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What Are Flotek Industries’ Future Drivers?

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What does Flotek Industries’ management think?

Flotek Industries’ (FTK) management believes the company resisted energy market weakness through steady performance in the energy chemistry segment. In the company’s 3Q16 conference call, Flotek Industries CEO John Chisholm stated that “we feel fortunate that our focus on high-end value added technology, especially in our energy chemistry segment has provided some insulation from the storm. In fact, we are proud of the fact that while many of our peers continue to experience sequential challenges, Flotek specialty chemistry performance has held its own against sequential and year-over-year comparisons, especially when compared to overall completion activity.” FTK makes up 0.08% of the iShares Core S&P Small-Cap ETF (IJR). The energy sector makes up 3.5% of IJR.

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4Q16 outlook for major OFS companies

Flotek Industries’ future drivers

  • According to its agreement with Anton Oilfield Services Group of China, Flotek will provide Anton with exclusive rights to use certain Flotek chemistry in China and other key markets. Anton holds ~400 industry patents and patent applications in oil and gas research. Anton works with major onshore oil and gas fields in China. It has bases in Central Asia, the Middle East, and Latin America.
  • Flotek has several growth opportunities in South America. It is currently discussing a pilot project with YPF (YPF), an upstream giant from Argentina. The project involves validating wells using FTK’s CnF (Complex nano-Fluid) technology and developing well design.
  • FTK will be acquiring International Polymerics in July, which could grow FTK’s prescriptive chemistry management program.

Next, we’ll discuss Flotek Industries’ revenue and earnings.

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