. We are very
pleased to have Paul Hensley and his SCS family joining Natural Gas Services.
This move will create additional management depth to the combined companies."
About Natural Gas Services Group, Inc.
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NGS manufactures, fabricates, sells, leases and services natural gas compressors
that enhance the production of oil and gas wells. The Company also manufactures
and sells flare systems and flare ignition systems for plant and production
facilities.
For more information visit the Company's website at www.ngsgi.com.
This release contains forward-looking statements subject to various risks and
uncertainties that could cause the company's future plans, objectives and
performance to differ materially from those in the forward-looking statements.
Forward-looking statements can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "intend," "subject to,"
"anticipate," "estimate," "continue," "future," "appears," "prospective,"
"designed," or other variations thereof or comparable terminology. Factors that
could cause or contribute to such differences could include, but are not limited
to, those relating to the company's expansion strategy, changes in demand for
the company's products because of changes in oil and natural gas prices,
competition among the various providers of compression services and products,
changes in safety, health and environmental regulations pertaining to the
production and transportation of natural gas, changes in economic or political
conditions in the markets in which the company operates, introduction of
competing technologies by other companies, operating risks, outstanding
indebtedness, changes in interest rates, expansion and other activities of
competitors, changes in federal or state environmental laws and the
administration of such laws, and the general condition of the economy and its
effect on the securities market. While we believe our forward-looking statements
are based upon reasonable assumptions, these are factors that are difficult to
predict and that are influenced by economic and other conditions beyond our
control. Investors are directed to consider such risks and other uncertainties
discussed in documents filed by the company with the Securities and Exchange
Commission.
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