compressco partners 2011 propspectus

8/2/2019 Compressco Partners 2011 Propspectus

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2,670,000 Common Units

PROSPECTUS

Representing Limited Partner Interests

We are a Delaware limited partnership formed by TETRA Technologies, Inc., or TETRA, to provide wellheadcompression-based production enhancement services to domestic and international customers. This is the initialpublic offering of our common units. Prior to this offering, there has been no public market for our common units.We have been approved to list our common units on the NASDAQ Stock Market LLC under the symbol GSJK.

Investing in our common units involves risks. Please read Risk Factors beginning on page 21.

These risks include, but are not limited to, the following: We may not have sufficient cash from operations following the establishment of cash reserves and payment of

debt service and other contractual obligations, fees and expenses, including cost reimbursements to ourgeneral partner, to enable us to make cash distributions to holders of our common units at the minimumquarterly distribution rate under our cash distribution policy.

On a pro forma basis we would not have had sufficient cash available for distribution to pay the fullminimum quarterly distribution on all units for the twelve months ended March 31, 2011.

We may be unable to achieve our expected growth and market penetration. Our ability to manage and grow our business effectively and provide adequate production enhancementservices to our customers may be adversely affected if our general partner loses its management or is unableto retain trained personnel.

Our general partner and its affiliates own a controlling interest in us and will have conflicts of interest withus. Our partnership agreement limits the fiduciary duties that our general partner owes to us, which maypermit it to favor the interests of TETRA to our unitholders detriment and limits the circumstances underwhich our unitholders may make a claim relating to conflicts of interest, as well as the remedies available toour unitholders in that event.

Holders of our common units have limited voting rights and are not entitled to elect our general partner or itsdirectors.

Our unitholders will experience immediate and substantial dilution of $12.21 in tangible net book value percommon unit.

Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes, as well as ournot being subject to a material amount of additional entity-level taxation by individual states or

non-U.S. jurisdictions. If the Internal Revenue Service treats us as a corporation or we become subject to amaterial amount of entity-level taxation by individual states or by non-U.S. jurisdictions, it wouldsubstantially reduce the amount of cash available for distribution to our unitholders.

Unitholders may be required to pay taxes on income from us even if they do not receive any cash distributionsfrom us.

PerCommon Unit Total

Initial public offering price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.00 $53,400,000Underwriting discount(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.28 $ 3,417,600Proceeds to Compressco Partners, L.P. (before expenses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18.72 $49,982,400

(1) Excludes aggregate fees of $133,500 payable to Raymond James and J.P. Morgan in consideration of advicerendered by them regarding the structure of this offering and our partnership.

An aggregate of 6,026,757 common units will be issued to our general partner and its affiliates at the closing of thisoffering. We have also granted the underwriters a 30-day option to purchase up to an additional 400,500 common units

from us on the same terms and conditions as set forth above, if the underwriters sell more than 2,670,000 commonunits in this offering. If the underwriters exercise their option to purchase up to 400,500 additional common unitswithin 30 days of this offering, the number of common units purchased by the underwriters pursuant to such exercisewill be issued to the public instead of to our general partner. Net proceeds to us will not change if the underwritersexercise their option to purchase additional common units because the net proceeds from any exercise of theunderwriters option to purchase additional common units will be used to make a distribution to our general partner.

Neither the Securities and Exchange Commission nor any state securities commission has approved ordisapproved of these securities or determined if this prospectus is truthful or complete. Any representation to thecontrary is a criminal offense.

Raymond James, on behalf of the underwriters, expects to deliver the common units on or about June 20, 2011.

RAYMOND JAMES J.P. MORGANRBC CAPITAL MARKETS

The date of this prospectus is June 14, 2011.


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TABLE OF CONTENTS

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Compressco Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Production Enhancement Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Predecessor Revenues and Trailing Twelve-Month Average Henry Hub Gas Price . . . . . . . . . . . . . . . . . . 4

Business Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Competitive Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Our Relationship with TETRA and Compressco. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Formation Transactions and Partnership Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Ownership of Compressco Partners, L.P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Management of Compressco Partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Principal Executive Offices and Internet Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Summary of Conflicts of Interest and Fiduciary Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Selected Historical and Pro Forma Financial and Operating Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Non-GAAP Financial Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Risks Related to Our Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Risks Inherent in an Investment in Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Tax Risks to Common Unitholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

DILUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS . . . . . . . . . . . . . 50

General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Our Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Pro Forma Cash Available for Distribution for the Twelve Months Ended December 31, 2010 andMarch 31, 2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Estimated Cash Available for Distribution for the Twelve Months Ending June 30, 2012 . . . . . . . . . . . . . 56

Assumptions and Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

Provisions Of Our Partnership Agreement Relating To Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . 63

Distributions of Available Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Operating Surplus and Capital Surplus. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Subordination Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Distributions of Available Cash From Operating Surplus During the Subordination Period . . . . . . . . . . . . 68

Distributions of Available Cash From Operating Surplus After the Subordination Period . . . . . . . . . . . . . 68

General Partner Interest and Incentive Distribution Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

Percentage Allocations of Available Cash From Operating Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

General Partners Right to Reset Incentive Distribution Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70

Distributions From Capital Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels . . . . . . . . . . . . . . . . . 73

Distributions of Cash Upon Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Adjustments to Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

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SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA. . . . . . . . . . . . 76

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTSOF OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

How We Evaluate Our Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Industry Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82Items Impacting the Comparability of Our Historical Financial Results to our Future Results of

Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Critical Accounting Policies and Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

Recently Issued Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

PRODUCTION ENHANCEMENT SERVICES INDUSTRY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

General Activity Levels for Oil and Natural Gas Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

U.S. Natural Gas Market and Production Enhancement Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

U.S. Crude Oil Market and Production Enhancement Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Foreign Production Enhancement Services Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Business Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Competitive Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

Our Relationship with TETRA and Compressco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Our Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

MANAGEMENT OF COMPRESSCO PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Directors, Executive Officers and Other Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Reimbursement of Expenses of Our General Partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

EXECUTIVE COMPENSATION AND DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . 116Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Compensation Philosophy and Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

Compensation Setting Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

Elements of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

Other Compensation Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

Actions Taken following Fiscal Year 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Summary of Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

Grants of Plan-Based Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

Narrative Description to Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

Outstanding Equity Awards at Fiscal Year End. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130Option Exercises and Stock Vested in 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Pension Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Nonqualified Deferred Compensation Table for 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

Potential Payments upon a Change in Control or Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

Compensation Policies and Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . 134

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CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . 135

Distributions and Payments to Our General Partner and its Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 135

Agreements Governing the Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Omnibus Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

Contribution Conveyance and Assumption Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Related-Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138CONFLICTS OF INTEREST AND FIDUCIARY DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140

Fiduciary Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

DESCRIPTION OF THE COMMON UNITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

The Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Transfer of Common Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

THE PARTNERSHIP AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Organization and Duration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Cash Distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151Capital Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

Applicable Law; Forum, Venue and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

Limited Liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

Issuance of Additional Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Amendment of the Partnership Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

Merger, Consolidation, Conversion, Sale or Other Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . 157

Termination and Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Liquidation and Distribution of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Withdrawal or Removal of Our General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158

Transfer of General Partner Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Transfer of Ownership Interests in Our General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Transfer of Subordinated Units and Incentive Distribution Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

Change of Management Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Limited Call Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Meetings; Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Voting Rights of Incentive Distribution Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161

Status as Limited Partner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Books and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162

Right to Inspect Our Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163

UNITS ELIGIBLE FOR FUTURE SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

MATERIAL TAX CONSEQUENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

Partnership Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

Limited Partner Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

Tax Consequences of Unit Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167

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Tax Treatment of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

Disposition of Common Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

Uniformity of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Tax-Exempt Organizations and Other Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Administrative Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

State, Local, Foreign and Other Tax Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179INVESTMENT IN COMPRESSCO PARTNERS BY EMPLOYEE BENEFIT PLANS . . . . . . . . . . . . . . 181

General Fiduciary Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Prohibited Transaction Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Plan Asset Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

UNDERWRITING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Option to Purchase Additional Common Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Discounts and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Directed Units Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

Stabilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185Conflicts/Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Discretionary Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Determination of Initial Offering Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

Electronic Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

FINRA Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Notice to Prospective Investors in Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Notice to Prospective Investors in European Economic Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

VALIDITY OF THE COMMON UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

WHERE YOU CAN FIND MORE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . 189

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

You should rely only on the information contained in this prospectus. We have not, and the underwriters

have not, authorized anyone to provide you with different information. If anyone provides you with different

or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an

offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that

the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus.

Our business, financial condition, results of operations and prospects may have changed since that date.

Until July 9, 2011 (25 days after the date of this prospectus), all dealers that buy, sell or trade our

common units, whether or not participating in this offering, may be required to deliver a prospectus. This is in

addition to the dealers obligation to deliver a prospectus when acting as underwriters and with respect to theirunsold allotments or subscriptions.

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SUMMARY

This summary provides a brief overview of information contained elsewhere in this prospectus. This

summary does not contain all of the information that you should consider before investing in our common

units. You should read the entire prospectus carefully, including the historical and pro forma financial

statements and the notes to those financial statements included in this prospectus. Unless indicated otherwise,

the information presented in this prospectus is based on the initial public offering price of $20.00 per common

unit and assumes that the underwriters option to purchase additional common units is not exercised and that

no outstanding common unit awards have been granted under our long-term incentive plan. Please read Risk

Factors for more information about important risks that you should consider carefully before buying our

common units.

References in this prospectus to Compressco Partners, we, our, us, the Partnership or like

terms refer to Compressco Partners, L.P. and its wholly owned subsidiaries, including Compressco Partners

Operating, LLC and Compressco Partners Sub, Inc. References to our Operating LLC refer to Compressco

Partners Operating LLC and its wholly owned subsidiaries and references to our Operating Corp refer to

Compressco Partners Sub, Inc. References to TETRA refer to TETRA Technologies, Inc., or TETRA, and

TETRAs controlled subsidiaries, other than us. References to Compressco refer to Compressco, Inc., a

wholly owned subsidiary of TETRA, and Compresscos controlled subsidiaries, other than us. References to

CFSI refer to Compressco Field Services, Inc., a wholly owned subsidiary of Compressco. References to

TETRA International refer to TETRA International Incorporated, a wholly owned subsidiary of TETRA.

References to Compressco Partners GP or our general partner refer to our general partner, Compressco

Partners GP Inc., a wholly owned subsidiary of Compressco. References to compressor units refer to our

GasJack units and our VJackTM units. References to Compressco Partners Predecessor or our

predecessor refer to the predecessor of Compressco Partners for accounting purposes. As further described

elsewhere in this prospectus, our predecessor consists of (1) all of the historical assets, liabilities and

operations of Compressco, combined with (2) certain assets, liabilities and operations of the subsidiaries of

TETRA conducting wellhead compression-based production enhancement services and related well monitoring

and automated sand separation services in Mexico.

At or prior to the completion of this offering, TETRA will contribute to us a portion of our predecessors

business, as further described in Our Relationship with TETRA and Compressco. All historical operations,

results of operations, financial statements and notes to the financial statements presented throughout this

prospectus reflect those of our predecessor and exclude the pro forma adjustments required to reflect the

portion of our predecessors business that will not be contributed to us in connection with this offering.

Because our operations will not represent the entirety of our predecessors business, and due to other factors

described in Managements Discussion and Analysis of Financial Condition and Results of Operations

Overview Items Impacting the Comparability of Our Financial Results, certain total amounts that will be

presented in our future results of operations may not be initially comparable to our predecessors historical

results.

Compressco Partners

Overview

We are a leading provider of wellhead compression-based production enhancement services, or

production enhancement services, to a broad base of natural gas and oil exploration and productioncompanies operating throughout most of the onshore producing regions of the United States. Internationally,

we have significant operations in Canada and Mexico and a growing presence in certain countries in South

America, Eastern Europe and the Asia-Pacific region. Our production enhancement services primarily consist

of wellhead compression, related liquids separation, gas metering and vapor recovery services. In certain

circumstances, we also provide ongoing well monitoring services and, in Mexico, automated sand separation

services in connection with our primary production enhancement services. While our services are applied

primarily to mature wells with low formation pressures, our services are also employed on newer wells that

have experienced significant production declines or are characterized by lower formation pressures. Our

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services are performed by our highly trained staffs of regional service supervisors, optimization specialists and

field mechanics. In addition, we design and manufacture the compressor units we use to provide our

production enhancement services and, in certain markets, sell our compressor units to customers.

We believe that we provide a strong value proposition to our customers. Our production enhancement

services improve the value of natural gas and oil wells by increasing daily production and total recoverable

reserves. We primarily utilize our natural gas powered GasJack compressors, or GasJack units, to provide

our wellhead compression services. In addition, we recently introduced our electric VJackTM compressors, or

VJackTM units, to provide our wellhead compression services on wells located in larger, mature oil fields,

such as the Permian Basin in West Texas and New Mexico, and in environmentally sensitive markets, such as

California, when electric power is available at the production site. We believe that both of these compressor

platforms provide a reliable, compact and low-emission package that is easy to transport and install on our

customers well site.

GasJack units and VJackTM units

We believe that our 46-horsepower GasJack unit is more fuel-efficient, produces lower emissions, and

handles variable liquid conditions encountered in natural gas and oil wells more effectively, than the higher

horsepower screw and reciprocating compressors utilized by many of our competitors. Our compact GasJack

unit allows us to perform wellhead compression, liquids separation and optional gas metering services all from

one skid, thereby providing services that otherwise would generally require the use of multiple, more costly

pieces of equipment from our competitors. As of March 31, 2011, we had a fleet of 3,627 GasJack units,

2,729 of which were being utilized.

We believe that our 40-horsepower VJackTM unit provides production uplift with zero engine-driven

emissions and requires significantly less maintenance than a natural gas powered compressor. Our VJackTM

unit is primarily designed for vapor recovery applications (to capture natural gas vapors emitting from closed

storage tanks after production and to reduce storage tank pressures) and backside pumping applications on oil

wells (to reduce pressures caused by casing head gas in oil wells with pumping units). Centered on GasJack

unit technology, the VJackTM unit is capable of full wellbore stream production, and can handle up to

50 barrels per day, or bpd, of liquids on a standard skid package. As of March 31, 2011, we had a fleet of

28 VJackTM units, 24 of which were being utilized under services contracts.

Our Services and Marketing

Our production enhancement services primarily consist of wellhead compression, related liquids

separation, gas metering and vapor recovery services. Utilizing our ePumper system, a state-of-the-art

SCADA satellite telemetry-based reporting system, we remotely monitor, in real time, whether our wellhead

compression services are being continuously provided at each well site. The ePumper system has been

instrumental in improving the response time of our field personnel and, consequently, reducing well downtime

and increasing production for our customers. In certain circumstances, we also provide ongoing well

monitoring services and, in Mexico, automated sand separation services in connection with our primary

production enhancement services. Our well monitoring services involve the ongoing testing and evaluation of

wells to determine the expected production uplift that may be achieved by the provision of our wellhead

compression services on the well and the optimal way to utilize our wellhead compression services for

maximum production uplift. These services allow well operators to make informed decisions about how to

maximize the production from a well. Our automated sand separation services are utilized at the well to

remove and discharge solids that would otherwise cause abrasive wear damage to production enhancement and

other equipment that is installed downstream and inhibit the production from the well. We believe that the

value, breadth and quality of services that we provide to natural gas and oil producers gives us an advantage

over our competitors who primarily provide only equipment and maintenance services, without ongoing

monitoring and modification services.

Central to our marketing efforts is our emphasis on performing well data analyses at our petroleum

engineering office in Houston, Texas. Our engineering staff focuses on geologic basins with reservoir

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characteristics that are known to be responsive to our technology and analyzes publicly available production

data to identify wells within those basins that we believe could benefit from our production enhancement

services. We proactively market to producers in these basins and our marketing services range from a low cost

two-week trial of our production enhancement services up to a comprehensive well-test project that allows our

customers to confirm the effectiveness of our services prior to entering into a service contract. We believe this

proactive strategy of performing well data analyses and approaching producers with targeted solutions

increases our marketing and application success rates and further differentiates us from our competitors.

Trends and Growth Prospects

We believe that the natural gas and oil production enhancement services market continues to demonstrate

significant domestic and international long-term growth potential. According to the Annual Energy Outlook

2011, or AEO 2011, issued by the Energy Information Administration, or EIA, U.S. dry natural gas

production is expected to increase by 23.7% from 2010 to 2035, driven primarily by the continued growth in

production of shale gas. The EIA forecasts in the AEO 2011 that natural gas production from onshore

conventional resources will decline by 22.9% from 2010 to 2035, while production from unconventional

natural gas resources will increase by 114.6% over this same period.

As a result of this expected shift in domestic natural gas supply sources, we believe that onshore

conventional resources will increasingly be characterized by mature wells with marginal production that willbenefit from our production enhancement services. Additionally, onshore unconventional wells are often

characterized by more significant decline rates than typical conventional wells, which we believe will provide

additional opportunities to employ our production enhancement services. We are currently providing our

services on approximately 140 natural gas wells in the Fort Worth Basin and Barnett Shale, one of the largest

unconventional natural gas resources in the United States.

We primarily target natural gas wells in our operating regions that produce between 30 thousand and 300

thousand cubic feet of natural gas per day, or Mcf/d, and, to maximize our compressor units ability to

separate fluids effectively, we primarily target wells that produce less than 50 barrels of water per day. We

also provide our services on wells that produce 50 to 150 barrels of water per day. According to the EIA,

approximately 219,000 natural gas wells in the United States produced approximately 24 Mcf/d to 300 Mcf/d

in 2009, an increase of approximately 22% of the number of such wells since 2004. We do not have a

practical method of determining how many of these natural gas wells produce less than 50 barrels of water perday, so we cannot estimate with certainty how many of these wells could be primary candidates for our

production enhancement services. With the rapid pace of drilling over the last several years, we believe that

the number of wells with daily production within this 24 Mcf/d to 300 Mcf/d range described by the EIA has

grown substantially since 2009, although not all of these wells will be candidates for our production

enhancement services. We believe that our long-term growth opportunities are strong based on the small size

of most of our competitors and the significant number of wells that may be candidates for our services. Along

with increased domestic opportunities, we continue to experience strong demand for our services in gas

producing regions of Canada and Mexico and growing demand for our services in certain countries in South

America, Eastern Europe and the Asia-Pacific region.

Predecessors Growth and Historical Operating Results

Our predecessors business experienced substantial organic growth over the past eight fiscal years. Ourpredecessors revenues grew during that eight-year period from approximately $14.9 million during 2002 to

approximately $81.4 million during 2010, representing a 446.3% increase. Our predecessors number of

compressor units in service grew from 761 compressor units as of December 31, 2002 to 2,753 compressor

units as of March 31, 2011, representing a 261.8% increase. This growth was generated entirely by organic

expansion, with no acquisitions made during that eight-year period. During the three months ended March 31,

2011, our predecessors services revenues increased to $21.9 million, as compared to $20.3 million for the

same period in 2010. For more detail on our predecessors operating results, please read Managements

Discussion and Analysis of Financial Condition and Results of Operations.

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Production Enhancement Fundamentals

Demand for our production enhancement services is linked more to natural gas production and

consumption than to natural gas exploration activities. Natural gas production and consumption may be

affected by, among other factors, natural gas prices, weather, demand for energy and availability of alternative

energy sources. We do not take title to any natural gas in connection with our services and, accordingly, have

no direct exposure to fluctuating commodity prices. While we have a significant number of customers who

have retained our services through high and low commodity prices, we generally experience less growth andmore customer attrition during periods of significantly high or low commodity prices. For a discussion of our

indirect exposure to fluctuating natural gas prices, please read Risk Factors Risks Related to Our

Business We depend on domestic and international demand for and production of natural gas, and a

reduction in this demand or production could adversely affect the demand or the prices we charge for our

services, which could cause our revenue and cash available for distribution to our unitholders to decrease.

The following chart illustrates the historical correlation between our predecessors revenues for the quarters

shown and the trailing twelve-month average Henry Hub gas price during such quarters.

Predecessor Revenues and Trailing Twelve-Month Average Henry Hub Gas Price

$millions

$/MMBtu

$-

$5

$10

$15

$20

$25

$30

1Q2008

2Q2008

3Q2008

4Q2008

1Q2009

2Q2009

3Q2009

4Q2009

1Q2010

2Q2010

3Q2010

1Q2011

4Q2010

$0

$5

$10

$15

Predecessor Revenues Trailing 12-Month Average Henry Hub Gas Price

Time Period Predecessor Revenues

Trailing Twelve-MonthAverage Henry Hub

Gas Price

(in millions) ($/MMBtu)

First Quarter 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $23.83 $7.30

Second Quarter 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . $24.37 $8.24

Third Quarter 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25.43 $8.98

Fourth Quarter 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.32 $8.85

First Quarter 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26.33 $7.86

Second Quarter 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . $22.12 $5.96

Third Quarter 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.65 $4.47

Fourth Quarter 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.48 $3.93

First Quarter 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.33 $4.07

Second Quarter 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.05 $4.22

Third Quarter 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.11 $4.50

Fourth Quarter 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20.92 $4.37

First Quarter 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21.88 $4.15

Gas price source: Platts Gas Daily reports

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We believe we will be able to continue growing our business by capitalizing on the following positive,

long-term fundamentals that we believe exist for the production enhancement services industry:

Most of the wells that would benefit from our production enhancement services do not currently utilize

those services;

Aging natural gas and oil wells will require more of our production enhancement services;

Natural gas production from unconventional sources, including tight sands, shales and coalbeds, is

expected to continue to increase, according to the AEO 2011, and, over time, production from these

unconventional sources could benefit substantially from our production enhancement services due to the

relatively fast production decline rates of wells drilled to these formations; and

Natural gas and oil producers continue to outsource their requirements for the production enhancement

services we provide.

Business Strategies

We intend to grow our business by implementing the following strategies:

Increase service coverage within our current domestic and international markets;

Pursue additional domestic and international growth opportunities;

Improve our service offerings;

Promote our additional service applications, including vapor recovery, well monitoring, automated sand

separation and production enhancement services for use on pumping oil wells;

Leverage our relationships with TETRA and its customers; and

Take advantage of selective acquisition opportunities.

Competitive Strengths

We believe that we are well positioned to successfully execute our business strategies for the following

reasons:

Our ability to increase the value of natural gas wells;

Our superior customer service and highly trained field personnel;

Our proactive, engineered approach to marketing and service;

Our GasJack units and VJackTM units;

Our broad geographic presence in domestic markets and growing international presence;

Our experienced management team with proven ability to deliver strong, long-term, organic

growth; and

Our record of maintaining established customer relationships.

Our Relationship with TETRA and Compressco

We are a Delaware limited partnership formed by TETRA and our general partner is an indirect, wholly

owned subsidiary of TETRA. TETRA is a geographically diversified oil and gas services company focused on

completion fluids and other products, production testing, wellhead compression and selected offshore services,

including well plugging and abandonment, decommissioning and diving, with a concentrated domestic

exploration and production business. Through Compressco and certain other subsidiaries of TETRA, TETRA

provides wellhead compression-based and certain other production enhancement services to the natural gas and

oil industry in the United States, Canada and Mexico and in certain countries in South America, Eastern Europe

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and the Asia-Pacific region. Compressco designs and manufactures the compressor units used to provide these

production enhancement services and, in certain markets, Compressco sells compressor units to customers.

Following this offering, and as a result of the formation transactions that will occur in connection with

this offering, TETRA will retain a significant economic interest in us through its indirect ownership of

6,427,257 common units (6,026,757 common units if the underwriters exercise their option to purchase

additional common units in full) and 6,273,970 subordinated units, representing an aggregate 41.0% and

40.0% limited partner interest in us, respectively (assuming that no common unit awards have been granted

under our long-term incentive plan), and through its indirect ownership of our general partner, which will own

a 2.0% general partner interest in us and receive incentive distribution rights. For more information about

these formation transactions and TETRAs retained economic interest in us, please read Summary

Formation Transactions and Partnership Structure. While we believe our relationship with TETRA provides

many benefits to us, it may also be a source of conflicts. For example, neither TETRA nor its affiliates are

prohibited from competing with us. TETRA and its affiliates may acquire, construct or dispose of assets in the

future without any obligation to offer us the opportunity to purchase or construct those assets. Please read

Conflicts of Interest and Fiduciary Duties. From time to time following the completion of this offering,

TETRA may utilize our compressor units in connection with the production enhancement services it provides,

and we expect to be appropriately compensated for any equipment or services we provide to TETRA for such

use of our equipment, although we do not expect such transactions to be material going forward.

The Contributed Business

At or prior to the completion of this offering, TETRA will contribute to us substantially all of our

predecessors business, operations and related assets and liabilities. Based on the business and related assets of

our predecessor that we will receive in connection with this offering, our pro forma revenues represent

approximately 99.4% and 99.4% of our predecessors revenues for the year ended December 31, 2010 and the

three months ended March 31, 2011, respectively, and our pro forma assets, including the impact of the

retained offering net proceeds, represent approximately 104.8% of our predecessors assets as of March 31,

2011. For more pro forma financial and operating information about the portion of our predecessors business

that will be contributed to us in connection with this offering, please read Selected Historical and Pro Forma

Financial and Operating Data.

Following TETRAs contribution to us, a significant majority of our production enhancement services will

be performed by our Operating LLC pursuant to contracts that our counsel has concluded will generatequalifying income under Section 7704 of the Internal Revenue Code, or qualifying income. We will not pay

federal income taxes on the portion of our business conducted by Operating LLC. For a detailed discussion of

Section 7704 of the Internal Revenue Code, please read Material Tax Consequences Partnership Status

and, for a summary of certain of the relevant terms of these contracts, please read Business Our

Operations Our Production Enhancement Services Contract Terms. Our Operating Corp will conduct

substantially all of our operations that our counsel has not concluded will generate qualifying income and it

will pay federal income tax with respect to such operations. Approximately 81.9% and 80.4% of our pro

forma revenues for the year ended December 31, 2010 and the three months ended March 31, 2011,

respectively, is attributable to the portion of our operations that will be conducted by our Operating LLC, and

approximately 18.1% and 19.6% of our pro forma revenues for the year December 31, 2010 and the three

months ended March 31, 2011, respectively, is attributable to the portion of our operations that will be

conducted by our Operating Corp. Going forward, we intend to conduct substantially all of our new

production enhancement service business pursuant to contracts that our counsel concludes will generate

qualifying income and such business will be conducted through our Operating LLC.

Following the completion of this offering, all of Compresscos employees will become our or our general

partners employees and will devote substantially all of their time to managing our operations and conducting

our business. In addition, TETRA will provide certain employees of its Mexican subsidiaries to conduct our

Mexican business, as well as certain corporate staff and general and administrative support services to conduct

our operations, and we will reimburse TETRA for those employees and services. For more information about

the employees that will conduct our business and operations, please read Business Our Operations

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Employees and Certain Relationships and Related Party Transactions Omnibus Agreement Provision of

Personnel and Services to Conduct Our Business.

Omnibus Agreement

Following this offering, our relationship with TETRA will be governed by an omnibus agreement.

Pursuant to the omnibus agreement, we will reimburse TETRA and our general partner for services they

provide to us. For the year ending December 31, 2011, we expect reimbursements to TETRA to be

approximately $700,000, representing approximately $100,000 of such reimbursements for each month

subsequent to the offering.

TETRA will indemnify us against certain potential claims, losses and expenses associated with

environmental, title and tax issues. For a further description of the omnibus agreement, please read Certain

Relationships and Related Party Transactions Omnibus Agreement.

Risk Factors

An investment in our common units involves risks associated with our business, our limited partnership

structure and the tax characteristics of our common units. Please read carefully the risks under the caption

Risk Factors beginning on page 20 of this prospectus.

Formation Transactions and Partnership Structure

At or prior to the completion of this offering, the following transactions will occur:

TETRA will cause Compressco, TETRA International and their controlled affiliates to contribute to us

a portion of our predecessors business, operations and related assets and liabilities, as previously

described in Summary Our Relationship with TETRA and Compressco;

we will issue to affiliates of TETRA, including our general partner, 6,427,257 common units

representing an aggregate 41.0% limited partner interest in us1, and 6,273,970 subordinated units

representing an aggregate 40.0% limited partner interest in us (assuming that no common unit awards

have been granted under our long-term incentive plan);

we will issue to our general partner a 2.0% general partner interest in us;

we will issue to our general partner the incentive distribution rights, which entitle the holder to

increasing percentages, up to a maximum of 48.0%, of the cash we distribute to our unitholders in

excess of $0.445625 per unit per quarter, as described under Provisions of Our Partnership Agreement

Relating to Cash Distributions General Partner Interest and Incentive Distribution Rights;

we will enter into an omnibus agreement with TETRA and our general partner, as previously described

in Summary Our Relationship with TETRA and Compressco;

we will issue 2,670,000 common units to the public in this offering, representing an aggregate 17.0%

limited partner interest in us (assuming that no common unit awards have been granted under our long-

term incentive plan);

simultaneously with the completion of this offering, we will issue restricted units to certain directors,executive officers and other employees of our general partner, Compressco and TETRA;

7

1 An aggregate of 6,026,757 common units will be issued to our general partner and its affiliates at the closing of this offering and up to

an aggregate of 400,500 common units will be issued to our general partner within 30 days of this offering. However, if the underwriters

exercise their option to purchase up to 400,500 additional common units within 30 days of this offering, the number of common units

purchased by the underwriters pursuant to such exercise will be issued to the public instead of to our general partner. The net proceeds to

us will not change if the underwriters exercise their option to purchase additional common units because the net proceeds from any

exercise of the underwriters option to purchase additional common units (approximately $7.5 million based on the initial offering price of

$20.00 per common unit, if exercised in full) will be used to make a distribution to our general partner.


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we will assume approximately $32.2 million of intercompany indebtedness owed by our predecessor to

TETRA (as partial consideration for the assets we acquire from TETRA in connection with this

offering), which will be repaid in full from the net proceeds received from this offering, and the

balance of the intercompany indebtedness will be repaid by our predecessor prior to this offering;

we will enter into a new $20.0 million revolving credit facility (which will be undrawn at closing of

this offering) and use approximately $375,000 of the net proceeds received from this offering to pay

financing fees and transaction costs in connection therewith; and

the balance of the net proceeds received from this offering will be used as described in Use of

Proceeds.

We will conduct our operations through our subsidiaries. We will initially have two direct operating

subsidiaries: (1) Compressco Partners Operating, LLC, a limited liability company that will, directly and

through its subsidiaries, conduct business that our counsel has concluded will generate qualifying income and

(2) Compressco Partners Sub, Inc., a corporation that will conduct business that our counsel has not concluded

will generate qualifying income. The diagram on the following page depicts our organization and ownership

after giving effect to the formation transactions and the offering.

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Organizational Structure After the Formation Transactions and the Offering

Ownership of Compressco Partners, L.P. (1)

Units

Outstanding

Ownership

Percentage

Publicly held common units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,670,000 17.0%Common units held by affiliates of TETRA . . . . . . . . . . . . . . . . . . . . . . . 6,427,257 41.0%Subordinated units held by affiliates of TETRA. . . . . . . . . . . . . . . . . . . . . 6,273,970 40.0%General partner interest held by Compressco Partners GP . . . . . . . . . . . . . 2.0%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,371,227 100.0%

(1) Assuming no exercise of the underwriters overallotment option and that no common unit awards have

been granted under our long-term incentive plan.

TETRA Technologies, Inc.and its Subsidiaries

Compressco, Inc.and its Subsidiaries

Public Unitholders2,670,000

Common Units

Compressco Partners

Operating, LLC

(the Operating LLC)

Canadian Operating

Subsidiary

2.0% General

Partner Interest

Compressco Partners GP Inc.(our General Partner)

5,704,046 Common Units,

5,521,094 Subordinated Units,

2.0% General Partner Interest,

and Incentive Distribution Rights

100% Ownership Interest


Compressco Partners, L.P.(the Partnership)

TETRA International

Incorporatedand its Subsidiaries

723,211 Common Units and

752,876 Subordinated Units


Mexican Operating

Subsidiary

Argentinean Operating

Subsidiary

Compressco Partners

Sub, Inc.

(the Operating Corp)

71.6% Limited

Partner Interest

9.4% Limited

Partner Interest17.0% Limited

Partner Interest



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Management of Compressco Partners

We rely on our general partners board of directors and executive officers to manage our operations and

make decisions on our behalf. Our general partner, Compressco Partners GP, is an indirect, wholly owned

subsidiary of TETRA. Unlike shareholders in a publicly traded corporation, our unitholders will not be entitled

to elect our general partner or its directors. All of our general partners directors will be elected by TETRA.

For more information about our general partners board of directors, executive officers and other management,

please read Management of Compressco Partners Directors, Executive Officers and Other Management.

Our general partner will not receive any management fee in connection with its management of our

business or this offering. Our general partner, however, may receive incentive distributions resulting from

holding the incentive distribution rights. Please read Provisions of our Partnership Agreement Relating to

Cash Distributions Distributions of Available Cash General Partner Interest and Incentive Distribution

Rights. Under the terms of the omnibus agreement, our general partner and TETRA will be reimbursed for all

expenses incurred on our behalf, including the compensation of employees of our general partner or TETRA

that perform services on our behalf. Please read Certain Relationships and Related Party Transactions

Omnibus Agreement Provision of Personnel and Services to Conduct Our Business. Our general partner

will also be entitled to distributions from us, based on its general partner interest, to the extent we have

available cash. Please read Provisions of Our Partnership Agreement Relating to Cash Distributions and

Certain Relationships and Related Party Transactions.

Principal Executive Offices and Internet Address

Our principal executive offices are located at 101 Park Avenue, Suite 1200, Oklahoma City, Oklahoma

73102 and our telephone number is (405) 677-0221. Our website will be located at

www.compresscopartners.com and will be activated in connection with the completion of this offering. We

will make our periodic reports and other information filed with or furnished to the Securities and Exchange

Commission, which we refer to as the SEC, available, free of charge, through our website, as soon as

reasonably practicable after those reports and other information are electronically filed with or furnished to the

SEC. Information on our website or any other website is not incorporated by reference into this prospectus

and does not constitute a part of this prospectus.

Summary of Conflicts of Interest and Fiduciary Duties

Conflicts of Interest. Our general partner has a legal duty to manage us in a manner beneficial to ourcommon and subordinated unitholders. This legal duty originates in statutes and judicial decisions and is

commonly referred to as a fiduciary duty. However, because our general partner is indirectly owned by

TETRA, the executive officers and directors of our general partner also have fiduciary duties to manage our

general partner in a manner beneficial to TETRA. As a result of these relationships, conflicts of interest may

arise in the future between us and our unitholders, on the one hand, and our general partner and its affiliates,

including TETRA, on the other hand. For a more detailed description of the conflicts of interest and fiduciary

duties of our general partner, please read Risk Factors Risks Inherent in an Investment in Us.

Partnership Agreement Modifications to Fiduciary Duties. Our general partner and its affiliates own a

controlling interest in us and will have conflicts of interest with us. Our partnership agreement limits the

liability and reduces the fiduciary duties of our general partner to our unitholders, which may permit it to

favor its own interests to our unitholders detriment. Our partnership agreement also restricts the remedies

available to our unitholders for actions that might otherwise constitute a breach of our general partnersfiduciary duties owed to our unitholders. By purchasing a common unit, the purchaser agrees to be bound by

the terms of our partnership agreement and, pursuant to the terms of our partnership agreement, each

unitholder consents to various actions contemplated in the partnership agreement and conflicts of interest that

might otherwise be considered a breach of fiduciary or other duties under applicable state law.

For a more detailed description of the conflicts of interest that may affect us and the fiduciary duties of

our general partner and the relationships we have with our affiliates, please read Management of Compressco

Partners Directors, Executive Officers and other Management, Certain Relationships and Related Party

Transactions and Conflicts of Interest and Fiduciary Duties.

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The Offering

Common units offered to the public . . . . 2,670,000 common units, representing a 17.0% limited partner

interest in us, or 3,070,500 common units, if the underwriters

exercise in full their option to purchase additional common units,

representing a 19.6% limited partner interest in us (in each case,

assuming that no common unit awards have been granted under our

long-term incentive plan).

Common units and subordinated units

outstanding after this offering. . . . . . . 9,097,257 common units, representing a 58.0% limited partner

interest in us, and 6,273,970 subordinated units, representing a

40.0% limited partner interest in us (assuming that no common

unit awards have been granted under our long-term incentive plan).

If the underwriters do not exercise their option to purchase

additional common units, we will issue to our general partner

400,500 common units at the expiration of the 30-day option

period. If, and to the extent, the underwriters exercise their option

to purchase additional common units, the number of units

purchased by the underwriters pursuant to such exercise will be

issued to the public, and the remainder of any of the 400,500common units not purchased by the underwriters pursuant to the

option will be issued to our general partner. Accordingly, the

exercise of the underwriters option will not affect the total number

of units outstanding after the option period.

General partner interest outstanding after

this offering . . . . . . . . . . . . . . . . . . . . Our general partner will own a 2.0% general partner interest in us.

Use of proceeds. . . . . . . . . . . . . . . . . . . We will receive net proceeds from this offering of approximately

$42.5 million, after deducting the underwriting discount,

structuring fees and offering expenses.

We will use approximately $32.2 million of the net proceeds

received from this offering to retire intercompany indebtedness

owed by our predecessor to TETRA, which we will assume as

partial consideration for the assets we acquire from TETRA in

connection with this offering. We will also use approximately

$375,000 of the net proceeds to pay financing fees and transaction

costs in connection with the closing of the revolving credit facility.

The balance of the net proceeds (approximately $9.9 million) will

be available for general partnership purposes, which include

funding the manufacturing of compressor units and the acquisition

of field trucks and other equipment, as needed, and otherwise

investing in short-term interest bearing securities. The following

table summarizes our intended use of proceeds:

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CompresscoPartners, L.P.

(in thousands)

Gross proceeds from this offering (2,670,000common units at $20.00 per unit). . . . . . . . . . . . . $ 53,400Less: Underwriting discount, structuring fees and

offering expenses . . . . . . . . . . . . . . . . . . . . . . . (10,900)

Net proceeds from this offering . . . . . . . . . . . . . . . . $ 42,500Less: Repayment on intercompany indebtedness

to TETRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,200)Less: Payment of financing fees and transaction

costs incurred in connection with closing therevolving credit facility . . . . . . . . . . . . . . . . . . (375)

Balance of net proceeds from this offering availablefor general partnership purposes . . . . . . . . . . . . . . $ 9,925

Net proceeds to us will not change if the underwriters exercise

their option to purchase additional common units because the net

proceeds from any exercise of the underwriters option to purchase

additional common units (approximately $7.5 million based on the

initial offering price of $20.00 per common unit, if exercised infull) will be used to make a distribution to our general partner.

An affiliate of one of the underwriters is the lender under our

revolving credit facility and, in that respect, will receive a portion

of the proceeds from this offering through the payment of fees to

establish our revolving credit facility. Please read Underwriting.

Please read Underwriting and Use of Proceeds.

Cash distributions . . . . . . . . . . . . . . . . . We will pay the minimum quarterly distribution of $0.3875 per

common unit ($1.55 per common unit on an annualized basis) to

the extent we have sufficient cash from operations after

establishment of cash reserves and payment of debt service and

other contractual obligations, fees and expenses, includingpayments to our general partner and its affiliates. We will adjust

the minimum quarterly distribution for the period from the

completion of this offering through June 30, 2011, based on the

actual number of days that the units were outstanding during the

quarterly period. Our ability to pay our minimum quarterly

distribution is subject to various restrictions and other factors

described in more detail under the caption Our Cash Distribution

Policy and Restrictions on Distributions.

Our partnership agreement requires us to distribute all of our cash

on hand at the end of each quarter, less reserves established by our

general partner. We refer to this cash as available cash, and we

define its meaning in our partnership agreement attached asAppendix A.

Our partnership agreement requires us to distribute all of our

available cash each quarter in the following manner:

first, 98.0% to the holders of common units and 2.0% to our

general partner, until each common unit has received the

minimum quarterly distribution of $0.3875 plus any arrearages

from prior quarters;

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second, 98.0% to the holders of subordinated units and 2.0% to

our general partner, until each subordinated unit has received the

minimum quarterly distribution of $0.3875; and

third, 98.0% to all unitholders, pro rata, and 2.0% to our general

partner, until each unit has received a distribution of $0.445625.

If cash distributions to our unitholders exceed $0.445625 per unitin any quarter, our unitholders and our general partner will receive

distributions according to the following percentage allocations:

Total Quarterly Distribution TargetAmount per Unit Unitholders

GeneralPartner

Marginal PercentageInterest in Distributions

above $0.445625 up to $0.484375 . . 85.0% 15.0%

above $0.484375 up to $0.581250 . . 75.0% 25.0%

above $0.581250 . . . . . . . . . . . . . . . 50.0% 50.0%

The percentage interests shown for our general partner include its

2.0% general partner interest. We refer to the additional increasing

distributions to our general partner as incentive distributions.Please read Provisions of Our Partnership Agreement Relating to

Cash Distributions Distributions of Available Cash General

Partner Interest and Incentive Distribution Rights.

We must generate approximately $24.3 million (or approximately

$6.1 million per quarter) of available cash to pay the aggregate

quarterly distribution for four quarters on all of our common units

and subordinated units that will be outstanding immediately after

this offering (assuming that no common unit awards have been

granted under our long-term incentive plan) and the corresponding

distribution on the general partner interest. If we had completed the

transaction contemplated in this prospectus on January 1, 2010 and

April 1, 2010, our pro forma cash available for distribution for the

twelve months ended December 31, 2010 and March 31, 2011

would have been approximately $24.7 million and $23.9 million,

respectively. This amount would not have been sufficient to pay the

aggregate minimum quarterly distribution on our common units

and subordinated units and the corresponding distribution on the

general partner interest for the twelve months ended March 31,

2011. The shortfall in available cash for distributions for the twelve

months ended March 31, 2011 would have resulted in distributions

representing approximately 100.0% of the aggregate minimum

quarterly distribution on our common units, but only 95.7% of the

aggregate minimum quarterly distribution on our subordinated

units. For a calculation of our ability to make distributions to our

unitholders based on our pro forma results for the twelve monthsended December 31, 2010 and March 31, 2011, please read Our

Cash Distribution Policy and Restrictions on Distributions Pro

Forma Cash Available for Distribution for the Twelve Months

Ended December 31, 2010 and March 31, 2011.

We believe that, based on the estimates contained in our financial

forecast and related assumptions listed under the caption Our

Cash Distribution Policy and Restrictions on Distributions

Estimated Cash Available for Distribution for the Twelve Months

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Ending June 30, 2012, we will have sufficient cash available to

pay the aggregate minimum quarterly distribution on our common

units and subordinated units and the corresponding distribution on

the general partner interest for each quarter in the twelve months

ending June 30, 2012. Please read Cash Distribution Policy and

Restrictions on Distributions Estimated Cash Available for

Distribution for the Twelve Months Ending June 30, 2012.

Subordinated units. . . . . . . . . . . . . . . . . Affiliates of TETRA will initially own all of our subordinated

units. The principal difference between our common and

subordinated units is that in any quarter during the subordination

period, the subordinated units will not be entitled to receive any

distribution until the common units have received the minimum

quarterly distribution, plus any arrearages in the payment of the

minimum quarterly distribution from prior quarters. Subordinated

units will not accrue arrearages.

Conversion of subordinated units . . . . . . The subordination period will end on the first business day after

we have earned and paid at least (1) $1.55 (the minimum quarterly

distribution on an annualized basis) on each outstanding common

and subordinated unit and the corresponding distribution on the

general partner interest for each of three consecutive, non-

overlapping four quarter periods ending on or after June 30, 2014

or (2) $2.325 (150.0% of the annualized minimum quarterly

distribution) on each outstanding common and subordinated unit

(assuming that no common unit awards have been granted under

our long-term incentive plan) and the corresponding distributions

on the general partner interest and the incentive distribution rights

for the four-quarter period immediately preceding that date.

The subordination period also will end upon the removal of our

general partner other than for cause if no subordinated units or

common units held by the holders of subordinated units or their

affiliates are voted in favor of that removal.

When the subordination period ends, all subordinated units will

convert into common units on a one-for-one basis, and, thereafter,

all common units will no longer be entitled to arrearages. Please

read Provisions of Our Partnership Agreement Relating to Cash

Distributions Subordination Period.

General partners right to reset the target

distribution levels. . . . . . . . . . . . . . . . Our general partner, as the initial holder of our incentive

distribution rights, has the right, at any time when there are no

subordinated units outstanding and it has received incentive

distributions at the highest level to which it is entitled (48.0%, in

addition to distributions paid on the general partner interest) foreach of the prior four consecutive fiscal quarters, to reset the initial

target distribution levels at higher levels based on our cash

distributions at the time of the exercise of the reset election. If our

general partner transfers all or a portion of our incentive

distribution rights in the future, then the holder or holders of a

majority of our incentive distribution rights will be entitled to

exercise this right. Assuming that our general partner holds all of

the incentive distribution rights at the time that a reset election is

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made, following a reset election, the minimum quarterly

distribution will be adjusted to equal the reset minimum quarterly

distribution, and the target distribution levels will be reset to

correspondingly higher levels based on the same percentage

increases above the reset minimum quarterly distribution.

If our general partner elects to reset the target distribution levels, it

will be entitled to receive common units and to retain its then-

current general partner interest. The number of common units to be

issued to our general partner will equal the number of common

units that would have entitled the holder to an average aggregate

quarterly cash distribution in the prior two quarters equal to the

average of the distributions to our general partner on the incentive

distribution rights in the prior two quarters. Please read Provisions

of Our Partnership Agreement Relating to Cash Distributions

General Partners Right to Reset Incentive Distribution Levels.

Issuance of additional partnership

units . . . . . . . . . . . . . . . . . . . . . . . . . We can issue an unlimited number of partnership units in the

future, including units that are senior in right of distributions,

liquidation and voting to the common units, without the approval

of our unitholders. Please read Units Eligible for Future Sale and

The Partnership Agreement Issuance of Additional Securities.

Limited voting rights . . . . . . . . . . . . . . . Our general partner will manage and operate us. Unlike the holders

of common stock in a corporation, our unitholders will have only

limited voting rights on matters affecting our business. Unitholders

will have no right to elect our general partner or its directors. Our

general partner may not be removed except by a vote of the

holders of at least 6623% of the outstanding common and

subordinated units, including any units owned by our general

partner and its affiliates, voting together as a single class. Upon

consummation of this offering, our general partner and its affiliates

will own an aggregate of 82.6% of our common and subordinated

units (assuming the underwriters do not exercise their option to

purchase additional common units and assuming that no common

unit awards have been granted under our long-term incentive plan).

This will give our general partner the ability to prevent its

involuntary removal. Please read The Partnership Agreement

Voting Rights.

Limited call right . . . . . . . . . . . . . . . . . If at any time our general partner and its affiliates own more than

90% of the outstanding common units, our general partner will

have the right, but not the obligation, to purchase all of the

remaining common units at a price not less than the then-current

market price of the common units.

Estimated ratio of taxable income to

distributions. . . . . . . . . . . . . . . . . . . . We estimate that a purchaser of common units in this offering who

owns these common units from the date of closing of this offering

through the record date for distributions for the period ending on

December 31, 2013, will be allocated, on a cumulative basis, an

amount of U.S. federal taxable income for that period that will be

less than 20% of the cash distributed with respect to that period. For

example, if our unitholders receive an annual distribution of $1.55

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per unit, we estimate that our unitholders average allocable U.S.

federal taxable income per year will be no more than $0.31 per unit.

Please read Material Tax Consequences Tax Consequences of

Unit Ownership Ratio of Taxable Income to Distributions.

Material tax consequences . . . . . . . . . . . For a discussion of other material federal income tax consequences

that may be relevant to prospective unitholders who are individual

citizens or residents of the United States, please read Material TaxConsequences.

Exchange listing . . . . . . . . . . . . . . . . . . We have been approved to list our common units on the NASDAQ

Stock Market LLC under the symbol GSJK.

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Selected Historical and Pro Forma Financial and Operating Data

At or prior to the completion of this offering, TETRA will contribute to us a portion of our predecessors

business, as further described in Summary Our Relationship with TETRA and Compressco. Based on the

business and assets of our predecessor that we will receive in connection with this offering, our pro forma

revenues represent approximately 99.4% and 99.4% of our predecessors revenues for the year ended

December 31, 2010 and the three months ended March 31, 2011, respectively, and our pro forma assets,including the impact of the retained offering net proceeds, represent approximately 104.8% of our

predecessors assets as of March 31, 2011. All historical operations, results of operations, financial statements

and notes to the financial statements presented throughout this prospectus reflect those of our predecessor and

exclude the pro forma adjustments required to reflect the portion of our predecessors business that will not be

contributed to us in connection with this offering. Because our operations will not represent the entirety of our

predecessors business, and due to other factors described in Managements Discussion and Analysis of

Financial Condition and Results of Operations Overview Items Impacting the Comparability of Our

Financial Results, certain total amounts that will be pre

compressco partners 2011 propspectus

Documents