Natural Gas Services Group Receives First Orders For New Two-Stage, Rotary Screw Compressors
Company Leases Four Compressor Packages Valued at More Than $1 Million
MIDLAND, Texas — Natural Gas Services Group, Inc. (NGSG) (Amex: NGS, NGS.WS), a provider of equipment and services to the natural gas and oil industry, today announced it has received four lease agreements for the Company's recently introduced two-stage, rotary screw natural gas compressors. The compressors have a combined market value of more than $1 million.
Each of the leases, which were signed by an existing customer, covers an initial 24-month term and is expected to yield margins comparable to those generated by NGS's other compressor lines. The first lease will commence in February 2003, and a new lease will begin in each of the three subsequent months. All four compressor packages will be installed at the customer's gas gathering operation in Farmington, New Mexico.
Wayne Vinson, president and CEO of NGS, said a key factor in the customer's selection of the new 420-horsepower unit was the compressor's ability to generate higher pressures with much lower emissions than competing reciprocating compressors. The new unit is powered by a Cummins natural gas engine that can be adapted to comply with a range of increasingly strict environmental emissions standards.
"Our rotary screw compressors have fewer moving parts and are typically more efficient and less expensive to install and operate than reciprocating compressors," Vinson said. "With the higher horsepower and operating pressures achieved by our new two-stage model, we can address the demands of a much broader segment of the natural gas compression market.
"We believe there is significant pent up demand for a cost-effective, more efficient compressor in the 400-horsepower range," Vinson added. "In fact, we received the preliminary orders for these units even before the final product design had been completed."
Vinson said that operating cash flow and proceeds from the Company's recent IPO will allow NGS to increase production of more powerful --– and potentially more profitable – compressors. In addition to compressors built for the Company's rental fleet, NGS continues to manufacture products for customers that prefer to purchase.
NGSG manufactures, fabricates, sells, leases and services natural gas compressors that enhance the production of oil and gas wells. The Company also manufactures and sells flare systems and flare ignition systems for plant and production facilities. For more information on NGSG, please visit the Company's website at www.ngsgi.com.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause NGSG's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, the loss of market share through competition or otherwise; the introduction of competing technologies by other companies; a prolonged, substantial reduction in oil and gas prices which could cause a decline in the demand for NGSG's products and services; and new governmental safety, health and environmental regulations which could require NGSG to make significant capital expenditures. The forward-looking statements included in this press release are only made as of the date of this press release, and NGSG undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. A discussion of these factors is included in the Company's registration statement filed with the Securities and Exchange Commission.
CONTACTS:
Natural Gas Services Group, Inc.
Wayne Vinson or Wallace Sparkman
915-563-3974
Pfeiffer High Public Relations, Inc.
Geoff High
303-393-7044
