Good morning. Welcome to the Archrock conference call. Your host for this morning's call is Megan Repine, Vice President of Investor Relations at Archrock. I will now turn the call over to Ms. Repine. You may begin. Thank you, Krista. Hello, everyone, and thanks for joining us on today's call. With me today are Brad Childers, President and Chief Executive Officer of Archrock, and Doug Aron, Chief Financial Officer of Archrock. Yesterday, Archrock issued a press release announcing its acquisition of Total Operations and Production Services, LLC or TOPS. In a separate filing, we announced select preliminary financial results for the second quarter, and this morning, we announced the pricing of a common stock offering. If you've not received copies, you can find these materials, as well as the presentation discussing the transaction, on the company's website at www.archrock.com. During this call, we will make forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, based on our current beliefs and expectations, as well as assumptions made by and information currently available to Archrock's management team. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Please refer to our filings with the SEC for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. I'll now turn the call over to Brad to discuss the transaction. Thank you, Megan, and good morning, everyone. I appreciate you joining us on short notice. As you've read, we're excited to announce that Archrock will be acquiring TOPS, the leading provider of electric motor drive contract compression services in the Permian Basin. This transaction is an exciting milestone for Archrock that builds on the meaningful progress we've made orienting our business for the future and for long-term success. We believe this transaction will further solidify our position as the premier contract compression services company and enable us to continue serving customers' growing demand for lower carbon solutions. As I said, TOPS is the leading provider of electric motor drive contract compression services in the Permian. The TOPS fleet is young, deployed primarily in gas lift and equipped with innovative remote monitoring technology. Led by CEO Brian Green, TOPS has a talented team of employees committed to delivering cleaner energy across the U.S. We're excited to welcome Brian and the TOPS team to Archrock. First, let me touch on the terms of the transaction. Archrock will acquire TOPS and its approximately 580,000 horsepower for $983 million in cash and stock. The stock portion will be funded by issuing 6.87 million newly issued shares of Archrock common stock to be paid to the seller, Apollo. Now, Doug will talk about the other parts of our financing strategy later in the call, but a key takeaway is Archrock remains committed to the company's stated target leverage ratio of between 3-3.5x. Before we review the significant strategic and financial benefits of this transaction, I want to talk about how this acquisition fits into Archrock's overall strategy. As a leading compression company with 70 years of operating experience, we regularly evaluate M&A opportunities. However, we've maintained both our discipline and our rigorous standards for asset quality, safety, customer relationships, and value creation. With today's robust market of growing natural gas production and compression demand, one of our top priorities has been investing in high quality, high return, and highly standardized compression assets. Equally as important, we've been funding these investments within our cash flow so that we've been able to deliver on our commitments to increasing cash returns to investors while maintaining a strong balance sheet. This transaction with TOPS aligns with our strategic focus and is an exceptional opportunity to expand our contract compression operations, diversify our capabilities, and increase sustainability across our fleet. With TOPS, we're adding 580,000 horsepower of young compression assets, including approximately 500,000 operating horsepower and a substantial and contracted backlog of new equipment. And doing so in a way that reinforces our best-in-class capital allocation and financial strategy makes this an incredibly compelling opportunity for Archrock and our investors. We believe this transaction has four key value drivers. First, the acquisition of high-quality assets with contracted cash flows adds meaningful, low-risk growth. Second, the acquisition enhances our scale and complements our existing Permian Basin compression capacity. Third, this acquisition accelerates the growth of our electric motor drive fleet and augments our internal electrical expertise. And fourth, this transaction is consistent with our financial and capital allocation priorities, and we expect it will facilitate the accelerated return of capital to shareholders. I'd like to now dive deeper into each one of these four value drivers. First, this transaction immediately adds high-quality assets with contracted cash flows to Archrock's fleet. Since 2016, we've worked continuously to upgrade our fleet, markets, customer relationships, and technology. I'm proud of the strong market financial position we've established as a result of these efforts, and believe that the TOPS assets will build on our momentum and further enhance our competitive position. I want to highlight a few key aspects of the TOPS fleet that make these assets the right fit for Archrock. First, this is one of the newest contract compression fleets, particularly when looking at asset packages of this scale. The average age of the TOPS fleet is three years, making it cost-effective and efficient. Next, TOPS equipment has market-leading technology. As I mentioned at the outset, TOPS doesn't sell remote monitoring on its electric units, and as you know, we've been focused on innovative technology and process investments to digitize and increasingly automate our operating platform. Adding TOPS capabilities to our fleet further advances our technology capabilities. The units that we are acquiring are 95% utilized today and are backed by fee-based contracts. Finally, TOPS currently serves an outstanding group of customers. Roughly 75% of TOPS horsepower is contracted with the company's top 10 customers. These are major blue-chip Permian producers and integrated players. At Archrock, we are looking forward to strengthening and expanding our relationships with some of these shared customers and adding new key long-term relationships. Turning to value driver number two, the transaction is expected to result in enhanced scale across a highly complementary geographic footprint. We're confident that this acquisition has the potential to enhance our Archrock's position as a leading provider of contract compression in the United States, with pro forma operating horsepower totaling 4.1 million and pro forma enterprise value in excess of $6 billion. The acquired assets are exclusively serving customers in the Permian, where Archrock already has a complementary presence, further improving our position in this important basin. Not only are these assets located in a high-growth area, but they will, they will round out our service offering in the Permian, given TOPS focus on gas lift. Substantially, all of TOPS horsepower is deployed on gas lift, where compression is used to reinject natural gas into producing wells to help lift liquids to the surface. These applications use a wide variety of horsepower. Low to mid-range horsepower equipment is located at or near the wellhead, or large horsepower compressed equipment for centralized gas systems servicing multiple wells. TOPS has focused on mid-range electric horsepower, with approximately two-thirds of the fleet ranging between 300 and 1,000 horsepower per unit. Gas lift compression is directly tied to oil production compared to pure gas production, gathering, and transportation. It's used like an ESP or other artificial lift technology to help relieve the pressure in the wellbore to facilitate oil production. We see strong U.S. oil growth ahead, especially in the Permian, where production is expected to grow 30% over the next decade. We expect this should drive steady demand for gas lift going forward. Turning to the third key value driver, we're focused on powering a cleaner America and helping our customers reduce their emissions footprint. This strategy has informed the organic expansion of our own electric motor drive horsepower over the last several years as we've seen demand steadily grow across geographies, horsepower categories, and customers. We've further electrified our fleet through high-return new build investments and by converting some of our existing units to electric motor drive. With favorable long-term industry trends toward electric compression, we believe this transaction represents a unique opportunity to jumpstart our electric motor drive compression capabilities and enhance our trucks' position and electric motor drive compression. Through this acquisition, we anticipate an increase in Archrock's electric compression fleet to approximately 648,000 horsepower. On a pro forma basis, electric compression assets will comprise 15% of our fleet. There are meaningful advantages to using electric motor drive compressors instead of gas-driven compressors beyond reduced emissions. The first is superior uptime. We believe customers benefit from higher mechanical runtimes with electric motor drive compression compared to gas-driven engines. The second is reduced maintenance. Electric motor drive equipment can be simpler to maintain with fewer moving parts, resulting in a lot longer major overhaul intervals and lower maintenance expenses. We've seen both of these benefits with our own electric compression assets and look forward to more fully capitalizing on these benefits through this transaction. Turning to the fourth value driver I want to highlight today, the transaction economics are attractive for Archrock and its shareholders. We're buying a rapidly growing business with a substantial and contracted backlog. We expect the TOPS operating fleet of approximately 500,000 horsepower will grow rapidly as new build horsepower is delivered and begins generating revenue under contracts. We estimate the acquired assets will generate approximately $136 million of third quarter 2024 annualized Adjusted EBITDA, exclusive of any synergies. The purchase price translates into an attractive transaction multiple of 7.3x third quarter 2024 annualized Adjusted EBITDA, which is meaningfully below Archrock's current trading multiple. We do expect to realize some synergies, which will create further upside, but I want to emphasize this transaction is about accretive growth, not cost cutting. TOPS has been run in a very cost-effective manner, so we're not targeting immediate cost synergies. As we go through the integration process, we do expect to find opportunities to leverage best practices and capture new efficiencies. As we work through the integration and planning processes in the coming weeks and months ahead, we'll be looking for such opportunities. We expect the acquisition to be more than 10% accretive to earnings per share and at least 20% accretive to cash available for dividend per share in 2025. This increased earnings per share will further enhance our financial flexibility and enable us to deliver on our capital allocation priorities of generating shareholder returns, maintaining a strong balance sheet, and funding high return investment in our fleet. In particular, we believe the increase in pro forma discretionary cash flow will provide Archrock greater financial flexibility and capacity to increase dividends to our shareholders over time, while maintaining industry-leading coverage. In summary, the TOPS acquisition is value accretive and consistent with our strategy of maintaining a high-quality fleet of operating horsepower units, operating in high-growth basins, continuously improving the performance and profitability of our business, and offering our customers innovative solutions to meet their uptime and their emissions objectives. We look forward to continuing these efforts as we welcome the TOPS employees to the Archrock family. With that, I'd like to turn the call over to Doug to discuss key aspects of the transaction's pricing, consideration structure, and financing. Thanks, Brad. Good morning. Appreciate you joining us this morning. As Brad mentioned earlier, we are acquiring TOPS for total consideration of $983 million, which will be funded with a combination of $826 million in cash and 6.87 million newly issued Archrock shares to the seller. Archrock intends to fund the $826 million cash portion of the total consideration with a combination of equity and debt. On the equity portion, I'm pleased to say this morning, we announced the pricing of a common stock offering, raising net proceeds of $223 million at an offering price of $21 per share. This represented an 8% discount to Friday's close and a 3.3% premium to our 30-day volume-weighted average price. In addition, the underwriters have a 30-day option to purchase up to an additional 1.65 million shares of common stock from Archrock. We have made strong progress over the last several years in reducing our leverage, ending the most recent quarter with a leverage ratio of 3.2x. We remain committed to maintaining a leverage ratio of between 3x and 3.5x, and our financing approach for this transaction is in line with this disciplined strategy. The TOPS acquisition has been unanimously approved by the Archrock board of directors. As you would expect, the acquisition is subject to receipts of customary regulatory approvals and other customary closing conditions. We currently anticipate closing this transaction by the end of 2024. We expect that TOPS will operate much as it does today, as a subsidiary of Archrock. TOPS has both high caliber equipment and a talented team that we are excited to welcome to Archrock, and we are confident in our ability to effectively integrate the acquired assets into our existing business. Archrock has a strong track record of successful asset integration, and we look forward to building an even stronger Archrock together for the benefit of our employees, customers, and investors. With that, we'd now like to open up the line for questions. Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw that question, again, press star one. Your first question comes from Selman Akyol with Stifel. Please go ahead. Thank you. Good morning. Congratulations. First, can I just ask you sort of what operating costs are associated with these engines, as we think about the difference between revenues and EBITDA? So, the main difference between-- yep, go ahead. Thanks, Selman. The main difference between the operating of the electric motor drive is literally the motor itself is a lot less cost and activity intensive to operate, but you still do operate the compressor. And so, we still have the same, you know, kind of lubrication system on the compressor is still present, but what you don't have is the same volume and quantity of moving parts in the engine, that the electric motor drive, as you know, is more like a generator. It just spins without the same level of maintenance intensity, and that does have a very positive impact to maintenance activities as well as maintenance expense. Got it. And then just turning over to the capital allocation, and it sounded like you, you'll be in a position to continue growing your dividend, and you had been doing some, stock repurchases as well. So, can you just maybe talk about that as you see looking out into 25 and, just any comments you can make around that? Yes. Number one, capital allocation priorities at Archrock remain the same. We are very much focused on increasing and growing our dividends and distributions to our investors as we grow our business and as we grow our profitability over time. We're also committed to funding our growth out of existing operating cash flow, and delivering free cash flow, as an enterprise. The TOPS acquisition is not only consistent with that strategy, but it enhances our ability to continue to do that, as well as increases the cash flow that we can then use, to improve our dividends and grow dividends over time. Got it. And then just last one for me: do you see this as a springboard of being able to take electric engines into other basins? We've been operating electric motor drive horsepower for more than 10 years. In the past, the primary market that looked for electrification and electric motor drive was actually in the Rockies for emissions reasons, and they were kind of ahead of everybody on this emissions front for regulatory reasons in that area. But what we've seen is, with a much higher focus on emissions, that it is now expanding. The Permian being the main growth driver for oil and gas production in the United States today, it's leading the charge, really, on the move for more electrification. So, the short answer is, yeah, we do expect over time that more plays will electrify as the grid expands and power becomes available. But it's going to require a significant investment in power infrastructure in all of the plays in order to facilitate that. Today, we're seeing those investments primarily in the Permian and the Rockies. Selman, I might just reemphasize, you know, Brad said it at the open of the call, that the TOPS is the premier provider of electric motor drive compression in the United States, in the Permian, largest fleet in that area. We're really excited to work with Brian and his team and be able to take that expertise that they've garnered. Yes, I mean, I think it is fair to say that, when you're acquiring the best in the industry, we'll continue to enhance that and push that forward. Got it. All right. Thanks again, and congratulations. Thanks, Selman. Your next question comes from the line of Jim Rollyson with Raymond James. Please go ahead. Hey, good morning, Brad and Doug. Congrats. Question on the $136 million annualized 3Q EBITDA. I'm assuming the roughly 500,000 operating horsepower and the total of 580,000, the difference, is that mostly stuff that's on order or idle? I'm just kinda trying to see where that run rate might go, kind of where they stand on orders for equipment, those kind of things, just to kinda see where that trajectory might be headed next year. The 500,000 is operating today. The incremental 80 is fully funded, you know, by the seller on the balance sheet today for TOPS, and is contracted with customers and will be going to work. Look, Jim, you know, as to why provide you a Q3 roll forward? Look, this is a business that has seen a lot of demand, and TOPS has been managing that really well. They've been adding approximately 15,000 horsepower a month, slightly more than that through the first six months of this year, and we expect that trend to continue, you know, as you get from that 500 to 580. So we're trying our best to give you the most current reflection of what that fleet looks like and think we did that in that 136 number. Yeah. No, that's perfect. And, and I presume from a going-forward basis, it sounds like the 15,000 horsepower a month, is that a kinda run rate you guys would expect to continue based on what demand looks like? Actually, I think that that's, that 15,000 per month is between 15 and 20. And with the 80, you can see that the backlog that's just in the 80 already has a number just like that built into it. So I think that, you know, it's a fair estimate of what they've accomplished on a year-to-date basis in 2024. It's a good estimate of what they have in the backlog today. But we're pretty ambitious that as the market grows, we can continue to expand that, noting that we have our own electric motor drive business to build on as well. And so that understates, I think, a bit, what we expect to do going forward. Perfect. That, that's helpful. And, Brad, maybe last one, just on the Gas lift side, you guys have had, obviously, a portion of your business, Gas lift, and the TOPS fleet, as you mentioned, is predominantly all Gas lift. Just kind of curious where you are on a percentage on a combination from a Gas lift perspective. I presume it's consistent with your Permian exposure, but curious. Pre-acquisition, our percent of our fleet on gas lift was about 21%. Pro forma, bringing TOPS onto the Archrock platform takes it up to about 30%. And we're very excited to see that horsepower category increase going forward, as we think that the oil field is going to continue to focus on electrification. This acquisition puts us in the driver's seat, really, to help drive that solution for the benefit of our customers in the marketplace going forward. Absolutely. Last one, Doug, on the debt funding of the portion of this transaction, is that something you're just gonna, at least in the near term, probably use the credit facility to do and then maybe term that out down the road? Yeah, I think that's fair. Look, we've got to get Q2 reported. I think we're able to get an equity deal in just under the wire, Jim. I think if you did the math on the remaining cash to be raised, you'd find that that would put us at the top end of our credit facility. So whether it's either, you know, a term loan from a bank group or I think right now it seems to me that the high yield market has been pretty receptive, we would anticipate funding that the remainder with debt, given the successful equity offering yesterday. Perfect. Thanks, guys. Congrats again. Thanks, Jim. Your next question comes from the line of Elvira Scotto with RBC Capital Markets. Please go ahead. Hi, good morning, everyone. You talked about the $136 million annualized EBITDA that's exclusive of any synergies, and then I think you mentioned that, you know, this is probably not a deal that's gonna have a lot of cost synergies. Can you talk a little bit about where you could see some synergies, be it commercial or otherwise? Sure. Thanks, Elvira. One of the key benefits to the transaction is the complementary footprint of the two operations. One thing we know is that we get tremendous cost benefits by increasing density in our operations. The more units you can have in a concentrated geography, it just creates more efficiency for the mechanics, for the workforce, for the number of trips, and the efficiency of touches when we have to go, go visit a location and visit a unit. And so that increased density is something that we believe will yield synergies over time. But what we really want to emphasize is that this is a very well-priced, very accretive transaction out the gate that is not dependent upon synergies for its value creation. It's value-enhancing from day one, and that was one of the main points we wanted to emphasize. The other thing I'd point out is that, this is a growth company. The natural gas business, the compression business, is in growth mode. We're looking to expand and grow this business. We are not trying to cut or look for cost cuts, to drive this business. So that was just a key thesis for the transaction we wanted to emphasize. Great. That's super helpful. Is there any way that you can provide maybe a pro forma maintenance CapEx and/or growth CapEx estimate? We don't have that today. I mean, we do have estimates for those today. We're just not yet ready. We weren't in a position to provide pro forma because their work for Q2 hasn't yet been done. As a private company, they didn't have quite the same deadlines we do. Elvira, that will be forthcoming in time, and we'll certainly share it with you and the rest of the analysts when we're ready to do so. But there are a couple of things I'd emphasize on this. The first is that, as you can tell by our, our statements around our capital allocation priorities, we intend to be able to fund the growth of these of the combined business from cash flow. So, that should give you some, some indication as to where this fits in from a capital demand and a growth capital perspective. The second thing that's really exciting about this deal is that from a cost perspective, the TOPS fleet and the TOPS management team have done an excellent job of operating these their, their business and these units at a high gross margin profile. So when we look at the comparable units that we have in the Archrock fleet, what we know is that these assets operate at the highest level of profitability in the existing Archrock business and in the TOPS business. And so by doing this, we're expanding, just from a cost perspective, we're expanding the most profitable part of our business with this acquisition. I wanted to share that with you so you could kind of think about and bracket. There's not a radical change in CapEx from an overall maintenance or from a growth perspective, and we're expanding the most profitable part of our business when you think about gross margin and the operating costs. That's great. Thank you. That's all I had. Thank you. Your next question comes from the line of Josh Jayne with Daniel Energy Partners. Please go ahead. Thanks. Good morning. First question- Good morning. This is just, when I think about the CapEx that, you know, you've spent over the last number of years, you've had a great growth profile. And just when I think about electric motor drive going forward and that opportunity, should we think about more of your capital going forward being towards electric motor drive equipment? And how should we think about that on a percentage of your CapEx spend going forward versus traditional equipment? You are correct. We will allocate an increasing portion of our growth CapEx toward electric motor drive compression. Over the past couple of years, we've targeted between 20% and 30% of our, of our growth capital to go toward electric motor drive compression. And that's both the building of new units, as well as the conversion of existing gas drive to electric motors. The gating item on that is, candidly, we want to meet our customers where our customers wish to be met. And so having the customer base that has that focus on electrification is a part of the puzzle. With the TOPS acquisition, we've just expanded our customer base that's focused on electric motor drive compression, and that does mean that we will look for future opportunities to invest more of our budget, more of our CapEx budget and growth, into electric motor drive to satisfy and meet those customer needs. Is that closer to 50% going forward, would you say, or you're just not ready to quantify at this time? You know, it, it's a little bit of guesswork, but I think it's probably in the 40% range, ±. But- Okay. We have to do that work. And then one other item, just, both you and TOPS have talked about on their side, and then on your prior calls, you've talked a lot about remote monitoring and automation and control. Could you just talk about their technology and how it's different from yours? And maybe what you guys expect to learn going forward and how they do things versus you expect to complement each other would be helpful. There are really two categories of what TOPS has accomplished that we admire and respect a lot, that we are excited to both bring onto the Archrock platform and to learn. The first is that just the electrification in the oil field itself is a conversion from just much more purely mechanical expertise to adding in both mechanical and electrical expertise. TOPS, with their fleet, they clearly have led the pack, and they are the market leader in that integration of the expertise required in the technicians and in the field between mechanical and electrical expertise in the field employees. So that's one step that's not to be underestimated, and they've just done a great job on it. The second is what you alluded to, and that is the combination of things we look at: remote monitoring, digitization, and automation. Where I think the TOPS team, in particular, has done a just a really impressive job, is in expanding much more of the automation, that is, you know, auto on/off capabilities, onto their equipment. And they have a leading, I think they have a leading technology in that space, as well as really solid telemetry and remote monitoring capabilities. So they've been working on exactly the same stuff we've been working on, and they are definitely a step ahead on the electric motor drive part of, of that expertise. Thanks. That's all I had. Thank you. Your next question comes from Steve Ferenz with Sidoti. Please go ahead. Morning, Brad. Morning, Doug. Appreciate all the detail on the call this morning. I wanted to ask a little bit about the gas lift market. You said it's 21% of your business, previously up to 30%. Obviously, you highlighted the production growth in the Permian and why that is positive over the next few years. But can you just give us an idea of, through cycles, how gas lift utilization compares to more of your traditional business? And also, not to extend the question, but once a unit goes to a well site, does it typically stay there as long as there's economic production from the well? To the last part of your question, the answer is yes. It stays there as long as there's economic production at the right volume for that size compression at the wellhead. To the first part of your question, the one thing I'll point out is, you know, TOPS utilization itself through the most recent COVID-driven cycle, they sustained growth through that cycle with their business on the Permian. And what I would say is that the gas lift characterization of how horsepower is deployed is less important than whether it's on the right level of production in the right basin. So if you look at all horsepower applications, if you're in a dry gas play, clearly no gas lift, so you have to have a liquids play that needs to be long lived. We've looked at, and the market has seen some plays come and go, that were not long lived. What's really strong about the TOPS business is not just that it's gas lift, not just that it's well run. Those are absolutely true. It's that it's leveraged to the most dominant growth play we have in the U.S. today, in the Permian Basin, which is expected to grow in its oil production for, you know, for years. What's really cool about this is, and I've said this before, but if you step back and think about the most profitable, the most exciting parts of the business today in compression are, there are two aspects: One, the deployment of large horsepower for gas gathering and transportation. And number two, the deployment of gas lift for oil production. Both of these are very production-oriented, production levered, one to natural gas, the other one to oil production. And we're excited about the future prospect for both the growth of natural gas production and the growth of oil production. We think that's the important distinction here, not just the application on gas lift. Great. That's helpful. Can you talk a little bit about, and you did in the presentation, the customer base overlap versus your customer base? I'm assuming folks who have invested in the electric drives probably are the larger, better financed ones that typically will operate through cycles and also will be consolidators. Can you confirm that? Is that my thinking on that generally true? And where there isn't overlap, is there other growth opportunities for you on the field compression? There's really good overlap for about half the customer base we already do business with, and there's another half the customer base we're very happy to expand and build new relationships with, or, you know, for Archrock, new relationships and leverage the existing TOPS relationships. The customer base at TOPS is a great customer base. About 50% of their customer base are investment grade, and a large number of them are just top blue chip names that you would recognize. So it's a great customer base. We think the credit profile is excellent. We think their durability as investors in oil and gas long term is excellent, and we're really happy and pleased to expand our business to include this set of customers. Fantastic. Last quick one for me. The regulatory, anything that could be roadblocks, anything that could make the deal close faster or take a little bit longer? We have to go through the normal regulatory process, but this deal will be done. We're highly confident this deal gets done in 2024. Great. Thanks, Brad. Thank you. That concludes our question and answer session. I will now turn the conference over to Megan Repine for closing remarks. Great. Thanks, everyone, for participating in today's call. We are excited about this deal, which we believe will create substantial shareholder value. I look forward to talking with you again during our second quarter earnings call in the next couple of weeks. Thank you. Thank you all for attending today's call. We hope you have a wonderful day, and you may all disconnect.