AROC - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. Welcome to Archrock Fourth Quarter and Full Year 2018 Conference Call.

Your host for this morning’s call is Paul Burkhart, Treasurer and Vice President of Investor Relations at Archrock. I will now turn the call over to Mr. Burkhart.

begin. may You

Paul Burkhart

Aron, Good for on Adrianne. XXXX. Childers, and for as financial annual and thanks and Yesterday, as of Thank released well fourth Archrock call. morning, quarter With us its Doug Archrock of today’s Executive operating Brad for Financial me joining Officer Chief Archrock. results you, and Officer everyone Chief the today guidance President XXXX are of

the company’s you find on If not the copy, received at can you website have a www.archrock.com. information

During make meaning this Exchange statements of team. and on expectations forward-looking Section XXXX by currently and made and our information of management we Securities as available call, will assumptions Archrock’s within well current beliefs XXE the of Act as based the to

expectations latest such reasonable, in SEC made believes with Although in differ prove forward-looking assurance such materially the the our management call. from can those for it list cause be factors statements expectations that to filings to are to refer that during that results will no forward-looking may give of actual the this a Please statements correct. reflected

In margin dividend. our and margin, including gross adjusted available discussion gross financial reference today EBITDA, non-GAAP addition, certain for measures, cash percentage will

the business. full For quarter update an over results, Form fourth press turn and our release I to our these X-K SEC. Archrock’s financial and Brad results discuss and furnished GAAP reconciliations call of please to measures now of to will our non-GAAP to financial see yesterday’s year to provide the

Brad Childers

the night, XXXX results fourth we year Good and Archrock. Paul. to tremendous Last successful quarter everyone. morning, productive strong a year. you, Thank cap off was reported for

safety accomplished financial, a few I To back of am reflect I what of would operational, our on highlight from team strategic proud XXXX our to off, start As achievements. perspective. like XXXX, a and I

operating in to XXXX. as fleet improved by our utilization up XX% XX% our in results strong margin our to well. adjusted and to aftermarket As we on by X.X business AMS more million year-over-year XX%. operating contract delivered our compression We XX%. horsepower in XXXX, of EBITDA compared than grew XXX,XXX were Revenues compared our horsepower and XX% by exiting than by to XX% fleet gross XXXX revenue bringing grew We more services

Lastly, we Partners completed in which our cost improvement, Archrock capital. lowered accelerated our our our April acquisition structure, of and simplified of leverage

of financially in in and XXXX. result a XXXX, is enter as our As Archrock excellent performance well positioned we growth operationally

solid. is quality service Our

our and to the We that the expect. have services the processes deliver talent customers level of high

strategic while most the newbuild capital quality additions fleet of that of horsepower, continued efficient a fleet competitiveness our perspective. to from assets and large ensuring competitive. The utilized Our returns standardized is invested our the high is units fleet, has and improve in

stable, the relationships our equipments service financially We with are with and as Our partnership a filled relationships levels, companies and expertise. grade. approach who customers Archrock first strong who value technical

strong position financial Our improving. is and

greater of We to coverage while have lowering Xx. below and are available track liquidity successful XXXX be on in Xx growth robust than maintain been and maintaining fund leverage to in sufficient dividend

our history in it’s increase year the correct Now U.S. think largest XXXX experiencing. for the gas in in backdrop I put natural important are services. witnessed single the robust performance our production we of market in position unique to in a market context resulting

work critical is significant opportunities customers in resulted have part. in compression and growing XXXX. the have horsepower change in Archrock go time. we to flows cycle, gas of but deploy pricing attractive sizable these environment necessitate support exceptional resulting a stable dynamics natural that commodity is for improved As and just contracted cash over units and to gas we for part structural our amount These of to discuss of later, which increase ability rather not together at a natural and and gas in compression invest investment the generate infrastructure Taking in realize compression additional production and will demand production price part factors our oil of believe the are a in to new an returns, already to-date

Over balance experiencing Turning to performance activity full of and contract realized across throughout our supporting our XXX,XXX saw customer our in horsepower by to We operating the operations and Basin XX%. excellent Niobrara strong is the with the XXXX activity gross in and a fleet demand quarters reflecting the the our Bakken. improvement production in footprint. year horsepower the margin increased business SCOOP/STACK, sequential revenue We operations, new delivered half our are support we operational in deployed growth. all year Permian

come Looking for this ahead at we benefit units, a from the our growth consecutive customer The diverse continues category XXXX year’s as for similar to growth to expect operating commitments makeup utilization geographic to horsepower based our of continue second on from driver for demand geographically platform. held large and quarter. XX% this fleet to-date, steady a biggest we

been price additional While XXXX. improved demand have Gas at and year the XX% of at half activity where the majority from increases pleased activity. of January expect in lead to over increase fleet end also active large an rate we by continues We in horsepower are approximately the on on our a utilization Lift the increase primarily fleet horsepower XX% units remaining experiencing with year of this last we driven implemented to throughout for end, smaller year up

Spot with level and years. dynamics XXXX being continued market contract placed segment, to going operations services work its rates, X units all operations on to benefit up new across to with contract our demand utilization horsepower engines. latest representing continues units these year aftermarket revenue is contract to to and also high we highest pricing high same maintain new our units Similar that experience. prerogative ago a pricing XX% fields between being pricing our the has remained of XX% strong our business the our our business from Given within reflective from for and is market pricing we strong in customers tight

as and be to flexed activity scalable service demand merit. accommodate can aftermarket segment of is Our levels highly

optimistic about the as require and to equally services. base customers their continued business our compression own are outlook this for We grow

In our efficiency success proactive position ongoing we focus on addition the believe remain environment, and our to improvement. a in leader. is market innovation, to supported We and macro this critical as

technicians the equipment on current capabilities next for fleet. operating will platform the assets. other to on later compression supply allocation our customers’ continue I of to customers assets in people effectively proposition XXXX, we capital systems, harness enhance will to will things and in track Over the attractive are This to and X review and field to customer chain existing experience increasing capital with investing reduce upgrade three and efficiency platform, through needs; leverage expand Xx over more returning We of our barcoding, improve guidance call. dividends. inventory and grow returns project investment to our our and technology will and in value to this be capital record Oracle processes our XXXX in walk connection would in years, further improved full Doug main to our These our and efficiently through below technology yield second, Archrock our in return improve investors. our our the the founded efficiency, will like for the platform year meet and monitoring first, remote our production manage capital technology business incorporation cost among reductions. result first which exceptional But plans is uptime in approach long-term of today finally of investment to the our high investments great believe objectives: form in invest growth our our in shareholders our that quarterly and management

our we quarterly latest prior to reflects through dividend over committed quarter and annually XX% year Our by XXXX. growth to the dividend remain XX% increasing X%

Moving on the about market compression. to for excited remain and the looking ahead, we broader market

for compression constructive While changed towards business the market, the in dynamics. experience as in disruptions continues shifts the especially to has demand gas, The volatility becoming and U.S. facilities The to to a due landscape for energy infrastructure in for elsewhere the there player directly have been natural gas creating compression U.S. the market. for demand macro in build-out required market of and supply that additional structural highly scale the of chain global incremental the demand gas natural is and is and gather LNG component growth this LNG significant value the critical benefiting large to market. a compression, moves move

the exports is much between million being continue expected And of demand XXX,XXX between horsepower market placed production into oil, of XXXX into under This of start oil gas by for use be demand applications. compression pipeline to to Mexico, and With natural driven petrochemical feedstock. for for higher as power LNG, to transportation the production this compression support in is Lift Gas of bookings to a contract crude growth generation customer natural compression to continuing in to XXX,XXX XXXX spending levels and gas drive Yesterday, strong levels. is remain of announced support which for commitment plan, of addition horsepower XXXX Entering similar In we investment and our will customer service million additions, growth $XXX to at XXXX, have capital the are includes elevated and new in contract. fleet. we in $XXX XXXX. our that which at had what already even we commitments

commitments for be of negotiating as work about we fact, will today, that actively in are In contracts. signed this and XXX,XXX to delivered we have horsepower XXXX go to of new additional

solid oil sheet Our investments key support position. new reflects on large and our capital to improving focused tied opportunities production remaining applications These in while midstream ongoing gas the that build units horsepower on assets focused in yielding plays. XXXX growth natural to stable balance invest are program returns

Let into me in built is summarize over XXXX. we that the XXXX carrying momentum by sharing

an ahead exciting have us. We year of

to year capturing provide and With to harnessing profitability guidance. turn the quarter we to addition of over and let In performance time. to XXXX review a our and technology improve will color that, additional efficiency our me call be Doug over drive for full on fourth to opportunities, market operations our

Doug Aron

us higher thanks to cost was you quarter joining with period. operating XXXX for and a audits the improved Thank delivered strong by quarter prior the of of to the the fourth you, $XXX $X.X Included Brad settlements. horsepower, was totaled reflecting fourth Adjusted year results. increase pricing an for $XX XX% quarter and tax Archrock fourth financial of ongoing another of for results quarter morning. EBITDA increase over compared in million an this controls. driven quarter and our Revenues XX% million of fourth associated million, all

the of jobs execution labor fourth increase new for quarter, Gross quarter areas attractive XX.X%. well in involving by at units resulted assets were and XXXX Venezuelan quarter. margins aftermarket nationalized higher affect through guidance income from pressures year in to X% compared quarter quarter XX% XX% and XX% prior $XX fourth driven in the the including Jobs prior of as the of compared $XX.X spin-off operations phase our higher deployment XX% results million Gross to up million below and received not segment Tax year seventh contract million in strong Net from XXXX we This we improved $XX.X XX% operational quarter $XX.X fourth are of of horsepower the In of net proceeds reported fourth relating This Exterran’s was the our margins the the from quarter. connection pricing. of quarter to quarter million with XXXX. revenue XXXX consecutive our with Net the higher for experienced remained fourth as PDVSA several it of $XX the cost quarter, did million year. previously to of revenues the up an fourth our our received XXXX. benefit million, million, increase in included $XX income operating In operations certain to the AMS These our The income parts. compared XXXX XX% statement. from million. over the $XX team’s During we last income the services margins of cost for was Exterran in for for slightly Cuts sale Act. payment $XXX quality from of as in

delivered The cost fourth SG&A the optimize we the initiatives of ongoing prior settlements up for pricing better million XX% from our benefit million tax of in $XX XXXX gross driven to $XX from audits resides $X.X in compared year efficiency the and and in period. For XX% the year structure. our quarter to SG&A. margins totaled million by majority

and our this, quarter Excluding $XX in our of million between was line fourth $XX SG&A with million. guidance

mentioned further in to for the the of successful XXXX quarter with with million $XX CapEx and growth the guidance. quarter the Maintenance of from with of compared $XX were forma for the also our full of We X.Xx quarter to $X.X capital in cash X.Xx total line the debt guidance. million third exited fourth bringing our flow our This resulted billion business generation the reducing totaled We merger. pro the X.Xx, position, reduction For quarter. unchanged end line earlier. the CapEx in as million million to from fourth another bringing $XXX that leverage with Exterrna to was compared full year $XX of leverage as down expenditures total and strong XXXX prior quarter our our at in XXXX payment year year the ratio exiting cash benefits well and growth in effectively

quarter. prior result increased capacity position sequential driven to our on growth improvement $XXX in exited with XXXX. $XXX as borrowing EBITDA. million, leverage of year available our of leverage are in the our from firmly was to liquidity committed and This reduction liquidity Xx below from a up goals the lower in We continue expect leverage revolver, in resulting We by million our

fourth We and basis, dividend $X.XXX quarter as have declared quarter of from previous $X.XXX annualized an XXXX. the XX% or to compared share per the recently up on unchanged

yield closing $XX dividend of approximately based on represents yesterday’s dividend the latest payment a total price X% Our of million. and

quarter of all on to dividend February fourth was X. of XX record paid as shareholders February Our

our and for totaled available dividend activities fourth fourth from leading the quarter X.Xx. operating million of cash flows $XX coverage $XX dividend million cash For to totaled our quarter,

the tax fourth have would roughly Excluding been coverage our settlement quarter X.Xx.

As of in our better infrastructure yesterday, is consistent an in of energy announced way $XXX in we our the our which expect approach earnings This our release aligned Archrock on $XXX and to performance and annual we is adjusted XXXX range contract to full pricing range monitor million important $XXX in million. in marks Archrock’s to in and you $XXX EBITDA We business it be benefit our stability newly continue our as saw issued business. fleet invest operations from our operating introduced forecasting higher million year deployed XXXX reflects million change existing as revenue In we grow the to guidance. peers with with the and units.

achieved of between business, of margin higher the XX% forecast for of We realizing year and the XX% our as in the year of million with In extend gross by controlling to XXXX and expect focus XX%. between gross continuing we pricing benefits margins and XX% $XXX revenue we costs. improvement million $XXX we margins on AMS our full

first and seasonal to quarters. and second The some our experienced third generally quarters compared impacts fourth

million. million expected to $XXX We $XXX expense for and expect SG&A $XXX $XXX and million to million. expected expense is between Depreciation year above amortization be around be is slightly the and total interest to

$XXX million expect between XXX,XXX new million. newbuild to CapEx million maintenance to forecasted $XX million be Turning to total and a $XXX capital capital, expect $XX million. basis, and that, on approximately with Of support between $XXX to in to to year to $XXX CapEx XXX,XXX expenditures total full million approximately horsepower we be we

$XX anticipate and Brad earlier. for in also investing vehicles We $XX and further new technology between million that million investments discussed

Adrianne, please process? which would will With our sale the also of be assets approximately used line We of will asset and year to the million questions. capital we to raise our those $XX find anticipate portion like XXXX our meeting up targeted open portfolio begin that, continue for prune returns not to optimize will you that now a the will and for for expenditures. equipment we

Operator

Tonet from JPMorgan. first you. our [Operator question Instructions] comes from Thank Jeremy And

open. is line Your

Unidentified Analyst

good This Charlie Hi, in Jeremy. for is morning.

at the off gross keep mostly guidance for you are that kind of of passing so that bit check wanted guess confident cost that start increases how to just kind contract I that kind range, ‘XX that’s pricing Just to and are historical margin through an you obviously ops a guidance in you margin on just keep level? that above of the is curious

Brad Childers

Jeremy, for Thanks question. this the Hey, is Brad.

XX% put these as range can notwithstanding believe as as XX%, on well as the inflationary utilization overcome work We We we our because is to inclined we are in market at tight the margins. confident are the we with positively pressures in the we achieve that can continue pretty marketplace to that it costs.

business here will our on are We XX% around plus And on this platform our in is think financial this We investments than that the out in pretty confident and gets period. one the have self the positive. making will I XX% range strong point when own we thing our we operating repeat higher margin gross platform on lot I in they on in you will and the the past at today. said returns that more margin that that I to and execute customers do platform a it analysis. are if than invites see And a solve that as gross space their

XX% range ahead plus So, which see what market the we really range on you XX% and good in in plus be see we of kind of or to this is our the in minus we feel guidance. expect

Unidentified Analyst

fleet of the thought as One of mindset your come general have the maybe looking just mean their on plea Great. high-grading have am peers where capital just what think beyond spend, curious spend new of operating maybe you is I is, on age there? down in been a orders seen you so have some bit versus existing your I you to regard and kind kind XXXX

Brad Childers

stepping back, as or our is the business we and levels more the need structural see of are At we demand look seeing infrastructure macro and monetization require this their the of natural resulting for The drivers what the seeing driven can’t look that what the of gas we level. to the level, for for forward a sure, I in production see low energy as the export. not to am higher by of in I is both speak is now, shift transactional in And gas investment. level, can’t and in U.S. are in what that and are to in a exactly, they the back. others I lot shift natural speak LNG market, and of today and opportunity the step competitors form a right to the the are that candidly macro price, lean use occurring well in in market oil of part an which gas Petrochem

driver the that��s demand U.S. there available affordable, the and meet it. macro fundamental So, is that supply is and abundant readily to

it that’s level, the that for And to in the part us to the and price is infrastructure advent years gas of just a is to so required infrastructure monetizing At last a XX and Shell customers from that’s natural the the resources, market. been their looking on oil support this are both works bring and come this gas and build-out it’s gas low it’s investments transactional Shell for in our growth. with of

so equates budget CapEx booked to little start a between bit of already horsepower been which our to and XXX,XXX what additions. announced have And XXXX. for we XXX,XXX XXX,XXX over

well a and transactional when at be there customers our that’s So, what our need fleet as us, the today, opportunity returns great and our macro as in as level, and in our capital well budget to we level, reflects. business both enterprise investment generate solid see as the

Unidentified Analyst

some a have pace of what and slower a about – live customers, your of of of and outsourcing on reliance pulling reporting the curious thinking E&P sense. to have last names but effects cash maybe upstream on necessarily E&P free was outlook traditionally the more been trying these some kind little follow-up – compression greater maybe of customers, One thoughts not on bit Makes I back within are potential done maybe or versus kind your some that here some your the that for growth services or larger flow. of companies in-house.

something that? there’s like wondering if upside just any see So, of just kind maybe you

Brad Childers

Yes, totally today that our dynamic constructed on customers coming from front.

this this of says the other One outsource business now. hit they time is to allocation of into because to E&P the a upstream customers, that lean capital that you more that demands investing right in on is are in the reasons looking for

business capital we a rationalization midstream place And supporting the so the be very our long to expect in in for occurring that’s long-term much good that constructively as in we growth that out time. deployed is yielding put marketplace assets

supporting So, the that in now. dynamic is much our right growth very business

Unidentified Analyst

Great. That’s Thanks. for it me.

Operator

Riley. question And the comes next B. from from Ryan Pfingst

Your line is open.

Ryan Pfingst

Hey, guys. good morning,

Brad Childers

morning. Good

Ryan Pfingst

spot up X, in you since since how much they Just pricing, they on early how handy, if it back much rates call are have bottomed your and November in maybe last ‘XX? are

Brad Childers

of up But Well, talking of to for that’s reasons something top in units, the information a obvious amount that the lot we’re between in large to just prices willing very up share is short-term to overall perspective the reasons. not bottom. bottom a the too of are XX% from about from across we’re pricing for do, kind and tight demand XX%

pricing is I sharply. So, mean, up

so Now, you’ve but that is encountered I out performance, obviously, some robustly. will we’ve there in gross our it’s up definitely and point pricing margin up cost it are seen that pressures

Ryan Pfingst

determine helpful. quarterly to XX% XX%? Okay, margin that to turning What variables to do likely gross going And aftermarket percentage services. ends the for whether gross what sequential or progression are and the that you swing is that’s key annual closer will margins up be expect then

Brad Childers

this BMS it’s us Yes, by and in business, a on required. a adds margin, capital constructively look giving return very it business lumpy good that lower we’ve business invested business, CapEx incremental much the that’s the it’s to

the a what set it it and see effectively. have And edge very So, more to lower business that the we predict of influences you’re the mix range business on business our lot more the has contract the in beyond to the top the we forecast end into of type it that those But pushes quarter-over-quarter. range over cost as makes us variable what is pushes translates quarter which drivers we we into us range higher seeing. quarter very that’s lumpiness see right like the of the in margin parts sits hard out, associated business business the business, and – operations that of but primary And we are translates service margin the lower to and with that it business. especially

Ryan Pfingst

guys. turn I’ll Alright, it thanks back.

Brad Childers

Thanks.

Operator

Energy. next the Simmons from comes from And question John Watson

open. Your is line

John Watson

guys. Hey, good morning,

Brad Childers

morning. Good

John Watson

due to CapEx, I yes, prepared other in make on this think that’s that year-over-year Oracle to some upgrades? of focused other start to the cetera. CapEx increase to Brad, called you remarks, mentioned talk the et I just you also that Is technological wanted out want your those system the I the upgrades benefit right? And sure from you in can revenue potential but

Brad Childers

CapEx the project a prepared described was So, I that remarks my of other right, it is part the you’re in increase.

I’ll is is technology off, that and is technology our to increasing in stuff. the the our share exciting I’ll the project two out our We’ve operations just components back. the and in comes One CapEx in we’re and you, on into of I’ll trucks, the increase first future this So, which other But stepping that’s investment other that, really. component workforce. growth And other support seeing CapEx. project, discuss level pretty point with required falls seen

the looking of as company’s as in ERP. our current platform to efficiency to level tools operations, a drive our technology are ability deploy overall much including operating more platform at the to overall, well just We higher our in field

in a and of field efficiency the in this of achieve level great by system followed what better operating ERP look customer a will candidly, different level technology of to our the deployment an experience in like improvement. improvement first, field So, the be operations platform service will in

going I that’s other and start that’s what early project the – to then of probably benefits to the this potentially late is about the of we’ll when about of million see require about project. X as driving require off that’s timing So, XXXX investment, and what’s up we’re the Look the going of working that’s we’re mean, this to investment split in see but benefits in XXXX, CapEx It’s years this accrued as million see $XX to after it. XXXX and that. going between CapEx of $XX SG&A we’ll and XXXX, in

with going our as the are believe to will on what growth, It’s we’re impact translates in today, achieve this see margin, benefits lowering it’s or this far is investing to – program. How what far the in to We As going incremental equal that, benefits, going equipment in is returns – in fact, out. well you cost. and that exceed quantifying the I’d returns, generate those as what the investment we’re solid a so the we more about share excited have can to too talk growth positive into of in cost-effective and/or investment we definitely that future we’ll in returns. improvements about our

John Watson

the deployed? leading But the not field just one to an today Great. into a a of if trying the That horsepower your question is as classes. to very earlier that’s think field the know And wide there is easy differing follow-up that’s gap unit just deployed narrow helpful. unit can been versus And to few went and on maybe Thank maybe in gap between for or a through average you years I’m edge I for breakdown. a pricing, that between you speak a because what today. gap is the out

Brad Childers

quantify But pricing Yes, market operating no, keep I’d you we can’t effort that. at our is to is with levels. horsepower what now right share our that,

have we out contracts years price on typically, can are that – are X implement have increase and of we know term. different a to units that of you X from As so we durations

pricing feel in as market pricing our majority that that able the current to the vast the bring the so multi-year to and expect to the to well but to we of market we throughout ability the market pricing But up the by market it This all to implemented market XXXX. as pricing vast pricing we we by term our up will been about that we up have bring remaining then has up about about January the of good varies in do of For majority by on rest half our year. end bring feel be and of unit. get XXXX. will to good the XXXX, because of increase fleets of fleet far a effort The that to fleet market price contracts,

John Watson

very to. helpful, qualitatively last you than job That’s of number by this the horsepower for cycle growth a the is grown quantitatively, to larger have to what different more a a compares of how at that demand I’m or Perfect. could point more of fleet know. variety growth the you than speaking planning spent nice planning Can you did assuming even CapEx, needed you’re there what one, – could that reasons. One you’re really spend? CapEx have to why either Is to you a for speak you

Brad Childers

Yes, correct.

more we’re You’re completely the right. that demand There is meeting. market in

definitely capital our to their are but not entertain all trying needs, in meet the with customers the we’re new with to could demand customers satisfying and that work for key core We marketplace today. equipment we

the spend but in capital So, capital allocation in definitely to objectives absorb and market to market, meet we’ve out, more. been order this multiple laid that appetite is to satisfy amount the an we’ve there’s the of this for willing

pull lower we’ll developing if along is interesting the definitely The the we some also have or other be side we’ve the the end to because even don’t of CapEx. that lines of we on ability seen market then that see our back

that it plan CapEx market dependent as to. performing out is upon the we the expect So, we’ve laid

XXXX, our expectations objectives – showing as well doesn’t back we’ve as ramp up and both range market strongly of as in to financial if show up the we as flexibility have in our it our within right now candidly the up We see customers. pull meet

John Watson

for congrats all the you questions quarter. taking thank and and on good understood Great, my

Brad Childers

Thanks.

Doug Aron

John. Thanks,

Operator

Johnson And comes Rice. from from Daniel question Instructions] [Operator next Burke our

open. is line Your

Daniel Burke

guys. morning, good Yes,

Brad Childers

Hey, Daniel.

Daniel Burke

the have you level just As you kind years, over heated new escalation what in that any, investment curious, has quantify on last the maybe years? the of if newbuild you’ve of I market couple say up seen unit up, pricing was last X costs? seen over step pricing your of the Can

Brad Childers

the about we’ve range seen been vendors is seen – increases OEMs that’s saw, coming ‘XX the key X% from range. it’s in The and Yes. we the packagers, in but price both what major and through that have in

Daniel Burke

of shifting speaks appropriately We’ve gears, well. XX%-ish growth fleet there’s of market. fleet to a here in recognized But market as the given churn of forward sort X? out intensity the then look utilization of And to or the year there Brad. thanks, what’s as sort on XX% focus and opportunity next fleet push that above we the Okay, a the tight demand in certainly over the utilized is entire level the

Brad Childers

exactly We’re new the gauge turn churn, coming we that The that the how to can assure start I when is we’ll working that’s the is given have try easy thing hard successful can fact units them do say. going to so fleet we into to thing be to that there you, on.

we We smaller off, units especially to in horsepower highly major on large ready to stage have units utilized coming above somewhat we’ve next us. range units, look the XX% the getting have shop for the ability already. we’re X then job, have for units have and But for the at market the available well every

we’re as to to achieve as and can optimize the high basis rate business utilization we as we our time in-time done utilization just and So, we’re the and as continue for returns can work highest deliveries pushing investors can. to going on work – we have to that

already of certain the the to challenging. and operate seeing more in it it’s we’re categories horsepower geography that ability range that pull It’s and up that makes broad So, that across we working. in

Daniel Burke

advance should least year, then the the one nuance but this it. annual just guidance I I think to squeeze one incremental year price in. the turn maybe margin about could how you think if through ops want QX, into the about here in as compression quarterly have any to we QX got last don’t year guidance, when trend we you capture advances think Got as about goes margin is contract that would at or pretty ratable to on? the business in the provide margin And

Doug Aron

a look, the it’s get levels think sort guess of Daniel, slight lag Sure. I into half is we of you it very pretty a I Obviously, quickly. first that Yes. towards I converting much good about CapEx Doug, not in cash job of to let’s will a as much, spinning, XX-XX business mean any, this flow see I or does year. weighted even the CapEx talk being think first our XX-XX

them first the right bigger maybe X. assuming the effective tell of through think in for yes start given slug purposes, are impact, most QX in showing And would that the second So up smaller we the half and the with I QX half CapEx the in you modeling that percentage you pricing of gets the spent that year. on flows January of

that which There expenses some see as for will meant have starts will that be. or said that’s would start the to I guidance of for also expect are given that I some to say year. have and But think why you so startup those is QX that And overall look have in offset we we you related got that’s where new kind to we those of QX. would is that mute

Daniel Burke

Got it.

I Doug, guys you, Thank time. appreciate that. the Okay. for

Doug Aron

Thanks.

Brad Childers

Thanks Daniel.

Operator

questions. the remarks. more no for to call Childers And are Mr. like There I back final to over turn would

Brad Childers

Great.

strong the from and for Thanks to the am joining as dynamics in I you, May. year an equally thank XXXX up to first benefit in optimistic morning. U.S. for market constructive we So gas call this forward you a year everyone. on I are look Archrock. our results everyone is oil was shaping quarter growth strong production XXXX driving updating that our that be

Operator

for and Thank disconnect. this you. you Ladies participating you and concludes now conference. today’s gentlemen, may Thank

Archrock (AROC) 20 Feb 192018 Q4 Earnings call transcript