Altus Midstream Bundle
Who are Kinetik's Customers?
Understanding customer demographics and target markets is crucial for success in the midstream energy sector. Following its 2022 merger, Altus Midstream, now Kinetik Holdings Inc., significantly reshaped its operational focus and customer base.
Kinetik's evolution, particularly after merging with BCP Raptor Holdco, LP, has redefined its market position. The company's infrastructure network primarily serves producers in the Delaware Basin, a key area within the Permian Basin.
Kinetik's customer base consists of natural gas, NGL, and crude oil producers operating within the Permian Basin. The company's infrastructure, including its Altus Midstream BCG Matrix, supports these producers by providing essential transportation and processing services. This focus on the Permian Basin, especially the Delaware Basin, highlights Kinetik's role in facilitating the movement of hydrocarbons from production sites to downstream markets.
Who Are Altus Midstream’s Main Customers?
The primary customer segments for the company are businesses within the upstream oil and gas sector. These include exploration and production (E&P) companies that focus on extracting natural gas, natural gas liquids (NGLs), crude oil, and water.
Upstream Oil and Gas Producers
The company's core clientele consists of E&P companies actively engaged in production. These entities operate within key basins, particularly the Permian Basin's Delaware Basin.
Geographic Focus
A significant portion of the customer base is concentrated in the Delaware Basin, with operations spanning areas like Eddy County, New Mexico. This strategic focus allows for efficient service delivery.
Customer Base Expansion
Recent strategic acquisitions have broadened the customer roster, incorporating over 60 new clients, many of whom are private operators. This expansion enhances market reach and service capabilities.
Key Growth Drivers
Revenue growth and expansion are directly linked to the increasing production volumes of E&P customers in the Delaware Basin. This trend is a primary indicator of the company's market performance.
The company's target market is defined by the operational scale and production volumes of E&P companies within its service territories. Factors such as production levels and future development plans are critical in identifying and serving these clients. The company processed natural gas volumes of 1.80 Bcf/d in the first quarter of 2025, marking a 17% increase year-over-year. Projections indicate an anticipated 20% growth in gas processed volumes across its system for 2025, exceeding general Permian growth rates. This growth is supported by strategic moves, such as expanding into New Mexico to provide producers access to its enhanced infrastructure, including the Kings Landing complex slated for early third quarter of 2025 operations. Understanding these Revenue Streams & Business Model of Altus Midstream is key to grasping its market position.
Customer Segmentation Criteria
While traditional demographic data like age or gender is not applicable to B2B clients, key criteria for segmentation include the size and operational scope of E&P companies. Production volumes and strategic development plans within the company's operational footprint are also vital.
- Operational Scale of E&P Companies
- Production Volumes
- Development Plans in Service Areas
- Geographic Concentration (Delaware Basin)
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What Do Altus Midstream’s Customers Want?
The primary customers for Altus Midstream are exploration and production (E&P) companies. These companies require efficient, reliable, and cost-effective midstream services for their produced hydrocarbons and water. Their purchasing decisions are heavily influenced by factors like infrastructure proximity, service reliability, and competitive pricing.
Core Customer Needs
E&P companies need midstream services to transport and process their oil, natural gas, NGLs, and produced water. They seek partners that can handle increasing production volumes, especially from prolific basins.
Key Purchasing Drivers
Purchasing behavior is driven by infrastructure availability, capacity, service dependability, and cost. E&P companies look for seamless integration from wellhead to market hubs.
Psychological Motivations
Customers are motivated by the assurance of uninterrupted flow and maximizing the value of their produced commodities. This provides them with greater operational certainty.
Practical Considerations
Long-term, fixed-fee agreements are highly valued for providing financial stability and predictability. This allows producers to better manage their operational costs and revenue streams.
Addressing Pain Points
Customers seek solutions for processing capacity limitations and takeaway constraints that can lead to curtailed production. They want to avoid situations like the negative pricing seen in the Waha hub in 2024.
Service Customization
The company tailors its services by integrating assets and expanding infrastructure to meet evolving market needs, such as increased egress capacity and higher gas-to-oil ratios.
The Altus Midstream target market is characterized by E&P companies operating in key producing regions, particularly the Permian Basin, which is a significant driver of U.S. oil and gas production. Market trends, such as the projected 1.0 Bcf/d increase in marketed natural gas production in the Permian region for 2025, directly influence the demand for midstream services. The company's strategy involves expanding processing capacity, such as the Kings Landing complex with a 220 MMcf/d capacity expected in Q3 2025, and building new pipelines to alleviate bottlenecks and unlock volumes. This proactive approach aligns with the needs of producers facing constraints, as highlighted by the issues experienced in the Waha hub. Furthermore, the integration of assets like Barilla Draw enhances the ability to serve diverse production streams, catering to a broad spectrum of E&P customer segments. Understanding these customer needs and market dynamics is crucial for identifying Altus Midstream's key customers and their strategic importance. This approach to service provision reflects a commitment to addressing the evolving demands within the oil and gas sector, aligning with the company's Mission, Vision & Core Values of Altus Midstream.
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Where does Altus Midstream operate?
The company's geographical market presence is primarily concentrated within the Permian Basin, with a significant and growing footprint in the Delaware Basin. This area spans across West Texas and southeastern New Mexico, encompassing key counties such as Eddy, Lea, and Chaves in New Mexico, and Reeves County in Texas.
Core Operating Region
The company's operations are heavily focused on the Permian Basin, particularly the Delaware Basin. This strategic positioning allows for extensive service to producers in West Texas and New Mexico.
Key Counties Served
Major markets include Eddy, Lea, and Chaves counties in New Mexico, alongside Reeves County in Texas. This concentration highlights the company's deep engagement within these productive oil and gas regions.
Market Position in Delaware Basin
The company holds a strong market position as the third largest natural gas processor in the Delaware Basin. This ranking underscores its substantial infrastructure and service capabilities in this critical area.
Expansion into New Mexico
Strategic expansion into New Mexico is a key element of the company's long-term vision. This move aims to provide producers in this growing market with access to its gathering and processing systems.
The company's expansion efforts are supported by significant infrastructure projects and strategic acquisitions. A 20-mile, large-diameter, high-pressure pipeline extending from Loving County, Texas, into Lea County, New Mexico, was anticipated for service in the first quarter of 2024. Furthermore, the 2024 acquisition of Durango Midstream significantly enhanced the company's presence in Eddy, Lea, and Chaves counties, New Mexico, by adding approximately 2,400 miles of gas gathering pipelines and 220 MMcf/d of processing capacity. These developments are crucial for adapting to regional needs, such as the higher carbon dioxide and hydrogen sulfide content often found in New Mexico's produced gas, which is now manageable with the addition of front-end amine treating at processing facilities. This adaptability is further exemplified by long-term gathering and processing agreements, such as a 15-year agreement in Eddy County, New Mexico. The ongoing development of facilities like the Kings Landing complex in Eddy County, New Mexico, scheduled for completion in April 2025, is designed to boost processing capacity and unlock previously curtailed volumes, directly addressing specific regional demands. The overall growth trajectory is heavily influenced by the Delaware Basin, which is projected to be the primary driver of U.S. oil and natural gas production growth in 2025. This strategic focus aligns with the company's Marketing Strategy of Altus Midstream.
Pipeline Expansion
A 20-mile pipeline project connecting Texas to New Mexico was expected to be operational in early 2024. This expansion enhances connectivity and service for producers.
Acquisition Impact
The acquisition of Durango Midstream in 2024 significantly increased gathering and processing capacity in New Mexico. This move bolstered the company's footprint in key counties.
Regional Customization
The company adapts its services to regional geological characteristics, such as incorporating amine treating for gas with higher CO2 and H2S content. This demonstrates a commitment to serving diverse production streams.
Long-Term Agreements
Long-term gathering and processing agreements, like the 15-year deal in Eddy County, New Mexico, provide stability and a strong customer base. These agreements are vital for sustained operations.
Capacity Enhancement
The Kings Landing complex in Eddy County, New Mexico, slated for April 2025 completion, will increase processing capacity. This project is designed to meet growing regional demand and unlock production.
Delaware Basin Focus
The Delaware Basin is expected to lead U.S. oil and natural gas production growth in 2025. The company's concentrated presence in this basin positions it for significant future opportunities.
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How Does Altus Midstream Win & Keep Customers?
The customer acquisition and retention strategies for companies like Altus Midstream are built on operational reliability and strategic infrastructure development. As a business-to-business service provider, acquisition focuses on securing new gathering and processing agreements and expanding infrastructure into key production areas.
Customer Acquisition Through Agreements and Expansion
Acquisition primarily occurs through establishing new gathering and processing agreements and expanding infrastructure into new production areas. For instance, the acquisition of Durango Midstream in 2024 added over 60 new customers, many of whom are private operators.
Retention via Service Quality and Contract Stability
Retention is driven by providing reliable, high-quality services across gathering, transportation, and processing. Long-term, fixed-fee contracts, which are expected to account for approximately 83% of 2025 gross profit, offer stability and mitigate commodity price risks.
Leveraging Data for Anticipatory Service
Customer data and relationship management systems are vital for understanding production profiles and anticipating future needs. This allows for optimized infrastructure development to meet evolving customer demands.
Infrastructure Investment and Sustainability Focus
Strategic investments in processing capacity, like the Kings Landing complex, and pipeline projects enhance takeaway capacity and operational flexibility. A focus on sustainability, as highlighted in the 2024 Sustainability Report, can also attract environmentally conscious producers.
Strategic shifts have emphasized leveraging acquisitions and organic growth to enhance integrated services and solidify a focused market presence. This approach directly impacts customer loyalty and lifetime value by delivering more comprehensive and efficient solutions, aligning with the Target Market of Altus Midstream.
New Customer Acquisition
Primarily through new gathering and processing agreements and infrastructure expansion into new production areas.
Customer Retention Drivers
Reliable, high-quality services and long-term, fixed-fee contracts are key to retaining customers.
Contractual Stability
Approximately 83% of expected 2025 gross profit is from fixed-fee agreements, offering predictability.
Data-Driven Operations
CRM systems help understand customer needs and optimize infrastructure for future demands.
Infrastructure Enhancements
Investments in processing capacity and pipelines improve takeaway capacity and customer flexibility.
Sustainability Appeal
Focus on reducing emissions can attract environmentally conscious producers, fostering long-term relationships.
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- What is Brief History of Altus Midstream Company?
- What is Competitive Landscape of Altus Midstream Company?
- What is Growth Strategy and Future Prospects of Altus Midstream Company?
- How Does Altus Midstream Company Work?
- What is Sales and Marketing Strategy of Altus Midstream Company?
- What are Mission Vision & Core Values of Altus Midstream Company?
- Who Owns Altus Midstream Company?
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