Latin America buoying business for Exterran

Oil and gas equipment and service provider Exterran sees further growth in Latin America which accounted for around a third of company revenue in the third quarter.

“In Latin America, despite all of the difficulties the region has faced between COVID-19, geopolitical challenges and currency headwinds, we continue to have commercial success,” CEO Andrew Way said during Exterran’s 3Q20 earnings call.

“On top of the more than US$200mn of extensions so far in the region, we have had a couple of small ECO [Exterran contract operation] wins and we still see additional opportunities for important renewals within the coming months and quarters,” he added.

In the quarter, Exterran renewed a Latin American ECO contract for six years and worth US$$80mn. Details were not disclosed.

When asked how the regional renewal compared to the previous rate, Way said that “the renewal that we saw during the quarter was pretty consistent with the renewals that we’ve had year to date in terms of the commercial terms of those contracts. We see no changes to our current outlook.”

ARGENTINA

“We think there’s a good opportunity for us in terms of equipment, potentially ECO deals, but it’s one that we need to move cautiously and carefully just given the environment there,” the CEO said in response to a question on Argentina.

Way highlighted “enhanced concerns” regarding currency devaluation and credit risk, and the challenge of in-country capital availability.

Nevertheless, the executive pointed to the company's long history in Argentina and constant customer engagement with more business expected in 2021.

Exterran’s revenue from Latin America in July-September rose 3% sequentially to US$60mn, which represents 36% of company-wide revenue.