##### Table of Contents



As filed with the Securities and Exchange Commission on
    November 9, 2007
 
 Registration No. 333-144971
    UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    
  Amendment No. 2
 
 to
  Form S-1
 REGISTRATION
    STATEMENT
 UNDER
 THE SECURITIES ACT OF
    1933
      CDM RESOURCE PARTNERS,
    L.P.
 (Exact Name of Registrant as
    Specified in Its Charter)
      Delaware

4922

26-0216763(State or Other Jurisdiction
    of
    Incorporation or Organization)

(Primary Standard Industrial
    Classification Code Number)

(I.R.S. Employer
    Identification Number)   20405 Tomball Parkway
 Suite 310
 Houston, Texas 77070
 (866) 236-7515
 (Address, Including Zip Code,
    and Telephone Number, Including Area Code, of Registrants
    Principal Executive Offices)
  Richard W. Fairchild, Jr.
 Chief Financial Officer
 20405 Tomball Parkway
 Suite 310
 Houston, Texas 77070
 (866) 236-7515
 (Name, Address, Including Zip
    Code, and Telephone Number, Including Area Code, of Agent for
    Service)
      Copies to:
  William N. Finnegan IV
    Vinson & Elkins L.L.P.
    1001 Fannin Street, Suite 2500
    Houston, Texas 77002
    (713) 758-2222

Joshua Davidson
    Felix P. Phillips
    Baker Botts L.L.P.
    910 Louisiana Street
    Houston, Texas 77002
    (713) 229-1234       Approximate date of commencement of proposed sale to the
    public:
  o
  o
  o
  o
  o
  The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Securities
    and Exchange Commission, acting pursuant to said
    Section 8(a), may determine.




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##### Table of Contents



The
information in this preliminary prospectus is not complete and
may be changed. These securities may not be sold until the
registration statement filed with the Securities and Exchange
Commission is effective. This preliminary prospectus is not an
offer to sell nor does it seek an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.  
 Subject to
    Completion, dated November 9, 2007
 
  PROSPECTUS
  
 7,000,000 Common Units
 Representing Limited Partner
    Interests
  
   
  Investing in our common units
    involves risks. Please read Risk Factors beginning
    on page 16.
    
    We may not have sufficient cash from operations following the
    establishment of cash reserves and payment of fees and expenses,
    including cost reimbursements to our general partner, to enable
    us to pay our minimum quarterly distribution to holders of our
    common units and subordinated units.
    A long-term reduction in the demand for or production of natural
    gas or crude oil in the locations where we operate could
    adversely affect the demand for our services or the prices we
    charge for our services, which could result in a decrease in our
    revenues and cash available for distribution to our unitholders.
    We have several key customers. The loss of any of these
    customers would result in a decrease in our revenues and cash
    available for distribution to our unitholders.  
    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 fiduciary duties that our
    general partner owes to us, which may permit it to favor its own
    interests to your detriment and limits the circumstances under
    which you may make a claim relating to conflicts of interest, as
    well as the remedies available to you in that event.  
    Holders of our common units have limited voting rights and are
    not entitled to elect our general partner or the directors of
    its general partner. 
  
    You will experience immediate and substantial dilution of $10.92
    in tangible net book value per common unit. 
  
    Our tax treatment depends on our status as a partnership for
    federal income tax purposes. If the Internal Revenue Service
    were to treat us as a corporation, our cash available for
    distribution to our unitholders would be substantially reduced.
    You may be required to pay taxes on your share of our income
    even if you do not receive any cash distributions from us.  Per Common Unit


TotalInitial public offering price

$



$Underwriting discount(1)

$



$Proceeds to CDM Resource Partners, L.P. (before expenses)

$



$   (1)
    
    Excludes an aggregate fee of
    $0.4 million payable to Lehman Brothers and Merrill
    Lynch & Co. in consideration of advice rendered by
    them regarding the structure of this offering and our
    partnership.  30-day
    
   Lehman
    Brothers
    Merrill
    Lynch & Co.    Goldman,
    Sachs & Co.
    Wachovia
    Securities  TudorPickering
  ,
    2007




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TABLE OF
    CONTENTS
  
 SUMMARY


1CDM Resource Partners, L.P.


1Our Relationship with CDMR Holdings


2Risk Factors


3Formation Transactions and Partnership
    Structure


3Organizational Structure After the
    Transactions


5Management of CDM Resource Partners,
    L.P.


6Principal Executive Offices and Internet
    Address


6Summary of Conflicts of Interest and Fiduciary
    Duties


6The Offering


7Summary Historical and Pro Forma Financial and
    Operating Data


11Non-GAAP Financial Measures


13RISK FACTORS


16Risks Related to Our Business


16Risks Inherent in an Investment in Us


23Tax Risks to Common Unitholders


30USE OF PROCEEDS


34CAPITALIZATION


35DILUTION


36OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON
    DISTRIBUTIONS


37General


37Our Cash Distributions


38Pro Forma Cash Available for Distribution for the
    Twelve Months Ended December 31, 2006 and
    September 30, 2007


40Estimated Cash Available for Distribution for the
    Twelve Months Ending December 31, 2008


43Assumptions and Considerations


47PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING
    TO CASH DISTRIBUTIONS


52Distributions of Available Cash


52Operating Surplus and Capital Surplus


53Subordination Period


54Distributions of Available Cash from Operating
    Surplus During the Subordination Period


56Distributions of Available Cash from Operating
    Surplus After the Subordination Period


56General Partner Interest and Incentive
    Distribution Rights


56Percentage Allocations of Available Cash from
    Operating Surplus


57General Partners Right to Reset Incentive
    Distribution Levels


57Distributions from Capital Surplus


60Adjustment to the Minimum Quarterly Distribution
    and Target Distribution Levels


61Distributions of Cash Upon Liquidation


61SELECTED HISTORICAL AND PRO FORMA FINANCIAL AND
    OPERATING DATA


64Non-GAAP Financial Measures


66MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


69Overview


69Items You Should Consider When Evaluating
    the Historical Financial Performance of CDM Resource Management
    Predecessor and Assessing Our Future Prospects


70Factors That Impact Our Business


71How We Evaluate Our Operations


72Industry Trends


73 
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##### Table of Contents



Operating Highlights


73Financial Results of Operations


75Effects of Inflation


79Liquidity and Capital Resources


80Critical Accounting Policies and Estimates


84Recent Accounting Pronouncements


86Quantitative and Qualitative Disclosures About
    Market Risk


87NATURAL GAS COMPRESSION INDUSTRY


88BUSINESS


90Overview


90Business Strategies


91Competitive Strengths


92Our Relationship with CDMR Holdings


92Our Operations


93MANAGEMENT OF CDM RESOURCE PARTNERS,
    L.P.


101Directors and Executive Officers


102Reimbursement of Expenses of Our General
    Partner


103Executive Compensation and Employment Matters


104Compensation Discussion and Analysis


104Compensation of Directors


105Long-Term Incentive Plan


105SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT


107CERTAIN RELATIONSHIPS AND RELATED PARTY
    TRANSACTIONS


108Distributions and Payments to Our General Partner
    and its Affiliates


108Agreements Governing the Transactions


109Omnibus Agreement


109CDM Operating Partnership Agreement and CDM OLP
    GP, LLC Limited Liability Company Agreement


111Natural Gas Contract Compression Services
    Contracts between CDM Operating and CDM MAX, LLC


111Related Party Transactions Involving Carlyle/Riverstone


111CONFLICTS OF INTEREST AND FIDUCIARY DUTIES


112Conflicts of Interest


112Fiduciary Duties


118DESCRIPTION OF THE COMMON UNITS


121The Units


121Transfer Agent and Registrar


121Transfer of Common Units


121THE PARTNERSHIP AGREEMENT


122Organization and Duration


122Purpose


122Power of Attorney


122Cash Distributions


122Capital Contributions


122Voting Rights


123Limited Liability


124Issuance of Additional Securities


125Amendment of the Partnership Agreement


125Merger, Consolidation, Conversion, Sale or Other
    Disposition of Assets


127 
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Termination and Dissolution


128Liquidation and Distribution of Proceeds


128Withdrawal or Removal of the General Partner


129Transfer of General Partner Units


130Transfer of Ownership Interests in the General
    Partner


130Transfer of Incentive Distribution Rights


130Change of Management Provisions


130Limited Call Right


131Meetings; Voting


131Status as Limited Partner


132Non-Citizen Assignees; Redemption


132Indemnification


132Reimbursement of Expenses


133Books and Reports


133Right to Inspect Our Books and Records


133Registration Rights


134UNITS ELIGIBLE FOR FUTURE SALE


135MATERIAL TAX CONSEQUENCES


136Partnership Status


136Limited Partner Status


137Tax Consequences of Unit Ownership


138Tax Treatment of Operations


143Disposition of Common Units


144Uniformity of Units


146Tax-Exempt Organizations and Other Investors


146Administrative Matters


147State, Local, Foreign and Other Tax
    Considerations


149SELLING UNITHOLDER


150INVESTMENT IN CDM RESOURCE PARTNERS, L.P. BY
    EMPLOYEE BENEFIT PLANS


151UNDERWRITING


152Commissions and Expenses


152Option to Purchase Additional Common Units


153Indemnification


153Lock-Up
    Agreements


153Listing on the New York Stock Exchange


153Offering Price Determination


154FINRA Regulations


154Stabilization, Short Positions and Penalty
    Bids


154Electronic Distribution


155Stamp Taxes


155Other Relationships


155VALIDITY OF THE COMMON UNITS


156EXPERTS


156WHERE YOU CAN FIND MORE INFORMATION


156FORWARD-LOOKING STATEMENTS


156INDEX TO FINANCIAL STATEMENTS


F-1Appendix A  Form of Amended and
    Restated Agreement of Limited Partnership of CDM Resource
    Partners, L.P.


A-1Appendix B  Glossary of Terms


B-1Form of Underwriting AgreementList of SubsidiariesConsent of KPMG LLPConsent of Director Nominee  
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iv




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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 assumes an initial
    public offering price of $20.00 per common unit and that the
    underwriters option to purchase additional common units is
    not exercised. You should read Risk Factors for more
    information about important risks that you should consider
    carefully before buying our common units. We include a glossary
    of some of the terms used in this prospectus as
    Appendix B.
  References in this prospectus to CDM Resource
    Partners, we, our, us,
    the Partnership or like terms refer to CDM Resource
    Partners, L.P. and its majority-owned subsidiaries, including
    CDM Resource Management, Ltd. (CDM Operating).
    References to CDMR Holdings refer to CDMR Holdings,
    LLC, the owner of our general partner. Following the closing of
    this offering, we will own a 52.999% limited partner interest
    and a 0.001% general partner interest in CDM Operating, and CDMR
    Holdings will own a 47.0% limited partner interest in CDM
    Operating.
  CDM
    Resource Partners, L.P.
  Overview
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Business
    Strategies
    
    Continue to maximize our customers cash flow
    Continue to deliver strong organic growth
    Continue to manage our operating costs and expenses
    Take advantage of selective acquisition opportunities  Competitive
    Strengths
    
    Experienced management team with proven ability to deliver
    strong organic growth
    Modern and efficient compressor fleet
    Large horsepower installations with long-term commitments
    Stable and growing fee-based cash flows
    Long-standing customer relationships  Our
    Relationship with CDMR Holdings
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Risk
    Factors
    Formation
    Transactions and Partnership Structure
  General
    
    CDMR Holdings will contribute a 53.0% partnership interest in
    CDM Operating to us;
    we will issue to CDMR Holdings or its subsidiaries 1,050,000
    common units and 5,551,724 subordinated units, representing an
    aggregate 47.6% limited partner interest in us;
    we will issue to CDM RP GP, L.P., an indirect wholly-owned
    subsidiary of CDMR Holdings, a 2.0% general partner interest in
    us and all of our incentive distribution rights, which will
    entitle our general partner to increasing percentages of the
    cash we distribute in excess of $0.345 per unit per quarter
    (115% of the minimum quarterly distribution); 
  
    we will issue 7,000,000 common units to the public in this
    offering, representing a 50.4% limited partner interest in us,
    and will contribute the net proceeds therefrom of approximately
    $126.7 million to CDM Operating, which will use those
    proceeds to repay indebtedness outstanding under its amended
    credit facility; 
  
    CDMR Holdings will assume and repay $40.0 million of
    indebtedness outstanding under CDM Operatings amended
    credit facility;
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
    CDM Operating will amend and extend its $300 million credit
    facility to provide for a three-year term and an amended
    interest rate schedule;
    we will enter into an omnibus agreement with CDMR Holdings and
    its affiliates that will address, among other things:  
    CDMR Holdings agreement to provide us all operational
    staff, corporate staff and support services reasonably necessary
    to run our business;
    CDMR Holdings agreement to limit through December 31,
    2008 our incremental general and administrative expenses
    resulting from being a publicly traded partnership to
    $1.5 million per fiscal year (prorated for 2007); and
    the terms and conditions under which we may exercise our right
    of first offer to acquire all or a part of CDMR Holdings
    47.0% interest in CDM Operating.
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Organizational
    Structure After the Transactions
    Public Common Units


50.4
%CDMR Holdings, LLC Common Units


7.6
%CDMR Holdings, LLC Subordinated Units


40.0
%General Partner Units


2.0
%Total


100.0
%
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Management
    of CDM Resource Partners, L.P.
      Principal
    Executive Offices and Internet Address
  www.cdmp.com
  Summary
    of Conflicts of Interest and Fiduciary Duties
  Conflicts of Interest.
  Partnership Agreement Modifications to Fiduciary
    Duties.
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The
    Offering
  Common units offered to the public
    
    7,000,000 common units.Common units subject to the underwriters option to
    purchase additional common units
    
    If the underwriters exercise their option to purchase additional
    common units in full, we will issue 1,050,000 additional common
    units to the public and use the net proceeds to redeem 1,050,000
    common units from CDMR Holdings, which may therefore be deemed
    to be a selling unitholder in this offering. Please read
    Selling Unitholder.Units outstanding after this offering
    
    8,050,000 common units and 5,551,724 subordinated units,
    representing 58.0% and 40.0%, respectively, limited partner
    interests in us. 
  Use of proceeds
    
    We expect to receive net proceeds of approximately $126.7million, after deducting the underwriting discount, fees of
    approximately $0.4 million payable to Lehman Brothers and
    Merrill Lynch for evaluation, analysis and structuring of our
    Partnership, and offering expenses. We will contribute the net
    proceeds from this offering to CDM Operating, which will use
    those proceeds to repay indebtedness outstanding under its
    amended credit facility. Please see Use of Proceeds. 
  We will use the net proceeds from any exercise of the
    underwriters option to purchase additional common units to
    redeem from CDMR Holdings a number of common units equal to the
    number of common units issued upon the exercise of the
    underwriters option.Cash distributions
    
    We will pay the minimum quarterly distribution of $0.30 per unit
    ($1.20 per unit on an annualized basis) to the extent we have
    sufficient cash from operations after establishment of cash
    reserves and payment of fees and expenses, including payments to
    our general partner and its affiliates. We will adjust the
    minimum quarterly distribution for the period from the closing
    of this offering through December 31, 2007 based on the
    actual length of the 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 and in the glossary of terms attached as
    Appendix B. Our partnership agreement also requires that we
    distribute all of our available cash from operating surplus each
    quarter in the following manner: first, 98% to the holders of common units and 2% to
    our general partner, until each common unit has received a
    minimum quarterly distribution of $0.30 plus any arrearages from
    prior quarters;
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 second, 98% to the holders of subordinated units and
    2% to our general partner, until each subordinated unit has
    received a minimum quarterly distribution of $0.30; third, 98% to all unitholders, pro rata, and 2% to
    our general partner, until each unit has received a distribution
    of $0.345; fourth, 85% to all unitholders, pro rata, and 15% to
    our general partner, until each unit has received a distribution
    of $0.375; fifth, 75% to all unitholders, pro rata, and 25% to
    our general partner, until each unit has received a distribution
    of $0.45; and thereafter, 50% to all unitholders, pro rata, and
    50% to our general partner.We refer to the distributions to our general partner in excess
    of 2% as incentive distributions. Please read
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions. 
  Our pro forma cash available for distribution for the twelve
    months ended December 31, 2006 and September 30, 2007
    would have been sufficient to pay the full minimum quarterly
    distribution on all of the common units and 31.6% and 11.6%,
    respectively, of the minimum quarterly distribution on the
    subordinated units during these periods. 
  We believe that, based on the estimates contained and the
    assumptions listed under the caption Our Cash Distribution
    Policy and Restrictions on Distributions, we will have
    sufficient cash available to pay the full minimum quarterly
    distribution of $0.30 per unit per quarter for the
    four-quarter period ending December 31, 2008 on all common
    units and subordinated units.Subordinated units
    
    CDMR Holdings or its affiliates will initially own all of our
    subordinated units. The principal difference between our common
    units and subordinated units is that in any quarter during the
    subordination period, holders of the subordinated units are
    entitled to receive the minimum quarterly distribution of $0.30
    per unit only after 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.The subordination period will end on the first business day
    after we have earned and paid at least $1.20 (the annualized
    minimum quarterly distribution) on each outstanding unit for any
    three consecutive, non-overlapping four-quarter periods ending
    on or after December 31, 2010. The subordination period
    will also end upon the removal of our general partner other than
    for cause if the units held by our general partner and its
    affiliates are not voted in favor of such removal.When the subordination period ends, all the subordinated units
    will convert into common units on a one-for-one basis, and the
    common units will no longer be entitled to arrearages.
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Early conversion of subordinated units
    
    If we have earned and paid at least $1.80 (150% of the
    annualized minimum quarterly distribution) on each outstanding
    unit for any four-quarter period ending on or after
    December 31, 2008, all of the subordinated units will
    convert into common units on a one-for-one basis.Please read Provisions of Our Partnership Agreement
    Relating to Cash Distributions  Subordination
    Period.General Partners right to reset the target distribution
    levels
    
    Our general partner has the right, at a time when there are no
    subordinated units outstanding and it has received incentive
    distributions at the highest level to which it is entitled (48%)
    for each of the prior four consecutive fiscal quarters, to reset
    the initial target distribution levels at higher levels based on
    the distribution at the time of the exercise of the reset
    election. Following a reset election by our general partner, the
    minimum quarterly distribution amount will be reset to an amount
    equal to the average cash distribution amount per common unit
    for the two fiscal quarters immediately preceding the reset
    election (such amount is referred to as 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 amount as our initial target distribution levels.In connection with resetting these target distribution levels,
    our general partner will be entitled to receive Class B
    units. The Class B units will be entitled to the same cash
    distributions per unit as our common units and will be
    convertible into an equal number of common units. The number of
    Class B units to be issued will be equal to that number of
    common units whose aggregate quarterly cash distributions
    equaled the average of the distributions to our general partner
    on the incentive distribution rights in the prior two quarters.
    For a more detailed description of our general partners
    right to reset the target distribution levels upon which the
    incentive distribution payments are based and the concurrent
    right of our general partner to receive Class B units in
    connection with this reset, please see Provisions of Our
    Partnership Agreement Related to Cash Distributions 
    General Partners Right to Reset Incentive Distribution
    Levels.Issuance of additional units
    
    We can issue an unlimited number of units, 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, you will have only
    limited voting rights on matters affecting our business. You
    will have no right to elect our general partner or the directors
    of its general partner on an annual or other continuing basis.
    Our general partner may not be removed except by a vote of the
    holders of at least
    662/3%
    of the outstanding units, including any units owned by our
    general partner and its affiliates, voting together as a single
    class. Upon
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consummation of this offering, our general partner and its
    affiliates will own an aggregate of 48.5% of our common and
    subordinated units. 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 80% of the outstanding common units, our general partner
    has 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 if you own the common units you purchase in
    this offering through the record date for distributions for the
    period ending December 31, 2010, you will be allocated, on
    a cumulative basis, an amount of federal taxable income for that
    period that will be  % or less of the cash distributed
    to you with respect to that period. For example, if you receive
    an annual distribution of $1.20 per unit, we estimate that your
    average allocable federal taxable income per year will be no
    more than $   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 Tax Consequences.Exchange listing
    
    We intend to apply to list our common units on the New York
    Stock Exchange under the symbol CDP.
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Summary
    Historical and Pro Forma Financial and Operating Data
      
    The historical financial information of CDM Resource Management
    Predecessor as of December 31, 2005 and 2006 and for the
    years ended December 31, 2004, 2005 and 2006 is derived
    from the audited financial statements of CDM Resource Management
    Predecessor, which are included elsewhere in this prospectus;
    The historical financial information of CDM Resource Management
    Predecessor as of December 31, 2004 is derived from the
    audited financial statements of CDM Resource Management
    Predecessor, which are not included in this prospectus; 
  
    The historical financial information of CDM Resource Management
    Predecessor as of September 30, 2007 and for the nine
    months ended September 30, 2006 and September 30, 2007
    is derived from the unaudited financial statements of CDM
    Resource Management Predecessor, which are included elsewhere in
    this prospectus; and 
 
  
    The historical financial information of CDM Resource Management
    Predecessor as of September 30, 2006 is derived from the
    unaudited financial statements of CDM Resource Management
    Predecessor, which are not included in this prospectus. 
 
   
  
    the contribution to us of a 53.0% interest in CDM Operating and
    the retention by CDMR Holdings of the remaining 47.0% interest
    in CDM Operating;
    the issuance by us of 1,050,000 common units and 5,551,724
    subordinated units to CDMR Holdings;
    the issuance by us of a 2.0% general partner interest and all of
    our incentive distribution rights to CDM RP GP, L.P., our
    general partner; 
  
    the issuance by us of 7,000,000 common units to the public and
    the contribution of the net proceeds therefrom of approximately
    $126.7 million to CDM Operating, which will use those
    proceeds to repay indebtedness outstanding under its amended
    credit facility; 
  
    CDMR Holdings assumption and repayment of
    $40.0 million of indebtedness outstanding under CDM
    Operatings amended credit facility; and 
  
    CDM Operatings purchase at or prior to the closing of this
    offering of 67 compression units with approximately 82,990
    aggregate horsepower that CDM Operating finances under capital
    leases or uses under operating leases, all with a third party,
    for approximately $26.6 million.
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CDM Resource Management Predecessor


CDM Resource Partners, L.P. Pro FormaNineMonthsYear Ended


Nine Months


Year Ended


EndedDecember 31,


Ended September 30,


December 31,


September 30,2004


2005


2006


2006


2007


2006


2007(In thousands, except per unit and operating data)Statement of Operations Data:Revenues:Operating revenue

$
29,687


$
42,056


$
61,054


$
43,356


$
65,381


$
61,054


$
65,381Reimbursed installation services revenue


4,310



5,310



6,636



3,528



4,498



6,636



4,498Total revenues


33,997



47,366



67,690



46,884



69,879



67,690



69,879Costs and expenses:Cost of operations


14,837



20,676



26,190



19,454



30,015



23,183



27,760Reimbursed installation services expense


4,310



5,310



6,636



3,528



4,498



6,636



4,498General and administrative expense


4,422



5,425



8,153



5,437



8,848



8,153
(1)


8,848
(1)Depreciation expense


3,229



4,851



7,311



5,560



8,417



7,845



8,818Gain on sale of assets










(64
)


(64
)


(49
)


(64
)


(49
)Total costs and expenses


26,798



36,262



48,226



33,915



51,729



45,753



49,875Operating income


7,199



11,104



19,464



12,969



18,150



21,937



20,004Other income (expense):Interest expense, net of capitalized interest


(3,449
)


(5,090
)


(10,928
)


(7,223
)


(13,458
)


(2,505
)


(6,521
)Other income (expense)


62



68



108



62



163



108



163Total other income (expense)


(3,387
)


(5,022
)


(10,820
)


(7,161
)


(13,295
)


(2,397
)


(6,358
)Income before income tax expense and non-controlling interest


3,812



6,082



8,644



5,808



4,855



19,540



13,646Income tax expense(2)


















270







270Income before non-controlling interest


3,812



6,082



8,644



5,808



4,585



19,540



13,376Non-controlling interest(3)






















(9,184
)


(6,287
)Net income

$
3,812


$
6,082


$
8,644


$
5,808


$
4,585


$
10,356


$
7,089Pro forma net income per limited partner unit:Common unit





















$
1.20


$
0.86Subordinated unit





















$
0.09



Balance Sheet Data (at period end):Working capital(4)

$
171


$
(2,978
)

$
10,009


$
(1,777
)

$
(12,371
)





$
(10,781
)Total assets


112,623



159,262



275,779



244,187



372,068







385,634Long-term debt


61,952



85,965



185,148



157,437



264,247







112,833Non-controlling interest(3)


























114,197Partners equity/owners equity


37,496



58,572



71,780



64,230



76,252







128,775Other Financial Data:Adjusted EBITDA(5)

$
10,490


$
16,023


$
26,883


$
18,591


$
26,730


$
29,890


$
28,985Capital expenditures


31,178



73,013



107,058



81,057



104,575Cash flows provided by (used in):Operating activities

$
4,741


$
15,405


$
7,908


$
10,633


$
19,539Investing activities


(30,930
)


(75,013
)


(110,938
)


(82,632
)


(96,170
)Financing activities


27,878



55,978



103,727



71,276



76,561
 12




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##### Table of Contents



CDM Resource Management Predecessor


CDM Resource Partners, L.P. Pro FormaNineMonthsYear Ended


Nine Months


Year Ended


EndedDecember 31,


Ended September 30,


December 31,


September 30,2004


2005


2006


2006


2007


2006


2007(In thousands, except per unit and operating data)Operating Data (at period end)  unaudited:Total available horsepower(6)


220,983



293,120



429,777



399,808



540,326Revenue generating horsepower


213,744



275,718



414,535



377,725



531,996Revenue generating compression units


222



309



473



435



612Average horsepower per revenue generating compression unit


963



892



876



868



869Horsepower utilization:At period end


96.7
%


94.1
%


96.5
%


94.5
%


98.5
%Average for the period(7)


97.6
%


97.2
%


96.6
%


97.3
%


97.7
%  
    (1)
    
    Does not include incremental general and administrative expenses
    we expect to incur as a result of being a publicly traded
    partnership. We expect these expenses to total approximately
    $3.3 million per year; however, CDMR Holdings will bear any
    such expenses that exceed $1.5 million per year through
    December 31, 2008 (prorated for 2007). All of these
    expenses, even those reimbursed to us, will be recorded as our
    expense in our future statements of operations.(2)
    
    This represents the Texas franchise tax (applicable to income
    apportioned to Texas beginning January 1, 2007) which, in
    accordance with SFAS No. 109, is classified as an
    income tax for reporting purposes.(3)
    
    Pro forma non-controlling interest represents CDMR
    Holdings 47.0% limited partner interest in CDM Operating.(4)
    
    Working capital is defined as current assets minus current
    liabilities. 
  (5)
    
    Adjusted EBITDA is defined as our net income plus the 47.0%
    non-controlling interest in CDM Operatings net income plus
    interest expense, income taxes and depreciation expense. Please
    read  Non-GAAP Financial Measures
    for more information regarding Adjusted EBITDA. 
  (6)
    
    Total available horsepower includes horsepower under contract
    that is generating revenue, horsepower under contract that is
    not yet generating revenue, and idle horsepower, but does not
    include compression units included in our work in progress.(7)
    
    Calculated as the average utilization for the months in the
    period based on utilization at the end of each month in the
    period.  Non-GAAP Financial
    Measures
   
   
  
    The financial performance of CDM Operatings assets without
    regard to the impact of financing methods, capital structure or
    historical cost basis of its assets;
 13




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##### Table of Contents




    The ability of CDM Operatings assets to generate cash
    sufficient to make debt payments and to make distributions to
    its partners; and
    CDM Operatings operating performance as compared to those
    of other companies in its industry without regard to the impact
    of financing methods and capital structure.
 14




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##### Table of Contents



CDM Resource Partners,CDM Resource Management Predecessor


L.P. Pro FormaNineMonthsYear Ended


Nine Months


Year Ended


EndedDecember 31,


Ended September 30,


December 31,


September 30,2004


2005


2006


2006


2007


2006


2007(In thousands)Reconciliation of
    Non-GAAP
    Adjusted EBITDA to GAAP Net income
    and Net cash provided by operating activities.Net income

$
3,812


$
6,082


$
8,644


$
5,808


$
4,585


$
10,356


$
7,089Interest expense, net of capitalized interest


3,449



5,090



10,928



7,223



13,458



2,505



6,521Depreciation expense


3,229



4,851



7,311



5,560



8,417



7,845



8,818Income tax expense


















270







270Non-controlling interest






















9,184



6,287Adjusted EBITDA

$
10,490


$
16,023


$
26,883


$
18,591


$
26,730


$
29,890


$
28,985Interest expense, net of capitalized interest


(3,449
)


(5,090
)


(10,928
)


(7,223
)


(13,458
)Income tax expense


















(270
)Other


33



318



220



79



241Changes in operating assets and liabilities:Trade and other accounts receivable


(2,966
)


(2,231
)


(10,773
)


(7,029
)


1,176Inventory


(768
)


(1,033
)


(539
)


(1,233
)


(170
)Other current assets


(738
)


(41
)


103



(522
)


(195
)Accounts payable and other payables


1,369



5,320



(91
)


5,794



527Accrued liabilities


67



1,010



1,144



776



2,428Other, including changes in non-current assets and liabilities


703



1,129



1,889



1,400



2,530Net cash provided by operating activities

$
4,741


$
15,405


$
7,908


$
10,633


$
19,539
 15




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##### Table of Contents



RISK
    FACTORS
  Limited partner interests are inherently different from
    capital stock of a corporation, although many of the business
    risks to which we are subject are similar to those that would be
    faced by a corporation engaged in the natural gas contract
    compression services business. You should consider carefully the
    following risk factors together with all of the other
    information included in this prospectus in evaluating an
    investment in our common units.
  If any of the following risks were to occur, our business,
    financial condition or results of operations could be materially
    adversely affected. In that case, we may be unable to pay the
    minimum quarterly distribution to our unitholders, the trading
    price of our common units could decline and you could lose all
    or part of your investment.
  Risks
    Related to Our Business
  We may
    not have sufficient cash from operations following the
    establishment of cash reserves and payment of fees and expenses,
    including cost reimbursements to our general partner, to enable
    us to pay our minimum quarterly distributions to holders of our
    common units and subordinated units.
    
    the fees it obtains for natural gas contract compression
    services;
    the level of production of, and demand for, natural gas and
    crude oil, particularly the level of production in the locations
    where CDM Operating provides natural gas contract compression
    services;
    its operating costs and expenses;
    prevailing global and regional economic and political
    conditions; and
    the effect of governmental regulations on the conduct of its
    business.    
    the levels of maintenance capital expenditures and expansion
    capital expenditures CDM Operating makes;
    its debt service requirements and other liabilities;
    fluctuations in its working capital needs;
    restrictions contained in its debt instruments;
    the cost of any acquisitions;
    its ability to borrow funds and access capital markets; and
    the amount of cash reserves established.   16




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##### Table of Contents



On a
    pro forma basis we would not have had sufficient cash available
    for distribution to pay the full minimum quarterly distribution
    on all of our units for the twelve months ended
    December 31, 2006 and September 30,
    2007.
 
 
   
  The
    assumptions underlying our estimate of cash available for
    distribution described in Our Cash Distribution Policy and
    Restrictions on Distributions are inherently uncertain and
    subject to significant business, economic, financial, regulatory
    and competitive risks and uncertainties that could cause us to
    be unable to pay our minimum quarterly distributions to holders
    of our common units and subordinated units.
    A
    long-term reduction in the demand for or production of natural
    gas or crude oil in the locations where we operate could
    adversely affect the demand for our services or the prices we
    charge for our services, which could result in a decrease in our
    revenues and cash available for distribution to our
    unitholders.
   17




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##### Table of Contents



We
    have several key customers. The loss of any of these customers
    would result in a decrease in our revenues and cash available
    for distribution to our unitholders.
 
   
  We
    face significant competition that may cause us to lose market
    share and reduce our ability to make distributions to our
    unitholders.
    We may
    be unable to grow our cash flows if we are unable to expand our
    business, which could limit our ability to increase
    distributions to our unitholders.
    
    develop new business and enter into contracts for new service
    with our existing and new customers;
    acquire all or part of the 47.0% interest in CDM Operating owned
    by CDMR Holdings;
    consummate accretive acquisitions; and
    obtain required debt or equity financing for our existing and
    new operations.    We may
    be unable to grow by acquiring the interest in CDM Operating
    owned by CDMR Holdings, which could limit our ability to
    increase our cash available for distribution.
    
    CDMR Holdings may choose not to sell the interest.
    Our conflicts committee may decide not to make an offer for the
    interest. 18




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##### Table of Contents




    Our conflicts committee may be unable to agree on acceptable
    purchase terms with CDMR Holdings.
    We may be unable to obtain financing for the purchase on
    acceptable terms or at all.
    We may be prohibited by the terms of credit facilities or
    indentures or other contracts from purchasing some or all of the
    47.0% interest in CDM Operating, and CDMR Holdings may be
    prohibited by the terms of its credit facilities or indentures
    or other contracts from selling some or all of the 47.0%
    interest in CDM Operating. If we or CDMR Holdings must seek
    waivers of such provisions or refinance debt governed by such
    provisions in order to consummate a sale of the interest, we or
    CDMR Holdings may be unable to do so timely or at all.    We may
    be unable to grow successfully through future acquisitions or to
    manage successfully future growth, and we may not be able to
    effectively integrate the businesses we may acquire, which may
    impact our operations and limit our ability to increase
    distributions to our unitholders.
    We may
    be unable to fully execute our growth strategy if we are unable
    to obtain debt and equity financing or encounter reduced
    availability of compression equipment, which could adversely
    impact the market price of our common units and reduce our cash
    available for distribution to unitholders.
     19




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##### Table of Contents



Our
    ability to manage and grow our business effectively may be
    adversely affected if CDM GP, LLC loses management or
    operational personnel.
      We
    depend on particular suppliers and are vulnerable to product
    shortages and price increases, which could have a negative
    impact on our results of operations.
    Due to
    our lack of asset and geographic diversification, adverse
    developments in our natural gas contract compression services
    business would have a significant impact on our results of
    operations and would reduce our ability to make distributions to
    our unitholders.
    We are
    subject to stringent environmental laws and regulations that may
    expose us to significant costs and liabilities.
   20




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##### Table of Contents



We do
    not insure against all potential losses and could be seriously
    harmed by unexpected liabilities.
    CDM
    Operatings debt levels may limit its and our flexibility
    in obtaining additional financing, pursuing other business
    opportunities and paying distributions.
 
  three-year
 
  
    our ability to obtain additional financing, if necessary, for
    working capital, capital expenditures, acquisitions or other
    purposes may be impaired or such financing may not be available
    on favorable terms; 21




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##### Table of Contents




    CDM Operating will need a substantial portion of its cash flow
    to make payments on its indebtedness, reducing the funds that
    would otherwise be available for operation, future business
    opportunities and distributions to its partners, including us;
    and
    CDM Operatings debt level will make it more vulnerable
    than its competitors with less debt to competitive pressures or
    a downturn in its business or the economy generally.    Restrictions
    in CDM Operatings credit facility may prevent CDM
    Operating from making distributions to us, which will limit our
    ability to make distributions to our unitholders and may limit
    our ability to capitalize on acquisition and other business
    opportunities.
    
    make distributions if any default or event of default occurs;
    incur additional indebtedness or guarantee other indebtedness;
    grant liens or make certain negative pledges;
    make certain loans or investments;
    make any material change to the nature of our business,
    including mergers, consolidations, liquidations and
    dissolutions; or
    enter into a merger, consolidation, sale and leaseback
    transaction or sale of assets.   22




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##### Table of Contents



Increases
    in interest rates could adversely impact our unit price and our
    ability to issue additional equity to make acquisitions, incur
    debt or for other purposes.
    If we fail to develop or maintain an effective system of
    internal controls, we may not be able to report our financial
    results accurately, or prevent fraud, which could have an
    adverse effect on our business and would likely have a negative
    effect on the trading price of our common units.
    Risks
    Inherent in an Investment in Us
  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 fiduciary duties that our general partner
    owes to us, which may permit it to favor its own interests to
    your detriment, and limits the circumstances under which you may
    make a claim relating to conflicts of interest and the remedies
    available to you in that event.
    
    neither our partnership agreement nor any other agreement
    requires CDMR Holdings to pursue a business strategy that favors
    us. Directors and officers of CDMR Holdings have a fiduciary
    duty to make decisions in the best interests of their respective
    owners, which may be contrary to our interests;
    our general partner controls the interpretation and enforcement
    of contractual obligations between us and our affiliates, on the
    one hand, and CDMR Holdings, on the other hand, including
    provisions governing administrative services, acquisitions and
    non-competition provisions;
    if we exercise our right of first offer to purchase all or part
    of CDMR Holdings 47.0% interest in CDM Operating,
    consummation of the purchase will depend on our reaching an
    agreement with CDMR Holdings regarding the terms of the purchase; 23




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##### Table of Contents




    our general partner is allowed to take into account the
    interests of parties other than us, such as CDMR Holdings, in
    resolving conflicts of interest, which has the effect of
    limiting its fiduciary duty to our unitholders;
    the officers of CDMR Holdings who will provide services to us
    will also devote significant time to the business of CDMR
    Holdings and will be compensated for such services;
    our general partner determines the amount and timing of
    expenses, asset purchases and sales, borrowings, repayments of
    indebtedness, issuances of additional partnership securities and
    cash reserves, each of which can affect the amount of cash that
    is available for distribution to our unitholders;
    our general partner determines the amount and timing of any
    capital expenditures and whether a capital expenditure is a
    maintenance capital expenditure, which reduces operating
    surplus, or an expansion capital expenditure, which does not
    reduce operating surplus. This determination can affect the
    amount of cash that is distributed to our unitholders and the
    ability of the subordinated units to convert to common units;
    our general partner may cause us to borrow funds in order to
    permit the payment of cash distributions;
    our general partner determines which costs incurred by it and
    its affiliates are reimbursable by us, and CDMR Holdings will
    determine the allocation of shared overhead expenses;
    our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered to us on terms that are fair and reasonable to us or
    entering into additional contractual arrangements with any of
    these entities on our behalf;
    our general partner intends to limit its liability regarding our
    contractual and other obligations and has an incentive to make
    any of our debt or other contractual obligations nonrecourse to
    it and, in some circumstances, will be indemnified by us;
    our general partner may exercise its limited right to call and
    purchase all of our common units if it and its affiliates own
    more than 80% of our outstanding common units; and
    our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.    Our
    partnership agreement limits our general partners
    fiduciary duties to holders of our units and restricts the
    remedies available to holders of our units for actions taken by
    our general partner that might otherwise constitute breaches of
    fiduciary duty.
    
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. This entitles our general partner to consider
    only the interests and factors that it desires, and it has no
    duty or obligation to give any consideration to any interest of,
    or factors affecting, us, our affiliates or any limited partner.
    Actions of our general partner which are made in its individual
    capacity will be made by CDMR Holdings as the sole member of CDM
    GP, LLC. Examples include the exercise of our general
    partners right to make a determination to receive
    Class B Units in exchange for resetting the target
    distribution levels, the exercise of its limited call right, the
    exercise of its rights to transfer or vote the units it owns,
    the exercise of its registration rights and its determination
    whether or not to consent to any sale, merger or consolidation
    of the partnership or amendment to the partnership agreement;
    provides that our general partner will not have any liability to
    us or our unitholders for decisions made in its capacity as a
    general partner so long as it acted in good faith; 24




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##### Table of Contents




    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the conflicts committee
    of the board of directors of our general partner acting in good
    faith and not involving a vote of unitholders must be on terms
    no less favorable to us than those generally being provided to
    or available from unrelated third parties or must be fair
    and reasonable to us, as determined by our general partner
    in good faith and that, in determining whether a transaction or
    resolution is fair and reasonable, our general
    partner may consider the totality of the relationships between
    the parties involved, including other transactions that may be
    particularly advantageous or beneficial to us;
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud or
    willful misconduct or, in the case of a criminal matter, acted
    with knowledge that the conduct was criminal; and
    provides that in resolving conflicts of interest, it will be
    presumed that in making its decision the general partner or its
    conflicts committee acted in good faith, and in any proceeding
    brought by or on behalf of any limited partner or us, the person
    bringing or prosecuting such proceeding will have the burden of
    overcoming such presumption.    Our
    general partner may elect to cause us to issue Class B
    units to it in connection with a resetting of the target
    distribution levels related to our general partners
    incentive distribution rights without the approval of the
    conflicts committee of our general partner or our unitholders.
    This may result in lower distributions to holders of our common
    units in certain situations.
     25




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##### Table of Contents



Our
    partnership agreement limits our business purpose to providing
    natural gas compression services.
 
 
   
  Holders
    of our common units have limited voting rights and are not
    entitled to elect our general partner or the directors of its
    general partner.
    Even
    if holders of our common units are dissatisfied, they cannot
    initially remove our general partner without its
    consent.
  2 3
  Cost
    reimbursements due to our general partner and its affiliates for
    services that they provide to us, which will be determined by
    our general partner, will be substantial and will reduce our
    cash available for distribution to our
    unitholders.
   26




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##### Table of Contents



Our
    partnership agreement may be amended to modify our cash
    distribution policy, which could have an adverse impact on
    distributions to our unitholders and the trading price of the
    common units.
    We can
    issue an unlimited number of units, including units that are
    senior in right of distributions, liquidation and voting to the
    common units, without the approval of our
    unitholders.
    
    our unitholders proportionate ownership interest in us
    will decrease;
    the amount of cash available for distribution on each unit may
    decrease;
    because a lower percentage of total outstanding units will be
    subordinated units, the risk that a shortfall in the payment of
    the minimum quarterly distribution will be borne by our common
    unitholders will increase;
    the ratio of taxable income to distributions may increase;
    the relative voting strength of each previously outstanding unit
    may be diminished; and
    the market price of the common units may decline.  Control
    of our general partner may be transferred to a third party
    without unitholder consent.
   
  You
    will experience immediate and substantial dilution of
    $10.92 in tangible net book value per common
    unit.
 
 
   
 27




---



##### Table of Contents



Our
    partnership agreement restricts the voting rights of
    unitholders, other than our general partner and its affiliates,
    including CDMR Holdings, owning 20% or more of our common units.
    Accordingly, your voting rights may be limited.
    Affiliates
    of our general partner may sell common units in the public
    markets, which could have an adverse impact on the trading price
    of the common units.
    Our
    general partner has a limited call right that may require you to
    sell your units at an undesirable time or price.
    Your
    liability may not be limited if a court finds that unitholder
    action constitutes control of our business.
    
    a court or government agency determined that we were conducting
    business in a state but had not complied with that particular
    states partnership statute; or
    your right to act with other unitholders to remove or replace
    the general partner, to approve some amendments to our
    partnership agreement or to take other actions under our
    partnership agreement constitute control of our
    business.    Unitholders
    may have liability to repay distributions that were wrongfully
    distributed to them.
  Section 17-607
 28




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##### Table of Contents



There
    is no existing market for our common units, and a trading market
    that will provide you with adequate liquidity may not develop.
    The price of our common units may fluctuate significantly, and
    you could lose all or part of your investment.
      We
    will incur increased costs as a result of being a publicly
    traded partnership. If these costs are higher than we currently
    estimate they could reduce our cash available to make
    distributions to our unitholders.
    After
    December 31, 2008, CDMR Holdings will no longer bear the
    public-company related expenses we incur in excess of
    $1.5 million per year, which could materially reduce our
    cash available for distribution to our
    unitholders.
   29




---



##### Table of Contents



Tax
    Risks to Common Unitholders
  In addition to reading the following risk factors, you should
    read Material Tax Consequences for a more complete
    discussion of the expected material federal income tax
    consequences of owning and disposing of our common units.
  Our
    tax treatment depends on our status as a partnership for federal
    income tax purposes. If the Internal Revenue Service were to
    treat us as a corporation, our cash available for distribution
    to our unitholders would be substantially reduced.
        A
    material amount of additional entity-level taxation by
    individual states would reduce our cash available for
    distribution to you.
    We
    prorate our items of income, gain, loss and deduction between
    transferors and transferees of our units each month based upon
    the ownership of our units on the first day of each month,
    instead of on the date a particular unit is transferred. The IRS
    may challenge this treatment, which could change the allocation
    of items of income, gain, loss and deduction among our
    unitholders.
   30




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##### Table of Contents



A
    unitholder whose units are loaned to a short seller
    to cover a short sale of units may be considered as having
    disposed of those units. If so, he would no longer be treated
    for tax purposes as a partner with respect to those units during
    the period of the loan and may recognize gain or loss from the
    disposition.
    If the
    IRS contests the federal income tax positions we take, the
    market for our common units may be adversely impacted, and the
    cost of any IRS contest will reduce our cash available for
    distribution to our unitholders.
    You
    may be required to pay taxes on your share of our income even if
    you do not receive any cash distributions from us.
    Tax
    gain or loss on disposition of our common units could be more or
    less than expected.
   31




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##### Table of Contents



Tax-exempt
    entities and foreign persons face unique tax issues from owning
    our common units that may result in adverse tax consequences to
    them.
  non-U.S. persons non-U.S. persons non-U.S. persons
  You
    will likely be subject to state and local taxes and tax return
    filing requirements in states in which we conduct operations
    even if you do not live in those states.
    We
    will treat each purchaser of our common units as having the same
    tax benefits without regard to the actual common units
    purchased. The IRS may challenge this treatment, which could
    adversely affect the value of the common units.
    We
    will adopt certain valuation methodologies that may result in a
    shift of income, gain, loss and deduction between the general
    partner and the unitholders. The IRS may challenge this
    treatment, which could adversely affect the value of the common
    units.
   32




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##### Table of Contents



The
    sale or exchange of 50% or more of our capital and profits
    interests during any twelve-month period will result in the
    termination of our partnership for federal income tax
    purposes.
   33




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##### Table of Contents



USE
    OF PROCEEDS
 
   
     34




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##### Table of Contents



CAPITALIZATION
   
  
    the cash and the capitalization of CDM Resource Management
    Predecessor as of September 30, 2007; and 
 
  
    our pro forma cash and capitalization as of September 30,
    2007, as adjusted to reflect this offering, the other
    transactions described under Summary  Formation
    Transactions and Partnership Structure  General
    and the application of the net proceeds from this offering as
    described under Use of Proceeds. 
    
 As of September 30, 2007CDM Resource


CDM ResourceManagement


Partners, L.P.Predecessor


Pro Forma(In thousands)Cash

$
1,444


$
1,294Long-term debt:CDM Operatings credit facility(1)(2)

$
252,988


$
112,833Obligations under capital leases, net of current portion(2)(3)


11,259



Total long-term debt


264,247



112,833Non-controlling interest(4)






114,197Partners equity/owners equity:Partners equity


76,252



Common unitholders






74,690Subordinated unitholder






51,510General partner interest






2,575Total partners equity/owners equity


76,252



128,775Total capitalization

$
340,499


$
355,805  
   
  (1)
    
    We will contribute the net proceeds from this offering of
    approximately $126.7 million to CDM Operating, which will
    use those proceeds to repay indebtedness outstanding under its
    amended credit facility. In addition, at the closing of this
    offering, CDMR Holdings will assume and repay $40.0 million
    of indebtedness outstanding under CDM Operatings amended
    credit facility. 
 
  (2)
    
    After September 30, 2007 but prior to the closing of this
    offering, CDM Operating will borrow approximately
    $26.6 million under its amended credit facility to purchase
    67 compression units that CDM Operating finances under
    capital leases or uses under operating leases, resulting in the
    termination of approximately $13.0 million in capital lease
    obligations. 
 
  (3)
    
    As of September 30, 2007, the current portion of
    obligations under capital leases was approximately
    $1.7 million. 
  (4)
    
    Pro forma non-controlling interest represents CDMR
    Holdings 47.0% interest in CDM Operating.   35




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##### Table of Contents



DILUTION
 
   
  
 Assumed initial public offering price per common unit





$
20.00Net tangible book value per unit before the offering(1)

$
10.68Decrease in net tangible book value per unit attributable to
    purchasers in the offering


(1.60
)Less: Pro forma net tangible book value per unit after the
    offering(2)






9.08Immediate dilution in net tangible book value per common unit to
    new investors(3)





$
10.92  
   
  (1)
    
    Determined by dividing the number of units and general partner
    units (1,050,000 common units, 5,551,724 subordinated units and
    277,586 general partner units) to be issued to CDMR Holdings and
    its affiliates for the contribution of a 53.0% partnership
    interest in CDM Operating to CDM Resource Partners, L.P. into
    the net tangible book value of the contributed interests. 
  (2)
    
    Determined by dividing the total number of units and general
    partner units to be outstanding after the offering (8,050,000
    common units, 5,551,724 subordinated units and 277,586 general
    partner units) into our pro forma net tangible book value. 
  (3)
    
    For each increase or decrease in the initial public offering
    price of $1.00 per common unit, then dilution in net tangible
    book value per common unit would increase or decrease by $0.75
    per common unit. 
    
 Units Acquired


Total ConsiderationNumber


Percent


Amount


PercentGeneral partner and affiliates(1)(2)


6,879,310



49.6
%

$
116,252,000



45.4
%New investors


7,000,000



50.4
%

$
140,000,000



54.6
%Total


13,879,310



100.0
%

$
256,252,000



100.0
%  
    (1)
    
    The common and subordinated units and general partner units
    acquired by our general partner and its affiliates consist of
    1,050,000 common units, 5,551,724 subordinated units and 277,586
    general partner units.(2)
    
    The 53.0% partnership interest in CDM Operating contributed by
    CDMR Holdings and its affiliates was recorded at historical cost
    in accordance with GAAP. 36




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##### Table of Contents



OUR
    CASH DISTRIBUTION POLICY AND RESTRICTIONS ON
    DISTRIBUTIONS
  You should read the following discussion of our cash
    distribution policy in conjunction with the specific assumptions
    included in this section. For more detailed information
    regarding the factors and assumptions upon which our cash
    distribution policy is based, please read
     Assumptions and Considerations below. In
    addition, you should read Forward-Looking Statements
    and Risk Factors for information regarding
    statements that do not relate strictly to historical or current
    facts and certain risks inherent in our business.
  All information in this section refers to CDM Resource
    Management Predecessor and CDM Resource Partners, L.P. For
    additional information regarding our historical and pro forma
    operating results, you should refer to the historical financial
    statements of CDM Resource Management Predecessor and the
    unaudited pro forma financial statements of CDM Resource
    Partners, L.P. included elsewhere in this prospectus. The
    information presented in the following discussion assumes the
    underwriters option to purchase additional common units is
    not exercised.
  General
    Definition of Available Cash.
  
    less the amount of cash reserves established by our general
    partner to:  
    provide for the proper conduct of our business;
    comply with applicable law, any of our debt instruments or other
    agreements; or
    provide funds for distributions to our unitholders and to our
    general partner for any one or more of the next four quarters;  
    plus, if our general partner so determines, all additional cash
    and cash equivalents on hand on the date of determination of
    available cash for the quarter resulting from working capital
    borrowings made after the end of the quarter. Working capital
    borrowings are generally borrowings that are made under a credit
    facility, commercial paper facility or similar financing
    arrangement, and in all cases are used solely for working
    capital purposes or to pay distributions to partners and with
    the intent of the borrower to repay such borrowings within
    12 months.  Limitations on Cash Distributions.
  
    We may lack sufficient cash to pay distributions to our
    unitholders due to a number of factors, including reduced
    distributions by CDM Operating to its partners including us,
    reduced demand for our compression services, loss of a key
    customer, increases in our general and administrative expense,
    principal and interest payments on our outstanding debt, tax
    expenses, working capital requirements and anticipated cash
    needs. Our cash available for distribution to unitholders is
    directly impacted by our cash expenses necessary to run our
    business and will be reduced dollar-for-dollar to the extent
    that such expenses increase. 
  
    CDM Operatings amended credit facility will restrict CDM
    Operatings ability to make distributions to its partners,
    including us, if it is not in compliance with the covenants of
    that facility, including: (i) a compression unit
    utilization covenant of 80% (i.e., idle equipment cannot exceed
    20% of our total 
 37




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##### Table of Contents



available horsepower) and (ii) a fixed charge coverage
    ratio covenant of 1.0 to 1.0. Should CDM Operating be unable to
    satisfy the covenants under its amended credit facility or
    otherwise be in default under the credit facility, CDM Operating
    would be prohibited from making cash distributions to its
    partners, including us, and we in turn could not make
    distributions to our unitholders notwithstanding our stated cash
    distribution policy.  The material covenants of the amended
    credit facility are more fully described under
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources  Our Liquidity and Capital
    Resources  Description of Credit Facility. 
  
    Our general partner will have the authority to establish
    reserves for the prudent conduct of CDM Operatings
    business and for future cash distributions to its partners. The
    establishment of those reserves could result in a reduction in
    cash distributions to our unitholders from the levels currently
    anticipated pursuant to our stated cash distribution policy.
    Any determination by our general partner of the amount of cash
    to be reserved and the amount of cash to be distributed to
    unitholders made in good faith will be binding on all of our
    unitholders. Our partnership agreement provides that in order
    for a determination by our general partner to be made in good
    faith, our general partner must believe that such determination
    is in our best interests.
    Under
    Section 17-607
    of the Delaware Revised Uniform Limited Partnership Act, we may
    not make a distribution to our unitholders if the distribution
    would cause our liabilities to exceed the fair value of our
    assets.  Our Ability to Grow is Dependent on Our Ability to Access
    External Expansion Capital.
  Our Ability to Change Our Cash Distribution
    Policy.
  Our
    Cash Distributions
   38




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##### Table of Contents



DistributionsNumber of


One


FourUnits


Quarter


QuartersPublicly held common units


7,000,000


$
2,100,000


$
8,400,000Common units held by CDMR Holdings


1,050,000



315,000



1,260,000Subordinated units held by CDMR Holdings


5,551,724



1,665,517



6,662,069General partner units held by CDM RP GP, L.P.


277,586



83,276



333,103Total


13,879,310


$
4,163,793


$
16,655,172          
  
    Unaudited Pro Forma Cash Available for Distribution,
    in which we present the amount of cash we would have had
    available for distribution to our unitholders and our general
    partner for the twelve months ended December 31, 2006 and
    September 30, 2007 based on our pro forma financial
    statements; and 
  
    Estimated Cash Available for Distribution, in which
    we present how we calculate the estimated  Adjusted EBITDA
    necessary for us to have sufficient cash available for
    distribution to pay the full minimum quarterly distribution on
    all units for the four-quarter period ending December 31,
    2008. In 39




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##### Table of Contents



Pro
    Forma Cash Available for Distribution for the Twelve Months
    Ended December 31, 2006 and September 30, 2007
 
 
   
   
   
  CDM
    Resource Partners, L.P.
    Unaudited Pro Forma Cash Available for Distribution
  
 Twelve Months EndedDecember 31,


September 30,2006(a)


2007(a)(In thousands,except per unit amounts)Pro forma revenues:Operating revenue

$
61,054


$
83,079Reimbursed installation services revenue


6,636



7,606Total pro forma revenues


67,690



90,685Pro forma costs and expenses:Cost of operations


23,183



33,743Reimbursed installation services expense


6,636



7,606General and administrative expense


8,153



11,564Depreciation expense


7,845



10,702Gain on sale of assets


(64
)


(49
)Total pro forma costs and expenses


45,753



63,566Pro forma operating income


21,937



27,119Pro forma other income (expense):Interest expense, net of capitalized interest(b)


(2,505
)


(8,881
)Interest income


108



209Pro forma total other income (expense)


(2,397
)


(8,672
)Pro forma income before income tax expense and non-controlling
    interest


19,540



18,447Pro forma income tax expense(c)






270Pro forma income before non-controlling interest


19,540



18,177Pro forma non-controlling interest(d)


(9,184
)


(8,543
)Pro forma net income(e)

$
10,356


$
9,634 40




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##### Table of Contents



Twelve Months EndedDecember 31,


September 30,2006(a)


2007(a)(In thousands,except per unit amounts)(continued from prior
    page)Pro forma net income(e)

$
10,356


$
9,634Adjustments to reconcile pro forma net income to pro forma
    Adjusted EBITDA:Add:Depreciation expense


7,845



10,702Interest expense, net of capitalized interest(b)


2,505



8,881Income tax expense(c)






270Non-controlling interest(d)


9,184



8,543Pro forma Adjusted EBITDA(f)

$
29,890


$
38,030Adjustments to reconcile pro forma Adjusted EBITDA to pro forma
    cash available for distribution:Less:Pro forma cash interest expense(g)


2,733



9,309Income tax expense(c)






270Expansion capital expenditures(h)


105,388



125,040Maintenance capital expenditures(i)


1,670



5,536Add:Borrowings to fund expansion capital expenditures


105,388



125,040Pro forma cash available for distribution from CDM
    Operating

$
25,487


$
22,915Less:CDMR Holdings 47.0% interest in CDM Operatings pro
    forma cash available for distribution


11,979



10,770Incremental general and administrative expense associated with
    being a publicly traded partnership(j)


1,500



1,500Pro forma cash available for distribution by CDM Resource
    Partners, L.P.

$
12,008


$
10,645Per unit minimum annual distribution

$
1.20


$
1.20Annual distributions to:Publicly held common units(k)

$
8,400


$
8,400Common units held by CDMR Holdings(k)


1,260



1,260Subordinated units held by CDMR Holdings(k)


6,662



6,662General partner units held by our general partner(k)


333



333Total minimum annual cash distributions(k)

$
16,655


$
16,655Surplus/(Shortfall)(l)

$
(4,647
)

$
(6,010
)  
   
  (a)
    
    Unaudited pro forma cash available for distribution for the year
    ended December 31, 2006 was derived from the unaudited pro
    forma financial statements included elsewhere in this
    prospectus. Unaudited pro forma cash available for distribution
    for the twelve months ended September 30, 2007 was derived
    by combining pro forma amounts for the three months ended
    December 31, 2006 (not included in this prospectus) and the
    nine months ended September 30, 2007 (included in this
    prospectus). 
  (b)
    
    At or prior to the closing of this offering, CDM Operating will
    amend its existing credit facility. The amended credit facility
    will bear interest at a floating rate plus a spread. The
    floating rate, based at our option, will either be prime rate or
    LIBOR, which will fluctuate depending on borrowing availability
    under the amended credit facility as calculated in accordance
    with our borrowing base. The amended credit facility will
    contain covenants limiting CDM Operatings ability to: make
    distributions if any default or event of default occurs; incur
    additional indebtedness; grant liens or make certain negative
    pledges; enter into transactions with affiliates; make a
    disposition of its assets; materially alter the character of its
    business as conducted at the closing of this offering; or engage
    in a merger, consolidate, or dissolve. In addition, the amended
    credit facility will contain (i) a compression unit
    utilization covenant of 80% (i.e., idle equipment cannot exceed
    20% of total available horsepower) and (ii) a fixed charge
    coverage ratio covenant of 1.0 to 1.0. Prior to the closing of
    this offering, we expect to enter into an interest rate hedge
    that effectively will fix our interest rate on $100 million
    of borrowings under this facility. 41




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Historical interest rates ranged from 7.5% to 8.5% for the year
    ended December 31, 2006 and from 8.25% to 8.5% for the nine
    month period ended September 30, 2007. 
 
  (c)
    
    This represents the Texas franchise tax (applicable to income
    apportioned to Texas beginning January 1, 2007) which, in
    accordance with SFAS No. 109, is classified as an income
    tax for reporting purposes. 
  (d)
    
    Pro forma non-controlling interest represents CDMR
    Holdings 47.0% interest in CDM Operating.(e)
    
    Reflects our pro forma net income for the period indicated and
    gives effect to this offering and the related formation
    transactions. 
  (f)
    
    Adjusted EBITDA is defined as our net income plus the 47.0%
    non-controlling interest in CDM Operatings net income plus
    interest expense, income taxes and depreciation expense. Please
    read Selected Historical and Pro Forma Financial and
    Operating Data  Non-GAAP Financial Measures for
    more information regarding Adjusted EBITDA. 
  (g)
    
    Pro forma cash interest expense is derived from the pro forma
    interest expense, net of capitalized interest expense, by taking
    into account the adjustments set out in the table below.  
 Twelve Months EndedDecember 31,


September 30,2006


2007Pro forma interest expense, net of capitalized interest

$
2,505


$
8,881Less: Debt issuance amortization


(199
)


(302
)Plus: Capitalized interest


427



730Pro forma cash interest expense

$
2,733


$
9,309  
  (h)
    
    Reflects actual expansion capital expenditures for the periods
    presented. Expansion capital expenditures are capital
    expenditures made to expand the operating capacity or revenue
    generating capacity of existing or new assets, including by
    acquisition of compression units or through modification of
    existing compression units to increase their capacity.(i)
    
    Reflects actual maintenance capital expenditures for the periods
    presented. Maintenance capital expenditures are capital
    expenditures made to replace partially or fully depreciated
    assets, to maintain the operating capacity of our assets and
    extend their useful lives, or other capital expenditures that
    are incurred in maintaining our existing business and related
    cash flow.(j)
    
    Reflects an adjustment for estimated incremental cash expense
    associated with being a publicly traded partnership, including
    costs associated with annual and quarterly reports to
    unitholders, financial statement audits, tax return and
    Schedule K-1
    preparation and distribution, investor relations activities,
    registrar and transfer agent fees, incremental director and
    officer liability insurance costs and director compensation. The
    unaudited pro forma financial statements do not reflect this
    anticipated incremental general and administrative expense. We
    estimate these incremental general and administrative expenses,
    some of which will be allocated to us by CDMR Holdings,
    associated with being a publicly traded partnership will
    increase our expenses by approximately $3.3 million per
    year; however, until December 31, 2008 CDMR Holdings will
    bear our public company related costs and expenses that exceed
    $1.5 million per fiscal year (prorated for 2007). 42




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##### Table of Contents



(k)
    
    The table below sets forth the assumed number of common units,
    subordinated units and general partner units to be outstanding
    upon the closing of this offering and the estimated aggregate
    distribution amounts payable on our common units, subordinated
    units and general partner units for four quarters at our minimum
    quarterly distribution rate of $0.30 per unit per quarter ($1.20
    per common unit on an annualized basis).  DistributionsNumber of


One


FourUnits


Quarter


QuartersPublicly held common units


7,000,000


$
2,100,000


$
8,400,000Common units held by CDMR Holdings


1,050,000



315,000



1,260,000Subordinated units held by CDMR Holdings


5,551,724



1,665,517



6,662,069General partner units held by CDM RP GP, L.P.


277,586



83,276



333,103Total


13,879,310


$
4,163,793


$
16,655,172  
   (l)
    
    Pro forma cash distributions are based on an assumed
    distribution of $0.30 per unit per quarter. Our pro forma cash
    available for distribution for the twelve months ended
    December 31, 2006 and September 30, 2007 would have
    been sufficient to pay the full minimum quarterly distribution
    on the common units and 31.6% and 11.6%, respectively, of the
    minimum quarterly distribution on the subordinated units during
    these periods. 
  Estimated
    Cash Available for Distribution for the Twelve Months Ending
    December 31, 2008
   
   
   
   
 43




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44




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##### Table of Contents



CDM
    Resource Partners, L.P.,
    Estimated Cash Available for Distribution
  
 Twelve MonthsEndingDecember 31,2008(In thousands, exceptper unit amounts)Revenues:Operating revenue

$
126,392Reimbursed installation services revenue


7,807Total revenues


134,199Costs and expenses:Cost of operations


52,720Reimbursed installation services expense


7,807General and administrative expense


14,962Depreciation expense


15,265Total costs and expenses


90,754Operating income


43,445Other income (expense):Interest expense(a)


(15,991
)Interest income


180Total other income (expenses)


(15,811
)Income before income tax expense and non-controlling interest


27,634Income tax expense(b)


515Income before non-controlling interest


27,119Non-controlling interest(c)


(12,746
)Net income(d)

$
14,373Adjustments to reconcile net income to estimated Adjusted EBITDA:Add:Depreciation expense


15,265Interest expense(a)


15,991Income tax expense(b)


515Non-controlling interest(c)


12,746Estimated Adjusted EBITDA(e)

$
58,890 
 45




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##### Table of Contents



Twelve MonthsEndingDecember 31,2008(In thousands, exceptper unit amounts)(continued from prior page)Estimated Adjusted EBITDA(e)

$
58,890Adjustments to reconcile estimated Adjusted EBITDA to estimated
    cash available for distribution:Less:Cash interest expense(f)


15,665Income tax expense(b)


515Expansion capital expenditures(g)


118,483Maintenance capital expenditures(h)


3,019Add:Borrowings to fund expansion capital expenditures


118,483Estimated cash available for distribution from CDM Operating

$
39,691Less:CDMR Holdings 47.0% interest in CDM Operatings
    estimated cash available for distribution


18,655Incremental general and administrative expense associated with
    being a publicly traded partnership(i)


1,500Estimated cash available for distribution by CDM Resource
    Partners, L.P.

$
19,536Per unit minimum annual distribution

$
1.20Annual distributions to:Publicly held common units(j)

$
8,400Common units held by CDMR Holdings(j)


1,260Subordinated units held by CDMR Holdings(j)


6,662General partner units held by our general partner(j)


333Total minimum annual cash distributions

$
16,655Excess of cash available for distributions over total minimum
    annual distributions

$
2,881  
   
  (a)
    
    At or prior to the closing of this offering, CDM Operating will
    amend its existing credit facility. The amended credit facility
    will bear interest at a floating rate plus a spread. The
    floating rate, based at our option, will either be prime rate or
    LIBOR, which will fluctuate depending on borrowing availability
    under the amended credit facility as calculated in accordance
    with our borrowing base. The amended credit facility will
    contain covenants limiting CDM Operatings ability to: make
    distributions if any default or event of default occurs; incur
    additional indebtedness; grant liens or make certain negative
    pledges; enter into transactions with affiliates; make a
    disposition of its assets; materially alter the character of its
    business as conducted at the closing of this offering; or engage
    in a merger, consolidate, or dissolve. In addition, the amended
    credit facility will contain (i) a compression unit
    utilization covenant of 80% (i.e., idle equipment cannot exceed
    20% of total available horsepower) and (ii) a fixed charge
    coverage ratio covenant of 1.0 to 1.0. Prior to the closing of
    this offering, we expect to enter into an interest rate hedge
    that effectively will fix our interest rate on $100 million
    of borrowings under this facility. For the year ended
    December 31, 2006, historical rates ranged from 7.5% to
    8.5%. For the twelve months ending December 31, 2008, the
    estimated interest rates ranged from 6.9% to 7.4%, based on
    estimated borrowing levels under the amended credit facility. 
 46




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##### Table of Contents



(b)
    
    This represents the Texas franchise tax (applicable to income
    apportioned to Texas beginning January 1, 2007) which, in
    accordance with SFAS No. 109, is classified as an income
    tax for reporting purposes. 
  (c)
    
    Pro forma non-controlling interest represents CDMR
    Holdings 47.0% interest in CDM Operating.(d)
    
    Reflects our pro forma net income for the period indicated and
    gives effect to this offering and the related formation
    transactions. 
  (e)
    
    Adjusted EBITDA is defined as our net income plus the 47.0%
    non-controlling interest in CDM Operatings net income plus
    interest expense, income taxes and depreciation expense. Please
    read Selected Historical and Pro Forma Financial and
    Operating Data  Non-GAAP Financial Measures for
    more information regarding Adjusted EBITDA. 
 
  (f)
    
    Estimated cash interest expense of $15.7 million is
    comprised of estimated interest expense of $16.0 million
    less debt issuance amortization cost of $0.3 million. In
    calculating cash interest expense, we treat interest expense
    that is added to the outstanding loan balance monthly as if it
    were interest expense paid in cash. 
  (g)
    
    Reflects estimated expansion capital expenditures. Expansion
    capital expenditures are capital expenditures made to expand the
    operating capacity or revenue generating capacity of existing or
    new assets, including by acquisition of compression units or
    through modification of existing compression units to increase
    their capacity.(h)
    
    Reflects estimated maintenance capital expenditures. Maintenance
    capital expenditures are capital expenditures made to replace
    partially or fully depreciated assets, to maintain the operating
    capacity of our assets and extend their useful lives, or other
    capital expenditures that are incurred in maintaining our
    existing business and related cash flow.(i)
    
    Reflects an adjustment for estimated incremental cash expense
    associated with being a publicly traded partnership, including
    costs associated with annual and quarterly reports to
    unitholders, financial statement audits, tax return and
    Schedule K-1
    preparation and distribution, investor relations activities,
    registrar and transfer agent fees, incremental director and
    officer liability insurance costs and director compensation. The
    unaudited pro forma financial statements do not reflect this
    anticipated incremental general and administrative expense. We
    estimate these incremental general and administrative expenses
    associated with being a publicly traded partnership will
    increase our expenses by approximately $3.3 million per
    year; however, until December 31, 2008, CDMR Holdings will
    bear our public company related costs and expenses that exceed
    $1.5 million per fiscal year (prorated for 2007).(j)
    
    The table below sets forth the assumed number of common units,
    subordinated units and general partner units to be outstanding
    upon the closing of this offering and the estimated aggregate
    distribution amounts payable on our common units, subordinated
    units and general partner units for four quarters at our minimum
    quarterly distribution rate of $0.30 per unit per quarter
    ($1.20 per common unit on an annualized basis).  DistributionsNumber of


One


FourUnits


Quarter


QuartersPublicly held common units


7,000,000


$
2,100,000


$
8,400,000Common units held by CDMR Holdings


1,050,000



315,000



1,260,000Subordinated units held by CDMR Holdings


5,551,724



1,665,517



6,662,069General partner units held by CDM RP GP, L.P.


277,586



83,276



333,103Total


13,879,310


$
4,163,793


$
16,655,172   Assumptions
    and Considerations
   47




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Operating revenue.
 
 
  
    We estimate that the amount of revenue generating horsepower at
    December 31, 2007 will be approximately 590,290 compared to
    revenue generating horsepower of 531,996 at September 30,
    2007, an increase of 11.0%. We further estimate this amount to
    increase by 6.0%, 6.0%, 7.4% and 7.3% at March 31, 2008,
    June 30, 2008, September 30, 2008 and
    December 31, 2008 as compared to the respective preceding
    quarter end, resulting in estimated revenue generating
    horsepower of approximately 765,000 as of December 31,
    2008. For the quarters ended December 31, 2006,
    March 31, 2007, June 30, 2007 and September 30,
    2007 our pro forma revenue generating horsepower increased 9.7%,
    7.5%, 9.2% and 9.4% as compared to the respective preceding
    quarter end. Our estimated revenue generating horsepower is
    based upon (i) customer commitments representing
    approximately 60% of the 233,004 increase in revenue generating
    horsepower from September 30, 2007 to December 31,
    2008, (ii) customer indications of horsepower needs related
    to their shorter-term field development drilling commitments and
    (iii) general discussions with our customers regarding
    their longer-term planned field development and enhancement
    programs. 
 
  
    For the twelve months ending December 31, 2008, the
    estimated service fee revenue assumes an average monthly revenue
    per operating horsepower of $15.55 compared to $15.12 for the
    twelve months ended September 30, 2007 and operating
    horsepower of 765,000 at December 31, 2008 compared to
    531,996 at September 30, 2007. The increase of our average
    monthly service fee per revenue generating horsepower includes
    the effect of inflation-based adjustments for our existing
    contracts and market-based pricing for new contracts. Our
    average monthly service fee per revenue generating horsepower is
    calculated by averaging the service fee per revenue generating
    horsepower for each of the twelve months in the applicable
    twelve month period. For the quarters ended
    December 31, 2006, March 31, 2007, June 30, 2007
    and September 30, 2007, our pro forma average monthly
    service fee per revenue generating horsepower increased by 1.9%,
    3.4%, 1.5% and 0.1%, compared to the respective preceding
    quarter. Our average monthly service fee per revenue generating
    horsepower is calculated by dividing the cumulative revenue for
    the applicable quarter by the average of the revenue generating
    horsepower in place at the end of each of the three months in
    the quarter, and dividing this amount by three. 
 
  
    Utilizing the estimated average revenue per operating horsepower
    at December 31, 2007, of $15.26, we estimate that approximately
    12.5% (or $15.9 million) of the revenue projected for the
    year ending December 31, 2008 will be attributable to the
    increase in horsepower and approximately 2.2% (or
    $2.8 million) will be attributable to the increase in the
    average revenue per operating horsepower. 
  Reimbursed installation services revenue and
    expense. 99-19,
 
  Cost of Operations.
 
 
  
    We estimate that the average monthly cost of operations per
    revenue generating horsepower will be $6.88 for the twelve
    months ending December 31, 2008 as compared to $6.68 for
    the twelve months ended September 30, 2007. This increase
    is primarily due to our estimates of cost escalations, including
    the effect of inflation. Our average monthly cost of operations
    per revenue generating horsepower is calculated by averaging the
    monthly cost of operations per revenue generating horsepower for
    each of the twelve months in the applicable
    twelve month period. For the quarters ended
    December 31, 2006, March 31, 2007, June 30, 2007
    and September 30, 2007, our average 
 48




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monthly cost of operations per revenue generating horsepower
    increased/(decreased) by (17.6)%, 30.0%, 4.7% and (3.5)%, as
    compared to the respective preceding quarter. The increases in
    average monthly cost of operations per revenue generating
    horsepower resulted primarily from increases in labor costs due
    to the hiring and training of new field technicians as well as
    higher labor rates, and increases in lubrication oil costs. The
    decrease in the quarter ended December 31, 2006 is
    primarily attributable to inventory adjustments arising from
    physical inventory counts at period end. Average monthly cost of
    operations per revenue generating horsepower is calculated by
    dividing the cumulative cost of operations for the applicable
    quarter by the average of the revenue generating horsepower in
    place at the end of each of the three months in the quarter, and
    dividing this amount by three. The percentage increase in
    cumulative cost of operations is not directly linear to the
    percentage increase in horsepower because the horsepower
    increase is calculated based on horsepower at quarter end, while
    cost of operations related to that horsepower is generated
    incrementally as the horsepower is installed over the course of
    the quarter. 
 
  
    At or prior to the closing of this offering, we intend to
    purchase all of our existing horsepower subject to operating and
    capital lease agreements with Caterpillar Financial Services
    Corporation. For the quarters ended December 31, 2006,
    March 31, 2007, June 30, 2007 and September 30,
    2007 our cost of operations included operating lease payments of
    approximately $750,000 per quarter. 
 
  General and administrative expense.
 
 
  Depreciation expense.
 
 
  Cash interest expense.
 
 
  
    The loan balance on CDM Operatings amended credit facility
    was approximately $253.0 million at September 30, 2007
    and is expected to be approximately $150.9 million as of
    December 31, 2007. The $102.1 million decrease in the
    loan balance between September 30, 2007 and
    December 31, 2007 reflects the use of net proceeds from
    this offering of $126.7 million to pay down the loan
    balance, CDMR Holdings assumption and repayment of
    $40.0 million of indebtedness at the closing of this
    offering, additional borrowings under the amended credit
    agreement to finance the purchase of equipment under lease of
    $26.6 million, $32.7 million borrowed to finance
    expansion capital expenditures and an estimated
    $5.3 million of interest added to the loan balance. We
    estimate that the loan balance on CDM Operatings amended
    credit facility will further increase by approximately
    $133.3 million to approximately $284.2 million as of
    December 31, 2008 as a result of an estimated
    $118.5 million borrowed to finance expansion capital
    expenditures and an estimated $14.8 million of interest
    added to 
 49




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the loan balance. Please read our assumption below for
    information regarding the treatment of interest expense payable
    under the facility. 
  
    Interest expense for the twelve months ending December 31,
    2008 is estimated based on an assumed interest rate ranging from
    a low of the prime rate to a high of 25 basis points over the
    prime rate, or alternatively, at our election, a low interest
    rate of 150 basis points over three-month LIBOR and a high
    interest rate of 275 basis points over three-month LIBOR, on the
    estimated $150.9 million loan balance under CDM
    Operatings amended credit facility as of December 31,
    2007, plus the debt projected to be borrowed to finance all of
    our estimated expansion capital expenditures and interest added
    to the loan balance. Under the amended credit facility any
    interest payable will be added to the loan balance, reducing the
    borrowing capacity under the amended credit facility by an
    amount equal to the interest expense. We expect to enter into
    interest rate hedging arrangements covering not less than
    $100 million of borrowings under the amended credit
    facility that will effectively fix our interest rate on that
    portion of indebtedness. The interest expense assumed on the
    initial balance and on debt borrowed to finance our expansion
    capital expenditures is an estimate because we have not entered
    into any swaps with respect to the debt. Interest expense also
    includes amortization of deferred issuance costs of
    $0.2 million, which are being amortized over three years.
    Because the amortization of deferred issuance costs is a
    non-cash expense, it is not included in our cash interest
    expense estimate. 
  
    We assume that we will remain in compliance with the restrictive
    financial covenants in our future debt agreements. 
  Income tax expense.
 
 
  Non-controlling interest.
 
 
  Capital expenditures.
 
 
  
    We estimate expansion capital expenditures will be approximately
    $118.5 million for the twelve months ending
    December 31, 2008, compared to $125.0 million for the
    twelve months ended September 30, 2007 on a pro forma
    basis. The expected decrease is attributable to the fact that no
    increase in work in process is included in the period ending
    December 31, 2008 while an increase in work in process is
    reflected in the period ended September 30, 2007. 
 
  
    We estimate that maintenance capital expenditures will be
    approximately $3.0 million for the twelve months ending
    December 31, 2008 compared to approximately
    $5.5 million for the twelve months ended September 30,
    2007 on a pro forma basis. Our maintenance capital expenditures
    are estimated based on the anticipated overhaul requirements of
    our compression units. Our maintenance capital expenditures for
    the twelve months ending December 31, 2008 are assumed to
    be lower than for the twelve months ended September 30,
    2007 on a pro forma basis, primarily due to a level of
    maintenance capital expenditures incurred in the nine months
    ended September 30, 2007 that we do not expect to occur in
    the twelve months ending December 31, 2008. For example,
    approximately $1.6 million in 
 50




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51




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PROVISIONS
    OF OUR PARTNERSHIP AGREEMENT
    RELATING TO CASH DISTRIBUTIONS
    Distributions
    of Available Cash
  General.
 
  Definition of Available Cash.
 
  
    less the amount of cash reserves established by our general
    partner to:  
    provide for the proper conduct of our business;
    comply with applicable law, any of our debt instruments or other
    agreements; or
    provide funds for distributions to our unitholders and to our
    general partner for any one or more of the next four quarters; 
  
    plus, if our general partner so determines, all additional cash
    and cash equivalents on hand on the date of determination of
    available cash for the quarter resulting from working capital
    borrowings made after the end of the quarter. Working capital
    borrowings are generally borrowings that are made under a credit
    facility, commercial paper facility or similar financing
    arrangement, and in all cases are used solely for working
    capital purposes or to pay distributions to partners and with
    the intent of the borrower to repay such borrowings within
    12 months from sources other than additional working
    capital borrowings. 
  Intent to Distribute the Minimum Quarterly
    Distribution.
  General Partner Interest and Incentive Distribution
    Rights.
   52




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Operating
    Surplus and Capital Surplus
  General.
  Operating Surplus.
  
    an amount equal to $8.3 million; plus
    all of our cash receipts after the closing of this offering,
    excluding cash from (1) borrowings other than working
    capital borrowings, (2) sales of equity and debt
    securities, (3) sales or other dispositions of assets
    outside the ordinary course of business, (4) the
    termination of commodity hedge contracts or interest rate swap
    agreements prior to the termination date specified therein,
    (5) corporate reorganizations or restructurings and
    (6) capital contributions received; plus
    working capital borrowings made after the end of a quarter but
    on or before the date of determination of operating surplus for
    the quarter; less
    all of our operating expenditures after the closing of this
    offering (but not the repayment of borrowings) and maintenance
    capital expenditures; less
    the amount of cash reserves established by our general partner
    to provide funds for future operating expenditures; less
    all working capital borrowings not repaid within twelve months
    after having been incurred or repaid within such twelve-month
    period with the proceeds of additional working capital
    borrowings.    
    repayment of working capital borrowings deducted from operating
    surplus pursuant to the last bullet point of the definition of
    operating surplus above when such repayment actually occurs;
    payments (including prepayments) of principal of and premium on
    indebtedness other than working capital borrowings;
    expansion capital expenditures;
    payment of transaction expenses (including taxes) relating to
    interim capital transactions;
    distributions to our partners; and
    non-pro rata repurchases of units of any class made with the
    proceeds of an interim capital transaction (as defined below).   53




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Capital Surplus.
  
    borrowings other than working capital borrowings;
    sales of our equity and debt securities;
    sales or other dispositions of assets for cash, other than
    inventory, accounts receivable and other current assets sold in
    the ordinary course of business or as part of normal retirement
    or replacement of assets;
    the termination of commodity hedge contracts or interest rate
    swap agreements prior to the termination date specified therein;
    capital contributions received; and
    corporate reorganizations or restructurings.  Characterization of Cash Distributions.
  Subordination
    Period
  General.
 54




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Subordination Period.
  
    distributions of available cash from operating surplus on each
    of the outstanding common units, subordinated units and general
    partner units equaled or exceeded the minimum quarterly
    distributions on the common units, subordinated units and
    general partner units for each of the three consecutive,
    non-overlapping four-quarter periods immediately preceding that
    date;
    the adjusted operating surplus (as defined below)
    generated during each of the three consecutive, non-overlapping
    four-quarter periods immediately preceding that date equaled or
    exceeded the sum of the minimum quarterly distributions on all
    of the outstanding common units, subordinated units and general
    partner units during those periods on a fully diluted
    basis; and
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.  Expiration of the Subordination Period.
  
    the subordination period will end and each subordinated unit
    will immediately convert into one common unit;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    the general partner will have the right to convert its general
    partner interest and its incentive distribution rights, if any,
    into common units or to receive cash in exchange for those
    interests.  Early Conversion of Subordinated Units.
  
    distributions of available cash from operating surplus on each
    of the outstanding common units, subordinated units and general
    partner units equaled or exceeded $1.80 (150% of the annualized
    minimum quarterly distribution on the common units, subordinated
    units and general partner units) for any four-quarter period
    immediately preceding that date;
    the adjusted operating surplus (as defined below)
    generated during any four-quarter period immediately preceding
    that date equaled or exceeded the sum of a distribution of $1.80
    (150% of the annualized minimum quarterly distribution) on all
    of the outstanding common units, subordinated units and general
    partner units on a fully diluted basis; and
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.  Adjusted Operating Surplus.
  
    operating surplus generated with respect to that period
    (excluding any amounts attributable to the items described in
    the first bullet point under  Operating Surplus
    and Capital Surplus  Operating Surplus above);
    plus
    any net reduction in cash reserves for operating expenditures
    with respect to that period not relating to an operating
    expenditure made with respect to that period; plus
    any net decrease in working capital borrowings with respect to
    that period; plus
    any net reduction in cash reserves for operating expenditures
    with respect to that period not relating to an operating
    expenditure made with respect to that period; plus 55




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
    any net increase in cash reserves for operating expenditures
    with respect to that period required by any debt instrument for
    the repayment of principal, interest or premium.    Distributions
    of Available Cash from Operating Surplus During the
    Subordination Period
    
    first, 98% to the common unitholders, pro rata, and 2% to
    the general partner, until we distribute for each outstanding
    common unit an amount equal to the minimum quarterly
    distribution for that quarter;
    second, 98% to the common unitholders, pro rata, and 2%
    to the general partner, until we distribute for each outstanding
    common unit an amount equal to any arrearages in payment of the
    minimum quarterly distribution on the common units for any prior
    quarters during the subordination period;
    third, 98% to the subordinated unitholders, pro rata, and
    2% to the general partner, until we distribute for each
    subordinated unit an amount equal to the minimum quarterly
    distribution for that quarter; and
    thereafter, in the manner described in
     General Partner Interest and Incentive
    Distribution Rights below.    Distributions
    of Available Cash from Operating Surplus After the Subordination
    Period
    
    first, 98% to all unitholders, pro rata, and 2% to the
    general partner, until we distribute for each outstanding unit
    an amount equal to the minimum quarterly distribution for that
    quarter;
    thereafter, in the manner described in
     General Partner Interest and Incentive
    Distribution Rights below.    General
    Partner Interest and Incentive Distribution Rights
     56




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
    we have distributed available cash from operating surplus to the
    common and subordinated unitholders in an amount equal to the
    minimum quarterly distribution; and
    we have distributed available cash from operating surplus on
    outstanding common units in an amount necessary to eliminate any
    cumulative arrearages in payment of the minimum quarterly
    distribution;    
    first, 98% to all unitholders, pro rata, and 2% to the
    general partner, until each unitholder receives a total of
    $0.345 per unit for that quarter (the first target
    distribution);
    second, 85% to all unitholders, pro rata, and 15% to the
    general partner, until each unitholder receives a total of
    $0.375 per unit for that quarter (the second target
    distribution);
    third, 75% to all unitholders, pro rata, and 25% to the
    general partner, until each unitholder receives a total of $0.45
    per unit for that quarter (the third target
    distribution); and
    thereafter, 50% to all unitholders, pro rata, and 50% to
    the general partner.    Percentage
    Allocations of Available Cash from Operating Surplus
    Marginal PercentageTotal Quarterly

Interest in DistributionsDistribution per Unit




GeneralTarget Amount

Unitholders


PartnerMinimum Quarterly Distribution

$0.30


98%



2%First Target Distribution

above $0.30 up to $0.345


98%



2%Second Target Distribution

above $0.345 up to $0.375


85%



15%Third Target Distribution

above $0.375 up to $0.45


75%



25%Thereafter

above $0.45


50%



50%   General
    Partners Right to Reset Incentive Distribution
    Levels
   57




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##### Table of Contents




    first, 98% to all unitholders, pro rata, and 2% to the
    general partner, until each unitholder receives an amount equal
    to 115% of the reset minimum quarter distribution for that
    quarter;
    second, 85% to all unitholders, pro rata, and 15% to the
    general partner, until each unitholder receives an amount per
    unit equal to 125% of the reset minimum quarterly distribution
    for that quarter;
    third, 75% to all unitholders, pro rata, and 25% to the
    general partner, until each unitholder receives an amount per
    unit equal to 150% of the reset minimum quarterly distribution
    for that quarter; and
    thereafter, 50% to all unitholders, pro rata, and 50% to
    the general partner. 58




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##### Table of Contents



Marginal PercentageInterest in Distribution


Quarterly DistributionQuarterly Distribution




General


per Unit Followingper Unit Prior to Reset

Unitholders


Partner


Hypothetical ResetMinimum Quarterly Distribution

$0.30


98
%


2
%

$0.60First Target Distribution

above $0.30 up to $0.345


98
%


2
%

above $0.60 up to $0.69(1)Second Target Distribution

above $0.345 up to $0.375


85
%


15
%

above $0.69 up to $0.75(2)Third Target Distribution

above $0.375 up to $0.45


75
%


25
%

above $0.75 up to $0.90(3)Thereafter

above $0.45


50
%


50
%

above $0.90(3)     (1)
    
    This amount is 115% of the hypothetical reset minimum quarterly
    distribution.(2)
    
    This amount is 125% of the hypothetical reset minimum quarterly
    distribution.(3)
    
    This amount is 150% of the hypothetical reset minimum quarterly
    distribution.    General Partner Cash DistributionsCommon


Prior to ResetQuarterly Distribution

Unitholders Cash





2% Generalper Unit

Distributions


Class B


Partner








TotalPrior to Reset

Prior to Reset


Units


Interest


IDRs


Total


DistributionsMinimum Quarterly Distribution

$0.30

$
4,080,517


$



$
83,276


$



$
83,276


$
4,163,793First Target Distribution

above $0.30 up to $0.345


612,078







12,491







12,491



624,569Second Target Distribution

above $0.345 up to $0.375


408,052







9,601



62,408



72,009



480,061Third Target Distribution

above $0.375 up to $0.45


1,020,129







27,203



312,840



340,043



1,360,172Thereafter

above $0.45


2,040,259







81,610



1,958,649



2,040,259



4,080,518$
8,161,035


$



$
214,181


$
2,333,897


$
2,548,078


$
10,709,113  59




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##### Table of Contents



Common


General Partner Cash DistributionsUnitholders Cash


Following Hypothetical ResetQuarterly Distribution

Distributions





2% Generalper Unit Following

Following


Class B


Partner








TotalHypothetical Reset

Hypothetical Reset


Units


Interest


IDRs


Total


DistributionsMinimum Quarterly Distribution

$0.60

$
8,161,034


$
2,333,896


$
214,182


$



$
2,548,078


$
10,709,112First Target Distribution

above $0.60 up to $0.69






















Second Target Distribution

above $0.69 up to $0.75






















Third Target Distribution

above $0.75 up to $0.90






















Thereafter

above $0.90

$
8,161,034


$
2,333,896


$
214,182


$



$
2,548,078


$
10,709,112     Distributions
    from Capital Surplus
  How Distributions from Capital Surplus Will Be
    Made.
  
    first, 98% to all unitholders, pro rata, and 2% to the
    general partner, until we distribute for each common unit that
    was issued in this offering, an amount of available cash from
    capital surplus equal to the initial public offering price;
    second, 98% to the common unitholders, pro rata, and 2%
    to the general partner, until we distribute for each common
    unit, an amount of available cash from capital surplus equal to
    any unpaid arrearages in payment of the minimum quarterly
    distribution on the common units; and
    thereafter, we will make all distributions of available
    cash from capital surplus as if they were from operating surplus.    Effect of a Distribution from Capital
    Surplus.
 60




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##### Table of Contents



Adjustment
    to the Minimum Quarterly Distribution and Target Distribution
    Levels
    
    the minimum quarterly distribution;
    the target distribution levels;
    the unrecovered initial unit price; and
    the number of common units into which a subordinated unit is
    convertible.      Distributions
    of Cash Upon Liquidation
  General.
   61




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Manner of Adjustments for Gain.
  
    first, to the general partner and the holders of units
    who have negative balances in their capital accounts to the
    extent of and in proportion to those negative balances;
    second, 98% to the common unitholders, pro rata, and 2%
    to the general partner, until the capital account for each
    common unit is equal to the sum of: (1) the unrecovered
    initial unit price; (2) the amount of the minimum quarterly
    distribution for the quarter during which our liquidation
    occurs; and (3) any unpaid arrearages in payment of the
    minimum quarterly distribution;
    third, 98% to the Class B unitholders, pro rata, and
    2% to the general partner, until the capital account for each
    Class B unit is equal to the sum of: (1) the
    unrecovered initial unit price; and (2) the amount for the
    minimum quarterly distribution for the quarter during which our
    liquidation occurs;
    fourth, 98% to the subordinated unitholders, pro rata,
    and 2% to the general partner, until the capital account for
    each subordinated unit is equal to the sum of: (1) the
    unrecovered initial unit price; and (2) the amount of the
    minimum quarterly distribution for the quarter during which our
    liquidation occurs;
    fifth, 98% to all unitholders, pro rata, and 2% to the
    general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    first target distribution per unit over the minimum quarterly
    distribution per unit for each quarter of our existence; less
    (2) the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the minimum
    quarterly distribution per unit that we distributed 98% to the
    unitholders, pro rata, and 2% to the general partner, for each
    quarter of our existence;
    sixth, 85% to all unitholders, pro rata, and 15% to the
    general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    second target distribution per unit over the first target
    distribution per unit for each quarter of our existence; less
    (2) the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the first
    target distribution per unit that we distributed 85% to the
    unitholders, pro rata, and 15% to the general partner for each
    quarter of our existence;
    seventh, 75% to all unitholders, pro rata, and 25% to the
    general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    third target distribution per unit over the second target
    distribution per unit for each quarter of our existence; less
    (2) the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the second
    target distribution per unit that we distributed 75% to the
    unitholders, pro rata, and 25% to the general partner for each
    quarter of our existence; and
    thereafter, 50% to all unitholders, pro rata, and 50% to
    the general partner.      Manner of Adjustments for Losses.
  
    first, 98% to holders of subordinated units in proportion
    to the positive balances in their capital accounts and 2% to the
    general partner, until the capital accounts of the subordinated
    unitholders have been reduced to zero; 62




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
    second, 98% to holders of Class B units in
    proportion to the positive balances in their capital accounts
    and 2% to the general partner, until the capital accounts of the
    Class B unitholders have been reduced to zero;
    third, 98% to the holders of common units in proportion
    to the positive balances in their capital accounts and 2% to the
    general partner, until the capital accounts of the common
    unitholders have been reduced to zero; and
    thereafter, 100% to the general partner.      Adjustments to Capital Accounts.
 63




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##### Table of Contents



SELECTED
    HISTORICAL AND PRO FORMA FINANCIAL AND OPERATING DATA
      
    The historical financial information of CDM Resource Management
    Predecessor as of December 31, 2005 and 2006 and for the
    years ended December 31, 2004, 2005 and 2006 is derived
    from the audited financial statements of CDM Resource Management
    Predecessor, which are included elsewhere in this prospectus;
    The historical financial information of CDM Resource Management
    Predecessor as of December 31, 2002, 2003 and 2004 and for
    the years ended December 31, 2002 and 2003 is derived from
    the audited financial statements of CDM Resource Management
    Predecessor, which are not included in this prospectus; 
  
    The historical financial information of CDM Resource Management
    Predecessor as of September 30, 2007 and for the nine
    months ended September 30, 2006 and September 30, 2007
    is derived from the unaudited financial statements of CDM
    Resource Management Predecessor, which are included elsewhere in
    this prospectus; and 
 
  
    The historical financial information of CDM Resource Management
    Predecessor as of September 30, 2006 is derived from the
    unaudited financial statements of CDM Resource Management
    Predecessor, which are not included in this prospectus. 
 
   
  
    the contribution to us of a 53.0% interest in CDM Operating and
    the retention by CDMR Holdings of the remaining 47.0% interest
    in CDM Operating;
    the issuance by us of 1,050,000 common units and 5,551,724
    subordinated units to CDMR Holdings;
    the issuance by us of a 2.0% general partner interest and all of
    our incentive distribution rights to CDM RP GP, L.P.,
    our general partner; 
  
    the issuance by us of 7,000,000 common units to the public and
    the contribution of the net proceeds therefrom of approximately
    $126.7 million to CDM Operating, which will use those
    proceeds to repay indebtedness outstanding under its amended
    credit facility; 
  
    CDMR Holdings assumption and repayment of
    $40.0 million of indebtedness outstanding under CDM
    Operatings amended credit facility; and 
  
    CDM Operatings purchase at or prior to the closing of this
    offering of 67 compression units with approximately 82,990
    aggregate horsepower that CDM Operating finances under capital
    leases or uses under operating leases, all with a third party,
    for approximately $26.6 million. 
   64




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##### Table of Contents



CDM Resource Partners,L.P. Pro FormaNineCDM Resource Management Predecessor





MonthsNine Months Ended


Year Ended


EndedYear Ended December 31,


September 30,


December 31,


September 30,2002


2003


2004


2005


2006


2006


2007


2006


2007(In thousands, except per unit and operating data)Statement of Operations Data:Revenues:Operating revenue

$
13,912


$
18,290


$
29,687


$
42,056


$
61,054


$
43,356


$
65,381


$
61,054


$
65,381Reimbursed installation services revenue


997



1,488



4,310



5,310



6,636



3,528



4,498



6,636



4,498Total revenues


14,909



19,778



33,997



47,366



67,690



46,884



69,879



67,690



69,879Costs and expenses:Cost of operations


8,648



10,501



14,837



20,676



26,190



19,454



30,015



23,183



27,760Reimbursed installation services expense


997



1,488



4,310



5,310



6,636



3,528



4,498



6,636



4,498General and administrative expense


2,063



3,112



4,422



5,425



8,153



5,437



8,848



8,153
(1)


8,848
(1)Depreciation expense


1,613



1,854



3,229



4,851



7,311



5,560



8,417



7,845



8,818Loss (gain) on sale of assets


18



(5
)










(64
)


(64
)


(49
)


(64
)


(49
)Total costs and expenses


13,339



16,950



26,798



36,262



48,226



33,915



51,729



45,753



49,875Operating income


1,570



2,828



7,199



11,104



19,464



12,969



18,150



21,937



20,004Other income (expense):Interest expense, net of capitalized interest


(1,052
)


(2,179
)


(3,449
)


(5,090
)


(10,928
)


(7,223
)


(13,458
)


(2,505
)


(6,521
)Other income (expense)


(1,320
)


47



62



68



108



62



163



108



163Total other income (expense)


(2,372
)


(2,132
)


(3,387
)


(5,022
)


(10,820
)


(7,161
)


(13,295
)


(2,397
)


(6,358
)Income before income tax expense and
    non-controlling
    interest


(802
)


696



3,812



6,082



8,644



5,808



4,855



19,540



13,646Income tax expense(2)


























270







270Income (loss) before non-controlling interest


(802
)


696



3,812



6,082



8,644



5,808



4,585



19,540



13,376Non-controlling interest(3)






























(9,184
)


(6,287
)Net income (loss)

$
(802
)

$
696


$
3,812


$
6,082


$
8,644


$
5,808


$
4,585


$
10,356


$
7,089Pro forma net income per limited partner unit:Common unit





























$
1.20


$
0.86Subordinated unit





























$
0.09



Balance Sheet Data (at period end):Working capital(4)

$
2,736


$
79


$
171


$
(2,978
)

$
10,009


$
(1,777
)

$
(12,371
)





$
(10,781
)Total assets


35,313



60,494



112,623



159,262



275,779



244,187



372,068







385,634Long-term debt


22,124



38,824



61,952



85,965



185,148



157,437



264,247







112,833Non-controlling interest(3)


































114,197Partners equity/owners equity


9,385



14,325



37,496



58,572



71,780



64,230



76,252







128,775 
 65




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##### Table of Contents



CDM Resource Partners,L.P. Pro FormaNineCDM Resource Management Predecessor





MonthsNine Months Ended


Year Ended


EndedYear Ended December 31,


September 30,


December 31,


September 30,2002


2003


2004


2005


2006


2006


2007


2006


2007(In thousands, except per unit and operating data)Other Financial Data:Adjusted EBITDA(5)

$
1,863


$
4,729


$
10,490


$
16,023


$
26,883


$
18,591


$
26,730


$
29,890


$
28,985Capital expenditures


1,679



17,762



31,178



73,013



107,058



81,057



104,575Cash flows provided by (used in):Operating activities

$
1,926


$
682


$
4,741


$
15,405


$
7,908


$
10,633


$
19,539Investing activities


(1,279
)


(20,101
)


(30,930
)


(75,013
)


(110,938
)


(82,632
)


(96,170
)Financing activities


(274
)


19,937



27,878



55,978



103,727



71,276



76,561Operating Data (at period end)  unauditedTotal available horsepower(6)


103,239



139,437



220,983



293,120



429,777



399,808



540,326Revenue generating horsepower


103,062



139,042



213,744



275,718



414,535



377,725



531,966Revenue generating compression units


114



151



222



309



473



435



612Average horsepower per revenue generating compression unit


904



921



963



892



876



868



869Horsepower utilization:At period end


99.8
%


99.7
%


96.7
%


94.1
%


96.5
%


94.5
%


98.5
%Average for the period(7)


99.1
%


99.5
%


97.6
%


97.2
%


96.6
%


97.3
%


97.7
%  
    (1)
    
    Does not include incremental general and administrative expenses
    we expect to incur as a result of being a publicly traded
    partnership. We expect these expenses to total approximately
    $3.3 million per year; however, CDMR Holdings will bear any
    such expenses that exceed $1.5 million per year through
    December 31, 2008 (prorated for 2007). All of these
    expenses, even those reimbursed to us, will be recorded as our
    expense in our future statements of operations.(2)
    
    This represents the Texas franchise tax (applicable to income
    apportioned to Texas beginning January 1, 2007) which, in
    accordance with SFAS No. 109, is classified as an
    income tax for reporting purposes.(3)
    
    Pro forma non-controlling interest represents CDMR
    Holdings 47.0% limited partner interest in CDM Operating.(4)
    
    Working capital is defined as current assets minus current
    liabilities. 
  (5)
    
    Adjusted EBITDA is defined as our net income plus the 47.0%
    non-controlling interest in CDM Operatings net income plus
    interest expense, income taxes and depreciation expense. Please
    read  Non-GAAP Financial Measures
    for more information regarding Adjusted EBITDA. 
  (6)
    
    Total available horsepower includes horsepower under contract
    that is generating revenue, horsepower under contract that is
    not yet generating revenue, and idle horsepower, but does not
    include compression units included in our work in progress.(7)
    
    Calculated as the average utilization for the months in the
    period based on utilization at the end of each month in the
    period.  Non-GAAP Financial
    Measures
   66




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##### Table of Contents




    The financial performance of CDM Operatings assets without
    regard to the impact of financing methods, capital structure or
    historical cost basis of its assets;
    The ability of CDM Operatings assets to generate cash
    sufficient to make debt payments and to make distributions to
    its partners; and
    CDM Operatings operating performance as compared to those
    of other companies in its industry without regard to the impact
    of financing methods and capital structure.   
   
   67




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##### Table of Contents



CDM ResourcePartners, L.P.Pro FormaNineCDM Resource Management Predecessor





MonthsNine Months Ended


Year Ended


EndedYear Ended December 31,


September 30,


December 31,


September 30,2002


2003


2004


2005


2006


2006


2007


2006


2007(In thousands)Reconciliation of Non-GAAP Adjusted EBITDA to
    GAAP Net income and Net cash provided by
    operating activities.Net income (loss)

$
(802
)

$
696


$
3,812


$
6,082


$
8,644


$
5,808


$
4,585


$
10,356


$
7,089Interest expense, net of capitalized interest


1,052



2,179



3,449



5,090



10,928



7,223



13,458



2,505



6,521Depreciation expense


1,613



1,854



3,229



4,851



7,311



5,560



8,417



7,845



8,818Income tax expense


























270







270Non-controlling interest






























9,184



6,287Adjusted EBITDA

$
1,863


$
4,729


$
10,490


$
16,023


$
26,883


$
18,591


$
26,730


$
29,890


$
28,985Interest expense, net of capitalized interest


(1,052
)


(2,179
)


(3,449
)


(5,090
)


(10,928
)


(7,223
)


(13,458
)Income tax expense


























(270
)Other


1,421



14



33



318



220



79



241Changes in operating assets and liabilities:Trade and other accounts receivable


(14
)


(1,194
)


(2,966
)


(2,231
)


(10,773
)


(7,029
)


1,176Inventory


(51
)


(104
)


(768
)


(1,033
)


(539
)


(1,233
)


(170
)Other current assets


(25
)


(1,687
)


(738
)


(41
)


103



(522
)


(195
)Accounts payable and other payables


(156
)


1,329



1,369



5,320



(91
)


5,794



527Accrued liabilities


79



(98
)


67



1,010



1,144



776



2,428Other, including changes in non-current assets and liabilities


(139
)


(128
)


703



1,129



1,889



1,400



2,530Net cash provided by operating activities

$
1,926


$
682



4,741


$
15,405


$
7,908


$
10,633


$
19,539  
 68




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  You should read the following discussion of our historical
    financial condition and results of operations in conjunction
    with the audited and unaudited financial statements and related
    notes for CDM Resource Management Predecessor (described below)
    and the unaudited pro forma financial statements and related
    notes for CDM Resource Partners, L.P. included elsewhere in this
    prospectus. Among other things, those financial statements
    include more detailed information regarding the basis of
    presentation for the following information.
  Overview
       
   
 69




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##### Table of Contents



Items You
    Should Consider When Evaluating The Historical Financial
    Performance of CDM Resource Management Predecessor and Assessing
    Our Future Prospects
    
    We will not own 100% of CDM Operating following this
    offering.  The following discussion analyzes the
    historical financial condition and results of operations of CDM
    Resource Management Predecessor, the predecessor to CDM
    Operating, in its entirety. Following the close of this
    offering, we will control CDM Operating through our ownership of
    its general partner and we will own a 53.0% limited partnership
    interest in CDM Operating. Our pro forma financial statements
    consolidate, and our financial statements after the closing of
    this offering will consolidate, all of CDM Operatings
    financial results with ours in accordance with GAAP and will
    reflect CDMR Holdings 47.0% limited partner interest in
    CDM Operating as a non-controlling interest.
    Our cash flow will depend on distributions we receive from
    CDM Operating.  CDM Operatings partnership
    agreement requires it to distribute to its partners all of its
    available cash each quarter. In determining the amount of cash
    available for distribution, the board of directors of our
    general partner must approve the amount of cash reserves to be
    set aside by CDM Operating, including reserves for future
    maintenance capital expenditures, working capital and other
    matters. Our 53.0% partnership interest in CDM Operating will
    represent our primary cash generating asset and source of cash
    flow.
    We will incur additional general and administrative
    expenses.  Prior to the closing of this offering,
    we, CDMR Holdings and other affiliates will enter into an
    omnibus agreement pursuant to which CDMR Holdings will agree to
    provide us all operational staff, corporate staff and support
    services reasonably necessary to run our business as conducted
    by CDM Operating. We will reimburse our general partner for all
    expenses it incurs on our behalf, including management
    compensation and expenses relating to its board of directors,
    including compensation, travel, and liability insurance costs.
    In addition, we will incur expenses as a result of being a
    publicly traded partnership, including costs associated with SEC
    filings, expenditures required for complying with the
    Sarbanes-Oxley Act of 2002, investor relations, NYSE annual
    listing fees and tax compliance expenses. We estimate these
    incremental general and administrative expenses associated with
    being a publicly traded partnership will increase our expenses
    by approximately $3.3 million per year; however, until
    December 31, 2008, CDMR Holdings will bear our
    public-company related costs and expenses that exceed
    $1.5 million per fiscal year (prorated for 2007). Please
    read the unaudited pro forma financial statements and related
    notes of CDM Resource Partners L.P. included elsewhere in this
    prospectus for further details regarding the estimated impact of
    these additional expenses. These expenses are not included in
    the unaudited pro forma financial statements. We may also grant
    equity compensation that would result in an increase in our
    operating expenses, although we currently do not have an
    estimate of that possible expense. Please read Management
    of CDM Resource Partners, L.P.  Long-Term Incentive
    Plan.
    Accounting Terminology and Principles.  Our
    discussion and analysis uses the following accounting
    terminology and principles:  
    Operating revenue.  Operating revenue consists
    of gross revenue derived from the provision of turn-key natural
    gas contract compression services.
    Reimbursed installation services revenue and
    expense.  Reimbursed installation services revenue
    represents costs incurred by CDM Operating primarily during
    installation of a compression unit, which are reimbursed by our
    customers. These amounts are reflected both as a revenue and as
    an 70




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##### Table of Contents



expense in accordance with Emerging Issues Task Force (EITF)
    99-19,
    Reporting Revenue Gross as a Principal versus Net as an
    Agent.  
    Cost of operations.  Cost of operations
    consists of direct non-capitalized costs associated with the
    repair and maintenance of compression units, direct and indirect
    personnel related costs including salaries and benefits and
    other costs to support operational activities.
    General and administrative expense.  General
    and administrative (G&A) expense consists of
    centralized support functions such as accounting, payroll,
    treasury, insurance administration and risk management,
    marketing, sales, human resources, legal, information technology
    and other services.
    Depreciation expense.  Depreciation expense
    represents depreciation taken on the capitalized cost of asset
    additions beginning in the month the asset is placed in service.
    Depreciation is calculated on the straight-line method with
    various lives including 10 to
    30-year
    lives for compression units.  Factors
    that Impact Our Business
    Customers
        Demand
    for Natural Gas
    Supply
    of Natural Gas
   71




---



##### Table of Contents



How
    We Evaluate Our Operations
    Revenue Generating Horsepower.
  Horsepower Utilization.
 
  Cost of Operations.
 
 
  Adjusted EBITDA.
 
  
    The financial performance of CDM Operatings assets without
    regard to the impact of financing methods, capital structure or
    historical cost basis of its assets;
    The ability of CDM Operatings assets to generate cash
    sufficient to make debt payments and to make distributions to
    its partners; and
    CDM Operatings operating performance as compared to those
    of other companies in its industry without regard to the impact
    of financing methods and capital structure.     72




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##### Table of Contents



Industry
    Trends
      Operating
    Highlights
    
 Nine Months EndedOperating Data (at Period End

Year Ended December 31,


Percent Change


September 30,


PercentUnless Otherwise Stated):

2004


2005


2006


2005


2006


2006


2007


Change(In thousands)Total available horsepower(1)


220,983



293,120



429,777



32.6
%


46.6
%


399,808



540,326



35.1
%Revenue generating horsepower


213,744



275,718



414,535



29.0
%


50.3
%


377,725



531,996



40.8
%Revenue generating compression units


222



309



473



39.2
%


53.1
%


435



612



40.7
%Average horsepower per revenue generating compression unit


963



892



876



(7.4
)%


(1.8
)%


868



869



0.1
%Horsepower utilization:At period end


96.7
%


94.1
%


96.5
%


(2.6
)%


2.4
%


94.5
%


98.5
%


4.0
%Average for the period(2)


97.6
%


97.2
%


96.6
%


(0.4
)%


(0.6
)%


97.3
%


97.7
%


0.4
%Work in progress(3)

$
5,359


$
7,037


$
19,894



31.3
%


182.7
%

$
23,787


$
43,765



84.0
%Adjusted EBITDA(4)

$
10,490


$
16,023


$
26,883



52.7
%


67.8
%

$
18,591


$
26,730



43.8
%  
 73




---



##### Table of Contents



(1)
    
    Total available horsepower includes horsepower under contract
    that is generating revenue, horsepower under contract that is
    not yet generating revenue, and idle horsepower, but does not
    include compression units included in our work in progress.(2)
    
    Calculated as the average utilization for the months in the
    period based on utilization at the end of each month in the
    period. 
  (3)
    
    Work in progress consists of component costs, such as compressor
    engines, coolers and frames, and other related costs, such as
    packaging costs and trucking and crane costs for delivery of
    components to the packager. Work in progress also includes newly
    assembled compression units that are awaiting installation. At
    September 30, 2007, there were approximately
    86 compression units in work in progress in various stages
    of completion with an average horsepower per unit of 891. 
 
  (4)
    
    Adjusted EBITDA is defined as our net income plus the 47.0%
    non-controlling interest in CDM Operatings net income plus
    interest expense, income taxes and depreciation expense. Please
    read Selected Historical and Pro Forma Financial and
    Operating Data  Non-GAAP Financial Measures for
    a reconciliation of Adjusted EBITDA to its most directly
    comparable financial measure calculated and presented in
    accordance with GAAP. 
   74




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##### Table of Contents



Financial
    Results of Operations
 
  Nine
    months ended September 30, 2007 compared to the nine months
    ended September 30, 2006
 
    
 Nine Months EndedSeptember 30,


Percent2006


2007


Change(In thousands)Revenue:Operating revenue

$
43,356


$
65,381



50.8
%Reimbursed installation services revenue


3,528



4,498



27.5
%Total revenue


46,884



69,879



49.0
%Costs and expenses:Cost of operations


19,454



30,015



54.3
%Reimbursed installation services expense


3,528



4,498



27.5
%General and administrative expense


5,437



8,848



62.7
%Depreciation expense


5,560



8,417



51.4
%Gain on sale of assets


(64
)


(49
)


23.4
%Total costs and expenses


33,915



51,729



52.5
%Operating income


12,969



18,150



39.9
%Other income (expense):Interest expense, net of capitalized interest


(7,223
)


(13,458
)


86.3
%Interest income


62



163



162.9
%Total other income (expense)


(7,161
)


(13,295
)


85.7
%Income tax expense






270



N/ANet income

$
5,808


$
4,585



(21.1
)%  
 
  Operating revenue.
 
 
  Reimbursed installation services revenue and
    expense.
 
 
  Cost of operations.
 
 75




---



##### Table of Contents



General and administrative expense.
 
 
  Depreciation expense.
 
 
  Interest expense, net of capitalized
    interest.
 
 
  Income tax expense.
 
 76




---



##### Table of Contents



Year
    ended December 31, 2006 compared to the year ended
    December 31, 2005
    
 Year EndedDecember 31,


Percent2005


2006


Change(In thousands)Revenue:Operating revenue

$
42,056


$
61,054



45.2
%Reimbursed installation services revenue


5,310



6,636



25.0
%Total revenues


47,366



67,690



42.9
%Costs and expenses:Cost of operations


20,676



26,190



26.7
%Reimbursed installation services expense


5,310



6,636



25.0
%General and administrative expense


5,425



8,153



50.3
%Depreciation expense


4,851



7,311



50.7
%Gain on sale of assets






(64
)


N/ATotal costs and expenses


36,262



48,226



33.0
%Operating income


11,104



19,464



75.3
%Other income (expense):Interest expense, net of capitalized interest


(5,090
)


(10,928
)


114.7
%Interest income


68



108



58.8
%Total other income (expense)


(5,022
)


(10,820
)


115.5
%Net income

$
6,082


$
8,644



42.1
%  
  Operating revenue.
  Reimbursed installation services revenue and
    expense.
  Cost of operations.
 77




---



##### Table of Contents



General and administrative expense.
  Depreciation expense.
  Gain on sale of assets.
  Interest expense, net of capitalized
    interest.
  Year
    ended December 31, 2005 compared to the year ended
    December 31, 2004
    
 Year EndedDecember 31,


Percent2004


2005


Change(In thousands)Revenue:Operating revenue

$
29,687


$
42,056



41.7
%Reimbursed installation services revenue


4,310



5,310



23.2
%Total revenues


33,997



47,366



39.3
%Costs and expenses:Cost of operations


14,837



20,676



39.4
%Reimbursed installation services expense


4,310



5,310



23.2
%General and administrative expense


4,422



5,425



22.7
%Depreciation expense


3,229



4,851



50.2
%Total costs and expenses


26,798



36,262



35.3
%Operating income


7,199



11,104



54.2
%Other income (expense):Interest expense, net of capitalized interest


(3,449
)


(5,090
)


47.6
%Interest income


62



68



9.7
%Total other income (expense)


(3,387
)


(5,022
)


48.3
%Net income

$
3,812


$
6,082



59.5
%  
 78




---



##### Table of Contents



Operating revenue.
  Reimbursed installation services revenue and
    expense.
  Cost of operations.
  General and administrative expense.
  Depreciation expense.
  Interest expense, net of capitalized
    interest.
  Effects
    of Inflation
   79




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##### Table of Contents



Liquidity
    and Capital Resources
  CDM
    Resource Management Predecessors Liquidity and Capital
    Resources
 
   
    
 Year Ended


Nine Months EndedDecember 31,


September 30,2005


2006


2006


2007(In thousands)Net cash provided by operating activities

$
15,405


$
7,908


$
10,633


$
19,539Net cash used in investing activities


(75,013
)


(110,938
)


(82,632
)


(96,170
)Net cash provided by financing activities


55,978



103,727



71,276



76,561  
 
  Net cash provided by operating activities.
 
   
  Net cash used in investing activities.
 
   
  Net cash provided by financing activities.
 
 80




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Our
    Liquidity and Capital Resources
 
  Liquidity.
 
 
   
      Capital Requirements.
  
    maintenance capital expenditures, which are capital expenditures
    made to replace partially or fully depreciated assets, to
    maintain the operating capacity of our assets and extend their
    useful lives, or other capital expenditures that are incurred in
    maintaining our existing business and related cash flow, and
    expansion capital expenditures, which are capital expenditures
    made to expand the operating capacity or revenue generating
    capacity of existing or new assets, including by acquisition of
    compression units or through modification of existing
    compression units to increase their capacity.   81




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Our Ability to Grow Depends on Our Ability to Access External
    Expansion Capital.
  Description of Credit Facility.
 
   
       82




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
    grant liens;
    incur additional indebtedness;
    engage in a merger, consolidation or dissolution;
    enter into transactions with affiliates;
    sell or otherwise dispose of our assets, businesses and
    operations;
    materially alter the character of its business as conducted at
    the closing of this offering; and
    make acquisitions, investments and capital expenditures.    
    failure to pay any principal, fees or interest when due;
    failure to perform or otherwise comply with the covenants in the
    credit agreement;
    failure of any representation or warranty to be true and correct
    at the time made in any material respect;
    failure to pay debt;
    a change of control; and
    other customary defaults, including specified bankruptcy or
    insolvency events, the Employee Retirement Income Security Act
    of 1974, or ERISA, violations, and judgment defaults.     83




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Total Contractual Cash Obligations.
  More ThanLess Than 1








5 YearsYear


2-3 Years


4-5 Years


(BeyondTotal


(2007)


(2008 and 2009)


(2010 and 2011)


2011)(In thousands)Long-term debt(1)

$
172,717


$



$
172,717


$



$
Estimated interest on debt obligations(2)


18,287



6,096



12,191







Capital lease obligations


17,490



2,534



5,068



5,068



4,820Operating lease obligations


14,139



3,832



7,222



3,068



17Equipment/capital purchases(3)


66,168



51,364



14,804







Total contractual cash obligations(4)

$
288,801


$
63,826


$
212,002


$
8,136


$
4,837     (1)
    
    Represents future principal repayments under CDM
    Operatings amended credit facility.(2)
    
    Represents future interest repayments under CDM Operatings
    amended credit facility based on the interest rate at
    December 31, 2006 of 8.5%.(3)
    
    Represents forward commitments for engines and compressor
    frames. The total contractual cash commitment at
    December 31, 2006 for these purchase commitments was
    $33.7 million if cancellation rights had been exercised as
    of such date. 
  (4)
    
    We will contribute the net proceeds from this offering of
    approximately $126.7 million to CDM Operating, which will
    use those proceeds to repay indebtedness outstanding under its
    amended credit facility. In addition, at the closing of this
    offering, CDMR Holdings will assume and repay $40.0 million
    of indebtedness outstanding under CDM Operatings amended
    credit facility and at or prior to the closing approximately
    $26.6 million will be funded under CDM Operatings
    amended credit facility to purchase compression units previously
    under operating and capital leases. See
    Capitalization. 
 
   
    Critical
    Accounting Policies and Estimates
   84




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Depreciation
 
   
  Business
    Combinations and Goodwill
   
   
  Long-Lived
    Assets
    Allowances
    and Reserves
   85




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Revenue
    Recognition
      Recent
    Accounting Pronouncements
 
   
 
   
 
   
   86




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Quantitative
    and Qualitative Disclosures About Market Risk
  Variable
    Rate Debt
 
   
    Off
    Balance Sheet Arrangements
    Other
 
   
 87




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NATURAL
    GAS COMPRESSION INDUSTRY
      on-site
      
    the ability to more efficiently meet their changing compression
    needs over time while limiting their capital investments in
    compression equipment;
    access to the compression services providers specialized
    personnel and technical skills, including engineers and field
    service and maintenance employees, which generally leads to
    improved production rates;
    the ability to increase their cash flow by transporting or
    producing a higher volume of natural gas through decreased
    compression downtime and reduced operating, maintenance and
    equipment costs by allowing the compression service provider to
    efficiently manage their changing compression needs; and 88




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
    the flexibility to deploy their capital on projects more
    directly related to their primary business by reducing their
    compression equipment and maintenance capital requirements.    
    according to the Energy Information Administrations most
    recent Annual Energy Outlook, natural gas consumption in the
    United States will increase from 22.7 Tcf in 2007 to 24.6 Tcf in
    2012, representing an 8.3% increase during this period and an
    average annual increase of approximately 1.7%;
    the aging of producing natural gas fields and natural gas lift
    crude oil fields in the United States will require more
    compression to continue producing the same volume of natural gas
    and crude oil;
    natural gas production from sources such as longer-lived tight
    sands, shales, and coalbeds is expected to continue to increase,
    according to the Energy Information Administration, and
    production from these sources requires significantly more
    compression than generally required for traditional sources of
    natural gas production; and
    natural gas producers, transporters and processors continue to
    outsource their natural gas compression requirements. 89




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BUSINESS
  Overview
   
   
 
   
 
   
 90




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Business
    Strategies
    
    Continue to maximize our customers cash
    flow.  Our primary strategy is to maintain and
    grow our business by increasing our customers cash flow by
    optimizing their production and throughput of natural gas and
    crude oil by providing compression and other throughput
    solutions along with superior service. We do this by
    (i) guaranteeing and achieving 98% mechanical availability
    of our natural gas contract compression equipment for land
    installations and 96% mechanical availability for over-water
    installations, (ii) designing compressor packages specific
    to the needs of our customers, and (iii) monitoring our
    customers throughput over time and modifying our
    compression services and recommending other changes, such as the
    design and configuration of their infrastructure, to maximize
    their production.
    Continue to deliver strong organic growth.  We
    believe that organic growth is generally the most cost effective
    growth method for us. We seek to achieve organic growth by
    increasing our business with existing customers, obtaining new
    customers in our existing areas of operations and expanding our
    operations into new geographic areas. We manage our growth in a
    disciplined manner by focusing on geographic areas where we can
    achieve economies of scale through high density operations and
    on customers with whom we can build valuable long-term
    relationships. We will expand into new operating areas if we can
    obtain a significant horsepower commitment and can identify
    compression service needs in the area that provide opportunity
    for future growth of our business. CDM Operating has
    successfully used this disciplined approach over the last ten
    years to expand its natural gas contract compression services
    operations into many of the producing basins and fields in Texas
    and Louisiana, and most recently, Arkansas. We believe there are
    numerous potential new customers in our existing areas of
    operation that can benefit from our services and expertise and
    that there are geographic areas in which we do not currently
    operate that offer significant opportunities for our future
    expansion.
    Continue to manage our operating costs and
    expenses.  We intend to continue to adhere to our
    operating philosophy and decentralized organizational structure,
    which we believe empower our field-level operating personnel to
    maximize our effectiveness in serving our customers and to
    minimize our operating costs. Our operating philosophy, grounded
    in our standardized fleet, and our field-level operating
    structure, founded on unit level accountability, allow us to
    deliver our contracted mechanical availability while managing
    costs effectively.
    Take advantage of selective acquisition
    opportunities.  While our principal growth
    strategy will continue to be organic growth through CDM
    Operating, we may, individually or through CDM Operating, pursue
    selective acquisition opportunities. These acquisitions may
    involve the purchase of compression units from existing or new
    customers in conjunction with our providing their natural gas
    contract compression services, or the acquisition of a competing
    business. We believe that recent consolidation in the industry
    among certain of our competitors provides us with an opportunity
    to increase our customer base while these competitors devote
    resources to integrating their operations, and may provide us
    with opportunities to acquire businesses that are complementary
    to ours. We will consider acquisitions, whether of customer
    owned compression units or a competing business, that
    (i) are compatible with our operating philosophy and
    long-term business objectives, (ii) represent opportunities
    in existing geographic areas of operations or new geographic
    areas identified to represent high growth potential,
    (iii) meet certain economic thresholds and (iv) for
    which financing is available.   91




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Competitive
    Strengths
   
  
    Experienced management team with proven ability to deliver
    strong organic growth.  Our management team
    includes senior officers of CDMR Holdings, including the
    founders of CDM Operating who each have over 25 years of
    experience in the natural gas contract compression services or
    energy industries. This management team has successfully grown
    CDM Operatings in-service fleet from 103,062 revenue
    generating horsepower at December 31, 2002 to
    531,996 revenue generating horsepower
    at September 30, 2007. This organic growth was created
    as a result of our managements commitment to maximize
    customer cash flows by delivering outstanding mechanical
    availability, turn-key customer solutions and superior service. 
 
  
    Modern and efficient compressor fleet.  Our
    highly standardized compressor fleet provides us with
    significant operational efficiencies and flexibility.
    Approximately 70% of our total available horsepower at
    September 30, 2007 was purchased new since
    December 31, 2003. We believe the young age and overall
    composition of our compressor fleet results in fewer mechanical
    failures, lower fuel usage (a direct cost savings for our
    customers), and reduced environmental emissions. In addition, in
    developing and maintaining our standardized fleet, we have
    acquired increased technical proficiency in predictive and
    preventive maintenance and overhaul operations on our equipment,
    which helps us to achieve our mechanical availability
    commitments. 
  
    Large horsepower installations with long-term commitments.  The large horsepower applications on which we
    focus generally result in long-term installations with our
    customers, which we believe improves the stability of our cash
    flows. Our contracts generally have initial terms ranging from
    one to five years. 
  
    Stable and growing fee-based cash flows.  We
    charge our customers either a fixed monthly fee for our natural
    gas contract compression services, regardless of the volume of
    natural gas we compress in that month, or a fee based on the
    volume of natural gas compressed per month. Approximately 66%
    and 80% of our revenues for the year ended December 31,
    2006 and the nine months ended September 30, 2007,
    respectively, were generated under fixed fee contracts and the
    balance was generated under throughput contracts. We believe the
    longer-term nature of our contracts combined with a high level
    of fixed fee contracts reduce volatility and enhance our ability
    to generate relatively stable, predictable cash flow. 
  
    Long-standing customer relationships.  CDMR
    Holdings has developed long-standing customer relationships by
    delivering outstanding mechanical availability, customer
    solutions and superior service, and by effectively adapting to
    our customers continually changing field compression
    needs. Substantially all of CDM Operatings customers that
    have contracted for services since its formation in 1997 remain
    active customers today. These relationships provide a strong
    platform for continued organic growth as we respond to our
    customers increasing and dynamic natural gas compression
    needs.    Our
    Relationship with CDMR Holdings
   92




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Our
    Operations
  Contract
    Compression Services
   93




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Our
    Compressor Fleet
 
   
 
   
  
    94




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Total Revenue


Percentage ofGenerating


Revenue Generating


Number ofHorsepower Range

Horsepower


Horsepower


Units0 - 499


37,877



7.1
%


230500 - 999


59,769



11.2
%


961,000 and over


434,350



81.7
%


286Total(1)


531,996



100.0
%


612  
 
  (1)
    Includes compression units that CDM Operating finances under
    capital leases or uses under operating leases, all of which CDM
    Operating intends to purchase at or prior to the closing of this
    offering.    
 Year Ended


Nine MonthsDecember 31, 2006


Ended2002


2003


2004


2005


2006


September 30, 2007Average horsepower per revenue generating compression unit


904



921



963



892



876



869Horsepower utilization:At period end


99.8
%


99.7
%


96.7
%


94.1
%


96.5
%


98.5
%Average for the period


99.1
%


99.5
%


97.6
%


97.2
%


96.6
%


97.7
%  
    on-site
     95




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##### Table of Contents



General
    Contract Compression Contract Terms
    Term and Termination.
  Mechanical Availability. force
    majeure
  Fees and Expenses. force
    majeure
 96




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Service Standards and Specifications.
  Title; Risk of Loss.
  Insurance.
  Marketing
    and Sales
    Customers
 
   
  Suppliers
    and Service Providers
    Competition
   97




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Seasonality
    Insurance
    Environmental
    and Safety Regulations
      Air Emissions.
 98




---



##### Table of Contents



and/or Massachusetts v. EPA Massachusetts
  Water Discharge.
  Solid Waste.
 99




---



##### Table of Contents



Site Remediation.
    Safety and Health.
  Properties
    Employees
 
   
  Legal
    Proceedings
   100




---



##### Table of Contents



MANAGEMENT
    OF CDM RESOURCE PARTNERS, L.P.
   
   
 
   
 
   
     101




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##### Table of Contents



Directors
    and Executive Officers
    
 Name

Age

Position with CDM GP, LLCRandall H. Dean

52

President and Chief Executive Officer and DirectorRichard W. Fairchild, Jr.

64

Chief Financial Officer and DirectorRandy J. Craft

51

Chief Operating OfficerDavid G. Marrs

54

Executive Vice President and DirectorPierre F. Lapeyre, Jr.

45

DirectorGregory A. Beard

36

DirectorLeigh Ann Ryan

33

DirectorWilliam H. Shea, Jr.

53

Director Nominee  
    Randall H. Dean
  Richard W. Fairchild, Jr.
  Randy J. Craft
  David G. Marrs
  Pierre F. Lapeyre, Jr.
 102




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##### Table of Contents



Gregory A. Beard
  Leigh Ann Ryan
 
  William H. Shea, Jr.
 
  Reimbursement
    of Expenses of Our General Partner
   103




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##### Table of Contents



Executive
    Compensation and Employment Matters
 
   
   
 
   
    Compensation Discussion and Analysis
     104




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##### Table of Contents



Compensation
    of Directors
    Long-Term
    Incentive Plan
 
  General.
 
  Unit Awards.
  Restricted Units and Phantom Units.
 105




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##### Table of Contents



Unit Options and UARs.
    Other Unit-based Awards.
  Termination of Long-Term Incentive Plan.
 106




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##### Table of Contents



SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
    each person who then will beneficially own 5% or more of the
    then outstanding units;
    all of the directors and director nominees of CDM GP, LLC;
    each executive officer of CDM GP, LLC; and
    all directors and officers of CDM GP, LLC as a group.  
 Percentage ofPercentage of





Percentage of


Common andCommon


Common


Subordinated


Subordinated


SubordinatedUnits to be


Units to be


Units to be


Units to be


Units to beBeneficially


Beneficially


Beneficially


Beneficially


BeneficiallyName of Beneficial Owner(1)

Owned


Owned


Owned


Owned


OwnedCDMR Holdings, LLC(2)


1,050,000



13.0
%


5,551,724



100.0
%


48.5
%Randall H. Dean(2)







%







%



%Richard W. Fairchild, Jr.







%







%



%Randy J. Craft(2)







%







%



%David G. Marrs(2)







%







%



%Pierre F. Lapeyre, Jr.(2)







%







%



%Gregory A. Beard(2)







%







%



%Leigh Ann Ryan(2)







%







%



%William H. Shea, Jr.(3)







%







%



%All directors and officers as a group (eight persons)







%







%



%  
    (1)
    
    Unless otherwise indicated, the address for all beneficial
    owners in this table is 20405 Tomball Parkway, Suite 310,
    Houston, Texas 77070. 
  (2)
    
    At the closing of this offering CDMR Holdings, LLC will be owned
    by four entities: two investment limited partnerships affiliated
    with Carlyle/Riverstone Global Energy and Power Fund II,
    L.P. (collectively the
    Carlyle/Riverstone
    Entities), and two entities owned primarily by certain
    members of the senior management of CDM Operating (the
    Management Entities). The Carlyle/Riverstone
    Entities and the Management Entities have a 67% and a 33%
    ownership interest in CDMR Holdings, LLC, respectively. The
    Carlyle/Riverstone Entities are C/R CDM Holdings II, L.P.
    and C/R CDM Investment Partnership III, L.P. The
    Carlyle/Riverstone Entities are associated with Riverstone
    Holdings LLC (Riverstone) and The Carlyle Group
    (Carlyle). The address of the Carlyle/Riverstone
    Entities and Riverstone is 712 Fifth Avenue,
    51st
    Floor, New York, NY 10019. The address of Carlyle is 1001
    Pennsylvania Avenue, N.W., Suite 200, Washington, D.C.
    20004. The Carlyle/Riverstone Entities are ultimately controlled
    by a management committee which includes Mr. Lapeyre, who
    is a director of CDM GP, LLC. Mr. Lapeyre disclaims
    beneficial ownership of the securities owned by CDMR Holdings,
    LLC. The Management Entities are CDM Investments, Ltd. and CDM
    Compression, LLC.  Mr. Dean, Mr. Craft and Mr. Marrs are the
    owners of the Management Entities. As such, Mr. Dean, Mr. Craft
    and Mr. Marrs may be deemed to have voting and dispositive power
    over the securities owned by CDMR Holdings, LLC.  Mr. Dean, Mr.
    Craft and Mr. Marrs each disclaim beneficial ownership of the
    securities beneficially owned by CDMR Holdings, LLC. 
 
  (3)
    
    Mr. Shea is a director nominee who will be appointed to the
    board of directors of our general partner upon the closing of
    this offering. 
   107




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CERTAIN
    RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
    Distributions
    and Payments to Our General Partner and its Affiliates
    Formation StageThe consideration received by CDMR Holdings and its subsidiaries
    for the contribution to us of a 53.0% interest in CDM Operating
    (consisting of a 0.001% general partner interest and a 52.999%
    limited partner interest)

 1,050,000 common units;
   5,551,724 subordinated units;
   277,586 general partner units; and
   the incentive distribution rights.Operational StageDistributions of available cash to our general partner and its
    affiliates

We will generally make cash distributions 98% to our unitholders
    pro rata, including our general partner and its affiliates, as
    the holders of an aggregate 8,050,000 common units and 5,551,724
    subordinated units, and 2% to our general partner. In addition,
    if distributions exceed the minimum quarterly distribution and
    other higher target distribution levels, our general partner
    will be entitled to increasing percentages of our distributions,
    up to 50% of all distributions we make above the highest target
    distribution level.Assuming we have sufficient available cash to pay the full
    minimum quarterly distribution on all of our outstanding units
    for four quarters, our general partner and its affiliates would
    receive an annual distribution of approximately $0.3 million on
    their general partner units and $7.9 million on their common and
    subordinated unitsPayments to our general partner and its affiliates

We will reimburse CDMR Holdings and its affiliates for the
    payment of all direct and indirect expenses incurred on our
    behalf, subject to certain limitations. For further information
    regarding the reimbursement of these expenses, please read
     Omnibus Agreement. 108




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##### Table of Contents



Withdrawal or removal of our general partner

If our general partner withdraws or is removed, its general
    partner interest and its incentive distribution rights will
    either be sold to the new general partner for cash or converted
    into common units, in each case for an amount equal to the fair
    market value of those interests. Please read The
    Partnership Agreement  Withdrawal or Removal of the
    General Partner.Liquidation StageLiquidation

Upon our liquidation, the partners, including our general
    partner, will be entitled to receive liquidating distributions
    according to their respective capital account balances.   Agreements
    Governing the Transactions
    Omnibus
    Agreement
    Non-competition
      Provision
    of Services Necessary to Operate Our Business
     109




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##### Table of Contents



Right
    of First Offer for CDMR Holdings Interest in CDM
    Operating
      Indemnification
    for Environmental and Related Liabilities
      
    certain defects in title to CDM Operatings assets as of
    the closing of this offering and any failure to obtain, prior to
    the closing of this offering, certain consents and permits
    necessary to own and operate 110




---



##### Table of Contents



such assets, to the extent we notify CDMR Holdings within two
    years after the closing of this offering; and  
    tax liabilities attributable to the operation of CDM
    Operatings assets prior to the closing of this offering.  CDM
    Operating Partnership Agreement and CDM OLP GP, LLC Limited
    Liability Company Agreement
      
    effecting any merger or consolidation involving CDM Operating;
    effecting any sale or exchange of all or substantially all of
    CDM Operatings assets;
    dissolving or liquidating CDM Operating;
    creating or causing to exist any consensual restriction on the
    ability of CDM Operating or its subsidiaries to make
    distributions, pay any indebtedness, make loans or advances or
    transfer assets to us or our subsidiaries;
    settling or compromising any claim, dispute or litigation
    directly against, or otherwise relating to indemnification by
    CDM Operating of, any of the directors or officers of CDM OLP
    GP, LLC; or
    issuing additional partnership interests in CDM Operating.  Natural
    Gas Contract Compression Services Contracts between CDM
    Operating and CDM MAX, LLC.
 
   
 
  Related
    Party Transactions Involving Carlyle/Riverstone
 
 
   
 
   
 111




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CONFLICTS
    OF INTEREST AND FIDUCIARY DUTIES
  Conflicts
    of Interest
        
    approved by the conflicts committee in good faith although our
    general partner is not obligated to seek such approval;
    approved by the vote of a majority of the outstanding common
    units, excluding any common units owned by our general partner
    or any of its affiliates;
    on terms no less favorable to us than those generally being
    provided to or available from unrelated third parties; or
    fair and reasonable to us, taking into account the totality of
    the relationships among the parties involved, including other
    transactions that may be particularly favorable or advantageous
    to us.      CDMR
    Holdings may engage in competition with us under certain
    circumstances and may conduct its own businesses in a manner
    detrimental to our own.
   112




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Neither
    our partnership agreement nor any other agreement requires CDRM
    Holdings to pursue a business strategy that favors us or
    utilizes our assets or dictates what markets to pursue or grow.
    CDRM Holdings directors have a fiduciary duty to make
    these decisions in the best interests of the owners of CDRM
    Holdings, which may be contrary to our interests.
  and/or
  Our
    general partner is allowed to take into account the interests of
    parties other than us, such as CDMR Holdings, in resolving
    conflicts of interest.
    We
    will not have any officers or employees and will rely on
    officers and employees of our general partner and its
    affiliates, including CDMR Holdings.
    Our
    partnership agreement limits our general partners
    fiduciary duties to holders of our units and restricts the
    remedies available to holders of our units for actions taken by
    our general partner that might otherwise constitute breaches of
    fiduciary duty.
    
    permits our general partner to make a number of decisions in its
    individual capacity, as opposed to in its capacity as our
    general partner. This entitles our general partner to consider
    only the interests and factors that it desires, and it has no
    duty or obligation to give any consideration to any interest of,
    or factors affecting, us, our affiliates or any limited partner.
    Actions of our general partner which are made in its individual
    capacity will be made by CDMR Holdings as the sole member of CDM
    GP, LLC. Examples include the exercise of our general
    partners right to make a determination to receive
    Class B 113




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##### Table of Contents



Units in exchange for resetting the target distribution levels,
    the exercise of its limited call right, the exercise of its
    rights to transfer or vote the units it owns, the exercise of
    its registration rights and its determination whether or not to
    consent to any sale, merger or consolidation of the partnership
    or amendment to the partnership agreement;  
    provides that our general partner will not have any liability to
    us or our unitholders for decisions made in its capacity as a
    general partner so long as it acted in good faith;
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the conflicts committee
    of the board of directors of our general partner acting in good
    faith and not involving a vote of unitholders must be on terms
    no less favorable to us than those generally being provided to
    or available from unrelated third parties or must be fair
    and reasonable to us, as determined by our general partner
    in good faith and that, in determining whether a transaction or
    resolution is fair and reasonable, our general
    partner may consider the totality of the relationships between
    the parties involved, including other transactions that may be
    particularly advantageous or beneficial to us;
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud or
    willful misconduct or, in the case of a criminal matter, acted
    with knowledge that the conduct was criminal; and
    provides that in resolving conflicts of interest, it will be
    presumed that in making its decision the general partner or its
    conflicts committee acted in good faith, and in any proceeding
    brought by or on behalf of any limited partner or us, the person
    bringing or prosecuting such proceeding will have the burden of
    overcoming such presumption.    Except
    in limited circumstances, our general partner has the power and
    authority to conduct our business without unitholder
    approval.
    
    the making of any expenditures, the lending or borrowing of
    money, the assumption or guarantee of or other contracting for,
    indebtedness and other liabilities, the issuance of evidences of
    indebtedness, including indebtedness that is convertible into
    our securities, and the incurring of any other obligations;
    the purchase, sale or other acquisition or disposition of our
    securities, or the issuance of additional options, rights,
    warrants and appreciation rights relating to our securities;
    the mortgage, pledge, encumbrance, hypothecation or exchange of
    any or all of our assets;
    the negotiation, execution and performance of any contracts,
    conveyances or other instruments;
    the distribution of our cash;
    the selection and dismissal of employees and agents, outside
    attorneys, accountants, consultants and contractors and the
    determination of their compensation and other terms of
    employment or hiring;
    the maintenance of insurance for our benefit and the benefit of
    our partners; 114




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
    the formation of, or acquisition of an interest in, the
    contribution of property to, and the making of loans to, any
    limited or general partnerships, joint ventures, corporations,
    limited liability companies or other relationships;
    the control of any matters affecting our rights and obligations,
    including the bringing and defending of actions at law or in
    equity and otherwise engaging in the conduct of litigation,
    arbitration or mediation and the incurring of legal expense and
    the settlement of claims and litigation;
    the indemnification of any person against liabilities and
    contingencies to the extent permitted by law;
    the making of tax, regulatory and other filings, or rendering of
    periodic or other reports to governmental or other agencies
    having jurisdiction over our business or assets; and
    the entering into of agreements with any of its affiliates to
    render services to us or to itself in the discharge of its
    duties as our general partner.   
  Our
    partnership agreement limits our business purpose to providing
    natural gas compression services.
 
 
   
  Our
    general partner determines the amount and timing of asset
    purchases and sales, capital expenditures, borrowings, issuances
    of additional partnership securities and the creation, reduction
    or increase of reserves, each of which can affect the amount of
    cash that is distributed to our unitholders.
    
    the manner in which our business is operated;
    the amount of our borrowings;
    the amount, nature and timing of our capital expenditures;
    our issuance of additional units;
    asset purchases, transfers and sales and other acquisitions and
    dispositions; and
    the amount of cash reserves necessary or appropriate to satisfy
    general, administrative and other expenses and debt service
    requirements, and otherwise provide for the proper conduct of
    our business.   115




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
    enabling our general partner or its affiliates to receive
    distributions on any subordinated units held by them or the
    incentive distribution rights; or
    hastening the expiration of the subordination period.      Our
    general partner determines which costs incurred by CDMR Holdings
    and its affiliates are reimbursable by us.
    Our
    partnership agreement does not restrict our general partner from
    causing us to pay it or its affiliates for any services rendered
    to us or entering into additional contractual arrangements with
    any of these entities on our behalf.
      Our
    general partner intends to limit its liability regarding our
    obligations.
   116




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Our
    general partner may exercise its right to call and purchase
    common units if it and its affiliates own more than 80% of the
    common units.
    Common
    unitholders will have no right to enforce obligations of our
    general partner and its affiliates under agreements with
    us.
    Our
    general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.
    Our general partner may elect to cause us to issue
    Class B units to it in connection with a resetting of the
    target distribution levels related to our general partners
    incentive distribution rights which may result in lower
    distributions to our common unitholders in certain
    situations.
   117




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Fiduciary
    Duties
      State-law fiduciary duty standards
    
    Fiduciary duties are generally considered to include an
    obligation to act in good faith and with due care and loyalty.
    The duty of care, in the absence of a provision in a partnership
    agreement providing otherwise, would generally require a general
    partner to act for the partnership in the same manner as a
    prudent person would act on his own behalf. The duty of loyalty,
    in the absence of a provision in a partnership agreement
    providing otherwise, would require a general partner to act in
    good faith and would generally prohibit a general partner of a
    Delaware limited partnership from taking any action or engaging
    in any transaction where a conflict of interest is present.The Delaware Act generally provides that a limited partner may
    institute legal action on behalf of the partnership to recover
    damages from a third party where a general partner has refused
    to institute the action or where an effort to cause a general
    partner to do so is not likely to succeed. In addition, the
    statutory or case law of some jurisdictions may permit a limited
    partner to institute legal action on behalf of himself and all
    other similarly situated limited partners to recover damages
    from a general partner for violations of its fiduciary duties to
    the limited partners.Partnership agreement modified standards
    
    Our partnership agreement contains provisions that waive or
    consent to conduct by our general partner and its affiliates
    that might otherwise raise issues about compliance with
    fiduciary duties or applicable law. For example, our partnership
    agreement provides that when our general partner is acting in
    its capacity as our general partner, as opposed to in its
    individual capacity, it must act in good faith and
    will not be subject to any other standard under applicable law.
    Good Faith requires that the person or persons 118




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making such determination or taking or declining to take such
    other action believe that the determination or other action is
    in the best interests of the Partnership or the holders of the
    common units, as the case may be. In addition, when our general
    partner is acting in its individual capacity, as opposed to in
    its capacity as our general partner, it may act without any
    fiduciary obligation to us or the unitholders whatsoever. These
    standards reduce the obligations to which our general partner
    would otherwise be held.In addition to the other more specific provisions limiting the
    obligations of our general partner, our partnership agreement
    further provides that our general partner and its officers and
    directors will not be liable for monetary damages to us, our
    limited partners or assignees for errors of judgment or for any
    acts or omissions unless there has been a final and
    non-appealable judgment by a court of competent jurisdiction
    determining that the general partner or its officers and
    directors acted in bad faith or engaged in fraud or willful
    misconduct.Special provisions regarding affiliated transactions
    
    Our partnership agreement generally provides that affiliated
    transactions and resolutions of conflicts of interest not
    involving a vote of unitholders and that are not approved by the
    conflicts committee of the board of directors of our general
    partner must be: on terms no less favorable to us than those
    generally being provided to or available from unrelated third
    parties; or fair and reasonable to us, taking into
    account the totality of the relationships between the parties
    involved (including other transactions that may be particularly
    favorable or advantageous to us).If our general partner does not seek approval from the conflicts
    committee and its board of directors determines that the
    resolution or course of action taken with respect to the
    conflict of interest satisfies either of the standards set forth
    in the bullet points above, then it will be presumed that, in
    making its decision, the board of directors, which may include
    board members affected by the conflict of interest, acted in
    good faith and in any proceeding brought by or on behalf of any
    limited partner or the partnership, the person bringing or
    prosecuting such proceeding will have the burden of overcoming
    such presumption. These standards reduce the obligations to
    which our general partner would otherwise be held.Our partnership agreement provides for the allocation of
    overhead costs to us by our general partner and its affiliates
    in such amounts deemed to be fair and reasonable to us.   119




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120




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DESCRIPTION
    OF THE COMMON UNITS
  The
    Units
    Transfer
    Agent and Registrar
  Duties.
  
    surety bond premiums to replace lost or stolen certificates,
    taxes and other governmental charges;
    special charges for services requested by a common
    unitholder; and
    other similar fees or charges.    Resignation or Removal.
  Transfer
    of Common Units
    
    represents that the transferee has the capacity, power and
    authority to become bound by our partnership agreement;
    automatically agrees to be bound by the terms and conditions of,
    and is deemed to have executed, our partnership
    agreement; and
    gives the consents and approvals contained in our partnership
    agreement, such as the approval of all transactions and
    agreements that we are entering into in connection with our
    formation and this offering.         121




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THE
    PARTNERSHIP AGREEMENT
      
    with regard to distributions of available cash, please read
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions;
    with regard to the fiduciary duties of our general partner,
    please read Conflicts of Interest and Fiduciary
    Duties;
    with regard to the transfer of common units, please read
    Description of the Common Units  Transfer of
    Common Units; and
    with regard to allocations of taxable income and taxable loss,
    please read Material Tax Consequences.  Organization
    and Duration
    Purpose
 
   
 
   
  Power
    of Attorney
    Cash
    Distributions
    Capital
    Contributions
     122




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Voting
    Rights
    
    during the subordination period, the approval of a majority of
    the common units, excluding those common units held by our
    general partner and its affiliates, and a majority of the
    subordinated units, voting as separate classes; and
    after the subordination period, the approval of a majority of
    the common units and Class B units, if any, voting as a
    single class.    Issuance of additional units
    
    No approval right.Amendment of the partnership agreement
    
    Certain amendments may be made by the general partner without
    the approval of the unitholders. Other amendments generally
    require the approval of a unit majority. Please read
     Amendment of the Partnership Agreement.Merger of our partnership or the sale of all or substantially
    all of our assets
    
    Unit majority in certain circumstances. Please read
     Merger, Consolidation, Conversion, Sale or
    Other Disposition of Assets.Dissolution of our partnership
    
    Unit majority. Please read  Termination and
    Dissolution.Continuation of our business upon dissolution
    
    Unit majority. Please read  Termination and
    Dissolution.Withdrawal of the general partner
    
    Under most circumstances, the approval of a majority of the
    common units, excluding common units held by our general partner
    and its affiliates, is required for the withdrawal of our
    general partner prior to December 31, 2017 in a manner that
    would cause a dissolution of our partnership. Please read
     Withdrawal or Removal of the General
    Partner.Removal of the general partner
    
    Not less than
    662/3%
    of the outstanding units, including units held by our general
    partner and its affiliates. Please read
     Withdrawal or Removal of the General
    Partner.Transfer of the general partner interest
    
    Our general partner may transfer all, but not less than all, of
    its general partner interest in us without a vote of our
    unitholders to an affiliate or another person in connection with
    its merger or consolidation with or into, or sale of all or
    substantially all of its assets, to such person. The approval of
    a majority of the common units, excluding common units held by
    the general partner and its affiliates, is required in other
    circumstances for a transfer of the general partner interest to
    a third party prior to December 31, 2017. See
     Transfer of General Partner Units. 123




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Transfer of incentive distribution rights
    
    Except for transfers to an affiliate or another person as part
    of our general partners merger or consolidation, sale of
    all or substantially all of its assets or the sale of all of the
    ownership interests in such holder, the approval of a majority
    of the common units, excluding common units held by the general
    partner and its affiliates, is required in most circumstances
    for a transfer of the incentive distribution rights to a third
    party prior to December 31, 2017. Please read
      Transfer of Incentive Distribution
    Rights.Transfer of ownership interests in our general partner
    
    No approval required at any time. Please read
     Transfer of Ownership Interests in the
    General Partner.  Limited
    Liability
    
    to remove or replace the general partner;
    to approve some amendments to the partnership agreement; or
    to take other action under the partnership agreement;       124




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Issuance
    of Additional Securities
          Amendment
    of the Partnership Agreement
  General.
 125




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Prohibited Amendments.
  
    enlarge the obligations of any limited partner without its
    consent, unless approved by at least a majority of the type or
    class of limited partner interests so affected; or
    enlarge the obligations of, restrict in any way any action by or
    rights of, or reduce in any way the amounts distributable,
    reimbursable or otherwise payable by us to our general partner
    or any of its affiliates without the consent of our general
    partner, which consent may be given or withheld at its option.    No Unitholder Approval.
  
    a change in our name, the location of our principal place of our
    business, our registered agent or our registered office;
    the admission, substitution, withdrawal or removal of partners
    in accordance with our partnership agreement;
    a change that our general partner determines to be necessary or
    appropriate to qualify or continue our qualification as a
    limited partnership or a partnership in which the limited
    partners have limited liability under the laws of any state or
    to ensure that neither we nor the operating partnership nor any
    of its subsidiaries will be treated as an association taxable as
    a corporation or otherwise taxed as an entity for federal income
    tax purposes;
    an amendment that is necessary, in the opinion of our counsel,
    to prevent us or our general partner or its directors, officers,
    agents or trustees from in any manner being subjected to the
    provisions of the Investment Company Act of 1940, the Investment
    Advisors Act of 1940, or plan asset regulations
    adopted under the Employee Retirement Income Security Act of
    1974, or ERISA, whether or not substantially similar to plan
    asset regulations currently applied or proposed;
    an amendment that our general partner determines to be necessary
    or appropriate for the authorization of additional partnership
    securities or rights to acquire partnership securities,
    including any amendment that our general partner determines is
    necessary or appropriate in connection with:  
    the adjustments of the minimum quarterly distribution, first
    target distribution, second target distribution and third target
    distribution in connection with the reset of our general
    partners incentive distribution rights as described under
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions  General Partners Right to Reset
    Incentive Distribution Levels;
    the implementation of the provisions relating to our general
    partners right to reset its incentive distribution rights
    in exchange for Class B units; and
    any modification of the incentive distribution rights made in
    connection with the issuance of additional partnership
    securities or rights to acquire partnership securities, provided
    that, any such modifications and related issuance of partnership
    securities have received approval by a majority of the members
    of the conflicts committee of our general partner;  
    any amendment expressly permitted in our partnership agreement
    to be made by our general partner acting alone;
    an amendment effected, necessitated or contemplated by a merger
    agreement that has been approved under the terms of our
    partnership agreement; 126




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
    any amendment that our general partner determines to be
    necessary or appropriate for the formation by us of, or our
    investment in, any corporation, partnership or other entity, as
    otherwise permitted by our partnership agreement;
    a change in our fiscal year or taxable year and related changes;
    an amendment necessary to require limited partners to provide a
    statement, certification or other evidence to us regarding
    whether such limited partner is subject to United States federal
    income taxation on the income generated by us;
    conversions into, mergers with or conveyances to another limited
    liability entity that is newly formed and has no assets,
    liabilities or operations at the time of the conversion, merger
    or conveyance other than those it receives by way of the
    conversion, merger or conveyance; or
    any other amendments substantially similar to any of the matters
    described in the clauses above.    
    do not adversely affect the limited partners (or any particular
    class of limited partners) in any material respect;
    are necessary or appropriate to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
    are necessary or appropriate to facilitate the trading of
    limited partner interests or to comply with any rule,
    regulation, guideline or requirement of any securities exchange
    on which the limited partner interests are or will be listed for
    trading;
    are necessary or appropriate for any action taken by our general
    partner relating to splits or combinations of units under the
    provisions of our partnership agreement; or
    are required to effect the intent expressed in this prospectus
    or the intent of the provisions of our partnership agreement or
    are otherwise contemplated by our partnership agreement.  Opinion of Counsel and Unitholder
    Approval.
    Merger,
    Consolidation, Conversion, Sale or Other Disposition of
    Assets
     127




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Termination
    and Dissolution
    
    the election of our general partner to dissolve us, if approved
    by the holders of units representing a unit majority;
    there being no limited partners, unless we are continued without
    dissolution in accordance with applicable Delaware law;
    the entry of a decree of judicial dissolution of our
    partnership; or
    the withdrawal or removal of our general partner or any other
    event that results in it ceasing to be our general partner other
    than by reason of a transfer of its general partner interest in
    accordance with our partnership agreement or withdrawal or
    removal following approval and admission of a successor.    
    the action would not result in the loss of limited liability of
    any limited partner; and
    neither our partnership, our operating partnership nor any of
    our other subsidiaries would be treated as an association
    taxable as a corporation or otherwise be taxable as an entity
    for federal income tax purposes upon the exercise of that right
    to continue.  Liquidation
    and Distribution of Proceeds
   128




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Withdrawal
    or Removal of the General Partner
      2 3 1 3
    
    the subordination period will end, and all outstanding
    subordinated units will immediately convert into common units on
    a one-for-one basis;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner interest and its incentive distribution rights into
    common units or to receive cash in exchange for those interests
    based on the fair market value of those interests at that time.   129




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Transfer
    of General Partner Units
    
    an affiliate of our general partner (other than an
    individual); or
    another entity as part of the merger or consolidation of our
    general partner with or into another entity or the transfer by
    our general partner of all or substantially all of its assets to
    another entity,      Transfer
    of Ownership Interests in the General Partner
    Transfer
    of Incentive Distribution Rights
    Change
    of Management Provisions
   130




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
    the subordination period will end and all outstanding
    subordinated units will immediately convert into common units on
    a one-for-one basis;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner units and its incentive distribution rights into common
    units or to receive cash in exchange for those interests based
    on the fair market value of those interests at that time.  Limited
    Call Right
    
    the highest cash price paid by either of our general partner or
    any of its affiliates for any limited partner interests of the
    class purchased within the 90 days preceding the date on
    which our general partner first mails notice of its election to
    purchase those limited partner interests; and
    the current market price as of the date three days before the
    date the notice is mailed.    Meetings;
    Voting
     131




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Status
    as Limited Partner
    Non-Citizen
    Assignees; Redemption
    Indemnification
    
    our general partner;
    any departing general partner;
    any person who is or was an affiliate of our general partner or
    any departing general partner;
    any person who is or was a director, officer, member, partner,
    fiduciary or trustee of any entity set forth in the preceding
    three bullet points; 132




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
    any person who is or was serving as director, officer, member,
    partner, fiduciary or trustee of another person at the request
    of our general partner or any departing general partner; and
    any person designated by our general partner.    Reimbursement
    of Expenses
    Books
    and Reports
        Right
    to Inspect Our Books and Records
    
    a current list of the name and last known address of each
    partner;
    a copy of our tax returns;
    information as to the amount of cash, and a description and
    statement of the agreed value of any other property or services,
    contributed or to be contributed by each partner and the date on
    which each partner became a partner;
    copies of our partnership agreement, our certificate of limited
    partnership, related amendments and powers of attorney under
    which they have been executed; 133




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
    information regarding the status of our business and financial
    condition; and
    any other information regarding our affairs as is just and
    reasonable.    Registration
    Rights
   134




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UNITS
    ELIGIBLE FOR FUTURE SALE
      
    1% of the total number of the securities outstanding; or
    the average weekly reported trading volume of the common units
    for the four calendar weeks prior to the sale.        lock-up
 135




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MATERIAL
    TAX CONSEQUENCES
            Partnership
    Status
     136




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Limited
    Partner Status
   137




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Tax
    Consequences of Unit Ownership
  Flow-Through of Taxable Income.
  Treatment of Distributions.
  and/or
  Ratio of Taxable Income to Distributions.
 138




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
    gross income from operations exceeds the amount required to make
    the minimum quarterly distributions on all units, yet we only
    distribute the minimum quarterly distribution on all
    units; or
    we make a future offering of common units and use the proceeds
    of the offering in a manner that does not produce substantial
    additional deductions during the period described above, such as
    to repay indebtedness outstanding at the time of this offering
    or to acquire property that is not eligible for depreciation or
    amortization for federal income tax purposes or that is
    depreciable or amortizable at a rate significantly slower than
    the rate applicable to our assets at the time of this offering.  Basis of Common Units.
  Limitations on Deductibility of Losses.
     139




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Limitations on Interest Deductions.
  
    interest on indebtedness properly allocable to property held for
    investment;
    our interest expense attributed to portfolio income; and the
    portion of interest expense incurred to purchase or carry an
    interest in a passive activity to the extent attributable to
    portfolio income.    Entity-Level Collections.
  Allocation of Income, Gain, Loss and
    Deduction.
   140




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
    his relative contributions to us;
    the interests of all the partners in profits and losses;
    the interest of all the partners in cash flow; and
    the rights of all the partners to distributions of capital upon
    liquidation.    Treatment of Short Sales.
  
    any of our income, gain, loss or deduction with respect to those
    units would not be reportable by the unitholder;
    any cash distributions received by the unitholder as to those
    units would be fully taxable; and
    all of these distributions would appear to be ordinary income.    Alternative Minimum Tax.
  Tax Rates.
  Section 754 Election.
 141




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Regulation Section 1.197-2(g)(3) Regulation Section 1.167(c)-1(a)(6),
  non-amortizable Regulation Section 1.167(c)-1(a)(6), Regulation Section 1.197-2(g)(3).
   142




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non-amortizable
  Tax
    Treatment of Operations
  Accounting Method and Taxable Year.
  Initial Tax Basis, Depreciation and
    Amortization.
       143




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Valuation and Tax Basis of Our Properties.
  Disposition
    of Common Units
  Recognition of Gain or Loss.
       144




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
    a short sale;
    an offsetting notional principal contract; or
    a futures or forward contract with respect to the partnership
    interest or substantially identical property.    Allocations Between Transferors and
    Transferees.
      Notification Requirements.
  Constructive Termination. twelve-month
 145




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Uniformity
    of Units
  Section 1.167(c)-1(a)(6) Regulation Section 1.197-2(g)(3).
  non-amortizable Regulation Section 1.167(c)-1(a)(6), Regulation Section 1.197-2(g)(3).
  Tax-Exempt
    Organizations and Other Investors
      Form W-8BEN
 146




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Administrative
    Matters
  Information Returns and Audit Procedures. Schedule K-1,
       147




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Nominee Reporting.
                  Accuracy-Related Penalties.
           148




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Reportable Transactions.
    
    accuracy-related penalties with a broader scope, significantly
    narrower exceptions, and potentially greater amounts than
    described above at  Accuracy-Related
    Penalties;
    for those persons otherwise entitled to deduct interest on
    federal tax deficiencies, nondeductibility of interest on any
    resulting tax liability; and
    in the case of a listed transaction, an extended statute of
    limitations.    State,
    Local, Foreign and Other Tax Considerations
     149




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SELLING
    UNITHOLDER
      
    the underwriters option to purchase additional common
    units is not exercised; and
    the underwriters exercise their option to purchase additional
    common units in full.  Units Owned ImmediatelyAfter Exercise of UnderwritersUnits Owned Immediately


Option and RelatedAfter This Offering


Unit RedemptionAssuming





AssumingUnderwriters





UnderwritersOption is Not





Option isName of Selling Unitholder

Exercised


Percent(1)


Exercised in Full


Percent(1)CDMR Holdings, LLCCommon units


1,050,000



7.6
%







%Subordinated units


5,551,724



40.0
%


5,551,724



40.0
%     (1)
    
    Percentage of total units outstanding, including common units,
    subordinated units and general partner units. 150




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INVESTMENT
    IN CDM RESOURCE PARTNERS, L.P.
    BY EMPLOYEE BENEFIT PLANS
    
    whether the investment is prudent under
    Section 404(a)(1)(B) of ERISA;
    whether in making the investment, that plan will satisfy the
    diversification requirements of Section 404(a)(1)(C) of
    ERISA; and
    whether the investment will result in recognition of unrelated
    business taxable income by the plan and, if so, the potential
    after-tax investment return. Please read Material Tax
    Consequences  Tax-Exempt Organizations and Other
    Investors.                   151




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UNDERWRITING
    Number ofUnderwriter

Common UnitsLehman Brothers Inc.Merrill Lynch, Pierce, Fenner & Smith
    IncorporatedGoldman, Sachs & Co.Wachovia Capital Markets, LLCTudor, Pickering & Co. Securities, Inc.Total


7,000,000     
    the obligation to purchase all of the common units offered
    hereby (other than those common units covered by their option to
    purchase additional common units as described below), if any of
    the common units are purchased;
    the representations and warranties made by us to the
    underwriters are true;
    there is no material change in our business or the financial
    markets; and
    we deliver customary closing documents to the underwriters.  Commissions
    and Expenses
        No Exercise


Full ExercisePer unit

$



$Total    152




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Option
    to Purchase Additional Common Units
    Indemnification
    Lock-Up
    Agreements
    180-day
  
    during the last 17 days of the
    180-day
    restricted period we issue an earnings release or material news
    or a material event relating to us occurs; or
    prior to the expiration of the
    180-day
    restricted period, we announce that we will release earnings
    results during the
    16-day
    period beginning on the last day of the
    180-day
    period,  18-day
  180-day 180-day
  lock-up
  Listing
    on the New York Stock Exchange
   153




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Offering
    Price Determination
    
    the history and prospects for the industry in which we compete;
    our financial information;
    the ability of our management and our business potential and
    earning prospects;
    the prevailing securities markets at the time of this
    offering; and
    the recent market prices of, and the demand for, publicly traded
    common units of generally comparable companies.    FINRA
    Regulations
    Stabilization,
    Short Positions and Penalty Bids
    
    Stabilizing transactions permit bids to purchase the underlying
    security so long as the stabilizing bids do not exceed a
    specified maximum.
    A short position involves a sale by the underwriters of common
    units in excess of the number of common units the underwriters
    are obligated to purchase in the offering, which creates the
    syndicate short position. This short position may be either a
    covered short position or a naked short position. In a covered
    short position, the number of common units involved in the sales
    made by the underwriters in excess of the number of common units
    they are obligated to purchase is not greater than the number of
    common units that they may purchase by exercising their option
    to purchase additional common units. In a naked short position,
    the number of common units involved is greater than the number
    of common units in their option to purchase additional common
    units. The underwriters may close out any short position by
    either exercising their option to purchase additional common
    units and/or
    purchasing common units in the open market. In determining the
    source of common units to close out the short position, the
    underwriters will consider, among other things, the price of
    common units available for purchase in the open market as
    compared to the price at which they may purchase common units
    through their option to purchase additional common units. A
    naked short position is more likely to be created if the
    underwriters are concerned that there could be downward pressure
    on the price of the common units in the open market after
    pricing that could adversely affect investors who purchase in
    the offering.
    Syndicate covering transactions involve purchases of the common
    units in the open market after the distribution has been
    completed in order to cover syndicate short positions.
    Penalty bids permit the representatives to reclaim a selling
    concession from a syndicate member when the common units
    originally sold by the syndicate member are purchased in a
    stabilizing or syndicate covering transaction to cover syndicate
    short positions.   154




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##### Table of Contents



Electronic
    Distribution
    and/or
  Stamp
    Taxes
    Other
    Relationships
   155




---



##### Table of Contents



VALIDITY
    OF THE COMMON UNITS
    EXPERTS
      WHERE
    YOU CAN FIND MORE INFORMATION
  Form S-1 1-800-SEC-0330. http://www.sec.gov.
    FORWARD-LOOKING
    STATEMENTS
   156




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##### Table of Contents



INDEX
    TO FINANCIAL STATEMENTS
  
 CDM RESOURCE PARTNERS, L.P. UNAUDITED PRO FORMA FINANCIAL
    STATEMENTS:Introduction

F-2Unaudited Pro Forma Balance Sheet as of
    September 30, 2007

F-4Unaudited Pro Forma Statement of Operations for
    the year ended December 31, 2006

F-5Unaudited Pro Forma Statement of Operations for
    the nine month period ended September 30, 2007

F-6Notes to Unaudited Pro Forma Financial
    Statements

F-7CDM RESOURCE MANAGEMENT PREDECESSOR FINANCIAL STATEMENTS:Audited Financial Statements:Report of Independent Registered Public
    Accounting Firm

F-9Balance Sheets as of December 31, 2005 and
    2006

F-10Statements of Operations for the years ended
    December 31, 2004, 2005 and 2006

F-11Statements of Partners Equity for the years
    ended December 31, 2004, 2005 and 2006

F-12Statements of Cash Flows for the years ended
    December 31, 2004, 2005 and 2006

F-13Notes to Financial Statements

F-14Unaudited Condensed Interim Financial Statements:Condensed Balance Sheets as of December 31,
    2006 and September 30, 2007

F-22Condensed Statements of Operations for the nine
    months ended September 30, 2006 and 2007

F-23Condensed Statements of Cash Flows for the nine
    months ended September 30, 2006 and 2007

F-24Notes to the Condensed Interim Financial
    Statements

F-25CDM RESOURCE PARTNERS, L.P. FINANCIAL STATEMENTS:Report of Independent Registered Public
    Accounting Firm

F-29Balance Sheet as of June 20, 2007

F-30Note to Balance Sheet

F-31CDM RP GP, L.P. FINANCIAL STATEMENTS:Report of Independent Registered Public
    Accounting Firm

F-32Balance Sheet as of June 20, 2007

F-33Note to Balance Sheet

F-34  
 F-1




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##### Table of Contents



UNAUDITED
    PRO FORMA FINANCIAL STATEMENTS
  Introduction
 
   
     
   
    
    the contribution to the Partnership of a 53.0% interest in the
    Predecessor and the retention by CDMR Holdings of the remaining
    47.0% interest in the Predecessor;
    the issuance by the Partnership of 1,050,000 common units and
    5,551,724 subordinated units to CDMR Holdings;
    the issuance by the Partnership of a 2.0% general partner
    interest and all of our incentive distribution rights to
    CDM RP GP, L.P., the Partnerships general partner; 
  
    the issuance by the Partnership of 7,000,000 common units at an
    assumed initial public offering price of $20.00 per common
    unit and the contribution of the net proceeds therefrom of
    approximately $126.7 million to the Predecessor, which will
    use such proceeds to repay indebtedness outstanding under its
    credit facility; 
  
    CDMR Holdings assumption and repayment of
    $40.0 million of indebtedness outstanding under the
    Predecessors credit facility; and F-2




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##### Table of Contents




    the Predecessors purchase at or prior to the closing of
    this offering of 67 compression units with approximately
    82,990 aggregate horsepower that the Predecessor finances under
    capital leases or uses under operating leases, all with a third
    party, for approximately $26.6 million based upon the third
    partys lease payoff quotation as of September 30,
    2007. 
   F-3




---



##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Unaudited Pro Forma Balance Sheet
 September 30, 2007
 
  
 CDM





CDMResource





ResourceManagement


Pro Forma


Partners, L.P.Predecessor


Adjustments


Pro Forma(In thousands)ASSETSCash

$
1,444


$
140,000
(2a)

$
1,294(13,280
)(2b)(126,720
)(2c)(150
)(2d)Trade accounts receivable, net


11,065







11,065Other accounts receivable


1,500







1,500Unbilled revenue


1,170







1,170Prepaid expenses


1,279







1,279Inventory


2,740







2,740Total current assets


19,198



(150
)


19,048Other receivables  long-term


4,492







4,492Property and equipment, net


326,833



12,680
(2e)


356,98417,471
(2e)Assets under capital leases, net


16,585



(16,585
)(2e)


Goodwill


2,138







2,138Other assets, net


2,822



150
(2d)


2,972Total other assets


352,870



13,716



366,586Total assets


372,068


$
13,566


$
385,634LIABILITIES AND PARTNERS EQUITYTrade accounts payable

$
18,325


$



$
18,325Accrued liabilities and other payables


4,996







4,996Deferred revenue


6,508







6,508Current portion of obligations under capital leases


1,740



(1,740
)(2e)


Total current liabilities


31,569



(1,740
)


29,829Long-term debt:Long-term debt, net of current portion


252,988



(166,720
)(2c)


112,83326,565
(2e)Obligations under capital leases, net of current portion


11,259



(11,259
)(2e)


Total long-term debt


264,247



(151,414
)


112,833Total liabilities


295,816



(153,154
)


142,662Non-controlling interest






114,197
(2f)


114,197Partners equity:Partners equity


79,252



140,000
(2a)


(13,280
)(2b)40,000
(2c)(3,000
)(2g)(114,197
)(2f)(128,775
)(2h)Less: note receivable from related party


(3,000
)


3,000
(2g)


Common unitholders






74,690
(2h)


74,690Subordinated unitholder






51,510
(2h)


51,510General partner interest






2,575
(2h)


2,575Total partners equity


76,252



52,523



128,775Total liabilities and partners equity


372,068


$
13,566


$
385,634  
   F-4




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##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Unaudited Pro Forma Statement of
    Operations
 Year Ended December 31, 2006
  CDM





CDMResource





ResourceManagement


Pro Forma


Partners, L.P.Predecessor


Adjustments


Pro Forma(In thousands, except per unit data)Revenues:Operating revenue

$
61,054


$



$
61,054Reimbursed installation services revenue


6,636







6,636Total revenues


67,690







67,690Costs and expenses:Cost of operations


26,190



(3,007
)(2i)


23,183Reimbursed installation services expense


6,636







6,636General and administrative expense


8,153







8,153Depreciation expense


7,311



534
(2i)


7,845Gain on sale of assets


(64
)






(64
)Total costs and expenses


48,226



(2,473
)


45,753Operating income


19,464



2,473



21,937Other income (expense):Interest expense, net of capitalized interest


(10,928
)


8,423
(2d)


(2,505
)Interest income


108







108Total other income (expense)


(10,820
)


8,423



(2,397
)Income before non-controlling interest


8,644



10,896



19,540Non-controlling interest






(9,184
)(2f)


(9,184
)Net income

$
8,644



1,712


$
10,356General partner interest in net income









$
207Limited partner interest in net income









$
10,149Net income per:Common unit (basic and diluted)









$
1.20Subordinated unit (basic and diluted)









$
0.09Weighted average number of units outstandingCommon units (basic and diluted)










8,050Subordinated units (basic and diluted)










5,552    F-5




---



##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Unaudited Pro Forma Statement of
    Operations
 
 Nine Months Ended September 30, 2007
 
  
 CDM





CDMResource





ResourceManagement


Pro Forma


Partners, L.P.Predecessor


Adjustments


Pro Forma(In thousands, except per unit data)Revenues:Operating revenue

$
65,381


$



$
65,381Reimbursed installation services revenue


4,498







4,498Total revenues


69,879







69,879Costs and expenses:Cost of operations


30,015



(2,255
)(2i)


27,760Reimbursed installation services expense


4,498







4,498General and administrative expense


8,848







8,848Depreciation expense


8,417



401
(2i)


8,818Gain on sale of asset


(49
)






(49
)Total costs and expenses


51,729



(1,854
)


49,875Operating income


18,150



1,854



20,004Other income (expense):Interest expense, net of capitalized interest


(13,458
)


6,937
(2d)


(6,521
)Interest income


163







163Total other income (expense)


(13,295
)


6,937



(6,358
)Income before income tax expense and non-controlling interest


4,855



8,791



13,646Income tax expense


270







270Income before non-controlling interest


4,585



8,791



13,376Non-controlling interest






(6,287
)(2f)


(6,287
)Net income

$
4,585



2,504


$
7,089General partner interest in net income









$
142Limited partner interest in net income









$
6,947Net income per:Common unit (basic and diluted)









$
0.86Subordinated unit (basic and diluted)









$
0.00Weighted average number of units outstanding:Common units (basic and diluted)










8,050Subordinated units (basic and diluted)










5,552  
   F-6




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##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Notes to Unaudited Pro Forma Financial
    Statements
  (1)
    Estimated
    Incremental General and Administrative Expense  Schedule K-1
  (2)
    Pro Forma
    Adjustments and Assumptions   
   
 
   
    
 December 31,


September 30,2006


2007Predecessor interest expense, net of capitalized interest

$
10,928


$
13,458Pro forma adjustments:Add: additional debt issuance cost


50



38Add: interest expense on additional borrowings to fund the
    purchase of compression units under capital and operating leases


2,323



1,742Less: termination of capital leases


(951
)


(646
)Less: interest reduction from lower principal balance based upon
    the use of proceeds from the initial public offering


(9,845
)


(8,071
)(8,423
)


(6,937
)Pro forma interest expense, net of capitalized interest

$
2,505


$
6,521  
 
   
 
   
     F-7




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##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Notes to
    Unaudited Pro Forma Financial
    Statements  (Continued)
 
   
 
   
 
   
 
   
 
   
  (3)
    Pro Forma
    Net Income Per Limited Partner Unit     F-8




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
                          F-9




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Balance
    Sheets
  December 31,2005


2006(In thousands)ASSETSCash

$
817


$
1,514Trade accounts receivable, net


5,085



10,815Other accounts receivable


1,254



4,175Unbilled revenue


1,709



1,502Prepaid expenses


648



752Advances to affiliate


203



7,532Inventory


2,031



2,570Total current assets


11,747



28,860Other receivables  long-term


1,345



3,333Property and equipment, net


123,184



223,922Assets under capital leases, net


18,004



17,099Goodwill


2,138



2,138Advances to affiliate  long-term


2,500



Other assets, net


344



427Total other assets


147,515



246,919Total assets

$
159,262


$
275,779LIABILITIES AND PARTNERS EQUITYTrade accounts payable

$
9,943


$
10,303Other accounts payable






520Accrued liabilities


1,223



2,367Deferred revenue


2,103



3,975Current portion of obligations under capital leases


1,456



1,686Total current liabilities


14,725



18,851Long-term debt:Long-term debt, net of current portion


71,712



172,717Obligations under capital leases, net of current portion


14,253



12,431Total long-term debt


85,965



185,148Total liabilities


100,690



203,999Partners equity:Partners equity


61,572



74,780Less: note receivable from related party


(3,000
)


(3,000
)Commitments and contingencies






Total partners equity


58,572



71,780Total liabilities and partners equity

$
159,262


$
275,779    F-10




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Statements of Operations
  Year Ended December 31,2004


2005


2006(In thousands)Revenues:Operating revenue

$
29,687


$
42,056


$
61,054Reimbursed installation services revenue


4,310



5,310



6,636Total revenues


33,997



47,366



67,690Costs and expenses:Cost of operations


14,837



20,676



26,190Reimbursed installation services expense


4,310



5,310



6,636General and administrative expense


4,422



5,425



8,153Depreciation expense


3,229



4,851



7,311Gain on sale of assets










(64
)Total costs and expenses


26,798



36,262



48,226Operating income


7,199



11,104



19,464Other income (expense):Interest expense, net of capitalized interest


(3,449
)


(5,090
)


(10,928
)Interest income


62



68



108Total other income (expense)


(3,387
)


(5,022
)


(10,820
)Net income

$
3,812


$
6,082


$
8,644    F-11




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Statements of Partners Equity
 (In thousands)
  Balance, December 31, 2003

$
17,324Capital contributions, net of transaction costs of $640


19,360Net income


3,812Balance, December 31, 2004


40,496Capital contributions, net of transaction costs of $605


14,994Net income


6,082Balance, December 31, 2005


61,572Capital contributions, net of transaction costs of $436


4,564Net income


8,644Balance, December 31, 2006

$
74,780    F-12




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##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Statements of Cash Flows
  Year Ended December 31,2004


2005


2006(In thousands)Cash flows from operating activities:Net income

$
3,812


$
6,082


$
8,644Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation expense


3,229



4,851



7,311Amortization of deferred loan costs


33



188



150Bad debt expense






130



134Gain on sale of assets










(64
)Changes in operating assets and liabilities:(Increase) decrease in trade receivables


(2,959
)


360



(5,864
)Increase in other receivables


(7
)


(2,591
)


(4,909
)(Increase) decrease in unbilled revenue


(544
)


(31
)


207Increase in prepaid expenses


(194
)


(10
)


(104
)Increase in inventory


(768
)


(1,033
)


(539
)(Increase) decrease in other assets


36



(21
)


17Increase (decrease) in accounts payable


1,369



5,320



(611
)Increase in other accounts payable










520Increase in accrued liabilities


67



1,010



1,144Increase in deferred revenue


667



1,150



1,872Net cash provided by operating activities


4,741



15,405



7,908Cash flows from investing activities:Proceeds from collections on lease receivables


248







Proceeds from sale of equipment






703



949Advances to affiliate






(2,703
)


(4,829
)Additions to property and equipment


(31,178
)


(73,013
)


(107,058
)Net cash used in investing activities


(30,930
)


(75,013
)


(110,938
)Cash flows from financing activities:Proceeds from issuance of long-term debt


41,055



71,712



101,005Principal payments on long-term debt


(30,368
)


(7,188
)


Debt issuance costs


(97
)


(320
)


(250
)Principal payments on obligations under capital leases


(2,072
)


(23,220
)


(1,592
)Contributions by partners, net of transaction costs


19,360



14,994



4,564Net cash provided by financing activities


27,878



55,978



103,727Net increase (decrease) in cash and cash equivalents


1,689



(3,630
)


697Cash and cash equivalents, beginning of year


2,758



4,447



817Cash and cash equivalents, end of year

$
4,447


$
817


$
1,514Supplemental disclosures of cash flow information:Cash paid for interest

$
3,416


$
4,758


$
956Non-cash interest added to credit facility










10,366    F-13




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to Financial Statements
  (1)
    Summary
    of Significant Accounting Policies  (a)
    Basis
    of Presentation          (b)
    Use of
    Accounting Estimates    (c)
    Cash
    and Cash Equivalents    (d)
    Trade
    Accounts Receivable   F-14




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
    December 31,2004


2005


2006(In thousands)Balance at beginning of period

$



$



$
Additions charged to bad debt expense






130



134Write-offs charged to the allowance






(130
)


(28
)Balance at end of period

$



$



$
106   (e)
    Other
    Accounts Receivable    (f)
    Advances
    to Affiliate    (g)
    Inventory    (h)
    Other
    Receivables  Long-term Portion  06-03,
  (i)
    Property
    and Equipment   F-15




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
      (j)
    Goodwill
    and Other Intangible Assets    (k)
    Other
    Assets    (l)
    Long-lived
    Assets    (m)
    Other
    Accounts Payable    (n)
    Revenue
    Recognition      (o)
    Reimbursed
    Installation Services Revenue and Expense   F-16




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
  EITF 99-19, EITF 01-14
  (p)
    Income
    Taxes      (q)
    Note
    Receivable from a Related Party    (r)
    Segment
    Reporting    (2)
    Inventory  December 31,2005


2006(In thousands)Components

$
1,523


$
1,692Lubrication oil/coolants


375



685Miscellaneous


133



193Total

$
2,031


$
2,570  F-17




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
  (3)
    Property
    and Equipment  Estimated

December 31,Useful Lives

2005


2006(Years)

(In thousands)Natural gas compression units

10 - 30

$
121,312


$
212,051Natural gas treatment equipment

15


2,064



1,110Capital spare parts




2,888



6,075Transportation equipment

5


803



1,035Other field related assets

5 - 10


401



593Office furniture and equipment

3 - 5


736



1,259Leasehold improvements

5


56



148128,260



222,271Work in progress




7,037



19,894Less accumulated depreciation




(12,113
)


(18,243
)Total



$
123,184


$
223,922   (4)
    Debt        December 31,2005


2006(In thousands)Note payable to lender, collateralized by compression units, at
    an interest rate of 8.5% and 7.5% at December 31, 2006 and
    2005, respectively, and due in December 2008

$
71,712


$
172,717Less current portion






Total

$
71,712


$
172,717    F-18




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
  (5)
    Capital
    Leases  10-year
  Estimated


December 31,Useful Lives


2005


2006(Years)


(In thousands)Compression units


30


$
20,441


$
20,271Less accumulated depreciation






(2,437
)


(3,172
)$
18,004


$
17,099     Year Ended December 31,(In thousands)2007

$
2,5342008


2,5342009


2,5342010


2,5342011


2,534Thereafter


4,820Total minimum lease payments


17,490Less interest


(3,373
)Present value of minimum lease payments


14,117Less current portion


(1,686
)Obligation under capital leases, net of current portion

$
12,431   (6)
    Employee
    Benefit Plan     F-19




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
    (7)
    Commitments    December 31,(In thousands)2007

$
3,8322008


3,7942009


3,4282010


2,0002011


1,068Thereafter


17$
14,139     (8)
    Related
    Party Transactions      (9)
    Business
    and Credit Concentrations    (10)
    Subsequent
    Events    (11)
    Recent
    Accounting Pronouncements   F-20




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Financial Statements  (Continued)
           F-21




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
    Unaudited Condensed Interim Financial Statements
  Balance
    Sheets
  
 December 31,


September 30,2006


2007(Unaudited)(In thousands)ASSETSCash

$
1,514


$
1,444Trade accounts receivable, net


10,815



11,065Other accounts receivable


4,175



1,500Unbilled revenue


1,502



1,170Prepaid expenses


752



1,279Advances to affiliate


7,532



Inventory


2,570



2,740Total current assets


28,860



19,198Other receivables  long-term


3,333



4,492Property and equipment, net


223,922



326,833Assets under capital leases, net


17,099



16,585Goodwill


2,138



2,138Other assets, net


427



2,822Total other assets


246,919



352,870Total assets

$
275,779


$
372,068LIABILITIES AND PARTNERS EQUITYTrade accounts payable

$
10,303


$
18,325Other accounts payable


520



88Accrued liabilities


2,367



4,908Deferred revenue


3,975



6,508Current portion of obligations under capital leases


1,686



1,740Total current liabilities


18,851



31,569Long-term debt:Long-term debt, net of current portion


172,717



252,988Obligations under capital leases, net of current portion


12,431



11,259Total long-term debt


185,148



264,247Total liabilities


203,999



295,816Partners equity:Partners equity


74,780



79,252Less: note receivable from related party


(3,000
)


(3,000
)Commitments and contingenciesTotal partners equity


71,780



76,252Total liabilities and partners equity

$
275,779


$
372,068  
   F-22




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
    Unaudited Condensed Interim Financial Statements
  Statements of Operations
  
 Nine Months Ended September 30,2006


2007(In thousands)Revenues:Operating revenue

$
43,356


$
65,381Reimbursed installation services revenue


3,528



4,498Total revenues


46,884



69,879Costs and expenses:Cost of operations


19,454



30,015Reimbursed installation services expense


3,528



4,498General and administrative expense


5,437



8,848Depreciation expense


5,560



8,417Gain on sale of assets


(64
)


(49
)Total costs and expenses


33,915



51,729Operating income


12,969



18,150Other income (expense):Interest expense, net of capitalized interest


(7,223
)


(13,458
)Interest income


62



163Total other income (expense)


(7,161
)


(13,295
)Income before income tax expense


5,808



4,855Income tax expense






270Net income

$
5,808


$
4,585  
   F-23




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##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
    Unaudited Condensed Interim Financial Statements
  Statements of Cash Flows
  
 Nine Months Ended September 30,2006


2007(In thousands)Cash flows from operating activities:Net income

$
5,808


$
4,585Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation expense


5,560



8,417Amortization of deferred loan cost


98



200Bad debt expense


45



90Gain on sale of assets


(64
)


(49
)Changes in operating assets and liabilities:Increase in trade receivables


(5,696
)


(1,499
)(Increase) decrease in other receivables


(1,333
)


2,675(Increase) decrease in unbilled revenue


(98
)


332Increase in prepaid expenses


(424
)


(527
)Increase in inventory


(1,233
)


(170
)(Increase) decrease in other assets


27



(3
)Increase in accounts payable


2,076



959Increase (decrease) in other accounts payable


3,718



(432
)Increase in accrued liabilities


776



2,428Increase in deferred revenue


1,373



2,533Net cash provided by operating activities


10,633



19,539Cash flows from investing activities:Proceeds from sale of equipment


949



873(Increase) decrease in advances to affiliate


(2,524
)


7,532Additions to property and equipment


(81,057
)


(104,575
)Net cash used in investing activities


(82,632
)


(96,170
)Cash flows from financing activities:Proceeds from issuance of long-term debt


72,726



92,271Principal payments on long-term debt






(12,000
)Debt issuance costs


(250
)


(300
)Principal payments on obligations under capital leases


(1,050
)


(1,118
)Deferred offering costs






(2,292
)Transaction costs


(150
)


Net cash provided by financing activities


71,276



76,561Net decrease in cash


(723
)


(70
)Cash, beginning of period


817



1,514Cash, end of period

$
94


$
1,444Supplemental disclosures of cash flow information:Cash paid for interest

$
723


$
657Non-cash interest added to credit facility


5,853



13,198  
   F-24




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##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to Unaudited Condensed Interim Financial
    Statements
  (1)
    Basis of
    Presentation       
   
  (2)
    Summary
    of Significant Accounting Policies  (a)
    Use of
    Accounting Estimates    (b)
    Advances
    to Affiliate 
   
 F-25




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Unaudited Condensed Interim Financial
    Statements  (Continued)
  (c)
    Income
    Taxes 
   
 
 
 
   
 
  (d)
    Sales
    and Use Taxes 
 
  04-009
 
 
   
 
  06-03,
 
 F-26




---



##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Unaudited Condensed Interim Financial
    Statements  (Continued)
 
  (e)
    Prior
    Period Adjustment 
 
   
 
  (3)
    Inventory 
  
 December 31,


September 30,2006


2007(In thousands)Components

$
1,692


$
1,610Lubrication oil/coolants


685



946Miscellaneous


193



184Total

$
2,570


$
2,740  
  (4)
    Debt   
   
 
   
  (5)
    Related
    Party Transaction 
   
 
   
 F-27




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##### Table of Contents



CDM
    RESOURCE MANAGEMENT PREDECESSOR
  Notes to
    Unaudited Condensed Interim Financial
    Statements  (Continued)
  (6)
    Subsequent
    Events 
   
 
 
  (7)
    Recent
    Accounting Pronouncements    and/or
 F-28




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
               F-29




---



##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P. Balance
    Sheet
 June 20, 2007ASSETSCash

$
1,000Total assets

$
1,000LIABILITIES AND PARTNERS EQUITYLimited partners interest

$
980General partners interest


20Total liabilities and partners equity

$
1,000    F-30




---



##### Table of Contents



CDM
    RESOURCE PARTNERS, L.P.
  Note to Balance Sheet
  Nature of
    Operations       F-31




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
  
        
    F-32




---



##### Table of Contents



CDM RP
    GP, L.P.
  Balance
    Sheet
  June 20, 2007ASSETSCash

$
980Investment in CDM Resource Partners, L.P.


20Total assets

$
1,000LIABILITIES AND PARTNERS EQUITYPartners equity

$
1,000Total liabilities and partners equity

$
1,000    F-33




---



##### Table of Contents



CDM RP
    GP, L.P. Note to Balance Sheet
 Nature of
    Operations       F-34




---



##### Table of Contents



APPENDIX A
 
   FIRST
    AMENDED AND RESTATED
    AGREEMENT OF LIMITED PARTNERSHIP
    OF
    CDM RESOURCE PARTNERS, L.P.




---



##### Table of Contents



TABLE OF
    CONTENTS
  ARTICLE I DEFINITIONS


A-1Section 1.1

Definitions.


A-1ARTICLE II ORGANIZATION


A-17Section 2.5

Powers.


A-18Section 2.7

Term.


A-19Section 2.8

Title to Partnership Assets.


A-19ARTICLE III RIGHTS OF LIMITED PARTNERS


A-20Section 3.3

Outside Activities of the Limited Partners.


A-20Section 3.4

Rights of Limited Partners.


A-20ARTICLE IV CERTIFICATES; RECORD HOLDERS; TRANSFER OF
    PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP
    INTERESTS


A-21Section 4.1

Certificates.


A-21Section 4.2

Mutilated, Destroyed, Lost or Stolen Certificates.


A-21Section 4.3

Record Holders.


A-22Section 4.4

Transfer Generally.


A-22Section 4.5

Registration and Transfer of Limited Partner Interests.


A-23Section 4.6

Transfer of the General Partners General Partner Interest.


A-24Section 4.7

Transfer of Incentive Distribution Rights.


A-24Section 4.8

Restrictions on Transfers.


A-24Section 4.9

Citizenship Certificates; Non-Citizen Assignees.


A-25Section 4.10

Redemption of Partnership Interests of Non-Citizen Assignees.


A-26ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF
    PARTNERSHIP INTERESTS


A-27Section 5.1

Organizational Contributions.


A-27Section 5.2

Contributions by the General Partner and its Affiliates.


A-27Section 5.3

Contributions by Initial Limited Partners.


A-28Section 5.4

Interest and Withdrawal.


A-28Section 5.5

Capital Accounts.


A-28Section 5.6

Issuances of Additional Partnership Securities.


A-30Section 5.7

Conversion of Subordinated Units.


A-31Section 5.8

Limited Preemptive Right.


A-32Section 5.9

Splits and Combinations.


A-32Section 5.10

Fully Paid and Non-Assessable Nature of Limited Partner
    Interests.


A-33Section 5.11

Issuance of Class B Units in Connection with Reset of Incentive
    Distribution Rights.


A-33ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS


A-35Section 6.1

Allocations for Capital Account Purposes.


A-35Section 6.2

Allocations for Tax Purposes.


A-41Section 6.3

Requirement and Characterization of Distributions; Distributions
    to Record Holders.


A-42Section 6.4

Distributions of Available Cash from Operating Surplus.


A-43Section 6.5

Distributions of Available Cash from Capital Surplus.


A-44Section 6.6

Adjustment of Minimum Quarterly Distribution and Target
    Distribution Levels.


A-45 A-i




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##### Table of Contents



Section 6.7

Special Provisions Relating to the Holders of Subordinated Units
    and Class B Units.


A-45Section 6.8

Special Provisions Relating to the Holders of Incentive
    Distribution Rights.


A-46Section 6.9

Entity-Level Taxation.


A-46ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS


A-47Section 7.1

Management.


A-47Section 7.2

Certificate of Limited Partnership.


A-48Section 7.3

Restrictions on the General Partners Authority.


A-49Section 7.4

Reimbursement of the General Partner.


A-49Section 7.5

Outside Activities.


A-50Section 7.6

Loans from the General Partner; Loans or Contributions from the
    Partnership or Group Members.


A-51Section 7.7

Indemnification.


A-51Section 7.8

Liability of Indemnitees.


A-53Section 7.9

Resolution of Conflicts of Interest; Standards of Conduct and
    Modification of Duties.


A-53Section 7.10

Other Matters Concerning the General Partner.


A-55Section 7.11

Purchase or Sale of Partnership Securities.


A-55Section 7.12

Registration Rights of the General Partner and its Affiliates.


A-55Section 7.13

Reliance by Third Parties.


A-58ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS


A-58Section 8.1

Records and Accounting.


A-58Section 8.2

Fiscal Year.


A-58Section 8.3

Reports.


A-58ARTICLE IX TAX MATTERS


A-59Section 9.1

Tax Returns and Information.


A-59Section 9.2

Tax Elections.


A-59Section 9.3

Tax Controversies.


A-59Section 9.4

Withholding.


A-60ARTICLE X ADMISSION OF PARTNERS


A-60Section 10.1

Admission of Limited Partners.


A-60Section 10.2

Admission of Successor General Partner.


A-60Section 10.3

Amendment of Agreement and Certificate of Limited Partnership.


A-61ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS


A-61Section 11.1

Withdrawal of the General Partner.


A-61Section 11.2

Removal of the General Partner.


A-62Section 11.3

Interest of Departing General Partner and Successor General
    Partner.


A-63Section 11.4

Termination of Subordination Period, Conversion of Subordinated
    Units and Extinguishment of Cumulative Common Unit Arrearages.


A-64Section 11.5

Withdrawal of Limited Partners.


A-64ARTICLE XII DISSOLUTION AND LIQUIDATION


A-64Section 12.1

Dissolution.


A-64Section 12.2

Continuation of the Business of the Partnership After
    Dissolution.


A-65 A-ii




---



##### Table of Contents



Section 12.3

Liquidator.


A-65Section 12.4

Liquidation.


A-66Section 12.5

Cancellation of Certificate of Limited Partnership.


A-66Section 12.6

Return of Contributions.


A-66Section 12.7

Waiver of Partition.


A-66Section 12.8

Capital Account Restoration.


A-66ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT;
    MEETINGS; RECORD DATE


A-67Section 13.1

Amendments to be Adopted Solely by the General Partner.


A-67Section 13.2

Amendment Procedures.


A-68Section 13.3

Amendment Requirements.


A-68Section 13.4

Special Meetings.


A-69Section 13.5

Notice of a Meeting.


A-69Section 13.6

Record Date.


A-69Section 13.7

Adjournment.


A-69Section 13.8

Waiver of Notice; Approval of Meeting; Approval of Minutes.


A-70Section 13.9

Quorum and Voting.


A-70Section 13.10

Conduct of a Meeting.


A-70Section 13.11

Action Without a Meeting.


A-70Section 13.12

Right to Vote and Related Matters.


A-71ARTICLE XIV MERGER, CONSOLIDATION OR CONVERSION


A-71Section 14.1

Authority.


A-71Section 14.2

Procedure for Merger, Consolidation or Conversion.


A-72Section 14.3

Approval by Limited Partners.


A-73Section 14.4

Certificate of Merger or Conversion.


A-74Section 14.5

Effect of Merger, Consolidation or Conversion.


A-74ARTICLE XV RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS


A-75Section 15.1

Right to Acquire Limited Partner Interests.


A-75ARTICLE XVI GENERAL PROVISIONS


A-76Section 16.1

Addresses and Notices; Written Communications.


A-76Section 16.2

Further Action.


A-76Section 16.3

Binding Effect.


A-76Section 16.4

Integration.


A-77Section 16.5

Creditors.


A-77Section 16.6

Waiver.


A-77Section 16.7

Third-Party Beneficiaries.


A-77Section 16.8

Counterparts.


A-77Section 16.9

Applicable Law.


A-77Section 16.10

Invalidity of Provisions.


A-77Section 16.11

Consent of Partners.


A-77Section 16.12

Facsimile Signatures.


A-77  A-iii




---



##### Table of Contents



FIRST
    AMENDED AND RESTATED AGREEMENT OF LIMITED
    PARTNERSHIP OF CDM RESOURCE PARTNERS, L.P.
 
  Organizational Limited Partner
 
  ARTICLE I
  DEFINITIONS
 
 
 
  Section Definitions
 
   
  Acquisition
 
 
  Additional Book Basis Book-Up
 
  Book-Up Book-Up
   
  Additional Book Basis Derivative Items
 
 
  Adjusted Capital Account Regulation Section 1.704-1(b)(2)(ii)(c) Regulation Sections 1.704-2(g)
 
 A-1




---



##### Table of Contents



Regulation Section 1.751-1(b)(2)(ii), Regulation Section 1.704-1(b)(2)(ii)(d)
 
  Adjusted Operating Surplus
 
 
  Adjusted Property
 
 
  Affiliate
 
 
  Aggregate Quantity of Class B Units
 
 
  Aggregate Remaining Net Positive Adjustments
 
 
  Agreed Allocation
 
 
  Agreed Value
 
 
  Agreement
 
 A-2




---



##### Table of Contents



Associate
 
 
  Available Cash
 
      less
           
  Beneficially Owns Rules 13-d 13d-5
 
 
  Board of Directors
 
 
  Book Basis Derivative Items
 
 
  Book-Down Event
 
 A-3




---



##### Table of Contents



Book-Tax Disparity
 
 
  Book-Up
    Event
 
 
  Business Day
 
 
  Capital Account
 
 
  Capital Contribution
 
 
  Capital Improvement
 
 
  Capital Surplus
 
 
  Carrying Value
 
 
  Cause
 
 
  CDMR Holdings
 
 
  Certificate
 
 A-4




---



##### Table of Contents



Certificate of Limited Partnership
 
 
  Citizenship Certification
 
 
  claim
 
 
  Class B Unit
 
 
  Closing Date
 
 
  Closing Price
 
 
  Code
 
 
  Combined Interest
 
 
  Commences Commercial Service
 
 
  Commission
 
 
  Commodity Hedge Contract
 
 
  Common Unit
 
 
  Common Unit Arrearage
 
 A-5




---



##### Table of Contents



Conflicts Committee
 
 
  Contributed Property
 
 
  Contribution Agreement
 
 
  Converted Common Units
 
 
  Credit Agreement
 
 
  Cumulative Common Unit Arrearage
 
 
  Curative Allocation
 
 
  Current Market Price
 
 
  Delaware Act Section 17-101,
 
 
  Departing General Partner
 
 
  Depositary
 
 
  Economic Risk of Loss Regulation Section 1.752-2(a).
 
 
  Eligible Citizen
 
 
  Estimated Incremental Quarterly Tax Amount
 
 
  Event of Withdrawal
 
 
  Expansion Capital Expenditures
 
 A-6




---



##### Table of Contents



Final Subordinated Units
 
 
  First Liquidation Target Amount
 
 
  First Target Distribution
 
 
  Fully Diluted Basis
 
 
  General Partner
 
 
  General Partner Interest
 
 
  General Partner Unit
 
 
  Group
 
 A-7




---



##### Table of Contents



Group Member
 
  Group Member Agreement
 
 
  Holder
 
 
  IDR Reset Election
 
 
  Incentive Distribution Right
 
 
  Incentive Distributions
 
 
  Incremental Income Taxes
 
 
  Indemnified Persons
 
 
  Indemnitee
 
 
  Initial Common Units
 
 
  Initial Limited Partner
 
 
  Initial Offering
 
 
  Initial Unit Price
 
 A-8




---



##### Table of Contents



Interest Rate Hedge Contract
 
 
  Interim Capital Transactions
 
 
  Issue Price
 
 
  Limited Partner
 
 
  Limited Partner Interest
 
 
  Liquidation Date
 
 
  Liquidator
 
 
  Maintenance Capital Expenditures
 
 A-9




---



##### Table of Contents



Merger Agreement
 
 
  Minimum Quarterly Distribution
 
 
  National Securities Exchange
 
 
  Net Agreed Value
 
 
  Net Income
 
 
  Net Loss
 
 
  Net Positive Adjustments Book-Up
 
 
  Net Termination Gain
 
 
  Net Termination Loss
 
 A-10




---



##### Table of Contents



Non-Citizen Assignee
 
 
  Nonrecourse Built-in Gain
 
 
  Nonrecourse Deductions Regulation Section 1.704-2(b),
 
 
  Nonrecourse Liability Regulation Section 1.752-1(a)(2) Regulation 1.752-7.
 
 
  Notice of Election to Purchase
 
 
  Omnibus Agreement
 
 
  Operating Expenditures
 
         A-11




---



##### Table of Contents



Operating Partnership
 
 
  Operating Surplus
 
         
  Opinion of Counsel
 
 
  Option Closing Date
 
 
  Organizational Limited Partner
 
 
  Outstanding
 
 A-12




---



##### Table of Contents



Over-Allotment Option
 
 
  Partner Nonrecourse Debt Regulation Section 1.704-2(b)(4).
 
 
  Partner Nonrecourse Debt Minimum Gain Regulation Section 1.704-2(i)(2).
 
 
  Partner Nonrecourse Deductions Regulation Section 1.704-2(i),
 
  Partners
 
  Partnership
 
 
  Partnership Group
 
 
  Partnership Interest
 
 
  Partnership Minimum Gain Regulation Section 1.704-2(d).
 
 
  Partnership Security
 
 
  Per Unit Capital Amount
 
 
  Percentage Interest
 
 
  Person
 
 A-13




---



##### Table of Contents



Pro Rata
 
 
  Purchase Date
 
 
  Quarter
 
 
  Recapture Income
 
 
  Record Date
 
 
  Record Holder
 
 
  Redeemable Interests
 
 
  Registration Statement Form S-1 No. 333-144971)
 
 
  Remaining Net Positive Adjustments
 
 
  Required Allocations
 
 A-14




---



##### Table of Contents



Reset MQD
 
 
  Reset Notice
 
 
  Residual Gain Residual
    Loss
 
 
  Retained Converted Subordinated Unit
 
 
  Second Liquidation Target Amount
 
 
  Second Target Distribution
 
 
  Securities Act
 
 
  Securities Exchange Act
 
 
  Share of Additional Book Basis Derivative
    Items
 
 
  Special Approval
 
 
  Subordinated Unit
 
 
  Subordination Period
 
 
  Subsidiary
 
 A-15




---



##### Table of Contents



Surviving Business Entity
 
 
  Target Distributions
 
 
  Third Liquidation Target Amount
 
 
  Third Target Distribution
 
 
  Trading Day
 
 
  transfer
 
 
  Transfer Agent
 
 
  Underwriter
 
 
  Underwriting Agreement
 
 
  Unit
 
 
  Unit Majority
 
 
  Unitholders
 
 
  Unpaid MQD
 
 
  Unrealized Gain
 
 
  Unrealized Loss
 
 A-16




---



##### Table of Contents



Unrecovered Initial Unit Price
 
 
  U.S. GAAP
 
 
  Withdrawal Opinion of Counsel
 
 
  Working Capital Borrowings
 
  Section Construction.
    ARTICLE II
  ORGANIZATION
  Section Formation.
    Section Name.
   A-17




---



##### Table of Contents



Section Registered
    Office; Registered Agent; Principal Office; Other Offices.
    Section Purpose
    and Business.
   
 
 
  Section Powers
 
    Section Power
    of Attorney.
     A-18




---



##### Table of Contents



Section Term
 
   
 
 
  Section Title
    to Partnership Assets
 
   A-19




---



##### Table of Contents



ARTICLE III
  RIGHTS OF
    LIMITED PARTNERS
  Section Limitation
    of Liability.
    Section Management
    of Business.
  Section 17-303(a)
  Section Outside
    Activities of the Limited Partners.
    Section Rights
    of Limited Partners.
           A-20




---



##### Table of Contents



ARTICLE IV
  CERTIFICATES;
    RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
 REDEMPTION OF
    PARTNERSHIP INTERESTS
  Section Certificates.
    Section Mutilated,
    Destroyed, Lost or Stolen Certificates.
   A-21




---



##### Table of Contents



Section Record
    Holders.
  and/or
  Section Transfer
    Generally.
   A-22




---



##### Table of Contents



Section Registration
    and Transfer of Limited Partner Interests.
           A-23




---



##### Table of Contents



Section Transfer
    of the General Partners General Partner Interest.
        Section Transfer
    of Incentive Distribution Rights.
    Section Restrictions
    on Transfers.
   A-24




---



##### Table of Contents



Section Citizenship
    Certificates; Non-Citizen Assignees.
  30-day
 A-25




---



##### Table of Contents



Section Redemption
    of Partnership Interests of Non-Citizen Assignees.
  30-day
     A-26




---



##### Table of Contents



ARTICLE V
  CAPITAL
    CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
  Section Organizational
    Contributions.
    Section Contributions
    by the General Partner and its Affiliates.
 
   
   A-27




---



##### Table of Contents



Section Contributions
    by Initial Limited Partners.
        Section Interest
    and Withdrawal.
  Section 17-502(b)
  Section Capital
    Accounts.
  Regulation Section 1.704-1(b)(2)(iv).
 A-28




---



##### Table of Contents



Regulation Section 1.704-1(b)(2)(iv)(m), Regulation Section 1.704-1(b)(2)(iv)(m),
           A-29




---



##### Table of Contents



Regulation Section 1.704-1(b)(2)(iv)(f),
  Regulation Section 1.704-1(b)(2)(iv)(f),
  Section Issuances
    of Additional Partnership Securities.
     A-30




---



##### Table of Contents



Section Conversion
    of Subordinated Units.
     A-31




---



##### Table of Contents



Section Limited
    Preemptive Right.
    Section Splits
    and Combinations.
     A-32




---



##### Table of Contents



Section Fully
    Paid and Non-Assessable Nature of Limited Partner Interests.
  Sections 17-607 17-804
  Section Issuance
    of Class B Units in Connection with Reset of Incentive
    Distribution Rights.
   A-33




---



##### Table of Contents



A-34




---



##### Table of Contents



ARTICLE VI
  ALLOCATIONS
    AND DISTRIBUTIONS
  Section Allocations
    for Capital Account Purposes.
                     A-35




---



##### Table of Contents



A-36




---



##### Table of Contents



Regulation Sections 1.704-2(f)(6), Regulation Section 1.704-2(f)
  Regulation Section 1.704-2(i)(4),
 A-37




---



##### Table of Contents



Regulation Sections 1.704-2(i)(4) Regulation Section 1.704-2(i)(4)
        Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
  Regulation Sections 1.704-2(g)
 A-38




---



##### Table of Contents



Regulation Section 1.704-2(i).
  Regulation Section 1.752-3(a)(3),
  Section 1.704-1(b)(2)(iv)(m),
       A-39




---



##### Table of Contents



A-40




---



##### Table of Contents



Book-Up
    Section Allocations
    for Tax Purposes.
          Regulation Section 1.704-3(d)
     A-41




---



##### Table of Contents



Regulation Section 1.167(c)-l(a)(6)
  Regulation Section 1.1245-1(e) Regulation Section 1.1250-1(f),
        Section Requirement
    and Characterization of Distributions; Distributions to Record
    Holders.
  Sections 17-607 17-804
 A-42




---



##### Table of Contents



Section Distributions
    of Available Cash from Operating Surplus.
  Sections 17-607 17-804
               A-43




---



##### Table of Contents



Sections 17-607 17-804
              Section Distributions
    of Available Cash from Capital Surplus.
  Sections 17-607 17-804
 A-44




---



##### Table of Contents



Section Adjustment
    of Minimum Quarterly Distribution and Target Distribution
    Levels.
      Section Special
    Provisions Relating to the Holders of Subordinated Units and
    Class B Units.
         A-45




---



##### Table of Contents



Section Special
    Provisions Relating to the Holders of Incentive Distribution
    Rights.
    Section Entity-Level Taxation.
   A-46




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ARTICLE VII
  MANAGEMENT
    AND OPERATION OF BUSINESS
  Section Management.
                     A-47




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Section Certificate
    of Limited Partnership.
   A-48




---



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Section Restrictions
    on the General Partners Authority.
    Section Reimbursement
    of the General Partner.
       A-49




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Section Outside
    Activities
 
         A-50




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##### Table of Contents



Section Loans
    from the General Partner; Loans or Contributions from the
    Partnership or Group Members.
       
 
 
  Section Indemnification
 
   A-51




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A-52




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Section Liability
    of Indemnitees.
          Section Resolution
    of Conflicts of Interest; Standards of Conduct and Modification
    of Duties.
   A-53




---



##### Table of Contents



A-54




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##### Table of Contents



Section Other
    Matters Concerning the General Partner.
        Section Purchase
    or Sale of Partnership Securities.
    Section Registration
    Rights of the General Partner and its Affiliates.
   A-55




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##### Table of Contents



A-56




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##### Table of Contents



A-57




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##### Table of Contents



Section Reliance
    by Third Parties.
    ARTICLE VIII
  BOOKS,
    RECORDS, ACCOUNTING AND REPORTS
  Section Records
    and Accounting.
    Section Fiscal
    Year.
   
  Section Reports.
 
   A-58




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##### Table of Contents



ARTICLE IX
  TAX MATTERS
  Section Tax
    Returns and Information.
    Section Tax
    Elections.
      Section Tax
    Controversies.
   A-59




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##### Table of Contents



Section Withholding.
    ARTICLE X
  ADMISSION OF
    PARTNERS
  Section Admission
    of Limited Partners.
          Section Admission
    of Successor General Partner.
   A-60




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Section Amendment
    of Agreement and Certificate of Limited Partnership.
    ARTICLE XI
  WITHDRAWAL
    OR REMOVAL OF PARTNERS
  Section Withdrawal
    of the General Partner.
          debtor-in-possession),
       A-61




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Section Removal
    of the General Partner.
  2 3
 A-62




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Section Interest
    of Departing General Partner and Successor General Partner.
       A-63




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Section Termination
    of Subordination Period, Conversion of Subordinated Units and
    Extinguishment of Cumulative Common Unit Arrearages.
    Section Withdrawal
    of Limited Partners.
    ARTICLE XII
  DISSOLUTION
    AND LIQUIDATION
 
 
 
  Section Dissolution
 
       A-64




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Section Continuation
    of the Business of the Partnership After Dissolution.
            Section Liquidator.
   A-65




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##### Table of Contents



Section Liquidation.
  Section 17-804
      Regulation Section 1.704-1(b)(2)(ii)(g)),
  Section Cancellation
    of Certificate of Limited Partnership.
    Section Return
    of Contributions.
    Section Waiver
    of Partition.
    Section Capital
    Account Restoration.
   A-66




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##### Table of Contents



ARTICLE XIII
  AMENDMENT OF
    PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
  Section Amendments
    to be Adopted Solely by the General Partner.
                 A-67




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Section Amendment
    Procedures.
    Section Amendment
    Requirements.
      provided, however
   A-68




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Section Special
    Meetings.
    Section Notice
    of a Meeting.
    Section Record
    Date.
    Section Adjournment.
   A-69




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Section Waiver
    of Notice; Approval of Meeting; Approval of Minutes.
    Section Quorum
    and Voting.
    Section Conduct
    of a Meeting.
    Section Action
    Without a Meeting.
   A-70




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Section Right
    to Vote and Related Matters.
      ARTICLE XIV
  MERGER,
    CONSOLIDATION OR CONVERSION
  Section Authority.
   A-71




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Section Procedure
    for Merger, Consolidation or Conversion.
                           A-72




---



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Section Approval
    by Limited Partners.
           A-73




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##### Table of Contents



Section 17-211(g)
  Section Certificate
    of Merger or Conversion.
    Section Effect
    of Merger, Consolidation or Conversion.
                   A-74




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ARTICLE XV
  RIGHT TO
    ACQUIRE LIMITED PARTNER INTERESTS
  Section Right
    to Acquire Limited Partner Interests.
  90-day
   A-75




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##### Table of Contents



ARTICLE XVI
  GENERAL
    PROVISIONS
  Section Addresses
    and Notices; Written Communications.
    e-mail
  Section Further
    Action.
    Section Binding
    Effect.
   A-76




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Section Integration.
    Section Creditors.
    Section Waiver.
    Section Third-Party
    Beneficiaries.
    Section Counterparts.
    Section Applicable
    Law.
    Section Invalidity
    of Provisions.
    Section Consent
    of Partners.
    Section Facsimile
    Signatures.
    [REMAINDER
    OF THIS PAGE INTENTIONALLY LEFT BLANK.]
 A-77




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IN WITNESS WHEREOF
  GENERAL PARTNER
    By:
    CDM GP, LLC   By:  Title:
    Chief Executive Officer  ORGANIZATIONAL LIMITED PARTNER
    By:  Title:
    Chief Executive Officer   [Signature
    Page  First Amended & Restated Agreement of
    Limited Partnership
    of CDM Resource Partners, L.P.]
 A-78




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LIMITED PARTNERS:
      By:
    CDM GP, LLC,   By:   Title:
    Chief Executive Officer   [Signature
    Page  First Amended & Restated Agreement of
    Limited Partnership
    of CDM Resource Partners, L.P.]
 A-79




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##### Table of Contents



ANNEX A
    to the First Amended and Restated
    Agreement of Limited Partnership of
    CDM Resource Partners, L.P.
  Certificate
    Evidencing Common Units 
    Representing Limited Partner Interests in 
    CDM Resource Partners, L.P.
  No.
    Common
    Units       Annex A-1




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##### Table of Contents



Dated:

CDM Resource Partners, L.P.Countersigned and Registered by:

By: CDM RP GP, L.P., 
    its General PartnerBy: CDM GP, LLC, 
    its General PartnerBy: ­
    ­as Transfer Agent and Registrar

Name: ­
    ­By: ­
    ­Authorized
    Signature

By: ­
    ­Secretary     ABBREVIATIONS
    TEN COM 

as tenants in common

UNIF GIFT/TRANSFERS MIN ACTTEN ENT 

as tenants by the entireties

Custodian     (Cust)                      (Minor)JT TEN 

as joint tenants with right of survivorship and not as tenants
    in common

under Uniform Gifts/Transfers to CD Minors Act (State)    Annex A-2




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##### Table of Contents



ASSIGNMENT
    OF COMMON UNITS OF
    CDM RESOURCE PARTNERS, L.P.
  FOR VALUE RECEIVED,

hereby assigns, conveys, sells and transfers unto(Please
    print or typewrite name and address of Assignee)

(Please
    insert Social Security or other identifying number of Assignee)     Date:NOTE:


The signature to any endorsement hereon must correspond with the
    name as written upon the face of this Certificate in every
    particular, without alteration, enlargement or change.THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
    INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
    AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
    GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C.
    RULE 17d-15


(Signature)
    (Signature)  Annex A-3




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Annex A-4




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##### Table of Contents



APPENDIX B
  GLOSSARY
    OF TERMS
 
  Adjusted operating surplus:
 
 
   
 
   
 
   
 
   
 
   
  Available cash:
                provided, however
  provided, further
  Bcf:
 B-1




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##### Table of Contents



Capital account:
  Capital surplus:
  Closing price:
  Common unit arrearage:
  Current market price:
  Interim capital transactions:
          LNG:
  Mcf:
  MMcf:
  MMcf/d:
 B-2




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##### Table of Contents



Operating expenditures:
              Operating surplus:
                 B-3




---



##### Table of Contents



Subordination period:
                Tcf:
  Total available horsepower:
 
  Working capital borrowings:
 
 B-4




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##### Table of Contents








---



##### Table of Contents



7,000,000 Common Units
 Representing Limited Partner
    Interests
     PROSPECTUS
 ,
    2007
     Joint Book-Running Managers
  Lehman
    Brothers
  Merrill
    Lynch & Co.
    Goldman,
    Sachs & Co.
  Wachovia
    Securities
  TudorPickering




---



##### Table of Contents



PART II
  INFORMATION
    NOT REQUIRED IN THE PROSPECTUS
  Item 13.
    Other
    Expenses of Issuance and Distribution.    
 SEC registration fee

$
5,190NASD filing fee


17,405New York Stock Exchange listing fee


150,000Printing and engraving expenses


575,000Accounting fees and expenses


1,100,000Legal fees and expenses


1,800,000Transfer agent and registrar fees


50,000Subscription Agent fees


*Information Agent fees


*Standby Commitment fees


*Structuring fee


400,000Miscellaneous


102,405Total

$
4,200,000  
   
  *
    
    None 
  Item 14.
    Indemnification
    of Directors and Officers.  Section 17-108
  Item 15.
    Recent
    Sales of Unregistered Securities.    Item 16.
    Exhibits
    and Financial Statement Schedules.    
 ExhibitNumber

Description1
.1

Form of Underwriting Agreement3
.1**

Certificate of Limited Partnership of CDM Resource Partners, L.P.3
.2

Form of Amended and Restated Agreement of Limited Partnership of
    CDM Resource Partners, L.P. (included as Appendix A to the
    Prospectus) 
 II-1




---



##### Table of Contents



ExhibitNumber

Description3
.3**

Certificate of Formation of CDM GP, LLC3
.4*

Amended and Restated Limited Liability Company Agreement of CDM
    GP, LLC5
.1*

Opinion of Vinson & Elkins L.L.P. as to the legality
    of the securities being registered8
.1*

Opinion of Vinson & Elkins L.L.P. relating to tax
    matters10
.1*

Form of Credit Agreement10
.2*

Form of Contribution, Conveyance and Assumption Agreement10
.3*

Form of Omnibus Agreement10
.5*

Form of Long Term Incentive Plan of CDM Resource Partners, L.P.21
.1

List of subsidiaries of CDM Resource Partners, L.P.23
.1

Consent of KPMG LLP23
.2*

Consent of Vinson & Elkins L.L.P. (contained in
    Exhibit 5.1)23
.3*

Consent of Vinson & Elkins L.L.P. (contained in
    Exhibit 8.1)23
.4

Consent of Director Nominee24
.1**

Powers of Attorney (included on the signature page)  
    *
    
    To be filed by amendment.**
    
    Previously Filed    Item 17.
    Undertakings.           II-2




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##### Table of Contents



Form 10-K
 II-3




---



##### Table of Contents



SIGNATURES
 
   
  CDM RESOURCE PARTNERS, L.P.
  By:
    CDM RP GP, L.P.   By:
    CDM GP, LLC,   By:
    /s/  Randall
    H. Dean    
   
  
 Signature

Title/s/  Randall
    H. DeanRandall
    H. Dean

Chief Executive Officer
    (Principal Executive Officer)
    and Director/s/  Richard
    W. Fairchild, Jr.Richard
    W. Fairchild, Jr.

Chief Financial Officer
    (Principal Financial Officer
    and Principal Accounting Officer)
    and Director/s/  David
    G. MarrsDavid
    G. Marrs

Director/s/  Pierre
    F. Lapeyre, Jr.Pierre
    F. Lapeyre, Jr.

Director/s/  Gregory
    A. BeardGregory
    A. Beard

Director/s/  Leigh
    Ann RyanLeigh
    Ann Ryan

Director* By:

Randall
    H. DeanAttorney-in-fact  
 II-4




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##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNumber

Description1
.1

Form of Underwriting Agreement3
.1**

Certificate of Limited Partnership of CDM Resource Partners, L.P.3
.2

Form of Amended and Restated Agreement of Limited Partnership of
    CDM Resource Partners, L.P. (included as Appendix A to the
    Prospectus)3
.3**

Certificate of Formation of CDM GP, LLC3
.4*

Amended and Restated Limited Liability Company Agreement of CDM
    GP, LLC5
.1*

Opinion of Vinson & Elkins L.L.P. as to the legality
    of the securities being registered8
.1*

Opinion of Vinson & Elkins L.L.P. relating to tax
    matters10
.1*

Form of Credit Agreement10
.2*

Form of Contribution, Conveyance and Assumption Agreement10
.3*

Form of Omnibus Agreement10
.5*

Form of Long Term Incentive Plan of CDM Resource Partners, L.P.21
.1

List of subsidiaries of CDM Resource Partners, L.P.23
.1

Consent of KPMG LLP23
.2*

Consent of Vinson & Elkins L.L.P. (contained in
    Exhibit 5.1)23
.3*

Consent of Vinson & Elkins L.L.P. (contained in
    Exhibit 8.1)23
.4

Consent of Director Nominee24
.1**

Powers of Attorney (included on the signature page)  
    *
    
    To be filed by amendment.**
    
    Previously filed II-5