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As Permian E&Ps Shift to Natural Gas-Rich Zones, Horsepower Demand Follows, Says Kodiak Chief

Natural Gas Intelligence · last updated

Permian Basin explorers are shifting to “deeper, gassier development zones,” opening up a broad growth path for Kodiak Gas Services Inc., one of the largest natural gas contract compression firms in the Lower 48.

Pie chart illustrating Kodiak Gas Services’ fleet horsepower profile. The chart shows that 79% of the company’s total compression fleet horsepower comes from large units exceeding 1,000 horsepower, while 21% comes from smaller units under 1,000 horsepower. Data source: Kodiak Gas Services Inc.

The company, headquartered north of Houston in The Woodlands, deployed 31,800 hp of compression units during the second quarter, CEO Mickey McKee told investors during the recent second quarter conference call.

Fleet utilization increased to 97.2%, a 290 basis point (bp) increase from 2Q2024. Large horsepower “is being effectively fully utilized at over 99%,” he said.

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