From short-term rentals to long-term operating leases, Enerflex not only offers the benefits of using gas compression and production and processing equipment but does this without the drawbacks that ownership may bring.
Why own the equipment at all? It’s a question many in the industry have begun to ask. Others believe a strategic combination of owning and renting/leasing is the right business choice.
Reasons to rent
- Capital budget constraints;
- Can generate a greater return to your shareholders with the capital you would otherwise spend on facilities by drilling additional wells;
- Short lead time for installation and need to produce while waiting for permanent equipment to be built;
- You can rent the equipment you think you will need and either purchase it or swap it out once the production is known;
- Uncertain gas prices;
- Competitive drainage situation;
- Small resource pools (quick depletion);
- Equipment needs at a site will change over time as natural pressures change;
- Pilot plant installation;
- Reduce debt burden on financial statements;
- Want the option to return equipment or renew contract;
- Known monthly cost removes risk of having to pay for unexpected but normal equipment failures. All of our rentals include coverage of major & minor overhauls;
- Produce current gas fields while area drilling continues and long-term reserves are proven;
- Rent equipment during overhauls to eliminate any downtime;
- Want to eliminate risk/hassle of having to dispose of the equipment;
- It often takes 6 months of production until it is known how a gas well will produce and what equipment will fit best; and
- Rental terms can range from 1 to 24 months.
Reasons to Lease
- Flexible financial statement presentation;
- Free up cash resources for other activities;
- Defer sales tax;
- Flexible tax planning; and
- Minimize equipment disposal and obsolescence risk.
Enerflex has now added another option for our customers, Variable Cost Production (“VCP”). This alternative puts the full responsibility and accountability for ensuring your compressor and other production equipment are continuously optimized in Enerflex’s hands. Enerflex will own, including byback of existing equipment, monitor, maintain, and operate your equipment for a fee based on the throughput through the equipment. However, complete strategic control of these assets will remain in your hands. You will gain the full benefit of Enerflex’s 25+ years of experience and over 2,700 employees to ensure your equipment is optimized and operating is efficiently as possible freeing up your internal resources to focus on finding more oil and gas.
With all of these options, Enerflex has one of the most comprehensive and sophisticated offerings for our customers’ equipment needs.
