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As I have previously stated, we are very confident in our ability to deliver upon significant synergies provided by this combination, which will drive incremental value for our combined shareholder base. We are updating our guidance for the year and are very excited to announce revised adjusted EBITDA guidance of $580 million to $610 million. This reflects a full year of Kodiak’s contribution, three quarters of CSI’s contribution and anticipated synergies we expect to realize throughout the rest of the year. John will discuss acquisition synergies further in his remarks, along with providing first quarter highlights and reviewing our outlook in more detail. So, let’s jump into it. Our first quarter results came in better than expected, while maintaining our industry-leading horsepower utilization at 99.8%.

In addition to record-setting adjusted EBITDA contributions of $118 million for the quarter, up 11% versus the prior year period, we continue to strategically grow our large horsepower Permian-focused fleet, increasing revenue-generating horsepower by over 26,000 horsepower in Q1. We also paid another quarterly well-covered dividend with a compelling yield, reinforcing our commitment to returning capital to shareholders, consistent with our previously discussed capital allocation strategy, targeting a 3.5x leverage by the end of 2025. But as you might imagine, I am even more excited for the future due to the step change we’ve made at Kodiak by becoming the largest contract compression provider in the industry with over 4.4 million horsepower.

We are still in the early days following the close of the CSI acquisition and are in the evaluation phase of determining if there are small noncore assets that we could or should sell. Our strategy of focusing on large horsepower in liquids-rich associated gas basins has not changed, and the majority of the horsepower acquired in the transaction continues to fit that strategic growth profile. This increase in that strategic horsepower is extremely attractive given the long-term bullish outlook for natural gas compression and the tight supply as reflected by our industry-leading utilization level of 99.8%. As we have previously discussed, Kodiak is fully contracted on our 2024 new unit deliveries, including CSI new unit deliveries, and we are now fully contracted through the first three quarters of 2025.

When we couple that contracted growth with our leading position in the Permian Basin, the addition of CSI’s more than 600,000 horsepower of large horsepower compressors, the result is a dominant position in the most prolific oil and gas producing regions in the United States. As many of our peers have recently discussed, the U.S. is poised to see a step change in natural gas demand as numerous factors are shaping up to lay the foundation for a multiyear period of above average growth. The next wave of U.S. Gulf Coast LNG export capacity is expected to become operational soon with the first project slated to start up in the fourth quarter of this year. Natural gas exports to Mexico are set to increase at a faster rate over the next several years.

And lastly, we are expecting to see exponential growth in power demand due to the proliferation of AI and data center technology, which will largely have to be sourced from natural gas-fired power generation. In total, we are seeing estimates that are calling for as much as a 20% increase in natural gas demand by 2030. The Permian is strategically positioned to meet this incremental demand and supply the U.S. and the world with clean, reliable and cheap fuel to power energy security while reducing worldwide emissions and energy poverty. However, in order to achieve this, there will need to be a large increase in horsepower compression capacity. Given the historical relationship between compression horsepower and domestic natural gas production, that much incremental demand would require more horsepower than the current combined fleets of Kodiak, or truck and USA Compression, which took decades to build.

Combined with the well-documented supply and demand macro trends for our industry, we believe Kodiak is well positioned to be the critical compression infrastructure partner of choice. Our focus on customers and employees, industry-leading mechanical availability and utilization and our market position will be instrumental to meet this expected demand. And now, I’ll pass the call on to John Griggs to review first quarter financial highlights and discuss our updated outlook. John?

John Griggs: Thanks, Mickey. Here is the key takeaway. First quarter of Kodiak results came in better than expected, and we’re optimistic about steady, profitable growth in ‘24 and beyond. That said let me now highlight a few aspects of our first quarter standalone results. Total revenues were just under $216 million, up 13% compared to the first quarter of ‘23. The increase in revenues was driven by year-over-year growth in both of our operating segments. Adjusted EBITDA was $118 million, up over 3% from Q4 and nearly 11% compared to the same quarter of the last year. Looking at our segments. Compression operations revenues for the quarter were $193 million, up 2% and 9% when compared to the fourth quarter and the same quarter a year ago, respectively.

The top line growth was driven by a combination of higher pricing on the incumbent fleet as the tight market has allowed us to recontract at higher rates as well as an increase in our overall revenue-generating horsepower from fleet additions. Revenue-generating horsepower increased by over 26,000 sequentially and 116,000 year-over-year. Fresh operations adjusted gross margin percentage was just shy of 66%, which is the high end of our guidance range. In our other services segment, revenues were $22 million in the first quarter of ‘24 compared to $12 million in the first quarter of last year. Other services adjusted gross margin was $4.4 million compared to $3.4 million in the first quarter of ‘23. As we’ve discussed in prior calls, our other services segment is lumpy, but strategic.

Station construction projects are synergistic with our compression business and require no capital. Every dollar of incremental cash flow adds to both our overall return on capital employed and discretionary cash flow, which in turn allows us to pay more dividends and invest in high-return growth capital projects. In terms of CapEx for the first quarter, our maintenance capital expenditure figure was just under $11 million. As a reminder, our maintenance spend is a function of the hours and age of our equipment and will vary by year depending upon when units were added to the fleet. Growth CapEx was $59 million for the quarter, of which $6 million was non-new unit CapEx. As we mentioned last quarter, our growth CapEx this year is front-end loaded, basically a function of when we ordered new units last year, and you’re seeing that in Q1.

Moving to the balance sheet. As of March 31, we had debt of $1.9 billion, consisting of the $750 million in senior unsecured notes we issued in February and the rest, borrowings under our ABL facility. Our credit agreement leverage ratio was just under 4x. We ended the first quarter with approximately $1.1 billion of availability on the ABL facility. On April 1, in connection with the closing of CSI, we drew down on our ABL to retire all of CSI’s debt. Pro forma for the transaction and including fees and expenses paid on the closing date, we had total debt of approximately $2.6 billion. Let’s turn to the updated 2024 outlook. We provided updated guidance ranges in yesterday’s earnings release. Given that we’ve only owned CSI for a few weeks, we felt it was appropriate to provide relatively high level guidance this quarter.

You should expect us to come out with more fulsome updated guidance in our second quarter earnings call in August. With that said, I’ll reiterate what Mickey mentioned at the outset, we are more than pleased with the CSI acquisition. Our original investment thesis is proving true and at this point, our previously estimated cost synergies seem conservative. For the full year, which includes 12 months of Kodiak but only 9 months of CSI and synergies, we expect revenues will range between $1.125 billion and $1.175 billion. We estimate adjusted EBITDA to range between $580 million and $610 million. We expect maintenance CapEx to come in between $55 million and $65 million. In terms of growth CapEx, we’re forecasting between $215 million to $235 million for the year.

Bear in mind that the lion’s share of that growth CapEx was committed by each of Kodiak and CSI during 2023 given the lead times on new equipment. Not included in that figure is approximately $35 million of extraordinary capital expenditures related to the acquisition. Prior to close, we knew there would be a variety of cleanup items. But now that we’ve owned them for a few weeks, we have a good handle of what those are and what we need to spend. These are items like fleet upgrades to meet Kodiak safety and emission standards, plus facilities and rolling stock to meet the needs of the combined company. We think it’s important to knock as much of this out in ‘24 as we can to get it behind us and solidify the foundation. Also, a meaningful portion of that $35 million figure relates to non-cash accounting approvals triggered by the transaction, including the conformance between our 2 companies of lease accounting methodologies and sales and use taxes on equipment purchases.

We are obviously not guiding on 2025, but we don’t see this type of CapEx spend being repeated in the future. To wrap things up, last week, our Board declared a quarterly dividend payment of $0.38 a share, which will be paid on May 20. This equates to an annualized dividend of $1.52 per share, yielding about 5.4% at a 2.4x discretionary cash flow coverage ratio. Dividends are a key component of our capital allocation framework, which I will remind you, encompasses measured growth plus an attractive return off and return on capital, all while living within cash flow and driving towards our 3.5x leverage target by the end of ‘25. That’s it from my prepared comments. Thank you for your participation and support. I’ll hand it back to Mickey.

Mickey McKee: Thanks, John. In summary, I would like to close the call by thanking the extraordinary women and men of Kodiak Gas Services and again, welcoming the CSI employees to the Kodiak family. A company that is stronger than the sum of the parts. Each team members’ hard work and dedication to safety and our customers are what makes Kodiak special, and we would not be an industry leader without this commitment to excellence. We are very happy with the start of the year, and we look forward to continuing profitable growth in 2024 and beyond, which we expect will further enhance value for all of our shareholders. At this point, we will open the lineup for questions. Operator?

Operator: Thank you. [Operator Instructions] Our first question is coming from John Mackay of Goldman Sachs. Please go ahead.

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