Financial Data and Key Metrics Changes - The company reported a record full-year Adjusted EBITDA of $613.8 million and Distributable Cash Flow (DCF) of $385.7 million, both representing significant achievements for the company [3][11] - In Q4 2025, net income was $27.8 million, operating income was $76.6 million, and net cash provided by operating activities was $139.5 million [10] - The average pricing per horsepower reached an all-time high of $21.69, marking a 1% increase from the previous quarter and a 4% increase year-over-year [10] Business Line Data and Key Metrics Changes - The total fleet horsepower at the end of Q4 was approximately 3.9 million hp, with an average utilization rate of 94.5%, slightly up from the prior quarter [10][11] - Expansion capital expenditures for Q4 were $40 million, while maintenance capital expenditures were $7.8 million [11] - The company plans to budget approximately 105,000 new horsepower for 2026, representing a 2% increase in active horsepower [6] Market Data and Key Metrics Changes - Natural gas prices averaged $3.52 per MMBTU, a 56% increase from the prior year, contributing to growth in major gas basins [5] - The company noted that while oil production flattened, natural gas production increased by approximately 9% year-over-year [4] Company Strategy and Development Direction - The acquisition of J-W Power is expected to enhance the company's presence across major oil and gas basins in the U.S. and improve service reliability [3][4] - The company aims to achieve annual run-rate synergies of approximately $10 million to $20 million by the end of 2027 through operational optimizations [7][8] - The focus will be on increasing customer retention and extending average contract durations while integrating J-W assets [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the Permian Basin despite short-term challenges due to lower oil prices [4] - The company anticipates that the addition of J-W assets will initially reduce aggregate gross margins but aims to align these margins with its own over the next two years [14][15] - The management is optimistic about the overall gas industry, driven by demand from data centers and LNG [43] Other Important Information - The company has refinanced its ABL and senior notes, significantly reducing borrowing costs and improving strategic flexibility [3][14] - Lead times for new equipment have increased to over two years, presenting both opportunities and challenges for the company [5] Q&A Session Summary Question: Growth CapEx guidance breakdown - Approximately $205 million of growth capital is tied to the typical compression business, with about $150 million allocated for new units [19] Question: Balance sheet improvement and distribution coverage - The normalized distribution coverage is about 1.55x, with expectations to reach 1.6x+ in the coming year [25] Question: Timing of new capacity delivery - Most of the new horsepower is expected to come online in the back half of the year, primarily from July onward [28] Question: Impact of lead times on pricing - Lead times are primarily driven by demand for Caterpillar engines, and an increase in equipment costs is anticipated later in the year [31] Question: Evaluation of distributed power space - The company is continuously evaluating opportunities in the distributed power business but has not yet found suitable candidates [33]