The Flotek Industries (ticker: FTK) business model is becoming more and more refined.
After shifting its emphasis into oil and gas chemistry, the company’s business model on the energy side is built on offering both chemical product solutions and oilfield services for oil and gas producers through its Energy Chemistry Technologies business.
Flotek also believes that the oil industry’s demand for technology has increased significantly. Smaller E&P companies, both private and public, are using advanced technology in their operations. In many cases, in fact, Flotek has found that smaller companies are more likely to use new technology than larger E&Ps. According to President and CEO John Chisholm, this may be the result of younger people more comfortable with technology entering the oil industry.
The company’s products include chemical solutions for cementing, improved oil recovery, drilling fluids, coil tubing, and stimulation. Flotek’s oilfield service component offers services in reservoir characterization, polymer conformance, and logistics management.
Closed the sale of drilling and production technologies divisions
Flotek closed on the sale of its drilling technologies and production technologies branches to two buyers in May, 2017. The Drilling Technologies branch was sold to National Oilwell Varco, L.P. for $17 million and the Production Technologies segment was sold to an undisclosed buyer for $2.9 million.
Complex nano-fluids coming on fast
One of Flotek’s premiere chemical products is its Improved Oil Recovery chemical suite, known as CnF®, also called Complex nano-fluids. The intent of the CnF® product is to utilize a specialized mix of chemicals to alter reservoir wettability, reduce capillary pressures and interfacial tensions to boost recovery efficiency from a reservoir.
Source: Flotek Industries
Complex nano-fluids—CnF®–a path for growth
Flotek believes that a growing industry-wide focus on more intensively engineered and specialized fluids will spur growth for its product lines.
The company’s CnF® revenues have grown by 55% since the fourth quarter of 2014—which has offset a drop in other product revenues inspired by challenging industry prices.
Flotek’s Q1 revenue increased by 25.3%, since Q1, 2016. In the Energy Chemistry Technology division, Q1 revenue increased by 14%—driven largely by CnF® growth, which was itself subject to a volume increase of 24.7% domestically, the company reported.
Source: Flotek Industries
Flotek’s partnership with IBM Watson
Flotek is in the process of developing software known as the Reservoir Cognitive Consultant, which is meant to simulate the effects of custom chemical designs in well production enhancement.
The Reservoir Cognitive Consultant will be developed using IBM Watson as an artificial intelligence base. This development is in line with the industry-wide trend of further utilizing computing power and, in the near future, artificial intelligence, in any number of oil and gas applications.
Flotek Industries is presenting at EnerCom’s The Oil & Gas Conference® 22
Flotek will be a presenting company at the upcoming EnerCom conference in Denver, Colorado—The Oil & Gas Conference® 22.
The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors. The conference will be at the Denver Downtown Westin Hotel, August 13-17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.
