uploads/2017/07/FCF.jpg

Inside Flotek Industries’ New 2017 Capex Plan

By

Updated

Flotek’s operating cash flows

Article continues below advertisement

Flotek’s free cash flow

In 1Q17, FTK’s capital expenditure or capex fell 51% in 1Q17 over 1Q16. Despite its lower capex, this negative CFO led to negative FCF (free cash flow) in 1Q17. In 1Q17, FTK’s FCF was -$4.4 million, compared with -$10.3 million in 1Q16. FCF’s capex has been negative for five out of the past 13 quarters.

Peer comparison

By comparison, Halliburton’s (HAL) 1Q17 FCF was a -$416 million, while Nabors Industries’ (NBR) 1Q17 FCF came in at -$258 million, and Weatherford International’s (WFT) 1Q17 FCF stood at -$221 million.

FTK’s 2017 capex plan

Flotek plans to spend between $10 million and $14 million on capex in 2017. This would be a reduction from the planned capex range of $15 million–$20 million it disclosed earlier in its 2016 Form 10-K. FTK’s capex totaled $14 million in 2Q16.

FTK’s capex is subject to a maximum limit of $20 million in 2017, according to the credit facility agreement with PNC Bank, FTK’s primary lender.

Notably, Flotek Industries makes up 0.13% of the iShares Micro-Cap ETF (IWC). IWC has risen 4% so far this, compared with the 5% fall in FTK’s stock. SPX-INDEX has risen 8%.

You can learn more about the oilfield equipment and services industry in Market Realist’s The Oilfield Equipment and Services Industry: A Primer.

Advertisement

More From Market Realist