THE WOODLANDS, Texas,
Jan. 29, 2021 /PRNewswire/ -- CSI Compressco LP ("CSI
Compressco" or the "Partnership") (NASDAQ: CCLP) announced today
that Spartan Energy Partners LP ("Spartan") is acquiring from TETRA
Technologies, Inc. ("TETRA"), the Partnership's General Partner,
incentive distribution rights ("IDRs") and a majority of the common
units in CSI Compressco previously owned by TETRA. CSI
Compressco will continue to be listed on NASDAQ and does not expect
any changes to its capital structure as a result of this
transaction. CSI Compressco will not issue any common units
nor incur any incremental indebtedness as a result of the
transaction.
Spartan, a Texas based private
company founded in 2010, is a global provider of gas treating,
compression and processing services. The management team of
Spartan is comprised of energy industry veterans from Hanover
Compressor, Exterran and Ariel Corporation. Spartan's majority
owner is Silverhawk Capital Partners.
In connection with the transaction, John
Jackson will become Chief Executive Officer of CSI
Compressco, replacing Brady Murphy,
Jon Byers will become Chief
Financial Officer of CSI Compressco, replacing Elijio Serrano, and Rob
Price will become Chief Operating Officer of CSI
Compressco. John Jackson has over 40 years of experience in
the energy industry including serving as Chief Executive Officer of
Hanover Compressor, a predecessor company of Exterran Corporation
and Archrock, Inc. Jon Byers has 15
years of energy industry experience serving in financial and
corporate development roles at Spartan, Price Gregory Services, Inc
(a division of Quanta Services), and private equity firm SCF
Partners. Rob Price has over
35 years of experience in the energy industry serving as VP of
North America Sales and Product Line Marketing Latin America for
Exterran and VP of Latin America
for Hanover Compressor Company. Previous to those roles he worked
for Ariel Compressor Corporation.
No changes are planned to the CSI Compressco leadership team of
Roy McNiven, Senior Vice-President
Operations; Matthew Pitcock,
Vice-President of Sales; Michael
Moscoso, Vice-President of Finance; and Lori Rogers, Director of Human Resources.
In addition, Ted Gardner will be
appointed Non-Executive Chairman of the Board of Directors of the
Partnership's General Partner (the "Board"). John Jackson, Jon
Byers, and Rob Price will
join the Board as Spartan affiliated board members.
Jim Larson will remain on the Board
as Chairman of the Audit Committee, and Steve Gill will join as an independent board
member and member of the audit committee. TETRA affiliated
board members Brady Murphy,
Elijio Serrano, Paul Coombs and Bill
Sullivan will resign from the Board in connection with the
transaction. In addition, Frank
Harrison will retire from the Board.
CSI Compressco's President and Chief Executive Officer,
John Jackson, commented, "We are
pleased to acquire the controlling interest in CSI Compressco which
we believe to be one of the premier compression services providers
with a deep customer base, strong footprint in the key shale
basins, and a solid management team. CSI Compressco's
business has significant recurring cash flow characteristics and is
well positioned to take advantage of an anticipated market
recovery. With Spartan's existing capabilities, we can add
value to further strengthen CSI Compressco's market position and
help grow its business. Our immediate focus will be on
delivering to our customers, generating liquidity and improving our
capital structure. The CSI Compressco management team has
laid the foundation for us, and we look forward to enhancing value
to all unit and bond holders."
TETRA will continue to provide back office support ("Transition
Services") to CSI Compressco for a period of time until CSI
Compressco has completed a full separation from TETRA's accounting,
IT and back office support functions. After completion
of this transaction, TETRA will continue to own 5.2 million common
units of CSI Compressco, or approximately 11% of the total
outstanding common units.
Brady Murphy, TETRA's President
and Chief Executive Officer comments, "CSI Compressco has continued
to invest in new large horsepower units, information technology and
systems, and has focused its fleet on large well-capitalized oil
& gas operators. In recent years, we have repositioned
CSI Compressco's business model to deliver consistent and
predictable earnings and cash flows. As a result, we believe
this is the appropriate time for TETRA to sell the General Partner,
IDRs and a majority of the units we own to Spartan, who can provide
additional capital support to CSI Compressco to further advance the
business model. This transaction will allow TETRA to focus on
its Fluids and Water Management and Flowback Services
segments. We remain a meaningful owner in CSI Compressco
holding 5.2 million common units which will enable us to
participate in CSI Compressco's continued success."
The sale of the General Partner, IDRs and 10.95 million common
units was for consideration of $13.95
million. Additionally, if certain financial targets
are achieved by CSI Compressco, TETRA will be entitled to a
contingent payment from Spartan of $3.1
million. In December, 2020 TETRA sold to Spartan 15
large horsepower compressors that are subject to a lease agreement
with CSI Compressco for $14.2
million. These transactions will not result in CSI
Compressco issuing equity or incurring any incremental
indebtedness.
The transaction is expected to be completed January 29, 2021 and is not subject to any
regulatory reviews nor approvals.
About CSI Compressco
CSI Compressco is a provider of compression services and
equipment for natural gas and oil production, gathering, artificial
lift, transmission, processing, and storage. CSI Compressco's
compression and related services business includes a fleet of more
than 4,900 compressor packages providing approximately 1.17 million
in aggregate horsepower, utilizing a full spectrum of low-, medium-
and high-horsepower engines. CSI Compressco also provides
well monitoring and automated sand separation services in
conjunction with compression and related services in certain Latin
American markets. CSI Compressco's aftermarket business provides
compressor package reconfiguration and maintenance services. CSI
Compressco's customers comprise a broad base of natural gas and oil
exploration and production, midstream, transmission, and storage
companies operating throughout many of the onshore producing
regions of the United States,
as well as in a number of foreign countries,
including Mexico, Canada and Argentina. CSI
Compressco is managed by Spartan Energy Partners.
Forward Looking Statements
This news release contains "forward-looking statements" and
information based on our beliefs and those of our general partner,
CSI Compressco GP LLC. Forward-looking statements in this news
release are identifiable by the use of the following words and
other similar words: "anticipates," "assumes," "believes,"
"budgets," "could," "estimates," "expectations," "expects,"
"forecasts," "goal," "intends," "may," "might," "plans," "planned,"
"predicts," "projects," "schedules," "seeks," "should," "targets,"
"will," and "would." These forward-looking statements include
statements, other than statements of historical fact, including
statements regarding the anticipated closing of Spartan's
acquisition of the Partnership's general partner, our expectations
regarding our business outlook and business plans; the business
plans of our customers; an anticipated recovery in oil and natural
gas market conditions, and other statements regarding the
Partnership's beliefs, expectations, plans, prospects and other
future events, performance, and other statements that are not
purely historical. Such forward-looking statements reflect
our current views with respect to future events and financial
performance, and are based on assumptions that we believe to be
reasonable, but such forward-looking statements are subject to
numerous risks and uncertainties, including but not limited to:
economic and operating conditions that are outside of our control,
including: risks related to acquisitions, dispositions and our
growth strategy, including Spartan's anticipated acquisition of the
Partnership's general partner; the trading price of our common
units; the severity and duration of the COVID-19 pandemic and
related economic repercussions and the resulting negative impact
on the demand for oil and gas, operational challenges
relating to the COVID-19 pandemic and efforts to mitigate the
spread of the virus, including logistical challenges, remote work
arrangements, and supply chain disruptions, other global or
national health concerns; and other risks and uncertainties
contained in our Annual Report on Form 10-K and our other filings
with the U.S. Securities and Exchange Commission ("SEC"), which are
available free of charge on the SEC website at www.sec.gov.
If any of these risks or uncertainties materialize, or if any of
the underlying assumptions prove incorrect, actual results may vary
from those indicated by the forward-looking statements, and such
variances may be material. All subsequent written and verbal
forward-looking statements made by or attributable to us or to
persons acting on our behalf are expressly qualified in their
entirety by reference to these risks and uncertainties. You
should not place undue reliance on forward-looking
statements. Each forward-looking statement speaks only as of
the date of the particular statement, and we undertake no
obligation to update or revise any forward-looking statements we
may make, except as may be required by law.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/spartan-energy-partners-acquiring-csi-compressco-lps-general-partner-from-tetra-technologies-announces-new-executive-officers-and-changes-in-the-board-of-directors-301217951.html
SOURCE CSI Compressco LP