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Company Description

Contact Info

508 West Wall Street

Suite 550

Midland, TX 79701

United States

Phone: 432-262-2700

Fax: 432-262-2701

Natural Gas Services Group, Inc. provides small to medium horsepower compression equipment to the natural gas industry. The company focuses primarily on the non-conventional natural gas and oil production business in the United States (such as coal bed methane, gas shale, tight gas and oil shales). The company manufactures, fabricates and rents natural gas compressors that improve the production of natural gas wells; and provides maintenance services for those compressors. In addition, the company sells custom fabricated natural gas compressors to meet customer specifications dictated by well pressures, production characteristics and particular applications. The company also manufactures and sells flare systems for oil and gas plant and production facilities. Operating Units The company’s operating units include Gas Compressor Rental, Engineered Equipment Sales, and Service and Maintenance. Gas Compressor Rental This operating unit’s rental business is primarily focused on non-conventional natural gas and oil production. The company provides rental of small to medium horsepower compression equipment to customers under contracts typically having minimum initial terms of 6 to 24 months. The company maintains and services compressor equipment rented to its customers. As of December 31, 2015, the company had 2,622 natural gas compressors in its rental fleet totaling 372,482 horsepower. The company had 1,818 natural gas compressors totaling 256,204 horsepower rented to 84 customers. Engineered Equipment Sales This operating unit includes the following components: Compressor Fabrication: Fabrication involves the assembly of compressor components manufactured by the company or other vendors into compressor units that are ready for rental or sale. In addition to fabricating compressors for its rental fleet, the company engineers and fabricates natural gas compressors for sale to customers to meet their specifications based on well pressure, production characteristics and the particular applications for which compression is sought. Compressor Manufacturing: The company designs and manufactures its own proprietary line of reciprocating compressor frames, cylinders and parts known as its Cylinder-in-Plane product line. The company uses the finished components to fabricate compressor units for its rental fleet or for sale to customers. The company also sells finished components to other fabricators. Flare Fabrication: The company designs, fabricates, sells, installs, and services flare stacks and related ignition and control devices for the onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas and liquefied petroleum gases. Parts Sales and Compressor Rebuilds: To provide customer support for the company’s compressor and flare sales businesses, it stocks varying levels of replacement parts at the company’s Midland, Texas facility and at field service locations. The company also provides an exchange and rebuilds program for screw compressors and maintains an inventory of new and used compressors to facilitate this part of its business. Service and Maintenance This operating unit services and maintains compressors owned by the company’s customers on an ‘as needed’ basis. The company performs wear-particle analysis on all packages and performs overhauls on a condition-based interval or a time-based schedule. Major Customers Sales and rental income to Devon Energy Production, Inc. and Occidental Permian, LTD. amounted to 21% and 10% of the company’s revenue, respectively for the year ended December 31, 2015. Sales and Marketing The company’s sales force pursues the rental and sales market for compressors and flare equipment and other services in their respective territories. Business Strategy The company’s business strategies include expanding rental fleet; geographic expansion; expanding its ‘secondary’ product lines; and selectively pursuing acquisitions. Government Regulation During the course of the company’s operations, it generates wastes (including but not limited to, used oil, antifreeze, filters, paints, solvents and abrasive blasting materials) in quantities regulated under the federal Resource Conservation and Recovery Act. The Clean Air Act and implementing regulations and comparable state laws and regulations regulate emissions of air pollutants from various industrial sources and also impose various monitoring and reporting requirements, including requirements related to emissions from certain stationary engines, such as those on the company’s compressor units. The company is subject to the requirements of Occupational Safety and Health Administration (OSHA) and comparable state statutes. The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Comprehensive Environmental Response Compensation and Liability Act of 1980, and similar state statutes require that the company maintains and/or discloses information about hazardous materials used or produced in the company’s operations. History Natural Gas Services Group, Inc. was founded in 1998. The company was incorporated in Colorado in 1998.

 

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