ProPetro Surges on Coterra Energy Services Contract
Deal for Permian Basin microgrids boosts ProPetro's contracted power to over 220 megawatts, signaling strong demand for its next-generation energy services.
ProPetro Holding Corp. (NYSE: PUMP) saw its shares gain traction after announcing a significant services agreement with a subsidiary of Coterra Energy (NYSE: CTRA), reinforcing the company's strategic pivot towards next-generation power solutions in the energy sector.
The Midland-based oilfield services provider disclosed that its power division, PROPWR, will develop and install distributed microgrids for Coterra across the New Mexico portion of the prolific Permian Basin. The move is a strong indicator of the growing demand for reliable and efficient power in oil and gas operations.
Following the announcement, ProPetro's stock traded actively, building on recent momentum that has pushed the shares near a 52-week high of $11.66. The new contract with Coterra brings ProPetro's total committed power under contract to over 220 megawatts, with a weighted average contract duration of approximately five years, providing a significant boost to the company's long-term revenue visibility.
"Within a year of launching this business, we have built a team, signed multiple contracts, deployed assets, and established a competitive supply chain position," stated Sam Sledge, Chief Executive Officer of ProPetro, in a press release on Business Wire. Deployment for the Coterra project is slated to begin in the first quarter of 2026.
This agreement comes at a time when energy producers are increasingly focused on operational efficiency and environmental sustainability. ProPetro has been a key beneficiary of this trend, particularly through its Force electric fracturing (e-frac) fleets, which offer a lower-emission alternative to traditional diesel-powered equipment. The microgrids supplied by PROPWR are essential infrastructure to power such modern oilfield technology.
The company’s strategic focus appears to be paying off. Despite a general slowdown in Permian Basin activity earlier in the year, which saw active frac fleets decline, ProPetro has successfully secured contracts for its advanced electric fleets. This latest deal with Coterra underscores operators' willingness to invest in dedicated power infrastructure to support large-scale, high-efficiency projects.
To meet the robust demand, ProPetro also announced it has ordered an additional 190 megawatts of power generation equipment, which will bring its total capacity—either delivered or on order—to approximately 550 megawatts by the end of 2027. This expansion has prompted the company to increase its 2026 capital expenditure guidance to a range of $250 million to $275 million.
With a market capitalization of approximately $1.17 billion, ProPetro has been the subject of renewed investor interest. The company posted stronger-than-expected third-quarter financial results on October 29, with revenue of $294 million beating analyst estimates. This performance, coupled with strategic wins like the Coterra contract and another recent deal to supply power to a hyperscaler data center, showcases the growing diversification of its PROPWR division.
Analysts have a consensus price target of $12.78 on the stock, suggesting potential upside from its current levels. While the company's quarterly revenue growth is down year-over-year, its forward-looking strategy and success in securing long-term contracts for its high-demand electric power and fracturing services have positioned it favorably within the evolving energy services landscape.