Current FTK Stock Info

 Flotek looks to core business in 2017

While the current industry downturn adversely affected E&P companies, it caused a tightening in service companies, with thousands of their employees being laid off. But as commodity prices recover somewhat, remaining in the $50s per barrel range, service companies are becoming more optimistic about future prospects. Flotek Industries (ticker: FTK), a chemical technology company, believes it is well positioned to take advantage of the recovery.

As a matter of fact, Flotek was able to weather the downturn relatively well, and still saw significant amounts of business. “We were able to keep above the market average level of activity even during the downturn,” Flotek President and CEO John Chisholm told Oil & Gas 360®. Chisholm believes that this is due to the measureable improvements that Flotek’s services provide. “It’s not witchcraft or smoke and mirrors,” as Chisholm put it.

Flotek also has found 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 Chisholm, this may be the result of younger people more comfortable with technology entering the oil industry.

Deleveraging main 2017 goal

Flotek’s current goal is to significantly reduce its debt in 2017, ideally becoming debt-free. The company’s long-term debt has decreased significantly in the last few years, dropping by 60% in the last year alone. This is part of the company’s overall transformation to focus on its core products. As part of this transformation, Flotek is looking to sell its downhole and production technologies departments. This will leave two departments: energy chemistry technologies and consumer and industrial technologies.

Flotek’s energy chemistry division offers a significant amount of services. Flotek offers additives for drilling, cementing, stimulation and production. The company’s acquisition of International Polymerics July added to Flotek’s stimulation product line with IPI’s guar processing systems. In addition, Flotek offers reservoir characterization and logistics services.

Many of these services take advantage of Flotek’s Complex nano-Fluid® technology. This system is a surfactant that uses, among other chemicals, a solvent extracted from oranges. According to Flotek, CnF® is “more effective than traditional surfactants as well as environmentally responsible.” Surfactants are chemicals that are used to lower the surface tension of a liquid. The oil and gas industry uses these chemicals in many applications, especially in enhanced oil recovery and fracturing treatments.

In addition to its chemicals for oil and gas companies, Flotek offers consumer and industrial products through its subsidiary Florida Chemical. Acquired by Flotek in 2013, Florida Chemical produces citrus oils for a wide range of applications. Citrus-derived chemicals produced by Florida Chemical are commonly used in solvents, as well as for flavor and fragrance purposes.

EnerCom Dallas presenter: FTK

Flotek Industries will be presenting its story at the Tower Club Downtown Dallas on Thursday, March 2, as part of EnerCom Dallas, an investor conference which is modeled after EnerCom’s The Oil & Gas Conference® in Denver.

The Dallas conference is designed to offer investment professionals a unique opportunity to listen to a wide variety of oil and gas company senior management teams update investors on their operational and financial strategies and learn how the leading independent energy companies are building value in 2017.

The forum offers healthy dialogue and informal networking opportunities for attendees. Additionally one-on-one meetings with Flotek management are open to request by buyside investing institutions at the attendee registration tab on the conference website.

To sign up for EnerCom Dallas and hear Flotek, or to find out more information about presenting companies and industry experts speaking at EnerCom Dallas, click here to visit the conference website.

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