ProPetro’s PROPWR Secures Landmark Microgrid Contract With Coterra Energy, Accelerates Growth in Permian Basin
ProPetro Holding Corp. (NYSE: PUMP) has reached a significant milestone in the evolution of its power solutions business, announcing that its PROPWR℠ division has executed a major turnkey power contract with a subsidiary of Coterra Energy Inc. The agreement will see PROPWR design, develop, install, and operate distributed microgrids across the New Mexico portion of the Permian Basin—one of North America’s most critical energy-producing regions.
The deployment and operational rollout of the project are scheduled to begin in the first quarter of 2026, underscoring PROPWR’s ability to rapidly execute large-scale power infrastructure projects while meeting the demanding timelines of oilfield operators. The contract further validates PROPWR’s strategic vision of delivering flexible, reliable, and scalable power solutions tailored to modern upstream energy operations.
Advancing Distributed Power in the Permian Basin
The Permian Basin continues to face increasing pressure on grid infrastructure as drilling activity intensifies and power demands rise across both energy production and adjacent industries. Distributed microgrids—capable of operating independently or alongside the grid—are becoming a critical solution for operators seeking reliability, resilience, and cost efficiency.
According to PROPWR President Travis Simmering, the new agreement represents more than just another commercial win. It signals a meaningful step forward in the company’s broader mission to redefine how power is delivered in the oilfield.
“This agreement is a major step forward for PROPWR’s vision of delivering reliable, innovative power solutions to Permian operators,” Simmering said. “By combining our technical expertise, flexible power assets, and speed-to-market capabilities with Coterra Energy’s operational excellence and forward-looking approach, we are creating a highly responsive and scalable energy platform that is well suited to the unique requirements of oilfield microgrid installations.”
Simmering added that PROPWR views the relationship with Coterra Energy as a long-term partnership and expects opportunities to expand the collaboration as power needs continue to evolve in the basin.
Strengthening a Growing Contracted Portfolio
With the execution of the Coterra contract, PROPWR now has more than 220 megawatts (MW) of power capacity committed under long-term contracts. At commencement, the company’s portfolio carries a weighted average contract duration of approximately five years, providing strong visibility into future cash flows and reinforcing the stability of its growing asset base.
The addition of this contract further demonstrates PROPWR’s ability to support some of the largest and most sophisticated operators in the Permian Basin. It also reflects increasing confidence among customers in PROPWR’s operational capabilities, technical expertise, and ability to deliver dependable power in challenging field environments.
Beyond oilfield applications, PROPWR’s commercial pipeline continues to expand across multiple end markets. The company is actively pursuing additional opportunities in both upstream energy and data center power solutions, sectors where demand for reliable, on-site power generation continues to accelerate.
Scaling Capacity With 190 MW of New Equipment Orders
To support its expanding pipeline of projects, PROPWR has placed orders for an additional 190 MW of power generation equipment. With this latest procurement, the company’s total delivered or on-order capacity now stands at approximately 550 MW.
PROPWR’s equipment mix reflects a deliberate strategy to balance efficiency, emissions performance, and operational flexibility. Approximately 70% of the portfolio consists of high-efficiency natural gas reciprocating engine generators, while the remaining 30% is composed of low-emissions modular turbine units. This diversified fleet allows PROPWR to tailor solutions to specific customer requirements and site conditions.
The company expects all newly ordered units to be delivered by the end of 2027, with contracts anticipated to be secured ahead of delivery. Leveraging long-standing relationships with key supply chain partners, PROPWR believes it is well positioned to continue scaling capacity as demand grows.
Looking further ahead, PROPWR continues to target approximately 750 MW of total delivered capacity by year-end 2028 and has set an ambitious long-term goal of reaching one gigawatt—or more—by the end of 2030. Importantly, the total cost per megawatt for the approximately 550 MW ordered to date averages about $1.1 million, inclusive of balance-of-plant costs, reflecting disciplined capital deployment amid a tight global equipment market.
Updated Capital Spending Outlook and Financing Strategy
As a result of the additional equipment orders and expectations for further incremental capacity investments, ProPetro has revised its capital expenditure outlook for 2026. The company now projects capital spending in the range of $250 million to $275 million, an increase from the previously guided range of $200 million to $250 million outlined in its third-quarter earnings report.
In parallel with organic capital deployment, ProPetro continues to evaluate strategic financing options to support PROPWR’s growth. As previously disclosed, the company has executed a letter of intent for a $350 million lease finance facility with an investment-grade partner experienced in power generation financing.
Definitive documentation for the facility is currently under advanced negotiation. If finalized, the facility would provide additional financial flexibility as PROPWR scales its asset base. Nevertheless, management emphasized that free cash flow generated from ProPetro’s core completions business and other operations remains the company’s primary and preferred source of funding for future growth.
Momentum Across the Broader ProPetro Platform
Chief Executive Officer Sam Sledge highlighted the rapid progress PROPWR has achieved since its launch just one year ago, noting that the division has already built a strong operational foundation.
“In a relatively short period of time, we have assembled a talented team, signed multiple customer contracts, deployed assets into the field, and established a supply chain position that we believe provides a meaningful competitive advantage,” Sledge said. “This momentum puts PROPWR on solid footing to execute on its long-term growth strategy and positions the business to become a leading provider of power services across multiple industries.”
Sledge also pointed to the strong performance of ProPetro’s other business lines, particularly its hydraulic fracturing operations. The company is currently operating 11 frac fleets and expects that level of activity to continue into 2026, supporting robust free cash flow generation and reinforcing ProPetro’s overall financial strength.
A Platform for Long-Term Growth
As demand for reliable, flexible, and lower-emissions power solutions continues to rise across the energy value chain, PROPWR is increasingly positioned as a critical enabler of next-generation infrastructure. The Coterra Energy contract represents not only a major commercial achievement but also a clear signal that distributed power solutions are becoming an essential component of modern oilfield operations.
With a growing contracted portfolio, expanding equipment base, disciplined capital strategy, and strong operational backing from ProPetro, PROPWR appears well positioned to play a leading role in reshaping how power is delivered across the Permian Basin and beyond.
Source Link: https://www.businesswire.com/
