Steve Taylor: Any increase of — well, an increase in the fleet is going to be obviously primarily driven by larger horsepower stuff. Any increase in rented compressors would just be dictated by utilization, which we expect the high horsepower utilization to stay high. The — and I think the medium horsepower will probably stay fairly steady. The only risk to utilization will probably be in the smaller horsepower, which is primarily driven by gas markets. But we haven’t seen — even with the drawdown in gas price, we haven’t seen a whole lot of return on that. We had some return last year due to price increases, which we expected. And obviously, operators don’t like the lower gas price. But we haven’t seen a a lot of equipment come back due to that.
I think — you have to remember, the gas price fell, but it didn’t fall below where it’s been for a decade. It went up mid to the end of last year and then it’s come back down. But it kind of came back down to where it was. Just a low price we’ve all been used to for a long time. So — if you look at it on just a point-to-point basis, it looks pretty bad. If you look at the trend in the last year or two, it’s pretty much business as usual. Gas price just doesn’t do much. There’s just a lot of gas in this country. So, we don’t see a whole lot right there. We have seen some weakness in pricing on it, but that’s about it, but not a whole lot of returned equipment at this point anyway. And I’ll kind of expand on that a little bit. I’ve had comments about, well, gosh, you get this — go ahead and get this line of credit and you take on some debt you haven’t had.
And people don’t remember, we used to have debt, but it’s been 10, 12 years ago. You do this and now oil prices had gone down. Of course, they came back up today. Gas prices have gone down, interest rates are going up. Oh my gosh, what the heck’s going on? And if you look at our overall fleet, about 25% of our revenue is driven by natural gas activity. So it’s pretty small. It used to be 10 years ago, it was 100%. And with this large horsepower diversification, we start to — started shifting our revenue towards oil commodity economics versus natural gas commodity economics. And so only roughly 25% of our revenue is driven by pure natural gas activity. And the other 75% is driven by oil, mainly due to the gas lift operations that a lot of producers have started doing based on — with the shale production.
So yes, if you look at gas price, it’s something — I’d love it to go to $5 or $10. I don’t think it’s going to anytime soon. But any variation in that gas price has a limited effect on what we’re doing. It has no effect on our capital expense because we really don’t reinvest in that smaller market, which is driven by natural gas primarily. All of our investment goes into the oil market. Now both commodities, both fluctuate oil is a better commodity from the standpoint that there’s less — it didn’t stay low. Obviously, at fluctuates, you go high, you go low, but it comes back into a fairly normalized range at times. And then you look at what’s happened on the macro aspect from the banking and interest rates and stuff like that, and they continue to go up and whatever the Fed you’re going to do in inflation and everything else.
