ProPetro Holding Corp. PUMP is expanding its power-generation business through a new agreement that significantly increases contracted capacity at one of its business units, PROPWR. The latest contracts with a subsidiary of Targa Resources Corp. TRGP highlight ProPetro’s push beyond its traditional completions-services operations and deepen its exposure to rising demand for reliable onsite power.
PROPWR Adds 230 MW Through Targa Contracts
PROPWR has entered into new long-term contracts with Targa, under which the ProPetro unit will commit approximately 230 megawatts (MW) of power-generation capacity. Following the agreements, PROPWR’s total capacity committed under contract stands at approximately 510 MW.
The increase also reflects a portfolio shift. Previously announced oil and gas power capacity is no longer committed under its earlier contracts, allowing PROPWR to redeploy that capacity to Targa. The move also makes additional megawatts available for potential data-center deployments beginning in 2027 and beyond.
Targa Deal Strengthens PROPWR’s Permian Exposure
Under the agreements, PROPWR will provide behind-the-meter power to support Targa’s continued investment in natural gas processing infrastructure in the Permian Basin. Full deployment of the contracted power capacity is expected in early 2028.
The relationship also gives PROPWR exposure to an investment-grade counterparty with a growing infrastructure footprint. ProPetro, currently carrying a Zacks Rank #3 (Hold), views the agreements as the beginning of a long-term relationship with Targa, also carrying a Zacks Rank #3 at present, and expects PROPWR to remain a reliable power provider as Targa expands its operations.
Natural Gas Demand Supports the Power Opportunity
The contracts arrive as natural gas infrastructure plays a larger role in meeting rising U.S. energy requirements. The document points to growing LNG export demand along the Gulf Coast, increasing power investment tied to data centers and artificial intelligence, and the need for additional grid-connected gas generation to support load growth and reliability.
These trends broaden the opportunity for PROPWR. Its mobile power systems can serve oil and gas producers, industrial projects and data centers, giving ProPetro access to customers beyond its core completions-services market.
PROPWR Broadens ProPetro’s Business Mix
Power Generation is ProPetro’s newest segment. PROPWR began generating revenues in the third quarter of 2025 and contributed $1.5 million for the year, meaning it remains a relatively small part of the overall company. However, the business adds another growth avenue tied to demand for dependable onsite power.
ProPetro remains primarily focused on Permian completions services, but PROPWR is gradually broadening its operating mix. Alongside fracturing, wireline, cementing and sand handling, mobile power gives PUMP a more integrated range of offerings. The 230-MW Targa agreement expands that strategy while leaving additional capacity available for potential data-center opportunities from 2027 onward.
Key Picks
Investors interested in the energy sector may consider some top-ranked stocks like CrossAmerica Partners LP CAPL and Magnolia Oil & Gas Corporation MGY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CrossAmerica Partners engages in the wholesale distribution of motor fuels, consisting of gasoline and diesel fuel, and owns and leases real estate used in the retail distribution of motor fuels. The Zacks Consensus Estimate for CAPL’s 2026 earnings indicates 30.4% year-over-year growth.
Magnolia Oil & Gas is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. The Zacks Consensus Estimate for MGY’s 2026 earnings indicates 64.3% year-over-year growth.
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Targa Resources, Inc. (TRGP): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).